Key Questions Yes No Are there any debts on the balance sheet or recorded against the borrower’s property, other than the primary mortgage, that will survive closing? . Are any of the debts to be paid off less than 2 years old? (Refer to Program Guidance below.) Does the borrower have any identities of interest with any of the existing lenders or noteholders? (Refer to Program Guidance below.) Do any of the debts to be paid off have prepayment penalties or other significant cost associated with them? Is any of the existing debt cross-collateralized with other assets (pooled debt or master leased) or financed with a line of credit? (If yes, explain how you allocated the debt between the facilities cross-collateralized.) Are delinquent real estate taxes included as an eligible transaction cost? <<For each answer above, provide a narrative discussion on the topic describing the risk “yes” and how it will be mitigated. >> <<If Swap Fees are not applicable to subject transaction this section may be deleted>> Swap Fees: If Swap Fees are eligible and will be included in the FHA-insured mortgage, please answer the following questions: Key Questions Yes No If the original financing is tax exempt, is there a legal opinion from qualified counsel that states the swap meets the definition of a or is “Qualified Hedge” substantially in conformance with that definition? (Check N/A if financing is taxable.) . N/A For interest rate swap contracts related to taxable financing, was the swap integrated with the original financing and entered into as an interest rate hedge within 15 days of the original financing? (Check N/A if financing is tax exempt.) N/A Is the loan-to-value with the swap termination costs included at or below 80% Is the swap termination cost proposed no more than 10% of the insured mortgage proceeds? Was the interest rate swap contract put into place prior to January 1, 2009? Does the Fairness Certification acceptably address the requirements outlined in Mortgagee Letter 2012-08? Program Guidance Eligible Debt on a Refinance: –
Key Questions Yes No Are there any debts on the borrower’s balance sheet or recorded against the property, other than the primary mortgage, that will survive closing? . Are any of the debts to be paid off less than 2 years old? (Refer to Program Guidance below.) Does the borrower have any identities of interest with any of the existing lenders or noteholders? (Refer to Program Guidance below.) Do any of the debts to be paid off have prepayment penalties or other significant cost associated with them? Is any of the existing debt cross-collateralized with other assets (pooled debt or master leased) or financed with a line of credit? (If yes, explain how you allocated the debt between the facilities cross-collateralized.) Are delinquent real estate taxes included as an eligible transaction cost? <<For each “yes” answer above, provide a narrative discussion on the topic describing the risk and how it will be mitigated. >> <<If Swap Fees are not applicable to subject transaction this section may be deleted>> Swap Fees: If Swap Fees are eligible and will be included in the FHA-insured mortgage, please answer the following questions: Key Questions Yes No If the original financing is tax exempt, is there a legal opinion from qualified counsel that states the swap meets the definition of a “Qualified Hedge” or is substantially in conformance with that definition? (Check N/A if financing is taxable.) . N/A For interest rate swap contracts related to taxable financing, was the swap integrated with the original financing and entered into as an interest rate hedge within 15 days of the original financing? (Check N/A if financing is tax exempt.) N/A Is the loan-to-value with the swap termination costs included at or below 80% Is the swap termination cost proposed no more than 10% of the insured mortgage proceeds? Was the interest rate swap contract put into place prior to January 1, 2009? Does the Fairness Certification acceptably address the requirements outlined in Mortgagee Letter 2012-08? Program Guidance – Eligible Debt on a Refinance:
9006_LN-SR-SINGLE-4C.DOCX