Streamlined Refinancing for Fannie Mae  Multifamily Loan Borrowers

Refinance Your Fannie Mae Insured Multifamily Loan With The Choice Refinance Program 

Refinancing a Fannie Mae multifamily loan might sound like a challenge, but with the Fannie Mae Choice Refinance program, the process is easier than it's ever been. The Fannie Mae Choice Refinance program has an 80% LTV allowance, a minimum DSCR requirement of 1.25x, and has both fixed and adjustable-rate options, making it a flexible and versatile option for all kinds of Fannie Mae multifamily borrowers. Plus, the Choice Refinance program has reduced documentation requirements, leading to a significantly faster underwriting process and less hassles for both borrowers and lenders alike. In addition, Choice Refinance loans are non-recourse, and are fully assumable with lender approval and a 1% fee. 



Sample Fannie Mae Terms For Choice Refinance Loans

Size:  No minimum loan amount 

Terms:  5-30 years 

Amortization:  30 years (in most cases) 

Interest Rate: Both fixed and adjustable rate options available, interest-only loans also available in some cases 

Maximum LTV80%, 75% for cash-out 

Minimum DSCR 1.25x 

Recourse:  Loans are non-recourse with standard “bad boy” carve-outs 

Prepayment Options:  Yield maintenance period/1% prepayment premium (may be waived once the yield maintenance period is finished) 

Occupancy Requirements: 85% physical occupancy, 70% economic occupancy

Eligible Properties:  Stabilized Fannie Mae-financed multifamily properties in good standing 

Advantages:

  • Faster underwriting/approval process
  • Less documentation required 
  • Competitive interest rates 
  • Loans are non-recourse 
  • Supplemental financing available after 12 months 
  • Rate locks available up to 180 days before closing 
  • Loans are fully assumable with lender approval and 1% fee 
  • Existing prepayment premiums (from old/pre-existing loan) may be reduced or waived in some situations. If it is not waived, the prepayment premium can be funded with the proceeds of the new Choice Refinance loan. 

Disadvantages:

  • Usually requires new third-party reports including Appraisal, Physical Needs Assessment (though they may be streamlined for Choice Refinances). May or may not require a Phase I Environmental Assessment. 
  • New title insurnace policy typically required 
  • Requires replacement reserves (minimum of $250/unit per year) 
  • 2% rate lock fee typically required (refunded after Fannie Mae purchases loan, usually around 30 days after closing)