Chapter 5

Purchase

Section 501

Generally
501.01

Cash and MBS

Requirements

Before Fannie Mae purchases an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. or a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. per the CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. , you must ensure

  • the Mortgage LoanMortgage 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. complies with Part IV, and
  • an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. complies with all disclosure requirements.
501.02

Delivery and Purchase

Requirements

You must deliver the Mortgage LoanMortgage 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. by the DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. deadline to ensure sufficient time for Fannie Mae to review the Mortgage LoanMortgage 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. data and Mortgage Loan Delivery PackageMortgage Loan Delivery PackageLoan Documents and underwriting material required in connection with the Delivery of a Mortgage Loan. for purchase.

Operating Procedures

Loan Type Fannie Mae will...
MBS Mortgage Loan Purchase the Mortgage LoanMortgage 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. on the Book-Entry DateBook-Entry DateDate a Security is delivered by Fannie Mae via the Federal Reserve book-entry system to the applicable Investor’s designated book-entry account at a depository institution. by wiring the MBSMBSMortgage-Backed Security via the Federal Reserve book-entry system per the wiring instructions you submitted in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. .
Cash Mortgage Loan
  • Purchase the Mortgage LoanMortgage 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. 48 hours after certifying it.
  • Wire the purchase amount per the wiring instructions you submitted in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. .
  • Disburse funds per this Chapter and the payee codes you submitted in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. (see Part IV, Chapter 4: Delivery, Section 404.02: Wiring Payee Codes).
  • Issue a detailed electronic purchase advice for each Mortgage LoanMortgage 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. listing components of the net disbursement, including
    • purchased principal,
    • any accrued interest,
    • prepaid interest, or
    • returned fees.
  • Assume no responsibility or liability for disbursing any other funds.

Guidance

For a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. , you may request that Fannie Mae purchase the Mortgage LoanMortgage 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. before the CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. expiration date by

  • selecting the Targeted Funding Date option in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. , and
  • ensuring Fannie Mae receives the complete DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. 3 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before (and not including) the requested purchase date.
501.03

C&D Purchase Notification

Operating Procedures

After Fannie Mae acquires the Mortgage LoanMortgage 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 will see the status in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. of

  • “Funded” for a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. , or
  • “Active/Issued” for an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. .
501.04

Fannie Mae Loan Number

Requirements

You must reference the Loan NumberLoan Number10-digit number assigned by Fannie Mae to each Mortgage Loan. in all communications with Fannie Mae about the Mortgage LoanMortgage 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. .

Operating Procedures

You will receive the Loan NumberLoan Number10-digit number assigned by Fannie Mae to each Mortgage Loan. through C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. after

  • Fannie Mae closes the MBS PoolMBS PoolMBS Security backed by MBS Mortgage Loans. for an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. , or
  • you submit the Mortgage LoanMortgage 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. data for a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. .
Section 502

Purchase Amount

Operating Procedures

For a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. , the purchase amount will be based on

  • the price (expressed as a percentage) per the CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. ,
  • multiplied by the Mortgage LoanMortgage 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. UPBUPBUnpaid Principal Balance at purchase, and
  • adding any accrued interest or deducting any prepaid interest, calculated based on the purchase date, to reflect your and Fannie Mae’s respective shares.

For an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. ,

  • Fannie Mae will wire the MBSMBSMortgage-Backed Security SecuritySecurityMBS, PFP MBS, or REMIC. in its face amount, and
  • you will coordinate with your MBS InvestorMBS InvestorFor MBS Mortgage Loans, either a Third Party MBS Investor for Lender-Arranged Sales, or the Multifamily Trading Desk. to determine any interest-related adjustments to the settlement proceeds due on the Book-Entry DateBook-Entry DateDate a Security is delivered by Fannie Mae via the Federal Reserve book-entry system to the applicable Investor’s designated book-entry account at a depository institution. .
Section 503

Third Party MBS Investor Delivery Scenarios

Operating Procedures

Delivery to... Under this scenario...
You or Your Designee
  • Fannie Mae will deliver the MBSMBSMortgage-Backed Security directly to your account or to your designee through the Federal Reserve book-entry system.
  • You or your designee will deliver the MBSMBSMortgage-Backed Security to the Third Party MBS InvestorThird Party MBS InvestorMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. through the Federal Reserve book-entry system.  The Federal Reserve simultaneously will
    • credit the Third Party MBS Investor’sThird Party MBS Investor’sMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. account with the MBSMBSMortgage-Backed Security ,
    • debit the Third Party MBS Investor’sThird Party MBS Investor’sMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. account for the purchase amount, and
    • credit your account for the purchase amount.
Third Party MBS Investor
  • Fannie Mae will deliver the MBSMBSMortgage-Backed Security directly to the Third Party MBS Investor’sThird Party MBS Investor’sMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. account per your delivery instructions.
  • When the Third Party MBS InvestorThird Party MBS InvestorMBS Investor for an MBS Mortgage Loan that is not the Multifamily Trading Desk. receives the MBSMBSMortgage-Backed Security , it will wire payment to you per the agreed-upon terms.
Section 504

MBS Mortgage Loan Disclosure
504.01

Multifamily MBS Prospectus

Guidance

For all MBSMBSMortgage-Backed Security , Fannie Mae issues a Multifamily MBS Prospectus containing information for MBSMBSMortgage-Backed Security InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. , including:

  • a general description of Fannie Mae’s multifamily mortgage business;
  • disclosure of general MBSMBSMortgage-Backed Security risk factors;
  • property types securing multifamily mortgage loans; and
  • specific SecuritySecurityMBS, PFP MBS, or REMIC. , Mortgage LoanMortgage 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. , and PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). disclosure data.

Since different characteristics may affect the performance assumptions and risk factors associated with an MBSMBSMortgage-Backed Security , Fannie Mae uses Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. to inform all MBSMBSMortgage-Backed Security InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. if any MBS Mortgage LoansMBS Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. have characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus.

You may access Multifamily MBS Prospectus documents at https://multifamily.fanniemae.com.

For MBSMBSMortgage-Backed Security issued prior to December 2017, Fannie Mae prepared a Prospectus Supplement containing specific Mortgage LoanMortgage 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. information in addition to the Multifamily MBS Prospectus.  This Prospectus Supplement had 2 parts:

  • The Prospectus Supplement Narrative (standard) was a transaction-specific disclosure describing the terms and structure of the Mortgage LoanMortgage 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. .
  • The Schedule of Pool and Loan Information, including:
    • Pool Statistics, providing SecuritySecurityMBS, PFP MBS, or REMIC. -level disclosure data; and
    • Multifamily Schedule of Loan Information, including specific Mortgage LoanMortgage 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. and PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). disclosure data.
504.02

Additional Disclosure

Requirements

You must disclose any Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. requiring Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. (per Form 4098) to Fannie Mae and to the MBS InvestorMBS InvestorFor MBS Mortgage Loans, either a Third Party MBS Investor for Lender-Arranged Sales, or the Multifamily Trading Desk. using the applicable Form 4097.Fixed or Form 4097.ARM before obtaining a Rate LockRate LockAgreement between you and the Investor containing the terms of the Lender-Arranged Sale or Multifamily Trading Desk trade of the Mortgage Loan and the MBS terms and conditions relating to the underlying MBS, if applicable, which may be documented via a recorded telephone conversation. .

Operating Procedures

If you identify Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. features on the applicable Form 4097.Fixed or Form 4097.ARM, you must also

  • mark the Mortgage LoanMortgage 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. for Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. ,
  • provide detailed information about the Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. , and
  • consult with the Fannie Mae Deal TeamFannie Mae Deal TeamTeam responsible for reviewing Pre-Review Mortgage Loans, waivers, etc. .

Guidance

For all Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. marked for Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. , Fannie Mae will review the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and data submitted and determine

  • if Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. is required, and
  • the final disclosure language.
If Fannie Mae determines Additional Disclosure is... Fannie Mae will issue...
Not required The standard Multifamily MBS Prospectus.
Required

Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. , and may use information you provided in

 

  • an Addendum to the Multifamily MBS Prospectus, or
  • a footnote on the Annex A.

Fannie Mae will post the Multifamily MBS Prospectus on DUS DiscloseDUS DiscloseMultifamily system providing disclosure to Investors on a multifamily Security, or any successor systems. at least 2 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the MBSMBSMortgage-Backed Security Book-Entry DateBook-Entry DateDate a Security is delivered by Fannie Mae via the Federal Reserve book-entry system to the applicable Investor’s designated book-entry account at a depository institution. .

504.03

Disclosure Obligations

Requirements

You must ensure that all information in the Multifamily MBS Prospectus, including any Additional Disclosure Addendum or footnote to Annex A, is complete and accurate.

Operating Procedures

You must:

  • Review the Multifamily MBS Prospectus, including any applicable Additional DisclosureAdditional DisclosureInformation you provide that is published as an addendum to the disclosure documents when an MBS is issued and describes special Security, Mortgage Loan, or Property characteristics or terms that differ from those described in the standard Multifamily MBS Prospectus. in any Addendum to the Prospectus and/or footnote to the Annex A.
  • Notify Fannie Mae of any inaccuracies before the Book-Entry DateBook-Entry DateDate a Security is delivered by Fannie Mae via the Federal Reserve book-entry system to the applicable Investor’s designated book-entry account at a depository institution. .
  • Certify to the completeness of the Multifamily MBS Prospectus Fannie Mae issues.
  • Comply with all
    • applicable federal and state securities laws, and
    • rules and guidelines of the SecuritiesSecuritiesMBS, PFP MBS, or REMIC. Industry and Financial Markets Association.
Section 505

ASAP

Requirements

If the Mortgage LoanMortgage 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. is funded under an ASAP OptionASAP OptionASAP Sale and ASAP Plus (including ASAP Plus POC) purchase options per Part IV, Chapter 2: Rate Lock and Committing, Section 205: ASAP Options. , you must comply with the ASAP ContractASAP ContractASAP Sale Contract, ASAP Plus Contract, and ASAP Plus POC Contract. .