704.07

Subordination Agreement

Requirements

For all Third-Party FinancingThird-Party FinancingAny loan to, or indebtedness of, a Borrower that: is not a Supplemental Mortgage Loan or Pre-Existing Mortgage Loan; and either: requires repayment by the Borrower; or is forgiven (over time or at maturity) subject to Borrower compliance with certain covenants or conditions. …, including Soft Financing, you, the BorrowerBorrowerPerson who is the obligor per the Note. , and the third-party lender must enter into:

  • if the third-party lender is a Public EntityPublic EntityA federal, state, or local government entity, or an entity that: is created by state statute, or one or more governmental entities acting pursuant to applicable statutory authority; has a governing body that is elected by voters in the applicable jurisdiction, or …, a Fannie Mae form
    • Subordination and Standstill Agreement (Public Entity) (Form 6456), or
    • Subordination and Standstill Agreement (Public Entity) (Form 6456.SUB); or
  • if the third-party lender is not a Public EntityPublic EntityA federal, state, or local government entity, or an entity that: is created by state statute, or one or more governmental entities acting pursuant to applicable statutory authority; has a governing body that is elected by voters in the applicable jurisdiction, or …, a Fannie Mae form Subordination and Standstill Agreement (Non-Public Entity) (Form 6414).

If a Public Entity, as issuer of a bond financing…

 Then you must enter into…
Assigns its Third-Party Financing documents to a bond trustee
 

Form 6414 with the

 

  • BorrowerBorrowerPerson who is the obligor per the Note. ,
  • Public EntityPublic EntityA federal, state, or local government entity, or an entity that: is created by state statute, or one or more governmental entities acting pursuant to applicable statutory authority; has a governing body that is elected by voters in the applicable jurisdiction, or …,
  • bond trustee, and
  • bondholder.
Reserves certain rights under the Third-Party Financing documents that remain unassigned

Form 6456, but only as to the reserved rights, with the

 

  • BorrowerBorrowerPerson who is the obligor per the Note. , and
  • Public EntityPublic EntityA federal, state, or local government entity, or an entity that: is created by state statute, or one or more governmental entities acting pursuant to applicable statutory authority; has a governing body that is elected by voters in the applicable jurisdiction, or …, as third-party lender.
  • Assigns its Third-Party Financing documents to a bond trustee; and
  • Reserves certain rights under the Third-Party Financing documents that remain unassigned

Both: 

 

  • Form 6414 with the
    • BorrowerBorrowerPerson who is the obligor per the Note. ,
    • Public EntityPublic EntityA federal, state, or local government entity, or an entity that: is created by state statute, or one or more governmental entities acting pursuant to applicable statutory authority; has a governing body that is elected by voters in the applicable jurisdiction, or …,
    • bond trustee, and
    • bondholder; and
  •  Form 6456, but only as to the reserved rights, with the
    • BorrowerBorrowerPerson who is the obligor per the Note. , and
    • Public EntityPublic EntityA federal, state, or local government entity, or an entity that: is created by state statute, or one or more governmental entities acting pursuant to applicable statutory authority; has a governing body that is elected by voters in the applicable jurisdiction, or …, as third-party lender.