Fannie Mae Mortgages

*A = Apartment AH = Affordable Housing C = Cooperative Housing MH = Manufactured Housing SH, = Senior Housing ST = Student Housing

Fixed-Rate Mortgage:

The Fixed-Rate loan is designed for the acquisition or refinancing of existing, stabilized properties. Key features include:

• Maximum Loan-to-Value (LTV): Up to 80% for purchases and up to 75% for refinances
• Debt Service Coverage Ratio (DSCR): Minimum requirement of 1.25x
• Loan Terms: Flexible terms ranging from 5 to 15 years

This product offers stability and predictability, making it an excellent choice for long-term property investment strategies.

Structured Adjustable-Rate Mortgage:

The Structured ARM loan product is designed for the purchase or refinancing of existing, stabilized traditional and manufactured housing communities. On a case-by-case basis, senior housing, student housing, and moderate rehabilitation mortgages may also qualify. However, this product is not available for affordable housing, bond credit enhancements, or substantial rehabilitation projects.

Key features include a minimum loan amount of $25 million, a maximum loan-to-value (LTV) ratio of 75%, and a minimum debt service coverage ratio (DSCR) of 1.0x. Loan terms are available from 5 to 10 years, providing flexible options for large-scale, stabilized housing communities.

Adjustable Rate Mortgage 7-6:

The ARM 7-6 loan is tailored for the purchase or refinance of existing, stabilized properties. Key features include:

• Maximum Loan-to-Value (LTV): Up to 80% for purchases and up to 75% for refinances
• Debt Service Coverage Ratio (DSCR): Minimum of 1.00x at the loan cap rate
• Loan Term: 7 years
• Prepayment Terms: 1-year lock-out period followed by a 1% prepayment premium

This product provides flexibility with adjustable rates, making it a strong option for borrowers seeking short- to mid-term financing solutions.

Manufactured Housing Mortgages:

The Manufactured Housing Community (MHC) loan product is designed to provide flexible financing solutions for the purchase or refinancing of stabilized manufactured housing communities. To qualify, the borrower must own not only the individual pad sites but also the associated common amenities and infrastructure, such as roads, utilities, clubhouses, and recreational areas. This ensures that the entire community is under unified management and ownership, contributing to long-term stability and operational efficiency.

Eligible communities must be professionally managed, which can include either all-ages or age-restricted (e.g., 55+) properties, and must consist of at least 50 pad sites to meet minimum size requirements. The program allows for a maximum loan-to-value (LTV) ratio of 80%, providing significant leverage for qualified borrowers. Additionally, a minimum debt service coverage ratio (DSCR) of 1.25x is required, helping to ensure the financial health and sustainability of the property. This loan product is ideal for investors and operators seeking to acquire, refinance, or improve established manufactured housing communities with a focus on stable, long-term performance.

Supplemental:

The Supplemental Loans product offers subordinate financing for properties that already have a fixed or adjustable Fannie Mae Mortgage Loan in place for at least 12 months.
Key Features:

• Maximum Loan-to-Value (LTV): 75%
• Minimum Debt Service Coverage Ratio (DSCR): 1.30x
• Third-Party Reports: New reports may not be required
• Early Rate Lock: Available for a fee

This product provides additional funding flexibility for property owners looking to leverage existing Fannie Mae financing.

Choice Refinance Program:

The Choice Refinance product offers a simplified refinancing process with reduced documentation requirements for properties with existing DUS Cash or MBS mortgages being refinanced by the same lender. Eligible properties must be stabilized, well-maintained, and have mortgages in good standing.
This streamlined option makes refinancing quicker and more convenient for qualifying property owners.

Freddie Mac Mortgages

*A = Apartment AH = Affordable Housing MH = Manufactured Housing SH, = Senior Housing

Fixed-Rate Loan:

The fixed rate loan product is a versatile financing option suitable for the acquisition or refinancing of a wide range of multifamily property types, including conventional apartments, senior housing, manufactured housing communities, student housing, and affordable housing developments. Loan amounts typically range from $5 million to $100 million, providing flexibility for both mid-sized and large-scale projects. These loans offer both interest-only and amortizing payment structures, allowing borrowers to tailor their financing to their cash flow needs. Properties must generally be stabilized, with a minimum of five units for most asset classes and at least 50 pad sites for manufactured housing communities.

Key underwriting features include a maximum loan-to-value (LTV) ratio of 80% and a minimum debt service coverage ratio (DSCR) of 1.25x, which help ensure the financial stability of the property and the borrower. Fixed rate loans are typically non-recourse, meaning the borrower is not personally liable beyond standard carve-outs, and most are fully assumable with lender approval. Additional benefits include competitive interest rates, flexible loan terms ranging from 5 to 30 years, and various prepayment options such as yield maintenance or prepayment premiums. Borrowers should expect requirements for replacement reserves and third-party reports, including property appraisals and environmental assessments, as part of the approval process.

Floating-Rate Loan:

The fixed rate loan product is a versatile financing option for the acquisition or refinancing of all major multifamily property types, excluding cooperative housing. This program is suitable for conventional apartments, senior housing, student housing, manufactured housing communities, and affordable housing projects. Loan amounts typically range from $5 million to $100 million, offering flexibility for both mid-sized and large transactions. Borrowers can choose from various payment structures, including interest-only options, to best fit their cash flow needs. Properties must generally be stabilized, with a minimum of five units for most asset types or at least 50 pad sites for manufactured housing communities.

Underwriting guidelines require a maximum loan-to-value (LTV) ratio of 80% and a minimum debt service coverage ratio (DSCR) of 1.25x, ensuring a strong balance between leverage and financial stability. Fixed rate loans are available with terms from 5 to 30 years, providing long-term payment predictability and rate security. Most loans are non-recourse, limiting borrower liability to standard carve-outs. Additional requirements may include reserves for replacements and third-party reports such as appraisals and property condition assessments. This product is ideal for investors looking for reliable, competitive, and straightforward financing for their multifamily properties.

Lease-Up Loan:

The lease-up loan product is specifically designed for traditional multifamily properties that have recently completed construction but have not yet achieved full stabilization. This financing option is not available for student housing, senior housing, or affordable housing projects. It is intended for properties that are substantially complete and require additional time and support to reach stabilized occupancy and cash flow levels. Borrowers can use this product to bridge the gap between construction completion and long-term permanent financing, providing the flexibility needed during the critical lease-up phase.

Underwriting for the lease-up product offers a maximum loan-to-value (LTV) ratio of 75% and requires a minimum debt service coverage ratio (DSCR) of 1.30x if the borrower provides a letter of credit or reserve. Without these additional credit enhancements, the maximum LTV is reduced to 65% and the minimum DSCR is set at 1.25x. These requirements help mitigate risk for lenders while giving borrowers the opportunity to secure competitive financing as they work toward full property stabilization. This product is ideal for developers and investors seeking interim financing for newly completed multifamily assets that are in the process of leasing up to stabilized occupancy.

Manufactured Housing Community Loan:

​​The manufactured housing loan product is designed for the acquisition or refinancing of existing, stabilized, and high-quality manufactured housing communities (MHCs). Eligible properties must be professionally managed and may operate as either all-ages or age-restricted communities, offering flexibility for a variety of investment strategies. This financing option is well-suited for owners and operators seeking to leverage or reposition established manufactured housing assets that demonstrate strong occupancy and operational performance.

Loan amounts for this product start at $1 million, making it accessible for both mid-sized and larger communities. Borrowers can take advantage of interest-only payment options to optimize cash flow during the loan term. The program allows for a maximum loan-to-value (LTV) ratio of 75%, ensuring responsible leverage, and requires a minimum debt service coverage ratio (DSCR) of 1.25x to promote financial stability. This combination of flexible terms, competitive leverage, and eligibility for both age-restricted and all-ages communities makes the manufactured housing loan product an attractive choice for experienced investors in the sector.

Revolving Credit Facility:

The revolving credit loan product is a secured, five-year line of credit designed for large portfolios of major multifamily property types. With this facility, borrowers can flexibly move assets in and out of the credit line, making it ideal for financing rehabilitation or upgrades, acquisitions, or refinancing activities across multiple properties. This structure allows for substantial portfolio management efficiency, as assets can be added or released without the need for substitution, and credit terms can be locked in for the full term of the facility. Typical loan amounts start at $100 million, and the facility is structured as interest-only, providing borrowers with enhanced cash flow management.

Key underwriting criteria include a maximum loan-to-value (LTV) ratio of 75% and a minimum debt service coverage ratio (DSCR) of 1.45x, which are assessed at the facility level rather than for individual assets. This approach allows for greater flexibility in portfolio management and expansion, as borrowers can access additional funds as property values or net operating income increase. The revolving credit facility is particularly well-suited for experienced investors and operators who require a dynamic financing solution to support ongoing property improvements, acquisitions, or refinancing needs across a diverse and evolving multifamily portfolio.

Supplemental Loan:

This supplemental loan is available for stabilized properties that have an existing Freddie Mac first lien mortgage.
Key Features:

• Minimum Loan Amount: $1 million
• Interest-Only Options: Available
• Maximum Loan-to-Value (LTV): Up to 80%
• Minimum Debt Service Coverage Ratio (DSCR): 1.25x

This product offers additional financing flexibility for property owners seeking to leverage their stabilized assets.

Value-Add Loan:

The value-add loan product is specifically tailored for investors seeking to acquire multifamily properties with plans for moderate upgrades or repositioning. This short-term financing solution provides a cost-effective way to fund both the purchase and the improvement of properties that have potential for increased value through renovations or operational enhancements. The loan features a floating, interest-only rate, which helps maximize cash flow during the renovation period and allows borrowers to focus capital on property improvements rather than principal payments.

With a maximum loan-to-value (LTV) ratio of 80%, the value-add loan offers significant leverage for qualified borrowers, making it easier to undertake substantial property upgrades. The required debt service coverage ratio is calculated based on a 7-year fixed rate at current market pricing, ensuring that the property’s projected financial performance is sufficient to support the loan once improvements are complete. This product is ideal for experienced investors and operators looking for flexible, short-term financing to execute value-enhancing strategies before transitioning to permanent financing.

Small Balance Mortgages:

The Freddie Mac Small Balance Loan Program offers financing solutions for small balance mortgages, with loan amounts ranging from $1 million to $5 million. Borrowers can choose between hybrid adjustable-rate (ARM) or fixed-rate options, with both partial-term and full-term interest-only payment features available.

This program is designed for efficiency, providing a streamlined approval process and competitive pricing, making it an attractive choice for smaller multifamily property financing needs.

FHA Mortgages

*A = Apartment AH = Affordable Housing C = Cooperative H = Hospitals MC= Memory Care SH = Senior Housing SNF= Skilled Nursing Facilities

Rental Housing – Section 207:

Section 207 of the National Housing Act was originally created to insure mortgages for the construction and substantial rehabilitation of multifamily rental housing. Over time, however, its use for these purposes has declined significantly. Developers and lenders now overwhelmingly prefer Section 221(d)(4), which offers more favorable terms, such as higher loan-to-value ratios, longer amortization periods, and more flexible underwriting standards. As a result, Section 207 is rarely used for new construction or substantial rehabilitation projects today.

Despite this shift, Section 207 still plays an important role in the multifamily housing finance landscape. It serves as the underlying insurance program for the Section 223(f) refinancing program, which is designed for the acquisition or refinancing of existing, stabilized multifamily properties. Through Section 223(f), property owners can benefit from long-term, fixed-rate, non-recourse financing, making it an attractive option for those looking to refinance or acquire multifamily assets.

Notably, in fiscal year 2013, the Department of Housing and Urban Development (HUD) did not insure any new mortgages under Section 207 for new construction or substantial rehabilitation, highlighting the program’s shift in focus. Today, Section 207’s primary relevance is as the foundation for Section 223(f) refinancing, while Section 221(d)(4) remains the preferred choice for new development and major rehabilitation projects.

Manufactured Housing – Section 207:

Section 207 provides mortgage insurance to support financing for mobile home parks. This program helps lenders offer more favorable loan terms for the development, acquisition, or refinancing of mobile home park communities by reducing their risk through federal insurance.

Rental Housing for Urban Renewal and Concentrated Development Areas – Section 220:

Section 220 is designed to support the development and rehabilitation of multifamily housing in urban renewal areas, code enforcement zones, and other designated revitalization districts. This program is eligible for Multifamily Accelerated Processing (MAP), which streamlines the application and approval process for borrowers.

In 2013, the FHA insured four multifamily projects under Section 220, encompassing a total of 788 units. The total insured mortgage amount for these projects was $111.3 million, with an average of $27.8 million per project. This program plays a vital role in promoting affordable housing and revitalization in targeted urban communities.

Existing Multifamily Rental Housing – Sections 207/223(F):

Sections 207/223(f) provide financing for the purchase or refinancing of existing multifamily properties. These programs are not available for projects requiring substantial rehabilitation, which must instead use the Section 221(d)(4) program. Any critical repairs identified must be completed before the loan is endorsed. Section 223(f) also qualifies for Multifamily Accelerated Processing (MAP), streamlining the approval process.

In fiscal year 2013, the FHA insured 740 projects under these sections, covering a total of 126,388 units. The combined insured mortgage amount was $7.7 billion, resulting in an average project size of $10.4 million. This program remains a key tool for preserving and improving the nation’s existing multifamily housing stock.

Supplemental Multifamily Mortgages – Section 241(a):

Section 214(a) provides supplemental mortgage financing for projects already insured under an FHA program. This additional funding can be used to extend the economic life of the original loan and is available for repairs, expansions, or improvements to multifamily properties, group practice facilities, hospitals, and nursing homes. The program also allows for the inclusion of major equipment purchases for insured medical facilities.

In fiscal year 2013, the FHA insured three projects under Section 214(a), covering a total of 398 units. The total insured amount was $16.9 million, averaging $5.6 million per project. This program offers valuable support for maintaining and upgrading existing FHA-insured properties and healthcare facilities.

Risk-Sharing Program – Qualified Participating Entities (QPE) – Section 542(b):

Section 214(a) provides supplemental mortgage financing for projects that are already insured under an FHA program. This financing helps extend the economic life of the original loan and can be used for repairs, additions, or improvements to multifamily housing, group practice facilities, hospitals, and nursing homes. Additionally, major equipment purchases for insured medical facilities may be included in the mortgage under this program.

In fiscal year 2013, the FHA insured three projects through Section 214(a), totaling 398 units. The combined mortgage amount was $16.9 million, with an average loan size of $5.6 million per project. This program supports the ongoing maintenance and enhancement of existing FHA-insured properties and healthcare facilities.

Housing Finance Agency Risk-Sharing – Section 542(c) :

Section 542(c) offers credit enhancement for mortgages on multifamily projects, with loans underwritten and serviced by Housing Finance Agencies (HFAs) through a risk-sharing arrangement. This program is designed to encourage the development and preservation of affordable multifamily housing by sharing the risk between the FHA and participating HFAs.

In fiscal year 2013, the FHA provided insurance for 54 projects under Section 542(c), covering a total of 5,009 units. The total insured mortgage amount reached $355 million, resulting in an average loan size of $6.6 million per project. This risk-sharing initiative helps expand access to financing for affordable rental housing across the country.