Fannie Mae revises multifamily loan documents requiring escrow reserves

Federal Issues Covid-19 Fannie Mae Mortgages

On April 8, Fannie Mae announced updates to certain loan documents for multifamily lenders in response to Covid-19.  Form 6102.25—Modifications to Multifamily Loan and Security Agreement—Addenda to Schedule 2, and Form 6268—Modifications to Multifamily Loan and Security Agreement (Additional Reserve Escrows) are both updated to provide clarity in the drafting notes for calculating the replace reserve deposit when closing a supplemental mortgage loan.  In addition, as a condition to closing a supplemental mortgage loan with required reserve escrows, the guidance clarifies that an additional principal and interest reserve escrow is required on the pre-existing mortgage loan.  Loan documents may be modified to include a higher amount of reserves (not greater than 10% of the unpaid principal balance of the loan), or hold the escrows in a non-interest bearing account to the extent permitted by law.