Fannie Mae Master Credit Facility

Benefits

  • Ultimate flexibility in portfolio management
  •  Allows opportunistic sale or release of properties
  •  Expansion feature allows easy addition of properties
  •  Recognize portfolio improvements with first lien borrow-ups
  •  Retain favorable interest rates with property substitutions
  • Balance sheet management
  • Pre-negotiated loan documents provide for certainty of execution and fast closings for facility expansions 

Features

  • Flexible financing terms for a portfolio of properties on a cross-collateralized and cross-defaulted basis
  • Property addition rights
  • Property release rights
  • Property substitution rights
  • "Borrow-Up" capabilities
  •  Ladder maturities with multiple tranches of debt
  • Eligible asset classes
    • Multifamily
    • Student Housing
    • Manufactured Housing 
Credit Facility Size Minimum initial advance of $55 million with unlimited expansion capacity.
Term 15 year Credit Facility, with 5 -15 year loan terms, available for maturity laddering.
Interest Rate Fixed, variable, or a combination thereof. Variable- rate advances may be converted to fixed rate.
An interest rate cap or other hedging arrangement is generally required for all variable-rate advances.
Amortization Interest-only and amortizing available, based upon property and pool performance.
Maximum LTV Up to 80% depending upon asset class and product type.
Minimum DSCR 1.20x depending upon asset class and product type.
Structuring Options/Features Single or multiple loans. 

Single or multiple collateral pools. 

No rebalancing required. 

No unused capacity fees. 
All structuring options/features subject to the terms of the Master Credit Facility Agreement. 

Prepayment Availability Flexible prepayment options available, including partially pre-payable debt, yield maintenance and declining prepayment premium.
Borrower Entity A single purpose, bankruptcy-remote entity is required for each borrower and any general partner, managing member, or sole member that is an entity. Borrowers must have common sponsorship.
Rate Lock 30- to 180-day commitments. Borrowers may lock a rate with the Early Rate Lock option.
Recourse Non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.
Escrows Replacement reserve, tax, and insurance escrows are typically required.
Third-Party Reports Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.
Assumption Assumption of the entire facility is permitted upon satisfaction of the requirements of the Master Credit Facility Agreement.
Fees Fannie Mae charges the following fees:
Structuring fee: 10 basis points on each advance.
Due Diligence fee: $1500 per property.
Other fees (e.g. substitution, release, assumption, and review) may apply.
Property Considerations Financial and operating covenants and geographic diversity requirements determined on a case-by- case basis.