Fannie Mae Unfunded Forward Commitment 4% LIHTC Properties

Securing financing for a multifamily property can be the first step of a very good investment opportunity, but the process is often complex. The dedicated professionals at LSG Lending Advisors have many years of experience in all areas of this specialized type of lending. Whether you are planning to do a purchase, acquisition, new construction, refinance or rehabilitation, our team is ready to guide you through each step along the way.  Every client has their own unique business needs and challenges, so we take the time to create custom made solutions that will meet the requirements of every project. We can help ensure that your loan application process goes smoothly and closes in a timely fashion.

  • 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.

LSG Lending Advisors are experts with regard to helping our clients adhere to FHA/HUD MAP lending guidelines and we also have strong relationships with some of the best FHA/HUD MAP approved lenders in the marketplace. Contact us today to learn more about why so many multifamily property investors consider us a trusted partner. 

The Fannie Mae Unfunded Forward Commitment 4% Low-Income Housing Tax Credit (LIHTC) allocation properties program is for properties with a 4% LIHTC allocation that need substantial rehabilitation or new construction, with fixed rate, permanent financing for tax-exempt transactions. The minimum loan amount is $3 million, and allows a loan term of up to 30 years with a 35-year amortization. The maximum LTV limit is up to 90% for transactions with 90% affordable units, and 85% for deals with less than 90% affordable units.

Term Sheet for Fannie Mae Unfunded Forward Commitment 4% Low-Income Housing Tax Credit (LIHTC)

Eligibility/ Benefits
  • Substantial rehabilitation or new construction transaction with 4% LIHTC allocation.
  • Fixed-rate, permanent financing for tax-exempt transactions.
  • Allows for rate lock and establishes other mortgage provisions for up to 30 months in advance of construction completion and conversion to a permanent mortgage loan.
Forward Rate Lock Period 24 or 30-month commitments. One six-month extension available.
Loan Amount Minimum $3.0 million.
Loan to Value
  • 90% for deals with 90% or more affordable units.
  • 85% for deals with less than 90% affordable units.
Loan Term Up to 30 years.
Amortization Up to 35 years.
Debt Service Coverage Ratio
  • 1.15x for deals with 90% or more affordable units.
  • 1.20x for deals with less than 90% affordable units.
Interest Rate Fixed rate set at the time of rate lock of the Forward Commitment.
Prepayment Flexible prepayment options available, including yield maintenance and declining prepayment premium.
Guaranty Non-recourse with standard carve-outs.
Subordinate Financing Available subject to Fannie Mae requirements.
Conversion Requirements
  • Project completion with certificates of occupancy for all units.
  • 90% Occupancy for 90 days.
  • Permanent loan must meet Fannie Mae’s underwriting requirements.
Reserves Deposit required for Replacement Reserves, Taxes, Insurance.
Processing Fee
  • Typically $20,000 - Includes cost of Third-Party Reports (Appraisal, Market Analysis, Environmental, and Engineering Report) and Lender Due Diligence.
  • Borrower is responsible for Legal Fees and Standard Closing Costs.
Commitment Fees Competitive and negotiable.
Good Faith Deposit 1% of loan amount, funded following conversion.
Forward Standby Fee One-time up-front fee of 0.15%.
Additional Considerations During the construction phase, the M.TEB execution requires the bonds to be cash collateralized with proceeds of the construction loan. 

 

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