Primary Changes

Updated Form 4254.DEF to adjust the Fannie Mae Debt Service calculation as follows:

• for any income the Borrower receives from an interest rate cap agreement:
  • exclude it from Other Income; and
  • subtract it from the Fannie Mae Debt Service; and
• for any replacement interest rate cap escrow payments:
  • exclude them from Other Expenses; and
  • add them to the Fannie Mae Debt Service.

The resulting debt service for a SARM Loan with an interest rate cap agreement equals:

• Principal; plus
• Interest; minus
• income received from an interest rate cap agreement; plus
• replacement interest rate cap escrow.

You must note any interest rate cap income and expense adjustments, estimates, and amounts in the Comments section.
 

Questions

Please contact the Multifamily Operating Statements Team at [email protected] with any questions.