2003.04

Commitment

Requirements

All:

Operating Procedures

You must

  • complete the steps in the following table, and 
  • submit the Forward CommitmentForward CommitmentCommitment to purchase a permanent Mortgage Loan for a to-be constructed or rehabilitated Property. in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. per the Committing & Delivery of Unfunded Forwards Job Aid.
Step You must...
For All Mortgage Loans
1

Obtain an executed Borrower CommitmentBorrower CommitmentYour written commitment with the Borrower to originate a Mortgage Loan, and any separate written or oral rate lock agreements between you and the Borrower to rate lock the Mortgage Loan. including:

 

  • BorrowerBorrowerPerson who is the obligor per the Note. covenants to 
    • close the permanent 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. per the Forward CommitmentForward CommitmentCommitment to purchase a permanent Mortgage Loan for a to-be constructed or rehabilitated Property. terms, and
    • pay all required fees and deposits; and 
  • all required Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and third-party documents in final form, including
    • Affordable Regulatory Agreements (or other affordable housing restrictions), and
    • Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. documents and subordination agreements.  
2 Pay all fees or submit acceptable collateral to Fannie Mae.
3

Ensure the BorrowerBorrowerPerson who is the obligor per the Note.

 

  • accepted the construction loan commitment, and 
  • complied with its conditions.
4

Obtain evidence that state and local authorities issued the BorrowerBorrowerPerson who is the obligor per the Note. all 

 

  • land disturbance, 
  • site, 
  • grading, 
  • foundation, and 
  • building permits, or their equivalents.
Additionally, for all non-Credit Enhancement Mortgage Loans
5 Obtain 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. .
6 Obtain the signed Delivery Assurance Agreement (Unfunded Forwards) (Form 6488).
7 Ensure any Delivery Assurance Security InstrumentDelivery Assurance Security InstrumentThe applicable Security Instrument (Form 6025 series). covers any permitted Borrower CommitmentBorrower CommitmentYour written commitment with the Borrower to originate a Mortgage Loan, and any separate written or oral rate lock agreements between you and the Borrower to rate lock the Mortgage Loan. extension terms.
8 Record any Delivery Assurance Security InstrumentDelivery Assurance Security InstrumentThe applicable Security Instrument (Form 6025 series). on the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). before the construction loan closing.
Additionally, for all Credit Enhancement Mortgage Loans
9 Ensure 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. pricing complies with Part IV, Chapter 8: Bond Transactions and Credit Enhancement Mortgage Loans, Section 801.04: Rate Lock.
10 Obtain the Credit Enhancement Commitment Letter.

After you complete these steps, Fannie Mae will confirm the Forward CommitmentForward CommitmentCommitment to purchase a permanent Mortgage Loan for a to-be constructed or rehabilitated Property. in C&DC&DElectronic committing and delivery system used for issuing and confirming Commitments for acquiring Mortgage Loans, or any such successor system. .  

Within 30 days after the Forward CommitmentForward CommitmentCommitment to purchase a permanent Mortgage Loan for a to-be constructed or rehabilitated Property. is confirmed, you must DeliverDeliverSubmission 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. the documents listed in: 

  • steps 4, 6, 8, and 10; and 
  • the Pre-Construction Monitoring Package (Form 4543).