Fannie Mae Senior Housing Loans
Fannie Mae Seniors Housing Loans provide financing for Independent Living, Assisted Living, and Alzheimer’s/Dementia Care facilities. The loans start at $5 million, permit LTVs of up to 80%, and are generally non-recourse.
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 QuotesFannie Mae Multifamily Financing for Senior Housing Developments
With more than 10,000 Americans turning 65 every single day, it has never been a better time to invest in the senior housing industry. If you're an experienced investor or developer interested in purchasing a senior housing project, a Fannie Mae Seniors Housing Loan might be the perfect fit. Fannie Mae Seniors Housing Loans have terms and amortizations up to 30 years, fixed and adjustable-rate interest options, and can be used to acquire or refinance independent living, assisted living, and Alzheimer's/Dementia Care facilities. Fannie Mae Seniors Housing Loans have a minimum loan amount of $5 million, allow LTVs of up to 80%, and are assumable (with a 1% fee and approval from both Fannie Mae and the lender.)
Keep reading below to learn more, or click here to download our easy-to-read Fannie Mae Seniors Housing Loan term sheet.
Sample Fannie Mae Terms For Seniors Housing Loans in 2023
Size: $5 million minimum (exceptions can be made on an individual basis)
Terms: 5-30 years
Use: Acquisitions or refinances
Amortization: Up to 30 years
Interest Rates: Fixed and adjustable-rate loans available
Maximum LTV:
75% (80% for fixed-rate, tax exempt bonds)
70% for Alzheimer's/Dementia Care properties
70% for properties with a Skilled Nursing component
Decrease max. LTV by 5% for cash-out refinances
Minimum DSCR:
1.30x for Independent Living only
1.40x for 100% Assisted Living properties
1.45x for 100% Alzheimer's/Dementia Care properties
1.50x for properties with a Skilled Nursing component
Weighted average calculation for properties with less than 50% Alzheimer's/Dementia Care units
Recourse: Most loans are non-recourse with standard “bad boy” carve-outs
Prepayment Options: Yield maintenance, defeasance, or graduated prepayment premiums
Commercial Space Limits: Commercial space must comprise no more than 10% of the net rentable area and produce no more than 10% of the project's effective gross income
Eligible Properties:
Properties must have between 5 and 50 units
Properties must be stabilized and can include manufactured housing communities
For acquisitions or refinances, loans must be first lien
Eligible borrowers must be single asset entities
No properties with entrance fees are allowed
Owner/operators must have at least 5 years of successful experience in senior living communities and must have owned/managed 5 or more senior housing properties
Advantages of Fannie Mae Seniors Housing Loans
Competitive interest rates
Most loans are non-recourse
Flexible prepayment options
Supplemental financing is allowed
30- 90 day rate locks available (early and extended rate locks are also available-- early rate locks allow borrowers to lock the rate between 45 and 365 days before closing)
Disadvantages of Fannie Mae Seniors Housing Financing
Requires third-party reports including an Appraisal, Property Condition Assessment, Zoning, Termite, Flood, and Seismic reports (for properties in specific areas), a Phase I Environmental Assessment, and a Seniors Housing Liability Assessment Report
Replacement reserves are required ($300/unit per year)
Typically requires 90% economic occupancy for 12 months (for Independent Living facilities) or 15 months (for Alzheimer's/Dementia Care or Skilled Nursing properties), though this may vary
Typically requires $15,000 application deposit and $3,000 non-refundable processing fee
Typically requires a 1% origination fee
A 2% rate lock fee is required (refundable at closing)
Commitment fees may also be charged