501.02D

Business Income (including Rental Value) Insurance

Requirements

You must ensure:

  • each PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). has business income insurance (including rental value insurance), for all required coverages, including
    • ordinance or law (Coverage D),
    • windstorm,
    • flood,
    • earthquake, and
    • terrorism, etc.;
  • coverage is based on:
    • Actual Loss Sustained for 12 months; or
    • the most recent annual reported (or annualized if annual financial are unavailable):
      • EGIEGIFor any specified period, the Property's total Net Rental Income, plus commercial income, plus other income, all calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. ; or
      • NOINOIAt underwriting or for any specified period, the Property's total Effective Gross Income minus operating expenses. plus continuing expenses;
  • the maximum deductible for business income insurance does not exceed:
    • the maximum deductible for the property insurance policy, or
    • a waiting period of
      • 3 days, or
      • 72 hours; and
  • coverage for a 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. with a UPBUPBUnpaid Principal Balance of $35 million or more includes a 90-day Extended Period of Indemnity option.