Effective March 18, 2021, Part III, Chapter 7: Multifamily Affordable Housing Properties was updated to expand delegation and clarify requirements, including new form Loan Documents and associated edits to:
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.
- rents on Properties with
- 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.
- 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).