PROGRAM SUMMARY:
The Fannie Mae Discounted Mortgage-Backed Security (DMBS) Program is a variable-rate financing facility for 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. The Fannie Mae DMBS variable-rate generally trades inside of 90 day LIBOR at a cost significantly below available conventional variable-rate financing.
ELIGIBLE PROPERTIES:
Multifamily apartments and manufactured housing communities. Properties in DMBS pools must have common control, not ownership.
PREFERRED LOAN SIZE:
$25 million (minimum) for a single asset. $50 million (minimum) for a pool of assets, which can be filled within 12 months from initial closing. There is no maximum loan size.
LOAN TERM:
5, 7 or 10 years.
MAXIMUM LOAN:
Amount equal to the lesser of:
1. 75% of appraised value; or
2. 1.00 debt service coverage at the lifetime interest rate ceiling.
INTEREST RATES:
Loans are priced at a fixed margin over the DMBS rate, as determined by market rates at the time of rate lock. The DMBS facility may also consist of a fixed-rate portion, which is priced at a spread over Fannie Mae mortgage-backed securities. Rates vary by loan-to-value ratio, debt service coverage and property quality.
AMORTIZATION:
Generally interest only. 30 years for higher leverage loans.
INTEREST RATE CAP/ SWAP:
Interest rate cap must be purchased separately prior to rate lock and closing. Interest rate swap is available for qualified borrowers.
CONVERSION:
Loans may convert to fixed-rate at any DMBS rollover date with nominal fee.
PERSONAL RECOURSE:
None, except for standard exceptions to non-recourse, which are the responsibility of the Key Principal(s).
ASSUMABILITY:
Assumable, subject to CWCapital approval and a 1% transfer fee.
PREPAYMENT:
Fee Maintenance schedule with a minimum of 1%. Loans can also be
structured with 1% prepayment premium throughout the life of the
loan.
SUBORDINATE FINANCING:
Fannie Mae Supplemental Loans (second mortgages) available 12 months after initial loan closing.
ESCROWS:
Monthly escrows for real estate taxes, property insurance and replacement reserves.
APPLICATION FEE:
Based on estimated underwriting costs for appraisal, architectural / engineering report, environmental assessment and other loan processing costs.
CLOSING EXPENSES:
Standard transaction costs, including lender legal fees, title and survey (where applicable).
PRELIMINARY SUBMISSION PACKAGE:
For each property, please include the following items in your request for
a loan quote:
1. Property description and location map.
2. Representative color photographs.
3. Current rent roll and year-to-date operating statement.
4. Operating history - prior 3 years, if available.
5. Current year operating budget.
6. Existing debt and cost basis.
7. Sponsor resume.
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This is a summary of general program terms, which are subject to change. This is not a commitment to lend.