Fannie Mae Multifamily Preferred Equity Guidance

This guide provides updated guidance on Preferred Equity (PE) and Structured Common Equity (SCE) for Fannie Mae Multifamily transactions. It outlines the goals for enhancing the framework, including streamlining review processes, tracking equity in Fannie Mae's portfolio, and expanding PE options. The document details the definitions of PE and SCE, including the rights and limitations associated with each. It also addresses challenges related to the application of the checklist for Common Equity and outlines new permitted equity default triggers. The guide emphasizes the need for additional principal due diligence in certain scenarios and clarifies the requirements for equity structures not subject to the checklist. Furthermore, it discusses the delegation of authority for equity types and the documentation requirements for transfers and assumptions involving equity structures. Overall, the guide aims to promote a consistent approach to PE and SCE while ensuring compliance with Fannie Mae's standards.