Fannie Mae Multifamily Near-Stabilization Execution Financing
Fannie Mae Insured Loans for Nearly Stabilized Apartment Buildings and Multifamily Developments
If you're an investor who owns a newly constructed or recently renovated property that's expected to achieve stabilized occupancy within 120 days, a Fannie Mae Multifamily Near-Stabilization Execution Loan could be a great choice. Starting at a minimum of $10 million, Near-Stabilization Execution Loans are an effective loan option for investors with properties that are currently being financed with a short-term construction or renovation loans, and want to switch to a permanent financing option. Fannie Mae Near-Stabilization Execution Loans loans offer a maximum LTV of up to 75% and fixed and variable-rate terms of between 5 and 12 years, with amortizations of between 5 and 30 years. Like many other Fannie Mae multifamily loans, these loans offer competitive interest rates and are non-recourse. Plus, Near-Stabilization Execution Loans are fully assumable (with lender approval and a 1% fee) and are available for both affordable and market-rate properties.
Sample Fannie Mae Terms For Near-Stabilization Execution Loans
Size: $10 million minimum
Terms: 5, 7, 10, and 12 year fixed and variable-rate loan terms available
Amortization: 5-30 years, after 12-month interest-only loan period. Interest-only loan period may be extended in some circumstances.
Maximum LTV: Up to 75% for conventional properties, up to 90% LTV/LTC for affordable properties
Minimum DSCR: Targeted DSCR of 1.25x, or targeted DSCR of 1.15x for multifamily affordable housing (MAH) properties (targeted DSCR being the DSCR deemed possible with 4 months of rate lock, as determined by Fannie Mae and the lender)
Prepayment Options: Yield maintenance or declining prepayment premiums
Occupancy Requirement: 75% physical occupancy, 60% economic occupancy
Eligible Borrowers: Borrowers should be in a strong financial position and have experience with successful lease-ups in the past. Single Asset Entities are preferred by many lenders, but may or may not be required.
Conventional and Multifamily Affordable Housing (MAH) developments
Partially leased, recently built, or newly renovated properties
Competitive interest rates
Loans are non-recourse
30- 180 day rate locks available after commitment (streamlined rate locks also available)
Supplemental financing allowed after 12 months
Loans are fully assumable with lender approval and 1% fee
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
Requires a 1% origination fee
Good faith deposit of 2% required at rate lock, which is refundable after closing