mf.freddiemac.com · Web viewThis Preliminary Legal Issues Memorandum (“PLIM”) is submitted to Freddie Mac on behalf of the Seller/Servicer in conformity with the requirements

PRELIMINARY LEGAL ISSUES MEMORANDUM (PLIM) – CHECKLIST FORM

(Form Revised 5-23-2018)

Prepared by: [ATTORNEY NAME] Phone and E-Mail: Law Firm: Seller/Servicer: Date Completed/Updated:

This Preliminary Legal Issues Memorandum (“PLIM”) is submitted to Freddie Mac on behalf of the Seller/Servicer in conformity with the requirements of the Freddie Mac Multifamily Seller/Servicer Guide (“Guide”). All capitalized terms not defined in this PLIM have the meanings given to them in the Guide. As with any PLIM, Freddie Mac may require additional information or analyses of the issues described in this PLIM.

Submit this PLIM in MS Word format. This PLIM should serve as a comprehensive summary of the legal issues affecting the transaction. If there are any updates, additions, or corrections, submit a revised PLIM together with a blackline showing the changes.

BASIC INFORMATION

Property Name and Address:

Freddie Mac Loan Number (if known):

Anticipated Loan Amount:

Additional legal analyses submitted or required? ☐ Y ☐ N If yes, enumerate and describe additional items below

Freddie Mac Producer and Underwriter (if known):

Freddie Mac In-House Counsel (and/or Outside Counsel, if applicable) (if known):

Freddie Mac Title Paralegal (if known):

Targeted Origination Date:

Pooled Transaction? ☐ Y ☐ N If yes: ☐ crossed ☐ uncrossed If yes, provide name of pool and anticipated aggregate loan amount

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DOCUMENT MODIFICATIONS

Document Modifications requested? ☐ Y ☐ N ☐ TBD If yes, does sponsor have a template or previously-approved modifications? ☐ Y ☐ N ☐ Unknown

If yes, provide property name/Freddie Mac loan number for most recent prior transaction(s) where document modifications were approved, if applicable

If document modifications are requested, in a separate MS Word file, provide the requested modifications recommended by Seller and Seller’s counsel, together with Seller’s counsel analysis where appropriate. Use blackline formatting to show modifications.

BORROWER STRUCTURE

Borrower(s)Date of formation: (or indicate if not yet formed)

SPE Equity OwnerIf not required, state “Not Applicable”

Date of formation: (or indicate if not yet formed)Guarantor(s)

Proposed Designated Entities for Transfers

Borrower Principal(s)

Non-U.S. Equity Owners

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Definitions for all entity types can be found in the Guide. If the organizational chart is revised after this PLIM is submitted, the Borrower Structure section must be revised with any applicable updates

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LOAN TYPE (select all that apply)

Product Type Loan Purpose Specialty Products/Features☐ Conventional (Regional) ☐ Acquisition ☐ Value Add

☐ Seniors Housing ☐ Refinance ☐ Completion guaranty☐ Manufactured Housing Community (MHC) ☐ Escrow☐ Student Housing Rate Type ☐ Lease up

☐ Fixed Rate ☐ Letter of credit☐ Floating Rate ☐ Escrow

☐ Targeted Affordable Housing (TAH) ☐ Third party cap ☐ Guaranty☐ Cash ☐ Internal cap ☐ No Credit Enhancement☐ Tax Exempt Loan (TEL) ☐ No cap ☐ Green Advantage Program☐ Bonds ☐ Float-to-Fixed ☐ Green Up☐ Unfunded Forward ☐ Float-to-Float ☐ Completion guaranty☐ Funded Forward ☐ Escrow☐ Preservation Rehab/4% LIHTC ☐ Supplemental Loan ☐ Green Certification☐ Preservation Rehab/9% LIHTC Senior Loan info

FM Loan Number:Loan Amount: K-Deal designation (if applicable):

☐ Green Assessment Refund☐ C-Pace

☐ Structured Transactions ☐ Green Rebate☐ Revolving Credit Facility ☐ Mod Rehab

☐ Crossed☐ Uncrossed

☐ Additional Proceeds LoanFM Loan Number for the Float-to-Fix or Float-to-Float Loan:

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ORGANIZATIONAL CHART

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COUNSEL TO INSERT OR ATTACH ORGANIZATIONAL CHART

DELETE THIS TEXT BOX AFTER REVIEW

Organizational chart must:

Be legible

Identify each Borrower, SPE Equity Owner, and Guarantor (including the state/country of formation if the party is an entity)

Include the role of each owner of Borrower, SPE Equity Owner, Guarantor and any Designated Entity for Transfer

(e.g. limited partner, manager, etc.)

Include % ownership for all individuals and entities with ownership or control in any Borrower, SPE Equity Owner, Guarantor or any

Designated Entity for Transfer (percentages must add up to 100%) - Note: the chart need not specifically name any limited partner or

non-managing member that owns less than 25% provided that the chart states that such individual or entity is not a Non-U.S. Equity

Holder, Borrower Principal or Designated Entity for Transfer.

Specifically identify each “Borrower Principal” and each “Non-U.S. Equity Holder” (as defined in the Guide) or state if there are none

For transactions with a master lease (e.g. Shari’ah or DST transaction), also provide an organizational chart for the master tenant

Organizational chart must not include EIN or social security numbers.

For Seniors Housing transactions, also include an organizational chart for the Operator, if applicable

If the organizational chart is updated after submission of the PLIM, an updated PLIM must be submitted with the final chart (together with any updates to the Borrower Structure section below, if applicable).

COMMON TRANSACTION ISSUES

Except as set forth in the “Additional Information and Analysis” column, if item is compliant with Guide and Commitment/ERLA requirements or not applicable to the Loan, no additional information is required. If item is applicable but not compliant, then provide additional analysis and recommendations below or in a separate memorandum. Contact FM Legal if you have any questions regarding the applicable requirements.

Issue (Select all that apply)

Compliant? (Y/N)

Additional Information, Analysis and Recommendations(Use boldface for responses; do not use italics)

Borrower - Single Purpose Entity ☐ For loans over $15MM, any single member LLC must be formed in DE to be an SPE.

Recycled? ☐ i.e. formed 90 days or more before closing or has conducted business prior to origination. Exceptions to the recycled reps must be noted here, including prior ownership of property other than the collateral.

Merged/Converted Entity? ☐ Describe history of the merger/conversion.

SPE Equity Owner Required? ☐ Required on all deals unless (i) loan is less than $25MM, (ii) Borrower is a corporation or a DE single member LLC, or (iii) Borrower is a single asset entity (SAE) or multiple asset entity (MAE). SPE Equity Owner must be a corporation or a DE single member LLC.

Recycled? ☐ i.e. formed 90 days or more before closing or has conducted business prior to origination. Exceptions to the recycled reps must be noted here, including prior ownership of property other than the collateral.

Merged/Converted Entity? ☐ Describe history of the merger/conversion.

Trust Guarantor (See Section 9.6(c) of the Guide)

☐ Name of Trust: Revocable or Irrevocable?Name of Trustee(s):

Entity Guarantor with term expiring before Loan Maturity

☐ Identify each expiring entity guarantor and date of expiration.

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COMMON TRANSACTION ISSUES

Except as set forth in the “Additional Information and Analysis” column, if item is compliant with Guide and Commitment/ERLA requirements or not applicable to the Loan, no additional information is required. If item is applicable but not compliant, then provide additional analysis and recommendations below or in a separate memorandum. Contact FM Legal if you have any questions regarding the applicable requirements.


Compliant? (Y/N)

Additional Information, Analysis and Recommendations(Use boldface for responses; do not use italics)

Guarantor is a Foreign Citizen or US Citizen residing outside US

☐ Identify the country of citizenship or primary residence, as applicable for each such Guarantor.

Investment Fund as Guarantor (See Section 9.10 of the Guide)

☐ Provide name of Investment Fund Guarantor.

Legally Non-Conforming Property ☐ Does the nonconformity give rise to an exception to the Seller/Servicer Representations and Warranties? ☐ Y ☐ N (If yes, specify why it is acceptable)

Month-to-Month Leases Rider Requested? ☐ Specify what percentage requested.

Survey Waiver Requested? (See the Survey Waiver Requirements on mf.freddiemac.com)

☐ ☐ Waiver of Current Survey (Loan $15MM or less) (for loans placed under Seller application with Borrower on or after October 18, 2017 only)☐ Western States Survey Waiver (CA, UT, OR, WA, NV, and AZ) ☐ ALTA Survey Waiver (NYC) ☐ Waiver of Current Survey (Property not located in NYC, CA, UT, OR, WA, NV,

or AZ)☐ Supplemental Loan - Waiver of Current Survey

Waiver of Non-Consolidation Opinion Requested? (Loans $25MM or greater)

☐ A Borrower Due Diligence Checklist is required unless Borrower is a NY Cooperative.

Supplemental Loan – Warehouse Lending Rider Requested?

☐

Manufactured Housing Loan ☐ A Manufactured Housing Questionnaire is required.

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OTHER TRANSACTION ISSUES - OVERVIEW (select one)

☐ This transaction does NOT involve any of the Other Transaction Issues described below. If the subject transaction does not involve any of Other Transaction Issues, you may omit the remaining pages from the PLIM

☐ This transaction does involve one or more of the Other Transaction Issues described below. If the subject transaction involves any of Other Transaction Issues, you must complete and include all the remaining pages from the PLIM unless otherwise indicated

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OTHER TRANSACTION ISSUES

Except as set forth in the “Additional Information and Analysis” column, if item is compliant with Guide and Commitment/ERLA requirements or not applicable to the Loan, no additional information is required. If item is applicable but not compliant, then provide additional analysis below or in a separate memorandum. Contact FM Legal if you have any questions regarding the applicable requirements.


Compliant? (Y/N)

Additional Information and Analysis(Use boldface for responses; do not use italics)

BORROWER, SPE EQUITY OWNER AND GUARANTOR ISSUES

Single Asset Entity Borrower ☐ Permitted for loans $5MM or less only.

Multi-Asset Entity Borrower ☐ Permitted for loans $5MM or less only; Identify all other assets owned by Borrower, including location. If known, provide information on the value of, and any indebtedness affecting, the other assets.

Tenancy–in-Common Borrower (See Section 9.12 of the Guide)

☐

Multiple Entities as Borrower/Co-Borrowers (other than Tenancy-In-Common)

☐ Provide information on structure, including whether all Co-Borrowers have identical ownership.

Cooperative as Borrower ☐

Nonprofit Borrower or Borrower Principal ☐

Delaware Statutory Trust (DST) Borrower ☐ Consult Freddie Mac Legal for additional analysis requirements.

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Compliant? (Y/N)


Preferred Equity ☐ Preferred Equity Control Takeover Rider is being requested: ☐ Y ☐ N

Provide Preferred Equity Analysis (even if Control Takeover Rider is not being requested)

To help determine whether an equity contribution constitutes preferred equity, Seller may, at Seller’s option, ask Borrower to complete a Borrower’s Equity Questionnaire. Seller is not required to submit the Borrower’s Equity Questionnaire to Freddie Mac, but Seller may do so for consultation/guidance.

Buy-Sell Transfer Rider Requested (*may not be used for a Preferred Equity Control Takeover)

☐ Provide Buy-Sell Analysis. For supplemental loans, an updated analysis must be provided even if an analysis was provided for the first-lien. Buy-Sell Analysis is not required if Seller has submitted a Preferred Equity Analysis.

Other Preapproved Transfer Riders Requested ☐ Identify which preapproved transfers are being requested and related relevant information.

Reverse 1031 Exchange ☐ Provide information regarding structure of exchange, including the identity of the affected entity, the Qualified Intermediary, Exchange Owner, and Exchange Owner Affiliate.

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Compliant? (Y/N)


Crowdfunding(see Section 9.2 (g) of the Guide)

☐ Funding a project or venture by raising capital either:

via general solicitation (i.e., marketing directed to the public at large, whether by internet or otherwise) that (i) names Freddie Mac or (ii) names or contains any information about the Property, and/or

from unaccredited investors in a public offering (e.g. under the related exemptions of Title III or Title IV of the Jumpstart Our Business Startups (JOBS) act).

Provide information regarding the nature of the crowdfunding, including: the applicable statute, the % of ownership interests that will be crowdfunded, and the affected entities. Crowdfunding of any controlling interest in Borrower, or of any interest in Borrower that may take control under any provisions of the organizational documents (e.g. preferred equity), is not permitted.

Seller/Servicer or employees of Seller/Servicer with ownership interest in Borrower structure

☐ Disclose nature of ownership (%, whether controlling or non-controlling)

Other issues relating to Borrower type/structure or unusual or notable aspects of Borrower structure

☐ e.g. limited liability partnership, land trust, business trust, OR REIT

PROPERTY ISSUES

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Compliant? (Y/N)


Primary Access Via Easement or Private Road (see Section 8.8(b) of the Guide)

☐ Provide the name and the date of the access easement agreement, the parties to the agreement, and the recording information and date.

Specify:(a) whether the easement is the sole means of access.(b) how maintenance obligations are allocated.

Shared Amenities or Facilities (see Section 8.9(e) of the Guide)

☐ Provide the name and the date of the shared amenities agreement, the parties to the agreement, and the recording information and date.

Specify: (a) which shared amenities or facilities are not located on the Property.(b) which shared amenities or facilities are located on the Property.(c) how maintenance obligations are allocated.

Condominium Deed Restriction (see Section 8.18(f) of the Guide)

☐

Existing Mechanic’s or Other Liens ☐ Provide information regarding any liens that will remain after loan origination, including the payee and amount.

Mortgage Recordation Tax Issues ☐ Describe the recordation tax issues.

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Compliant? (Y/N)


Shared Appreciation Rights ☐ Please describe the rights of any third party (such as any governmental entity or a ground lessor) to share in the proceeds from a future sale of the property or the operating cash flow of a property if Lender or any subsequent owner of the Property would be subject to such rights. For the purposes of this line item, you need not describe the rights of any holder of equity interests (including preferred equity interests).

If applicable, do such rights give rise to an exception to the Seller/Servicer Representations and Warranties? ☐ Y ☐ N

Other Noteworthy Title Exceptions or Issues ☐ Discuss any title exception that merits discussion beyond the title exception analysis.

Regulatory Agreement ☐ Provide Regulatory Agreement Analysis.

Tax Abatement or Exemption or Payments in Lieu of Taxes (PILOT)

☐ Provide Tax Abatement/Exemption/PILOT Questionnaire.

Housing Assistance Payments (HAP) Contract ☐ Provide Section 8 HAP Contract Analysis.

Low Income Housing Tax Credits (LIHTC) ☐ Provide Regulatory Agreement Analysis.

100% Owned Condo ☐

Partial/Fractured Condo (see Section 8.18 of the Guide)

☐ Provide information required under Sections 8.18(a), (c), (d), and (e) of the Guide.

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Compliant? (Y/N)


Self-Managed Property ☐

Sub-Manager as Property Manager ☐ Describe management structure.

Ground Lease (See Section 30 of the Guide)

☐ ☐ Fee interest will be mortgaged ☐ Fee interest will not be mortgaged

Provide Ground Lease Analysis.Master Lease ☐ Provide a summary of the Master Lease structure.

Commercial Lease Issues (See Section 8.11 and 55.2 of the Guide)

☐ Identify any nonresidential lease where any of the following is true:(a) a Commercial Lease Analysis is required under Section 55.2 of the Guide. (b) any of the circumstances listed in Section 8.11(e) of the Guide is applicable (c) the lessee is an affiliate of Borrower.(d) the lease does not comply with Section 8.11 of the Guide.

Provide legal analysis of any item that does not meet the requirements of Section 8.11 of the Guide.

If any circumstance listed in Section 8.11(e) of the Guide is applicable, indicate whether an SNDA is recommended (and if so, why).

Historic Tax Credits ☐ Submit Historic Tax Credits Master Lease Analysis (obtain from Freddie Mac Legal).

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Compliant? (Y/N)


Shari’ah Loan ☐ Describe the structure of the transaction.

Subordinate Loan, Bridge Loan or Mezzanine Debt ☐ Provide additional information and analysis regarding the subordinate or bridge loan or mezzanine debt.

Building Code and/or Fire Code Violations ☐ Describe violations that will remain after loan origination.

Units without Final Certificate of Occupancy ☐ Explain which final certificate(s) of occupancy are missing and why.

Corporate Lease Rider Requested? ☐ Specify percentage requested.

OTHER MISCELLANEOUS ISSUES

Letter of Credit (See Section 11.2 of the Guide) ☐ Indicate if a letter of credit is being included in the collateral for any purpose.

Material litigation affecting Property, Borrower, or Guarantor

☐ Provide relevant information regarding any material litigation affecting Borrower, the Property, or Guarantor. Generally, material litigation will not include slip and falls or ordinary landlord-tenant disputes that are covered by insurance.

Other Items ☐ Describe any other items which would ordinarily be disclosed in a PLIM or which are required to be disclosed pursuant to the Guide.

[SEE ADDITIONAL PAGES FOR SENIORS TRANSACTIONS AND CROSS-COLLATERALIZED TRANSACTIONS. IF NOT APPLICABLE, DELETE THE REMAINING PAGES]

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[INCLUDE THIS PAGE ONLY FOR SENIOR HOUSING TRANSACTIONS – OTHERWISE DELETE]


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SENIORS HOUSING TRANSACTION

**If applicable, provide Operating Lease Analysis and sub-Operating Lease Analysis in addition to the information below**

a. Is there an operator? If so, who is the operator? If the operator is not the borrower, is the operator a Borrower affiliate or a third party?

b. Is there a sub-operator? If so, who is the sub-operator? Is the sub-operator a Borrower affiliate or a third party?

c. Does the operator’s and/or the sub-operator’s term expire before maturity?

d. Who is the holder of the licenses?

e. What is the status of the licenses?

f. If an acquisition, who will hold the licenses at origination, and if not the Borrower or Operator, explain the process and timing for Borrower/Operator to obtain all licenses, and explain any recommended interim licensing structure such as an interim master sublease.

g. Who owns the F, F & E?

h. Is the Acuity Mix Conversion Rider being requested?

i. How many units, if any, will be used for respite care?

j. List the Material Contracts

k. Is the borrower or operator charging entrance fees? If so, describe.

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[INCLUDE THIS PAGE ONLY FOR CROSS-COLLATERALIZED TRANSACTIONS – OTHERWISE DELETE]


CROSS-COLLATERALIZED TRANSACTION

Provide information and analysis of the following issues:

a. Whether any of the properties are located in a single action state

b. If the pool involves properties from multiple states, whether any enforcement issues arise under state law if an in-state loan is crossed with a loan from out-of-state

c. Issues regarding recordation tax

d. Whether the right to releases and/or substitutions is being requested and if so, on what terms

e. Issues regarding required title policies and endorsements

f. Other issues relating to cross-collateralization

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Documents

mf.freddiemac.com · Web viewThis Preliminary Legal Issues Memorandum (“PLIM”) is submitted to Freddie Mac on behalf of the Seller/Servicer in conformity with the requirements