Commercial Mortgage Unlimited

Fannie Mae Multifamily Loans

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:

Fannie Mae Multifamily Small Loans

Description

Simplified loan approval process for long term fixed rate financing for apartments, manufactured housing, mobile home parks, and cooperative apartments.

Loan Amount

$750,000 – $3,000,000 nationwide – up to $5,000,000 in major markets

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

Non-recourse lending is available

Debt Service Coverage

1.25x minimum

Loan to Value

Up to 75% maximum LTV for refinances and 80% for purchases

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 and a 1% fee

Taxes and Insurance Escrows

May be waived on lower LTV loans

Net Worth and Liquidity

Net worth and liquidity requirements must be met

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

Fees

Due Diligence Fee: $4,500 – $8,500 non-refundable fee for 3rd party reports and processing

Timing

45-60 days from complete application to closing

Fannie Mae Multifamily Large Loans

Description

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

Loan Amount

$3,000,000 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.

**We are now an approved Fannie Mae mezzanine lender, able to write mezzanine loans behind DUS first mortgage loans that we originate. One of only 4 such approved firms. We can assist borrowers who need additional leverage up to 85% LTV and down to a combined DSCR of 110%, per Fannie Mae program.

Freddie Mac Multifamily Small Loan Program

Freddie Mac is another nationwide source of mortgage capital for apartment building financing. Up until recently, Freddie Mac focused exclusively on large balance loans. Now, Freddie Mac has unveiled a small balance apartment loan program to compete with Fannie Mae. These loans have very competitive rates, flexible prepayment options, and allow for cash out. These loans are called hybrid ARMs as they have fixed rates for the initial 5, 7, or 10 years followed by an adjustable-rate period and 30 year amortizations.  Available options include a five-year fixed followed by a 15 year adjustable, seven year fixed followed by a 13 year adjustable, and a 10 year fixed followed by a 10 year adjustable. All loans come with step down prepayment penalties (such as 5%, 4%, 3%, 2%, 1%) instead of yield maintenance.

Loan Amount

$1 million to $5 million

Loan Purpose

Purchase or refinance, including cash out refinances

Amortization

Up to 30 years

Property Types

Apartment buildings of 5+ units

Debt Service Coverage

1.20x in top markets, 1.25x nationwide

Maximum Loan to Value

80%

Recourse

Non-Recourse

Credit Score

Minimum of 650

Interest Only

Interest only loans are available

Occupancy

Minimum occupancy of 90% for 90 days

Taxes/Insurance

Escrows for taxes and insurance may be waived

Replacement Reserves

Not usually required

Rate Lock Deposit

1% at rate lock, refundable at closing

Adjustments

Annual and lifetime caps on all adjustments

Assumable

Yes

 

Whether you need funding for an apartment building with a full doc loan , No Doc , or Limited Doc program I can fit you into the best program. All loans in general are based on the borrowers financial strength and the current or projected cash flow.

If you want to purchase an apartment building with a Bridge Loan here is a great product. Please log onto my Bridge Loan Page for more information about Bridge loans.

Bridge Product

·         Multifamily, Retail, Office, Industrial, and Self-Storage (Value-Add opportunities)

• Flexible loan terms & prepay (1-3 years with extension options)
• Loan amount is determined by using in place cash flow as low as a 6.75% Debt Yield
• Up to 80% Loan to Purchase plus CapEx costs or 75% of stabilized value
• 1% Lender Fee, 1% Exit Fee; Exit Fee is waived if we (HMG) provide the takeout loan
• Pricing from 475bps to 525bps plus 30 day LIBOR (we are currently aggressive for this)

·         Minimum Loan Amount:  $5MM Multifamily; $7.5MM Commercial (up to $50MM)

• Non-Recourse