Section 402

Site Inspections

402.01

Physical Inspections
402.01A

Generally

Requirements

You must:

  • before the Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. , ensure your qualified employee per Part V, Chapter 5: Surveillance, Section 502.05A: Qualifications:
    • performs a physical PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection;
    • confirms the status of all units selected for inspection below (e.g., whether occupied or vacant), per a current rent roll;
    • completes the MBAMBAMortgage Bankers Association Standard Inspection Form using their own photos; and
    • compares the consistency of their photos with the
      • PCAPCAAssessment of the Property's physical condition and historical operation. , and
      • AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. ; and
  • not DeliverDeliverSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. any 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. secured by a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). with an overall condition rating of 4 or 5 per the Comprehensive Assessment tab of the MBAMBAMortgage Bankers Association Standard Inspection Form.
402.01B

Selecting Units

Requirements

To determine the minimum number of units to inspect, you must:

  • use the Physical Property Inspection table; and
  • increase the number by 25% if some units are not accessible.
Physical Property Inspection
For Properties with... You must inspect at least...
5 - 9 units all available units.
10 - 100 units

the greater of

 

  • 5 units or
  • 10% of all units.
101 - 300 units 10% of all units.
301 - 900 units 40 units.
901+ units 50 units.

When choosing which units to inspect, you must:

  • randomly select floors and units;
  • include:
    • all unit types and as many different floors as possible;
    • units from all buildings;
    • all units vacant for more than 90 days, unless the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is a Near Stabilized PropertyNear Stabilized PropertyNewly constructed or recently rehabilitated Property, with all construction or rehabilitation complete, which is expected to achieve Stabilized Residential Occupancy and the applicable required Underwritten Debt Service Coverage Ratio within 120 days after the Mortgage Loan Origination Date. ;
    • all down units (i.e., units that cannot currently be rented in the normal course of business); and
    • any additional units you deem appropriate based on
      • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). type,
      • other factors, or
      • the results of your initial inspection.
402.01C

Inspection Notification

Reqiurements

Before the inspection, you must email the BorrowerBorrowerPerson who is the obligor per the Note.  and management company to:

402.02

Capital Item Replacements

Requirements

For replacement of capital items, you must:

  • for refinances, obtain:
    • an itemized list of capital items completed within the last 24 months; and
    • for any capital item replacements you cannot independently confirm were completed, the invoices showing the associated actual costs;
  • use best efforts to obtain the PCA Consultant’sPCA Consultant’sIndividual or firm conducting a PCA and preparing a PCA Report. written confirmation that capital items were completed;
  • evaluate the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). actual condition, considering:
    • the list of capital items reportedly completed within the last 24 months; and
    • their associated actual costs;
  • confirm with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. that the actual cost of capital items completed within the last 12 months was factored into the Appraised ValueAppraised ValueAppraiser’s opinion of the Property's market value documented in the Appraisal, on an “as is” basis, unless use of an “as completed” basis is specifically permitted per the Guide. ; and
  • document your analysis in the Transaction Approval Memo.
Transaction Approval Memo Documentation
For... You must document the...
Interior Unit Renovations
  • specific scope, and
  • estimated percentage of units updated.
Replacements of capital items for refinances
  • work has been completed based on:
    • an inspection by
      • you, or
      • the PCA ConsultantPCA ConsultantIndividual or firm conducting a PCA and preparing a PCA Report. , or
    • invoices or documentation; or
  • if the work completed cannot be verified, request invoices or other documentation to confirm its completion.