SECURITY GROUP 1
Sensitivity of Class IO to Prepayments
Assumed Price 6.10222%*
CPR Prepayment Assumption Rates
5%
15%
25%
40%
8.2%
7.9%
10.8%
15.7%
* The price does not include accrued interest. Accrued interest has been added to the price in
calculating the yields set forth in the table.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following tax discussion, when read in conjunction with the discussion of "Certain
Federal Income Tax Consequences" in the Multifamily Base Offering Circular, describes the
material federal income tax considerations for investors in the Securities. However, these two
tax discussions do not purport to deal with all federal tax consequences applicable to all
categories of investors, some of which may be subject to special rules.
U.S. Treasury Circular 230 Notice
The discussion contained in this Supplement and the Base Offering Circular as to
certain federal tax consequences is not intended or written to be used, and cannot be
used, for the purpose of avoiding United States federal tax penalties. Such discussion is
written to support the promotion or marketing of the transactions or matters ad-
dressed in this Supplement and the Base Offering Circular. Each taxpayer to whom
such transactions or matters are being promoted, marketed or recommended should
seek advice based on its particular circumstances from an independent tax advisor.
REMIC Elections
In the opinion of Cleary Gottlieb Steen & Hamilton LLP, the Trust will constitute a Double
REMIC Series for federal income tax purposes. Separate REMIC elections will be made for the
Pooling REMIC and the Issuing REMIC.
Regular Securities
The Regular Securities will be treated as debt instruments issued by the Issuing REMIC for
federal income tax purposes. Income on the Regular Securities must be reported under an
accrual method of accounting.
The Class IO Securities are "Interest Weighted Securities" as described in "Certain Federal
Income Tax Consequences Tax Treatment of Regular Securities Interest Weighted Securi-
ties and Non-VRDI Securities" in the Multifamily Base Offering Circular. Although the tax
treatment of Interest Weighted Securities is not entirely certain, Holders of the Interest
Weighted Securities should expect to accrue all income on these Securities (other than income
attributable to market discount or de minimis market discount) under the original issue
discount ("OID") rules based on the expected payments on these Securities at the prepayment
assumption described below.
The Class Z Securities are Accrual Securities. Holders of Accrual Securities are required to
accrue income from their Securities (other than income attributable to market discount or de
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