Fannie Mae Multifamily Cooperative Apartment Loans
These loans start between $750,000 and $1 million, offering a maximum LTV of 55% and a fixed-rate term of between five and 30 years.
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 QuotesFannie Mae Multifamily Loans for Cooperative Apartment Buildings
Cooperative buildings, in which the residents collectively own the property together, can be notoriously difficult to finance. Fannie Mae has a loan product that can help: the Fannie Mae Cooperative Apartment Loan.
Starting at between $750,000 and $1 million, this loan offers a maximum LTV of 55% and a fixed-rate term of between five and 30 years. Just like its sibling, the Fannie Mae DUS Loan, the Fannie Mae Cooperative Apartment Loan offers competitive interest rates, is mainly non-recourse, and is fully assumable (with lender approval.)
To learn more, check out our official Fannie Mae Multifamily Cooperative Properties Product Sheet or keep reading below for an in-depth explanation of their cooperative apartment financing program.
Sample Fannie Mae Terms for Multifamily Cooperative Apartment Loans in 2023
Size: $750,000 to $1 million minimum, no maximum
Terms: 5- to 30-year fixed-rate loan terms available
Amortization: Up to 30 years
Maximum LTV: 55%
Minimum DSCR: 1.00x (actual operations), 1.55x (market rents)
Recourse: Most loans are non-recourse with standard “bad boy” carve-outs
Prepayment Options: 1% or yield maintenance, whichever is greater
Commercial Limits: Some commercial space is allowed, but can vary based on specific project
Eligible Properties:
Must typically be managed by a property management firm with experience managing similar properties
The cooperative organization must charge enough maintenance fees to achieve a balanced budget
The cooperative must maintain a reserve balance of at least 10% of the property's annual maintenance fees
In general. the Sponsor cannot own more than 40% of the property's units
Advantages:
Competitive interest rates
Most loans are non-recourse
Supplemental loans are allowed
30- to 180-day rate locks available after commitment (extended rate locks also available)
Loans are fully assumable with lender approval
Disadvantages:
Requires replacement reserves ($250 per unit minimum)
Typically requires 85% physical occupancy and 70% economic occupancy 90 days before closing
Requires third-party reports including an Appraisal, Property Condition Assessment, and a Phase I Environmental Assessment
Requires a $12,500 application deposit and a $3,000 processing fee