Form Hud 1724 - Prospectus Ginnie Mae I Page 6
Download a blank fillable Form Hud 1724 - Prospectus Ginnie Mae I in PDF format just by clicking the "DOWNLOAD PDF" button.
Open the file in any PDF-viewing software. Adobe Reader or any alternative for Windows or MacOS are required to access and complete fillable content.
Complete Form Hud 1724 - Prospectus Ginnie Mae I with your personal data - all interactive fields are highlighted in places where you should type, access drop-down lists or select multiple-choice options.
Some fillable PDF-files have the option of saving the completed form that contains your own data for later use or sending it out straight away.
ADVERTISEMENT
1
2
3
4
5
6
7Federal Income Tax Aspects
A Security Holder generally will be treated as owning a pro rata undivided interest in each
Mortgage. Accordingly, each Security Holder will be required to include in income its pro rata
share of the entire income from the Mortgages, including interest (without reduction for servicing
fees, to the extent those fees represent reasonable compensation for services) and discount, if
any. The income must be reported in the same manner and at the same time as it would have
been reported had the Security Holder held the Mortgages directly.
A Security Holder will generally be entitled to deduct its pro rata share of servicing fees, to the
extent those fees represent reasonable compensation for services. However, an individual, trust,
or estate that holds a Security directly or through a pass-through entity (e.g., a partnership) must
treat servicing fees as miscellaneous itemized deductions, which are deductible only to a limited
extent in computing taxable income and which are not deductible in computing alternative
minimum taxable income.
Interest paid on the Securities will qualify as portfolio interest. Consequently, payment of
interest to a Security Holder who is a non-resident alien or a foreign corporation will not be
subject to withholding tax provided that the Security Holder properly certifies to the withholding
agent the Security Holder’s status as a foreign person.
THE FOREGOING REPRESENTS ONLY A SUMMARY OF CERTAIN FEDERAL
INCOME TAX CONSEQUENCES RELATED TO AN INVESTMENT IN A SECURITY.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS
REGARDING THE TAX TREATMENT OF THE ACQUISITION, OWNERSHIP, AND
DISPOSITION OF A SECURITY.
Maturity, Prepayment, and Yield
An investor considering a purchase of the Securities should consider the following factors.
1. The applicable Mortgagor has the option to prepay the Project Loan on the terms described
in the Annex. In general, if prevailing mortgage interest rates fall sufficiently below the stated
interest rate on the Project Loan so that the cost of refinancing the Project Loan (including the cost
of paying the prepayment premium) is less than the interest cost of the Project Loan, it can be
expected that the Mortgagor will prepay the Project Loan.
2. Following any Mortgage default and the subsequent liquidation of the underlying
mortgaged property, Ginnie Mae guarantees that the principal balance of the Mortgage will be paid
to Security Holders. As a result, a default experienced on the Mortgages will accelerate the
distribution of principal of the Securities. Prepayments may also result from the repurchase of any
Mortgage as described herein.
3. The yields to investors will be sensitive in varying degrees to the rate of prepayments
(including liquidations and repurchases) on the Mortgages. In the case of Securities purchased at a
premium, faster than anticipated rates of principal payments could result in actual yields to
investors that are lower than the anticipated yields. In the case of Securities purchased at a
discount, slower than anticipated rates of principal payments could result in actual yields to
investors that are lower than the anticipated yields.
4. The effective yield on any Security will be less than the yield otherwise produced by its
stated interest rate and purchase price because interest will not be paid to the Security Holder until
the fifteenth calendar day of the month following the month in which interest accrues on the
Security.
Previous editions are obsolete.
Page 6 of 7
form HUD 1724 (10/2000)
Appendix IV-9
ref. Ginnie Mae Handbook 5500.3
ADVERTISEMENT
0 votes
Related Articles
Related forms
Form Hud-11701 - Application For Approval Fha Lender And/or Ginnie Mae Mortgage-backed Securities Issuer - 2003
Legal
Form Hud-637 - Title I Claim For Loss (part 1) Transmittal - U.s. Department Of Housing And Urban Development
Legal
Form Hud-637 - Title I Claim For Loss (part 2) Application Voucher Form - U.s. Department Of Housing And Urban Development
Legal
Related Categories
Parent category: Legal