FANNIE MAE DUS® MBS as Tax-Exempt Bond Collateral (M.TEB) – Fixed Rate

FANNIE MAE DUS® MBS as Tax-Exempt Bond Collateral (M.TEB) – Fixed Rate
BENEFITS
  • Faster closings with our unique delegated model.
  • Declining prepayment options or yield maintenance.
  • Interest-only is available.
  • Guaranteed direct pass-through of principal and interest is more attractive to bond buyers.
ELIGIBILITY
  • Multifamily Affordable Housing properties.
  • Loans underwritten to Fannie Mae Guide Requirements for tax-exempt bonds.
  • Refundings or new issues with in-place rehab.
  • Immediate delivery or standby forward commitment.
LOAN TERM10-30 years.
AMORTIZATIONUp to 35 years.
MAXIMUM LTV
  • 90% for 4% LIHTC properties with at least 90% of the units meeting affordability requirements.
  • 85% for 4% LIHTC properties with fewer than 90% of the units meeting affordability requirements.
  • 80% for refundings.
MINIMUM DSCR
  • 1.15x for 4% LIHTC properties with at least 90% of the units meeting affordability requirements
  • 1.20x for 4% LIHTC properties with fewer than 90% of the units meeting affordability requirements for refundings.
ISSUER AND TRUSTEE FEESLoan sizing must include underwriting of the Issuer and Trustee Fees; however, Issuer and Trustee Fees will be paid directly by borrower and are not enhanced or passed through by Fannie Mae.
MANDATORY OR OPTIONAL REDEMPTION FEATURENo separate mandatory or optional redemptions outside of the MBS structure.
PREPAYMENT AVAILABILITYFlexible prepayment options available, including yield maintenance and declining prepayment premium.
BOND PAYMENTSPrincipal and interest payments will be based on a monthly schedule in accordance with the terms of the MBS and will flow through the bond trustee for payment to the bondholder. Payments of principal and interest under the MBS are paid in arrears on the 25th of the month based on the prior month’s accrual; payment to the bondholder occurs on the following business day.
TAX-EXEMPT TO TAXABLE CONVERSION FEATUREIf there is a single bondholder, and subject to Issuer consent, the bondholder may pursue an option to redeem tax-exempt bonds and hold the MBS directly.
For 4% LIHTC transactions, this redemption cannot occur prior to the Placed-in-
Service date.
LOAN DOCUMENTSDocumented on Fannie Mae loan documents; Issuer must utilize the Fannie Mae form Indenture.
THIRD-PARTY SUBORDINATE FINANCINGHard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available property cash flow after payment of senior liens and property operating expenses.
RECOURSENon-recourse execution is with standard carve-outs for “bad acts” such as fraud and bankruptcy.
ESCROWSReplacement reserve, tax, and insurance escrows are typically required.
THIRD-PARTY REPORTSStandard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.