fannie mae final inspection requirements

This topic contains information on requirements for verifying completion of construction and repairs, and requirements for postponed improvements, including: Generally, improvements, alterations, and repairs on the subject property must be complete when the mortgage is sold to Fannie Mae. This report is by the Financial Services We design, build and sell homes in high-growth markets, including Charlotte, Raleigh, Jacksonville, Orlando, Denver, the Washington D.C. metropolitan area, Austin . Once a Conditional or Final Project Approval is completed through the PERS process, all projects are listed in Condo Project Manager (CPM). The PCA provides: an assessment of the Property's current physical condition; Read court documents, court records online and search Trellis.law comprehensive legal database for any state court documents. wire any insurance loss proceeds that were a result of a claim filed by Fannie Mae's property recovery firm or that were received by the servicer after confirming the REOgram to Fannie Mae within 10 business days of receipt. For traditional appraisals of one-unit properties in condo projects based on interior and exterior property inspections. order a new appraisal (which must be based on an inspection of both the interior and exterior of the property . Each owner has a separate mortgage for his or her unit and is responsible for making the payments on the loan and paying associated real estate taxes. The appraiser can complete the Completion Report section of Form 1004D based on an on-site visual inspection of the property. ), Selling, Securitizing, and Delivering Loans, Chapter B4-1: Property Assessment and Valuation, Research Visit Selling and Servicing Guide Communications and Forms. & Insights, Pricing & However, if the contractor or builder offers a guaranteed fixed-price contract for completion of the improvements, the funds in the completion escrow only need to equal the full amount of the contract price. use any insurance loss proceeds to reduce the outstanding mortgage loan debt. Access forms, announcements, lender letters, legal documents, and more to stay current on our selling policies. Once a certificate of completion is obtained, the lender must release the final draw from the escrow account, which should include any funds in excess of the amount needed to pay for completion of the postponed items. (see Visit Selling and Servicing Guide Communications and Forms. Having Issues with Seeing this Page Correctly? ); examples of recent updates, such as restoration, remodeling, and renovation, if present. Having Issues with Seeing this Page Correctly? Appraisals reported on Form 1004 Hybrid must be completed in accordance with the UAD Specification. Fannie Mae's project approval process is accepted by many institutional investors. becomes vacant. A form of homeownership that combines individual ownership of a unit with shared ownership of common facilities. The exhibits in the following table must accompany the appraisal report. We continue to respond and work with our lenders and servicers to assist homeowners impacted by the recent hurricanes. If the appraiser indicates on the Form 1004D that the property value has not declined, then the lender may proceed with the loan in process without requiring any additional fieldwork. When the servicer determines the property is vacant, the servicer must take the actions When the Borrower Does Not Intend to Make Repairs: If a borrower does not want to repair or restore the property, the servicer must take the actions described in the following table. For traditional appraisals of one-unit properties in co-op projects based on interior and exterior property inspections. an MBS mortgage loan serviced under the special servicing option. The borrower and the lender/client must be the same on the original and subsequent transaction. is authorized to disburse the remaining funds in increments not to exceed 25% of the insurance loss proceeds following inspection of the repairs. must follow up until the repairs have been completed. Center, Apps The letter must include (at a minimum) the following: When either of these attestation letter options is used, a link within the letter to any digital exhibits is acceptable but must be accessible by Fannie Mae for the life of the loan. The cost of completing improvements must not represent more than 10% of the as completed appraised value of the property. Ensure that the borrower is not involved in or party to litigation other than foreclosure or bankruptcy involving the subject property or mortgage loan. A link to the digital exhibits from within the form is acceptable but must be accessible by Fannie Mae for the life of the loan. The following table provides references to Announcements that are related to this topic. Make immediate arrangements to protect the property from vandalism and the elements A lender may only exercise the high LTV refinance value acceptance (appraisal waiver) or value acceptance + property data offer if. Note: Interior photographs on proposed or under construction properties may be taken at the time of the completion inspection and included with Form 1004D. Follow the requirements in E-3.2-12, Performing Property Preservation During Foreclosure Proceedings and the Property Preservation Matrix and Reference Guide to ensure the property is maintained and preserved. bankruptcy, or. Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. Appraisals reported on Form 1004 must be completed in accordance with the. The sketch must include the subject's exterior footprint with dimensions. Submit a request for expense reimbursement. Miami, Florida, United States. Fannie Mae customers! Form. Clearly identify the repairs that are being documented and confirm the repairs, How to do a hard refresh in Internet Explorer. Ask Poli features exclusive Q&As and moreplus official Selling & Servicing Guide content. 5. promptly upon completion they must conform to Fannie Mae's ARM requirements (see Resources). devalued, denied, and disrespected: how home appraisal bias and discrimination are hurting homeowners and communities of color 117th congress (2021-2022) The following table outlines the type of inspection the servicer must perform depending (For best result, pose your search like a question. To: All Fannie Mae Single-Family Sellers and Servicers Reimbursement for Property Inspections and Additional Servicing-Related Reminders. For mortgage loans that are current or less than 31 days delinquent at the time of the loss event, the servicer is authorized to use borrower-submitted photos and/or video, or conduct servicer-directed video calls with the borrower to document the progress or completion of repairs of the property, provided that the conditions listed in the following table are met. Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. In addition, a separate footprint sketch including dimensions must be provided for each additional structure with room labels, when applicable. The content of the inspection report must be sufficient for the lender to determine whether the property is safe, sound, and structurally secure. certification language that the alteration or repair was satisfactorily completed; visually verifiable exhibits of the completed work; and. The lender does not need to confirm the subject property is not currently listed for sale. Contact any other lienholders to determine if any action has been taken and their 365 0 obj <> endobj The servicer must remit insurance loss proceeds to Fannie Mae depending upon the circumstance of the mortgage loan, as outlined in the following table. Clear, descriptive color photographs showing the front, back, and a street scene of the subject property and the front of each comparable. feel free to email, the property is borrower/tenant occupied, and. including loan amount limits and credit score requirements. When there are two borrowers on the new loan and two borrowers on the existing loan, but only one borrowers Social Security number matches, the DU message will specify that not all of the borrower Social Security numbers match and will require that the lender confirm the borrowers on the existing loan are the same borrowers that will be on the new loan. Get answers to your Servicing Guide & policy questions with Fannie Mae's AI-powered search tool. Can a loan be delivered to Fannie Mae if the property is located on a community- owned or privately maintained ), Escrow, Taxes, Assessments, and Insurance, Mortgage Loan Payment Processing, Remitting, Accounting, and Reporting, Default-Related Legal Services, Bankruptcy, Foreclosure Proceedings, and Acquired Properties, Servicing Guide Procedures, Exhibits, and Quick Reference Materials, Part D, Providing Solutions to a Borrower, Subpart D2, Assisting a Borrower Who is Facing Default or, Chapter D2-2, Requirements for Contacting a Borrower, D2-2-10, Requirements for Performing Property Inspections, Research personally went to the property location and that the property is vacant. their relevant timing requirements, and the second section discusses the conditions under w hich a waiver may be obtained to offset the se timing requirements. Finance is the study and discipline of money, currency and capital assets.It is related to, but not synonymous with economics, which is the study of production, distribution, and consumption of money, assets, goods and services (the discipline of financial economics bridges the two). House report on REPORT ON THE ACTIVITY OF THE COMMITTEE ON FINANCIAL SERVICES OF THE UNITED STATES HOUSE OF REPRESENTATIVES FOR THE ONE HUNDRED AND SEVENTEENTH CONGRESS. Note: If the servicer determines that payment to a third party is warranted to protect the security interest of the property and/or benefit of the borrower, the servicer must request prior approval by submitting a Report of Property Insurance Loss (Form 176) to Fannie Maes SF CPM Division (see F-4-02, List of Contacts). & Technology, News & Obtain the proper lien releases, if applicable. For manually underwritten loans, an appraisal with an interior and exterior inspection is required. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. Fannie Mae guidelines, eligible for the Guaranteed Loan Program? Fannie Mae also permits other completion alternative methods - attestation letters - to verify completion of construction, alteration, or repairs in lieu of Form 1004D. The loan file must include the final UCDP Submission Summary Report (SSR) from each agency regardless of the final Document File Status. See Ask Poli features exclusive Q&As and moreplus official Selling & Servicing Guide content. Immediately issue the borrower a check for any amount designated for contents (for example personal property) or living expenses. If you still have Technical Support questions, The appraisal update must occur within four months prior tothe date of the note and mortgage. School of Multifamily Property Inspections. This form is not designed to report an appraisal for a manufactured home, or for a unit in a condo or co-op project. Once the property has been fixed, a final inspection will take place to verify that the work has been completed. Having Issues with Seeing this Page Correctly? See B2-1.5-02, Loan Eligibility, for information regarding property valuation requirements for mortgage loans sold to Fannie Mae more than four months from the note date. version of a page. an effort undertaken jointly by Freddie Mac and Fannie Mae at the direction of the Federal Housing Finance Agency. Fannie Mae ("Fannie Mae"; the Property Owner, Property Manager, Lender, Servicer, and Fannie Mae are each referred to in these Instructions as a "User"). Incomplete items, physical deficiencies, or items affecting safety, soundness, or structural integrity may also be identified through the property data collection process. For appraisal updates and/or completion reports for all one- to four-unit properties. When the effective date of the original appraisal report is more than four months but less than 12 months from the date of the note and mortgage,the appraiser must perform an appraisal update that includes inspecting the exterior of the property and reviewing current market data to determine whether the property has declined in value since the date of the original appraisal report. if there are legal constraints due to compliance with applicable law including active Visit Selling and Servicing Guide Communications and Forms. Minor conditions and deferred maintenance items include, but are not limited to, worn floor finishes or carpet, minor plumbing leaks, holes in window screens, missing handrails, or cracked window glass and are typically due to normal wear and tear. . the vacancy, in which the person who completed the inspection certifies that they Added missing requirements for RecordingFeeTotal . The Rule requires that creditors . Uniform Residential Appraisal Report ( Form 1004 ) For traditional appraisals of one-unit properties and units in PUDs (including those that have an illegal second unit or accessory dwelling unit) based on an interior and exterior on-site physical inspection of the property by the appraiser. Photo Requirements Use only clear, focused, color photos. . This section of the 1004D is most often referred to as a "final inspection." In certain situations, an appraiser will be asked to complete both sections of the form. all delinquent mortgage loans and continue inspecting every calendar month as long version of a page. The following table provides underwriting and documentation requirements applicable to high LTV refinance loans. Lenders must obtain evidence of completion and Fannie Mae allows for a variety of methods depending on the type of valuation method and condition (completion, alteration, or repair) that must be confirmed. Events, Appraiser Certifications and Limiting Conditions, B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements, B4-1.3-05, Improvements Section of the Appraisal Report, For traditional appraisals of one-unit properties and units in PUDs (including those that have an illegal second unit or accessory dwelling unit) based on an interior and exterior on-site physical inspection of the property by the appraiser. Please refer to Supplement 20-14 to the Fannie Mae Multifamily Selling and Servicing Guide for additional detail. applicable law allows for the accumulated interest to be applied to the UPB. The completion escrow may not adversely affect the mortgage insurance or title insurance. If the final title report is issued before the completion of the improvements, lenders must obtain an endorsement to the title policy that ensures the priority of Fannie Mae's lien. Review and approve the final plans for repair, including obtaining the necessary bids to repair the property. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property. . applicable foreclosure actions where there is no foreclosure sale and title is transferred topic. (Any appraisal report form including Hybrid and Desktop), Professionally prepared inspection report. with the requirements in B4-1.2-02 Appraisal Waivers: o Disaster Areas: For loans secured by properties in a FEMA declared disaster area granted Individual Assistance, see 10.10.7.1, Declared Disaster Areas - Property Inspection Types o Full appraisals are required for the following irrespective of DU findings: Purchases of REO properties, If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources. By making sure that the property is in good condition, it decreases the chances that the borrower will default on the loan. Access forms, announcements, lender letters, legal documents, and more to stay current on our selling policies. may be conducted simultaneously with other required property inspections. is authorized to release an initial disbursement of insurance loss proceeds of 25% of the total insurance loss proceeds but no more than the greater of. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. 90 or more days delinquent without regard to whether QRPC, as described in Repairs to a property damaged as the result of a disaster (as defined by this Selling Guide) are not required prior to loan sale as long as the loan meets the applicable property insurance requirements. If extenuating circumstances cause inspection If the appraiser indicates on the Form 1004D that the property value has declined, then the lender must obtain a new appraisal for the property. endstream endobj 366 0 obj <. Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. Whenthe appraisal showsthe existence of minor conditions or deferred maintenance that does not affect the safety, soundness, or structural integrity of the property, these items must be reflected in the appraiser'sopinion of value and the appraisal report must be completed "as-is." the property, the servicer must contact its Fannie Mae Servicing Representative (see (For best result, pose your search like a question. The lender must determine if repairs are required as a result of the inspection, verification per above requirements. Otherwise, an appraisal with an interior and exterior inspection is required. is authorized to make the disbursement in one payment. Events, Employment, Income, and Asset Verification, B5-7-03, High LTV Refinance Alternative Qualification Path, B3-3.1-06, Requirements and Uses of IRS IVES Request for Transcript of Tax Return Form 4506-C, To be eligible for the high LTV refinance option, the payment history for the existing loan for the most recent 12 months must reflect. must occur between 20 and 35 days apart. In all cases, the lender must verify completion before the loan is sold to Fannie Mae. certification language that the property was constructed in conformity with the plans and specifications including any amendments or changes, signatures and dates by the borrower(s) and builder, and, exterior and interior photos of the property (see. ), Selling, Securitizing, and Delivering Loans, Chapter B4-1: Property Assessment and Valuation, Research But there are a few basic property standards. Each Fannie Mae appraisal report form includes an appraisers certification (and, if applicable, a supervisory appraisers certification) and a statement of assumptions and limiting conditions. McLean, Virginia, United States. This topic contains information on appraisal report forms and exhibits, including: Appraisers must use the most recent version of the appraisal report forms and include any other information, either as an attachment or addendum to the appraisal report form, needed to adequately support the opinion of market value. Purpose. See preceding section, Age of Appraisal and Appraisal Update Requirements, for requirements for completing an appraisal update. Main Structure . Evaluate the borrower's eligibility and cash contribution requirements, if any, based on the status of the mortgage loan at the time of the respective evaluation. Final Inspection as needed Owner of record should match (AOS, Title/HUD) . With the exception of loans underwritten under the Alternative Qualification Path, lenders are not required to. and Property Preservation Expenses in No additional intended users are identified by the appraiser.. when the mortgage loan is 90 or more days delinquent if. If you have additional questions, Fannie Mae customers can visit Ask Poli to get Mortgages may be delivered before the energy-related improvements are complete; however, the postponed improvements must be completed within 180 days of the date of the mortgage note. Launch & Insights, Pricing & Fannie Mae customers! Fannie Mae Page 1 of 3 Form 30 August 2015 Property Inspection Report L. Loan Information I. At a minimum, the appraiser must complete the following steps: Visually inspect the subject property both inside and out. However, lenders are not required to comply with the waiting period and re-establishment of credit requirements for significant derogatory credit events or the payoff or satisfaction of a judgment identified on the credit report. examples of recent updates, such as restoration, remodeling, and renovation, if present. paid invoices for the alterations or repairs. . Center, Apps complete a property inspection every calendar month as long as the mortgage loan remains F-1-05, Expense Reimbursement for requesting reimbursement of property inspection fees. At a minimum, the appraisal report must include photographs of the following: main living areas of the property (such as the living room, family room, dining room, all bedrooms, etc. Overall, the home inspection requirements . Fannie Mae customers! If you have additional questions, Fannie Mae customers can visit Ask Poli to get feel free to email. ordinance or based on property condition). When DU finds a loan for the subject property address using either the address provided on the DU loan application or the standardized address, DU will then confirm that the Social Security number(s) for the borrower(s) on the new loan casefile match those on the existing loan. version of a page. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. Business Support Representative / Loan Officer. ), Escrow, Taxes, Assessments, and Insurance, Mortgage Loan Payment Processing, Remitting, Accounting, and Reporting, Default-Related Legal Services, Bankruptcy, Foreclosure Proceedings, and Acquired Properties, Servicing Guide Procedures, Exhibits, and Quick Reference Materials, Research Fannie Mae requires that the appraiser conduct a complete visual inspection of the accessible areas of the interior and exterior of the property. The servicer must follow the procedures in Reimbursement for Property Inspections Desktop Appraisals When the effective date of the original desktop appraisal report is more than four months from the date of the note and mortgage, a new appraisal is required. The intended use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated scope of work, purpose of the appraisal, reporting requirements of this appraisal report form, and definition of market value. a full payment has been received within the last 30 days, a workout option has been approved and the borrower is performing under the plan, A hard refresh will clear the browsers cache for a specific page and force the most recent ), Selling, Securitizing, and Delivering Loans, Subpart B5: Unique Eligibility & Underwriting Considerations, Chapter B5-7: High Loan-to-Value Refinance Option, Research and submit a recommendation for further action to its Fannie Mae Servicing Representative review the inspection report to verify the property condition. If the loan is a higher-priced mortgage loan or a higher-priced covered transaction under Regulation Z, the loan must comply with the Alternative Qualification Path requirements. (For best result, pose your search like a question. See Selling Guide A2-4.1-03, Electronic Records, Signatures, and Transactions for additional information. Events, Inspecting a Property Securing a Delinquent Mortgage Loan, Inspecting and Repairing a Property in Disrepair, Inspecting and Protecting a Vacant or Abandoned Property, E-3.3-03, Inspecting Properties Prior to Foreclosure Sale, A4-2.1-02, Property Inspection Vendor Management and Oversight, D1-3-01, Evaluating the Impact of a Disaster Event and Assisting a Borrower, Property Preservation Matrix and Reference Guide, A2-1-01, General Servicer Duties and Responsibilities, D2-2-01, Achieving Quality Right Party Contact with a Borrower, an interior inspection as allowed by applicable law, agrees to arrange for the necessary repairs and has the financial resources to do For traditional appraisals of one-unit manufactured homes (including manufactured homes in a PUD, condo, or co-op project, and MH Advantage properties) based on interior and exterior property inspections. the offer is not more than four months old on the date of the note and the mortgage. (For best result, pose your search like a question. However, the servicer must not complete a property inspection every calendar month Yield interest equivalent to the interest the borrower could expect to obtain from a savings or money market account. is current and/or the property is occupied, determine if inspections are necessary and whether it should pursue other actions, See Overview of General Servicer Duties and Responsibilities in The servicer must use a Property Inspection Report ( Form 30) or its own form that provides equivalent information to document the property inspection. 1. at a minimum: (1) concur with the original appraisal, (2) perform an exterior inspection of the subject property from at least the street, and (3) research, verify, and analyze current market data in order to determine if the property has declined in value since . and securing delinquent mortgage loans set forth in, How to do a hard refresh in Internet Explorer. Be a T&I custodial account with a depository institution that meets Fannie Maes eligibility criteria for custodial depositories. property inspection reports, . D1-3-01, Evaluating the Impact of a Disaster Event and Assisting a Borrower). Ask Poli features exclusive Q&As and moreplus official Selling & Servicing Guide content. Evaluate the borrower for a workout option in accordance with D2-3, Fannie Maes Home Retention and Liquidation Workout Options. Any funds remaining in the escrow account after the work is completed must be applied to reduce the unpaid principal balance of the mortgage loan. Conduct a final inspection to ensure all repairs are completed if the mortgage loan is 31 days or more delinquent at the time of the loss event. Inspection Training on program requirements, processes, and documentation. 30UL Hna`@,v?,A .mxC3k00?xg>bb8"D+,,S 7 L@h_- e?` information from other Fannie Mae published sources. When a borrower Social Security number is matched using 7 or 8 digits of the 9-digit Social Security number, the DU message will specify that the Social Security numbers are one or two digits different and will require the lender to confirm the borrowers on the existing loan are the same borrowers that will be on the new loan. sale and title is transferred by court order, the estimated court order docket date The lender is not required to ensure that the borrower has had these items repaired prior to sale of the loan to Fannie Mae when the appraisal is completed "as-is.". If the final title report is issued before the completion of the improvements, lenders must obtain an endorsement to the title policy that ensures the priority of Fannie Maes lien. ); basement, including all finished and unfinished rooms; examples of physical deterioration, if present; and. information from other Fannie Mae published sources. noted in this Servicing Guide. issued a final rule last week establishing multifamily housing goals for Fannie Mae and Freddie Mac over . If the lender obtains more than one appraisal for a loan due to applicable law, regulation, lender policy, or otherwise, the lender must. However, the servicer must complete more frequent property . The lender must ensure that the property has not undergone any significant remodeling, renovation, or deterioration to the extent that the improvement or deterioration of the property would materially affect the market value of the subject property. Fannie Mae And Freddie Mac. was last inspected to avoid a potential duplication of effort. These requirements also apply if the lender considers an appraisal to be deficient (see B4-1.3-12, Quality Assurance). feel free to email. Ensure a full and accurate review of income, assets, credit reports, title, hazard insurance, notes, appraisals for Fannie Mae (DU), Freddie Mac (LP) and Non-QM loan programs for W2 wage-earners . those related to the appraisers compliance with privacy laws and regulations in the development, reporting, and storage of an appraisal and the information on which it is based. When an appraisal is required and there are incomplete items, physical deficiencies, or items affecting the safety, soundness, or structural integrity of the improvements, the appraisal must be "subject to" completion of the specific repairs or alterations.