Fannie Mae 2006 Annual Report Download - page 169

“LIHTC partnerships” refer to low-income housing tax credit limited partnerships or limited liability
companies. For a description of these partnerships, refer to “Business Segments—Housing and Community
Development—Community Investment Group” above.
“Liquid assets” refers to our holdings of non-mortgage investments, cash and cash equivalents, and funding
agreements with our lenders, including advances to lenders and repurchase agreements.
“Loans,” “mortgage loans” and “mortgages” refer to both whole loans and loan participations, secured by
residential real estate, cooperative shares or by manufactured housing units.
“Loan-to-value ratio” or “LTV ratio” refers to the ratio, at any point in time, of the unpaid principal amount
of a borrower’s mortgage loan to the value of the property that serves as collateral for the loan (expressed as a
percentage).
“Minimum capital requirement” refers to the amount of core capital below which we would be classified by
OFHEO as undercapitalized. Our minimum capital requirement is generally equal to the sum of: (1) 2.50% of
on-balance sheet assets; (2) 0.45% of the unpaid principal balance of outstanding Fannie Mae MBS held by
third parties; and (3) up to 0.45% of other off-balance sheet obligations.
“Mortgage assets,” when referring to our assets, refers to both mortgage loans and mortgage-related securities
we hold in our portfolio.
“Mortgage credit book of business” or “book of business” refers to the sum of the unpaid principal balance
of: (1) the mortgage loans we hold in our investment portfolio; (2) the Fannie Mae MBS and non-Fannie Mae
mortgage-related securities we hold in our investment portfolio; (3) Fannie Mae MBS that are held by third
parties; and (4) credit enhancements that we provide on mortgage assets.
“Mortgage-related securities” or “mortgage-backed securities” refer generally to securities that represent
beneficial interests in pools of mortgage loans or other mortgage-related securities. These securities may be
issued by Fannie Mae or by others.
“Multi-class Fannie Mae MBS” refers to Fannie Mae MBS, including REMICs, where the cash flows on the
underlying single-class and/or multi-class Fannie Mae MBS, other mortgage-related securities or mortgage
loans are divided creating several classes of securities, each of which represents a beneficial ownership interest
in a separate portion of cash flows. By separating the cash flows, the resulting classes may consist of:
(1) interest-only payments; (2) principal-only payments; (3) different portions of the principal and interest
payments; or (4) combinations of each of these. Terms to maturity of some multi-class Fannie Mae MBS,
particularly REMIC classes, may match or be shorter than the maturity of the underlying mortgage loans
and/or mortgage-related securities. As a result, each of the classes in a multi-class Fannie Mae MBS may have
a different coupon rate, average life, repayment sensitivity or final maturity.
“Multifamily mortgage loan” refers to a mortgage loan secured by a property containing five or more
residential dwelling units.
“Multifamily business volume” refers to the sum in any given period of the unpaid principal balance of: (1) the
multifamily mortgage loans we purchase for our investment portfolio; (2) the multifamily mortgage loans we
securitize into Fannie Mae MBS; and (3) credit enhancements that we provide on our multifamily mortgage
assets.
“Multifamily mortgage credit book of business” refers to the sum of the unpaid principal balance of: (1) the
multifamily mortgage loans we hold in our investment portfolio; (2) the Fannie Mae MBS and non-Fannie
Mae mortgage-related securities backed by multifamily mortgage loans we hold in our investment portfolio;
(3) Fannie Mae MBS backed by multifamily mortgage loans that are held by third parties; and (4) credit
enhancements that we provide on multifamily mortgage assets.
“Negative-amortizing loan” refers to a mortgage loan that allows the borrower to make monthly payments that
are less than the interest actually accrued for the period. The unpaid interest is added to the principal balance
of the loan, which increases the outstanding loan balance. Negative-amortizing loans are typically adjustable-
rate mortgage loans.
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