416.10

Quarterly Monitoring and Re-Underwriting Assessments

416.10A

Quarterly Monitoring Reports (QMR)

All Credit FacilitiesCredit FacilitiesStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. must submit Quarterly Monitoring Reports through DUSDUSDelegated Underwriting and Servicing 360 per Part V, Chapter 5: Surveillance, Section 503.02: Quarterly Financial Analysis of Operations. 

416.10B

Credit Facilities with a Springing Debt Service Reserve Provision

A Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. with a Springing Debt Service ReserveSpringing Debt Service ReserveSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. provision in the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. :

  • is subject to additional quarterly monitoring in Section 416.10C; and
  • may require a re-underwriting assessment.
416.10C

Monitored Debt Service Coverage Ratio

When required per Part V, Chapter 5: Surveillance, Section 503.02: Quarterly Financial Analysis of Operations, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must determine the Monitored Debt Service Coverage RatioDebt Service Coverage RatioOn 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. on an aggregate basis 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. in the Collateral Pool, calculated as:

  • the total for all PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). of:
    • trailing 3-month annualized net rental income; plus
    • trailing 3-month annualized other allowable income, if any; minus
    • trailing 12-month operating expenses; minus
    • annual Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ;
  • divided by the annual Actual Pay Debt Service Amounts 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. .
416.10D

Re-Underwriting Assessment Determination

A Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. re-underwriting assessment is required if:

  • the Monitored 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 Pay Preferred Equity payments. is below 1.10; or
  • any other Trigger EventTrigger EventPer the Master Credit Facility Agreement, a defined event that gives the right to fully re-underwrite the Credit Facility per the Underwriting and Servicing Requirements. exists per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. .
416.10E

Re-Underwriting Assessments

For any Trigger EventTrigger EventPer the Master Credit Facility Agreement, a defined event that gives the right to fully re-underwrite the Credit Facility per the Underwriting and Servicing Requirements. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • immediately notify:
  • facilitate a meeting between the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , Fannie Mae, and BorrowerBorrowerPerson who is the obligor per the Note. ;
  • per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. :
  • retain copies of:
    • the re-underwriting assessment; and
    • all supporting documents in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. ; and
  • submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. if the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide any required documents.
416.10F

Re-Underwriting Assessment Timing

Initial re-underwriting assessments occur as follows:

For a Credit Facility with... Timing
Monitored DSCR below 1.10 45 days after Quarterly Monitoring forms are due per Part V, Chapter 5: Surveillance, Section 503.02: Quarterly Financial Analysis of Operations.
Any other Trigger EventTrigger EventPer the Master Credit Facility Agreement, a defined event that gives the right to fully re-underwrite the Credit Facility per the Underwriting and Servicing Requirements. 45 days after the event.