Though rent growth has cooled off to a degree, the national rent-to-income (RTI) ratio reached 30% for the first time in 2023, meaning that the average U.S. rental household is now cost-burdened. To help combat the affordability crisis, Fannie Mae has introduced a new tool – Sponsor-Dedicated Workforce (SDW).
This new SDW loan program aims to benefit borrowers and renters for the life of a loan. Borrowers will receive lower interest rates and streamlined underwriting by agreeing to keep a minimum of 20% of units affordable at 80% of AMI or 100-120% of AMI in specific cost-burdened markets. While similar to its sister product, Fannie Mae Sponsor Initiated Affordability (SIA), the SDW program only restricts rent, not income limits, and requires minimal compliance monitoring.
The new program is designed to support conventional multifamily properties and provides flexibility in structure – terms range from 5 to 30 years, with available fixed- or variable-rate pricing. Additional benefits include the option for a 30- to 180-day rate lock and the ability to combine SDW with Fannie Mae Green Financing to further reduce interest rates. Access the full Fannie Mae Sponsor-Dedicated Workforce (SDW) Housing term sheet here for additional program details.
Connect with a member of the NewPoint team to see if the SDW program can reduce costs on your next financing while also helping to mitigate the affordable housing crisis.