The amount of eligible lenders offering low-rate, long-term services for stabilized multifamily properties has reduced at a concerning rate compared to the transactions available. The options are even less for brokers who choose to concentrate on loans with small balance for multifamily properties.
Fortunately, some lenders improved their small-loan enterprises by providing small-cap multifamily property owners low-rate, long-term loans.
To figure out if a Fannie Mae multifamily loan is ideal for some distinct clients, it would be wise to separate fact from fiction. Bonneville Multifamily Capital shares some insights.
Fact: Small loans that have a Section 8, student or age restriction component are qualified.
Properties restricted with age are entitled to these Fannie Mae loans providing that there aren’t any more senior-housing features present, including meal plans or nursing care. Properties with a 20 percent student occupancy or less are permitted. However, you have to be ready to corroborate the student-occupancy composition.
Affordable housing properties that have regulatory agreements, Housing Assistance Payment Contracts or tax credits aren’t qualified for this small loan program of Fannie Mae. Nevertheless, properties with Section 8 vouchers, rent stabilized or controlled are qualified.
Myth: Local borrowers have to use third-party management companies to apply.
Commonly, local borrowers with the same amount of units or have a couple of years of property management experience don’t have to hire a third-party management company. Nonlocal borrowers are referred to those who reside a hundred miles or more from the subject property. They, however, generally have to get the services of third-party management companies.
Each Fannie Mae lender has their own sensitivities, culture and requirements. Particular lenders may have dislikes towards some markets as dictated by their experience. This is why brokers get confused whether certain requirements belong to the lenders or to Fannie Mae.