Section 409
| 409.01 | |
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An acceptable Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must be in place and maintained at all times for:
- variable rate Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. ;
- Structured ARM Loans; and
- 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. where (i) the BorrowerBorrowerPerson who is the obligor per the Note. executed the Fannie Mae Interest Rate Cap Reserve and Security Agreement (Form 6442 series), or a similar agreement, allowing for a “springing” Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. under certain circumstances, and (ii) the requirement of the BorrowerBorrowerPerson who is the obligor per the Note. to acquire and pledge to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. an Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has been triggered under the agreement.
The Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. may be either an Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. or Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , although the prior approval of Fannie Mae is required before the BorrowerBorrowerPerson who is the obligor per the Note. may enter into an Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Each Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. and its collateral assignment must meet the requirements of Part III, Chapter 12: Structured Adjustable Rate Mortgage (SARM) Loans.
Fannie Mae outside counsel must be engaged, at Borrower’sBorrower’sPerson who is the obligor per the Note. cost, to review the hedge bid package and documents, and prepare the amended Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for each hedge renewal. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a completed Counsel Designation Request for Interest Rate Hedge Transactions (Form 4625.A).
| 409.02 | |
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For BondBondTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must:
- be in place whenever the variable rate mode is in effect; and
- comply with the requirements of the Reimbursement Agreement and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Per the Interest Rate Cap Reserve and Security Agreement (Form 6442 series), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. reserve and determine if the cost of a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
must not adjust the reserve.
| 409.02B | |
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When required for a Structured Transaction, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. conforms to the applicable Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and/or the other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirements.
Per the Interest Rate Cap Reserve and Security Agreement (Form 6442 series), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. reserve and determine if the cost of a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure that sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
may:
- opt to not adjust the reserve; or
- calculate and adjust the monthly escrow payments needed to purchase a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
based on 115% of the cost of an Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with the term required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, provided:
- it is a Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. DeliveredDeliveredSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. before January 1, 2023;
- the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow payments are recalculated at least every 6 months;
- it is not part of a Variable Rate Bond Credit Enhancement Transaction;
- it does not have an existing Payment DefaultPayment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance DefaultPerformance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or a BorrowerBorrowerPerson who is the obligor per the Note. , 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. , or PrincipalPrincipalPerson who owns or controls specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals, and Guarantors. on ACheckACheckLender due diligence performed for the Borrower, Key Principal, and Principal using the ACheck application. ; and
- no other Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. in your Fannie Mae portfolio with that SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). have an existing Payment DefaultPayment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance DefaultPerformance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may refund to the BorrowerBorrowerPerson who is the obligor per the Note. any amount left in the reserve account after purchasing the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Every 6 months the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust the required Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow amount based on 110% of the current cost of the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
| 409.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- monitor the term of each Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. ;
- hold all escrowed funds for an Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in an account meeting the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. requirements of Part V, Chapter 3: Custodial Accounts;
- engage the BorrowerBorrowerPerson who is the obligor per the Note. prior to expiration of each Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. to ensure that an acceptable replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is in place prior to its expiration; and
- perform any required functions with respect to the Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. .
| 409.04 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain all UCCUCCUniform Commercial Code filings, and ensure that Fannie Mae’s LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. in the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is maintained. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not direct the investment, application, or release of the collateral under any Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , without express written authorization from Fannie Mae.
| 409.05 | |
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| 409.05A | |
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Any payments by the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider must be made to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and not to the BorrowerBorrowerPerson who is the obligor per the Note. . The disposition of funds depends on whether the BorrowerBorrowerPerson who is the obligor per the Note. is current on the 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. and Reimbursement Agreement payment obligations (principal or PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. deposit, as applicable, interest, any Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow, and all other amounts then due) or any default exists under the Reimbursement Agreement or any other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If no default exists, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider’s payment to the BorrowerBorrowerPerson who is the obligor per the Note. . If a default exists, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider’s payment as additional collateral for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations, to be held in accordance with the applicable agreements, and notify Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. of the receipt of the payment.
If the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. or another third party is to receive any payments from the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider, and the BorrowerBorrowerPerson who is the obligor per the Note. is not current on its payments or a default exists, then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- notify the payee of the facts; and
- instruct the third party to withhold the payment to the BorrowerBorrowerPerson who is the obligor per the Note. , and make payment to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to be held as additional collateral for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations.
| 409.05B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. to ensure that all payments are made on a timely basis. All payments under an Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must be made directly to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , which will:
- remit the amount received from the BorrowerBorrowerPerson who is the obligor per the Note. to the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider; or
- remit the amount received from the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider to the BorrowerBorrowerPerson who is the obligor per the Note. , but only after the BorrowerBorrowerPerson who is the obligor per the Note. has made the required monthly P&IP&IPrincipal and interest payment on the 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. .
Payments due on the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must match the payment dates on the 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. or the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , as applicable. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must advance Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. payments and Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. credit enhancement fees that are not made by the BorrowerBorrowerPerson who is the obligor per the Note. or the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider, as applicable, on a timely basis. These payments and their duration will be treated as Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not required to advance any termination payment due on the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
| 409.06 | |
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Fannie Mae lists the credit agency rating requirements and the acceptable Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. providers on Cap/Swap Counterparties for Multifamily Transactions. If the rating of a provider declines to a level where termination and replacement of the outstanding Interest Rate HedgesInterest Rate HedgesInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. with that provider is required, Fannie Mae will notify the affected servicers and direct them to contact their BorrowersBorrowersPerson who is the obligor per the Note. and work with them to effect the termination and replacement. Failure to replace any Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider whose rating no longer meets the rating requirements is a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the current Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. expires before the 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , at least 90 days before the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. terminates, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Borrower'sBorrower'sPerson who is the obligor per the Note. written intention to:
- purchase a replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. ; or
- convert the interest rate on a variable rate;
- Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. to a Bond Reset Interest Rate; or
- SARM Loan to a fixed rate.
If the BorrowerBorrowerPerson who is the obligor per the Note. elects to purchase a replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- confirm that the possible Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. providers are all on the current list of approved Cap/Swap Counterparties for Multifamily Transactions;
- review the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. timing requirements; and
- for a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
, ensure the:
- BorrowerBorrowerPerson who is the obligor per the Note.
purchases a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with a term equal to the lessor of the:
- remaining 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. term; or
- term specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- replacement Interest Rate Cap’sInterest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
notional amount:
- equals the Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. UPBUPBUnpaid Principal Balance when the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. becomes effective; and
- remains at that amount throughout the replacement Interest Rate Cap’sInterest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. term; and
- Cap Strike RateCap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. of the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is equal to or less than the Cap Strike RateCap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. required per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
- BorrowerBorrowerPerson who is the obligor per the Note.
purchases a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with a term equal to the lessor of the:
The BorrowerBorrowerPerson who is the obligor per the Note. may purchase a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in advance if the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. becomes effective on the initial Interest Rate Cap’sInterest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
If the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. expires and the BorrowerBorrowerPerson who is the obligor per the Note. failed to provide evidence of securing the replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. immediately. Fannie Mae will instruct the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. action regarding the Borrower’sBorrower’sPerson who is the obligor per the Note. default.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. the original replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. documents, including the Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap AgreementInterest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , the Assignment of Hedge Interest or Supplemental Hedge Security Agreement, and UCCUCCUniform Commercial Code Financing Statements, and retain copies in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a copy of the new Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap AgreementInterest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. 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. , and provide the new Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. information as follows:
- for Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. – upload Hedge Delivery Information (Form 4643) into CESIRCESIRCredit Enhancement Servicing and Investor Reporting System ;
- for all Interest Rate HedgesInterest Rate HedgesInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions – update hedge data in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. ; or
- for Structured ARM Loans (except in Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions) – submit Form 4643 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. .