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Supplemental Mortgage Loans

Subordinate financing options

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Fannie Mae® Multi-family offers subordinate financing options for multifamily properties with an existing Fannie Mae® Mortgage Loan.


  • Lower cost than refinancing
  • Access to additional capital
  • Flexible loan terms
  • Certainty of execution
  • Speed in processing and underwriting


  • 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



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.


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.
The Prepayment Premium Period End Date of a Supplemental Mortgage Loan need not coincide with the Prepayment Premium Period End Date of the senior Mortgage Loan.

Rate Lock30-day to 180-day commitments. Borrower may Rate Lock using the Streamlined Rate Lock option.
Accrual30/360 and Actual/360.
RecourseNon-recourse execution with standard recourse carve-outs required for “bad acts” such as fraud and bankruptcy.
EscrowsReplacement 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 ReportsStandard third-party reports, including Appraisal, Phase I Environmental Assessment, and a Property Condition Assessment, may not be required, if certain conditions are met.
AssumptionSupplemental 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.

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