Fannie Mae Choice Refinance
Refinancing a Fannie Mae multifamily loan is easy with the Choice Refinance program, which provides flexible terms and a fast underwriting process.
Better Financing Starts with More Options$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get QuotesStreamlined Refinancing for Fannie Mae Multifamily Loan Borrowers
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 in 2023
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 LTV: 80%, 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)