Fannie Mae Affordable Housing Preservation

Successfully arranging the financing for a multifamily property project is not always simple and it takes specialized knowledge to do it efficiently and in a timely manner. The professional team at LSG Lending Advisors have many years of experience helping our clients through the process.  We create tailor fit solutions for each client’s unique needs and challenges. Whether your loan objective be for a purchase, acquisition, new construction, refinance or rehabilitation, our team of knowledgeable professionals can guide you through the process from application to closing.

  • Over 7 years multifamily property loan underwriting experience.
  • Expert knowledge of financial terms and principles.
  • Highly experienced at guiding clients through complex transactions.
  • In depth analysis of current operating statements and projected financials.
  • Specialists in evaluating third party reports, including appraisals, environmental documents, market studies and project capital needs assessments.
  • Loan review documentation.
  • Tailor fit financing solutions for every client.

We have a great deal of experience in the evaluation of multifamily financing projects with regard to adhering to FHA/HUD MAP lending guidelines and can put you in contact with the best FHA/HUD MAP lenders in the industry. LSG Lending Advisors wants to be your partner in helping to accomplish your business goals. Contact us today to learn more about how we can put our expertise to work for you.

The Fannie Mae Affordable Housing Preservation program offers fixed or variable rate financing for purchases and refinancing at competitive pricing for affordable developments.

The eligible properties are:

  • Expiring Low-Income Housing Tax Credit (LIHTC) deals,
  • Refinancing existing tax-exempt bonds,
  • Rental Assistance Demonstration (RAD) properties,
  • Housing Assistance Payments (HAP) Section 8 contracts,
  • Existing Rural Housing Service (RHS) Section 515 loans, or
  • Loans currently insured under section 202 or 236 of the National Housing Act.  

These loans are assumable, subject to lender approval.
 

Term Sheet for Fannie Mae Affordable Housing Preservation

Term 5-30 years.
Amortization Up to 35 years.
Interest Rate Fixed- and variable-rate options available
Maximum LTV 80%.
Minimum DSCR 1.20x (fixed rate). 
Property Considerations

Low-income qualifying restrictions required and must be recorded:

  • 20% or more units rented to families earning at or below 50% of Area Median Income (AMI);
  • 40% or more units rented to families earning at or below 60% of AMI; or
  • Project-Based Housing Assistance Payments contract (Section 8) covering 20% or more units.
Supplemental Financing Supplemental loans are available.
Prepayment Availability Flexible prepayment options available, including yield maintenance and declining prepayment premium.
Rate Lock 30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option.
Accrual 30/360 and Actual/360.
Third-Party Subordinate Financing

Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x.

Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available property cash flow after payment of senior liens and property operating expenses.

Recourse Non-recourse execution with standard carve-outs for "bad acts" such as fraud and bankruptcy.
Escrows Replacement reserve, tax, and insurance escrows are typically required.
Third-Party Reports Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.
Assumption Loans are typically assumable, subject to review and approval of the new borrower's financial capacity and experience.

 

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