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FANNIE MAE DUS®

Near-Stabilization Execution

BENEFITS

  • Ability to pay off construction loan and add permanent non-recourse financing prior to full stabilization.
  • Competitive pricing.
  • Certainty of execution.
  • Speed in processing and underwriting.
  • ELIGIBILITY
    • Conventional and Multifamily Affordable Housing Properties.
    • Partially leased, newly constructed or recently renovated communities.
    • Strong borrowers with demonstrated lease-up track record.
    • Properties in Strong and Nationwide markets.
    • Available on a Pre-Review basis.
  • LOAN SIZE

    $10 million or greater.

  • TERM

    5, 7, 10, and 12 year term options are available.

  • AMORTIZATION

    5 – 30 years.

  • INTEREST RATE

    Fixed- and variable-rate options available.

  • MAXIMUM LTV

    Maximum LTV shall be Tier compliant. For a Tier 2 level – 75% of “as stabilized” loan-to-value.

  • MINIMUM DSCR
    • Minimum DSCR shall be Tier compliant. For a Tier 2 level – Underwritten DSCR of 1.25x, 1.15x for MAH loans.
    • Underwritten DSCR is defined as DSCR as deemed achievable within 4 months after rate lock and at Fannie Mae’s discretion.
  • INTEREST ONLY

    Monthly payments of interest only for the first 12 months of the loan term, based on the actual interest rate. An additional period of interest-only payments may be available.

  • PROPERTY CONSIDERATIONS

    Minimum physical occupancy of 75% at rate lock. MBS Additional Disclosure is required. Full disbursement of loan proceeds at closing.

  • PREPAYMENT AVAILABILITY

    Flexible prepayment options available, including yield maintenance and declining prepayment premium.

  • RATE LOCK

    30- to 120-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option.

  • ACCRUAL

    30/360 and Actual/360.

  • 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.


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