FNMA Manufactured Housing Communities – Purchase Or Refinance

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Fannie Mae Manufactured Housing Communities – Purchase or Refinance

Fannie Mae LogoThe FNMA (Fannie Mae) DUS Loan Program was created in 1989 to meet the needs of developers and owners of multifamily projects seeking short- and long-term, fixed rate, non-recourse financing.  Fannie Mae instituted an underwriting and processing license arrangement with privately-held mortgage bankers who would take “top end” risk on mortgage loans for the opportunity to underwrite and close loans without the pre-permission of Fannie Mae.  This allowed Fannie Mae to build a network of strong professional bankers who would originate, process, underwrite, commit, and close mortgage loans under a Fannie Mae guarantee of principal and interest payments to the mortgage investment market.

Eligible Properties

Manufactured housing communities of at least 50 homes or sites and rated at least “Four Star.”  Must have a minimum occupancy of 90% or better for the preceding 3-month period

Amortization and Loan Terms

25 or 30 years depending on property’s age with balloon terms of 5,7,10, 15, 18 years or full term loans of 20, 25, or 30 years

Minimum Loan Size

Minimum programmatic loan size is $1,000,000 but preferred minimum is $3,000,000

Personal Liability

None recourse for monetary default with typical carve-outs

Eligible Borrowers

For-profit individuals and entities and not-for-profit  single asset entities

Prepayment

All loans are subject to a prepayment penalty calculated using either a yield maintenance or defeasance formula for all but the last six months of the term of the loan. These terms can be modified by adjusting the interest rate.

Maximum Loan Refinancing

The Lesser of:

  1. For variable rate: 1.00 debt service coverage using the sum of the note rate plus either 3% or the lifetime cap whichever is greater
  2. For fixed rate: 1.25 debt service coverage
  3.  80.0% of appraised value
There are no statutory limits to loan amounts

Interest Rate

Market interest rates change daily. Call for quote.

Assumability

All loans are assumable and transferable at anytime for a 1.00% fee

Origination Fee

Negotiable

Escrows

Required for property taxes, insurance, and replacement reserves as calculated by the underwriter

Repairs/Replacements

125% to 150% of the estimated cost of repairs per the physical needs report.  Funds released upon completion.

Subordinate Financing

No third party subordinate financing, however Fannie Mae Supplemental Loans are allowed beginning 12 months after the initial first mortgage loan closing

Preliminary Submission Package

  • Location map and property description and photos (or website info)
  • Unit mix showing type, number, size, and current rent of all units
  • Description of commercial space if any
  • Last three months rent rolls along with year-to-date financial statements
  • Last full 36 month operating statements or pro-forma if recently completed construction
  • Business resume and financial statement of principals and entity
  • Terms of existing debt if any

Need A Loan For A Multifamily Project?
Contact Darach Advisors today for the best loan terms and pricing on Apartment Loans

Ralph Daruns vCardRalph Daruns
Senior Managing Director
(972) 741-7606
rdaruns@darachadvisors.com
4943 Stony Ford Drive
Dallas, TX 75287-7236
Multifamily Mortgae Loans DividerKathryn Thompson vCardKathryn Thompson
Senior Partner
(214) 662-9012
kgthompson@darachadvisors.com
10455 North Central Expressway, Suite 109-332
Dallas, TX 75231

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