Allows the borrower to match fund fixed-rate mortgages and
reduce associated interest rate and prepayment risk-borrower determines the level of risk protection
through selected CPR speed
·
Borrower must make annual prepayment of principal, equal
to the previously specified percentage
·
Used as a financing source for fixed rate mortgage loans and
mortgage-backed securities
Rate
Fixed for entire term to maturity
Accrual Basis
30 / 360 day basis
Interest and Principal are Paid
Monthly (payment is first credited to interest due, then to principal reduction)
Principal Prepayment Policy
Annually, the borrower must make a prepayment of principal equal to the
CPR percentage established by the borrower times the outstanding principal balance on the payment date; any
additional prepayment may be subject to prepayment fee; monthly payment is reset after any prepayment of principal
Submission of Application
A SPMMA application is required for each borrowing
