MODIFIED RISK SUPPLEMENT TO DELEGATED UNDERWRITING

AND SERVICING MASTER LOSS SHARING AGREEMENT

This MODIFIED RISK SUPPLEMENT (the "Supplement") to the Delegated Underwriting and Servicing Master Loss Sharing Agreement ("Loss Sharing Agreement") between Fannie Mae, a corporation organized and existing under the laws of the United States of America, and ______, a ______, (the "Lender"), which Loss Sharing Agreement was executed by Lender on ______, is made by and between Fannie Mae and Lender, effective as of the date of execution by Fannie Mae.

RECITALS:

A.Fannie Mae offers a multifamily mortgage purchase product line called Delegated Underwriting and Servicing ("DUS"), under which Fannie Mae purchases multifamily mortgage loans from approved multifamily mortgage lenders that underwrite, originate, sell and service such mortgage loans.

B.Fannie Mae and Lender have previously executed and delivered the Loss Sharing Agreement, under which Fannie Mae and Lender share in any losses on Mortgage Loans purchased from Lender by Fannie Mae under DUS or as to which Lender assumed loss sharing obligations under DUS.

C.The Lender has obtained commitment number ______from Fannie Mae to purchase a Mortgage Loan in the original principal amount of $______to be originated by Lender to ______, as borrower, and secured by a lien on a multifamily rental housing project located in ______, ______known as ______(the "Modified Risk Mortgage Loan").

D.Fannie Mae and Lender desire to supplement the Loss Sharing Agreement to reduce the loss under the Loss Sharing Agreement to be borne by Lender with respect to the Modified Risk Mortgage Loan.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth in this Supplement, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Fannie Mae and Lender incorporate the above recitals and agree as follows:

Section 1.Definitions.

(a) Allocable Percentage: With respect to the Modified Risk Mortgage Loan, the reduced level of loss which Lender has agreed to assume, expressed as a percentage, and shown on the Mortgage Loan Certificate (attached as Exhibit “A” hereto). The percentage for this Modified Risk Mortgage Loan is 50%.

(b) Capitalized terms used but not defined in this Supplement shall have the meanings assigned to them in the Loss Sharing Agreement.

Section 2.Loss Sharing Formula. The Loss Sharing Formula applicable to the Modified Risk Mortgage Loan shall be the Loss Sharing provisions set forth in Part VII of the Fannie Mae DUS Guide, as modified by this Supplement, in effect on Commitment Date for the Modified Risk Loan, notwithstanding any subsequent changes to the Loss Sharing provisions in the DUS Guide, unless agreed to in writing by Lender and Fannie Mae.

Section 3.Interim Loss Sharing Adjustments.

(a)The threshold level of Delinquency Advances, Servicing Advances, and Delinquency Reduction Costs made by Lender needed to request an Interim Loss Sharing Adjustment, as referenced in Section 5.05 of the Loss Sharing Agreement and Part VII, Chapter 8, section 801 of the DUS Guide, shall not be the "5% Amount" but shall be calculated using a 2.5% Amount.

(b)Lender’s percentage obligation to make Delinquency Advances pursuant to Section 5.05(g)(i) of the Loss Sharing Agreement, after the effective date set forth in the consent delivered by Fannie Mae to Lender approving the interim loss sharing adjustment, shall be reduced from 25% to 12.5%. Nothing herein alters or reduces the Lender’s obligation to pay when due all amounts with respect to taxes, assessments, insurance premiums, other Servicing Advances, and Delinquency Resolution Costs.

(c)Fannie Mae’s obligation to reimburse Lender under the interim loss sharing adjustment provisions, as set forth in Sections 5.05(g)(ii)- (iv) shall be increased to 87.5%.

Section 4.All calculations under the Loss Sharing Formula shall be identical to calculations made for a Mortgage Loan that is not a Modified Risk Mortgage Loan, except as follows:

(a)The Lender Deductible Amount (Chapter 4, section 401) shall be calculated by using the Lender Deductible Amount Percentage of 2.5%.

(b)The Lender Allocation in the Initial Reimbursement Base Allocation [Chapter 3, Section 301 (a)(i)] shall be calculated by using the Lender Allocation Percentage of 12.5%. The Fannie Mae Allocation shall be increased to 87.5%.

(c)The Lender Allocation in the Remaining Reimbursement Base Allocation [Chapter 3, Section 301 (a)(ii)] shall be calculated by using the Lender Allocation Percentage of 5%. The Fannie Mae Allocation shall be increased to 95%.

(d)The Limitation on Total Lender Loss [Chapter 1, Section 102] shall be calculated by using the Maximum Lender Loss Percentage of 10%.

IN WITNESS WHEREOF, the parties to this Supplement have caused it to be duly executed by their duly authorized officers or representatives. This Supplement shall be effective as of the date of its execution by Fannie Mae.

FANNIE MAE

By: ______

Name:

Title:

Address: 3900 Wisconsin Avenue, N.W.

Washington, D.C. 20016

Attn: Multifamily Activities

Facsimile: (202) 752-4231

Telephone: (202) 752-7405

Date:______

LENDER: ______

By:______

Name:

Title:

Address:______

______

______

Facsimile:

Telephone:

Date:______

Fannie Mae Modified Risk SupplementForm 4575.5003/04(Page 1)

50% - Standard DUS

 2004 Fannie Mae

EXHIBIT A TO MODIFIED RISK SUPPLEMENT

MORTGAGE LOAN CERTIFICATE

(MODIFIED RISK MORTGAGE LOAN)

This Mortgage Loan Certificate for a Modified Risk Mortgage Loan ("Certificate") forms an integral part of the Master Loss Sharing Agreement (the "Agreement") between the Federal National Mortgage Association and the Lender named below as in effect on the date of the Certificate.

This Certificate is designed to identify the Modified Risk Mortgage Loan described below as a Mortgage Loan to which the Agreement relates. By delivery to Fannie Mae of the Modified Risk Mortgage Loan identified below, the Lender agrees that the representations and warranties set forth in the Agreement with respect to Mortgage Loans shall be applicable to the Modified Risk Mortgage Loan described in this Certificate. Lender certifies to Fannie Mae that the following description of the Modified Risk Mortgage Loan is true and correct in all respects.

DESCRIPTION OF MODIFIED RISK MORTGAGE LOAN

Fannie Mae Commitment/Pool Number:

Commitment Date: ______

Borrower: ______

Project Name: ______

Original Principal Balance:

Gross Note Rate: ______

Maturity Date: ______

Lender is delivering this Modified Risk Mortgage Loan with an initial Loss Sharing Level of 1.

[Remainder of Page Left Intentionally Blank]

The Mortgage Loan described above is a Modified Risk Mortgage Loan for purposes of the Agreement because a written waiver has been granted to the Lender by Fannie Mae.

The Allocable Percentage of the Modified Risk Mortgage Loan identified in this Certificate is 50%.

Lender: ______

By: ______

Printed Name: ______

Title:*______

Date:______

  • Must be signed by the President or a Vice President or by a General Partner with authority to bind Lender.

Fannie Mae Modified Risk SupplementForm 4575.5003/04(Page A-1)

50% - Standard DUS

 2004 Fannie Mae