Underwriting Improvements Announced at 2017 Customer Conference
November 6, 2017
As we continue to grow, we continue to refine our processes to make it easier for you to do business with us.
At this year’s Customer Conference, the Conventional Underwriting team announced several improvements that will streamline your underwriting process and could save Borrowers money per deal in transaction costs. These improvements are effective immediately and apply to all Conventional, Seniors Housing and Targeted Affordable Housing (TAH) deals under application and currently in process:
- Moisture Management Plans (MMPs) and Operations and Maintenance Plans (O&Ms):
- MMPs are no longer programmatically required by Freddie Mac
- Asbestos-containing materials O&Ms are required only if friable materials remain present following origination of the loan
- Polychlorinated biphenyl O&Ms are required only if equipment is property-owned and pre-1979
- Carve-outs from non-recourse liability under the loan documents are no longer required for the problematic materials listed below provided remediation/replacement as a Priority Repair and/or costs for replacement over time as determined by the consultant are included in the PCA reserve schedule, and confirmation is received that there are no insurance exclusions:
- Aluminum wiring
- Galvanized and polybutylene piping
Updates reflecting the above underwriting improvements will be included in a upcoming release of the Freddie Mac Multifamily Seller/Servicer Guide.
If your loan is in process and a Commitment/ERLA has been issued with requirements for these matters and the Borrower wishes to include these changes in the loan documents, please let your Freddie Mac underwriter know, as the applicable Commitment/ERLA may need to be amended.