Section 313

Property and Liability Insurance

313.01	Property and Liability Insurance

313.01A	Generally

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

ensure the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is continuously covered by property and liability insurance per Part II, Chapter 5: Property and Liability Insurance;
ensure all renewal premiums are fully paid on time in:
- an annual lump sum; or
- installments;
collect reserves for the premium allocation obtained from the insurance agent or broker ensuring sufficient reserve funds for the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to pay the premium due for the applicable policy or policies in:
- an annual lump sum; or
- installments;
pay the premiums for all required insurance when due; and
ensure any BorrowerBorrowerPerson who is the obligor per the Note. -financing of premiums complies with Part II, Chapter 5: Property and Liability Insurance, Section 501.01G: Payment of Premium, and either:
- the Modifications to Multifamily Loan and Security Agreement (Financing of Insurance Premiums) (Form 6272) was executed on the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
- prior to the BorrowerBorrowerPerson who is the obligor per the Note. entering into a premium financing agreement, execute and submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. an Amendment to the Multifamily Loan and Security Agreement, substantially in the form of the Modifications to Multifamily Loan Agreement (Financing of Insurance Premiums) (Form 6272).

If no insurance escrows are collected, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

obtain annual evidence that all policies were fully paid; and
for BorrowerBorrowerPerson who is the obligor per the Note. -financed premiums, retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. :
- receipts confirming timely payments; and
- a copy of the financing agreement.

313.01B	Policy Renewal

For each policy renewal, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with the following timeline.

Timeline	The Servicer must...
No later than 60 days before the policy expiration date	Contact the BorrowerBorrowerPerson who is the obligor per the Note. to request an original or duplicate original of each renewal policy within 90 days after the policy’s expiration date.
No later than 15 days after the earlier of: receipt of each renewal policy; or the date the policy was due	Determine if the insurance coverage complies with Part II, Chapter 5: Property and Liability Insurance. If non-compliant, immediately notify: the BorrowerBorrowerPerson who is the obligor per the Note. to resolve all non-compliant items; and Fannie Mae per a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
No later than 60 days after notifying the Borrower of any noncompliant renewal policy	Resolve all non-compliant items with the BorrowerBorrowerPerson who is the obligor per the Note. and/or insurance agent (e.g., obtain a compliant renewal policy or endorsement, request a waiver, obtain force place coverage, etc.).
If, after 60 days, neither a compliant renewal policy nor an insurance waiver is obtained	Submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Immediately send the BorrowerBorrowerPerson who is the obligor per the Note. a Reservation of Rights Letter (Form 4804).

313.01C	Compliance Review

With each renewal, but at least annually, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

complete an insurance compliance checklist to review the adequacy of the Borrower’sBorrower’sPerson who is the obligor per the Note. insurance coverage and ensure compliance with:
- Part II, Chapter 5: Property and Liability Insurance;
- all Fannie Mae-approved modifications; and
- the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
confirm the insurance carrier’s rating per Part V, Chapter 3: Asset Management: Loan Document Administration, Section 313.01E: Ratings; and
retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. the:
- checklist; and
- evidence of the insurance carrier’s rating.

For an unrated Risk Retention GroupRisk Retention GroupState-chartered insurance company created by the 1986 federal Liability Risk Retention Act, insuring commercial businesses and government entities against liability risks. or Captive InsurerCaptive InsurerInsurance company wholly owned and controlled by its insureds, whose primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also comply with Part II, Chapter 5: Property and Liability Insurance, Section 501.01D: Risk Retention Groups and Captive Insurance.

313.01D	Exceptions

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any insurance exception, including a delegated one, through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , with:

a Multifamily Exception Request (Form 4638) for each exception signed by the authorizing person;
a recommendation explaining why any non-delegated waiver request should be approved;
all supporting documentation; and
any previous exception not approved for the life of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. , on an annual basis.

313.01E	Ratings

All property and liability insurance carriers for renewal policies must have the following ratings by A.M. Best Company:

General Policyholder Rating of A- or better; and
Financial Size Category of VII or better.

Rating requirements do not apply to policies issued:

through State-sponsored insurance programs; or
by insurers participating in NFIPNFIPProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. .

Per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to immediately obtain replacement coverage with a compliant carrier if the carrier is downgraded below B++ by A.M. Best Company.

313.02	No Servicer Financing of Insurance Premiums

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not provide financing to the BorrowerBorrowerPerson who is the obligor per the Note. for the payment of any insurance premiums.

313.03	Flood Map Changes; Obtaining Flood Insurance

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor all flood map and community status changes, and take appropriate action when changes affecting Mortgage LoansMortgage 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. it services occur. When a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is remapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to obtain flood insurance, regardless of whether the community is “participating” in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. .

The flood insurance must:

comply with Part II, Chapter 5: Property and Liability Insurance, Section 502.03: Flood Insurance, including the minimum mandatory purchase requirements; and
be in place within 45 days after the date the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. was notified of the remapping.

If the BorrowerBorrowerPerson who is the obligor per the Note. refuses to obtain the required coverage or pay a disputed premium, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the required coverage. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily InsuranceMultifamily InsuranceTeam that can be contacted at [email protected]. if:

a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is mapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. ;
the community in which the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is located does not participate in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. ; and
the BorrowerBorrowerPerson who is the obligor per the Note. cannot obtain the required flood insurance.

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

complete the most recent version of the Standard Flood Hazard Determination Form issued by FEMAFEMAFederal Emergency Management Agency ;
include in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. a:
- copy of the form; and
- signed copy of Notice to Borrower of Special Flood Hazard and Federal Assistance; and
require the determination firm, and any monitoring company, to notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. whenever a flood zone change occurs.

To remove a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). /building from an SFHASFHASpecial Flood Hazard Area designated by FEMA. , only an updated FEMA Standard Flood Hazard Determination Form (SFHDF) based on the following is acceptable:

Letter of Map Amendment (LoMA);
Letter of Map Revision (LoMR); or
Letter of Determination Review (LoDR).

313.04	Lender Placed Insurance

313.04A	Property and Liability Insurance

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

obtain the required property and liability insurance, at the Borrower’sBorrower’sPerson who is the obligor per the Note. expense, if:
- the BorrowerBorrowerPerson who is the obligor per the Note. fails to obtain acceptable insurance coverage; or
- per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the carrier is downgraded below the required ratings per Part V, Chapter 3: Asset Management: Loan Document Administration, Section 313.01E: Ratings; and
notify Fannie Mae if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. obtains the required property and liability insurance.

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

have force place vendor, retroactive, and/or automatic coverage for Mortgage LoansMortgage 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. serviced with:
- deductibles no greater than those required per Part II, Chapter 5: Property and Liability Insurance;
- coverage provided by carriers complying with Part II, Chapter 5: Property and Liability Insurance;
provide notice when coverage is force placed, including disclosing the coverage amount and deductibles; and
adjust the T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. balance when the BorrowerBorrowerPerson who is the obligor per the Note. pays the force place insurance premiums.

313.04B	Servicer’s Administrative Costs and Expenses

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is permitted to collect from the BorrowerBorrowerPerson who is the obligor per the Note. any reasonable out-of-pocket costs and expenses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to obtain insurance coverage for the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). .