FANNIE MAE MBS AS TAX-EXEMPT BOND COLLATERAL (M.TEB ...
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FANNIE MAE MBS AS TAX-EXEMPT BOND COLLATERAL (M.TEB) - FIXED RATE MBS USED AS COLLATERAL FOR FIXED-RATE BOND ISSUES IN CONJUNCTION WITH 4% LIHTC www.merchantscapital.com 10 - 30 years Up to 35 years 90% for 4% LIHTC properties with at least 90% of the units meeting affordability requirements. 85% for 4% LIHTC properties with less than 90% of the units meeting affordability requirements. 1.15x for 4% LIHTC properties with at least 90% of the units meeting affordability requirements. 1.20x for 4% LIHTC properties with less than 90% of the units meeting affordability requirements and for refundings. Loan sizing must include underwriting of the Issuer and Trustee Fees; however, Issuer and Trustee Fees will be paid directly by borrower and are not enhanced or passed through by Fannie Mae No separate mandatory or optional redemptions outside of the MBS structure. Flexible prepayment options available, including yield maintenance and declining prepayment premium. Principal and interest payments will be based on a monthly schedule in accordance with the terms of the MBS and will flow through the bond trustee for payment to the bondholder. Payments of principal and interest under the MBS are paid in arrears on the 25th of the month based on the prior month’s accrual; payment to the bondholder occurs on the following business day. If there is a single bondholder, and subject to Issuer consent, the bondholder may pursue an option to redeem tax-exempt bonds and hold the MBS directly. For 4% LIHTC transactions, this redemption cannot occur prior to the Placed-in-Service date. Documented on Fannie Mae loan documents; issuer must utilize the Fannie Mae form Indenture. Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available Property cash flow after payment of senior liens and Property operating expenses. Non-recourse execution is with standard carve-outs for “bad acts” such as fraud and bankruptcy. Replacement reserve, tax, and insurance escrows are typically required. Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment. Term Amortization Maximum Loan-to-Value (LTV) Ratio 1 Minimum DSCR Issuer and Trustee Fees Mandatory or Optional Redemption Feature Prepayment Availability Bond Payments Tax-Exempt to Taxable Conversion Feature Loan Documents Third-Party Subordinate Financing Recourse Escrows Third-Party Reports
Transcript of FANNIE MAE MBS AS TAX-EXEMPT BOND COLLATERAL (M.TEB ...
FANNIE MAE MBS AS TAX-EXEMPT BOND COLLATERAL (M.TEB) - FIXED RATE MBS USED AS COLLATERAL FOR FIXED-RATE BOND ISSUES IN CONJUNCTION WITH 4% LIHTC
www.merchantscapital.com
10 - 30 years
Up to 35 years
90% for 4% LIHTC properties with at least 90% of the units meeting affordability requirements.85% for 4% LIHTC properties with less than 90% of the units meeting affordability requirements.
1.15x for 4% LIHTC properties with at least 90% of the units meeting affordability requirements.1.20x for 4% LIHTC properties with less than 90% of the units meeting affordability requirements and for refundings.
Loan sizing must include underwriting of the Issuer and Trustee Fees; however, Issuer and Trustee Fees will be paid directly by borrower and are not enhanced or passed through by Fannie Mae
No separate mandatory or optional redemptions outside of the MBS structure.
Flexible prepayment options available, including yield maintenance and declining prepayment premium.
Principal and interest payments will be based on a monthly schedule in accordance with the terms of the MBS and will flow through the bond trustee for payment to the bondholder. Payments of principal and interest under the MBS are paid in arrears on the 25th of the month based on the prior month’s accrual; payment to the bondholder occurs on the following business day.
If there is a single bondholder, and subject to Issuer consent, the bondholder may pursue an option to redeem tax-exempt bonds and hold the MBS directly. For 4% LIHTC transactions, this redemption cannot occur prior to the Placed-in-Service date.
Documented on Fannie Mae loan documents; issuer must utilize the Fannie Mae form Indenture.
Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available Property cash flow after payment of senior liens and Property operating expenses.
Non-recourse execution is with standard carve-outs for “bad acts” such as fraud and bankruptcy.
Replacement reserve, tax, and insurance escrows are typically required.
Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.
Term
Amortization
Maximum Loan-to-Value(LTV) Ratio1
Minimum DSCR
Issuer and Trustee Fees
Mandatory or Optional Redemption Feature
Prepayment Availability
Bond Payments
Tax-Exempt to Taxable Conversion Feature
Loan Documents
Third-Party Subordinate Financing
Recourse
Escrows
Third-Party Reports
FANNIE MAE AFFORDABLE HOUSING PRESERVATIONPRESERVING THE AVAILABILITY AND AFFORDABILITY OF SUBSIDIZED RENTAL HOUSING FOR LOW-INCOME RENTERS
www.merchantscapital.com
5-30 years
Up to 35 years.
Fixed- and variable-rate options available
80%
1.20x (fixed-rate)
Low-income qualifying restrictions required and must be recorded: + 20% or more units rented to families earning at or below 50% of Area Median Income (AMI); + 40% or more units rented to families earning at or below 60% of AMI; or + Project-Based Housing Assistance Payments contract (Section 8) covering 20% or more units.
Supplemental Loans are available.
Flexible prepayment options available, including yield maintenance and declining prepayment premium.
30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option.
30/360 and Actual/360
Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available Property cash flow after payment of senior liens and Property operating expenses.
Non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.
Replacement reserve, tax. and insurance escrows are typically required.
Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.
Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience.
Term
Amortization
Interest Rate
Maximum LTV
Minimum DSCR
Property Considerations
Supplemental Financing
Prepayment Availability
Rate-Lock
Accrual
Third-Party Subordinate Financing
Recourse
Escrows
Third-Party Reports
Assumption
FANNIE MAE 9% LIHTC UNFUNDED FORWARD COMMITMENT LIHTC NEW CONSTRUCTION AND PROPERTIES UNDERGOING SUBSTANTIAL REHABILITATION
www.merchantscapital.com
Fixed Rate
1% of the loan amount, due at issuance of the Forward Commitment, refundable upon conversion.
24 or 30 month commitments. One delegated six-month extension available.
10 bps paid upfront prior to rate lock5 bps for the 6 month extension
+5% and -10% is available
The permanent loan will close upon project completion with certificates of occupancy for all units and 90% occupancy for 90 consequtive days. The permanent loan must meet Fannie Mae’s underwriting requirements.
Second lien Delivery Assurance Note and Mortgage are necessary if required by Fannie Mae or the Bond Investor.
Up to 30 years.
Up to 35 years.
90%
1.15x
Additional fees are applicable
Interest Rate
Good Faith Deposit
Forward Rate-Lock
Forward Standby Fee
Delivery Tolerance
Conversion to Permanent Loan
Additional Considerations
Term
Amortization
Maximum LTV
Minimum DSCR
Fees
WE ARE MERCHANTS CAPITALMerchants Capital is one of the nation’s top lenders for the refinance, acquisition, new construction and substantial rehabilitation of multifamily, affordable, senior and student housing. Whether you are considering Freddie Mac, Fannie Mae, HUD/FHA insured or balance sheet financing, let our personalized services help you meet your financing objectives. Experience the creativity of a small lender, with all the capabilities of a large institution.
