Fannie Mae Funded and Unfunded Forward Commitment

Unfunded Forward Commitment:              
Fannie Mae provides a forward rate lock (24/30 months) and commitment to purchase the permanent mortgage loan for properties eligible for 9% Low Income Housing Tax Credits (LIHTC) and undergoing new construction or substantial rehabilitation.

Funded Forward Commitment:
Fannie Mae provides a forward rate lock (24/30 months) and commitment to purchase the permanent mortgage loan for properties eligible for 9% LIHTCs.At the same time, Fannie Mae advances funds to the Construction Lender on an interest-only basis in an amount equal to the forward Commitment. Alternatively, Fannie Mae advances funds to the Lender in an amount equal to the Forward Commitment, and the Construction Lender independently makes a construction loan to the Borrower.Funded Forward Commitments are fully collateralized and/or secured during construction, lease-up, and stabilization by a Letter of Credit (“LOC”) issued by an entity rated “A” or better, or by a Guaranteed Investment Contract (“GIC”) issued by an entity rated “AA” or better, or other collateral acceptable to Fannie Mae.

Terms and Guidelines:       

Good Faith Deposit – 2% of the maximum mortgage amount (3% for unfunded forwards), due upon rate lock, lender to hold in escrow. May be secured by delivering a Letter of Credit in lieu of a cash deposit.

Standby Fee – one time up-front fee based on the term of the forward commitment (unfunded forward).

Extension Fee – fee required to extend the commitment beyond the first delegated month extension, normally $5,000 (unfunded forward).

Shortfall Fee – Charged if actual loan amount at permanent loan conversion is less than or equal to 90% of the permanent mortgage loan amount. Fee is the greater of 2% of the shortfall or a pair-off calculation as evidence in the Borrower Certificate.

Borrower Certificate – At the time of rate lock, the borrower will execute a Borrower Certificate that places a junior lien on the property as security for a possible non-delivery event. The lien is released upon delivery of the permanent loan to Fannie Mae or upon payment of the non-delivery fee, if applicable.

Loan Term:                  
18 years

Forward Commitment Term:    
24/30 months with 6 month delegated extension

Amortization:          
30 years

Maximum LTV:           
90%

Minimum DSCR:          
1.15x

Executions:                 
Cash, MBS, or Bond for Unfunded Forwards, Cash only for Funded Forwards.

Interest Rate:              
Set at time of rate lock of the Forward Commitment

Prepayment:                 
The permanent loan is subject to Yield Maintenance

Conversion:                 

The permanent loan closed upon project completion, with Certificate of Occupancy