103.05

Verifying Issuer Ratings

103.05A

Monitoring

Operating Procedures

While each Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. is outstanding, you must:

103.05B

Rating Noncompliance

Operating Procedures

If the rating of the financial institution issuing or confirming the Letter of Credit does not comply with... You must...
Part I, Chapter 2: Mortgage Loan, Section 204.02: Issuers and Ratings

Promptly notify Multifamily Business OperationsMultifamily Business OperationsTeam that can be contacted at [email protected] even if the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan.

 

  • provides different acceptable issuer rating criteria, or
  • does not authorize Fannie Mae to act if the rating falls.
Rating criterial in the Achievement Agreement or other Collateral Agreement
  • Promptly notify Multifamily Business OperationsMultifamily Business OperationsTeam that can be contacted at [email protected] .
  • Require the BorrowerBorrowerPerson who is the obligor per the Note. to provide a replacement or confirming Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. from an acceptably rated institution by the:
    • replacement deadline per the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. ; or
    • earlier of
      • 30 days after notifying the BorrowerBorrowerPerson who is the obligor per the Note. , or
      • 5 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 Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. expires.