Section 1502

Preferred Equity and Structured Common Equity

Requirements

For any Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. with Preferred EquityPreferred EquityA direct or indirect investment in the Borrower, for which the organizational documents provide that equity investor with: an asset management fee or other fee before dividends, distributions, payments, or returns are paid to the investors; or preferred or unequal rights to receive… or Structured Common EquityStructured Common EquityEquity interests in the Borrower's organizational structure (not including Preferred Equity) where the investor has: Forced Sale rights; or Control Takeover rights. in the Borrower’sBorrower’sPerson who is the obligor per the Note. ownership structure, you must comply with the

Guidance

This Section does not apply to any BorrowerBorrowerPerson who is the obligor per the Note. organizational or capital structures relating solely to the allocation of LIHTCsLIHTCsFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. .

Operating Procedures

You must submit:

  • a completed Equity Checklist (Form 6441) using:
    • DUS GatewayDUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. if the Borrower’sBorrower’sPerson who is the obligor per the Note. ownership structure includes any Preferred EquityPreferred EquityA direct or indirect investment in the Borrower, for which the organizational documents provide that equity investor with: an asset management fee or other fee before dividends, distributions, payments, or returns are paid to the investors; or preferred or unequal rights to receive… or Structured Common EquityStructured Common EquityEquity interests in the Borrower's organizational structure (not including Preferred Equity) where the investor has: Forced Sale rights; or Control Takeover rights. requiring Pre-ReviewPre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. per Form 6441; or
    • DUSDUSDelegated Underwriting and Servicing DocWayDocWayBusiness-to-business electronic documentation delivery application, or any successor system. with the Mortgage Loan Delivery PackageMortgage Loan Delivery PackageLoan Documents and underwriting material required in connection with the Delivery of a Mortgage Loan. in Folder II if the Borrower’sBorrower’sPerson who is the obligor per the Note. ownership structure does not include Preferred EquityPreferred EquityA direct or indirect investment in the Borrower, for which the organizational documents provide that equity investor with: an asset management fee or other fee before dividends, distributions, payments, or returns are paid to the investors; or preferred or unequal rights to receive… or Structured Common EquityStructured Common EquityEquity interests in the Borrower's organizational structure (not including Preferred Equity) where the investor has: Forced Sale rights; or Control Takeover rights. requiring Pre-ReviewPre-ReviewRequirement that you obtain Fannie Mae’s approval before you Rate Lock a Mortgage Loan. per Form 6441; and
  • Multifamily Underwriting CertificateMultifamily Underwriting CertificateMultifamily Underwriting Certificate (Form 6460 series) , and/or other agreement approved by Fannie Mae that provides underwriting information for a Mortgage Loan. (Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. /PrincipalPrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,…) (Form 6460.Key Principal) for all Preferred EquityPreferred EquityA direct or indirect investment in the Borrower, for which the organizational documents provide that equity investor with: an asset management fee or other fee before dividends, distributions, payments, or returns are paid to the investors; or preferred or unequal rights to receive… investors identified as PrincipalsPrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… with "Additional Principal Due Diligence Requirements" per Form 6441, with the Mortgage Loan Delivery PackageMortgage Loan Delivery PackageLoan Documents and underwriting material required in connection with the Delivery of a Mortgage Loan. in Folder II in DUSDUSDelegated Underwriting and Servicing DocWayDocWayBusiness-to-business electronic documentation delivery application, or any successor system. .