Supplemental Mortgage Loans
Subordinate financing options
Fannie Mae® Multi-family offers subordinate financing options for multifamily properties with an existing Fannie Mae® Mortgage Loan.
Benefits
- Lower cost than refinancing
- Access to additional capital
- Flexible loan terms
- Certainty of execution
- Speed in processing and underwriting
Eligibility
- Stabilized Conventional Properties, Multifamily Affordable Housing Properties, Seniors Housing Properties, Student Housing Properties, and Manufactured Housing Communities
- Subordinate to existing Fannie Mae fixed rate or variable rate
- Bond Credit Enhancement Mortgage Loans are eligible for Supplemental Mortgage Loans with prior approval of Fannie Mae
- Lender must be the Servicer of the existing Fannie Mae Mortgage Loan
- Fannie Mae must be the only debt holder on the Property
Term | A minimum of 5 years and a maximum of 30 years. May be either coterminous or non-coterminous with the Maturity Date of the Senior Mortgage Loan. |
Tier Dropping | Permitted if the Pre-Existing Mortgage Loan was
designated as eligible for a Tier Dropping
Supplemental Mortgage Loan and the combined UPB
of the Pre-Existing Mortgage Loan and the
Supplemental Mortgage Loan meet the minimum
DSCR and maximum LTV requirements for a Tier 2
Mortgage Loan. |
Amortization | Up to 30 years. |
Interest Rate | Fixed-rate and variable-rate options available. |
Maximum LTV | As high as 75%, depending upon asset class and use of proceeds. |
Minimum DSCR | As low as 1.30x, depending upon asset class and use of proceeds. |
Supplemental Loan Timing | Supplemental Mortgage Loans are available 12 months after the closing of the senior Fannie Mae Mortgage Loan. |
| Prepayment Availability | Supplemental Mortgage Loans may be voluntarily prepaid upon payment of yield maintenance for fixed rate loans and graduated prepayment for variable rate loans. |
| Rate Lock | 30-day to 180-day commitments. Borrower may Rate Lock using the Streamlined Rate Lock option. |
| Accrual | 30/360 and Actual/360. |
| Recourse | Non-recourse execution with standard recourse carve-outs required for “bad acts” such as fraud and bankruptcy. |
| Escrows | Replacement Reserve, tax and insurance escrows are typically required, based on the resulting Underwriting Tier of the combined Pre-Existing Mortgage Loans and Supplemental Mortgage Loan. |
| Third-Party Reports | Standard third-party reports, including Appraisal, Phase I Environmental Assessment, and a Property Condition Assessment, may not be required, if certain conditions are met. |
| Assumption | Supplemental Mortgage Loans are typically assumable with a concurrent assumption of the senior Mortgage Loans, subject to review and approval of the new borrower’s financial capacity and experience. |
During the HomeStreet Bank pre-qualification review, our Commercial Real Estate Group team members will estimate the loan amount and associated transaction fees. Actual loan amounts and transaction-related expenses may vary. A pre-qualification estimate is not a loan commitment. Terms and conditions may apply.
FannieMae® is a registered trademark of Fannie Mae. DUS® is a registered trademark of Fannie Mae.
All loans subject to approval.
