FAQs

FAQ Categories

HUD FHA 223(f) Transactions

HUD FHA 221(d)(4) New Construction and Substantial Rehabilitation Transactions

HUD FHA 223a7 Transactions

HUD FHA 232/223(f) Transactions

HUD FHA 232 Transactions

Fannie Mae Affordable Housing Preservation

Fannie Mae Adjustable Rate Mortgage 7-6

Fannie Mae Cooperative Properties

Fannie Mae Fixed-Rate Mortgage Loans

Fannie Mae Green Rewards

Fannie Mae Hybrid Adjustable Rate Mortgage

Fannie Mae Seniors Housing Financing

Fannie Mae Structured Adjustable Rate Mortgage

Fannie Mae Student Housing

Fannie Mae Funded Forward Rate Lock Commitment for 9% LIHTC Properties

Fannie Mae Streamlined Rate Lock

Fannie Mae Unfunded Forward Commitment for 4% LIHTC Properties

Fannie Mae Unfunded Forward Commitment for 9% LIHTC Properties

Freddie Mac Senior Housing

Freddie Mac Student Housing

Questions & Answers

HUD FHA 223(f) Transactions

What type of entities are eligible for HUD FHA 223(f) transactions?

A single asset borrower entity is required for all multifamily FHA mortgage insurance projects.

back to top

What are the most common types of single asset entities?

  • General Partnership (GP) with two or more general partners.
  • Limited Partnership (LP) with one or more general partners and one or more limited partners.
  • Corporation, C Corporation, or S Corporation with shareholder owners and corporate officers and directors who may or may not be shareholders.
  • Limited Liability Company (LLC) composed of members, with one or more managing members and one or more investor members.
  • Trust with beneficiaries and one or more trustees (when borrower is a trust the duration of the trust must be equal to or longer than the term on the FHA Note).
  • Nonprofit Corporation with officers and directors.
  • Any other public or private single asset borrower entity.

back to top

What is the average time from engagement to closing on a HUD FHA 223(f) transaction?

The average time is between 4 to 6 months and varies based on the complexity of the transaction.

back to top

What are the advantages of HUD FHA 223(f) transactions?

  • High LTV (loan-to-value) and low DSCR’s (debt-service-coverage-ratio’s)
    • 85% LTV and 1.18% minimum DSCR for Market Rate Properties
    • 87% LTV and 1.15% minimum DSCR for Affordable Properties
    • 90% LTV and 1.11% minimum DSCR for Subsidized Properties
  • Non-Recourse and fully assumable subject to both the lender and FHA approval
  • 80% LTV for cash out transactions
  • Low fixed-rate financing self-amortizing loan up to 35 years or 75% of remaining economic or useful life of the property
  • Lower debt-service coverage requirements than other loan types
  • No balloon payments and future risk of refinancing in rising interest rate environments eliminated
  • No geographical restrictions
  • Supplemental financing is available

back to top

What are the disadvantages of HUD FHA 223(f) transactions?

  • Significant documentation requirements
  • Transaction time (usually 4-6 months)
  • Costs are higher than other transactions
  • Higher initial escrow and monthly reserves required to fund future repairs
  • Annual CPA audited financials required
  • Owner distribution restrictions limited to two times a year

back to top

Are HUD FHA 223(f) transactions assumable?

Yes.  The loan is fully assumable with approvals from both the lender and HUD and assumption fee of 0.05% of the original loan amount.

back to top

Is there a mortgage insurance premium (MIP) on HUD FHA 223(f) transactions?

Yes, an upfront MIP of 1% is due at closing, and an annual MIP is charged based on property type below:

  • Market rate properties 0.60%
  • Affordable and subsidized properties between 0.25 and 0.35%
  • Energy Star certified properties 0.25%

back to top

Are there commercial space restrictions on HUD FHA 223(f) transactions?

Yes. A maximum net rental area of 25% is allowed, and a maximum of 20% of the effective gross income can be used.

back to top

Are cash out transactions allowed on HUD FHA 223(f) transactions?

Yes, for transactions up to 80% LTV.  50% of cash will be released at closing, and the remaining 50% will be held in escrow until all required non-critical repairs are completed.  A waiver can be requested to receive 75% cash at closing with 25% held in escrow until repairs are completed.

 

back to top

What are the occupancy requirements for HUD FHA 223(f) transactions?

The average physical occupancy cannot be less than 85%, and the occupancy must be stable for a six-month period up until the closing of the transaction.

back to top

Are Replacement Reserves required on HUD FHA 223(f) transactions?

Initial replacement reserves of approximately $1,000 per unit are required.  An annual replacement reserve amount between $250 to $400 per unit will be determined by the Physical Capital Needs Assessment (PCNA) report.

back to top

Do HUD FHA 223(f) transactions allow for secondary financing?

“Private secondary financing is permitted to offset mortgageable and non-mortgageable costs up to the difference between the loan-to-value percentage and a maximum combined debt of 92.5% of the FMV, except in instances when private secondary financing is combined with federal, state or local governmental agency secondary financing. (In these instances, the governmental loan, in aggregate with the HUD first and private second, may exceed the property’s FMV.)” Source HUD MAP Guide January 2016

back to top

What Third Party Reports are required on HUD FHA 223(f) transactions?

An Appraisal, Physical Capital Needs Assessment (PCNA), and Phase I Environmental Assessment are required.

back to top

HUD FHA 221(d)(4) New Construction and Substantial Rehabilitation Transactions

What are the advantages of the 221(d)(4) construction loan for multifamily apartments?

•    Pay interest only during construction period at the same rate of the permanent loan
•    Secure both the construction and permanent loan at the same time
•    Non-recourse

back to top

What items should a developer have ready to provide for an analysis?

•    Prior multifamily or HUD experience of the development team members which include the borrower/developer, general contractor and management company
•    Include detailed Proforma Operating Statements with as much information as possible on number of units, unit mix, rent projections, and expense projections
•    Estimated construction costs of the project
•    Market research or market study reflecting the demand for additional units that can be quickly absorbed after construction is completed

back to top

What 3rd party reports will be ordered by the lender?

•    Appraisal
•    Market Study
•    Environmental Site Assessment
•    Architectural Plan & Cost Review

back to top

What is the Davis-Bacon Act and how does it apply to FHA?

The Davis-Bacon Act requires the payment of wages that prevail in the locality on projects of a character similar to the work that will be performed on direct federal contracts. The National Housing Act (§ 212) requires Davis-Bacon compliance on multifamily projects assisted with FHA mortgage insurance under Section 221(d)(4).

back to top

Is a working capital escrow required?

Yes, a working capital escrow of 4% of loan amount is required (2% allocated to construction contingency and 2% to working capital expenses).

back to top

What is the approximate timing for a HUD/FHA 221(d)(4) construction loan?

The timing usually takes about 6 to 8 months assuming a MAP one-stage application and about 9 to 12 months assuming a MAP two-stage application (subject to deal specifics).

back to top

Are HUD/FHA 221(d)(4) transactions based on Loan-to-Value (LTV) or Loan-to-Cost (LTC)?

They are based on Loan-to-Cost. (LTC) is a ratio used to determine how much of a development project will be financed by debt versus equity. LTC is defined as the value of the loan divided by the cost of the project. The Loan-to-Value (LTV) is the ratio of the value of a loan to the market value of the property, as opposed to the cost of construction for a project.  LTV is the mortgage amount divided by the appraised value of the property.

Cost Driven Mortgage Limits for HUD/FHA 221 (d)(4)

Market Rate 85% Loan-to-Cost
Affordable 87% Loan-to-Cost
90% or Greater Rental Assistance 90% Loan-to-Cost

 

*Note: Loan amounts in excess of $75MM have higher Debt Service Coverage Ratio (DSCR) limits and decreased Loan-to-Value (LTV) limits.

back to top

Can market rate properties qualify for a FHA/HUD 221(d)(4) construction loan?

Yes. Many class A and B market rate multifamily apartment developments qualify. HUD is known for providing programs that provide financing programs for Section 8, affordable housing, and elderly and disabled, many of their programs can be taken advantage without these components.

back to top

Are there any restrictions on cash distributions?

Yes. Cash flow distribution allowed up to two times per year upon HUD approval of audit. Submission of annual audited financial statements is required.

back to top

Are HUD FHA 221(d)(4) transactions assumable?

Yes. The loan is fully assumable with approvals from both the lender and HUD and assumption fee of 0.05% of the original loan amount.

back to top

What type of monthly escrows are required?

Monthly escrows are required for property insurance, real estate taxes, reserves for replacement and mortgage insurance premiums.

back to top

Are there any commercial space and income limitations?

Yes. The maximum allowable percentage of total net rentable area is 25%, and the maximum allowable percentage of effective gross income is 15%.

back to top

What are a few important factors that HUD considers in their pre-application review?

•    That there is demand for the units proposed and there is not an oversupply in the current proposed market, as well as other proposed units coming online.
•    Environmental remediation at the site that there is removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water.

 

back to top

What are the requirements to meet to qualify for substantial rehabilitation?

The repairs, replacements, and improvement costs for an existing multifamily apartment property must be more than:

  • 15% of the property’s replacement cost after of all work is completed OR
  • Renovation costs of more than $15,000 per unit as adjusted by the local HUD office OR
  • The cost of replacing two or more buildings, regardless of the cost

back to top

What Third Party reports are required?

  • Appraisal
  • Market Study
  • Environmental Report
  • Projected Capital Needs Assessment

A review of the architectural documents and final construction by a HUD approved third party contractor is also needed.

back to top

HUD FHA 223a7 Transactions

What properties are eligible?

Multifamily and Healthcare properties with current FHA insured loans.

back to top

Are repairs and improvements eligible for this program?

Yes. Minor repairs are allowed not to exceed $1,500 per unit.  If the Physical Capital Needs Assessment (PCNA) report reflects required repairs over $1,500 per unit, you would not be eligible for this particular program.

back to top

What are the minimum Debt Service Coverage Ratios (DSCR) to qualify for both for profit and non-profit entities?

1.11x minimum DSCR For-profit entities

1.05x minimum DSCR Non-profit entities

back to top

Do I need an appraisal for a HUD/FHA 223(a)(7) transaction?

No appraisal is required.  The only 3rd party report that is required is the Physical Capital Needs Assessment (PCNA) report if one has not been completed within the last 5 years.

back to top

What is the maximum loan term available?

Maximum loan term is the remaining term on the existing mortgage. Can be increased up to 12 years beyond the remaining term of the existing mortgage, but not to exceed the original term. Cannot exceed 75% of the project’s remaining economic life.

back to top

What is the maximum loan size?

The Lesser of:

  • Original principal amount of existing insured mortgage;
  • DSC of 1.11x (1.05x for non-profit borrowers);
  • 100% of eligible transaction costs, including existing indebtedness, repairs, fees, third party costs and initial reserve deposit.

back to top

Can I withdraw overfunded replacement reserve account escrow account of my current loan?

No.  The entire balance of the current replacement for reserve escrow account is transferred to the new HUD/FHA 223(a)(7) loan.

back to top

How long does the loan process take to complete?

The transaction time from Engagement to close normally takes between 60 and 90 days.

back to top

View these answers within an infographic

Click here to download these answers within an infographic. 

back to top

HUD FHA 232/223(f) Transactions

What are the standard loan amounts for both refinancing and acquisition?

For REFINANCING, the lesser of:

  • 80% of fair market value (85% for non-profits)
  • 100% of FHA’s allowable transaction costs (no equity take-out)
  • 100% of FHA’s allowable costs less grants, public loans, and tax credits
  • Amount that results in a debt service coverage ratio of 1.45x based on the underwritten Net Operating Income

For ACQUISITION, the lesser of:

  • 85% of FHA’s allowable acquisition costs (90% for non-profits)
  • 100% of FHA’s allowable costs less grants, public loans, and tax credits
  • 80% of fair market value (85% for non-profits)
  • Amount that results in a debt service coverage ratio of 1.45x based on the underwritten Net Operating Income

View Infographic

back to top

Are Replacement Reserves required?

Yes. Annual deposits are required based on estimates determined by a third-party Project Capital Needs Assessment. An initial deposit to the replacement reserve will be required at closing and can be funded by the mortgage loan.

back to top

Is secondary financing allowed?

Secondary financing is allowed in the form of a surplus cash note. Combined loan to value cannot exceed 92.5% unless secondary financing is from a governmental source.

back to top

How much in repairs are eligible for this program?

Up to 15% of the appraised value of the property after completion of repairs, as long as no more than one building system is substantially renovated or replaced.

back to top

What is the maximum loan term?

The maximum loan term is 35 years or 75% of the remaining economic life of the property.

back to top

What Third Party reports are required?

  • Appraisal
  • Phase I Environmental report
  • Project Capital Needs Assessment (PCNA)

back to top

HUD FHA 232 Transactions

What properties are eligible?

Section 232 provides construction loans for assisted living facilities, skilled nursing, and intermediate and memory care properties meeting the following requirements:

  • Must provide continuous care
  • Must offer three meals per day
  • Facility must be licensed by appropriate government entity
  • Non-resident day care not to exceed 20% of gross area and 20% of gross income
  • May include up to 25% non-licensed independent living units
  • 20 bed minimum
  • Operating leases to qualified facility operators are permissible, subject to HUD approval
  • Major movable equipment, day-care facilities, and fire safety equipment may be financed
  • If a state has a Certificate of Need program, a CON must be obtained prior to filing for Pre-Application

View Infographic

back to top

Will HUD consider non-profit entities for the Section 232 program?

Yes.

back to top

Are there any special underwriting considerations for lower acuity Assisted Living Facilities?

If the units serve those needing assistance with at least 3 Activities of Daily Living (ADL) and meet the other ALF requirements (e.g. licensed) they are eligible under Section 232.  If they are independent, you would need to limit to 25% of total number of units or request a waiver of the 25% rule (for up to 30%). 

back to top

Does the 25% limitation on Independent Living refer to 25% of units or 25% of residents?

The limitation on Independent Living refers to 25% of units.

back to top

Does a property need to be eligible per the 3-year rule at the time of submission of the application, or would HUD accept an application submitted a few months in advance of the 3-year eligibility date?

Yes. The facility must have been completed or substantially rehabilitated for at least three years prior to the date of the Firm Commitment application. Projects with additions completed less than 3 years previous are eligible as long as the addition was not larger than the original project in size and number of beds.

back to top

What are the maximum Loan to Values (LTV) and minimum Debt Service Coverage Ratios (DSCR) required by HUD for Skilled Nursing facilities (SNF), Assisted Living (ALF) and Independent Care Facilities (ILU)?

OHP Benchmarks for each facility type are below, with the LTV presented first (in percentage) and the DSCR presented after the LTV for each type:

  • SNF/ILU Both for Profit 80% LTV 1.45 DSCR
     
  • SNF/ILU Both Non-Profit 85% LTV 1.45 DSCR
     
  • ALF New for Profit 75% LTV 1.45 DSCR
     
  • ALF New Non-Profit 80% LTV 1.45 DSCR
     
  • ALF Existing for Profit 80% LTV 1.45 DSCR
     
  • ALF Existing Non-Profit 85% LTV 1.45 DSCR

back to top

What escrows are required?

  • Taxes and Insurance escrowed monthly (post construction)
  • Replacement reserves required in accordance with HUD guidelines;
  • Working Capital Reserve equal to 2% of loan amount (post in cash or LOC)
  • Typically, equal to 12-18 months of debt service and released upon property maintaining 1.45x debt service coverage for 3 consecutive months
  • Debt service reserve is required and ranges from 6-12 months of principal, interest and MIP payments; will be held until an average debt service coverage of 1.45x is met for 12 consecutive months (no month can be below 1.25x).

back to top

Is debt used for developer fees mortgageable?

Developer’s Fees are not eligible mortgageable costs. However, costs associated with development of the project are allowed to be repaid through a surplus cash note. Justification to support what is included in the developer’s fee, including evidence that the work was specifically related to the project, is required if a surplus cash note is used.

back to top

What is the timing of the transaction from Engagement to closing?

Under the LEAN process this transaction can typically be completed in 9 to 12 months. Actual processing times vary depending on the complexity of the project and information available from the borrower.

back to top

Fannie Mae Affordable Housing Preservation

What are the available terms and amortization?

The term available is 5-30 years with an amortization of up to 35 years

back to top

What is the maximum LTV?

80%

back to top

What is the minimum Debt Service Coverage?

1.20x (fixed rate)

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Flexible underwriting to specific affordable developments
  • Competitive pricing
  • Flexible loan terms, and fixed- or variable-rate financing options
  • Certainty and speed of execution

back to top

What property types are eligible?

  • Expiring Low-Income Housing Tax Credit deals
  • Refinancing of existing tax-exempt bond deals
  • Properties eligible for the Rental Assistance Demonstration (RAD) program
  • Properties with HUD Section 8 HAP Contracts
  • Properties with existing Rural Housing Service (RHS) Section 515 loans
  • Loans insured under Sections 202 or 236 of the National Housing Act

back to top

Fannie Mae Adjustable Rate Mortgage 7-6

What are the available terms and amortization?

The term available is 7 years with an amortization of up to 30 years

back to top

What is the maximum LTV?

80%

back to top

What is the minimum Debt Service Coverage?

1.00x at the maximum lifetime interest rate

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Attractive low-cost financing
  • No minimum or maximum loan size
  • Maximum interest rate is set at rate lock
  • Convertible to a fixed-rate loan with minimal re-underwriting

back to top

What property types are eligible?

  • Existing, stabilized multifamily properties, including: Conventional, Multifamily Affordable Housing, Seniors Housing, Student Housing, and Manufactured Housing Communities
  • Loans for acquisition or refinance

back to top

Fannie Mae Cooperative Properties

What are the available terms and amortization?

The term available is 5-30 years with an amortization of up to 30 years.

back to top

What is the maximum LTV?

55% (on a market rental basis).

back to top

What is the minimum Debt Service Coverage?

1.0x on actual underwritten operations; 1.55x when utilizing market rate rentals.

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Flexible loan terms
  • Competitive pricing
  • Certainty and speed of execution
  • Customized solutions

back to top

Fannie Mae Fixed-Rate Mortgage Loans

What property types are eligible?

  • Existing stabilized Cooperative Properties in eligible Cooperative Property markets
  • Cooperative corporations with strong management and solid operating history
  • Limited equity cooperative properties for low- and moderate-income families are also eligible
  • Overall Property condition rating of two or better

back to top

What are the available terms and amortization?

The term available is 5-30 years with an amortization of up to 30 years.

back to top

What is the maximum LTV?

80% for Conventional Properties.

back to top

What is the minimum Debt Service Coverage?

1.25x for Conventional Properties.

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Flexible loan terms
  • Competitive pricing
  • Predictable payment and amortization schedule
  • Speed in processing and underwriting

back to top

What property types are eligible?

  • Existing, stabilized Conventional properties; Multifamily Affordable Housing properties; Seniors Housing properties; Student Housing properties; and Manufactured Housing Communities
  • Properties with a minimum of five units (50 pad sites for Manufactured Housing Communities)
  • Credit-worthy single asset U.S. borrower with U.S. ownership
  • Borrowers may have indirect foreign ownership interests, subject to proper structuring of the     borrowing entity and its parent.

back to top

Fannie Mae Green Rewards

What are the available terms and amortization?

The term available is 5-30 years with an amortization of up to 30 years

back to top

What is the maximum LTV?

Varies by asset class and product type

back to top

What is the minimum Debt Service Coverage?

Varies by asset class and product type

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Lower interest rate
  • Free Energy and Water Audit Report
  • Up to 5% more loan proceeds
  • Increased Net Cash Flow by underwriting projected energy and water cost savings
  • No minimum investment per unit
  • Attract more investors with the market’s only Green MBS

back to top

What property types are eligible?

  • Conventional and Affordable Housing
  • Multifamily, Seniors, Student, Military, and Cooperative
  • Borrower must commit to installing capital improvements that target a 25% or more reduction to the whole property’s annual energy or water use
  • Improvements must be installed within 12 months of loan origination
  • Properties may be located anywhere in the U.S.
  • Only Green Rewards loans that are projecting greater than 5% additional loan proceeds are Pre-Review.

back to top

Fannie Mae Hybrid Adjustable Rate Mortgage

What are the available terms and amortization?

The term available is 5-, 7- or 10-year fixed rate term followed by 25-, 23-, or 20-year adjustable rate term with an amortization of up to 30 years

back to top

What is the maximum LTV?

The maximum loan-to-value is up to 80%

back to top

What is the minimum Debt Service Coverage?

1.25x Actual Amortizing DSCR, if the Hybrid ARM is secured by a property located outside of a strong market, the maximum loan amount must be determined by using a minimum 1.0x DSCR sufficient to cover a debt service constant that equals the sum of the interest rate during the fixed rate term; plus 2.5%

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy

back to top

What are the benefits?

  • Competitive interest rates
  • Low cost of execution
  • Delegated Model provides Lenders and Borrowers speed and certainty of execution
  • No Underwriting Floor or Fixed Rate test in Strong Markets
  • Flexible prepayment terms

back to top

What property types are eligible?

  • Properties with loan amount $3 million or less in Nationwide Markets or $5 million or less in Eligible MSAs
  • Properties with 5-50 units and loan amount $5 million or less, regardless of location
  • Existing, stabilized multifamily properties, including Conventional properties and Manufactured Housing Communities
  • Loans for acquisition or refinance

back to top

Fannie Mae Seniors Housing Financing

What are the available terms and amortization?

The term available is 5-30 years with an amortization of up to 30 years

back to top

What is the maximum LTV?

The maximum loan to value is 75% (80% for fixed-rate tax-exempt bonds)

back to top

What is the minimum Debt Service Coverage?

The minimum DSCR is 1.30x if the property is 100% Independent Living, 1.40x if the property is 100% Assisted Living, 1.45%, if the property is stand-alone Alzheimer/Dementia Care.  For combinations of the above special rules apply to calculate the minimum DSCR

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Customized solutions
  • Flexible loan terms
  • Competitive pricing
  • Certainty of execution
  • Speed in processing and underwriting

back to top

What property types are eligible?

  • Existing, stabilized, purpose-built Seniors Housing Properties
  • Sponsors and Operators experienced in the Seniors Housing industry
  • Lenders experienced in financing Seniors Housing and approved by Fannie Mae for participation

back to top

Fannie Mae Structured Adjustable Rate Mortgage

What are the available terms and amortization?

The term available is 5,7 or 10 years with an amortization of up to 30 years

back to top

What is the maximum LTV?

The maximum loan to value is 75%.

back to top

What is the minimum Debt Service Coverage?

1.00x, using a DSCR calculated based on a variable underwriting rate. Mortgage loan amount shall not exceed that of a fixed-rate loan of similar terms.

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Attractive low-cost financing.
  • Convertible to fixed rate financing.
  • Flexible loan terms and prepayment options.
  • Ability to choose interest rate cap.

back to top

What property types are eligible?

  • Existing, stabilized Conventional properties; Multifamily Affordable Housing properties; Seniors Housing properties; Student Housing properties; and Manufactured Housing Communities
  • Mortgage Loans secured by properties undergoing Moderate Rehabilitation may be eligible on a case-by-case basis.
  • Credit Enhancement Mortgage Loans and Substantial Rehabilitation are not eligible
  • Loans of $25 million or more

back to top

Fannie Mae Student Housing

What are the available terms and amortization?

The term available is 5 to 30 years with an amortization of up to 30 years.

back to top

What is the maximum LTV?

The maximum loan to value is 75%.

back to top

What is the minimum Debt Service Coverage?

1.30x for Fixed-Rate and 1.05x for variable rate, subject to a fixed-rate test.

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Customized solutions
  • Competitive pricing
  • Certainty of execution
  • Speed in processing and underwriting

back to top

What property types are eligible?

  • Existing, stabilized properties that cater to a student tenant base because of design, tenancy, or location
  • Strong operators with proven records of accomplishment in student housing
  • Properties rented on a per-unit or per-bed basis

back to top

Fannie Mae Funded Forward Rate Lock Commitment for 9% LIHTC Properties

What are the available terms and amortization?

Up to 30 years with up to a 35-year amortization

back to top

What is the maximum LTV?

The maximum loan to value is 90%

back to top

What is the minimum Debt Service Coverage?

The minimum debt service coverage ratio is 1.15x

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Protection from interest rate volatility by locking the interest rate and other key provisions prior to completing construction.
  • Certainty and speed of execution.

back to top

What property types are eligible?

  • New construction and properties undergoing substantial rehabilitation, including preservation and rural transactions.
  • Lenders approved to deliver forward commitments under Fannie Mae’s Multifamily Affordable Housing product line.

back to top

Fannie Mae Streamlined Rate Lock

What are the benefits?

  • For rate locks with Fannie Mae’s trading desk and many other MBS investors, the breakage fee for failure to originate the loan is limited to the Good Faith Deposit
  • Expanded delivery tolerance allows greater flexibility for rate locks

back to top

What property types are eligible?

  • Existing, multifamily properties including Conventional, Coops, Green Rewards, Green Building Certification Loans, Hybrid ARM Loans, Manufactured Housing Communities, Multifamily Affordable Housing, Seniors Housing, Small Loans, Structured Transactions, Student Housing and Dedicated Student Housing properties. Some may be subject to pre-review.

back to top

Fannie Mae Unfunded Forward Commitment for 4% LIHTC Properties

What are the available terms and amortization?

Up to 30 years with up to a 35-year amortization

back to top

What is the maximum LTV?

The maximum loan to value is 90% for deals with 90% or more affordable units. 85% for all other deals.

back to top

What is the minimum Debt Service Coverage?

The minimum debt service coverage ratio is 1.15x for deals with 90% or more affordable units. 1.20x for all other deals.

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Protection from interest rate volatility by locking the interest rate and other key provisions prior to construction
  • Single asset security allows for customized loan structures
  • Certainty and speed of execution
  • M.TEB execution offers reimbursement of certain Costs of Issuance

back to top

What property types are eligible?

  • LIHTC new construction and properties undergoing substantial rehabilitation, including preservation and rural transactions
  • Lenders approved to deliver forward commitments under Fannie Mae’s Multifamily Affordable Housing product line

back to top

Fannie Mae Unfunded Forward Commitment for 9% LIHTC Properties

What are the available terms and amortization?

Up to 30 years with up to a 35-year amortization.

back to top

What is the maximum LTV?

The maximum loan to value is up to 90%.

back to top

What is the minimum Debt Service Coverage?

The minimum debt service coverage ratio is 1.15x.

back to top

Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

back to top

What are the benefits?

  • Protection from interest rate volatility by locking the interest rate and other key provisions prior to construction
  • Single asset security allows for customized loan structures
  • Certainty and speed of execution
  • M.TEB execution offers reimbursement of certain Costs of Issuance

back to top

What property types are eligible?

  • LIHTC new construction and properties undergoing substantial rehabilitation, including preservation and rural transactions
  • Lenders approved to deliver forward commitments under Fannie Mae’s Multifamily Affordable Housing product line

back to top

Freddie Mac Senior Housing

What are the available terms and amortization?

The term available is 5-10 years with up to 30 years for fixed rate loans

back to top

What is the maximum LTV?

Varies by term and property type up to 75% LTV

back to top

What is the minimum Debt Service Coverage?

Varies by term, LTV and property type

back to top

What borrowers are eligible?

  • Experienced owner/operator of comparable facilities
  •  If the loan is less than $5 million, the borrower may be a Single Asset Entity with some additional restrictions and may be a limited partnership, general partnership (no individuals may be general partners), limited liability company, corporation, or real estate investment trust (must be a corporation, not a trust)
  •  If the loan is $5 million or more, the borrower may be a limited partnership, a corporation, or a limited liability company and must be a Single Purpose Entity (SPE); see Section 6.13 of the Loan Agreement for basic SPE requirements
  • If the borrower is structured as a tenancy in common (TIC), each tenant in common must be an SPE (Note: TICs are not encouraged)

back to top

What property types are eligible?

  •  Independent living properties
  •  Assisted living properties
  •  Memory care properties
  •  Properties with a limited amount of skilled nursing (maximum 20% of NOI)
  •  Any combination of the above

back to top

Freddie Mac Student Housing

What are the available terms and amortization?

The term available is 5-10-years (up to 30 years for fixed-rate loans if loan is not purchased for securitization) with an amortization of up to 30 years

back to top

What is the maximum LTV?

The maximum loan-to-value is up to 80%

back to top

What is the minimum Debt Service Coverage?

Varies by term and LTV

back to top

What borrowers are eligible?

  • Borrower may be a limited partnership, corporation, limited liability company, or a tenancy in common (TIC) with 10 or fewer tenants in common
  • General partnerships, limited liability partnerships, real estate investment trusts (REITs) and certain trusts may also be acceptable in limited circumstances, subject to additional requirements
  • Borrower must generally be a Single Purpose Entity (SPE); however, on loans less than $5 million, upon borrower’s request, a borrower other than a TIC may be a Single Asset Entity instead of an SPE
  • If the borrower is structured as a TIC, each tenant in common must be a SPE

back to top

What property types are eligible?

  • Purpose-built student housing properties; must have a minimum of one bathroom for every two bedrooms, and each apartment must have a separate full kitchen
  • Stabilized garden, mid-rise and high-rise apartment properties that are greater than 50% occupied by student tenants
  • Supporting college/university has 8,000 or more students; student housing properties located within close proximity to multiple schools that have a combined student body of 8,000 students or more will be considered
  • Property is located less than two miles from college/university or on a public transportation route

back to top

newsletter signup

Close