Holder who receives a scheduled or prepaid principal payment with respect to a Regular Security will recognize income or loss equal to the difference between the amount of the payment and the allocable portion of his adjusted basis in the Security.  Any such income will be treated as ordinary income, rather than capital gain, to the extent such income reflects OID that is not de minimis.  The adjusted basis of a Regular Security generally will equal the cost of the Security to the Holder, increased by any OID or market discount previously includible in the Holder’s gross income with respect to the Security, and reduced by the portion of the basis of the Security allocable to payments on the Security previously received by the Holder and by any amortized premium.  Except to the extent that the market discount rules apply and except as provided below, any gain or loss on the sale or other disposition of a Regular Security generally will be capital gain or loss.  Such gain or loss will be long-term gain or loss if the Security is held as a capital asset for more than one year. If the Holder of a Regular Security is a bank, a mutual savings bank, a DB&L, or a similar institution described in section 582 of the Code, any gain or loss on the sale or exchange of the Regular Security will be treated as ordinary income or loss.  In the case of other types of Holders, gain from the disposition of a Regular Security that otherwise would be capital gain will be treated as ordinary income to the extent that the amount actually includible in income with respect to the Security by the Holder during his holding period is less than the amount that would have been includible in income if the yield on that Security during the holding period had been 110% of a specified U.S. Treasury borrowing rate as of the date that the Holder acquired the Security.  Although the relevant legislative history indicates that the portion of the gain from disposition of a Regular Security that will be recharacterized as ordinary income is limited to the amount of OID (if any) on the Security that was not previously includible in income, the applicable Code provision contains no such limitation. The Code contains provisions that require the recognition of gain upon the “constructive sale of an appreciated financial position.”  These provisions do not apply to Classes of Certificates other than the Notional Classes.  Investors in the Notional Classes should consult their own tax advisors with respect to the possible application of these provisions. Tax Treatment of Residual Securities Overview Residual Securities will represent residual interests in the Trust REMIC or Trust REMICs to which they relate.  A REMIC is an entity for federal income tax purposes consisting of a fixed pool of mortgages or other mortgage-backed assets (including Ginnie Mae Multifamily Certificates) in which investors hold multiple classes of interests.  To be treated as a REMIC, the Trust (or one or more segregated pools of Trust assets) must meet certain continuing qualification requirements, and a REMIC election must be in effect.  See “—REMIC Qualification.”  A Trust REMIC generally will be treated as a pass-through entity for federal income tax purposes, i.e., as not subject to ent ity- level tax.  All interests in a Trust REMIC other than the Residual Securities must be regular interests, i.e., Regular Securities or Pooling REMIC Regular Interests (as defined below).  As described in “—Tax Treatment of Regular Securities” above, a regular interest generally is an interest whose terms are analogous to those of a debt instrument, and it generally is treated as such an instrument for federal income tax purposes.  The Base Offering Circular – Multifamily 36 RICHMOND 801041v3