Section 409
| 409.01 | |
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An acceptable Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must be in place and maintained at all times for:
- variable rate Credit Enhancement Mortgage Loans Credit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. ;
- Structured ARM Loans; and
- any Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 where (i) the Borrower BorrowerPerson who is the obligor per the Note. executed the Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! Interest Rate Cap Reserve and Security Agreement ( Form 6442 series ), or a similar agreement, allowing for a “springing” Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. under certain circumstances, and (ii) the requirement of the Borrower BorrowerPerson who is the obligor per the Note. to acquire and pledge to the Lender LenderPerson Fannie Mae approved to sell or service Mortgage Loans. an Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has been triggered under the agreement.
The Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. may be either an Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. or Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , although the prior approval of Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! is required before the Borrower BorrowerPerson who is the obligor per the Note. may enter into an Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Each Interest Rate Hedge Agreement Interest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. and its collateral assignment must meet the requirements of Part III, Chapter 11: Structured Adjustable Rate Mortgage (SARM) Loans .
Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! outside counsel must be engaged, at Borrower’s Borrower’sPerson who is the obligor per the Note. cost, to review the hedge bid package and documents, and prepare the amended Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for each hedge renewal. The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a completed Counsel Designation Request for Interest Rate Hedge Transactions ( Form 4625.A ).
| 409.02 | |
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For Bond BondTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. Credit Enhancement Mortgage Loans Credit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , the Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must:
- be in place whenever the variable rate mode is in effect; and
- comply with the requirements of the Reimbursement Agreement and other Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Per the Interest Rate Cap Reserve and Security Agreement ( Form 6442 series ), the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. reserve and determine if the cost of a replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the Servicer
ServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
must not adjust the reserve.
| 409.02B | |
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When required for a Structured Transaction, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. conforms to the applicable Master Credit Facility Agreement Master Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and/or the other Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirements.
Per the Interest Rate Cap Reserve and Security Agreement ( Form 6442 series ), the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. reserve and determine if the cost of a replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure that sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the Servicer
ServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
may:
- opt to not adjust the reserve; or
- calculate and adjust the monthly escrow payments needed to purchase a replacement Interest Rate Cap
Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
based on 115% of the cost of an Interest Rate Cap
Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with the term required by the Loan Documents
Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, provided:
- it is a Portfolio Mortgage Loan Portfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. Delivered DeliveredSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. before January 1, 2023;
- the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow payments are recalculated at least every 6 months;
- it is not part of a Variable Rate Bond Credit Enhancement Transaction;
- it does not have an existing Payment Default Payment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance Default Performance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or a Borrower BorrowerPerson who is the obligor per the Note. , Key Principal Key PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , or Principal PrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… on ACheck ACheckLender due diligence performed for the Borrower, Key Principal, and Principal using the ACheckTM application. ; and
- no other Portfolio Mortgage Loans Portfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. in your Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! portfolio with that Sponsor SponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). have an existing Payment Default Payment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance Default Performance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. .
The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may refund to the Borrower BorrowerPerson who is the obligor per the Note. any amount left in the reserve account after purchasing the replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Every 6 months the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust the required Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow amount based on 110% of the current cost of the replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
| 409.03 | |
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The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- monitor the term of each Interest Rate Hedge Agreement Interest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. ;
- hold all escrowed funds for an Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in an account meeting the Custodial Account Custodial AccountAccount established by the Servicer for depositing P&I payments, T&I payments, and escrow, reserve, or other funds received from the Borrower per any Loan Document, including the: Collateral Agreement; Multifamily Loan Agreement; or Security Instrument. requirements of Part V, Chapter 3: Custodial Accounts ;
- engage the Borrower BorrowerPerson who is the obligor per the Note. prior to expiration of each Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. to ensure that an acceptable replacement Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is in place prior to its expiration; and
- perform any required functions with respect to the Interest Rate Hedge Agreement Interest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. .
| 409.04 | |
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The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain all UCC UCCUniform Commercial Code filings, and ensure that Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! ’s Lien LienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. in the Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is maintained. The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not direct the investment, application, or release of the collateral under any Interest Rate Hedge Agreement Interest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , without express written authorization from Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! .
| 409.05 | |
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| 409.05A | |
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Any payments by the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider must be made to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and not to the Borrower BorrowerPerson who is the obligor per the Note. . The disposition of funds depends on whether the Borrower BorrowerPerson who is the obligor per the Note. is current on the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 and Reimbursement Agreement payment obligations (principal or PRF PRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. deposit, as applicable, interest, any Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow, and all other amounts then due) or any default exists under the Reimbursement Agreement or any other Loan Document Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If no default exists, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider’s payment to the Borrower BorrowerPerson who is the obligor per the Note. . If a default exists, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider’s payment as additional collateral for the Borrower’s Borrower’sPerson who is the obligor per the Note. obligations, to be held in accordance with the applicable agreements, and notify Multifamily Structured Asset Management Multifamily Structured Asset ManagementTeam that can be contacted at [email protected]. of the receipt of the payment.
If the Bond Trustee Bond TrusteeTrustee for a Credit Enhancement Instrument. or another third party is to receive any payments from the Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider, and the Borrower BorrowerPerson who is the obligor per the Note. is not current on its payments or a default exists, then the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- notify the payee of the facts; and
- instruct the third party to withhold the payment to the Borrower BorrowerPerson who is the obligor per the Note. , and make payment to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to be held as additional collateral for the Borrower’s Borrower’sPerson who is the obligor per the Note. obligations.
| 409.05B | |
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The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. to ensure that all payments are made on a timely basis. All payments under an Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must be made directly to the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , which will:
- remit the amount received from the Borrower BorrowerPerson who is the obligor per the Note. to the Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider; or
- remit the amount received from the Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider to the Borrower BorrowerPerson who is the obligor per the Note. , but only after the Borrower BorrowerPerson who is the obligor per the Note. has made the required monthly P&I P&IPrincipal and interest payment on the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 .
Payments due on the Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must match the payment dates on the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 or the Bonds BondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , as applicable. The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must advance Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. payments and Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. credit enhancement fees that are not made by the Borrower BorrowerPerson who is the obligor per the Note. or the Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider, as applicable, on a timely basis. These payments and their duration will be treated as Delinquency Advances Delinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. . The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not required to advance any termination payment due on the Interest Rate Swap Interest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
| 409.06 | |
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Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! lists the credit agency rating requirements and the acceptable Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. providers on Cap/Swap Counterparties for Multifamily Transactions. If the rating of a provider declines to a level where termination and replacement of the outstanding Interest Rate Hedges Interest Rate HedgesInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. with that provider is required, Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will notify the affected servicers and direct them to contact their Borrowers BorrowersPerson who is the obligor per the Note. and work with them to effect the termination and replacement. Failure to replace any Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider whose rating no longer meets the rating requirements is a default under the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the current Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. expires before the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , at least 90 days before the Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. terminates, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Borrower's Borrower'sPerson who is the obligor per the Note. written intention to:
- purchase a replacement Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. ; or
- convert the interest rate on a variable rate;
- Credit Enhancement Mortgage Loan Credit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. to a Bond Reset Interest Rate; or
- SARM Loan to a fixed rate.
If the Borrower BorrowerPerson who is the obligor per the Note. elects to purchase a replacement Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- confirm that the possible Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. providers are all on the current list of approved Cap/Swap Counterparties for Multifamily Transactions;
- review the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the replacement Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. timing requirements; and
- for a replacement Interest Rate Cap
Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
, ensure the:
- Borrower
BorrowerPerson who is the obligor per the Note.
purchases a replacement Interest Rate Cap
Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with a term equal to the lessor of the:
- remaining Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 term; or
- term specified in the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- replacement Interest Rate Cap’s
Interest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
notional amount:
- equals the Mortgage Loan’s Mortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 UPB UPBUnpaid Principal Balance when the replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. becomes effective; and
- remains at that amount throughout the replacement Interest Rate Cap’s Interest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. term; and
- Cap Strike Rate Cap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. of the replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is equal to or less than the Cap Strike Rate Cap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. required per the Loan Documents Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
- Borrower
BorrowerPerson who is the obligor per the Note.
purchases a replacement Interest Rate Cap
Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with a term equal to the lessor of the:
The Borrower BorrowerPerson who is the obligor per the Note. may purchase a replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in advance if the replacement Interest Rate Cap Interest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. becomes effective on the initial Interest Rate Cap’s Interest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
If the Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. expires and the Borrower BorrowerPerson who is the obligor per the Note. failed to provide evidence of securing the replacement Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Structured Asset Management Multifamily Structured Asset ManagementTeam that can be contacted at [email protected]. immediately. Fannie Mae Fannie MaeThis Glossary term Is Created Using Automation in Lower Environments and is used for testing purposes only!! will instruct the Servicer’s Servicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. action regarding the Borrower’s Borrower’sPerson who is the obligor per the Note. default.
The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send to Multifamily Certification and Custody Multifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business Days Business DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. the original replacement Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. documents, including the Interest Rate Cap Agreement Interest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap Agreement Interest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , the Assignment of Hedge Interest or Supplemental Hedge Security Agreement, and UCC UCCUniform Commercial Code Financing Statements, and retain copies in the Servicing File Servicing FileYour file for each Mortgage Loan serviced. . The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a copy of the new Interest Rate Cap Agreement Interest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap Agreement Interest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. through the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , and provide the new Interest Rate Hedge Interest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. information as follows:
- for Credit Enhancement Mortgage Loans Credit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. – upload Hedge Delivery Information ( Form 4643 ) into CESIR CESIRCredit Enhancement Servicing and Investor Reporting System ;
- for all Interest Rate Hedges Interest Rate HedgesInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in Credit Facility Credit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk Delivery Bulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions – update hedge data in MSFMS MSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. ; or
- for Structured ARM Loans (except in Credit Facility Credit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk Delivery Bulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions) – submit Form 4643 through the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .