B7-3-07, Evidence of Property Insurance (12/14/2022)

The following requirements apply when documenting and retaining evidence of property insurance policies:

• The lender or servicer must verify the existence of a valid insurance policy that meets Fannie Mae's requirements. Information related to the policy should be passed on to the servicer, when applicable.
• The lender or servicer must retain acceptable evidence of insurance for each required policy, which includes sufficient information about the insurance policy, the subject property, and the borrower to ensure compliance with Fannie Mae's requirements for a first mortgage, unless the lender or servicer is covered by a mortgage impairment or mortgagee interest insurance policy or uses other evidence of insurance that Fannie Mae considers acceptable.
• The servicer of a second mortgage must retain a copy of the insurance policy, any endorsements to it, and evidence of premium payments.
• The servicer must verify at least annually that any property insurance policy for a one- to four-unit property or a unit in a project development meets Fannie Mae's requirements.

Note: If a lender is unable to determine whether the applicable insurance policy meets Fannie Mae's requirements, the associated loan is not eligible for purchase by Fannie Mae.

A lender or servicer may accept a certificate of property insurance in lieu of a complete property insurance policy if the certificate includes all of the information needed for the lender or servicer to determine whether the insurance meets Fannie Mae's requirements. The certificate of property insurance must be signed by the insurer.

When required, the lender or servicer must obtain a copy of the current master property insurance policy or a certificate of property insurance showing that the subject unit is covered under the master property insurance policy. See Servicing Guide, B-2-03, Master Property Insurance Requirements for Project Developments, for additional servicer responsibilities related to evidence of master property insurance policies for project developments.

Electronic data files are acceptable in lieu of hard copy insurance policies if all the requirements in the following table are met.