PRS Annual Inspection Form Desk Reference

Annual

Inspection

Form

Desk Reference

July

2024

PUBLIC

ANNUAL INSPECTION FORM | DESK REFERENCE

Introduction

This desk reference highlights the Annual Inspection Form (AIF) submission protocols and template

submission requirements and provides guidelines on how to complete the form to ensure pertinent

information on property performance is communicated appropriately.

As a reminder, thoughtful and thorough completion of the form should provide clarity on the current

performance of property management/ownership and the complete physical condition of the property,

including if it is being adequately maintained to ensure protection of Freddie Mac’s collateral as well as

safe & decent housing for tenants.

Note

This desk reference should be used in conjunction with the MBA Reference Guide for Commercial and

Multifamily Property Inspection Reports, which provides information regarding due diligence for

property inspections, guidance on completion of the inspection form report, helpful tips regarding the

inspection process, and best practices on review of the final report. If there are any conflicts in protocol

between the MBA Reference Guide and Freddie Mac’s Guide requirements, Freddie Mac’s requirements

take priority.

Form Version

As of January 1, 2024, the current version of the MBA Inspection Form is Version 3.1.

This version was updated from MBA Inspection Form v3.03 to reflect the adoption of a single rating scale

across the agencies and industry. What was previously known as the Fannie Mae Rating Scale in v3.03

is now known as the MBA Rating Scale in v3.1.

You can download the current version of the MBA inspection form from the MBA website (see link on last

page). It will also be available in the Property Reporting System (PRS), where you will be able to

download it as a blank template or a prepopulated template. While the Freddie Mac Multifamily Inspection

form contains all tabs, you will not be required to complete all tabs on the form. This desk reference

highlights all required tabs in the form. Please note the rent roll is required to be submitted as a separate

attachment and is not required to be provided within the form.

ANNUAL INSPECTION FORM | DESK REFERENCE

Submission Protocol

This table lists submission protocol for the AIF effective for all inspections.

Steps

Comments

Quick Start Guide

For successful completion of the AIF and submission to PRS, observe

the following quick start guide:

The AIF can be downloaded from PRS or the MBA website. Once

downloaded, users must enable Macros in Excel for the form to work

properly.

The template is to be completed and stored on your local machine, file

server, or document management system (depending upon local IT

policies and procedures). Upon successful completion, the completed

form can be uploaded into the PRS system.

Retrieve the AIF

Within PRS, you have the option of downloading a blank AIF or a pre-

populated form. When you download a pre-populated form, the system

will populate the following data fields where applicable:

• Freddie Mac Loan Number

• Property Name

• Servicer Name

• Owner of Loan

• Investor Loan Number

Understanding the

Current Version of the

AIF

Always enable the macro and Active X controls before using the

template. Refer to the General Tips for Using the MBA Property

Inspection Form provided in the MBA Reference Guide.

Complete the AIF

The AIF is an Excel-based workbook that contains worksheets providing

information on the property condition and management. Additional

reporting is required on Healthcare properties; you are required to

complete one additional tab for properties categorized as Healthcare.

Data Validation and

Completeness

Verification – Submitting

the AIF Package

The system will perform data validation and completeness verification at

the time of the form submission:

• Forms that do not pass the data validation and completeness

verification will not be accepted and will be rejected for

submission. Only forms that pass the data validation and

completeness verification will be accepted by Freddie Mac.

• Incomplete forms or forms with incorrect data will be rejected by

Freddie Mac and servicers will be notified at the time of

submission. Do not delete or rename any tabs from the original

file, this will cause PRS to reject the file.

• Attachments can be uploaded to the system before, concurrently

with or after form submission. Assessments will not move to

Complete status until all required attachments have been

uploaded.

ANNUAL INSPECTION FORM | DESK REFERENCE

General Guidance

The MBA Reference Guide and Chapter 40 of the Multifamily Seller/Servicer Guide (Guide) provide

comprehensive instructions on how to prepare for and conduct an inspection as well as how to complete

the AIF.

AIF Guidance

The guidelines listed below are Freddie Mac anticipated responses on certain data fields. The list is not

all encompassing of all data fields but focuses on data fields which may need further guidance.

General Information Tab

Section

Data Fields

Comments

Rating Scale

Ensure you are using the updated MBA

rating scale as defined in MBA Inspection

Form v3.1. All inspections submitted to

PRS beginning on 1/1/2024 will require

use of the updated rating scale.

Servicer and Loan Information

Loan Balance (UPB)

Include all Freddie Mac debt

Asset Manager Name,

Phone, Email

Provide the contact information for the

primary preparer of the AIF

Inspection Scheduling

Contact Information

Contact Company

Provide the contact information for the

company and person with whom the

inspection was scheduled. This may or

may not be the same company or person

as is provided in the Management

Company Information section.

Management Company

Information

Management company

change since last

inspection

Only answer “Yes” if there has been a

change in the Property Management

Company (not simply a change in

Property Manager or specific personnel)

If “Yes”, include a comment if Freddie

Mac approvals were required/obtained

and also a brief description of the

Property Management Company (PMC).

Provide these comments in the “Other

Information and Management Evaluation

Comments” box at the bottom of the

Management Interview tab

Servicer and Inspector

Comments

Property Inspector’s

General Comments

Required input: In addition to what is

suggested in the MBA reference guide,

please provide a brief summary of the

overall performance/condition of the

property. For loans subject to HUD REAC

ANNUAL INSPECTION FORM | DESK REFERENCE

inspections, please note any material

differences between the two inspections.

General Information Tab (cont’d)

Section

Data Fields

Comments

Property Profile and

Occupancy

Property offers Rental

Concessions

If yes, enter details of concessions in

comment box

Are there down units?

If yes, enter details of down units in the

comment box. Details should include

length of time units have been down and

when they are expected to be rent ready.

Operations and Maintenance

(O&M) plans

List of O&M Plan(s)

Required in Loan

Documents

Includes Asbestos, Lead Paint,

Moisture/Mold, Radon, Storage Tanks,

PCB, and Other. If “Other” is selected,

please specify type of O&M plan in the

comment box below. Please indicate if

Management is aware of the plan and if

the plan is available. Loan will be

considered O&M non-compliant if

management is not aware OR if the plan

is unavailable. This section is expandable,

and you may add up to 5 O&M plans.

Capital Expenditures

Repairs,

Replacements or

Capital Improvements

within the past 12 or

future 12 months

This section is expandable, and you may

add up to 15 capital expenditures. Also

include hazard loss repairs that are

covered by insurance as well as priority

repairs identified at UW.

Neighborhood and Site

Comparison Data

All data fields in this

section are required

inputs

As suggested in the reference guide,

please use the comment box in this

section to describe the Subject’s

surroundings and trends that impact

operations. For example, new

construction that competes directly with

Subject, major employer changes,, or

poor visibility due to location.

Other Information

Additional Collateral

Description and

Negative News

Provide any pertinent information that

could explain property performance.

Examples include property management

negligence, tenant profile (student),

LIHTC/rent regulations limiting tenant

base, high turnover issues, absence of

commercial tenants causing decline in

income and unique unit configurations.

Affirm that servicer has conducted a

search for negative news and provide

links to any notable articles from the prior

ANNUAL INSPECTION FORM | DESK REFERENCE

year. Notable articles include anything

that can impact the property’s reputation

or reflects poor physical upkeep of the

asset. Include information that has

occurred since the last inspection

submission.

ANNUAL INSPECTION FORM | DESK REFERENCE

Physical Condition and DM Tab

Section

Data Fields

Comments

Property

Assessment

Overall Rating

and Trend

Overall Rating is required on all items except Down Units; trend

required if an overall rating of 1-5 is entered. “Unknown” is not an

acceptable response for Trend. If a building component is not

accessible or not applicable, please enter the response

accordingly and leave a “Blank” Response for Trend. For the first

annual inspection, the trend should be determined based on a

comparison of the condition at the time of underwriting.

Environmental

Rating

Indicate if there is a minor, major or no environmental issue. If

minor or major selected, enter the appropriate Trend; Unknown is

not an acceptable response. Provide details in the comments,

including any details on O&M non-compliance.

Inspector

Comments

Required Input. Please enter comments pertinent to the

physical condition element

Identify and describe the severity of capital needs and/or deferred

maintenance where applicable.

Include cost estimates in the Deferred Maintenance Items list and

photos (including comments) in the Photos attachments where

applicable

Exterior/Interior –

Additional

description of the

property

conditions

Comment on any completed/outstanding repair

agreements/capital expenditure requirements/ renovations and the

status of completions

relative to due dates

Comment on deferred maintenance items that have been

corrected from previous.

Inspection. Comment on whether outstanding deferred

maintenance items have been addressed in a timely manner.

Comment on status of units brought online/offline due to hazard

loss situations

Deferred

maintenance

Items

Ratings, Photo#, Life Safety, and Estimated Cost are required

inputs if a deferred maintenance item is identified and described.

Beginning with MBA inspection form v3.03, you may easily

transfer deferred maintenance items to this list from the Photos

tab. The deferred maintenance list is expandable up to 50 items.

Distinguish between Imminent and Potential Life Safety with I for

Imminent or P for Potential and position the designation prior to

each Deferred Maintenance Item. Comment on severity and

pervasiveness on the items. Note: Seniors Housing Healthcare

Items should not be included here. Use the Seniors Supplement

Tab to detail.

ANNUAL INSPECTION FORM | DESK REFERENCE

Deferred Maintenance Items for Healthcare properties. Do not

duplicate repair estimates in both tabs.

Fannie Mae Assessment

Section

Data Fields

Comments

All sections

Limitations of Field

Assessment,

Comprehensive Property

Assessment Ratings, and

Level/Volume of Issues

Noted and Appropriate

Follow-up

Recommendations

Not required; however, with the adoption of

the new rating scale in 2024, Freddie Mac

encourages servicers to complete this

section as it details limitations of the

assessment and helps drill down to an

accurate rating.

Photos

Section

Data Fields

Comments

Photos

Add photos

Photos may be included in the inspection

form or as a separate attachment. MBA

Inspection Form integrates the photos tab

functionality with the Deferred Maintenance

and Repair Verification tabs. This

functionality allows photos to be sent directly

to the DM list, complete with description,

rating, life/safety indicator, cost, and photo

identifier. Photos can alternatively be added

to the Repairs Verification list, complete with

comments and repair status. In order to take

advantage of this enhancement, we

encourage you to upload photos into the

form itself. The form can hold up to 99

photos

Rent Roll Tab

Section

Data Fields

Comments

Rent Roll

N/A

Rent Roll is required to be submitted as a

separate attachment, but may also be

included in the form

ANNUAL INSPECTION FORM | DESK REFERENCE

Management Interview Tab

Section

Data Fields

Comments

Management

Information &

Interview

In the past 12 months, have

there been any fires, significant

water intrusion or other property

damage?

Select yes and comment on the

situation if applicable

Ensure Form 1140 – Hazard Loss

Summary was submitted timely if required

(refer to Section 43.8 of S/S Guide)

Provide any updates on the

Hazard Loss

Is the property undergoing any

significant rehab/construction?

If yes, in addition to location, size and

costs, comment if Freddie Mac approval is

required/obtained, how many units are

impacted and expected rehab completion

dates

To the best of your knowledge,

are there any pending lawsuits

that may negatively impact the

property?

If yes, in addition to providing details of the

lawsuit(s), provide any information on

mitigations, settlements and/or expected

resolution dates.

Are there units or corporate

leases for the purposes of home

sharing (home sharing can be

defined as short term (<1 month)

rentals generally marketed

through an online platform such

as Airbnb)?

If yes, provide details of number of units

and actions taken if leases are not in

compliant with loan documentation.

Note – Corporate units with 12-month

leases who sublet to shorter-term tenants

is not considered home sharing.

Other Information and

Management Evaluation

Comments

Provide commentary as it relates to the

effectiveness of the on-site Manager. If the

onsite Property Manager or specific

personnel has changed and this has

negatively impacted the property, describe

the change and impact. If there is no on-

site management, please indicate this.

Information could include number of

outstanding work orders and typical time

frame of remediation.

Multifamily Tab

Section

Data Fields

Comments

Property

Information

Unit Breakdown

Ensure there is no discrepancy between

total units/inspected units in this section

and the Overview of Property

Information section on the

ANNUAL INSPECTION FORM | DESK REFERENCE

General Info tab. A validation check below

the table has been added to assist in

reconciliation.

Property Condition

Detailed Report of Units

Inspected

At least three must be entered for the form

to be accepted as complete. Please refer

to Chapter 40 of the Guide for full

inspection requirements

ANNUAL INSPECTION FORM | DESK REFERENCE

FRE Assessment Addendum Tab

Section

Data Fields

Comments

Physical Inspection

Additional

Questions

Q1. Are any deferred

maintenance items

outstanding from last

inspection?

If “Yes”, comment on severity (minor/major) of

items, what is being or will be done to have

deferred maintenance corrected, estimated

costs/anticipated date of remediation and

whether follow up (annually or sooner) is

required

Q2. Was a harmful

environmental condition

observed that is not

covered by an existing

O&M plan (such as mold)?

If “Yes”, comment on severity (minor/major) of

items, what is being or will be done to have

deferred maintenance corrected, estimated

costs/anticipated date of remediation and

whether follow up (annually or sooner) is

required. For example, isolated instances of

bathroom mold in the tub would rate much lower

in severity than mold that has penetrated

through the dry wall.

and is visible on the wall surfaces

Q3. Is property out of

compliance with any

applicable ADA

requirements?

If “Yes”, describe ADA requirement, why

property is out of compliance, what is being or

will be done to ensure compliance, estimated

costs/anticipated date of remediation and

whether follow up (annually or sooner) is

required. If Property is exempt from certain

requirements (for example, due to age), the

inspector should state “No”, the property is not

out of compliance

Repairs Verification Tab

Section

Data Fields

Comments

Repairs Verification

General description of

improvements and

summary comments

In addition to the general description of

improvements, highlight any repair agreements

in place. Include explanations of repairs that are

behind schedule where applicable

Verification Items – Item

Description and Location

List Deferred Maintenance items noted in prior

year’s inspection and with appropriate

comments and repair status of each item.

These items can be transferred directly from the

Photos tab. Include Repair Agreement or

Priority Repair items, comments and status as

appropriate

Expected percentage

completed and Overall

observed percentage

completed

For Repair Agreement / Deferred Maintenance

items: Input the percentage of repairs expected

to be completed by the time of inspection and

the percentage of completed repairs observed

ANNUAL INSPECTION FORM | DESK REFERENCE

Seniors Housing Supplement

The Seniors Supplement is required to be completed for all Healthcare properties. The Seniors

Supplement is divided into 6 sections.

SRS Supplement Part I

Section

Data Fields

Comments

Part I: Physical

Inspection

Site / Interior Common

Areas / Amenities

Current Condition, Trend, and

Life/Safety are required inputs

If “Yes” to Life safety,

comments become required inputs

Comment on severity

(minor/major) of items, what is being or will be

done to have Life/Safety issues corrected,

estimated costs and whether follow up

(annually or sooner) is required

Enter only cost to repair amounts that are

specific to additional Senior Housing

components. Other deferred maintenance

cost to repair amounts should be captured in

the Physical Condition and Deferred

Maintenance tab. Do not enter duplicate

repair estimates in both tabs.

SRS Supplement Part II & III

Section

Data Fields

Comments

Part II: Resident

Rooms/Occupancy

Types of Services

Provided

Required inputs

Provide occupancy based on # of beds to be

consistent with senior housing industry

standards

Does the unit mix comply

with the unit mix specified

in the Mortgage and/or

approved by Freddie Mac

since origination?

If “No”, describe why it is not in compliance,

whether Freddie Mac has been notified of

non-compliance and steps taken to ensure

compliance

Part III: Resident

Services

Safety & Security

This subsection becomes a required input if

Alzheimer’s/Memory Care is part of the unit

mix

ANNUAL INSPECTION FORM | DESK REFERENCE

SRS Supplement Part IV

Section

Data Fields

Comments

Part IV: Management

Are there written Policies and

Procedures in place for the

eight items listed

Required Input.

If “No”, explain what steps are being

taken to ensure compliance

SRS Supplement Part V

Section

Data Fields

Comments

Part V: Marketing

Inspector’s discussion with

Marketing staff

Comment as appropriate

Competitor Analysis

Comment as appropriate

SRS Supplement Part VI

Section

Data Fields

Comments

Part VI: Regulatory

Compliance

Regulatory/Licensing Agency:

Expiration Date of Operating

License

Required input.

For evergreen licenses, enter date of

next scheduled Agency inspection. If

there is no expiration date applicable,

enter the next annual inspection date

and add a comment in the

Certification/Licensure row just below

explaining why you used the next annual

inspection date

Purpose of Visit: 8 questions

5 of 8 are required inputs

If property is not in compliance, please

describe why, severity of non-

compliance, and steps taken toward

ensuring compliance

Were any of the corrective

actions related to the resident

care and/or criminal

background checks?

If “Yes”, describe issue at hand and

status of resolution

Miscellaneous

Are there any material

violations, lawsuits or

judgments against any licensed

professional employed by the

operator?

If “Yes”, describe issue at hand and

status of resolution

Are there any material

violations, lawsuits or

judgments against any other

personnel at the property?

If “Yes”, describe issue at hand and

status of resolution

ANNUAL INSPECTION FORM | DESK REFERENCE

Hospitals Tab

Section

Data Fields

Comments

All sections

Not required

REAC Inspections as a Data Point

For loans with HUD involvement (i.e. those with Project-based Section 8 contracts), the servicer must

obtain a copy of the latest HUD REAC (Real Estate Assessment Center) Inspection and review it as an

additional data point to the current inspection. This should be done prior to the current inspection so any

notable issues can be addressed with the Borrower on-site. If there are items included in the REAC

inspection that is within the scope of a Freddie Mac inspection and was not identified, the servicer must

explain why such items were not addressed in the AIF comments. The servicer must include information

regarding the latest REAC inspection score and note any material differences between the two

inspections within the General Comments section of the AIF assessment.

Please upload to DMS any REAC inspections with scores less than or equal to 60 under the “Agency

Inspection Form” file type.

Rating Guidance

Please keep in mind the following guidance when selecting a physical condition rating for a property:

• The property’s physical condition rating should be made independently of the condition of other

properties in the area.

• If the servicer submits an AIF with a property condition rating of 4 or 5, please notify

MF_Surveillance@freddiemac.com

within 10 Business Days of PRS submission. Additionally,

the servicer must begin collection of Reserve deposits for Replacement Reserves if such

Reserve deposits have been deferred pursuant to the terms of the Loan Agreement. For more

details, see Guide Section 40.7(d).

• The presence of hazard loss damage alone does not necessitate a property condition rating of 4

or 5. If the insurance covers the repairs, repair plans are in-place, and/or work is actively being

done, the property condition rating may not warrant a 4 or 5, barring other factors. If hazard loss

damage is being ignored with no plans to repair, then dropping the rating to a 4 or 5 should be

considered.

• The servicer is responsible for the completed assessment/final rating regardless of who

performed the inspection (such as a third-party fee inspector), and will be held responsible for

material mistakes, misrepresentations, or omissions in the assessment submission as outlined in

Guide Section 40.10.

ANNUAL INSPECTION FORM | DESK REFERENCE

Inspector Experience

To accomplish competently the objectives of each inspection, the servicer must employ experienced and

trained personnel. Minimum training and experience requirements for all inspectors are set forth in Guide

Sections 40.13 and 40.14.

Assessment Type/ Attachment Requirements/

Naming Conventions/ Due Dates

Inspections must be submitted within 60 days of the inspection date. The Annual Inspection Form must

be submitted prior to or on the Due Date or it will be considered late. Penalties will be assessed for late

submissions, as detailed in Guide Section 40.10.

Assessment

Type

Submissions

Naming Convention

Due Dates

Annual

Inspection

Required:

1. FM Inspection

Form

Other optional

attachments include:

• Photos

attachment

• Payment

• history

• Repair

agreements

• O&M

compliance

certificates

• Market surveys

xxxxxxxxx_Inspection_MMDDYY_SYY

YY (xxxxxxxxx = loan number;

MMDDYY = due date of inspection;

YYYY = Submission Period)

xxxxxxxxx_AIF_Photos_MMDDYY_SY

YYY (xxxxxxxxx = loan number;

MMDDYY = date of Photo

Attachment; YYYY = Submission

Period)

xxxxxxxxx_AIF_Other_MMDDYY_SYYYY

(xxxxxxxxx = loan number; MMDDYY =

due date of Inspection; YYYY =

Submission Period)

Quarterly of

Anniversary

of Note Date

(unless

stated

otherwise)

i.e., 3/31,

6/30, 9/30

Rent Roll Submission Requirement

Submitted in separate queue.

Assessment Type

Submissions

Naming Convention

Due Dates

Rent Roll

xxxxxxxxx_RR_MMDDYY

(xxxxxxxxx = loan

number;

MMDDYY= expected end

date of Rent Roll(a))

Expected End Date is

the first day of the Due

Date month, i.e. 3/1,

6/1, 9/1 & 12/1

Note: The Rent Roll requirement related to an Inspection (AIF) will have a Due Date of quarter end and

ANNUAL INSPECTION FORM | DESK REFERENCE

Expected Date of the first day of the Due Date month (i.e., Due Date of 3/31/24, 6/30/24, 9/30/24 and

12/31/24 would have Expected Date of 3/1/24, 6/1/24, 9/1/24, and 12/1/24, respectively). However, the

Rent Roll submitted to PRS to satisfy an AIF's completion is required to be within plus or minus 2 months

of the Inspection Date. The Inspection Date is noted on the General Info Tab of the Inspection form. If an

inspection is performed earlier than the quarter in which the inspection is due in PRS, servicers will need

to adjust the Expected End Date for the Rent Roll to satisfy the AIF submission requirements. For

example, if the AIF due date is 12/31/2024, the corresponding Rent Roll will have an Expected Date

12/1/2024 and Due Date of 12/31/2024. If the inspection was performed in July, the servicer needs to

adjust the Expected End Date in PRS on the Fin Stmt / Rent Roll Due Queue by selecting the Rent Roll

and clicking on Expected End Date Update/Request to change the Expected End Date to 9/1/2024 so

that the submitted Rent Roll will be within 2 months (plus or minus) of the submitted inspection date.

More details and pictures can be found in the FS/RR Desk Reference.

Other Tools

• MBA Inspection Form v3.1 and MBA Property Inspection Reference Guide

Note: This is accessible through your MBA login

• Chapter 40

of the Multifamily Seller/Servicer Guide