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Last updated on Jan 3, 2023
2 min read

Fannie Mae Multifamily Affordable Housing Loans

Fannie Mae Affordable Housing Loans can be used for both purchases and refinances, are mainly non-recourse, start at $750,000 to $1 million, have fixed-rate terms between 10 and 30 years, and permit LTVs between 80% and 90%.

Better Financing Starts with More Options Start Your Application and Unlock the Power of Choice. Click Here to Get Quotes →$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 Quotes
In this article:
  1. Fannie Mae Multifamily Financing for Affordable Housing 
  2. Sample Fannie Mae Terms For Affordable Multifamily Housing Loans in 2023
  3. Get Financing

Fannie Mae Multifamily Financing for Affordable Housing 

With housing costs on the rise across the United States, it's never been more important for American families to have housing options that they can actually afford. If you're an investor interested in providing affordable housing solutions, a Fannie Mae multifamily affordable housing loan could be a great choice. However, these loans aren't just available for property acquisitions; they're also available for refinancing, and can be given to properties already taking advantage of Low Income Housing Tax Credits (LIHTCs), properties with a Section 8 contract, or properties with a Housing Assistance Payment (HAP) contract. Just like most other Fannie Mae multifamily loan options, Fannie Mae multifamily affordable housing loans offer competitive interest rates, are mainly non-recourse, and are fully assumable (with a 1% fee and lender approval.)

Sample Fannie Mae Terms For Affordable Multifamily Housing Loans in 2023

Minimum Loan Size: $750,000 to $1 million (no set maximum) 

Terms: 10- to 30-year fixed-rate loan terms 

Use: Acquisitions and refinances 

Amortization: 30 years

Maximum LTV: 80% to 90% 

Minimum DSCR: 1.15x 

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

Prepayment Options: Yield maintenance or 1% prepayment penalty, whichever is larger

Affordability Requirements: In most cases, at least 20% of the building's units must be rented to families earning 50% or less than the Area Median Income (AMI), or at least 40% of a building's units must be rented to families earning 60% or less than the AMI. 

Advantages:

  • Very competitive interest rates

  • Up to 90% LTV for some projects

  • Most loans are non-recourse

  • Supplemental loans are permitted after 12 months

  • 30- to 180-day rate locks available after commitment, early and extended rate lock options are also available

  • Loans are fully assumable (with lender approval and 1% fee)

  • Funded or unfunded forward commitments may also be available

Disadvantages:

  • Requires replacement reserves

  • Typically requires 85% physical occupancy, 70-80% economic occupancy for 90 days before closing

  • Requires third-party reports including Appraisal, Physical Needs Assessment, and Phase I Environmental Assessment

  • Requires a $12,500 application deposit and a $3,000 processing fee

  • 2% rate lock fee required (refunded after loan closing)

  • Commitment fees may also be required

In this article:
  1. Fannie Mae Multifamily Financing for Affordable Housing 
  2. Sample Fannie Mae Terms For Affordable Multifamily Housing Loans in 2023
  3. Get Financing

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