Description

Plan Number

04891

Terms

Permitted combinations of fixed rate and adjustable rate terms:

• 5-year fixed rate term, followed by automatic conversion to a 25-year adjustable rate term;
• 7-year fixed rate term, followed by automatic conversion to a 23-year adjustable rate term; or
• 10-year fixed rate term, followed by automatic conversion to a 20-year adjustable rate term.

Maximum Loan Amount

Per Part III, Chapter 9: Small Mortgage Loans, Section 901.01: Description.

Ineligible Products

• Cooperative PropertyCooperative PropertyMultifamily residential property owned by a Cooperative Organization.
• Military Housing PropertyMilitary Housing PropertyMultifamily rental Property in which 40% or more of the units are occupied by individuals serving in, or employed by, the United States military.
• MAH PropertyMAH PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants.
• Near Stabilized PropertyNear Stabilized PropertyNewly constructed or recently rehabilitated Property, with all construction or rehabilitation complete, which is expected to achieve Stabilized Residential Occupancy and the applicable required Underwritten Debt Service Coverage Ratio within 120 days after the Mortgage Loan Origination Date.
• Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units.
• Student Housing PropertyStudent Housing PropertyA multifamily residential rental property in which 40% or more, but less than 80%, of the units are leased to either undergraduate or graduate students.
• Dedicated Student Housing PropertyDedicated Student Housing PropertyMultifamily rental Property in which 80% or more of the units are leased to undergraduate or graduate students.
• Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae.

Prepayment Premium Options

Either

• standard yield maintenance, or
• graduated Prepayment PremiumPrepayment PremiumWhen a Mortgage Loan prepayment is made, amount required to be paid by the Borrower in addition to the principal amount being prepaid and accrued interest per the related Loan Documents. .

Prepayment Premium Period End Date / Yield Maintenance Period End Date

Final day of the last Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. of the applicable fixed rate term.

Conversion to Adjustable Rate

Automatic conversion from a fixed rate to an adjustable rate on the 1st day of the 1st Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. following the applicable fixed rate term.

Index During Adjustable Rate Term

6-month LIBORLIBORLondon Interbank Offered Rate is the benchmark interest rate banks quote to lend funds to one another in the international interbank market for short-term loans, or as replaced by an alternative Index determined by Fannie Mae. .

Interest Rate Floor

Must not be less than the combined

• Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan. , plus
• Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming Lender's portion of credit risk for a Mortgage Loan. , plus
• investor spread (per Form 4660Form 4660Multifamily Underwriting Standards identifying Pre-Review Mortgage Loans and containing the minimum underwriting requirements (e.g., debt service coverage ratio, loan to value ratio, interest only, underwriting floors, etc.) for all Mortgage Loans. ).

Rate Change Date

Date the interest rate changes based on changes in the selected IndexIndexBasis for determining the Gross Note Rate of an ARM Loan. .

Gross Note Rate During Adjustable Rate Term

Equals the

• IndexIndexBasis for determining the Gross Note Rate of an ARM Loan. , plus
• Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan. , plus
• Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming Lender's portion of credit risk for a Mortgage Loan. , plus
• investor spread (per Form 4660Form 4660Multifamily Underwriting Standards identifying Pre-Review Mortgage Loans and containing the minimum underwriting requirements (e.g., debt service coverage ratio, loan to value ratio, interest only, underwriting floors, etc.) for all Mortgage Loans. ).

Interest Rate Change Frequency During Adjustable Rate Term

Every 6 months, based on changes in the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan. .

Frequency of Payment Change During Adjustable Rate Term

P&IP&IPrincipal and interest are recalculated every 6 months on the Rate Change Date.

Maximum Interest Rate Change

Plus or minus 1% of the then-current interest rate both

• at conversion from fixed rate to adjustable rate, and
• during the adjustable rate term.

Maximum Interest Rate During Adjustable Rate Term

5% over the fixed rate.

Index Look-Back Period

45 days before the Rate Change Date.

Interest Accrual Method

Must be

• Actual/360, or
• 30/360.

Payments

Calculated using a 30/360 interest accrual method.

Interest-Only

Must not exceed the fixed rate term.