| 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
- M.TEB execution offers reimbursement of certain Costs of Issuance up to 75 bps
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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 Affordable Housing product line.
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| INTEREST RATE | - 9% LIHTC: Fixed Rate
- 4% LIHTC: Fixed or Variable Rate
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| GOOD FAITH DEPOSIT | 1% of the loan amount, due at issuance of the Forward Commitment, refundable upon conversion |
| FORWARD RATE LOCK | 24 to 36- month commitments; one delegated six-month extension available |
| FORWARD STANDARD FEE | - 9% LIHTC: 10 bps paid upfront prior to rate lock.
- 4% LIHTC: 15 bps per year paid upfront prior to rate lock.
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| DELIVERY TOLERANCE | - 9% LIHTC: +5% and -10% is available.
- 4% LIHTC: The original principal amount of the permanent Mortgage Loan must not be greater than 100% of the amount of the Unfunded Forward Commitment
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| CONVERSION TO PERMANENT LOAN | The permanent loan will close upon project completion with certificates of occupancy for all units and 90% occupancy for 90 consecutive days; the permanent loan must meet Fannie Mae’s underwriting requirements. |
| ADDITIONAL CONSIDERATIONS | - 9% LIHTC: Second lien Delivery Assurance Note and Mortgage are necessary if required by Fannie Mae or the Bond Investor
- 4% LIHTC: During the construction phase, the M.TEB execution requires the bonds to be cash collateralized with proceeds of a side-by-side construction loan and bond loan. The MBS will be delivered as bond collateral after conversion, following the M.TEB delivery guidelines.
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| TERM | 10 to 30 years |
| AMORTIZATION | Up to 35 years |
| MAXIMUM LTV | - 9% LIHTC: 90%
- 4% LIHTC: 90% for deals with 90% or more affordable units. 85% for less than 90% affordable units. 80% for refundings.
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| MINIMUM DSCR | - 9% LIHTC: 1.15x
- 4% LIHTC: 1.15x for deals with 90% or more affordable units. 1.20x for all other deals.
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