Fannie Mae Apartment Loans - Large Balance

Fannie Mae is one of the nation’s leading secondary market sources of capital for apartment building financing. Fannie Mae provides mortgage capital for conventional, affordable housing, cooperatives, senior housing, student housing, manufactured housing communities and mobile home parks nationwide. Fannie Mae's apartment loan program offers many distinct advantages over traditional bank programs, including: long-term fixed rates up to 30 years, high LTV ratios up to 80%, and nonrecourse financing (no personal guarantee to the principals). Fannie Mae's offerings include:

Description

Long term, fixed rate financing for the purchase or refinance of apartment buildings, mobile home parks and cooperative properties

Loan Amount

$6,000,000 and up

Loan Terms

Fixed rates for 5, 7, 10, 12, 15, 20 and 30 years

Amortization

Up to 30 years, based on property condition; Interest-only financing is available

Loan to Value Maximum

Up to 80%

Coverage Minimum

Typically 1.25x, 1.20x in certain markets

Borrower

Domestic single asset borrowing entity is required

Interest Rate

Subject to “tiered” LTV ratio (55%, 65%, and 80% tiers) 

Prepayment Terms

Yield maintenance and step-down prepayment options available

Third Party Reports

MAI Appraisal, Physical Needs Assessment, and Environmental Phase I Assessment are required, plus Seismic Report may be required for properties in Seismic Zones 3 and 4

Escrows

Real estate taxes, insurance, and replacement reserves subject to underwriting guidelines

Application Fee

$10,000; covers 3rd party reports and processing/underwriting costs

Legal Fees

$8,000 to $12,000 varying with characteristics of the deal

Timing

45-60 days from application to closing; dependent on 3rd party report timing and borrower’s submission of due diligence

Rate Lock

Typically, lock occurs after commitment is issued; Early Rate Lock option is available, allowing rate lock within 3-4 weeks of application

Assumability

Loan is assumable, subject to lender approval.

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