Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) Loans

Rehab Without a Construction Loan

The Reduced Occupancy Affordable Rehab execution, which everyone calls ROAR, is permanent mortgage financing for an affordable property that is about to be torn apart. Fannie's own framing is the point of it: it eliminates the need for a construction loan or a forward commitment.

That is unusual. Most lenders will not hold permanent debt on a property whose occupancy is falling and whose coverage is dropping below 1.0x. ROAR is built to do exactly that, with the covenants relaxed for a defined rehab window and then snapped back.

How Far Can the Property Fall?

Further than most sponsors expect, and the numbers are specific. During the rehabilitation period occupancy may drop from stabilized levels to a minimum of 50%. Coverage may drop to 1.0x on an interest-only basis, or 0.75x on an amortizing basis.

A permanent lender accepting 0.75x coverage and half-empty buildings is the entire product. The tradeoff is that Fannie wants guarantees and a hard re-stabilization date.

Terms confirmed against the Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) Execution term sheet at multifamily.fanniemae.com/financing-options/affordable-loans/reduced-occupancy-affordable-rehab-roar-execution, fetched July 31, 2026. ROAR is flagged Duty to Serve eligible.

What Does $120,000 Per Unit Cover?

Nearly anything short of a rebuild. For comparison, Freddie Mac's Value-Add Loan tops out at $25,000 per unit and its Moderate Rehab product handles larger scopes, while Fannie's own Mod Rehab supplemental sets a floor of $8,000 per unit of completed work. ROAR sits at the heavy end of tenant-in-place rehabilitation: systems, envelope, unit interiors, and site work in one program.

That ceiling is why the guarantees exist. A sponsor spending $120,000 a unit with residents still in the building is running a construction project, and Fannie wants completion and operating deficit guarantees to back it.

Why Underwrite to As-Improved Rents?

Because it produces more proceeds, and Fannie names increased leverage opportunities when underwritten to as-improved rents as a benefit. On an affordable property where the rehab lifts allowable rents or restores units to service, sizing on the post-rehab rent roll rather than the current one can be the difference between the sources balancing and not.

It also means your rehab budget and your rent projections are underwriting documents, not planning documents. They will be tested.

Who Qualifies

Existing, stabilized Multifamily Affordable Housing properties undergoing renovations, for either acquisition or refinance. Fannie wants strong borrowers with a demonstrated tenant-in-place rehab track record, and lenders with demonstrated experience.

Tenant-in-place rehab is a specific operational skill. Relocating residents unit by unit, sequencing trades around occupied apartments, and holding a schedule while people live in the building is not something a market-rate developer picks up on the first try. Fannie's experience requirement is doing real work.

What Are the Alternatives?

If the rehab is lighter and already complete, the Mod Rehab supplemental monetizes it after the fact at $8,000 per unit and up. If the property is conventional rather than affordable, ROAR is unavailable and the answer is a bridge loan plus a takeout, or Freddie's Value-Add Loan for scopes under $25,000 per unit.

If the deal is new construction rather than rehabilitation, look at Fannie's forward commitments for 4% and 9% LIHTC properties, mapped on our affordable housing overview.

Send us the rehab scope per unit, the relocation plan, and the as-improved rent projections. We will tell you whether ROAR sizes the deal.