Fannie Mae Hybrid ARM Financing for Multifamily Developments 

Fannie Mae Insured Loans for Apartment Buildings and Other Multifamily Properties

Borrowers looking for hybrid ARM financing for multifamily developments don't have to look beyond Fannie Mae's Hybrid ARM Loan for the funding they need. Fannie Mae Hybrid ARM Loans have 5, 7, and 10-year fixed-rate period options, after which the loan converts to an adjustable interest rate based on the 6-month LIBOR rate. Fannie Mae Hybrid ARM Loans have an LTV allowance up to 80%, are non-recourse, and are fully assumable (with lender approval.) 

To learn more, check out our official Fannie Mae Hybrid Adjustable-Rate Mortgage Product Sheet or keep reading below for an in-depth explanation of Fannie Mae’s Hybrid ARM financing program.

Sample Fannie Mae Terms For Hybrid ARM Multifamily Loans

Size:  Varies, typically $3 million maximum in smaller markets and $5 million maximum in larger markets 

Terms:  30 years, with a 5, 7, or 10-year fixed rate term, which then converts to an adjustable-rate for the rest of the loan 

Amortization:  Up to 30 years

Interest Rates:  Adjustable rate term based on 6-month LIBOR rate 

Interest Rate Cap:  Adjustable interest rate cannot exceed the initial interest rate by more than 5%, rate cannot be adjusted more than 1% up or down during each adjustment period 

Maximum LTVUp to 80%

Minimum DSCR 1.25x (may vary based on market location) 

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

Prepayment Options:  Yield maintenance or declining prepayment premiums during fixed-rate term, no prepayment fees during the adjustable-rate term

Eligible Properties: 

  • Properties must have at between 5 and 50 units

  • Properties must be stabilized, and can include manufactured housing communities

  • For acquisitions or refinances, loans must be first lien


  • Competitive interest rates

  • Less fees than comparable Fannie Mae loans

  • Loans are non-recourse

  • Flexible prepayment options

  • 30- 180 day rate locks available (streamlined and early rate locks also available)


  • Requires third-party reports including a property appraisal, property condition assessment, and a Phase I Environmental Assessment

  • Replacement reserves are required

  • Supplemental financing is not available