Section 106

Ground Leased Properties

106.01

Generally

Requirements

If 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). has a Ground Lease Ground LeaseContract for the rental of land, usually on a long term basis. , 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 collateral must include a Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on the Leasehold LeaseholdProperty held under a long-term lease or Ground Lease. estate.

You must ensure that the Ground Lease Ground LeaseContract for the rental of land, usually on a long term basis.  complies with the Ground Lease Review Checklist ( Form 6479 ), unless

  • the ground lessor joins with the Borrower BorrowerPerson who is the obligor per the Note. in executing the Security Instrument Security InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. and grants a Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on the ground lessor's fee estate, or
  • the absence of the Leasehold LeaseholdProperty held under a long-term lease or Ground Lease. estate would not have a material adverse effect on 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). operation or value.
106.02

Ground Lease Rents

Requirements

You must:

  • establish an escrow for ground rents;
  • ensure the Borrower BorrowerPerson who is the obligor per the Note. deposits sufficient funds; and
  • make all payments due per the Ground Lease Ground LeaseContract for the rental of land, usually on a long term basis. .
106.03

Ground Lease Estoppel Certificate

Requirements

You must obtain an executed Ground Lessor Estoppel Certificate ( Form 6495 ). 

106.04

Ground Lease Review

Requirements

You must:

  • review and analyze the Ground Lease Ground LeaseContract for the rental of land, usually on a long term basis. to ensure compliance with the requirements of this Section; and
  • retain the completed  Form 6479 in your Servicing File Servicing FileYour file for each Mortgage Loan serviced. .