Fannie Mae - Apartment Building Loan - Apartment Building Mortgage

Fannie Mae’s DMBS (Discounted Mortgage Backed Security) program provides exceptional rates for borrowers seeking either a large single loan of at least $25 million or a pool of loans totaling $50 million filled over a 12 month period. Properties in DMBS pools must have common control, not ownership, and there is no requirement for cross collateralization or geographical diversity.

This variable-rate financing alternative benefits property owners seeking the lowest pay rate. Loans are funded through the issuance of a DMBS, which is sold at a discount and recast at par every 3, 6 or 9 months in lieu of a stated interest rate. With current all-in rates below 2.5%, the DMBS can result in substantial cash flows and huge savings over the life of the loan.

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Features

Fannie Mae’s only real estate backed short-term securities, issued with maturities between three and nine months, in one month increments
Non-interest bearing MBS, sold to investors at a discount and recast at par upon maturity
Variable Rate is comparable to 90 day LIBOR at a much lower cost than the conventional ARM

Structure
Loan Amount	single loan minimum $25 million; pool minimum $50 million
Loan to Value	maximum 75%
Debt Service Coverage	minimum 1.00x, at capped interest rate
Loan Terms	5, 7, and 10 years
Amortization	maximum 30 years
Recourse	nonrecourse with standard carveouts
Interest-Rate Cap	must be purchased separately prior to rate lock and closing

Optional Features
Subordinate Financing	DUS™ supplemental mortgage available after one year, subject to lender’s approval
Assumability	fully assumable with Lender’s consent and upon payment of 1% fee
Prepayment Fee	maintenance schedule with a minimum of 1%

Conversion to Fixed Rate

May convert to a Fixed Rate at any DMBS rollover date with nominal fee

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