Fannie Mae ARM 5-5 Multifamily Loan

The Fannie Mae ARM 5-5 Multifamily Loan provides great variable rate financing to those looking to either acquire a property or refinance their existing debt. This program offers an initial 5 year loan term with the option to extend for a second 5 year period. There is no maximum loan size and the maximum interest rate is set at rate lock. With attractive low-cost financing, this program is great solution for investors of all types of existing and stabilized multifamily properties.

Fannie Mae ARM 5-5 Multifamily Loan Highlights

Term - Initial loan term is 5 years. Option to extend for another 5 years.

Amortization - Up to 30 years

Interest Rate - Adjustable based on the 30 day Average SOFR

LTV - Maximum of 65%

DSCR - Minimum of 1.00x

Recourse - Non-recourse with standard “bad boy” carveouts

Prepayment - No prepayment allowed in the first year (of both 5 year periods). After that prepayment penalty of 1%. No penalty during last 3 months of the term.

Supplemental Financing - Available

Interest Rate Cap - Maximum monthly rate adjustment of 1%. Maximum lifetime rate capped at 5%.

Escrows - Loans require escrows for replacement reserves, taxes and insurance

Assumption - Loans are assumable subject to review and approval

Conversion to Fixed Rate
Variable interest rate may be converted to a 7 or 10 year fixed rate loan with following conditions:

• No Prepayment Penalty is charged when variable rate is converted to fixed rate
• Minimal underwriting required
• Lender determines that the current net operating income can support the new fixed-rate terms.
• No increase in the loan amount; loan may be eligible for a Supplemental Loan.