If a Mortgage Loan has non-standard characteristics

• it may require additions to the MBS Prospectus and/or accompanying Annex A, and
• you must check the Additional Disclosure Indicator and add Additional Disclosure Comments in the Commitment and Delivery (C&D) system.

This update includes:

• New non-standard Mortgage Loan characteristics:
  • Participation Interests - Applies to any pool that holds less than 100% participation interest in a Mortgage Loan.
  • Scattered Sites - Applies to Properties with multiple non-contiguous sites with separate parcels that are managed and operated as one property.
  • LIHTC Investment - Applies if Fannie Mae is a LIHTC investor.
  • Multiple Series Limited Liability Company - Applies if the Borrower is formed under a series LLC statute.
• Updated non-standard Mortgage Loan characteristics:
  • Cross-Defaulted/Cross-Collateralized – Any cross defaulted and/or cross collateralized mortgage loan that allows the release of the crossed property or has a due on sale clause requires Additional Disclosure (see Job Aid: Data Guidance for Cross-Defaulted and Cross-Collateralized Mortgage Loans for details).
  • Changed Other Prepayment Premium to Declining Prepayment Premium, Other Year Schedule and Other Prepayment Premium – If Declining Prepayment Premium schedules are not available as allowable values in C&D, use Declining Prepayment, Other Year Schedule.
  • Updated language for
    • Mezzanine Financing or Preferred Equity,
    • Senior Third Party Debt,
    • Condominium Project,
    • Future Release, Condemnation, or Property Not Security,
    • Property Valuation,
    • Conflict Mortgage Loans (i.e., Lender’s Equity Interest),
    • Non-Standard Events or Default and/or Personal Recourse Triggers,
    • Revenue and Expenses (e.g., Tax Abatements), and
    • Properties with Multiple Addresses.

• Removed Hybrid ARM Systems Additional Disclosure characteristic.

Superseded Lender Letter

This publication supersedes Lender Letter 17-17.

Contact Us

Please contact Patty Lafean at (202) 752-6240 or [email protected] with any questions.