Fannie Mae introduced a new set of form multifamily loan documents in 2011. These new documents reflect a major overhaul of the previous Fannie Mae loan documents in both form and substance and they include several additional provisions that materially expand the risks of recourse exposure to borrowers and loan guarantors.
As many multifamily professions are probably aware, the most apparent change in the new loan documents is structural. Fannie Mae consolidated a number of the previously standard loan documents, including its Replacement Reserve and Security Agreement, Completion/Repair Agreement, and Certificate of Borrower, into one document: the Loan and Security Agreement. This “Loan Agreement,” along with the Security Instrument and the Environmental Indemnity Agreement, contain all most all of the substantive loan provisions. The Note and the Guaranty round out the list of core Fannie Mae loan documents.
While the structural changes to the Fannie Mae loan documents are noteworthy, there are a number of more important substantive changes that are worthy of consideration. The following is a list of the top 10 issues we believe borrowers should focus on as they evaluate the new Fannie Mae loan documents.
Read more...New Fannie Mae Loan Documents: 10 Issues for Multifamily Borrowers via multihousingnews.com
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