Base Offering Circular Multifamily
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servicing and guaranty fees. Holders of Ginnie Mae Construction Loan Certificates are not
entitled to receive any payments of principal collected on the Mortgage Loan as long as the
Ginnie Mae Construction Loan Certificates are outstanding. During such period, any
prepayments and other recoveries of principal (other than proceeds from the liquidation of the
related Mortgage Loan) or any Prepayment Penalties on the underlying Mortgage Loan received
by the Ginnie Mae Issuer will be deposited into a non-interest bearing escrow account (the P&I
Custodial Account). Any such amounts will be held for distribution to the related Ginnie Mae
REMIC Trust (unless otherwise negotiated between the Ginnie Mae Issuer and the contracted
security purchaser) on the earliest of (i) the liquidation of the Mortgage Loan, (ii) at the related
Ginnie Mae Issuers 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 Certificate to
a Ginnie Mae Project Loan Certificate and (iii) the applicable Maturity Date.
At any time following the final endorsement of a Mortgage Loan and upon satisfaction of
the prerequisites for conversion outlined in Chapter 32 of the MBS Guide, Ginnie Mae
Construction Loan Certificates shall be redeemed for Ginnie Mae Project Loan Certificates. The
principal amount of the Ginnie Mae Project Loan Certificates may be less than or equal to the
amount of advances that has been disbursed and insured on the Mortgage Loan underlying the
related Ginnie Mae Construction Loan Certificates. Any difference between the principal
balance of the Ginnie Mae Construction Loan Certificates and the principal balance of the Ginnie
Mae Project Loan Certificates issued at conversion will be disbursed to the holders of the Ginnie
Mae Construction Loan Certificates as principal upon conversion. To the extent the underlying
Mortgage Loan begins to amortize prior to the conversion of the Ginnie Mae Construction Loan
Certificates to Ginnie Mae Project Loan Certificate, the related Ginnie Mae Issuer will be
required to pay, at its option, any such prepayments (i) on the date of the conversion of the
Ginnie Mae Construction Loan Certificates or (ii) on the Ginnie Mae Certificate Payment Date
of the Ginnie Mae Project Loan Certificate following conversion.
The related Offering Circular Supplement will describe certain characteristics of the Ginnie Mae
Construction Loan Certificates and the underlying Mortgage Loans.
Although the Trust may receive principal payments, unscheduled recoveries of principal and
Prepayment Penalties, if any, in connection with the liquidation of a Mortgage Loan or following
conversion of a Ginnie Mae Construction Loan Certificate prior to the Ginnie Mae Certificate
Payment Date, the Trust will not distribute any such amounts until the Distribution Date
immediately following receipt of such amounts. The Holders of the Securities will not be
entitled to receive any interest on such amounts.
The Ginnie Mae Project Loan Certificates
All Ginnie Mae Project Loan Certificates issued prior to March 1, 1997 will have an
original term to maturity of not more than 40 years and will be based on and backed by one
multifamily Mortgage Loan. Ginnie Mae Project Loan Certificates issued after March 1, 1997,
may be based or backed by more than one multi-family Mortgage Loan. Some outstanding
Ginnie Mae Project Loan Certificates, issued pursuant to a Ginnie Mae program (the Tandem
Program) that has been discontinued, are based on and backed by two or more multifamily