Successfully arranging the financing for a multifamily property project is not always simple and it takes specialized knowledge to do it efficiently and in a timely manner. The professional team at LSG Lending Advisors have many years of experience helping our clients through the process. We create tailor fit solutions for each client’s unique needs and challenges.
We have a great deal of experience in the evaluation of multifamily financing projects with regard to adhering to FHA/HUD MAP lending guidelines and can put you in contact with the best FHA/HUD MAP lenders in the industry.
Contact us today to learn more about how we can put our expertise to work for you.
The Fannie Mae Affordable Housing Preservation program offers fixed or variable rate financing for purchases and refinancing at competitive pricing for affordable developments.
The eligible properties are:
- Expiring Low-Income Housing Tax Credit (LIHTC) deals,
- Refinancing existing tax-exempt bonds,
- Rental Assistance Demonstration (RAD) properties,
- Housing Assistance Payments (HAP) Section 8 contracts,
- Existing Rural Housing Service (RHS) Section 515 loans, or
- Loans currently insured under section 202 or 236 of the National Housing Act.
These loans are assumable, subject to lender approval.
Term Sheet for Fannie Mae Affordable Housing Preservation
| Term |
5-30 years. |
| Amortization |
Up to 35 years. |
| Interest Rate |
Fixed- and variable-rate options available |
| Maximum LTV |
80%. |
| Minimum DSCR |
1.20x (fixed rate). |
| Property Considerations |
Low-income qualifying restrictions required and must be recorded:
- 20% or more units rented to families earning at or below 50% of Area Median Income (AMI);
- 40% or more units rented to families earning at or below 60% of AMI; or
- Project-Based Housing Assistance Payments contract (Section 8) covering 20% or more units.
|
| Supplemental Financing |
Supplemental loans are available. |
| Prepayment Availability |
Flexible prepayment options available, including yield maintenance and declining prepayment premium. |
| Rate Lock |
30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option. |
| Accrual |
30/360 and Actual/360. |
| Third-Party Subordinate Financing |
Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x.
Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available property cash flow after payment of senior liens and property operating expenses.
|
| Recourse |
Non-recourse execution with standard carve-outs for "bad acts" such as fraud and bankruptcy. |
| Escrows |
Replacement reserve, tax, and insurance escrows are typically required. |
| Third-Party Reports |
Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment. |
| Assumption |
Loans are typically assumable, subject to review and approval of the new borrower's financial capacity and experience. |