Section 1702

Credit Facilities

Requirements

A Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. is a Structured Transaction that

  • is governed by a Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , and
  • includes cross-collateralized and cross-defaulted Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. and PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). .

Guidance

A Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. may also include:

  • variable rate debt, fixed rate debt, or a combination of both;
  • varied loan maturities and repayment terms;
  • the ability to increase borrowing based on
    • increases in the aggregate DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. , and
    • decreases in the aggregate LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage.   of the PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
  • the ability to increase the amount of the Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. by delivering additional PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). as collateral; or
  • collateral substitutions and releases.

Requirements

Product Description
Minimum Transaction Size $100 million.
Borrowers

Must have:

 

  • common ControlControlPossessing, directly or indirectly, the power to direct or cause the management and operations of an entity (e.g., through the ownership of voting securities or other ownership interests, or by contract). per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. ; and
  • identical ownership, although ownership percentage may vary.
Fannie Mae Due Diligence Fee

$1,500 for each PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code).

 

  • in the initial Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. , and
  • added or substituted post-closing.

Operating Procedures

Credit FacilitiesCredit FacilitiesStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. require intensive Fannie Mae involvement, including the assignment of an in-house legal lead who will direct outside counsel services. 

Fannie Mae will engage outside counsel at your expense to prepare all related documentation.

You may require the BorrowerBorrowerPerson who is the obligor per the Note. to

  • pay these legal fees and expenses, and
  • fund a deposit for their payment.