Coverage requirements
Fannie Mae
Last updated August 2026 · Maintained and reviewed by the Advocate Insurance Consultants coverage research team.
Overview
What an adequately protected Fannie Mae program looks like
A single profile capturing every insurance requirement Fannie Mae establishes for multifamily and commercial real estate lending, across all seven eligible asset types. Turn to this profile to validate coverage on an active Fannie Mae deal or to measure an existing program against full agency standards.
Key takeaways
- Spans 2,395 published requirements across 60 coverage type-peril pairs.
- Applies to 7 asset types: Assisted Living, Cooperative Corporation, Independent Living, Mixed Use, Mobile Home Park, Multi Family, Student Housing.
- Covers 12 coverage types and 16 distinct perils.
At a glance
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Completion score
21 of 60 WIM pairs required
Coverage tower
Required limits by coverage type and peril
Requirements
Full requirement set for Fannie Mae
Every requirement in the Advocate standard, 2,395 rows across limits, deductibles, carrier rating, and presence checks. Search and filter to drill in.
Showing 50 of 2,395 matching · 2,395 total
Compliance
Who requires Fannie Mae
- Fannie Mae's Multifamily Guide governs the insurance that Delegated Underwriting and Servicing (DUS) lenders must verify at origination and enforce over the life of the loan.
- Under the delegated model, the DUS lender carries responsibility for confirming that coverage meets the Guide before closing.
- Borrowers and sponsors obtain and renew the policies, servicers track evidence and catastrophe exposures, and brokers placing agency multifamily deals build programs to the Guide's specifications.
- Carriers must satisfy Fannie Mae's rating criteria.
- Acceptable insurance is a condition of loan delivery and of continued servicing, so any deficiency can stall a rate lock, create a servicing exception, or expose the lender under its loss-sharing obligations.
- Multifamily, cooperative, assisted living, independent living, mixed use, mobile home park, and student housing collateral all fall under the standards.
Carrier standard. Carrier must have an AM Best Rating that meets the required Letter and Financial Size ratings.
Advocate runs these checks automatically for the brokers who place habitational coverage.
Exclusions
What Fannie Mae does not cover
- Fannie Mae's Guide concentrates on property, rental value, and primary liability.
- A number of lines a habitational borrower may still need are not required by the agency and should be assessed independently: These omissions reflect the scope of the agency requirement rather than the absence of risk.
- Each remains a potential gap that operations, jurisdiction, or lender overlays may make necessary.
Risk advisory
Typical coverage gaps in Habitational
Recurring compliance gaps cluster around valuation, time element, and catastrophe terms.
- Confirm property is written at replacement cost with an agreed value or coinsurance waiver so no coinsurance penalty applies at claim time.
- Rental value or business income should provide an adequate indemnity, generally 12 to 18 months, to protect cash flow through restoration.
- On catastrophe, verify flood for improvements in a Special Flood Hazard Area and note that Fannie Mae may also require flood where storm-water or proximity risk exists.
- Keep the named storm deductible within the 7.5 percent of insurable value cap and confirm storm-surge flood is addressed where the wind form excludes it.
- Validate wind or hail limits, earthquake where the probable maximum loss warrants it, ordinance or law for non-conforming structures, boiler and machinery for centralized systems, a terrorism election under TRIA, and correct mortgagee, additional insured, and loss-payee endorsements naming Fannie Mae and the servicer.
FAQ
Frequently asked questions
What insurance does Fannie Mae require for multifamily properties?
Fannie Mae requires replacement-cost property insurance, rental value or business income coverage, ordinance or law, and commercial general liability. Catastrophe perils including flood, named storm, wind or hail, earthquake, boiler and machinery, and terrorism are required based on the property's location and systems, together with the mortgagee and loss-payee endorsements specified in the Multifamily Guide.
What is Fannie Mae's named storm deductible limit?
Fannie Mae requires that named storm insurance carry a deductible no greater than 7.5 percent of the insurable value. If the named storm policy does not respond to storm-surge flooding, the borrower must maintain flood insurance for buildings in the applicable flood zone, generally equal to the maximum NFIP coverage available or its equivalent.
Does Fannie Mae require flood insurance outside a flood zone?
Sometimes. Beyond the mandatory requirement inside a Special Flood Hazard Area, Fannie Mae may require flood insurance for improvements in Zone X or Zone D when the location is subject to storm-water flooding or sits close to an SFHA boundary. For excess flood, the acceptable deductible is the limit of the underlying NFIP policy.
Does Fannie Mae require terrorism insurance on DUS loans?
Yes. Fannie Mae requires terrorism coverage for certified acts, generally satisfied through the federal Terrorism Risk Insurance Program (TRIA). Where TRIA-backed coverage is declined or unavailable on acceptable terms, the lender must document the analysis and any standalone terrorism solution in accordance with the Multifamily Guide.
When does Fannie Mae require ordinance or law coverage?
Fannie Mae requires ordinance or law insurance when a property is non-conforming under a current land-use law or building ordinance. The coverage funds the loss to the undamaged portion, demolition, and increased cost of construction to rebuild to code, protecting the collateral value on older assets that no longer meet present zoning or building standards.
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