Financial Statements

Requirements

You must:

• obtain signed financial statements dated within 15 months of the Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. from all parties relevant to 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
• ensure all:
  • Potential Red Flags for Mortgage Fraud and Other Suspicious Activity were considered; and
  • unresolved red flags were reported per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 310: Compliance.

For all financial statements, you must collect:

• a list of all other assets, including
  • notes receivable from related entities, and
  • an estimate of the market value of each asset with the basis for calculating value estimates; and
• all liabilities and contingent liabilities, including
  • debts under lines or letters of credit,
  • personal guaranties,
  • unmet obligations to partnerships or other entities, and
  • other future obligations, with their amount and timing.

For all 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. , you must determine any:

• appropriate adjustments to the reported net worth and liquidity of the SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). and each Key PrincipalKey PrincipalPerson 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/or may be required to provide a Guaranty. or GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. ; and
• other factors that may impact the party’s financial position immediately or during the term 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. (including any known threat of potential lawsuits that may arise from the parties’ business operations).