FANNIE MAE DUS®
Unfunded Forward Commitment for 4% LIHTC Properties
BENEFITS
- 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.
- MTEB execution offers optional reimbursement of certain costs of issuance up to 75bps.
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ELIGIBILITY
- LIHTC new construction and Properties undergoing substantial rehabilitation, including preservation and rural transactions
- Lenders approved to deliver forward commitments under Fannie Mae’s Multifamily Affordable Housing product line.
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INTEREST RATE
Fixed- or Variable-rate.
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GOOD FAITH DEPOSIT
- LIHTC new construction and Properties undergoing substantial rehabilitation, including preservation and rural transactions
- Lenders approved to deliver forward commitments under Fannie Mae’s Multifamily Affordable Housing product line.
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FORWARD RATE LOCK
24 to 36 month commitments. Up to two delegated six-month extension available.
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FORWARD COMMITMENT STANDBY FEE
15 bps per year paid upfront prior to Rate Lock.
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CONVERSION TO PERMANENT MORTGAGE LOAN
The permanent Mortgage Loan will close upon project completion and the issuance of certificates of occupancy for all units and at least 90% occupancy for 90 consecutive days. The permanent Mortgage Loan must meet Fannie Mae’s underwriting requirements.
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ADDITIONAL CONSIDERATIONS
During the construction phase, the MTEB 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 MTEB delivery guidelines.
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TERM
10 to 30 years.
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DELIVERY TOLERANCE
The original principal amount of the permanent Mortgage Loan must not be greater than 110% of the amount of the Unfunded Forward Commitment, subject to Maximum LTV and Minimum DSCR constraints.
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AMORTIZATION
Up to 35 years.
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MAXIMUM LTV
90% for Mortgage Loans secured by a Property with at least 90% of units meeting affordability requirements. 85% for a Property with less than 90% of units meeting affordability requirements. 80% for refundings.
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MINIMUM DSCR
1.15x for Mortgage Loans secured by a Property with at least 90% of units meeting affordability requirements. 1.20x for refundings and properties with less than 90% of units meeting affordability requirements.
