Fannie Mae published its Preferred Equity Guide Update (25-06) and its Preferred Equity Checklist (Form 6441) in mid-April. Although unpublished iterations have been circulating for the past two years, lenders and law firms have interpreted the requirements in varying ways, at times leading to different outcomes for very similar equity structures.

The Krooth & Altman Team at Miles & Stockbridge welcomes this newly published Checklist, as we expect it to bring more clarity and consistency to the treatment of preferred equity structures across the board with Fannie Mae. There may also be challenges where non-preferred equity structures such as common equity structures and promote structures will be swept into the formalized review process. Fannie Mae has hosted training sessions on the preferred equity requirements and has indicated that it will distribute its own FAQ about the checklist.

In the meantime, to help clients get up to speed on the changes, we’ve covered the highlights in a question-and-answer format we think will matter most to our clients — from key definitions to the Checklist benefits. To learn more about our Q&A or if you have questions about the Checklist, please contact Sameer Upadhya or Travis Shafer.

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