Section 603

Legal and Property Compliance

603.01

Borrower and the MH Community
603.01A

Borrower Ownership

Requirements

If the Borrower BorrowerPerson who is the obligor per the Note. is a non-profit entity, then you must ensure that each of the following complies with  Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals :

  • the Borrower BorrowerPerson who is the obligor per the Note. ;
  • Key Principals Key PrincipalsPerson 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. ;
  • Guarantors GuarantorsKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. ; and
  • Principals PrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… .

Guidance

If the Borrower BorrowerPerson who is the obligor per the Note. is a non-profit entity, you may reimburse the Borrower BorrowerPerson who is the obligor per the Note. from the Origination Fee Origination FeeFee you charge the Borrower for underwriting and originating the Mortgage Loan. for up to a combined total of $10,000 for the cost of any required MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. 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 third-party reports (e.g., Appraisal AppraisalWritten 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. , Environmental Site Assessment Environmental Site AssessmentInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. ).

Operating Procedures

Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will reimburse the cost of any third-party report within 2 months after the delivery of 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 .  To receive reimbursement, you must:

  • request an invoice from the vendor with the report cost listed as a separate line item from any ancillary charges (Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will not reimburse other costs such as fees for expediting a report);
  • within 1 month after the Mortgage Loan Origination Date Mortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. :
    • complete  Form 4829 , detailing the Lender’s Lender’sPerson Fannie Mae approved to sell or service Mortgage Loans. information, the commitment number or loan number, 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). information, wiring instructions, and listing the third-party cost as “Other” (note that any fields related to servicing may be left blank); and
    • manually sign or e-sign  Form 4829 , scan or save it as a PDF file, and email the signed PDF  Form 4829 and the third-party report invoice to: [email protected].
603.01B

Collateral; Tenant-Occupied and Affiliate-Owned Homes

Requirements

The collateral for an MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. 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 consists of

  • the MH Community's MH Community'sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. land and infrastructure,
  • the rents for the MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. , and
  • any other Borrower BorrowerPerson who is the obligor per the Note. -owned property used for the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. .

The percentage of tenant-occupied Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. must not exceed 35%.  If the percentage of tenant-occupied Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. is greater than 25%, then:

  • the Borrower’s Borrower’sPerson who is the obligor per the Note. business plan must reflect the conversion of tenant-occupied Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. to owner-occupied over time; and
  • ongoing business related to the sale, financing, or rental of a Manufactured Home Manufactured HomeFactory-built home complying with the Manufactured Home HUD Code. located on 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). must be performed by an Affiliate AffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key… .

If any Affiliate-Owned Manufactured Homes Affiliate-Owned Manufactured HomesManufactured Home or park model home located on an MH Site that is owned by an Affiliate of the Borrower. are leased to tenants by an Affiliate AffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key… of either the Borrower BorrowerPerson who is the obligor per the Note. or a Key Principal Key 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. , then:

  • The MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. lease must be at a market rate rent.
  • If the tenant’s rent payment includes both the rent for the Affiliate-Owned Manufactured Home Affiliate-Owned Manufactured HomeManufactured Home or park model home located on an MH Site that is owned by an Affiliate of the Borrower. and the rent for the MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. , then either:
    • the check must be payable to and deposited by the Borrower BorrowerPerson who is the obligor per the Note. , which must pay all required P&I P&IPrincipal and interest , and escrows before remitting the rent payment to the Affiliate AffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key… ; or
    • you must consider whether it is appropriate to require a lockbox arrangement with the Borrower BorrowerPerson who is the obligor per the Note. and the Affiliate AffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key…
      • into which all rent checks for the Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. and MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. must be deposited, and
      • from which you can control the disbursement of funds for P&I P&IPrincipal and interest , required escrows, and the Manufactured Home Manufactured HomeFactory-built home complying with the Manufactured Home HUD Code. rentals, with the remainder disbursed to the Borrower BorrowerPerson who is the obligor per the Note. .
603.01C

MH Community

Requirements

An eligible MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. must:

  • have a minimum of 50 MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. ;
  • consist of contiguous parcels or, if the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. is made up of Non-Contiguous Parcels Non-Contiguous ParcelsMultiple parcels of land securing a Mortgage Loan that do not share common boundaries or that are separated by dedicated or private streets that are major arterials. :
    • all parcels must be located within the same MSA MSAGeographic delineation for a metropolitan area determined by the U.S. Census Bureau. ; and
    • each separate parcel (individually), and all Non-Contiguous Parcels Non-Contiguous ParcelsMultiple parcels of land securing a Mortgage Loan that do not share common boundaries or that are separated by dedicated or private streets that are major arterials.  (together), must comply with the Guide GuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. ; and
  • achieve at least a Level 3 Quality Rating per the Manufactured Housing Community Quality Rating Standards table in  Part III, Chapter 6: Manufactured Housing Communities, Section 603.02: MH Community Score .

An MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. must be served by either

  • public underground utilities, or
  • private sewage treatment plants, septic systems, and private water wells which are:
    • common for the market;
    • owned by the Borrower BorrowerPerson who is the obligor per the Note. or an Affiliate AffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key… ; and
    • in compliance with all applicable government requirements.

Guidance

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 may be secured by either an Age-Restricted MH Community Age-Restricted MH CommunityMH Community that limits residents to those who are over a particular age (e.g., persons who are age 62 or older, or at least 80% of the Manufactured Homes occupied by at least 1 person who is age 55 or older). or an All-Age MH Community All-Age MH CommunityMH Community that accepts residents of any age. .

You should consider the following:

  • For an MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. that is more than 25 years old, does the Borrower BorrowerPerson who is the obligor per the Note. have a plan for placing new Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. in the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. as MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. with older Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. are vacated?
  • Are the landscaping and entrance signage high quality and well maintained?
  • For an MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. served by a private sewage treatment plant, septic system, or a private water well, then:
    • Address the availability and cost of obtaining a backup source for water if the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. has a private water well.
    • Ensure that the operator of the facility, including its employees and contractors, meet all applicable government requirements to perform ongoing operation and maintenance.
    • If the operator is an employee of the Borrower BorrowerPerson who is the obligor per the Note. , identify a local, qualified vendor that could be retained if substitute services are needed.
    • Exercise reasonable due diligence, including contacting municipal agencies, to confirm that
      • the MH Community’s MH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. connection to a municipal system has not been mandated, and
      • no mandate is expected to occur during the term of 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 .
    • If hookup is imminent, determine if an escrow for the cost is appropriate.
603.02

MH Community Score

Requirements

You must determine the MH Community Score MH Community ScoreScore of 3 through 5 based on characteristics of the MH Community per Part III, Chapter 6: Manufactured Housing Communities, Section 603.02: MH Community Score. using the MH Community Quality Rating Standards table.  The overall MH Community Quality Rating is based on the lowest rating for any 1 characteristic.  

The MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. must:

  • meet a Level 3 Quality Rating; or
  • achieve most of the minimum Quality Rating characteristics and either
    • the unsatisfactory characteristics are not materially detrimental to the performance, overall appearance, desirability, and quality of the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. , or
    • any failed characteristic must be remediated as a Completion/Repair Completion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. item.

Manufactured Housing Community Quality Rating Standards

Characteristic

Level 3 Quality Rating

Level 4 Quality Rating

Level 5 Quality Rating

 

Minimum Standard

Minimum Standard applies

(except as detailed)

Level 4 applies

(except as detailed)

Streets

Paved Roads.

Same as Level 3.

Rolled curbs (if warranted by layout/drainage needs).

Home Sites
  • Area under the Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. consists of concrete, crushed rock, or dirt.
  • Entry to the Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. is through a patio or porch.
  • Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. are supported by stacks of hollow concrete block or steel pier systems along the main beams (with ground anchors and steel straps holding the frame against movement) that meet local and state requirements.

Same as Level 3 with at least 60% of MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. having commercial grade porch/cabanas or patios.

Same as Level 3 with all MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. having commercial grade porch/cabanas or patios.

Site Size

Preference for 50% doublewide MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. , however you have delegated discretion on the percentage of doublewide sites as long as the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. is competitive with a clear market demand for singlewide MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. .

Same as Level 3.

Minimum 50% doublewide MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. .

Density

Density reflects the norm for 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). market.  Generally, maximum density is 12 MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. per acre, however you have delegated discretion to determine the typical density in your market.

Density reflects the norm for 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). market.  Generally, maximum density is 7 MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. per acre, or 10 MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. per acre if developed before 2000.

Same as Level 4.

Skirts/Hitches

100% of the Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. are professionally skirted, with hitches covered or removed.

You can meet this requirement through a Completion/Repair Schedule Completion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… .

Same as Level 3.

All of the Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. are professionally skirted, with hitches removed.

Parking

Minimum of 2 on- or off-street parking spaces per MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. that are properly maintained, paved, concrete, or gravel (if common in the market).  You have delegated discretion to determine compliance based on prevailing market conditions, subject to local ordinances.

Same as Level 3.

2 paved off-street parking spaces per MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. .

Amenities

Not required, but amenity package should be competitive based on market comparables.

Competitive amenity package required.

High quality amenity package competitive with other high-quality MH Communities MH CommunitiesResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. .
603.03

Code Standards

Requirements

You must:

  • determine if all Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. in the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. meet the requirements of the Manufactured Home HUD Code Manufactured Home HUD CodeNational Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code) (42 USC 5401 et seq) and the Manufactured Home Construction and Safety Standards (24 CFR Part 3280), as amended. ; and 
  • ensure the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require Borrower BorrowerPerson who is the obligor per the Note. certification that no additional Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. predating the Manufactured Home HUD Code Manufactured Home HUD CodeNational Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code) (42 USC 5401 et seq) and the Manufactured Home Construction and Safety Standards (24 CFR Part 3280), as amended. will be added to the MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. during 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 term.

Guidance

Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! may allow Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. predating the Manufactured Home HUD Code Manufactured Home HUD CodeNational Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code) (42 USC 5401 et seq) and the Manufactured Home Construction and Safety Standards (24 CFR Part 3280), as amended. if

  • they are Borrower BorrowerPerson who is the obligor per the Note. -owned Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. or Affiliate-Owned Homes Affiliate-Owned HomesManufactured Home or park model home located on an MH Site that is owned by an Affiliate of the Borrower.  that comply with local codes with no identified life safety issues, and
  • you document the number of Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. predating the Manufactured Home HUD Code Manufactured Home HUD CodeNational Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code) (42 USC 5401 et seq) and the Manufactured Home Construction and Safety Standards (24 CFR Part 3280), as amended. . 

Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! may allow rental units that do not comply with the Manufactured Home HUD Code Manufactured Home HUD CodeNational Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code) (42 USC 5401 et seq) and the Manufactured Home Construction and Safety Standards (24 CFR Part 3280), as amended. (e.g., certain park model recreational vehicles) if the rental income is included as commercial income in  Part III, Chapter 6: Manufactured Housing Communities, Section 606: Property Income and Underwritten NCF .

603.04

Flood Zone
603.04A

Rising Water

Requirements

For an MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. located in a flood zone with rising water (e.g., flood water that quickly dissipates and flood zone A or AE) you must ensure the Borrower BorrowerPerson who is the obligor per the Note.  notifies all Homeowners HomeownersFor an MH Community, a tenant of the Borrower who pays ground rent to the owner for use and occupancy of the MH Site and for use of the MH Community’s utilities and amenities. and all tenants of Borrower BorrowerPerson who is the obligor per the Note. -owned or Affiliate-Owned Homes Affiliate-Owned HomesManufactured Home or park model home located on an MH Site that is owned by an Affiliate of the Borrower. occupying an MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. located in the flood zone before the Mortgage Loan Origination Date Mortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. .

For Manufactured Homes located in a rising water flood zone...

If you

 
  • do not know the base flood elevation for the flood zone (e.g., flood zone A), or
  • know that the living floor levels are below the base flood elevation

Then:

 

  • you must calculate the Underwritten DSCR Underwritten 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, Chapter 2: Valuation and Income, Section 203: Income Analysis, as adjusted for the applicable products and… excluding the site rent for Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. with living floor levels within the flood zone; and
  • if the resulting Underwritten DSCR Underwritten 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, Chapter 2: Valuation and Income, Section 203: Income Analysis, as adjusted for the applicable products and… decreases to more than 10 basis points below the minimum Tier TierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 standard, you cannot underwrite the site rent for those Manufactured Homes Manufactured HomesFactory-built home complying with the Manufactured Home HUD Code. .
603.04B

Moving Water

Requirements

For an MH Community MH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. located in a flood zone with the potential for flooding due to moving water (e.g., typically in flood zone A and AE and located next to a stream, river, etc.), you must ensure:

  • your underwriting assumes that MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. located in the flood zone are considered non-income producing MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. ; and
  • the Borrower BorrowerPerson who is the obligor per the Note. notifies all Homeowners HomeownersFor an MH Community, a tenant of the Borrower who pays ground rent to the owner for use and occupancy of the MH Site and for use of the MH Community’s utilities and amenities. and all tenants of Borrower BorrowerPerson who is the obligor per the Note. -owned or Affiliate-Owned Homes Affiliate-Owned HomesManufactured Home or park model home located on an MH Site that is owned by an Affiliate of the Borrower. occupying an MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. located in the flood zone before the Mortgage Loan Origination Date Mortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. .
603.05

Lease Terms
603.05A

Master Leases

Requirements

You must ensure there are no master lease arrangements affecting any of the MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. .

603.05B

MH Site Leases

Requirements

MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Leases LeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. must

  • be in writing, and
  • not contain an option to purchase the MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. .

The Borrower BorrowerPerson who is the obligor per the Note. must agree to implement the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… for all MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. by the end of the first loan year.

Operating Procedures

The Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… may be incorporated

  • by amending each MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Lease LeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. ; or 
  • within the MH Community’s MH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. rules and regulations, if the MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Lease LeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. incorporates the rules and regulations by reference.

The Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. must include a:

  • covenant to implement the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… by the end of the first loan year;
  • requirement that, if the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… were implemented within the MH Community’s MH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. rules and regulations:
    • the rules and regulations are publicly posted; and 
    • each lessee of an MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Lease LeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. receives written notice of the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… ; and
  • Borrower BorrowerPerson who is the obligor per the Note. :
    • representation stating the percentage of MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Leases LeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. with the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… ;
    • covenant to continue the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… over the entire 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 term; and
    • requirement to annually submit to you a:
      • certified copy of the MH Community’s MH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. current Rules and Regulations;
      • certified copy of the notice sent to all MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Lease LeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. tenants if the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… were implemented by the Rules and Regulations;
      • certified copy of the current form of Residential Leases for MH Sites MH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. ;
      • copy of any requested MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Leases LeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. ; and
      • certification of the percentage of MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. Leases LeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. with the Tenant Site Lease Protections Tenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… .

Guidance

You may allow

  • month-to-month lease terms,
  • lease terms for up to 2 years, and
  • lease terms longer than 2 years, but only if the lease provides for:
    • an annual rent increase sufficient to cover the current and/or projected Consumer Price Index (CPI);
    • the pass-through of real estate taxes over a base year;
    • the pass-through of any utilities provided by the Borrower BorrowerPerson who is the obligor per the Note. ; and
    • cannot result in the Manufactured Home Manufactured HomeFactory-built home complying with the Manufactured Home HUD Code. on the MH Site MH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. being titled as real estate.
603.05C

Loan Document Modification

Requirements

You must modify the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  to reflect the use of short-term or long-term leases.