Fannie Mae Credit Facility Apartment Loans
Fannie Mae’s Multifamily Mortgage Business provides a credit facility structuring option that gives the ability for borrowers to arrange financing terms for a group of properties on a cross-collateralized and cross-defaulted basis, with property release, property substitution, property addition, borrow-up, and expansion capabilities.
| Overview | |
| Structure | A Credit Facility is governed by a Master Credit Facility Agreement between borrower and lender that permits multiple cross-collateralized and cross-defaulted advances. |
| Bulk Delivery Amount | $55MM+ |
| Term | Min. 5 years |
| Amortization | Interest-only and amortizing available, based upon property and pool performance. |
| Maximum LTV/ Minimum DSCR | Fannie Mae DUS “Tier 2” DSCR and LTV standards (as applicable). |
| Recourse | Non-recourse, subject to standard non-recourse carveouts. |
| Rate Lock | 30- to 90-day commitments. An early rate lock feature is available allowing the borrower to lock a rate 45 to 180 days in advance of closing. |
| Property Substitutions | Subject to the terms of the Master Credit Facility Agreement, a property generally may be substituted if (i) the substitute property being added satisfies minimum DSCR and maximum LTV tests, (ii) the remaining properties satisfy maximum LTV and minimum DSCR pool tests, (iii) the substitute property has a valuation equal to or greater than the valuation of the property being released, (iv) the substitute property has net operating income equal to or greater than the net operating income of the property being released, and (v) geographic diversification requirements are satisfied (if applicable). |
| Property Releases | Subject to the terms of the Master Credit Facility Agreement, a property generally may be released provided that (i) the remaining properties satisfy the minimum DSCR and maximum LTV tests, (ii) the maximum LTV and minimum DSCR of the remaining properties are unchanged or improved after the release, (iii) the geographical diversification requirements continue to be satisfied after release (if applicable), and (iv) Borrower pays a release price equal to the greater of 100% of the allocated advance amount for the property being released, or the amount necessary to meet the above requirements, along with any prepayment premium due. |
| Property Additions | Subject to the terms of the Master Credit Facility Agreement, a property generally may be added provided that (i) the individual property being added satisfies minimum DSCR and maximum LTV tests, and (ii) all outstanding advances collectively satisfy the maximum LTV and minimum DSCR tests for the credit facility. |
| Borrow-Ups | Subject to the terms of the Master Credit Facility Agreement, Borrowers may request additional loan advances, without adding any additional properties to the credit facility, subject to Lender’s approval and underwriting standards mortgages. |
| Expansion | Subject to Fannie Mae approval, the maximum amount of the credit facility may be increased. |
| Assumption | Assumption of the entire facility is permitted upon satisfaction of the requirements of the Master Credit Facility Agreement. |
| Prepayment Options | Yield maintenance and other graduated prepayment options are available. Other options may be available on a negotiated basis.. |
| Interest Rate | Fixed-rate and variable-rate available. Mortgages in a credit facility may include multiple interest rate types. Variable-rate advances may be converted to fixed-rate for the remainder of the loan term. An interest rate cap or other hedging arrangement is generally required for all variable-rate advances |
FNMA Multifamily Mortgages
Fannie Mae Apartment Loans
