SS Multifamily Memo 11-02

CONTACT: Eric A. Havelock - Multifamily Underwriting Supervisor

Date: September 14, 2011

Multifamily Loan Purchase Program

Seven and Ten year balloon options

(Section 1002.02.K.1) Amortization

AHFC is pleased to announce a program option that incorporates a seven or ten year balloon provision. Effective September 19, 2011, applications for commitment may include proposals that utilize a 30-year amortization for the calculated P&I, yet have a seven or ten year balloon feature. A balloon feature means that although the payment of the loan is amortized over a 30 year period, the loan becomes due and fully payable at the established balloon payment date.

This option is offered for investors who intend to hold their properties for shorter periods of time. Lenders are cautioned that this option is not for every investor and should discuss the pros and cons of selecting this feature with their borrower. While there is a definite rate advantage, consideration should be given to the consequences in the event the balloon payment comes due. If that occurs, AHFC will have various options, such as: 1. Refinance the loan at current rates and terms; 2. Require the borrower to pay off the loan; or 3. Foreclosure. Since the lending environment can change and every circumstance is different, there is no way of knowing what option will be utilized. Interest rates associated with this program option will be published weekly on AHFC's internet site in addition to the fully amortizing, fixed rates as usual.

Multifamily Loan Purchase Program

Federally Insured Multifamily Loan Purchase Program

Interest Rate Buydowns

(Section 1002.02.M.4 and 1002.04.C - respectively)

AHFC is pleased to announce a change to the pricing table for interest rate buydowns. Effective with the date of this memo, the fee structure for an interest rate buydown is reflected in the chart below and replaces the chart in Multifamily Memorandum 11-01.

A buydown associated with a commitment issued prior to the date of this memo will be honored as stated in the commitment contract.

Buydowns cannot be used with the Seven and Ten year balloon options as further described above.

Interest Rate

Buydown Amount

Buydown Fee

15 year

30 year

























Forms Guide revisions: Contact Underwriting

Available in PDF. (Adobe Acrobat or Adobe Reader is required to read and print PDF files).


Available in PDF only. (Adobe Acrobat or Adobe Reader is required to read and print PDF files).


Section 1002 Revised: 09-11

Section 1002 Federal Revised: 09-11