407.01

Non-Fannie Mae Subordinate Financing

A Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is generally not permitted unless it complies with Fannie Mae’s requirements.  Approval of any Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and must be approved in advance by Fannie Mae.  Additionally:

  • with respect to any Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must abide by the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , and any Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , provided that the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. will control in the case of any conflict;
  • unless the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not permit the BorrowerBorrowerPerson who is the obligor per the Note. , without prior Fannie Mae approval, to incur the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. or allow a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. securing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. to be placed against the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
  • if the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. without the approval of the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , the consent of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae is not required; however, notice of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. and a copy of any documents must be submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ;
  • the BorrowerBorrowerPerson who is the obligor per the Note. and the subordinate lender must enter into and record the appropriate Subordination Agreement (Form 6414 or Form 6456 for the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; Form 4503 or Form 4507 for the 4000 Series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ); and
  • the proceeds of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. must benefit the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). (i.e., cash-out financing is not permitted).

 The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. in writing upon learning of any unauthorized additional unsecured debt or indebtedness secured by a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). or of any pledge of ownership interests that is not permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and send the BorrowerBorrowerPerson who is the obligor per the Note. a Reservation of Rights Letter (Form 4804) with a copy submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .  Fannie Mae will determine whether to approve the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , or exercise its remedies.