Section 1204

Prepayment Terms

1204.01

Generally

Requirements

The following table describes various situations and the applicable prepayment provisions; see Part V, Chapter 2: Reporting and Remitting, Section 213: Prepayment Premium Sharing for Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. calculations and sharing between you and Fannie MaeFannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .

Situation

Prepayment Provisions

Borrower attempts to make a voluntary prepayment during the lockout period.

BorrowerBorrowerPerson who is the obligor per the Note. cannot make a voluntary prepayment during the lockout period.

SARM Loan is accelerated during the prepayment lockout period.

BorrowerBorrowerPerson who is the obligor per the Note. owes a 5% Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Borrower makes a prepayment sometime after the lockout period and before the "open period" (typically 3 months before Maturity Date) for any reason other than a casualty or condemnation.

BorrowerBorrowerPerson who is the obligor per the Note. owes a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

SARM Loan converts to a fixed rate Mortgage Loan.

BorrowerBorrowerPerson who is the obligor per the Note. does not owe a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Borrower makes a prepayment during the "open period" (typically 3 months before the Maturity Date).

BorrowerBorrowerPerson who is the obligor per the Note. does not owe a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Borrower makes a prepayment due to casualty or condemnation.

BorrowerBorrowerPerson who is the obligor per the Note. does not owe a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .
1204.02

Prepayment Option 1 – Declining Prepayment Premium Schedule

Requirements

For a voluntary prepayment after the lockout period using Prepayment Option 1, you must use Schedule 4 of the Multifamily Loan and Security Agreement - Prepayment Premium Schedule (Graduated Prepayment Premium – ARM, SARM) (Form 6104.10) with the applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. percentage listed in this table.

Loan Year

5-Year Term

7-Year Term

10-Year Term

1 (Locked Out)1

N/A

N/A

N/A

2

4%

4%

4%

3

3%

3%

3%

4

2%

2%

2%

5

1%

1%

1%

6

N/A

1%

1%

7

N/A

1%

1%

8

N/A

N/A

1%

9

N/A

N/A

1%

10

N/A

N/A

1%

1 During the lockout period, the Borrower cannot voluntarily prepay the SARM Loan.  If the SARM Loan is accelerated during the lockout period, the Borrower owes a 5% Prepayment Premium.
1204.03

Prepayment Option 2 - 1% Prepayment Premium Schedule

Requirements

For a voluntary prepayment after the lockout period using Prepayment Option 2, you must use Schedule 4 to Multifamily Loan and Security Agreement (Prepayment Premium Schedule-1% Prepayment Premium – ARM, SARM) (Form 6104.11) to document the required 1% Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .

Loan Year

5-Year Term

7-Year Term

10-Year Term

1 (Locked Out)1

N/A

N/A

N/A

2

1%

1%

1%

3

1%

1%

1%

4

1%

1%

1%

5

1%

1%

1%

6

N/A

1%

1%

7

N/A

1%

1%

8

N/A

N/A

1%

9

N/A

N/A

1%

10

N/A

N/A

1%

1 During the lockout period, the Borrower cannot voluntarily prepay the SARM Loan.  If the SARM Loan is accelerated during the lockout period, the Borrower owes a 5% Prepayment Premium.