Section 1909

Taxable Tails and Supplemental Mortgage Loans

1909.01

Taxable Tails

Requirements

Terms A Taxable Tail must...
Structure

Be fixed or variable rate debt structured as

 

  • BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. ,
  • a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. , or
  • an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. .
Underwriting and Loss Sharing

Be treated with the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds.

 

  • as a single combined 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
  • with a blended weighted average Underwritten DSCRUnderwritten DSCRRatio of Underwritten Net Cash Flow to the annual debt service for a Mortgage Loan amount based on a level debt service payment with the applicable amortization, and calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis, as adjusted for the applicable products and…, LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage.  , interest rate, etc., based on the combined UPBUPBUnpaid Principal Balance of the tax-exempt and taxable debt.
Cross Provisions Be cross-collateralized and cross-defaulted with the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. .
MBS Mortgage Loan Have 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. .
Maturity and Prepayment
  • Mature no earlier than the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. .
  • Be fully repaid before the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. is prepaid.

Operating Procedures

A Taxable TailTaxable TailTaxable debt secured by the Property securing the Credit Enhancement Mortgage Loan. usually fully amortizes over its loan term.  This may require “hyper-amortization” where all principal payments are applied

  • first to the Taxable TailTaxable TailTaxable debt secured by the Property securing the Credit Enhancement Mortgage Loan. until it fully amortizes, and
  • then to the tax-exempt debt.
1909.02

Supplemental Mortgage Loans

Requirements

You must ensure any Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. :

  • is taxable debt that is cross-collateralized and cross-defaulted with the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
  • is originated after the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. ;
  • complies with the BondBondTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. documents; and
  • is properly disclosed to InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. .