Remington Capital – Brad Sweet

Several agencies of the federal government are committed to providing lending support for multifamily properties.  They include HUD, FNMA, and FHLMC. Our team at Remington makes use of the available funding and our unmatched access to active lenders to provide brokers and owners an opportunity to invest and re-invest in their properties.

• U.S. Department of Housing and Urban Development (HUD):  HUD’s mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination.  HUD offers several programs targeting multifamily and healthcare facilities.  Within HUD, the Federal Housing Administration (FHA), provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories (Agency Lenders).  FHA insures mortgages for the acquisition, new construction, refinancing or substantial rehabilitation of multifamily housing, including senior and student housing as well as manufactured home communities.

• Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the Great Depression.  The corporation’s purpose is to purchase and securitize mortgages in order to ensure that funds are consistently available to the institutions that lend money to homebuyers.  

FNMA provides multifamily financing for affordable and market-rate rental housing, and operates nationally, in all multifamily markets and under all economic conditions.  Eighty-nine percent of the rental housing financed by FNMA lenders is affordable to families at or below the median income of their communities.  FNMA provides financing through a nationwide network of Delegated Underwriting and Servicing (DUS®) and other lenders (collectively, Agency Lenders).  They also increase the availability of affordable multifamily housing through investments in properties that qualify for federal housing tax credits.  Working with nonprofit and for-profit sponsors, FNMA makes funds available for affordable housing through investments in individual properties or groups of properties.   FNMA loans may be used for the acquisition, new construction, refinancing or moderate or substantial rehabilitation of multifamily housing, including senior and student housing as well as manufactured home communities.

• Federal Home Loan Mortgage Corporation (Freddie Mac):  In 1970, Congress created Freddie Mac with a few important goals in mind:
  • Make sure that financial institutions have mortgage money to lend
  • Make it easier for consumers to afford a decent house or apartment
  • Stabilize residential mortgage markets in times of financial crisis

To fulfill this mission, Freddie Mac conducts business in the U.S. secondary mortgage market and works with a national network of mortgage lending customers.   Freddie Mac provides a full range of competitively priced, reliable mortgage products for the acquisition, new construction, refinancing or moderate or substantial rehabilitation of multifamily housing, including senior and student housing as well as manufactured home communities.

FHA Programs

The U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA) Division provides the following multifamily loan programs:

FHA Section 207/221(d) Loans

FHA provides mortgage insurance for new construction or substantial rehabilitation of multifamily rental properties

• 5 or more units
• Up to 85% LTV
• Up to 35 years fully amortized
• Construction to permanent loans available up to 90% LTV (100% for non-profits) and up to 40 years

FHA Section 207/223(f) Loans

FHA provides mortgage insurance for the purchase or refinance of existing multifamily rental properties

• 5 or more units
• Up to 85% LTV for purchases
• Up to 80% LTV for refinances
• Up to 35 years fully amortized

FHA Section 207/234(d) Loans

FHA provides mortgage insurance for new construction or substantial rehabilitation of multifamily condominium properties

• 5 or more units
• Up to 85% LTV
• Up to 35 years fully amortized

FHA Section 207 Loans for Manufactured Home Parks

FHA provides mortgage insurance for the construction or substantial rehabilitation of manufactured home parks

• 5 or more units
• Up to 85% LTV for purchases
• Up to 80% LTV for refinances
• Up to 35 years fully amortized

FHA Section 232 Loans for Long-Term Care Facilities

FHA provides mortgage insurance for construction, acquisition, refinance, or substantial rehabilitation long-term care facilities.

• 20 or more residents
• Up to 90% LTV (95% for non-profits) for new construction or substantial rehabilitation
• Up to 85% LTV (90 % for non-profits) for purchases or refinances
• Up to 35 years fully amortized

FHA Section 232/223(f) Loans for Healthcare Facilities

FHA provides mortgage insurance for the acquisition, refinance, or moderate rehabilitation of existing healthcare facilities.

• Up to 85% LTV (90% for non-profits)
• Up to 35 years fully amortized

Freddie Mac Programs

The Federal Home Loan Mortgage Corporation, better known as Freddie Mac (FHLMC), offers the following lending programs for the acquisition, refinance or moderate rehabilitation of multifamily communities:

Standard Mortgage

FHLMC provides loan programs for the acquisition or refinance of multifamily rental properties

• 5, 7, 10, 15, 20, 25 and 30 year fully amortizing
• Up to 80% LTV for acquisitions (lower for the short term loans)
• Up to 75% LTV for refinances (lower for the short term loans)
• Minimum debt service coverage (DSC) ranges from 1.05 to 1.35 (higher for the short term loans)
• Cash out refinances are available at higher DSC

Construction Takeout

FHLMC provides loan programs for the construction takeout of multifamily rental properties

• 5, 7, 10, 15, 20, 25 and 30 year fully amortizing
• Up to the lower of 80% LTV or 90% LTC (lower for the short term loans)
• Minimum DSC ranges from 1.10 to 1.15 (higher for the short term loans)

Rehabilitation Mortgage

FHLMC provides loan programs for the moderate rehabilitation of multifamily rental properties

• 5, 7, 10, 15, 20, 25 and 30 year fully amortizing
• Up to 80% LTV (lower for the short term loans)
• Minimum DSC ranges from 1.25 to 1.30 (higher for the short term loans)

Student Housing Program

FHLMC provides loan programs for the acquisition or refinance of student housing rental properties

• 5, 7, and 10 year fully amortizing
• Up to 80% LTV for acquisitions (lower for the short term loans)
• Up to 75% LTV for refinances (lower for the short term loans)
• Minimum debt service coverage (DSC) ranges from 1.30 to 1.35 (higher for the short term loans)
• Cash out refinances are available at higher DSC

Senior Housing Program

FHLMC provides loan programs for the acquisition or refinance of senior housing rental properties

• 5, 7, 10, 15, 20, 25 and 30 year fully amortizing
• Up to 75% LTV for acquisitions (lower for the short term loans)
• Up to 70% LTV for refinances (lower for the short term loans)
• Minimum debt service coverage (DSC) ranges from 1.30 to 1.35 (higher for the short term loans)
• Cash out refinances are available at higher DSC

There’s a lot of information here to digest.  Give me a call and we can discuss any questions that you have if you feel that these programs may be able to help.  Thank you – Brad Sweet.