Fannie Mae Financing Solutions for Multifamily Affordable Housing (MAH) Rehabilitation Borrowers

Fannie Mae Issued Taxable and Tax-Exempt Bonds for Financing the Rehabilitation of Affordable Multifamily Developments

If you're an investor looking to rehabilitate a Multifamily Affordable Housing (MAH) development, the Fannie Mae MBS as Tax-Exempt Bond Collateral (M.TEB) could be a great solution. M.TEB execution is available for both existing bond refunding and new bond issues for properties using 4% Low-Income Housing Tax Credits (LIHTCs). This type of financing allows for incredibly generous LTV allowances up to 90% and interest-only loan options, making it a flexible and affordable option for many investors. 

Sample Fannie Mae Terms For MBS as Tax-Exempt Bond Collateral (M.TEB)

Size:  No minimum or maximum loan size 

Terms:  10-30 years 

Amortization:  Up to 35 years 

Interest Rates:  Fixed, variable-rate, and interest-only loan options available 

Maximum LTV:  Up to 90% 

Minimum DSCR:  1.00x for Structured ARM, 1.15x for fixed-rate

Prepayment Penalty: Yield maintenance and declining prepayment premium options available

Eligible Properties: 

  • 4% LIHTC Properties
  • 80-20s (deals in which 20% of the property is set aside for low income residents) 
  • Refunding of existing bonds 

Advantages:

  • Competitive interest rates (typically 0.20-0.25% better pricing than regular bond credit enhancement) 
  • Up to 90% LTV allowance 
  • Up to 35 year amortization
  • Interest-only options 
  • Flexible structure and certainty of execution 
  • Wide investor base
  • Tax-exempt or taxable interest allowed