FANNIE MAE®
Sponsor-Dedicated Workforce (SDW) Housing
BENEFITS
- Creation and preservation of workforce housing affordable to households earning 80% – 120% of AMI.
- Flexible loan terms.
- Competitive pricing.
- Supports workforce housing providers.
- Speed in processing and underwriting, with simple Loan Document modifications.
- Straightforward annual rent monitoring process.
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ELIGIBILITY
- Existing, stabilized Conventional properties.
- A minimum of 20% of units must be made affordable to households earning up to 80% of AMI or, in certain metros, up to 100% –120% AMI.
- The identified units will have workforce housing rents for the Mortgage Loan term.
- Rent affordability levels are identified and in place by the Mortgage Loan Origination Date.
- The Property has 12 months from the Mortgage Loan Origination Date to comply with the SDW rent restrictions. The Lender is responsible for notifying Fannie Mae of noncompliance.
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TERM
5 – 30 years.
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AMORTIZATION
Up to 30 years.
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INTEREST RATE
Fixed- and variable-rate options available. Structured ARM Loans with a lockout period of less than a twoyears are not eligible.
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MAXIMUM LTV
80%.
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MINIMUM DSCR
1.25x.
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LOAN DOCUMENT REQUIREMENTS
- Modifications to Loan Agreement (SponsorDedicated Workforce Housing) (Form 6271. SDW); and
- Modifications to Security Agreement (SponsorDedicated Workforce Housing) (Form 6325)
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ANNUAL COMPLIANCE REQUIREMENTS
The Servicer manages the affordability requirements, including verification of the SDW rent restrictions. The Borrower must annually submit a certification of compliance via the Supplemental Annual Loan Agreement Certification (Form 6620.Supplemental.SDW) and rent rolls to the Servicer.
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EXECUTION
MBS.
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SUPPLEMENTAL FINANCING
Supplemental Mortgage Loans are available.
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PREPAYMENT AVAILABILITY
Mortgage Loans may be voluntarily prepaid upon payment of the applicable Prepayment Premium, either Yield Maintenance or Graduated Prepayment Premium.
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RATE LOCK
30- to 180-day Rate Lock periods are available.
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ACCRUAL
30/360 and Actual/360.
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ESCROWS
Replacement reserve, tax, and insurance escrows are typically required.
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THIRD-PARTY REPORTS
Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.
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ASSUMPTION
Mortgage Loans are typically assumable, subject to review and approval of the proposed new borrower’s financial capacity and experience.
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ASSET MANAGEMENT
The Property must comply with the SDW rent restrictions within 12 months of the Mortgage Loan Origination Date. The Lender is responsible for notifying Fannie Mae of noncompliance.
