repurchase will result in prepayment of the
principal balance or reduction in the notional
balance of the securities ultimately backed by
such mortgage loan. No assurances can be
given as to the timing or frequency of any
such repurchases.
Extensions of the term to maturity of the
Ginnie Mae construction loan certificates
delay the payment of principal to the trust
and will affect the yield to maturity on
your securities.
Depending on its date of
issuance, the extension of the term to matur-
ity of any Ginnie Mae construction loan cer-
tificate will require the related Ginnie Mae
issuer to obtain the consent of either (i) all
the holders of the related Ginnie Mae con-
struction loan certificates or (ii) the con-
tracted security purchaser, the entity bound
under contract with the Ginnie Mae issuer to
purchase all the Ginnie Mae construction
loan certificates related to a particular multi-
family project. However, the sponsor, on be-
half of itself and all future holders of each
Ginnie Mae construction loan certificate to
be deposited into the trust and all related
Ginnie Mae construction loan certificates
(whether or not currently outstanding), has
waived the right to withhold consent to any
requests of the related Ginnie Mae issuer to
extend the term to maturity of those Ginnie
Mae construction loan certificates (provided
that any such extension, when combined
with previously granted extensions in respect
of such Ginnie Mae construction loan certifi-
cates, would not extend the term to maturity
beyond the term of the underlying mortgage
loan insured by FHA). This waiver effectively
permits the related Ginnie Mae issuer to
extend the maturity of the Ginnie Mae con-
struction loan certificates in its sole discre-
tion, subject only to the prior written
approval of Ginnie Mae. A holder of a Ginnie
Mae construction loan certificate is only enti-
tled to interest at the specified interest rate
on the outstanding principal balance of the
Ginnie Mae construction loan certificate un-
til the earliest of (1) the liquidation of the
mortgage loan, (2) at the related Ginnie Mae
Issuer's option, either (a) the first Ginnie
Mae certificate payment date of the Ginnie
Mae project loan certificate following the
conversion of the Ginnie Mae construction
loan certificate or (b) the date of conversion
of the Ginnie Mae construction loan certifi-
cate to a Ginnie Mae project loan certificate,
and (3) the maturity date (as adjusted for
any previously granted extensions) of the
Ginnie Mae construction loan certificate. Any
extension of the term to maturity may delay
the commencement of principal payments to
the trust and affect the yield on your
securities.
The failure of a Ginnie Mae construction
loan certificate to convert into a Ginnie
Mae project loan certificate prior to its
maturity date (as adjusted for any previ-
ously granted extensions), for any rea-
son, will result in the full payment of the
principal balance of the Ginnie Mae con-
struction loan certificate on its maturity
date and, accordingly, will affect the rate
of prepayment.
The Ginnie Mae construc-
tion loan certificate may fail to convert if the
prerequisites for conversion outlined in
Chapter 32 of the MBS Guide are not satis-
fied, including, but not limited to, (1) final
endorsement by FHA of the underlying mort-
gage loan, (2) completion of the cost certifi-
cation process, and (3) the delivery of
supporting documentation including, among
other things, the note or other evidence of
indebtedness and assignments endorsed to
Ginnie Mae. Upon maturity of the Ginnie
Mae construction loan certificates, absent any
extensions, the related Ginnie Mae Issuer is
obligated to pay to the holders of the Ginnie
Mae construction loan certificates the out-
standing principal amount. The payment of
any Ginnie Mae construction loan certificate
on the maturity date may affect the yield on
your securities.
Any delay in the conversion of a Ginnie
Mae construction loan certificate to a Gin-
nie Mae project loan certificate will delay
the payment of principal on your securi-
ties.
The conversion of a Ginnie Mae con-
struction loan certificate to a Ginnie Mae
project loan certificate can be delayed for a
wide variety of reasons, including work stop-
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