Fannie Mae and Freddie Mac Multifamily PCA Requirements: What Lenders and Borrowers Need to Know

Fannie Mae and Freddie Mac have not announced a single broad 2026 PCA crackdown.

Current scrutiny reflects targeted updates, clearer reporting requirements, and closer review of whether reports are complete, consistent, and usable for a credit decision.

What Lenders Are Focused on Now  

Property condition is coming up in nearly every Fannie Mae and Freddie Mac lender conversation I am having. Approved lenders are looking closely at whether the scope is correct, the observations are representative, the recommendations are conclusive, and the photographs, repair classifications, costs, reserves, and underwriting conclusions tell the same story. 

WHY PCA SCRUTINY FEELS DIFFERENT NOW 

No single official announcement establishes a uniform 2026 enforcement campaign across both Agencies. Several formal changes help explain why lender review feels more exacting: 

• Fannie Mae in 2023. Supplement 23-04, effective October 18, 2023, reinforced that the property rating and assessment must reflect the condition observed, without relying on planned repairs or other mitigants. It also emphasized lender training, consultant feedback, early screening, and consistency across the PCA and underwriting record. 

• Fannie Mae in 2026. Guide Update 26-04 revised accessibility and photograph requirements and updated Form 4099.G for aluminum branch wiring and specified electrical panels. Notification 26-13 later revised Form 4099 for modular construction and Heightened Property Condition Concern criteria. 

• Freddie Mac. Bulletin M2024-6 removed the Operational Repair category, revised repair definitions, and added borrower remediation-plan requirements for certain material Priority Repairs. Freddie Mac also updated its property condition rating scale in August 2025. 

These changes do not amount to one Agency-wide crackdown. They do make vague or internally inconsistent reporting harder to carry through underwriting. Reports are more likely to draw follow-up when limitations are not explained, planned work is not supported, repair categories do not match the observed condition, or reserve assumptions cannot be traced through the underwriting record. 

WHAT LENDERS NEED A MULTIFAMILY PCA TO ESTABLISH 

A multifamily Property Condition Assessment should document visible deficiencies and give the lender a defensible basis for evaluating collateral condition, repair exposure, capital needs, and the borrower’s ability to execute any required work. 

• Correct execution and current forms. The engagement should identify the Agency, product, current form version, required modules, lender overlays, reliance language, and timing before the site visit. 

• Independent and representative observations. The lender must preserve consultant independence, and the unit sample must represent the property rather than a curated subset. 

• Complete evidence. Records, interviews, photographs, inspection access, open violations, maintenance history, and planned capital work should support the report’s conclusions. 

• Conclusive recommendations. Each material deficiency needs a clear remedy, location, quantity or extent, timing, cost, and any additional analysis required to reach a conclusion. 

• Internal alignment. The narrative, photographs, condition ratings, repair schedule, replacement reserve analysis, underwriting inspection, business plan, and loan documents should describe the same property condition and response. 

WHAT FANNIE MAE FORM 4099 REQUIRES 

The minimum scope and report structure 

Fannie Mae Form 4099, updated in July 2026, defines the PCA as a comprehensive evaluation of current physical condition and anticipated capital expenditures. It establishes the minimum scope and standardized report format, while allowing the lender or other users to add requirements. The lender selects the PCA consultant, and the consultant must maintain independent third-party status. 

The report should address current condition, effective age and remaining useful life of major systems, past and current operations and maintenance, and physical needs over the proposed loan term plus two years. Pre-site records can include prior condition reports, Certificates of Occupancy, surveys and as-built drawings, maintenance reports, inspection certificates, warranties, repair tickets, and planned capital improvements. 

Representative unit selection 

The consultant must make a reasonable effort to distribute unit selection randomly across unit types, buildings, and floors. The report must identify each unit inspected and disclose whether the selection was random. If it was not, the report must explain the selection method and the limitation that prevented random selection. 

• Properties with 5 to 50 units. Inspect at least five occupied units, all vacant units up to 15 including all units vacant longer than 90 days, and all down units. 

• Properties with 51 to 300 units. Inspect at least 10 percent of all units, all units vacant longer than 90 days, and all down units. 

• Properties with more than 300 units. Inspect at least 5 percent of all units, with no fewer than 30, plus all units vacant longer than 90 days and all down units. 

If the minimum cannot be met, the consultant must notify the lender and document both the deviation and its effect on the analysis. Form 4099 also requires photographs sufficient to show current conditions, including all Immediate Repair Items and capital replacement items, major systems, equipment, and nameplates. 

Repair classifications, accessibility, and capital needs 

Form 4099 distinguishes Immediate Repair Items, Critical Repair Items, Deferred Maintenance Items, and Replacement of Capital Items. Immediate Repair Items include conditions that may cause injury, illness, or death, along with specified moisture, microbial-growth, pest, and energy-related issues. Critical Repairs address immediate needs, substantial deterioration, or systems essential to property operations. Deferred Maintenance covers nonrecurring capital items approaching or beyond useful life that could affect financial or operating performance if left unaddressed. 

Accessibility is part of the required visual survey. When applicable, the consultant reviews features such as designated parking, accessible routes, entrances, restrooms, common areas, amenities, and elevator controls. Repairs needed to address applicable accessibility requirements are included as Critical Repair Items. 

For capital planning, the PCA identifies replacement needs, remaining useful life, and estimated costs over the evaluation period. The applicable Fannie Mae Guide provisions and loan documents determine the final repair completion, escrow, and reserve terms for the transaction. 

Aluminum branch wiring and specified electrical panels 

Fannie Mae Form 4099.G requires every PCA to identify and photograph the observed branch-wiring type. When aluminum branch wiring is present, the report must state whether a retrofit is in place. Repair by complete rewiring, COPALUM crimp connectors, or AlumiConn connectors is required as an Immediate Repair, with the classification also considering current condition and remaining useful life. 

Form 4099.G also identifies Zinsco or GTE-Sylvania, Challenger, Bulldog or ITE-Pushmatic, and Federal Pacific Stab-Lok panels. The report should evaluate whether these panel types are present and recommend replacement as an Immediate Repair when they are identified. Current condition and performance inform whether the item is categorized as Life Safety, Critical, or Deferred Maintenance. 

EBI previously addressed this focused issue in Fannie Mae 2025 PCA Updates for Multifamily Owners and Lenders. 

WHAT FREDDIE MAC CHAPTER 62 AND FORM 1105 REQUIRE 

Consultant responsibility and report timing 

Freddie Mac Chapter 62 requires a property condition report, commonly called an engineering report, before Freddie Mac will issue a Letter of Commitment or accept an early rate-lock application. The report must describe major components and their condition, identify deferred maintenance, Critical and Priority Repairs, estimate capital needs and replacement reserves, and address readily observable code, accessibility, health, safety, moisture, mold, and problematic-system concerns. 

The Seller/Servicer retains and directs the consultant, verifies qualifications, and reviews the report for compliance and conclusive recommendations. The borrower may pay for the services, but may not retain or direct the consultant. The report generally must be dated within six months before delivery of the full underwriting package, and the supporting site inspection must be dated within 30 days before the report. 

Unit sampling and documentation 

The consultant selects the units and must cover all buildings and unit types. At least 10 percent of residential units must be inspected overall, including at least 50 percent of vacant units and at least 50 percent of down units. All commercial units must be inspected. If conditions in down units vary considerably, additional units are required to establish the cost to make them rent-ready. 

Freddie Mac also requires the report to identify the records reviewed, include sufficient photographs, and provide a recommended remedy for each deficiency. Form 1105 organizes the inspection, repair, cost, and reserve information so that each material item can be evaluated in underwriting. 

Critical, Priority, PR-90, and routine repairs 

Freddie Mac uses a different repair taxonomy from Fannie Mae. Critical Repairs are conditions that significantly impair habitability, safety, value, income, or marketability and must be corrected before Freddie Mac proceeds with the transaction. Priority Repairs generally must be addressed within 365 days after origination, while PR-90 Repairs must be addressed within 90 days. Routine Repairs and Maintenance are nominal-cost items expected to be handled through normal operations. 

For loans under Seller Application after December 31, 2024, Freddie Mac requires a borrower remediation plan when Priority Repairs exceed the greater of 100 basis points of the loan amount or $200,000, or $75,000 for Small Balance Loan transactions. A plan is also required for certain material repairs that may affect habitability, including structural, moisture or mold, and major building-system issues. The Priority Repair Remediation Plan guidance addresses funding, responsible parties, expected start dates, contractor or staff capacity, permits, and the path to completion. 

Electrical capacity and aluminum wiring 

Both Agencies require at least 60 amperes of electrical service to each unit. This is not just a Freddie Mac requirement, because Fannie Mae Form 4099.G also sets the 60-amp minimum. The major difference is how service below 60 amperes is evaluated. For Fannie Mae, the PCA consultant can complete an in-house electrical load calculation to determine whether the lower amperage is sufficient. For Freddie Mac, the report must include a Priority Repair recommendation for a licensed electrician to complete the load calculation. Inadequate supply under Freddie Mac must be corrected before origination or addressed through a repair reserve acceptable to Freddie Mac. 

The consultant must also evaluate overload protection and aluminum wiring. Aluminum branch-circuit terminations that are unsafe, not code-compliant, or not a Consumer Product Safety Commission permanent repair must be identified, along with the required corrective work. Freddie Mac states the performance and safety requirement broadly; Fannie Mae Form 4099.G is more prescriptive about named methods and panel types. 

WHERE FANNIE MAE AND FREDDIE MAC DIFFER 

The Agencies share the same basic objective: a complete, supportable view of property condition and capital needs. The mechanics differ enough that a generic “Agency PCA” scope can create avoidable problems. 

• Governing documents. Fannie Mae relies on Form 4099, applicable modules, Form 4099.G, and the Multifamily Guide. Freddie Mac relies on Chapter 62, Form 1105, and product-specific Guide requirements. 

• Unit selection. Both Fannie Mae and Freddie Mac require either the PCA consultant or the lender to randomly select the units to be observed. Fannie Mae then applies tiered minimums across unit types, buildings, and floors. Freddie Mac requires at least 10 percent of residential units, including at least 50 percent of vacant units and 50 percent of down units.

• Repair terminology. Fannie Mae uses Immediate Repair ItemsCategories (Life Safety, Critical Repairs, and Deferred Maintenance), and Replacement of Capital Items. Freddie Mac uses Immediate Repair Categories (Critical Repairs, Priority Repairs, and PR-90 Repairs), Replacement of Capital Needs over the Loan Term, and Routine Repairs and Maintenance.

• Electrical focus. Fannie Mae Form 4099.G and Freddie Mac Chapter 62 are largely aligned on the electrical issues a PCA must address, including minimum service capacity, load calculations, overload protection, aluminum branch wiring, and problematic electrical panels. Both set 60 amperes as the minimum service to each unit. The main difference is the response when service is below 60 amperes: Fannie Mae allows the PCA consultant to perform an in-house load calculation, while Freddie Mac requires a Priority Repair recommendation for a licensed electrician to complete the calculation.

• Timing and reserves. Fannie Mae and Freddie Mac are generally aligned on replacement reserve analysis, including capital needs over the loan term plus two years. The biggest difference is report age: the Freddie Mac Property Condition Report (PCR) can be no more than six months old, while the Fannie Mae PCA can be up to one year old.

• Material repair planning. Fannie Mae repair completion, escrow, and reserve terms follow the Guide and loan documents for the transaction. Freddie Mac requires a borrower remediation plan for certain material Priority Repairs before commitment. 

WHAT CAN CREATE FOLLOW-UP OR UNDERWRITING DELAYS 

Most avoidable delays begin before the first draft report is delivered. The following issues are especially likely to create additional questions, revised schedules, supplemental analysis, or changes to repair and reserve assumptions: 

• Wrong execution or scope. The engagement uses the wrong form, omits a required module, overlooks product-specific instructions, or fails to capture a lender overlay. 

• Report or site-visit timing problems. The report falls outside the applicable window, or the property changes materially after inspection. 

• Incomplete or curated unit access. The consultant cannot meet the minimum sample, vacant or down units are omitted, or property staff substitute units without a documented reason. 

• Insufficient records. Maintenance history, inspection certificates, open-violation records, capital plans, bids, contracts, budgets, or repair completion evidence are missing or inconsistent. 

• Evidence that does not align. Photographs, narrative findings, condition ratings, repair classifications, costs, reserves, and underwriting conclusions describe different conditions or remedies. 

• Vague recommendations. A material finding lacks a remedy, quantity, location, timing, cost, or a defined scope for additional analysis. 

• Unresolved material concerns. Electrical, accessibility, life-safety, moisture, mold, structural, or major-system issues are known, but the report, repair path, funding, or completion evidence is not sufficient for underwriting. 

• Unsupported planned work. The borrower expects future work to address a condition, but the scope, contract status, budget, funding, or schedule does not support that conclusion. 

• Reserve schedules that do not track the property. Remaining useful life, repair items, planned improvements, and business-plan assumptions are inconsistent or duplicated. 

• Consultant qualification or independence questions. Vendor credentials, references, conflicts, or specialized-review needs are addressed after the inspection instead of at engagement. 

WHAT LENDERS SHOULD DO BEFORE THE PCA BEGINS 

• Confirm the exact execution. Identify the Agency, product, current forms, required modules, lender overlays, reliance language, and submission milestones before engagement. 

• Retain and direct the consultant. Preserve independence, verify qualifications, and communicate known property or product concerns early. 

• Set the evidence standard before the visit. Provide prior reports, including Phase I Environmental Site Assessments (ESAs), prior PCAs, and other relevant due diligence reports, along with planned-work information and underwriting context needed to reach conclusive recommendations. 

• Build quality-control checkpoints into the schedule. Review sampling, limitations, photographs, repair categories, costs, reserves, and alignment with underwriting before the final report is issued. 

• Leave time for follow-up. Public-record responses, tenant access, specialty reviews, contractor information, remediation plans, and report revisions can affect commitment or full-package timing. 

WHAT BORROWERS, OWNERS, DEVELOPERS, AND CONSTRUCTION TEAMS SHOULD PREPARE 

• Prepare the document package early. Organize prior PCAs and related reports, Certificates of Occupancy, surveys, maintenance records, inspection certificates, warranties, capital histories, open violations, and repair documentation. 

• Provide an accurate unit list. Identify occupancy status, long-vacant units, and down units; arrange tenant notices; and avoid curating the inspection sample. 

• Make the right people available. The property manager and maintenance supervisor should be able to explain operations, recurring issues, recent work, and known complaints or failures. 

• Document planned and active work. Show what is completed, under contract, in progress, or proposed, along with budgets, funding, bids, permits, responsible parties, and expected completion dates. 

• Surface known concerns before inspection. Electrical, fire and life-safety, accessibility, envelope, structural, moisture, mold, code, and major-system issues are easier to evaluate when the supporting information is available at the outset. 

• Connect construction activity to the observed condition. For new development, rehabilitation, or active construction, document cost-to-complete, remaining scope, quality concerns, and how the work relates to the property condition and underwriting plan.