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Fannie Mae

Hybrid ARM

BENEFITS
  • Competitive interest rates.
  • Low cost of execution.
  • Delegated Model provides Lenders and Borrowers speed and certainty of execution.
  • No Underwriting Floor or Fixed Rate test.
  • Flexible prepayment terms.
ELIGIBILITY
  • Loan amount of $9 million or less.
  • Existing, stabilized multifamily properties, including Conventional properties and Manufactured Housing Communities.
  • Loans for acquisition or refinance.
TERM
  • 7-year fixed rate term, followed by a 23-year adjustable rate term; or
  • 10-year fixed rate term, followed by a 20-year adjustable rate term.
AMORTIZATION

30 years.

MAXIMUM LTV

Up to 80%.

MINIMUM DSCR

1.25x actual amortizing DSCR. The maximum loan amount must be determined by using a minimum 1.00 DSCR sufficient to cover a debt service constant that equals the sum of (i) the interest rate during the fixed rate term, plus (ii) 2.50%.

FIXED RATE LOCK

30- to 180-day commitments.

INTEREST RATE ADJUSTMENTS

Starting in the adjustable rate period, adjusts based on changes to the underlying index and is equal to the index plus the Margin.

INDEX DURING ADJUSTABLE RATE TERM

30-day Average SOFR.

MARGIN DURING ADJUSTABLE RATE TERM

1.15%, plus the Guaranty Fee Rate and the Servicing Fee Rate in effect at Rate Lock.

PREPAYMENT AVAILABILITY

Flexible prepayment options available during the fixed rate term, including yield maintenance and declining prepayment premium.
No prepayment premium required for any prepayment during the adjustable rate period.

MAXIMUM INTEREST RATE DURING ADJUSTABLE RATE TERM

Starting with the conversion from the fixed interest rate to the adjustable interest rate and thereafter, maximum semi-annual interest rate adjustment of 1% up or down.
Maximum lifetime interest rate to Borrower capped at 5% over the initial fixed rate.

LIFETIME INTEREST RATE FLOOR

The interest rate will never be less than the Margin.

LIFETIME INTEREST RATE FLOOR
The interest rate will never be less than the Margin.
SUPPLEMENTAL FINANCING

Supplemental loans are not available.

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

If underwriting to Small Mortgage Loans, then streamlined inspection and Environmental Screening using the ASTM E-1528-14 protocol, otherwise, 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.