Fannie Mae Financing Programs - Refinancing, Permanent Finance Programs
Fannie Mae Delegated Underwriting and Services Program (DUS)
PROGRAM OUTLINE
Under Delegated Under-writing and Servicing (DUS) Fannie Mae purchases eligible multifamily mortgages from our correspondent mortgage company, which has been delegated the responsibility for originating, underwriting, closing, and delivering multifamily mortgages without Fannie Mae's prior review. DUS allows us to act quickly and be flexible in structuring transactions.
STANDARD PRODUCT LINE
DUS lenders have full authority up to $20 million. Loan size above $20 million available with Fannie Mae approval
Commercial space - maximum of 20% space/income
Occupancy - minimum 90% for ninety days
STANDARD FEATURES
Fixed or adjustable rate, balloon mortgages with 5, 10, 15, or 18-year terms
Interest only mortgage available
Fully amortizing mortgages and other specially negotiated terms available
Thirty year amortization available
"Non-recourse" except for certain loan violations , which are typical in the industry
Assumable in accordance with the limiting conditions of the loan documents
Standard mortgage documents
Pre-payable with yield maintenance or defeasance
UNDERWRITING AND INTEREST RATES
Interest rates are offered by Fannie Mae and our correspondent mortgage company under a four-tier interest rate structure. Interest rates are based on spreads over benchmark "on the run" Treasury rates. Best interest rates are available for mortgages with a higher debt service coverage (DSC) and lower loan-to-value ratios
For a standard transaction, the following sets forth the minimum DSC ratios and maximum LTV ratios acceptable for each pricing tier
TIER Min DSC ratio Max LTV ratio
One 115% 80%
Two 125% 80%
Three 135% 65%
Four 155% 55%
Tier Three and Four loans also offer reduced due diligence requirements and less documentation. Market affordable housing (MAH) properties (such as those with LIHTC) may be eligible for special underwriting and special pricing
COMMITMENT FEES
When commitment is accepted, a refundable commitment fee of two percent (2%) of the loan amount is required (3% for Early Rate Lock)
ORIGINATION FEES
The amount of the origination fee is a function of the size, risk and complexity involved in each transaction
SERVICING
(Once the mortgage is closed and purchased by Fannie Mae) our correspondent mortgage company services the mortgage
REPLACEMENT RESERVES
Annual deposits are generally funded for nearly all properties - flexible funding terms available
STUDIES AND REPORTS
Appraisal using Fannie Mae standards
Engineering Study
Phase I Environmental Study
OTHER FEATURES
Supplemental Financing - permitted after one year with Fannie Mae's approval. Fannie Mae currently offers a supplemental loan program to meet this need
Assumable upon payment of 1% fee and satisfactory credit review of new borrower and at lender's option
Processing Time - 30 to 60 days from complete application to commitment
Early rate lock available
SPECIAL PRODUCT LINES
Forward commitments available for new construction of Low Income Housing Tax Credit (LIHTC) developments, Tax Exempt Bond transactions and Market Rate properties affordable to tenants at or below to 100% of area median income Credit Enhancement available for fixed rate bonds and "Lower Floaters"
Financing available for Cooperative ownership 5-50 Program with reduced reporting requirements for projects with five (5) to fifty (50) units
Adjustable Rate Mortgage (ARM)
Permanent fixed-rate financing for senior housing including independent living, congregate care and assisted living
Negotiated transactions for large multifamily loans and multifamily portfolio transactions
Aggregation program for multifamily "conduit" type transactions
Rehabilitation program for moderately priced rental units
Information is available on other Fannie Mae programs upon request.