1302.05A

Property

Requirements

Streamlined Underwriting

Appraisal

You must obtain a new Appraisal AppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. .

Property Management

If there has been or will be 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). management change, you must comply with  Part II, Chapter 1: Attributes and Characteristics, Section 114.01: Property Management .

Property Condition Assessment Report

You must obtain a PCA Report PCA ReportProperty Condition Assessment Report documenting the findings of a PCA. if 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. 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 reveals any adverse change in property condition or life safety issues.

 

A PCA Report PCA ReportProperty Condition Assessment Report documenting the findings of a PCA. is not required if:

 

  • there has been no adverse change;
  • the existing PCA Report PCA ReportProperty Condition Assessment Report documenting the findings of a PCA. is less than 3 years old;
  • all Immediate Repairs identified in the existing PCA Report PCA ReportProperty Condition Assessment Report documenting the findings of a PCA. have been satisfactorily completed; and
  • the most recent 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 indicates an overall rating of 1 or 2.

Replacement Reserves
  • If the PCA Report PCA ReportProperty Condition Assessment Report documenting the findings of a PCA. indicates a need to modify the existing or fund an initial Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , you must ensure the funding by amending 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… .
  • Even if there is no funding or only partial funding for a Pre-Existing Mortgage Loan Pre-Existing Mortgage LoanMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. , you must fully fund the Replacement Reserve Replacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. if the combined DSCR DSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Pay Preferred Equity payments. and LTV LTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage.  for 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. and 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. is Tier TierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2.

Environmental Site Assessment (ESA)

You must obtain a new or updated ESA ESAInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. and comply with  Part II, Chapter 5: Property and Liability Insurance, Section 504: Environmental Matters unless all the following are met:

 

  • an ESA ESAInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. was performed for a Pre-Existing Mortgage Loan Pre-Existing Mortgage LoanMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. ;
  • an Environmental Professional performs an environmental database review and identifies no
    • potential environmental concerns (as defined in ASTM ASTMAmerican Society for Testing Materials E1528 - Standard Practice for Limited Environmental Due Diligence: Transaction Screen), or 
    • adverse conditions requiring further due diligence;
  • the Borrower BorrowerPerson who is the obligor per the Note. executes an Environmental Indemnity Agreement ( Form 6085 );
  • you confirm that any disclosed Prohibited Activities or Conditions per the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. are adequately addressed through an O&M Plan O&M PlanRequired plan for remediating a Recognized Environmental Condition or Business Enivronmental Risk as described in Environmental Due Diligence Requirements (Form 4251). being implemented at 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 Borrower BorrowerPerson who is the obligor per the Note. certifies, and you confirm, that all appropriate O&M Plans O&M PlansRequired plan for remediating a Recognized Environmental Condition or Business Enivronmental Risk as described in Environmental Due Diligence Requirements (Form 4251). are in place and being fully and properly implemented.

Property and Liability Insurance

You must base the required amounts and coverages of all property and liability insurance on the combined UPB UPBUnpaid Principal Balance of 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. and 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. .

Title Insurance

You must ensure the Borrower BorrowerPerson who is the obligor per the Note. obtains a new title insurance policy.