American Trust Corporation

Fannie Mae DUS Multifamily Tax-Exempt Bond Credit Enhancement - Fixed and Weekly Variable Rate Options

Loan Amounts: $3,000,000 and up

Term & Remarketing Periods: Fannie Mae provides the highest rated credit enhancement for tax-exempt bonds for terms up to 30 years. The credit enhancement can be used for fixed or variable rate tax-exempt
bonds and in certain instances, taxable bonds. Fixed rate bonds may have mandatory tender provisions that result in a remarketing and rate reset after 10 years or longer. A 10-year minimum term with maximum term of 25 to 30 years is permitted with 25-year and 30-year amortization. An 18-year minimum term and initial reset period is required for projects with more than 20% LIHTC units.

Interest Rates:
Variable: Initially in Weekly Rate Mode, with option to convert to Fixed Rate (provided the term of the fixed rate conversion is for not less than 10 years or, if less than 10 years, for the remaining term of the credit enhancement). “A-1+/VMIG1” S&P and Moody’s bond ratings
possible.

Fixed: Structured either with a fixed rate to maturity of the bonds, or an interest rate reset and remarketing of the bonds as early as 10 years from the closing date. “AAA/Aaa” S&P and Moody’s bond ratings possible.

Credit Substitutions: Fannie Mae fixed or variable rate credit enhancement structures can be utilized as substitute credit enhancement on existing bond transactions, subject to review of existing bond documents. This is an excellent choice for acquisitions.

Prepayment Premiums:
Variable: Declining fixed percentages based upon the present value of any unpaid Fannie Mae credit enhancement and liquidity fees plus any unpaid lender servicing fees during the first seven or ten years, depending upon term of interest rate cap purchased. No premium is required for conversion to the fixed rate structure.

Fixed: Declining fixed percentages based upon the present value of unpaid Fannie Mae guaranty fees and unpaid lender servicing fees during the first 10 or 15 years, depending on how long the rate is fixed. Additional lockout and prepayment premiums may be imposed under the bond documents to protect the bond purchasers. If Fannie Mae’s credit enhancement continues after a remarketing, then a new prepayment premium period begins.

Loan To Value Ratios:
Variable Rate Issues: 85% Tier 2 without value of tax-exempt financing (80% including value of tax-exempt financing);

Fixed Rate: 85% Tier 2 without value of tax-exempt financing (80% including value of tax-exempt financing); Up to 90% permitted if project is over 90% LIHTC.

Debt Coverage Ratios:
Variable Rate Issues: 1.20X (Tier 2)*; 1.20X if project is over 90% LIHTC

Fixed Rate: 1.25X (Tier 2), 1.20X if project is over 90% LIHTC *Based on Underwriting Interest Rate (see “Variable Rate Issue Interest Rate Caps” below).

Subordinated Debt: Subordinated debt at closing may be available under certain circumstances, including taxable Fannie Mae second mortgages for properties that can support more debt than the bond
allocation.

Loan Features:

Non-Recourse, with the exception of standard carve-outs

Assumable

Taxable bonds can be included to cover financing costs, replacement reserves, capital improvements.
Supplemental Mortgage: At any time after the first year of the mortgage term, if the property value and income have increased such that additional equity is trapped, Borrower may apply for a DUS Supplemental Mortgage. Up to two supplemental mortgages may be obtained during the loan term with Fannie Mae’s approval, with a third available in order to reduce a purchaser’s down payment requirement in the event of an arm’s-length purchase of the property with approved
assumption of the prior Fannie Mae mortgage(s).

Variable Rate Issue Underwriting Rate: Variable Rate Loans are generally underwritten at an interest rate (the “Underwriting Interest Rate”) equal to the sum of: (1) the 52 week trailing average BMA rate (with a 3% minimum); (2) 200 basis points; (3) Fannie Mae credit enhancement, servicing and liquidity fees; (4) all ongoing bond fees such as annual trustee, issuer and remarketing fees; and (5) the
amortized estimated cost to purchase a replacement interest rate cap.

Interest Rate Cap Requirements: Borrower is required to purchase an interest rate cap with a term of at least 5 years with a strike rate of 300 basis points over the average BMA rate for the prior 52 weeks with a 3%
minimum rate from a provider acceptable to Fannie Mae. A new cap must be purchased upon expiration.

In its pre-qualifying review, American Trust Corporation will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts, fees and expenses may vary from the pre-qualifying estimates. A pre-qualifying estimate is not a commitment to make a loan.

Application Fee: $2,500 non-refundable inspection/loan processing fee payable to American Trust Corporation with the loan application, will be credited to origination fee at closing.

Origination Fee: 1%

What We Do

Lending Programs

Property Types

Application Forms

Global Financing Solutions

Short Term Commercial

Float to Fixed

Small Loan Programs

Hard Money Loans

Credit Tenant Financing

Mezzanine

Multifamily

Office

Health Care Financing

Hotel & Resort Financing

Auto, Marine & Equipment Financing

Mobile Home Park

FHA & Fannie Mae Products

Self Storage

Retail

Industrial

SBA Programs

Factoring and Business Finance

Small and Rural Hospital Finance

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	Fannie Mae DUS Multifamily Tax-Exempt Bond Credit Enhancement - Fixed and Weekly Variable Rate Options Loan Amounts: $3,000,000 and up Term & Remarketing Periods: Fannie Mae provides the highest rated credit enhancement for tax-exempt bonds for terms up to 30 years. The credit enhancement can be used for fixed or variable rate tax-exempt bonds and in certain instances, taxable bonds. Fixed rate bonds may have mandatory tender provisions that result in a remarketing and rate reset after 10 years or longer. A 10-year minimum term with maximum term of 25 to 30 years is permitted with 25-year and 30-year amortization. An 18-year minimum term and initial reset period is required for projects with more than 20% LIHTC units. Interest Rates: Variable: Initially in Weekly Rate Mode, with option to convert to Fixed Rate (provided the term of the fixed rate conversion is for not less than 10 years or, if less than 10 years, for the remaining term of the credit enhancement). “A-1+/VMIG1” S&P and Moody’s bond ratings possible. Fixed: Structured either with a fixed rate to maturity of the bonds, or an interest rate reset and remarketing of the bonds as early as 10 years from the closing date. “AAA/Aaa” S&P and Moody’s bond ratings possible. Credit Substitutions: Fannie Mae fixed or variable rate credit enhancement structures can be utilized as substitute credit enhancement on existing bond transactions, subject to review of existing bond documents. This is an excellent choice for acquisitions. Prepayment Premiums: Variable: Declining fixed percentages based upon the present value of any unpaid Fannie Mae credit enhancement and liquidity fees plus any unpaid lender servicing fees during the first seven or ten years, depending upon term of interest rate cap purchased. No premium is required for conversion to the fixed rate structure. Fixed: Declining fixed percentages based upon the present value of unpaid Fannie Mae guaranty fees and unpaid lender servicing fees during the first 10 or 15 years, depending on how long the rate is fixed. Additional lockout and prepayment premiums may be imposed under the bond documents to protect the bond purchasers. If Fannie Mae’s credit enhancement continues after a remarketing, then a new prepayment premium period begins. Loan To Value Ratios: Variable Rate Issues: 85% Tier 2 without value of tax-exempt financing (80% including value of tax-exempt financing); Fixed Rate: 85% Tier 2 without value of tax-exempt financing (80% including value of tax-exempt financing); Up to 90% permitted if project is over 90% LIHTC. Debt Coverage Ratios: Variable Rate Issues: 1.20X (Tier 2); 1.20X if project is over 90% LIHTC Fixed Rate:* 1.25X (Tier 2), 1.20X if project is over 90% LIHTC Based on Underwriting Interest Rate (see “Variable Rate Issue Interest Rate Caps” below). Subordinated Debt:* Subordinated debt at closing may be available under certain circumstances, including taxable Fannie Mae second mortgages for properties that can support more debt than the bond allocation. Loan Features: Non-Recourse, with the exception of standard carve-outs Assumable Taxable bonds can be included to cover financing costs, replacement reserves, capital improvements. Supplemental Mortgage: At any time after the first year of the mortgage term, if the property value and income have increased such that additional equity is trapped, Borrower may apply for a DUS Supplemental Mortgage. Up to two supplemental mortgages may be obtained during the loan term with Fannie Mae’s approval, with a third available in order to reduce a purchaser’s down payment requirement in the event of an arm’s-length purchase of the property with approved assumption of the prior Fannie Mae mortgage(s). Variable Rate Issue Underwriting Rate: Variable Rate Loans are generally underwritten at an interest rate (the “Underwriting Interest Rate”) equal to the sum of: (1) the 52 week trailing average BMA rate (with a 3% minimum); (2) 200 basis points; (3) Fannie Mae credit enhancement, servicing and liquidity fees; (4) all ongoing bond fees such as annual trustee, issuer and remarketing fees; and (5) the amortized estimated cost to purchase a replacement interest rate cap. Interest Rate Cap Requirements: Borrower is required to purchase an interest rate cap with a term of at least 5 years with a strike rate of 300 basis points over the average BMA rate for the prior 52 weeks with a 3% minimum rate from a provider acceptable to Fannie Mae. A new cap must be purchased upon expiration. In its pre-qualifying review, American Trust Corporation will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts, fees and expenses may vary from the pre-qualifying estimates. A pre-qualifying estimate is not a commitment to make a loan. Application Fee: $2,500 non-refundable inspection/loan processing fee payable to American Trust Corporation with the loan application, will be credited to origination fee at closing. Origination Fee: 1%
		What We Do Lending Programs Property Types Application Forms

		Global Financing Solutions Short Term Commercial Float to Fixed Small Loan Programs Hard Money Loans Credit Tenant Financing Mezzanine Multifamily Office Health Care Financing Hotel & Resort Financing Auto, Marine & Equipment Financing Mobile Home Park FHA & Fannie Mae Products Self Storage Retail Industrial SBA Programs Factoring and Business Finance Small and Rural Hospital Finance


Privacy Policy