FANNIE MAE – Small Loan Program –
$1,000,000 to $3,0000 (up to $5 million in large US cities)
This program has less documentation requirements, lower closing costs, slightly higher interest rates than the Fannie Mae standard loan program. Fannie normally requires the principal(s) to have a minimum of 4 to 5 similar multifamily properties in ownership and/or management. Additionally, Fannie would like to see post closing liquidity not less than the sum of nine months principal and interest of the new loan, plus a net worth equal to or greater than the loan amount. If all of the principals reside more than 100 miles from the property Fannie may reduce the maximum loan to value by 5%. If you are a little short of these levels please call to discuss the possibility to obtaining an exception.
Loan Amount: $1,000,000 minimum to $3,000,000 (in the largest MSA in the country they can lend up to $5 million)
Loan Terms: 3, 5, 7, 10, 15, 20, 25 and 30 Years
Amortization: Up to 30 Years
Minimum DSC: 1.25x
Maximum LTV: 7-year term or greater, 80%. If cash-out- 75%. 5 years, 75%. If cash-out – 70%.
Adjustable Rates are available: Generally pricing is off the one-month or three-month LIBOR. e.
Eligible Property Multifamily, minimum five units
Eligible Borrower Individuals, co-tenants and non-single asset entities acceptable. Must be US Citizens.
Occupancy Requirements: 90-days prior to closing the property must demonstrate 90% physical occupancy
Tax and Insurance Escrows: Monthly deposits required.
Replacement Reserves: Underwritten at a minimum $250 per unit per annum.
Non-recourse available in certain markets – subject to carve-outs for items such as fraud, waste, misappropriation of funds, environmental, and bankruptcy.
Commercial Space Maximum 35% of net rentable area and maximum 20% of effective gross income
Prepayment Penalty Method: Yield Maintenance.
Required Third Party Reports: Appraisal, Property Condition/Physical Needs Assessment and Environmental Report.
Supplemental Loans Pricing Eligible for secondary financing after12 months.
Rate Lock Standard 10-day rate lock period. Extended rate lock options available with deposits call for details.
Application Deposit: $10,000. Covers underwriting costs (including processing fee and site inspection).
Good Faith Deposit 2% of loan amount 1% of loan amount for certain transactions of $3 million or less with commitment periods of 45 days or less