Primary Changes

Multifamily Affordable Housing Properties

• Expanded your delegated authority to underwrite:
  • rents on Properties with
    • new HAP contracts, or
    • recently approved HAP contract rents;
  • HAP contract rents up to 10% above market rents for certain Properties;
  • using 3% economic vacancy
    • in Nationwide markets, and
    • for Properties without HAP contracts;
  • using 2.5% Property management fees for certain Properties in
    • Strong Markets, or
    • Eligible MSAs;
  • the Florida Affordable Housing property tax exemption;
  • without a Restabilization Reserve for Tier 4 Mortgage Loans; and
  • using 35-year amortization for Properties with new LIHTCs and loan terms of at least 10 years.
• Clarified information regarding:
  • Special Public Purpose and Sponsor Initiated Affordability;
  • components of Restricted and Unrestricted Values;
  • for LIHTC Properties,
    • when Sponsors elect to use LIHTC Income Averaging,
    • requiring a minimum 20% LIHTC equity contribution at closing,
    • deferred developer fees, and
    • applicable LIHTC rents equals the lower of maximum allowable LIHTC rents and actual rents in place;
  • LIHTC equity bridge loan
    • terms and conditions, and
    • requiring it to be paid off with the final LIHTC equity payment;
  • restrictive covenants and Affordable Regulatory Agreements apply to both MAH properties and non-MAH properties;
  • Conflict Mortgage Loan requirements if you have a LIHTC equity interest in the Property; and
  • for FHA Risk Sharing Mortgage Loans,
    • Special Public Purpose properties are ineligible,
    • specific Property locations are ineligible,
    • process change for reserving FHA units, and
    • when a subsidy layering review is required.

Associated Edits

Clarified:

• Any equity interest you acquire in the Borrower relating solely to obtaining the associated LIHTCs is not considered when determining if the Mortgage Loan is a Conflict Mortgage Loan.
• Any Affordable Regulatory Agreement for a non-MAH Property must be subordinated to the Security Instrument Lien.
• Asset management guidance for LIHTCs and added asset management requirements for an MAH Property with Sponsor-Initiated Affordability.

Added the following new required form Loan Documents for Sponsor-Initiated Affordability on www.fanniemae.com:

• Payment Guaranty (Pricing Incentive Recapture) (Form 6020.PIR);
• Modifications to Multifamily Loan and Security Agreement (Sponsor-Initiated Affordability Restrictions) (Form 6271); and
• Sponsor-Initiated Affordability Agreement (Form 6490).

Questions

Please contact Brian Wolf at [email protected], or Georgia Hessick at [email protected] with any questions.