FANNIE MAE® Unfunded Forward Commitment

  • Protection from interest rate volatility by locking the interest rate and other key provisions prior to construction.
  • Single asset security allows for customized loan structures.
  • Certainty and speed of execution
  • M.TEB execution offers reimbursement of certain Costs of Issuance up to 75 bps
  • LIHTC new construction and properties undergoing substantial rehabilitation, including preservation and rural transactions.
  • Lenders approved to deliver forward commitments under Fannie Mae’s Affordable Housing product line.
  • 9% LIHTC: Fixed Rate
  • 4% LIHTC: Fixed or Variable Rate
GOOD FAITH DEPOSIT1% of the loan amount, due at issuance of the Forward Commitment, refundable upon conversion
FORWARD RATE LOCK24 to 36- month commitments; one delegated six-month extension available
  • 9% LIHTC: 10 bps paid upfront prior to rate lock.
  • 4% LIHTC: 15 bps per year paid upfront prior to rate lock.
  • 9% LIHTC: +5% and -10% is available.
  • 4% LIHTC: The original principal amount of the permanent Mortgage Loan must not be greater than 100% of the amount of the Unfunded Forward Commitment
CONVERSION TO PERMANENT LOANThe permanent loan will close upon project completion with certificates of occupancy for all units and 90% occupancy for 90 consecutive days; the permanent loan must meet Fannie Mae’s underwriting requirements.
  • 9% LIHTC: Second lien Delivery Assurance Note and Mortgage are necessary if required by Fannie Mae or the Bond Investor
  • 4% LIHTC: During the construction phase, the M.TEB execution requires the bonds to be cash collateralized with proceeds of a side-by-side construction loan and bond loan. The MBS will be delivered as bond collateral after conversion, following the M.TEB delivery guidelines.
TERM10 to 30 years
AMORTIZATIONUp to 35 years
  • 9% LIHTC: 90%
  • 4% LIHTC: 90% for deals with 90% or more affordable units. 85% for less than 90% affordable units. 80% for refundings.
  • 9% LIHTC: 1.15x
  • 4% LIHTC: 1.15x for deals with 90% or more affordable units. 1.20x for all other deals.