Section 203

Pre-Review Mortgage Loans

Requirements

You must obtain Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! ’s Pre-Review approval before obtaining a Rate Lock Rate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. for any

  • Pre-Review Mortgage Loan Pre-Review Mortgage LoanMortgage Loan that is not delegated to you and requires Fannie Mae’s approval before Rate Lock. , and
  • Mortgage Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 not fully delegated to you.

You must ensure that your Chief Underwriter, or a delegated employee directly supervised by your Chief Underwriter, reviews and approves all material supporting the Pre-Review Pre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. approval request before submitting it.

Operating Procedures

The Pre-Review Pre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. approval process must follow these steps:

Step 1:  You submit a Pre-Review Pre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. request via DUS Gateway DUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. , including at a minimum:

  • a preliminary loan-sizing spreadsheet with
    • the preliminary Underwritten NCF NCFAt underwriting or for any specified period, the amount calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. , and
    • a refinance risk analysis;
  • a narrative describing the overall transaction, including risks and mitigating factors for each Pre-Review Pre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. reason; 
  • any additional information requested by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! ; and
  • the following items.

Pre-Review Category

Required Submission

Credit Facility

Include an aggregate

 

  • summary of the overall transaction, and
  • loan-sizing spreadsheet roll-up of all Properties PropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). .

Crowdfunding Equity
Delaware Statutory Trust (DST)
Forward Commitment Your preliminary analysis of the construction and/or rehabilitation and feasibility review per  Part III, Chapter 19: Forward Commitments .
Near Stabilized Property

Your analysis of the Property's Property'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). monthly historical and projected lease-up schedule, including:

 

  • a spreadsheet presenting the Property’s Property’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). monthly underwriting operating data and a lease-up schedule, including:
    • DSCR DSCROn 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 Pay Preferred Equity payments. ;
    • cumulative economic occupancy;
    • bad debt;
    • cumulative physical occupancy;
    • concessions, incentives, discounts, and allowances for all
      • new move-ins, and
      • lease renewals;
    • expiring leases/renewals;
    • unit move-ins and move-outs since leasing inception; and
    • projected move-ins and move-outs through the stabilized occupancy period and beyond; and
  • a rent-comparable survey including:
    • each rent-comparable’s
      • occupancy,
      • concessions, and
      • rent level; and
    • an analysis of the comparable rents, net of concessions.

 

Your submission must:

 

  • analyze the impact of the competitive supply of new apartments entering the Property's Property'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). submarket during the Property's Property'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). lease-up period;
  • note the target Rate Lock Rate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. date; and
  • present the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). management company's experience leasing up newly constructed properties.
Preferred Equity

Step 2:  Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! ’s Pre-Review response will indicate:

  • Pre-Review Approval.  You have Pre-Review Pre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. approval to underwrite the Mortgage Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 and request a Commitment CommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. on the proposed terms without further Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! approval before purchase.
  • Pre-Review Resubmission Required.  You are authorized to underwrite the Mortgage Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 on the proposed terms and pricing, but at least 10 Business Days Business DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before Rate Lock Rate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. , you must resubmit the Mortgage Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 for final Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! Pre-Review approval, along with: 
    • the applicable required resubmission documentation per the Multifamily Underwriting Standards (Form 4660 Form 4660Multifamily Underwriting Standards identifying Pre-Review Mortgage Loans and containing the underwriting requirements (e.g., debt service coverage ratio, loan to value ratio, interest only, underwriting floors, etc.) for all Mortgage Loans. ); and
    • any additional requested documentation.
  • Enhanced Pre-Review Resubmission Required.  You are authorized to underwrite the Mortgage Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 on the proposed terms and pricing, but at least 15 Business Days Business DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before Rate Lock Rate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. , you must resubmit the Mortgage Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 for final Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! Pre-Review approval, along with: 
    • the applicable required Enhanced Pre-Review resubmission documentation per the Multifamily Underwriting Standards (Form 4660 Form 4660Multifamily Underwriting Standards identifying Pre-Review Mortgage Loans and containing the underwriting requirements (e.g., debt service coverage ratio, loan to value ratio, interest only, underwriting floors, etc.) for all Mortgage Loans. ); and
    • any additional requested documentation.
  • Decline Approval.  You do not have Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! Pre-Review approval and may not request a Commitment CommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. on the proposed terms.  Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will issue a notice of denial containing its rationale. 

If you...

Within 30 days of Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! 's notice of denial, you must...

Either:

 

  • deny the Borrower credit; or
  • offer the Borrower another quote, commitment, or credit option (from a source other than Fannie Mae) that the Borrower does not expressly accept
  • issue the Borrower BorrowerPerson who is the obligor per the Note. an adverse action letter including Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! ’s denial reasons; and
  • upload into the Deal Documents section of DUS Gateway DUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. your:
    • copy of final adverse action letter; and
    • issuance evidence (e.g., email, certified mail receipt, courier receipt, etc.).

Offer the Borrower another quote, commitment, or credit option (from a source other than Fannie Mae) that the Borrower expressly accepts

upload into the Deal Documents section of DUS Gateway DUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. a statement confirming:

 

  • the Borrower BorrowerPerson who is the obligor per the Note. expressly accepted the credit; and
  • you sent no adverse action letter.