Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) Loans
Fannie Mae ROAR loans offer financing at competitive terms for any MAH property looking to significantly renovate.Better Financing Starts with More Options$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
Fannie Mae Rehabilitation Financing Loans for Renovating Affordable Multifamily Properties
If you own a Multifamily Affordable Housing (MAH) property, and you want to make significant renovations, you don't necessarily need to turn to a construction loan. Instead, you might want to consider a Fannie Mae Reduced Occupancy Affordable Rehab (ROAR) loan. ROAR loans offer generous terms, including allowing rehab costs of up to $120,000 per unit, an up to 90% "stabilized" LTV allowance, and a "stabilized" minimum 1.15x DSCR. Plus, ROAR loans only require 50% occupancy and 1.00x DSCR during the rehabilitation period, making the process easier and less stressful for borrowers and lenders alike.
To learn more, check out our official Fannie Mae Reduced Occupancy Affordable Rehab Product Sheet or keep reading below for an in-depth explanation of the ROAR financing program.
Sample Fannie Mae Terms for Reduced Occupancy Affordable Rehab (ROAR) Loans in 2023
Size: $5 million minimum, no maximum
Use: Acquisitions and refinances
Terms: 5 to 30 years
Amortization: Up to 35 years
Interest Rate: Fixed-rate for most loans, variable-rate financing available only for Credit Enhancement Mortgage Loan bond transactions. Loans are interest-only during the rehab period.
Maximum LTV: 80%, 90% "as stabilized" for Low Income Housing Tax Credit (LIHTC) properties
Minimum DSCR: 1.15-1.20x
Prepayment Penalty: Yield maintenance or declining prepayment options
Rehab Period: Rehabilitation must be complete within 12-18 months
Eligible Borrowers: Borrowers should have demonstrated experience owning and operating Multifamily Affordable Housing (MAH) properties
Eligible Properties: Stabilized Multifamily Affordable Housing (MAH) properties with planned renovations of up to $120,000/unit
Allows borrowers to execute substantial rehabilitations without the need for a construction loan
Fast underwriting/approval process
Competitive interest rates
90% LTV allowance
Loans are Interest-only during the rehab period
Only available for Multifamily Affordable Housing (MAH) properties
Properties must be fully stabilized within 18 months of loan origination