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REV: 06-11-25 LF <br />Subordination Processing <br />1. Subordination Request Package: Upon a borrower’s request for a subordination, <br />Consultant will send a Subordination Request Package to the borrower or designee <br />(lender or title). The City may require the borrower to pay the cost of the subordination <br />processing at application or the City may pay the cost upon billing from Consultant. <br />2. Review Process: The purpose of the subordination review process is to determine that <br />the new senior loan on the borrower’s property will be made in conformance with the <br />City’s subordination policy and that the City’s title position and security for its note is <br />properly treated. Also, a review of income of the borrower may be performed if there <br />are ongoing restrictions on income levels for the program participant. Documentation <br />typically required for the review may include the following: <br />a. Letter from borrower with reasons for requesting subordination <br />b. FNMA 1003 application, or other applicable application, for new senior loan <br />c. Lender’s approval of new senior loan <br />d. Title report <br />e. Appraisal <br />f. Closing instructions and estimated closing statement <br />g. Credit report (if required) <br />h. Tax return or other income documentation (if required) <br />i. Completed Subordination Agreement ready for signature <br />j. Request for Notice document on new senior loan(s) <br />3. Document Preparation: Consultant prepares subordination documents, or can review <br />documents prepared by the new senior lender. These documents generally include: <br />a. Subordination Agreement <br />b. Request for Notice document on new senior loan(s) <br />c. Closing instructions <br />4. Recommendation: At the completion of the review, a report is forwarded to the City <br />with a recommendation to either approve the request and to execute the Agreement, <br />or to deny the request. The report will contain a recapitulation of pertinent information <br />such as lowered monthly payment amounts, old and new Loan To Value Ratio’s <br />(LTV’s), new and old senior debt loan amounts, etc. <br />5. Approval: Upon the City’s approval of a request for subordination, the City will forward <br />to borrower’s lender or Title Company: <br />a. Completed and executed Subordination Agreement between the City and <br />borrower <br />b. Closing instructions dictating terms / use of Subordination Agreement <br />document <br />c. Request for Notice document for new senior loan <br />ATTY/AGR.2025.144/AmeriNational Community Services, LLC d/b/a AmeriNat (Page 23 of 31)