Multifamily ARM 7-6 and ARM 7-4 Partial Interest-Only MBS Amortization Schedule Announcement
Amortization of Multifamily ARM 7-6 and ARM 7-4 Partial Interest-Only Loans
The disclosure on certain Multifamily ARM 7-6 and ARM 7-4 mortgage loans with partial interest- only terms was determined to be inconsistent with the related mortgage loan documents. Fannie Mae is placing banners on 171 Multifamily MBS with ARM loans that are partial interest-only to describe changes to disclosure to reflect the loan documents. Certain partial interest-only ARM 7-6 and ARM 7-4 securities included in this change have been resecuritized into structured transactions through the Guaranteed Multifamily Structures (GeMS) program.
Banners are being placed on 154 ARM 7-6 and ARM 7-4 partial interest-only MBS loans issued before December 2017 to specify how the amount of their monthly payment following the interest-only period will be determined. The monthly loan payment will be determined based on an amortization period equal to the Original Amortization Term minus the number of scheduled Monthly Debt Service Payments that have elapsed on the loan. For loans still in their interest-only period, the current calculation of their interest-only monthly payment will not change.
In addition, effective with the August 2018 payment and going forward, the monthly payments on 17 Multifamily MBS ARM loans with partial interest-only terms will change to reflect the loan documents. Amortization payments on these 17 loans will also be based on an amortization period equal to the Original Amortization Term minus the number of scheduled Monthly Debt Service Payments that have elapsed on the loan rather than the Original Amortization Term. Banners have been placed on the 17 securities in DUS Disclose and in PoolTalk.
Please note that the banner language and changes only affect Multifamily MBS with ARM 7-6 or ARM 7-4 loans that have partial interest-only terms. A list of outstanding MBS with partial interest-only ARM 7-6 and ARM 7-4 loans and if applicable, the REMIC deals that they support is available in the following link.
Future Multifamily ARM 7 -6 and ARM 7-4 partial interest-only loans will use the amortization period specified above to calculate monthly payments following the interest-only period.
If you have questions about this change, please contact Fannie Mae's Investor Help Line at 1-800-232-6643 or by email.