Generally

Requirements

You must comply with this Section for all Letters of Credit Letters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. posted as Collateral CollateralProperty, Personal Property, or other property securing a Mortgage Loan. for a Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. .

You must obtain Fannie Mae’s approval for any new or renewal Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , regardless of whether the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. is required by you or Fannie Mae.

All Letters of Credit Letters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. must:

Name Fannie Mae as the sole beneficiary.
Have a minimum term of 1 year.
Be issued or confirmed by a financial institution that meets the eligibility criteria in Part I, Chapter 2: Mortgage Loan, Section 204.02: Issuers and Ratings .

All Letters of Credit Letters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. must meet the requirements in the Irrevocable Letter of Credit Instructions ( Form 4663 ), including the form of sight draft on the Issuer IssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. .

Operating Procedures

How do you request approval to use a Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. ?

Step 1: Complete the Letter of Credit Authorization and Certification Form ( Form 4664.B ) that states

whether the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. is new or will renew or confirm an existing Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , and
that the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. is posted as Collateral CollateralProperty, Personal Property, or other property securing a Mortgage Loan. for a Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. .

Step 2: Indicate whether the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. is required by the Guide GuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. or is required by you as additional collateral. If you require the Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , include the Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. imposing the requirement.

Step 3: Send the completed Form 4664.B to Lender Risk Management Lender Risk ManagementTeam that can be contacted at [email protected]. .

What do you do after Fannie Mae has approved a Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. ?

Step 1: Send the original Letter of Credit Letter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. :

to be delivered the following business day; and
addressed to Multifamily Certification and Custody Multifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. , Attention: Manager, Multifamily Operations - Recourse and Collateral.

Step 2: Include Form 4664.B in the Mortgage Loan Delivery Package Mortgage Loan Delivery PackageLoan Documents and underwriting material required in connection with the Delivery of a Mortgage Loan.

Step 3: Retain a copy of Form 4664.B in your Servicing File Servicing FileYour file for each Mortgage Loan serviced. .