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Fannie Mae

ARM 7-6

BENEFITS
  • Attractive low-cost financing.
  • No minimum or maximum loan size.
  • Maximum interest rate is set at rate lock.
  • Convertible to a fixed-rate loan with minimal re-underwriting.
ELIGIBILITY
  • Existing, stabilized multifamily properties, including Conventional, Multifamily Affordable Housing, Seniors Housing, Student Housing and Manufactured Housing Communities.
  • Loans for acquisition or refinance.
TERM

7 years.

AMORTIZATION

Up to 30 years.

INTEREST RATE ADJUSTMENTS

Adjusts based on changes to the underlying Index and is equal to the Index plus the Margin.

MAXIMUM LTV

80%.

MINIMUM DSCR

1.00x at the maximum lifetime interest rate.
Mortgage loan amount shall not exceed that of a fixed-rate loan with similar terms.

RATE LOCK

30-day commitments.

INDEX

30-day Average SOFR.

SUPPLEMENTAL FINANCING

Supplemental loans are available.

PREPAYMENT AVAILABILITY

No prepayment first year, 1% prepayment premium thereafter. No prepayment premium during the last 3 months of the loan term. When refinancing into a fixed-rate product with Fannie Mae, the prepayment premium may be waived under certain conditions.

INTEREST RATE CAP
  • Maximum monthly interest rate adjustment of 1% up or down.
  • Maximum lifetime interest rate to Borrower capped at 6%, plus the guaranty fee, plus the servicing fee.
INTEREST RATE FLOOR

The interest rate will never be less than the Margin, which is the sum of the investor spread, the guaranty fee, and the servicing fee.

CONVERSION TO FIXED RATE

Subject to the terms of the Loan Document, the variable rate Mortgage Loan may be converted to a fixed rate Mortgage Loan (with a 7- or 10-year term) on any rate change date beginning on the first day after the Lockout Period and ending on the first day of the third month prior to the Maturity Date.

  • No Prepayment Premium charged at the time the variable rate Mortgage Loan converts to a fixed rate Mortgage Loan.
  • Minimal re-underwriting; Lender determines that the current Net Cash Flow can support the new fixed-rate terms.
  • No increase in the loan amount; loan may be eligible for a Supplemental Loan.
ACCRUAL

Actual/360.

RECOURSE

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

ESCROWS

Replacement reserve, tax and insurance escrows are typically required.

THIRD-PARTY REPORTS

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

ASSUMPTION

Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience.

 

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.