Section 1703

Prepayment Premiums

Requirements

You must not waive any:

  • Prepayment Premium Prepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. based on required yield maintenance; or
  • portion of the Minimum 1% Prepayment Premium Minimum 1% Prepayment PremiumFor a prepayment, an amount equal to 1% of the UPB. above the required yield maintenance if the 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.
    • has a minimum Prepayment Premium Prepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. other than 1%,
    • will be refinanced before the Yield Maintenance Period End Date Yield Maintenance Period End DateLast day on which a Borrower owes yield maintenance for a voluntary Mortgage Loan prepayment. , or
    • is a fixed rate MBS Mortgage Loan MBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. with an Issue Date Issue DateFirst day of the month a Security is issued.  before April 1, 1999.

Guidance

For all other Choice Refinance Loans Choice Refinance LoansMortgage Loan refinancing a Portfolio Mortgage Loan using streamlined underwriting per Part III, Chapter 17: Choice Refinance Loans. :

Cash or MBS You may waive the Minimum 1% Prepayment Premium...
Fixed Rate
  • after the Yield Maintenance Period End Date Yield Maintenance Period End DateLast day on which a Borrower owes yield maintenance for a voluntary Mortgage Loan prepayment. , or 
  • for declining Prepayment Premiums Prepayment PremiumsFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. during the 6 months before the Maturity Date Maturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
ARM and SARM

after any lockout if the 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.

 

  • is being refinanced with a fixed rate 7- or 10-year term, and
  • was either
    • an ARM Loan ARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. with a Plan Number Plan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. of 02160, 02254, 02255, 03471, or
    • a SARM Loan with a Plan Number Plan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. of 03488.