FANNIE MAE DUS®
Unfunded Forward Commitment for 9% 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 rate.
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GOOD FAITH DEPOSIT
1% of the amount of the Forward Commitment, due at issuance of the Forward Commitment, and refundable upon conversion to the permanent Mortgage Loan.
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FORWARD RATE LOCK
24 to 36 month commitments. One delegated six-month extension available.
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FORWARD COMMITMENT STANDBY FEE
10 bps 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
Second Lien Delivery Assurance Note and Security Instrument are necessary if required by Fannie Mae or the Bond Investor.
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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 (i) greater than 105%, or (ii) less than 90% 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%
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MINIMUM DSCR
1.15x.
