Search Site
Fannie Mae

Cooperative

BENEFITS
  • Flexible loan terms.
  • Competitive pricing.
  • Certainty and speed of execution.
  • Customized solutions.
ELIGIBILITY
  • Existing stabilized Cooperative Properties in eligible Cooperative Property markets.
  • Cooperative corporations with strong management and solid operating history.
  • Limited equity cooperative properties for low- and moderate-income families are also eligible.
  • Overall Property condition rating of two or better.
TERM

5 – 30 years.

AMORTIZATION

Up to 30 years.

INTEREST RATE

Fixed-rate.

MAXIMUM LTV

55% (on a market rental basis).

MINIMUM DSCR

1.00x on actual underwritten operations; 1.55x when utilizing market rental operations.

PROPERTY CONSIDERATIONS
  • The property management company is required to have experience with cooperative properties of like size and market.
  • Reserve balance must be equal to or greater than 10% of annual maintenance fees.
  • Maintenance fees must be sufficient to achieve a balanced budget.
  • High levels of ownership by one sponsor or investor (in excess of 40%) will require additional due diligence.
SUPPLEMENTAL FINANCING

Supplemental loans are available.

PREPAYMENT AVAILABILITY

Loans may be voluntarily prepaid upon payment of yield maintenance.

RATE LOCK

30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option provided that the Board of Directors or managers of the Cooperative Organization approve any increase in the Cooperative Maintenance Fee prior to using the Streamlined Rate Lock option. 

RECOURSE

Non-recourse execution is available with standard carve-outs for “bad acts” such as fraud and bankruptcy.

ESCROWS

Replacement reserve, tax and insurance escrows may be required, depending on the Underwriting Tier. Escrows are typically required for a Limited Equity Cooperative Property.

THIRD-PARTY REPORTS

Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.

ASSUMPTION

Mortgage Loans secured by a Cooperative Property are typically not assumable by another entity.

 

This sheet sets out the general guidelines of a loan program and is designed solely as an aid to prospective borrowers and other clients. It does not represent or imply a contract or a commitment to lend funds. A commitment to lend funds may only be made by a written letter issued by NewPoint to a prospective borrower. This term sheet is subject to change at any time without notice at the sole discretion of NewPoint Real Estate Capital LLC.