Fannie Mae requires the servicer to complete a property inspection within 12 months after origination, then repeat it on a schedule set by the loan’s risk rating, original loan amount, and condition rating. Inspectors use the MBA Standard Inspection Form and rate condition from 1 (best) to 5. Third-party inspectors may be used on many loans, but not all.
This article covers Fannie Mae multifamily loans only. It reads the Fannie Mae Multifamily Guide, Section 502, as published on October 13, 2026. The guide changes by bulletin, so confirm the current text before you act on a specific loan.
When is the first servicing inspection due?
The servicer must complete a post-origination property inspection within 12 months. After that, additional inspections follow the Inspection Frequency column of the Property Inspection Protocol table in Section 502.03.
If a scheduled inspection falls within 6 months of the loan’s maturity date, the due date moves to 6 months before maturity. Loans in the maturing category are inspected within 12 months before the maturity date.
How often does Fannie Mae require an inspection?
Frequency depends on four inputs: the current Fannie Mae risk rating, the Property Condition Rating, the original loan amount, and the share of units inspected. The table below is a simplified excerpt. Section 502.03 holds the full version, including seniors housing, rent-stabilized, and maturing loans.
| Original loan amount | Situation | Frequency | Units inspected (min / max) | Who inspects |
|---|---|---|---|---|
| Over $30 million | Pass, Pass-Watch, or Special Mention | Annual | 5% (5 / 15) | Third party or in-house |
| Over $30 million | Substandard | Annual | 10% (10 / 20) | In-house only |
| Over $6 million, up to $30 million | Most recent rating of 3, passing risk rating | Annual | 10% (10 / 20) | Third party or in-house |
| Over $6 million, up to $30 million | Consecutive ratings of 3 or worse, or latest rating of 4 or 5 | Annual | 10% (10 / 20) | In-house only |
| Over $6 million, up to $30 million | Passing risk rating, DSCR above 1.35 (co-ops: above 1.00) | Every 2 years (annual if the required operating statement is not received) | 5% (5 / 15) | Third party or in-house |
| Over $6 million, up to $30 million | Passing risk rating, DSCR below 1.35 (co-ops: below 1.00) | Annual | 5% (5 / 15) | Third party or in-house |
| $6 million or less | Latest rating of 4 or 5 (unless delivered amount was under $750,000) | Annual | 10% (10 / 20) | In-house only |
| $6 million or less | Passing, delivered amount over $750,000 | Every 2 years | 5% (2 / 5) | Third party or in-house |
| $6 million or less | Passing, delivered amount under $750,000 | Walk-around every 5 years | Exterior photos only | Third party or in-house |
A property with 10 units or fewer on a loan of $6 million or less needs at least 2 units inspected. In the table, a “passing” risk rating means Pass, Pass-Watch, or Special Mention.
Who can perform the inspection?
Inspectors must meet one of three tests. They are certified by HUD’s Real Estate Assessment Center, ASHI, or InterNACHI as a home inspector. They are a state-certified home inspector, registered architect, or civil engineer. Or they completed other acceptable training, including the MBA School of Multifamily Property Inspections.
The guide also sets minimum experience: 10 multifamily inspections for most loans, 25 for loans with a Substandard risk rating, and 10 seniors housing inspections for seniors housing loans.
A third-party inspector must have no financial interest in the property, must have experience in the property’s market, and cannot hand the work to another person without the servicer’s approval. Fannie Mae can tell a servicer that a third-party inspector or firm is unacceptable. The servicer must also run a quality control program that reviews third-party inspections every year.
Our third-party loan servicing inspections are done by inspectors trained by the Mortgage Bankers Association. See our third-party loan servicing page for how we work with servicers.
What does the inspector record?
Every inspection uses the MBA Standard Inspection Form with the “Fannie Mae Inspection” option selected. Its tabs include General Information, Physical Condition and Deferred Maintenance, Photos, Rent Roll, Management Interview, and the Agency Assessment Addendum. The rent roll must be obtained during the site inspection.
Four rules shape what the inspector sees on site:
- The inspector, not the property manager, picks the units. All “down” units (units that cannot be rented in the normal course of business) are inspected.
- Photos must cover signage, frontage, the site office and clubhouse, amenities, a typical building front, an apartment interior, major building systems, deferred maintenance and life safety items, and any critical or substantial issue in the report.
- The inspector interviews the property manager and other on-site staff.
- The inspector confirms that life safety and deferred maintenance items from the prior inspection were corrected.
How does the 1 to 5 rating work?
The Property Condition Rating is an assessment of overall condition on the MBA form. It runs from 1 (best) to 5 (lowest). The servicer assigns an overall rating using the MBA Rating Scale Definitions.
Fannie Mae also sets a floor in two cases. The servicer sets the overall rating to 4, or 5 depending on severity, if 10% or more of the units are down for any reason. The same applies if casualty damage equals 25% of the current unpaid principal balance or $1 million.
What does a poor rating or a life safety finding trigger?
A third-party inspector who finds an issue that would rate 3, 4, or 5 in the Life Safety section of the Agency Assessment Addendum must notify the servicer within 3 business days after the inspection.
The servicer then has a set of steps:
- Notify the borrower within 45 days after the inspection date (or within 30 days after notice of a Fannie Mae reinspection). The notice identifies the repair or maintenance issues, includes photos, and directs the borrower to finish the work on time. The servicer uses Form 4830 when the rating is 3, 4, or 5.
- Follow up to confirm the work was done. If it was not, tell the borrower and Fannie Mae’s Multifamily Inspections team and include a recommended resolution.
- Report a rating of 4 or 5, incomplete repairs, significant deferred maintenance, or non-significant deferred maintenance left uncorrected 12 months after notice to Fannie Mae’s Multifamily Inspections and Loss Mitigation teams within 10 business days. Life safety issues are reported promptly.
- Reinstate any suspended completion/repair escrow or replacement reserve when the rating is 4 or 5, unless the rating came from a casualty loss.
If an inspection is inadequate, Fannie Mae can require the servicer to get a new one at the servicer’s expense.
How should owners prepare?
The guide tells you what the inspector will ask for. These steps follow from it:
- Have a current rent roll ready on the day.
- Make every down unit available, along with a spread of occupied and vacant units.
- Keep records that show how prior life safety and deferred maintenance items were fixed.
- Make the property manager and on-site staff available for the interview.
- Fix reported items inside the borrower notice window. Items left open for 12 months become a reporting trigger for the servicer.
Next step
If you service Fannie Mae multifamily loans and want inspections done to this protocol, review our third-party loan servicing inspections or request a proposal. For the difference between servicing inspections and a full condition report, see our multifamily inspections guide and our comparison of a PCA and a commercial building inspection. Our ASTM property condition assessments page describes the fuller condition report.
