Fannie Mae 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.  

To learn more, check out our official Fannie Mae Near-Stabilization Execution Product Sheet or keep reading below for an in-depth explanation of the Near-Stabilization financing program.

Sample Fannie Mae Terms for Near-Stabilization Execution Loans in 2023

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) 

Recourse:  Loans are non-recourse with standard “bad boy” carve-outs for fraud and other bad acts 

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. 

Eligible Properties:  

• Conventional and Multifamily Affordable Housing (MAH) developments

• Partially leased, recently built, or newly renovated properties

Advantages:

• Competitive interest rates

• Loans are non-recourse

• 30- to 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

Disadvantages:

• 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