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Fannie Mae

Affordable Housing Preservation

BENEFITS
  • Flexible underwriting to specific affordable developments.
  • Competitive pricing.
  • Flexible loan terms, and fixed- or variable-rate financing options.
  • Certainty and speed of execution.
ELIGIBILITY
  • Expiring Low-Income Housing Tax Credit deals.
  • Refinancing of existing tax-exempt bond deals.
  • Properties eligible for the Rental Assistance Demonstration (RAD) program.
  • Properties with HUD Section 8 HAP Contracts.
  • Properties with existing Rural Housing Service (RHS) Section 515 loans.
  • Loans insured under Sections 202 or 236 of the National Housing Act.
TERMS

5 – 30 years.

AMORTIZATION

Up to 35 years.

INTEREST RATE

Fixed- and variable-rate options available.

MAXIMUM LTV

80%.

MINIMUM DSCR

1.20x (fixed rate).

PROPERTY CONSIDERATIONS
  • Low-income qualifying restrictions required and must be recorded:
  • 20% or more units rented to families earning at or below 50% of Area Median Income (AMI);
  • 40% or more units rented to families earning at or below 60% of AMI; or
  • Project-Based Housing Assistance Payments contract (Section 8) covering 20% or more units.
SUPPLEMENTAL FINANCING

Supplemental Loans are available.

PREPAYMENT AVAILABILITY

Flexible prepayment options including yield maintenance and declining prepayment premium.

RATE LOCK

30- to 180-day commitments; Borrowers may lock a rate with the Streamlined Rate Lock option.

ACCRUAL

30/360 and Actual/360.

THIRD-PARTY SUBORDINATE FINANCING

Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available Property cash flow after payment of senior liens and Property operating expenses.

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.