Partial Collateral Releases

A borrower may wish to sell a portion of the land associated with the property backing a mortgage loan – for example, green space that may not be needed to support the existing property. We call this a “partial release of collateral.” Fannie Mae allows a partial release only to the extent that it is expressly permitted in the loan documents. The release must satisfy any conditions specified in the loan documents. If no conditions are given, the provisions of the Multifamily Selling and Servicing Guide apply.

The table below lists the key points to consider in reviewing a request for the partial release of collateral.

Guide Reference

Multifamily Selling and Servicing Guide
Part V: Servicing and Asset Management, Chapter 4, Section 409

Delegation Criteria

Generally, you may approve a partial release of collateral provided you answer “No” to all of the questions in Part IV of Form 4636.

Fannie Mae approval is required if:

  •  You answer “Yes” to even one question on Form 4636
  • The property was financed through a credit facility or bulk delivery.

Note: If the mortgage loan backs an MBS, collateral releases are limited by the loan documents and by the disclosures made to investors at MBS issuance. Fannie Mae must review the transaction. For all mortgage loans, collateral releases are limited by accounting and tax rules. [Editor’s Note to Legal: Would it be better to say something like – “For all mortgage loans, we also consider tax and accounting treatment in determining whether to approve a partial release” or “For all mortgage loans, tax and accounting treatment should be taken into account in determining whether to approve a partial release.”]

What to Submit

Multifamily Asset Management Delegated Transaction Form (Form 4636), Parts I, II, III, and IV.

If You Answer “No” to All Questions
Complete the relevant parts of Form 4636 and keep a signed copy in the servicing file for the mortgage loan.

If You Answer “Yes” to Even One Question
Complete the relevant parts of Form 4636 and submit the following to Fannie Mae:

  • A signed copy of Form 4636
  • The documents requested on the form for each question with a “Yes” answer (see example below)
  • Your recommendation regarding the acceptability of the partial release of collateral

You answer “Yes” that the partial release would either result in available parking falling below zoning minimums or materially affect the parking availability.

Along with any other documents required by the Guide and Form 4636, and your recommendation, you would submit a copy of the local ordinances affected by the partial release and the borrower’s plan to address the parking deficiency.

How to Submit

Generally: [email protected].

Structured Facilities*
(Credit Facilities and Bulk Deliveries): [email protected]

Seniors Housing*: [email protected]

Hard Copy (if required by Fannie Mae)
Fannie Mae
Credit Services/Drawer AM
Mailstop 8H-607
3900 Wisconsin Ave. NW
Washington, DC 20016

*Please contact us at these e-mail addresses for requirements specific to these financing types.


$5,000 review fee split evenly between you and Fannie Mae.

You may seek reimbursement from the borrower of reasonable out-of-pocket costs incurred in connection with the partial release.

Wire any fees due to Fannie Mae to the following account no later than 10 business days after you receive them. Include the type of fee or deposit, property name and Fannie Mae loan number.

ABA Number: 021 039 500
Telegraphic Abbreviation: FNMA/NYC
Account Number: 169220242
Note: Type of fee (Assumption or Partial Release), the Fannie Mae Loan Number and the Property Name.
Attn: Trans code 513 - GL 747669921

Use of Funds

Follow the requirements of the Multifamily Guide, MBS Trust Indenture/Agreement (if applicable), and the loan documents for applying the partial release proceeds to the mortgage loan balance and any required prepayment premium. [Editor’s Note: This is what the Guide says, but everything else flips things around the other way.]


For non-delegated requests, Fannie Mae reviews the documents and advises you of any follow-up actions that need to be taken.

For delegated requests, follow the instructions in the Guide for executing any documents required with this request.

If You Have Limited Power of Attorney
If you have delegated authority and limited power of attorney to execute partial release documents, an officer of your company may sign the documents as attorney-in-fact for Fannie Mae. The signature block must be signed “[Name of Servicer], as Attorney-in-Fact for Fannie Mae.”

If You Do Not Have Limited Power of Attorney
If you do not have limited power of attorney, send the documents to Drawer AM for review and execution.

In either case, you need to retain a copy of the documentation in your servicing file and send any executed originals to Drawer AM at the physical address listed above.

Unauthorized Release

If you become aware that the borrower has granted a partial release of property without your prior approval or that of Fannie Mae, promptly complete Form 4636 and follow the same process you would if the release had not yet been granted. Immediately send the borrower a Reservation of Rights Letter (Form 4804). Send a copy of Forms 4636 and 4804 to the applicable Asset Management mailbox. Fannie Mae will decide whether to approve the release or declare the mortgage loan in default.

Always consult the loan documents, transaction documents, your servicing agreement, the Multifamily Guide and the relevant forms for complete instructions.

© 2011 Fannie Mae. Trademarks of Fannie Mae.