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.