Issuers and Ratings

Operating Procedures

Who is eligible to issue a Letter of Credit?

A financial institution that satisfies the ratings criteria may issue or confirm a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit..

You, one of your AffiliatesAffiliatesWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key…, or an AffiliateAffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key… of the BorrowerBorrowerPerson who is the obligor per the Note., may issue a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit., but only if it is confirmed by a financial institution that is not an AffiliateAffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key… of you or the BorrowerBorrowerPerson who is the obligor per the Note..

Fannie Mae, in its sole discretion, may prohibit you from obtaining a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. (or confirming a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.) from a specific financial institution.

What ratings do Issuers need to satisfy?

A financial institution is eligible to issue or confirm a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. if it satisfies the following rating criteria:

Letter of Credit Rating Criteria
If rated by only 1 of the following rating agencies, the financial institution must have...	If rated by both of the following rating agencies, the financial institution must have...
Either a: Standard and Poor’s long-term issuer rating of "A" or better; or Moody’s long-term issuer rating of “A2” or better.	Both a: Standard and Poor’s long-term issuer rating of "A" or better; and Moody’s long-term issuer rating of “A2” or better.

Letter of Credit Rating Criteria

If rated by only 1 of the following rating agencies, the financial institution must have...

If rated by both of the following rating agencies, the financial institution must have...

Either a:

Standard and Poor’s long-term issuer rating of "A" or better; or
Moody’s long-term issuer rating of “A2” or better.

Both a:

Standard and Poor’s long-term issuer rating of "A" or better; and
Moody’s long-term issuer rating of “A2” or better.