The amount of OID required to be included in a Regular Holder’s income in any taxable year will be computed in accordance with section 1272(a)(6) of the Code, which provides for the accrual of OID under a constant yield method on regular interests in a REMIC.  Under section 1272(a)(6), as elaborated by the related legislative history, the amount and the rate of accrual of OID generally is to be calculated based on the prepayment rate for the REMIC’s mortgage collateral and the reinvestment rate on amounts held pending distribution that were assumed in pricing the Regular Securities (the “Pricing Prepayment Assumptions”).  The OID Regulations do not address directly the treatment of instruments that are subject to section 1272(a)(6).  However, until the Treasury issues guidance to the contrary, the Tax Administrator, in its capacity as party responsible for computing the amount of OID to be reported to a Regular Holder each taxable year, will base its computations on Code section 1272(a)(6) and the OID Regulations as described below.  Prospective investors should be aware that because no regulatory guidance currently exists under Code section 1272(a)(6), there can be no complete assurance that the methodology described below represents the correct manner of calculating OID on the Regular Securities. Amount of Original Issue Discount.  The amount of OID on a Regular Security equals the excess, if any, of the Security’s “stated redemption price at maturity” over its “issue price.”   Under the OID Regulations, a debt instrument’s stated redemption price at maturity is the sum of all payments provided by the instrument other than “qualified stated interest” (such payments, “Deemed Principal Payments”).  Qualified stated interest, in general, is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at (i) a single fixed rate or (ii) a variable rate that meets certain requirements set out in the OID Regulations.  See “—Variable Rate Securities” below.  Because an Accrual Security generally does not require unconditional payments of interest at least annually, all payments due thereon, whether designated as principal, accrued interest, or current interest will constitute Deemed Principal Payments.  A portion of interest accrued on a Security of a Partial Accrual Class will also constitute Deemed Principal Payments because payments of such amounts would not be required at least annually.  Consequently, all Accrual Securities will be considered to be issued with OID for federal income tax purposes.  The issue price of a Regular Security generally will equal the initial price at which a substantial amount of Securities of the same Class is sold to the public (including any amounts paid for interest accrued as of the Closing Date under the terms of the Security). Under a de minimis rule, a Regular Security will be considered to have no OID if the amount of OID is less than 0.25% of the Security’s stated redemption price at maturity multiplied by its weighted average maturity (“WAM”).  For that purpose, the WAM of a Regular Security is the sum of the amounts obtained by multiplying the amount of each Deemed Principal Payment by a fraction, the numerator of which is the number of complete years from the Security’s issue date until the payment is made, and the denominator of which is the Security’s stated redemption price at maturity.  Although no guidance has been issued regarding the application of the de minimis rule to REMIC regular interests, it is expected that the WAM of a Regular Security will be computed using the Pricing Prepayment Assumptions.  A Regular Holder will include de minimis OID in income on a pro rata basis as stated principal payments on the Security are received or, if earlier, upon disposition of the Security, unless the Holder makes the “Constant Yield Election” (as defined below). Base Offering Circular – Multifamily 482090 26