408.04
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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 .
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. .
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. .
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.
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:
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| 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:
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| 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:
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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. .
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. .
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.
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. .
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 | |
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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 | |
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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 | |
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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.
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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.
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.
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.