Section 408

Administration of Collateral Agreements

408.01

General Administrative Requirements
408.01A

Administration of Funds

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • administer and manage funds or collateral under all Collateral Agreements Collateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; and
  • ensure that any disbursements of funds, or other collateral releases or reductions, are:
    • approved only for valid reasons;
    • appropriately documented; and
    • consistent with the provisions of the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. and this Section.
408.01B

Funds to be Held in a Custodial Account

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deposit funds held under a Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. in a Custodial Account Custodial AccountAccount established by the Servicer for depositing P&I payments, T&I payments, and escrow, reserve, or other funds received from the Borrower per any Loan Document, including the: Collateral Agreement; Multifamily Loan Agreement; or Security Instrument. that meets the requirements of  Part V, Chapter 3: Custodial Accounts .

408.01C

Use of Funds

Funds must be used only for the purposes stated in the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and must not supplement a partial P&I P&IPrincipal and interest payment or cover any other Borrower BorrowerPerson who is the obligor per the Note. obligation unrelated to the primary purposes of the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .

408.01D

Funds as Additional Security for Mortgage Loan

All funds or other collateral held under a Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. constitute additional security for the Borrower’s Borrower’sPerson who is the obligor per the Note. obligations under the Note NoteInstrument evidencing a Mortgage Loan obligation, including  Form 6010 series,  any other Fannie Mae-approved note, and  all applicable addenda, schedules, and exhibits.  and the other Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  In the event of a default under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! reserves the right to apply (or direct the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to apply) the funds or other collateral held under any Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. in any manner allowed under the terms of such Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .  Following a default, unless instructed by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not:

  • release any funds or other collateral held under a Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
  • apply any funds or collateral to the repayment 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 ; or
  • reimburse itself from such funds or collateral for any expenses or losses incurred by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
408.01E

Servicer’s Fees and Costs

If the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. contemplates the payment of fees or costs by the Borrower BorrowerPerson who is the obligor per the Note. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain such fees or costs for its own account, adhering to any specific billing provisions of the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .  Any fees or costs retained by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be reasonable in relation to the nature and scope of the services provided by or on behalf of the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use any of the funds or other collateral held under the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. to cover such fees or costs.  However, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may deduct such fees or costs from any disbursement of funds to the Borrower BorrowerPerson who is the obligor per the Note. , provided such disbursements, fees, and costs are permitted under the Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , or if the Borrower BorrowerPerson who is the obligor per the Note. otherwise agrees in writing.

408.01F

Waiver or Modification of Terms of Collateral Agreement

Except as noted in this Chapter, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not waive or modify the terms of any Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .

408.02

Achievement Agreement or Other Agreement for Additional Collateral
408.02A

General

The provisions of this Section govern Achievement Agreements Achievement AgreementsAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. and all Collateral Agreements Collateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , other than:

  • Multifamily Loan Agreements Multifamily Loan AgreementsAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. , including the 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… and Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… ;
  • Security Instruments Security InstrumentsInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
  • Replacement Reserve Agreements Replacement Reserve AgreementsThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… ; and
  • Completion/Repair Agreements Completion/Repair AgreementsThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing:  the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. .

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain an effective system for monitoring the expiration date of any Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and ensure that all actions required to be taken pursuant to any such agreement have been timely performed and, if not timely performed, immediately notify Multifamily Asset Management Multifamily Asset ManagementTeam that can be contacted at [email protected]. .

408.02B

Releases or Reductions in Collateral

Any request for a release or reduction of collateral must be processed in accordance with this Section, unless these instructions conflict with the terms and conditions of the Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .

1.  General

If the Borrower BorrowerPerson who is the obligor per the Note. has not satisfied the requirements for a release or reduction of collateral contained in the Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not approve the Borrower BorrowerPerson who is the obligor per the Note. request, and may decline the Borrower BorrowerPerson who is the obligor per the Note. request without notice to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .  If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that the Borrower BorrowerPerson who is the obligor per the Note. has satisfied the requirements of the Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must recommend the release or reduction of collateral through the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , accompanied by the supporting documentation listed below.  Upon receipt and review of all pertinent information, Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will approve or deny the request and notify the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of its decision.

2.  Supporting Documentation and Analysis

The following documentation must be submitted through the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , and maintained in the Servicing File Servicing FileYour file for each Mortgage Loan serviced. , in connection with each request for a release or reduction of collateral

(a)   Income and Expense Statements; Current Rent Roll

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). income and expense statements and a current rent roll must be obtained from, and certified by, the Borrower BorrowerPerson who is the obligor per the Note. .  The statements must cover the applicable period required by the Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .  Based on the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Parts I - III, the certified income and expense statements, and the current rent roll, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must develop a Net Cash Flow Net Cash FlowAt underwriting or for any specified period, the amount calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. estimate to determine whether the release or reduction provisions of the applicable Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. are satisfied.  The income, vacancy, collection loss, and concession information should support the Effective Gross Income Effective Gross IncomeFor 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. that the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is relying on in assessing whether a release or reduction is warranted.

In deriving its estimate of Effective Gross Income Effective Gross IncomeFor 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. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust for:

  • income that was not allowed or recognized in the original underwriting;
  • the effect of a partial year’s performance when the shorter period reflects the short-term, positive impact from seasonal variations that do not reflect 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). year-round performance; and
  • non-monetary concessions, requiring the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to deduct the pro-rata value of the concession from the monthly rent for the applicable unit. 

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that all appropriate types of expenses, including underwritten Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, are included, and that any inappropriate expenses (e.g., capital improvement costs, repair costs covered by funds set aside for Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , partnership costs, etc.) are excluded.  To avoid unwarranted releases or reductions of collateral, the expense figures must reflect stabilized operating conditions, and must not be understated due to efficiencies or savings that could not be replicated by a different owner or manager, or that would not be recognized for underwriting purposes.

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform a line-by-line expense analysis, including a comparison of the original underwriting estimates with the actual expenses shown on the Borrower’s Borrower’sPerson who is the obligor per the Note. income and expense statements.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the greater of the underwritten or the actual expense figure shown for each item on the Borrower’s Borrower’sPerson who is the obligor per the Note. statement. 

(b)  Servicer’s Analysis

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide an analysis and recommendation regarding the release or reduction of collateral, including any calculations required under the terms of the applicable Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .

(c)  Correspondence

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide any correspondence with the Borrower BorrowerPerson who is the obligor per the Note. that pertains to the release or reduction request. 

3.  Property Inspection 

Before approving any request for a release or reduction of collateral, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform a physical inspection of 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). to verify that:

  • no deferred maintenance exists;
  • necessary capital improvements have been made; and
  • the general management and operations are acceptable and characteristic of a stabilized project.

The Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection must occur no more than 90 days prior to the date of the submission to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! of the release or reduction request.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the results of its inspection by completing the MBA MBAMortgage Bankers Association Standard Inspection Form.

408.02C

Draws on Letters of Credit or Application of Other Collateral

1.  Draws Triggered by Adverse Events

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Multifamily Asset Management Multifamily Asset ManagementTeam that can be contacted at [email protected].  when any of the following events occur, which could result in a draw on a Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. issued for an Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. :

  • a default under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including the Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
  • the failure to renew or replace an expiring Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. at least 30 days prior to its expiration date, or other deadline specified in the Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; or
  • the failure to replace a Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. by the replacement deadline when the Issuer IssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. is no longer acceptably rated.

The Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. notice to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! must include a recommended course of action, and be accompanied by a copy of the executed Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .

2.  Draw Resulting from Noncompliance with Issuer Rating Requirements or Expiration of Letter of Credit

If a draw on the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. occurs due to noncompliance with the rating requirements for the Issuer IssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. or because of an imminent expiration of the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will hold the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds in its designated account until the earliest of the following:

  • the Borrower BorrowerPerson who is the obligor per the Note. presents a replacement Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. and Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! agrees, in its sole discretion, to accept the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. ;
    (NOTE: Any agreement by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! to accept a replacement Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. will be conditioned upon the Borrower’s Borrower’sPerson who is the obligor per the Note. payment of all administrative and legal costs incurred by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! in connection with the replacement of the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .)
  • the release or reduction provisions of the applicable Achievement Agreement Achievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral Agreement Collateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. are satisfied; or
  • the Borrower BorrowerPerson who is the obligor per the Note. pays all amounts due and payable under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any required Prepayment Premium Prepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , and Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! releases the Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security Instrument Security InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. . 

3.  Draws Occasioned by Borrower Request

If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives a request from the Borrower BorrowerPerson who is the obligor per the Note. to draw on the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. and have the proceeds applied as a partial prepayment against the UPB UPBUnpaid Principal Balance , and the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. allow partial prepayments, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately forward the request, along with an analysis and recommendation, including an estimate of the applicable Prepayment Premium Prepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .  If the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not allow partial prepayments, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deny the Borrower BorrowerPerson who is the obligor per the Note. request.

Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will assess the Borrower BorrowerPerson who is the obligor per the Note. request and determine if the proposed use of the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds or other collateral would be in the best interest of Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! and/or the Investor InvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. in any Securitized Mortgage Loan Securitized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. .  Any decision to apply Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds or apply other collateral to a partial prepayment will be made by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! in its sole discretion.  Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will notify the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of its determination and will provide appropriate follow-up instructions.

4.  No Interest on Proceeds Held by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!!

Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will not pay interest on the cash proceeds it holds resulting from a draw on a Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .

408.02D

Releasing Additional Escrows for Principal and Interest, Taxes and Insurance, and Replacement Reserves

Notwithstanding anything contained in this Chapter, if no Event of Default has occurred and is continuing under any of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (including Forbearance), the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive any Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirement prohibiting the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. from immediately approving a partial or final disbursement request of Additional Escrows for P&I P&IPrincipal and interest , T&I T&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , and Replacement Reserves Replacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. required by:

  • Form 6268  – Modifications to Multifamily Loan and Security Agreement (Additional Reserve Escrows);
  • Form 6640  – Amendment to Multifamily Loan and Security Agreement (Additional P&I Escrow Agreement); or
  • Form 6641  – Additional P&I Escrow Agreement (4000 series Loan Documents).

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to: 

  • determine whether the waiver requires a Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment; and
  • document any amendment in any form the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines to be legally enforceable.

Servicers ServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document all disbursement requests, including any supporting documentation and analysis, in the Servicing File Servicing FileYour file for each Mortgage Loan serviced. .

408.03

Completion/Repairs
408.03A

General

The Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are:

  • for Mortgage Loans Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 documented with the 6000 series Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. , plus the:
    • 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… ;
    • Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Modifications to Multifamily Loan and Security Agreement (Rehabilitation Reserve - Moderate Rehabilitation/Substantial Rehabilitation); or
    • another approved Modifications to Multifamily Loan and Security Agreement; and
  • For Mortgage Loans Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 documented with the 4000 series Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the Completion/Repair Agreement Completion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing:  the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. .

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must administer the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  to ensure the timely implementation of all Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .  Once the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are completed and comply with the Guide GuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enter the final completion dates and close out the work items for 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 in the 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. module in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .  Additional information may be required for any 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 assigned to Loss Mitigation.  If 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 does not have work items in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , no further action in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. is required. 

408.03B

Extensions for Completion/Repairs

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to extend the time limits for making Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. if:

  • the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. subject to the extension request do not involve life safety issues; and
  • 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 does not have a Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! risk rating of Substandard or Doubtful.

Notwithstanding the above, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to grant a one-time extension of 30 days for a life safety issue if the Borrower BorrowerPerson who is the obligor per the Note. is diligently pursuing completion of the related 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. .

The duration of any permitted non-life safety extension may not exceed:

  • 1 year past the original completion date specified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  for that 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. , for a 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 without loss sharing; and
  • 2 years past the original completion date specified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  for that 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. , for any 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 with loss sharing.

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Non-Monetary Default Borrower Request in the MAMP MAMPMultifamily 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 required Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are not completed with this timeframe.

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to grant a one-time extension of up to 90 days past the original completion date for any Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. which the Borrower BorrowerPerson who is the obligor per the Note. agreed to implement to qualify as a Green Rewards Mortgage Loan Green Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. .  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated the authority to extend the time limit beyond 90 days.

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:

  • determine whether the extension requires an amendment to the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
  • document a required amendment in any form the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines to be legally enforceable. 
408.03C

Completion/Repair Loan Document Amendments

Servicers ServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are delegated the authority to move required Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. from the 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… to the Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… , or from the Completion/Repair Agreement Completion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing:  the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. to the Replacement Reserve Agreement Replacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… , and the associated deposit from the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. into the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , provided:

  • the 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. does not involve life safety issues;
  • delaying the 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. will not materially negatively impact 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). ; and
  • the total amount of Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. being transferred does not exceed the lesser of (i) 25% of the original Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , or (ii) $75,000.

Notwithstanding the above, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated the authority to move required Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. to the Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…  for any Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that the Borrower BorrowerPerson who is the obligor per the Note. agreed to implement in order to qualify as a Green Rewards Mortgage Loan Green Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. .

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • send the executed Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment to Multifamily Certification and Custody Multifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at  [email protected], (800) 940-4646, or for submissions:  Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA  20166. within 15 Business Days Business DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ;
  • submit a copy of the Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment through the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any 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 with 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. work item in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ; and
  • retain a copy in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. .
408.03D

Servicer’s Administrative Requirements

For all Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • retain a copy of the executed Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and 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… or Completion/Repair Agreement Completion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing:  the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. ;
  • hold all Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds in an account that meets the Custodial Account Custodial AccountAccount established by the Servicer for depositing P&I payments, T&I payments, and escrow, reserve, or other funds received from the Borrower per any Loan Document, including the: Collateral Agreement; Multifamily Loan Agreement; or Security Instrument. requirements of  Part V, Chapter 3: Custodial Accounts ;
  • ensure that all necessary permits are obtained, and that all required work is satisfactorily completed in a good and workmanlike manner by the completion dates stipulated in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • for a Green Rewards Mortgage Loan Green Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , ensure all Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. are completed in a timely manner and no later than:
  • process Borrower BorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • perform required inspections of completed work and, if appropriate, work in progress and, if necessary, arrange inspections by qualified professionals;
  • ensure that the 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. work does not result in any mechanics’ Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
  • promptly submit a Non-Monetary Default Borrower Request in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any 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. Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
  • take appropriate steps to remedy or address any default under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
  • perform all other administrative duties required by the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
408.03E

Processing Borrower Requisitions

1.  General

Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are available to reimburse the Borrower BorrowerPerson who is the obligor per the Note. for costs incurred for Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are specifically identified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may authorize the release of funds to cover the costs of other reasonable and necessary repairs, replacements, or improvements that are not specified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  only if the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit the disbursements, and all conditions are fully satisfied. 

2.  Required Documentation for Disbursement

To obtain reimbursement, the Borrower BorrowerPerson who is the obligor per the Note. must submit a written requisition specifying the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought, including:

  • the specific Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. completed;
  • the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased in connection with the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
  • the cost of all contracted labor or other services involved in completing the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .

The Borrower BorrowerPerson who is the obligor per the Note. requisition for the specified Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought must be accompanied by:

  • a Borrower BorrowerPerson who is the obligor per the Note. certification that the specific Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. have been completed:
    • in a good and workmanlike manner;
    • in accordance with any plans and specifications previously approved by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
    • in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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). ; and
  • if the invoice exceeds the lesser of $25,000 or 1% of the UPB UPBUnpaid Principal Balance : 
    • a copy of the invoice detailing the covered materials, labor, or services;
    • payment evidence; and
    • a Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman. 

3.  Disbursement of Funds (Excluding Final Disbursement)

 The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may disburse funds to the Borrower BorrowerPerson who is the obligor per the Note. only if it has received all required documentation and determined that all applicable conditions for disbursement have been met, including (but not limited to) the following:

  • all Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been completed in a good and workmanlike manner, as evidenced by the Borrower’s Borrower’sPerson who is the obligor per the Note. submission and, if appropriate, an inspection of the completed work (see guidance on inspections below);
  • all related invoices for items and services covered by the requisition have been paid, unless the Borrower BorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  for issuance of a joint check(s), made payable to the Borrower BorrowerPerson who is the obligor per the Note. and the Person PersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds under such invoices;
  • no mechanics’ Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist, unless acceptably bonded over; 
  • no default exists under any Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • for each Green Rewards Green RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. disbursement, the Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. was reported as:
  • for a Green Rewards Mortgage Loan Green Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. with a Solar PV System Solar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored… as an Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. , Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are only released after confirming commercial operation of the Solar PV System Solar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored… .

The amount disbursed to the Borrower BorrowerPerson who is the obligor per the Note. for any requisition, other than the final requisition, may not exceed the actual cost of the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and may be less than the actual cost if, after disbursement, the amount of funds remaining in the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. would be less than the anticipated cost of completing all remaining Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. plus any holdback specified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

Notwithstanding the above, once 75% of the total dollar amount of Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. is disbursed, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds in the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , provided:

  • funds are only released for Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that have been fully completed;
  • the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has complied with all other disbursement requirements;
  • the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. completes an analysis showing that the remaining amount in the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. is sufficient to complete all remaining Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ;
  • the Borrower BorrowerPerson who is the obligor per the Note. affirms in writing its obligation to complete the remaining Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. by the required completion dates; and
  • the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents.  is not for a Green Rewards Green RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that must be released per  Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification . 

For Green Rewards Green RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. included in a Moderate Rehabilitation Moderate RehabilitationProperty that will undergo at least $8,000 per unit of Rehabilitation Work. 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 , funds may be periodically disbursed from the applicable Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. or Rehabilitation Reserve Escrow as with a non-Green Rewards Mortgage Loan Green Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , rather than only after a compliant verification inspection of Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .

4.  Final Disbursement of Funds

Before making the final disbursement of funds from the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm and document the absence of any mechanics’ and materialmen’s Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. by requiring the Borrower BorrowerPerson who is the obligor per the Note. to obtain an updated title report or a title policy endorsement showing that no such Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may waive the updated title report or endorsement when the total scope of work is less than $75,000.  If the Borrower BorrowerPerson who is the obligor per the Note. fails to provide the required title documentation, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain a title report or title policy endorsement, and may charge the Borrower BorrowerPerson who is the obligor per the Note. for the cost.

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may make a final disbursement of all remaining funds upon satisfactory completion of all required Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and satisfaction of all other applicable release conditions contained in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .

5.  Maintenance of Servicing File

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the action taken with respect to each Borrower BorrowerPerson who is the obligor per the Note. requisition for funds from the Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. .

408.03F

Inspections

1.  Use of Third Party

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may inspect 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). , or have a qualified independent third party inspect 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). , to confirm that the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been satisfactorily completed.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for monitoring the third-party’s performance. 

2.  When Periodic Inspections Are Required

Periodic inspections must be performed as the work progresses if the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. :

  • exceed in the aggregate the lesser of:
    • $500,000, or 20% of the UPB UPBUnpaid Principal Balance for any 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 with loss sharing; or
    • $250,000, or 10% of the UPB UPBUnpaid Principal Balance for any 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 without loss sharing; and
  • are likely to require more than 6 months to complete.

Inspections must occur at least every 6 months, or more frequently at the Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. discretion.

3.  When a Final Inspection Is Required

An inspection must be performed to ensure that all Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. have been satisfactorily completed before approving and disbursing the final requisition when the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. exceed the lesser of:

  • $500,000, or 20% of the UPB UPBUnpaid Principal Balance for any 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 with loss sharing; or
  • $250,000, or 10% of the UPB UPBUnpaid Principal Balance for any 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 without loss sharing.

4.  Confirming Completion/Repairs if Inspection Is Not Required

Even if an inspection is not required by this Section, the Borrower BorrowerPerson who is the obligor per the Note. must provide evidence to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. that all Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been satisfactorily completed.  If not inspected sooner, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm the satisfactory completion of the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. during the next regularly scheduled 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). inspection.

5.  Documenting the Servicing File

In all instances, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. whether all work was satisfactorily completed.

408.03G

Fees

Completion/Repair Escrow Completion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds may not be used to cover any administrative or inspection fees due to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless expressly permitted Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the Borrower BorrowerPerson who is the obligor per the Note. agrees in writing.  If permitted, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the Borrower BorrowerPerson who is the obligor per the Note. and deduct the following from any disbursement of funds:

  • reasonable fees to cover the Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. costs of administering the Completion/Repairs Completion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
  • additional fees to cover any reasonable inspection costs that are not adequately covered by general administrative fees collected from the Borrower BorrowerPerson who is the obligor per the Note. .
408.03H

Completion/Repair Defaults

1.  Notification of Default to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!!

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any 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. Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.

2.  No Release of Funds to Borrower

No funds may be released to the Borrower BorrowerPerson who is the obligor per the Note. while the Borrower BorrowerPerson who is the obligor per the Note. is in default under any of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

408.03I

Green Rewards Efficiency Measure Verification

For all Green Rewards Mortgage Loans Green Rewards Mortgage LoansMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure a Green Rewards Verification Green Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection is performed for all Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. to confirm correct installation, and identify any errors that may hinder 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). achieving the expected savings and benefits.

1.  Green Rewards Verification Inspection

For a Green Rewards Verification Green Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection, the inspector must use the Green Rewards Verification Inspection Form ( Form 4221 ) that is pre-populated with 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 and the Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. identified as Green Rewards Repairs in the 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… .  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit  Form 4221  within 60 days after the Green Rewards Verification Green Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection date, and timely resolve any issues identified by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .

2.  Minimum Inspector Qualifications

Third-party or Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. staff must attend Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! 's Green Rewards Verification Green Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection training on the requirements, processes, and documentation before conducting Green Rewards Verification Green Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspections.

The minimum inspector qualifications correspond to the applicable Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. type, and may be held by the inspection project team, rather than by an individual inspector.  

Efficiency Measures Description Minimum Inspector Qualification
Basic

Simple upgrades such as:

 

  • low-flow water fixtures; or
  • lighting improvements.
 Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure the inspector is either a qualified third-party or Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. staff per  Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol and  Part V, Chapter 5: Surveillance, Section 502.05A: Qualifications . 
Complex

Upgrades and changes to building systems, such as:

 

  • heat recovery ventilation systems; or
  • boiler controls.
  • For Solar PV System Solar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored… Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain a
  • For other Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain a qualified PCA High Performance Building Consultant per  Form 4099 .

3.  Unit Inspection

The inspector must inspect a minimum number of occupied and vacant units as follows:

Total number of units Minimum number of units to be inspected
Less than 20 3 units
20 - 55 5 units
56 - 99 10% of total units
100 - 200 10 units
201 - 600 5% of total units
More than 600 30 units

Form 4221  calculates the required number of units and tracks the number of completed units based on the user's inputs.  When unit inspections are required, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • Determine the appropriate combination of vacant and occupied units for inspection.
  • Determine which vacant and occupied units to inspect.
  • Submit at least:
    • 1 representative photograph of each Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. listed on  Form 4221 ; and
    • 1 photograph of each non-compliant Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .

For Partial Efficiency Measures Partial Efficiency MeasuresEfficiency Measures installed in a subset of units (e.g., if new ENERGY STAR® refrigerators are only required in 40 of the Property's 100 units). , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request a rent roll or other documentation identifying the units that received Partial Efficiency Measure Partial Efficiency MeasureEfficiency Measures installed in a subset of units (e.g., if new ENERGY STAR® refrigerators are only required in 40 of the Property's 100 units). installations, and conduct the Green Rewards Verification Green Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. of those units.

4.  Determining Compliance

An Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. is compliant when the inspector:

  • inspects each Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. ;
  • verifies its proper installation within specifications using product information and field observation;
  • confirms the Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. installation meets the Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and 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… requirements; and
  • documents it on  Form 4221 .

5.  Remediating Noncompliance

When an Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. is noncompliant:

  • The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
    • provide a notice of the Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. deficiencies to the Borrower BorrowerPerson who is the obligor per the Note. and determine a course of action;
    • submit a remediation action plan through the DUS Property Monitor system that:
      • addresses 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). Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. deficiencies; and
      • provides a target date for remediation completion that is no more than 60 days after the Borrower BorrowerPerson who is the obligor per the Note. receives the notice of deficiencies.
  • The Borrower BorrowerPerson who is the obligor per the Note. must correct or complete the Efficiency Measure Efficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. installation during the remediation period.
  • Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! may require the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to inspect the remediated Efficiency Measures Efficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. based on the severity of noncompliance.

6.  Verification Inspection Form Review

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must internally review all Green Rewards Verification Inspection Forms ( Form 4221 ), whether prepared by a third party or by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. before submission.

408.04

Replacement Reserve
408.04A

General

The Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Replacement Reserves Replacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. are:

  • Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… , for Mortgage Loans Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 documented with the 6000 series Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
  • Replacement Reserve Agreement Replacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… , for Mortgage Loans Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 documented with the 4000 series Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

The Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must be held by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in a Custodial Account Custodial AccountAccount established by the Servicer for depositing P&I payments, T&I payments, and escrow, reserve, or other funds received from the Borrower per any Loan Document, including the: Collateral Agreement; Multifamily Loan Agreement; or Security Instrument. , and are intended to pay for necessary replacements of capital items or major maintenance work to 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). over 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 .

408.04B

Replacement Reserve Loan Document Amendments

If the Servicer's Servicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Limited Power of Attorney Limited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. delegates the authority to amend the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to revise the terms governing the Replacement Reserves Replacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , only the changes expressly permitted by this Section can be made, and the delegation does not expand the Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ability to change or modify any other term of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan Document Amendment to Multifamily Certification and Custody Multifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at  [email protected], (800) 940-4646, or for submissions:  Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA  20166. within 15 Business Days Business DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. .

408.04C

Servicer’s Administrative Requirements

For all Replacement Reserves Replacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • retain a copy of the executed Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve Agreement Replacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. ;
  • unless the Borrower BorrowerPerson who is the obligor per the Note. has requested in writing a non-interest bearing account, hold all funds in an interest-bearing Custodial Account Custodial AccountAccount established by the Servicer for depositing P&I payments, T&I payments, and escrow, reserve, or other funds received from the Borrower per any Loan Document, including the: Collateral Agreement; Multifamily Loan Agreement; or Security Instrument. that meets the requirements of  Part V, Chapter 3: Custodial Accounts and the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • ensure that all required deposits are made to the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • process Borrower BorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • perform required inspections of completed work and, if appropriate, work in progress, and arrange, if necessary, for inspections by qualified professionals;
  • ensure that work funded from the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. does not result in any mechanics’ Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
  • promptly submit a Non-Monetary Default Borrower Request in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
  • take appropriate steps to remedy or address any default under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Replacements ReplacementsCapital item replacements and major maintenance needs identified by the Property Condition Assessment or otherwise required. , Repairs, or Restoration; and
  • reassess the adequacy of the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. or the schedule of required deposits; and
  • perform all other administrative duties required by the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
408.04D

Modifications to Replacement Reserve Deposits

Based on the results of a 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). inspection or a new Property Condition Assessment Property Condition AssessmentAssessment of the Property's physical condition and historical operation. as required below, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may determine that the current level of Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding and scheduled deposits will be insufficient to meet all projected capital item or major maintenance needs.  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then:

  • adjust the Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or the Replacement Reserve Agreement Replacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… and the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding to a sufficient level, if warranted, in accordance with the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and Part III, by requiring the Borrower BorrowerPerson who is the obligor per the Note. to:
    • deposit a lump sum into the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and/or
    • increase the monthly Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposit; and
  • give the Borrower BorrowerPerson who is the obligor per the Note. at least 30 days advance written notice prior to implementing any of the foregoing changes.

Based on the results of the new Property Condition Assessment Property Condition AssessmentAssessment of the Property's physical condition and historical operation. obtained during the underwriting and delivery of a Supplemental Mortgage Loan Supplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may:

  • adjust the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding, scheduled deposits, and 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… of all Pre-Existing Mortgage Loans Pre-Existing Mortgage LoansMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. to match the Supplemental Mortgage Loan Supplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. underwriting; and
  • amend the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. accordingly.
408.04E

New Property Condition Assessments

1.  Timing and Waivers

A new full PCA PCAAssessment of the Property's physical condition and historical operation. per  Form 4099 is required for:

  • all MAH MAHProperty that: complies with Part III, Chapter 7: Multifamily Affordable Housing Properties, Section 702: MAH Property Eligibility; and is underwritten per Part III, Chapter 7: Multifamily Affordable Housing Properties. Properties PropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). every 5 years; or
  • for any other 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 with a term greater than 10 years, during the 10th Loan Year Loan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. , and every 10 years thereafter, while 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 remains outstanding, or per the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

Notwithstanding the above, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive the new PCA PCAAssessment of the Property's physical condition and historical operation. for non-MAH MAHProperty that: complies with Part III, Chapter 7: Multifamily Affordable Housing Properties, Section 702: MAH Property Eligibility; and is underwritten per Part III, Chapter 7: Multifamily Affordable Housing Properties. Properties PropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). as follows:

Remaining Loan Term Servicer Delegation
Less than 1 Year

The new PCA PCAAssessment of the Property's physical condition and historical operation. may be waived for a 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 with a:

 

  • Pass rating;
  • 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). inspection less than 1 year old; and
  • most recent Property Condition Rating Property Condition RatingAn assessment of the Property’s overall condition per the MBA Standard Inspection Form, expressed on a scale from 1 (the best Property Condition Rating) to 5 (lowest Property Condition Rating). of 1, 2, or 3.
1 Year to 5 Years

The new PCA PCAAssessment of the Property's physical condition and historical operation. may be waived for a 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 with a:

 

  • Pass rating;
  • 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). inspection report less than 1 year old; and
  • most recent Property Condition Rating Property Condition RatingAn assessment of the Property’s overall condition per the MBA Standard Inspection Form, expressed on a scale from 1 (the best Property Condition Rating) to 5 (lowest Property Condition Rating). of 1 or 2.
More than 5 Years

The new PCA PCAAssessment of the Property's physical condition and historical operation. may be waived for 5 years for a 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 with a:

 

  • Pass rating;
  • 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). Inspection report less than 1 year old; and
  • most recent Property Condition Rating Property Condition RatingAn assessment of the Property’s overall condition per the MBA Standard Inspection Form, expressed on a scale from 1 (the best Property Condition Rating) to 5 (lowest Property Condition Rating). of 1 or 2.

After 5 years, a new PCA PCAAssessment of the Property's physical condition and historical operation. is required unless 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 continues to qualify for Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. waiver delegation.  A 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). may only receive a PCA PCAAssessment of the Property's physical condition and historical operation. waiver twice (i.e., a 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 with a 30-year term may obtain a PCA PCAAssessment of the Property's physical condition and historical operation. waiver after the 10th loan year and the 15th loan year, but a new PCA PCAAssessment of the Property's physical condition and historical operation. is required after the 20th loan year).

All PCA PCAAssessment of the Property's physical condition and historical operation. waivers must be documented in the Servicing File Servicing FileYour file for each Mortgage Loan serviced. , and any PCA PCAAssessment of the Property's physical condition and historical operation. waiver may be rescinded by Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! or the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at any time 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). condition warrants a new PCA PCAAssessment of the Property's physical condition and historical operation. .

2.  Delivery and Payment of Property Condition Assessment

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any new PCA PCAAssessment of the Property's physical condition and historical operation. to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! through the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. and retain a copy in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. .  Subject to the terms of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the cost of the PCA PCAAssessment of the Property's physical condition and historical operation.  may be paid from funds in the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .

408.04F

When Replacement Reserve Funding Was Partially or Fully Waived

If Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding was partially or fully waived at the Mortgage Loan Origination Date Mortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the condition of 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). to ensure the Borrower BorrowerPerson who is the obligor per the Note. preserves and maintains 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). as required by the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! determines that the Borrower BorrowerPerson who is the obligor per the Note. is not properly preserving and maintaining 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). , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the Borrower BorrowerPerson who is the obligor per the Note. to begin making monthly deposits to the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with either the funding schedule set forth in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or an alternative funding schedule determined by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .

408.04G

Interest on Replacement Reserve Funds

If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. holds the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds in an interest-bearing Custodial Account Custodial AccountAccount established by the Servicer for depositing P&I payments, T&I payments, and escrow, reserve, or other funds received from the Borrower per any Loan Document, including the: Collateral Agreement; Multifamily Loan Agreement; or Security Instrument. , none of the interest earned on the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds may be retained by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .  Unless 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 is in default, all interest must be:

  • added to the balance of the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; or
  • paid to the Borrower BorrowerPerson who is the obligor per the Note. if applicable law requires or the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. agrees.
408.04H

Items Eligible for Funding from the Replacement Reserve

Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are available to reimburse the Borrower BorrowerPerson who is the obligor per the Note. for costs incurred to replace capital items or maintain major items specifically identified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds also may be used for discretionary replacements of capital items or major maintenance items that are not specifically identified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , but which the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines are intended to be covered by a Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… , such as those that would:

  • correct or forestall a problem that may adversely affect the physical condition, livability, marketability, or value of 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). ;
  • directly contribute to the maintenance or enhancement of 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). physical condition, livability, marketability, or value; or
  • likely be noted in an updated Property Condition Assessment Property Condition AssessmentAssessment of the Property's physical condition and historical operation. .

If Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are used for purposes not originally contemplated in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor and adjust the monthly reserve deposits to ensure sufficient funds are available to make timely replacements of capital items or major maintenance items in the manner contemplated in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and/or the PCA PCAAssessment of the Property's physical condition and historical operation. .

408.04I

Items Not Eligible for Funding from the Replacement Reserve

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to reimburse the Borrower BorrowerPerson who is the obligor per the Note. for any item specifically identified for reimbursement 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. , or for any routine maintenance item, routine repair, or cosmetic repair that would normally be characterized as an operating expense.  Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must never be used for P&I P&IPrincipal and interest , T&I T&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , or any other purpose not specifically permitted by the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the Guide GuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .

408.04J

Processing Borrower Requisitions

1.  General

The Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specify the frequency, timing, and size of disbursements from the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .

2.  Required Documentation

Each Borrower BorrowerPerson who is the obligor per the Note. requisition must be in writing and specify, at a minimum:

  • the specific capital item replaced or major maintenance items for which reimbursement is being sought, and if any item is not specifically identified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , an explanation of why the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds should be released for the item;
  • the quantity and price of each type of capital item replaced (e.g., refrigerators);
  • the quantity and price of all materials or parts (grouped by type or category) purchased; and
  • the cost of all contracted labor or other services.

Each Borrower BorrowerPerson who is the obligor per the Note. requisition submitted to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be accompanied by:

  • a Borrower BorrowerPerson who is the obligor per the Note. certification that the capital item replacements or major maintenance items covered by the requisition have been completed in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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). ; and
  • if the invoice exceeds the lesser of $25,000 or 1% of the UPB UPBUnpaid Principal Balance :
    • a copy of the invoice detailing the covered materials, labor, or services;
    • payment evidence; 
    • a Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
    • other relevant documentation required by the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

3.  Disbursement of Funds

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds to the Borrower BorrowerPerson who is the obligor per the Note. only if all required documentation is received, and all applicable release conditions have been met, including, but not limited to:

  • all capital item replacements or major maintenance items covered by the requisition have been completed in a good and workmanlike manner;
  • all related invoices for capital items and services have been paid, unless the Borrower BorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  for issuance of a joint check, made payable to the Borrower BorrowerPerson who is the obligor per the Note. and the Person PersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds;
  • no mechanics’ Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other Liens LiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
  • the Borrower BorrowerPerson who is the obligor per the Note. is not in default under any Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

The amount disbursed to the Borrower BorrowerPerson who is the obligor per the Note. must not exceed the actual cost of the capital item replacements or major maintenance items covered by the Borrower’s Borrower’sPerson who is the obligor per the Note. requisition.

4.  Maintenance of Servicing File

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the action taken with respect to each Borrower BorrowerPerson who is the obligor per the Note. requisition for funds from the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. is appropriately documented in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. .

408.04K

Inspections

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may use its discretion in deciding whether to conduct an on-site inspection before approving any specific requisition for Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds.  If the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to perform an on-site inspection when a requisition is submitted, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect all capital item replacements or maintenance items covered by the requisition during its next scheduled 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). inspection and confirm the satisfactory completion.

408.04L

Fees

If the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain:

  • a reasonable fee to cover the Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. routine costs of administering the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and
  • additional fees to cover:
    • reasonable inspection costs, including the fees of any qualified professional used by the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
    • any other reasonable costs incurred in connection with collecting, holding, investing, or disbursing Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds but which are not adequately covered by the general administrative fees collected from the Borrower BorrowerPerson who is the obligor per the Note. .

Subject to the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the Borrower BorrowerPerson who is the obligor per the Note. a reasonable fee for any special inspection services provided in connection with a Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. requisition; however, no fee may be charged if such inspection is made as part of a regularly scheduled 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). inspection.

Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds, including any interest, may not be used to cover fees due to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless:

  • the Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specifically permits the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to use Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to pay Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection fees; or
  • the Borrower BorrowerPerson who is the obligor per the Note. otherwise agrees in writing.
408.04M

Replacement Reserve Defaults

1.  Notification of Default to Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!!

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.

2.  No Release of Funds to Borrower

No funds may be released to the Borrower BorrowerPerson who is the obligor per the Note. while 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 is in default.

408.04N

Return of Replacement Reserve Funds to Borrower

No later than 30 days after 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 is paid in full, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refund to the Borrower BorrowerPerson who is the obligor per the Note. all remaining Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds.

408.04O

Alternative Funding of Replacement Reserves for Portfolio Mortgage Loans

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may amend existing the Schedule 5 to Multifamily Loan Agreement Multifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. - Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve Agreement Replacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…  on Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! ’s behalf to match the alternative Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding available for newly originated Mortgage Loans Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 if the Borrower BorrowerPerson who is the obligor per the Note. has a history of adequate property maintenance, and no other concerns are present (e.g., declining 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). condition, declining rents, declining Net Cash Flow Net Cash FlowAt underwriting or for any specified period, the amount calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. ).  The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment revising the Replacement Reserve Schedule Replacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve Agreement Replacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… to Multifamily Certification and Custody Multifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at  [email protected], (800) 940-4646, or for submissions:  Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA  20166. within 15 Business Days Business DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing File Servicing FileYour file for each Mortgage Loan serviced. .

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure 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). is properly maintained on an ongoing basis.  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). is not being properly maintained, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must reinstate monthly deposits to the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. and the reimbursement requisition process.