Multifamily Loan rates start as low as 5.51%(as of November 20th, 2024) • A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on multifamily
• Terms and amortizations up to 30 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
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Apartment Loan Basics
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 Multifamily provides long term permanent mortgage loans for the purchase or refinance (cash-out OK) of apartment properties nationwide.
Fannie Mae Multifamily loans can be used to finance apartment buildings with at least 5 residential units. No more than 20 percent of net rentable area can be leased out to commercial tenants. Fannie Mae Multifamily is an industry leader in apartment building loans and there terms are incredibly difficult to beat. This program offers loan terms between 5 and 30 years with amortization schedules up to 30 years. They offer flexible prepayment penalties and interest-only options. In addition, loans are typically assumable and allow for secondary financing.
While Fannie Mae Multifamily loans are a terrific option for investors in the multifamily space, this program does have some very specific underwriting guidelines. Typically, these loans are only eligible for apartment buildings in primary or secondary MSAs (with some exceptions for tertiary markets). These properties must be stabilized with 90% occupancy for at least 90 days. Standard multifamily properties must have at least 5 units and manufactured housing communities must have at least 50 pad sites. Borrowers must have strong financials with net worth equal to the loan amount and liquidity of 9 to 12 months of debt service. Typically, borrowers must have a credit score of at least 680 with no recent delinquencies.
If you are looking for a multifamily loan, Fannie Mae Multifamily may be the perfect option for you. The professionals at Select Commercial Funding are excited to help you find the perfect Fannie Mae product for your multifamily loan. Give us a call today to take the next step in financing your apartment building with a Fannie Mae Multifamily loan.
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 Apartment Loans - Large Balance 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 Multifamily provides long-term permanent mortgage loans for the purchase or refinance (cash-out OK) of apartment properties nationwide.
Fannie Mae Apartment Loans - Large Balance Highlights
Fannie Mae DUS Loan Program:
Eligible Properties and Borrowers:
Must be an existing and stabilized multifamily property
Can be either Conventional Property, Multifamily Affordable Housing Property, Seniors Housing Property, Student Housing Properties, and Manufactured Housing Communities
Properties must have a minimum of five units
Manufactured Housing Communities must have a minimum of 50 pad sites
Borrower must be a credit-worthy single asset entity
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
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 certain locations
Escrows: Real estate taxes, insurance, and replacement reserves subject to underwriting guidelines
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
Assumability: Loan is assumable, subject to lender approval
Recourse: Loans are non-recourse (subject to standard carve-outs for “bad acts” such as fraud and bankruptcy)
Fannie Mae is one of the nation’s leading secondary market sources of capital for apartment building financing. The Fannie Mae Apartment Loans - Small Balance program provides mortgage capital for conventional, affordable housing, cooperatives, senior housing, student housing, manufactured housing communities, and mobile home parks nationwide. Fannie Mae apartment loans - small balance 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 offers first lien permanent financing for the acquisition or refinance (including cash-out) of multifamily properties nationwide.
Fannie Mae Apartment Loans - Small Balance Highlights
Description: Simplified loan approval process for long-term fixed-rate financing for apartments, manufactured housing, mobile home parks, and cooperative apartments.
Loan Amount: $1,500,000 – $6,000,000+ nationwide (larger balance loans available through the Fannie Mae DUS platform)
Loan Terms: Fixed rates for 5, 7, 10, 12, 15, 20, and 30 years
Amortization: Up to 30 years, based on the age and condition of the property
Prepayment Penalty: Yield maintenance and step-down options available
Recourse: Loans are non-recourse lending (with standard carve-outs for “bad-boy” acts)
Debt Service Coverage: 1.25x minimum
Loan to Value: Up to 80% maximum LTV for purchases and 75% for refinances
Subordinate Financing: Supplemental mortgages are available after the first 12 months of the loan term or loan assumption
Occupancy: Typically expect to see 90% occupancy for the previous 3 months
Assumability: Non-recourse loans are assumable with the Lender’s consent
Taxes and Insurance Escrows: May be waived on lower LTV loans
Net Worth and Liquidity: Net worth and liquidity requirements must be met. Speak to us for details.
Replacement Reserve Escrows: To be determined based upon appraisal and engineering reports
Rate Lock: Rate lock occurs after commitment is issued; an early rate lock option is also available
Timing: 45-60 days from complete application to closing
The Fannie Mae Choice Refinance Multifamily Loan offers borrowers an option to flexibly refinance their properties with lower costs and faster execution. This product is perfect for borrowers with current Fannie Mae Cash or MBS Mortgage Loans. The Choice Refinance Loan is specifically for properties that are well maintained and stabilized. Additionally, the lender must be the current servicer of the loan being refinanced.
Fannie Mae Choice Refinance Multifamily Loans Highlights
Pre-Review: If pre-review category for the portfolio mortgage loan has already been approved by Fannie Mae, then no pre-review is needed.
Borrower Analysis:
Lender must review necessary structural documents if borrower’s organizational structure has changed
Lender will report ACheck result and obtain financial statements for borrower and all key principals
Prepayment Penalty:
1% penalty after the expiration of the yield maintenance period
1% penalty may be reduced in certain situations
Penalty may be paid from the proceeds of the new loan
Property Zoning:
Borrower must certify that there has been no change in zoning which impacts the property
This certification is in lieu of a full underwriting
Other Terms:
Escrows are usually required for replacement reserves, taxes and insurance
New appraisal and title insurance policy are required
Usually a new Phase 1 and Survey will not be required
The Fannie Mae Conventional Multifamily Loan is perfect for borrowers looking to acquire or refinance conventional multifamily properties. This product offers flexible loan terms, competitive pricing, and certainty of execution for existing and stabilized conventional properties. These loans are non-recourse loans and can have terms as long as 30 years. Additionally, this program allows borrowers to seek max leverage with financing up to 80% LTV.
Fannie Mae Conventional Multifamily Loan Highlights
Eligible Properties:
Existing and stabilized conventional multifamily properties
Properties must have a minimum of 5 apartment units
Properties must have stabilized occupancy, usually at least 90% occupancy for 90 days
Loan Term: 5-30 years
Amortization: Up to 30 years
Interest Rate: Both fixed and variable-rate options are available
Maximum LTV: 80%
Minimum DSCR: 1.25x
Prepayment: Fixed-rate loans can be prepaid with a yield maintenance penalty, and variable-rate loans may be repaid with a declining prepayment penalty
Recourse: Loans are non-recourse with standard carve outs for “bad boy acts”
Other Terms:
Supplemental financing is available
Loans are assumable subject to review of the new borrower
Escrows are usually required for replacement reserves, taxes, and insurance
Loans require standard third-party reports such as Appraisal, Phase 1, Environmental Site Assessment, and Property Condition Assessment
The Fannie Mae ARM 7-6 Multifamily Loan is a great option for investors looking for an adjustable loan. This product has a loan term of 7 years and allows up to 80% LTV. Additionally, borrowers can convert the Fannie Mae ARM 7-6 into a fixed-rate loan any time between the first day of the second year and the first day of the sixth year of the loan. This provides wonderful flexibility for multifamily investors who are interested in starting with an adjustable rate but converting into a fixed rate at some point during the loan term.
Fannie Mae ARM 7-6 Multifamily Loan Highlights
Loan Term: 7 years
Amortization: Up to 30 years
LTV: Up to 80%
DSCR: Minimum of 1.00x at the maximum lifetime interest rate
Interest Rate Adjustments: Equal to index + spread. Will adjust with changes to underlying index
Index: 30-Day Average SOFR
Interest Rate Cap and Floor:
Maximum monthly interest rate adjustment of plus or minus 1%
Maximum lifetime interest rate to Borrower capped at 6%
Interest rate will never be less than the Margin
Property Eligibility:
Available for existing and stabilized multifamily properties including: Conventional, Multifamily Affordable Housing, Seniors Housing, Student Housing, and Manufactured Housing Communities
Loans are available for both acquisitions and refinances
Rate Lock: Maximum 30-day commitments
Prepayment:
No prepayment is permitted during the Lockout Period which is usually the first year of the loan
After Lockout Period, 1% prepayment premium
No prepayment premium during the "open period" - the last 3 months of the loan term
Recourse: Loans are non-recourse with standard “bad boy” carveouts
Fixed-Rate Conversion: The ARM 7-6 can be converted to a 7 or 10 year fixed loan any time between the first day of the second year of the loan and the first day of the sixth year of the loan, without any prepayment penalties. The amount of the loan cannot increase, but borrowers can apply for supplemental financing. Converted loans have a yield maintenance prepayment penalty. Conversion requires minimal re-underwriting. However, the lender must confirm that the current Net Cash Flow can support the new fixed rate loan terms.
Other terms and benefits:
Low Cost Financing
No maximum loan size
Maximum interest rate is set at rate lock
Supplemental financing is available
Escrows are typically required for taxes, insurance, and replacement reserves
Are you part of a cooperative organization looking for a mortgage with flexible terms for your multifamily property? If so, the Fannie Mae Cooperative Property Loan Program could be the perfect option for you. This product gives Cooperative Organizations access to multifamily loans with competitive pricing, certainty, and speed of execution. Terms are flexible as they range from 5 to 30 years with up to 30 year amortization periods. In addition, these loans are non-recourse.
Fannie Mae Cooperative Property Multifamily Loans Highlights
Eligible Properties:
Stabilized Cooperative Properties
Must be in eligible markets
Must have an overall property condition rating of two or better
Term: 5 to 30 years
Amortization: Up to 30 years
Maximum LTV: 55%
Minimum DSCR: 1.00x for Actual Cooperative Property operations and 1.55x for Cooperative Market Rental operations
Prepayment Penalty: Yield Maintenance
Recourse: Loans are non-recourse with standard bad boy carveouts
Other Terms:
Interest rate is fixed
Supplemental financing is available
Loans are not typically assumable
Escrows for replacement reserves, taxes, and insurance are required
Property must have a management company with similar experience
Operating Reserve balance must be at least 10% of annual maintenance fees
High levels of ownership by one sponsor or investor (in excess of 40%) will require additional due diligence
Fannie Mae Affordable Housing Preservation Multifamily Loan
The Fannie Mae Affordable Housing Preservation Multifamily Loan offers long-term financing to owners of stabilized affordable housing properties with rent restrictions. With the demand for affordable housing on the rise, this product is a great option for borrowers looking to invest in this space. These loans offer competitive pricing and flexible loan terms for both acquisitions and refinances of affordable multifamily properties. If you are looking for a loan with certainty and speed of execution, this is definitely a great option for you!
Fannie Mae Affordable Housing Preservation Multifamily Loan Highlights
Loan Amount: $1,500,000 and up
Loan Terms: 5 to 30 years
Amortization: Maximum of 35 years
LTV: Up to 80% available
DSCR: Minimum of 1.20x
Interest Rate: Product offers both fixed and variable rate options
Eligible Properties:
At least 20% of all units must be occupied by families earning no more than 50% of Area Median Income (AMI)
At least 40% of all units must be rented to families earning no more than 60% of AMI
Project-Based Housing Assistance Payments contract (Section 8) covering 20% or more units
Prepayment Penalty: Flexible options including both yield maintenance and standard step down
Recourse: Loans are non-recourse with standard “bad boy” carve-outs
Loan Assumption: Loans are assumable subject to lender’s discretion and resume of new borrower
Escrows: Typically require replacement reserves and escrows for taxes and insurance
Other Terms:
Supplemental loans are usually available
Borrowers can lock rates for 30 to 180 day commitments
Are you looking for a great fixed-rate multifamily loan? Look no further than the Fannie Mae Fixed-Rate Mortgage Loan. With their flexible loan terms, competitive pricing, certainty of execution, and speed in underwriting, this product is one of the best in the market. This program provides investors of existing stabilized multifamily properties with first-lien permanent mortgage options to both purchase and refinance multifamily properties.
Fannie Mae Fixed-Rate Mortgage Multifamily Loans Highlights
Eligible Properties and Borrowers:
Must be an existing and stabilized multifamily property
Can be either Conventional Property, Multifamily Affordable Housing Property, Seniors Housing Property, Student Housing Properties, and Manufactured Housing Communities
Properties must have a minimum of five units
Manufactured Housing Communities must have a minimum of 50 pad sites
Borrower must be a credit-worthy single asset entity
Term: 5 to 30 years
Amortization: Up to 30 years
Maximum LTV: 80%
Minimum DSCR: 1.25x
Prepayment Penalty: Yield Maintenance and declining penalties available
Recourse: Loans are non-recourse with standard bad boy carveouts
Other Terms:
Interest rate is fixed
Supplemental financing is available
Loans are typically assumable
Escrows for replacement reserves, taxes, and insurance are required
Properties must have stabilized occupancy (typically 90%) for 90 days prior to funding. Loan commitments for pre-stabilized properties will be considered on a case-by-case basis.
Are you looking for an apartment loan with no balloon payment? If so, the Fannie Mae Hybrid ARM Multifamily Loan may be the perfect option for you. This 30-year loan is comprised of an initial term where interest is paid at a fixed rate. After this term ends, the loan adjusts to an adjustable rate for the remaining 30 years. This program offers competitive interest rates, low cost of execution, and flexible prepayment terms.
Fannie Mae Hybrid ARM Multifamily Loans Highlights
Property Eligibility:
Loan amount must be no more than $6 million
Properties must be existing and stabilized already
Available for both acquisitions and refinances
Loan Term:
7-year fixed rate term, followed by a 23-year adjustable-rate term
10-year fixed rate term, followed by a 20-year adjustable-rate term
Amortization: 30 years
Maximum LTV: 80%
Minimum DSCR: 1.25x
Interest Rate Adjustments:
During the adjustable rate period, interest rate adjusts based on changes to the underlying Index and is equal to the Index (30-day Average SOFR) plus the Margin.
Prepayment Penalty:
Various options available during the fixed rate term, including yield maintenance and declining prepayment premium.
No prepayment premium required for any prepayment during the adjustable rate period.
Recourse: Loans are non-recourse with standard carve-outs for bad boy acts
Other Terms:
Supplemental financing is available
Loans are typically assumable
Escrows are typically required for replacement reserves, taxes, and insurance
Fannie Mae Moderate Rehabilitation (Mod Rehab) Supplemental Multifamily Loans
Have you recently finished moderately rehabilitating your multifamily property with a Fannie Mae loan? If so, you may be in need of new funds, and conventional financing might not be ideal for you. The Fannie Mae Moderate Rehabilitation (Mod Rehab) Supplemental Mortgage Loan may be the perfect option. These loans are excluded from Fannie Mae’s one Supplemental Mortgage Loan rule. Additionally, they are generally lower cost than both refinancing and other supplemental mortgage loans. Compared to conventional Fannie Mae Moderate Rehab Supplemental Loans, these loans offer longer amortizations, higher LTV allowances, and lower minimum DSCR requirements. Plus, these loans are fully assumable with lender approval.
Fannie Mae Moderate Rehabilitation (Mod Rehab) Supplemental Multifamily Loan Highlights
Property Eligibility:
Must be a stabilized conventional, affordable housing, seniors housing, student housing, or manufactured housing multifamily property
First mortgage loan identified as moderate rehab
Must have an existing Fannie Mae mortgage loan on the property
Fannie Mae must be the only debtor on the property
Term: 5 to 30 years
Amortization: Up to 30 years
Interest Rate: Both fixed and variable rate options are available
Maximum LTV: 75%. Might be higher for certain properties
Minimum DSCR: 1.25x. May be lower for certain properties
Recourse: Loans are non-recourse with standard carve-outs for bad boy acts
Other Terms:
Loans are typically assumable
Escrows for replacement reserves, taxes, and insurance are typically required
Have you recently finished moderately rehabilitating your affordable housing multifamily property with a Fannie Mae loan? If so, you may be in need of new funds, and conventional financing might not be ideal for you. The Fannie Mae Moderate Rehabilitation (Mod Rehab) Supplemental Mortgage Loan for Affordable Housing may be the perfect option. These loans are excluded from Fannie Mae’s one Supplemental Mortgage Loan rule. Additionally, they are generally lower cost than both refinancing and other supplemental mortgage loans. Compared to conventional Fannie Mae Moderate Rehab Supplemental Loans, these loans offer longer amortizations, higher LTV allowances, and lower minimum DSCR requirements. Plus, these loans are fully assumable with lender approval.
Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) Multifamily Loans
The Fannie Mae Reduced Occupancy Rehab Multifamily Loan provides a great option for investors looking for a permanent mortgage loan for affordable housing property in need of renovations. This loan offers flexible and permanent loan solutions, allowing investors to rehabilitate their properties with more efficiency than standard construction loans or forward commitments. Additionally, this program offers interest only during the rehab period and provides increased leverage opportunities as loans are typically underwritten to as-improved rents.
Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) Multifamily Loan Highlights
Property and Sponsor Eligibility:
Must be an existing and stabilized multifamily affordable housing property
Property must be undergoing renovations
Borrower must have demonstrated experience
Available for both acquisition and refinance
Renovations can be up to $120,000 per unit
Loan Size: Minimum of $5 million
Term: 5-30 years
Amortization: Up to 35 years
Interest Rate: Both fixed- and variable-rate options are available
Maximum LTV: Up to 90% based on stabilized value
Minimum DSCR: 1.15x based on stabilized rents
Prepayment Penalty: Flexible prepayment options available, including yield maintenance and declining prepayment premium
Rehab Period: 12-15 months
Rehab Period Terms:
Occupancy may drop to 50% during rehab period
DSCR may drop to a minimum of 1.0x (interest-only basis) or 0.75x (amortizing basis)
Rehab funds will be escrowed
Property must be fully stabilized no later than 15 months after Mortgage Loan origination
Fannie Mae Structured Adjustable Rate Mortgage (SARM) Multifamily Loans
The Fannie Mae Structured Adjustable Rate Mortgage Multifamily Loan program offers very competitive variable interest rates that are convertible to fixed-rates. These loans are attractively priced, can be amortized over 30 years, and typically don’t require any personal guarantees.
Fannie Mae Structured Adjustable Rate Mortgage (SARM) Multifamily Loan Highlights
Property Eligibility:
Existing and stabilized conventional, affordable housing, seniors housing, student housing or manufactured housing multifamily properties
Properties undergoing moderate rehab may be eligible
Loans must be $25 million or more
Term: 5, 7 or 10 years
Amortization: Up to 30 years
Maximum LTV: 75%
Minimum DSCR: 1.0x
Prepayment Penalty:
Typically the first year is a required lock-out period (no prepayment allowance)
After the lockout period, loan may be repaid with a prepayment premium
No prepayment premium during the “open period” (usually last 3 months of loan term)
Recourse: Loans are non-recourse with standard carve-outs for bad boy acts
Other Terms:
After lockout period, loan can be converted to a fixed-rate 7 or 10 year loan
Supplemental financing is available
Loans are typically assumable
Escrows for replacement reserves, taxes and insurance are typically required
Fannie Mae Manufactured Housing Community Multifamily Loans
Are you looking to finance the acquisition or refinance of a manufactured housing community? If so, the Fannie Mae Manufactured Housing Community Multifamily Loan program may be the perfect option for you. This program provides financing solutions tailored specifically to each deal. The pricing is extremely competitive, and the speed and certainty of execution are hard to beat. These loans offer terms and amortizations of up to 30 years, are generally non-recourse, and can get up to 80% LTV.
Fannie Mae Manufactured Housing Community Multifamily Loan Highlights
Property and Borrower Eligibility:
Property must be an existing and stabilized manufactured housing community
Must be professionally managed
Must have at least 50 pad sites
At least one key principal should have similar experience
Tenant-occupied homes should not exceed 35%
Homes should conform to applicable HUD Code standards
Leases with 2-year terms or longer must not contain a tenant option to purchase the pad site
Term: 5 to 30 years
Amortization: Up to 30 years
Interest Rate: Both fixed and variable rate options are available
Maximum LTV: 80%
Minimum DSCR: 1.25x
Recourse: Loans are typically non-recourse with standard carve-outs for bad boy acts
Prepayment Penalty: Flexible options are available including yield maintenance and declining penalties
Other Terms:
Loans are typically assumable
Supplemental financing is available
Escrows for replacement reserves, taxes, and insurance are generally required
Are you looking to finance the acquisition or refinance of a seniors housing multifamily property? If so, the Fannie Mae Seniors Housing Multifamily Loan program may be the perfect option for you. This program provides financing solutions tailored specifically to each deal. The pricing is extremely competitive, and the speed and certainty of execution are hard to beat. These loans offer terms and amortizations of up to 30 years, are generally non-recourse, and can get up to 75% LTV.
Fannie Mae Seniors Housing Multifamily Loan Highlights
Property and Borrower Eligibility:
Must be an existing, stabilized, and purpose-built seniors housing property.
At least one key principal should have similar experience
Term: 5 to 30 years
Amortization: Up to 30 years
Interest Rate: Both fixed and variable rate options are available
Maximum LTV: 75%
Minimum DSCR:
1.3x if property is 100% independent living
1.4x if property is 100% assisted living
1.45x if property is stand-alone Alzheimer’s/Dementia Care
Recourse: Loans are typically non-recourse with standard carve-outs for bad boy acts
Prepayment Penalty: Flexible options are available including yield maintenance and declining penalties
Other Terms:
Loans are typically assumable
Supplemental financing is available
Escrows for replacement reserves, taxes, and insurance are generally required
Are you looking to finance the acquisition or refinance of a student housing multifamily property? If so, the Fannie Mae Student Housing Multifamily Loan program may be the perfect option for you. This program provides financing solutions tailored specifically to each deal. The pricing is extremely competitive, and the speed and certainty of execution are hard to beat. These loans offer terms and amortizations of up to 30 years, are generally non-recourse, and can get up to 75% LTV.
Fannie Mae Student Housing Multifamily Loan Highlights
Property and Borrower Eligibility:
Must be an existing, stabilized student housing property.
Must cater to student tenancy base
Property cannot be located on university-owned land
At least one key principal should have similar experience
Term: 5 to 30 years
Amortization: Up to 30 years
Interest Rate: Both fixed and variable rate options are available
Maximum LTV: 75%
Minimum DSCR:
1.3x for fixed rate loans
1.05x for variable rate loans (subject to a fixed rate test)
Recourse: Loans are typically non-recourse with standard carve-outs for bad boy acts
Prepayment Penalty: Flexible options are available including yield maintenance and declining penalties
Other Terms:
Loans are typically assumable
Supplemental financing is available
Escrows for replacement reserves, taxes, and insurance are generally required
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 a 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:
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.
