Chapter 8

In Place Loans

Section 801	General

Fannie Mae may refinance certain Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. that do not meet TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 underwriting requirements (“In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. ”) if:

the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). securing the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. is in good condition (or requires repairs that can reasonably be made in connection with the refinancing);
Fannie Mae has had a satisfactory relationship with the BorrowerBorrowerPerson who is the obligor per the Note. ; and
the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. may not realistically be able to be refinanced outside of Fannie Mae.

If Fannie Mae elects to purchase an In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. refinanced by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. , special attention will be paid to preserving collateral value and mitigating credit risk by:

improving the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). condition as necessary in an attempt to generate increased cash flow to repay the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. ;
maintaining the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). in good condition over the term of the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. by requiring good property management and adequately funded Replacement ReservesReplacement ReservesCustodial Account established by the Lender and funded by deposits from the Borrower over the term of the Mortgage Loan to fund the replacement of capital items at the Property. ; and
adding risk mitigating loan terms.

Section 802	In Place Loan Categories

802.01	Loan Sizing

Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. are divided into 3 categories:

Level 1: Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. that comply with the GuideGuideMultifamily Selling and Servicing Guide and Delegated Underwriting and Servicing Guide, including any exhibits, appendices, or other referenced forms, as updated, amended, restated, modified, or supplemented; however, for any topic in the Multifamily Selling and Servicing Guide, that Guide shall… and meet the minimum TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 requirements of the Form 4660Form 4660Multifamily Underwriting Standards identifying Pre-Review Mortgage Loans and containing the minimum underwriting requirements (e.g., debt service coverage ratio, loan to value ratio, interest only, underwriting floors, etc.) for all Mortgage Loans. , which are eligible for refinance by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and purchase by Fannie Mae;
Level 2: In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. that refinance Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. but do not meet TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 requirements, as described in Part V, Chapter 8: In Place Loans, Section 802.02: Level 2 In Place Loans; and
Level 3: In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. that refinance Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. but do not meet TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 requirements, as described in Part V, Chapter 8: In Place Loans, Section 802.03: Level 3 In Place Loans.

To calculate the preliminary loan amount of a Level 2 In Place LoanLevel 2 In Place LoanGenerally, Portfolio Mortgage Loans with an Underwritten DSCR not less than 5 basis points below Tier 2 standards and an LTV not greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. or a Level 3 In Place LoanLevel 3 In Place LoanGenerally, Portfolio Mortgage Loans with an Underwritten DSCR greater than 5 basis points below Tier 2 standards or an LTV greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. , the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must use an underwriting interest rate equal to the greater of:

the rate established using current rates and a TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 Plus/Plus Pricing Structure; or
the applicable underwriting floor.

The preliminary pricing and loan amount should not be shared with the BorrowerBorrowerPerson who is the obligor per the Note. until approved in writing by Fannie Mae, as Fannie Mae reserves the right to adjust the final approved pricing, loan structure and loan amount based upon the individual characteristics of the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. and the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). .

802.02	Level 2 In Place Loans

Level 2 In Place LoansLevel 2 In Place LoansGenerally, Portfolio Mortgage Loans with an Underwritten DSCR not less than 5 basis points below Tier 2 standards and an LTV not greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. are Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. that:

support an Underwritten DSCRUnderwritten DSCRRatio of Underwritten Net Cash Flow to the annual debt service for a Mortgage Loan amount based on a level debt service payment with the applicable amortization, and calculated per Part II: Property, Section 202, as adjusted for the applicable products and features in Part III. not less than 5 basis points below TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 standards and have an LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. not greater than 5 percentage points above TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 standards;
are subject to the special pricing and fee limitations set forth in the Pricing MemoPricing MemoApplicable DUS Pricing Memo or non-DUS Pricing Memo communicating pricing for various products and features. ; and
following approval by Fannie Mae, are committed and delivered by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. using the standard committing and delivery process specified in Part IV.

802.03	Level 3 In Place Loans

Level 3 In Place LoansLevel 3 In Place LoansGenerally, Portfolio Mortgage Loans with an Underwritten DSCR greater than 5 basis points below Tier 2 standards or an LTV greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. are Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. that:

support an Underwritten DSCRUnderwritten DSCRRatio of Underwritten Net Cash Flow to the annual debt service for a Mortgage Loan amount based on a level debt service payment with the applicable amortization, and calculated per Part II: Property, Section 202, as adjusted for the applicable products and features in Part III. greater than 5 basis points below TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 standards or have a LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. greater than 5 percentage points above TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 Standards;
may require highly customized loan structures and features;
are subject to the special pricing and fee limitations specified in the Pricing MemoPricing MemoApplicable DUS Pricing Memo or non-DUS Pricing Memo communicating pricing for various products and features. ;
are committed and delivered using the standard loan committing and delivery process in Part IV; and
are subject to a post-purchase monitoring process and may require changes in the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s Restricted Liquidity RequirementsRestricted Liquidity RequirementsAmount to be held in the Restricted Liquidity Reserve per the Program Rules. .

802.04	Level 2 and Level 3 In Place Loans – Generally

If Fannie Mae does not approve an In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. for purchase, then Fannie Mae in its sole discretion (or, for Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. with loss sharing, Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. , in their joint discretion) may agree to enter into a modification and extension of the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. with such additional loan terms as deemed necessary. Any modification or extension of the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. , or any new Level 3 In Place LoanLevel 3 In Place LoanGenerally, Portfolio Mortgage Loans with an Underwritten DSCR greater than 5 basis points below Tier 2 standards or an LTV greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. refinancing of a Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. with loss sharing will be subject to Triggering Modification Interim Loss Sharing under the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s Loss Sharing Addendum.

Section 803	Eligibility Requirements

A Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. is eligible to be refinanced by the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. and the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. purchased by Fannie Mae if:

during the 12 months preceding the refinance, the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. had a timely payment history;
no unauthorized transfers or changes of the ownership interest in the BorrowerBorrowerPerson who is the obligor per the Note. occurred;
no unauthorized LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. were placed or filed against the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
during the 12 months preceding the refinance, the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). operations were stable or indicated a positive trend;
the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). meets the underwriting and delivery requirements of the GuideGuideMultifamily Selling and Servicing Guide and Delegated Underwriting and Servicing Guide, including any exhibits, appendices, or other referenced forms, as updated, amended, restated, modified, or supplemented; however, for any topic in the Multifamily Selling and Servicing Guide, that Guide shall… in all respects (physical condition, unit mix, occupancy requirements, capital reserve, etc.), except as specifically modified by this Chapter; and
the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. is able to demonstrate in the Transaction Approval Memo that the credit risk of the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. is reduced by the refinancing and that the refinancing is not merely a delay of an inevitable foreclosure of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). that may increase any losses from the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. in the process.

Section 804	Underwriting Process

804.01	Generally

Unless specifically modified in this Chapter, an In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. must meet all of the requirements provided in:

Part I;
Part II;
the applicable Part III Chapters based on the specific products and features of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. ; and
Form 4660Form 4660Multifamily Underwriting Standards identifying Pre-Review Mortgage Loans and containing the minimum underwriting requirements (e.g., debt service coverage ratio, loan to value ratio, interest only, underwriting floors, etc.) for all Mortgage Loans. .

In all cases, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must exercise prudent judgment and, unless modified by this Chapter, give the same selling and servicing representations and warranties as are required for newly originated Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. .

804.02	Specific Underwriting Requirements

804.02A	Borrower Structure and Experience

No modifications are permitted to the underwriting requirements for the BorrowerBorrowerPerson who is the obligor per the Note. ’s structure and experience set forth in Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals. A new Underwriting Certificate is required from the BorrowerBorrowerPerson who is the obligor per the Note. , any GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other guaranty related to the Mortgage Loan. of the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. , and any Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. . In addition, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must:

confirm the original underwriting of the organizational structure, experience and creditworthiness of the BorrowerBorrowerPerson who is the obligor per the Note. , GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other guaranty related to the Mortgage Loan. , Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. , and PrincipalPrincipalPerson who owns or controls specified interests in the Borrower per Part I: Mortgage Loan, Section 303. ;
identify the GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other guaranty related to the Mortgage Loan. , Key PrincipalsKey PrincipalsAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. and PrincipalsPrincipalsPerson who owns or controls specified interests in the Borrower per Part I: Mortgage Loan, Section 303. of the BorrowerBorrowerPerson who is the obligor per the Note. and report the results of the ACheckACheckLender due diligence performed for the Borrower, Key Principal, and Principal using the ACheck application. for each BorrowerBorrowerPerson who is the obligor per the Note. , GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other guaranty related to the Mortgage Loan. , Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. , and PrincipalPrincipalPerson who owns or controls specified interests in the Borrower per Part I: Mortgage Loan, Section 303. ;
obtain updated copies of the organizational documents of the BorrowerBorrowerPerson who is the obligor per the Note. and the Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. and confirm that the BorrowerBorrowerPerson who is the obligor per the Note. ’s organization complies with Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals;
confirm that no unauthorized change has been made to the organizational structure and organization documents of the BorrowerBorrowerPerson who is the obligor per the Note. ; and
obtain a new good standing certificate from the jurisdiction where the BorrowerBorrowerPerson who is the obligor per the Note. is organized.

804.02B	Property Management

The BorrowerBorrowerPerson who is the obligor per the Note. is required to provide a management plan and a list of major repairs completed during the preceding 3 years, and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must confirm that the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). is capably managed.

804.02C	Occupancy

The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. is not required to obtain a copy of the Certificates of Occupancy for the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). . However, the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. should review the original loan files to identify any issues related to the legal status of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ’s occupancy, and all issues must be clearly outlined in the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ’s Transaction Approval Memo.

804.02D	Property Zoning, Location, and Condition

The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must confirm that there has been no change in the zoning affecting the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). . If the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). zoning has not changed since the time the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. was initially underwritten, and the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). is a non-conforming use, then a new zoning and non-conforming use analysis is not required for the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). . However, if the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). has been rezoned causing it to become a non-conforming use, or rezoned to further restrict the ability of an existing nonconforming use to rebuild, then the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. must deliver a non-conforming use analysis. The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. is not required to obtain an aerial photograph of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). .

Section 805	Appraisals, Inspections and Loan Documentation

805.01	Appraisal

An AppraisalAppraisalWritten statement independently and impartially prepared by a qualified appraiser stating an opinion of the market value of the Property as of a specific date, supported by the presentation and analysis of relevant market information. is required for all In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. .

805.02	Physical Condition Assessment

The LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. is required to obtain a PCAPCAAssessment of the current physical condition and historical operation of the Property. for all In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. . It is particularly important that the BorrowerBorrowerPerson who is the obligor per the Note. makes all needed repairs and improvements, or funds a Completion/Repair EscrowCompletion/Repair EscrowCustodial Account established by the Lender and initially funded by an escrow deposit from the Borrower on the Mortgage Loan Origination Date to complete Completion/Repairs or other capital improvements at the Property. in a sufficient amount so that the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). is either in good condition at refinancing or shortly thereafter. In addition, the Replacement ReserveReplacement ReserveCustodial Account established by the Lender and funded by deposits from the Borrower over the term of the Mortgage Loan to fund the replacement of capital items at the Property. must be fully funded in an amount that will ensure that the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). is maintained in good condition for the term of the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. .

805.03	Environmental Assessment

If no Phase I Environmental Site AssessmentPhase I Environmental Site AssessmentEnvironmental report and site assessment performed according to the process described in current ASTM E 1527, including any report summarizing the conclusions of the assessment. was performed for the original Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. , then a Phase I Environmental Site AssessmentPhase I Environmental Site AssessmentEnvironmental report and site assessment performed according to the process described in current ASTM E 1527, including any report summarizing the conclusions of the assessment. is required for the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. . If a Phase I Environmental Site AssessmentPhase I Environmental Site AssessmentEnvironmental report and site assessment performed according to the process described in current ASTM E 1527, including any report summarizing the conclusions of the assessment. (or, if applicable, a Phase II Environmental Site AssessmentPhase II Environmental Site AssessmentInvestigation performed according to current ASTM E 1903, or investigation other than a Phase I ESA, that may include analyzing soil, ground water, or building materials for contaminants, including any report summarizing the conclusions of the assessment. ) was performed for the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. , then it need only be updated by the Environmental Professional re-inspecting the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). to determine if:

an O&M PlanO&M PlanWritten plan, document, or agreement containing ongoing operating, maintenance, or monitoring actions for the Property or its Improvements. , if any, has been followed or is now required;
any other Recognized Environmental Conditions or Business Environmental RisksBusiness Environmental RisksRisk of material environmental or environmentally-driven impact on the business or property associated with a Property or the past, current or planned use of a Property, including all “non-scope considerations” under current ASTM E 1527, asbestos or asbestos-containing materials, radon, lead-based… identified in the original Phase I Environmental Site AssessmentPhase I Environmental Site AssessmentEnvironmental report and site assessment performed according to the process described in current ASTM E 1527, including any report summarizing the conclusions of the assessment. , but not the subject of an O&M PlanO&M PlanWritten plan, document, or agreement containing ongoing operating, maintenance, or monitoring actions for the Property or its Improvements. , have become worse and whether an O&M PlanO&M PlanWritten plan, document, or agreement containing ongoing operating, maintenance, or monitoring actions for the Property or its Improvements. should be implemented;
any new Recognized Environmental Condition or Business Environmental RiskBusiness Environmental RiskRisk of material environmental or environmentally-driven impact on the business or property associated with a Property or the past, current or planned use of a Property, including all “non-scope considerations” under current ASTM E 1527, asbestos or asbestos-containing materials, radon, lead-based… is apparent; and
any nearby land uses subject the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). to any Recognized Environmental Condition or Business Environmental RiskBusiness Environmental RiskRisk of material environmental or environmentally-driven impact on the business or property associated with a Property or the past, current or planned use of a Property, including all “non-scope considerations” under current ASTM E 1527, asbestos or asbestos-containing materials, radon, lead-based….

805.04	Mortgage Loan Documents

All new Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. are required to document the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. .

805.05	Title Policy and Survey Requirements

805.05A	Title Policy

A new mortgagee title insurance policy is required for all In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. .

805.05B	Survey

A new survey of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). is required, unless:

the new mortgagee title insurance policy for the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. includes all title exceptions, including those that would appear on the most recent survey provided by the BorrowerBorrowerPerson who is the obligor per the Note. to the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. ;
the BorrowerBorrowerPerson who is the obligor per the Note. certifies that there have been no changes to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). since the later of (i) the date of the survey referenced in the original title policy for the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. , or (ii) the date of most recent survey of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ; and
the Lender'sLender'sPerson approved by Fannie Mae to sell or service Mortgage Loans. inspection of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). reveals no evidence of new construction on the site or encroachments on the site from adjoining properties.

805.06	Subordinate Debt

If the original Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. has any existing Subordinate LoansSubordinate LoansMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. approved by Fannie Mae which will remain after the financing of the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. , the subordinate lender must reaffirm the subordination using the appropriate Subordination Agreement. The combined DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of: principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. of the Senior Mortgage LoanSenior Mortgage LoanSenior loan purchased by Fannie Mae. and all Subordinate LoansSubordinate LoansMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. must be disclosed for pricing during the underwriting of the In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. .

Section 806	Fees and Pricing Premiums

806.01	Origination Fees

For maximum Origination FeesOrigination FeesFee you charge the Borrower for underwriting and originating the Mortgage Loan. for all Level 2 In Place LoansLevel 2 In Place LoansGenerally, Portfolio Mortgage Loans with an Underwritten DSCR not less than 5 basis points below Tier 2 standards and an LTV not greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. , and maximum underwriting and processing fees for all Level 3 In Place LoansLevel 3 In Place LoansGenerally, Portfolio Mortgage Loans with an Underwritten DSCR greater than 5 basis points below Tier 2 standards or an LTV greater than 5% above Tier 2 standards per Part V: Servicing and Asset Management, Section 802. , see the Pricing MemoPricing MemoApplicable DUS Pricing Memo or non-DUS Pricing Memo communicating pricing for various products and features. .

806.02	Pricing Premiums

No pricing premiums are allowed in connection with the financing of In Place LoansIn Place LoansMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. .

806.03	Loan Modification, Extension and Forbearance Fees

If Fannie Mae agrees (or, for Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. with loss sharing, Fannie Mae and the LenderLenderPerson approved by Fannie Mae to sell or service Mortgage Loans. jointly agree) to enter into a modification and extension of the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. that does not otherwise qualify for refinancing as an In Place LoanIn Place LoanMortgage Loan refinancing a Portfolio Mortgage Loan that does not meet Tier 2 underwriting requirements. in accordance with this Chapter, loan modification fees may be charged in connection with the modification and extension of the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. as provided in Part V, Chapter 7: Non-Performing Mortgage Loans, Section 711: Courses of Action.