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- $1 million, have fixed-rate terms between 10 and 30 years, and permit LTVs between 80 - 90%.
Fannie Mae Multifamily Financing for Affordable Housing
Fannie Mae Insured Multifamily Loans for Affordable Housing Projects
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.)
Qualify for a fannie Mae multifamily affordable Housing Loan
Sample Fannie Mae Terms For Affordable Multifamily Housing Loans 2021
Size: $750,000- $1 million+ (no set maximum)
Terms: 10-30 year fixed-rate loan terms
Use: Acquisitions and refinances
Amortization: 30 years
Maximum LTV: 80-90%
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- 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