Terms of Fannie Mae Apartment Financing, Part 1
April 1, 2014
Fannie Mae apartment loans have some of the lowest rates and best terms available in America today for multifamily properties of five units or more. In 2013, Fannie Mae purchased and guaranteed loans from mortgage lenders totaling $28.5 billion dollars. Fannie Mae pools these loans and sells them as mortgage-backed security investments on Wall Street. Here are some of the terms of a Fannie Mae apartment loan:
- 5 units or more only. (Financing not available for 1 to 4 unit buildings unless they are on one tax lot or are contiguous units of 5 or more.)
- Up to 80% loan to value with no cash out.
- Up to 75% loan to value with cash out. (Cash out for any reason.)
- 30-year amortization.
- 5, 7, 10, 12, 15, 18, 20, 25, and 30-year fixed rates. The longer you fix the rate, the higher the rate.
- Pre-payment penalty – yield maintenance or a 1.00% fee, whichever is higher. (No pre-payment penalty the last 3 months of the loan.)
- Non-recourse available.
- Interest-only available (for the first 1 to 4 years only).
- 1.25% minimum debt coverage ratio (DCR).
- Lower rates for higher DCRs of 1.35% to 1.55% or more.
- Minimum loan $500,000. No maximum loan size.
- Assumable to a qualified borrower for a 1.00% loan fee.
At Apartment Loan Store, we have been Fannie Mae apartment financing specialists since 2004. For more information about your multifamily purchase or refinance, call 866-811-9515 to talk to one of our friendly loan specialists.
By Terry Painter, President