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.