MHP expands relationship with Fannie Mae

BOSTON, Sept. 10, 2015 --- To increase its ability to help borrowers create and preserve affordable rental housing, the Massachusetts Housing Partnership (MHP) announced today that it has expanded its relationship with Fannie Mae and is now offering Fannie Mae’s full suite of multifamily affordable financing programs.

An approved Fannie Mae affordable housing lender since 2009, MHP can now offer all of Fannie Mae’s fixed and variable rate products, including its new 7-year variable rate option product (“ARM 7-4”), which is ideal for the interim financing of existing multifamily properties. With its AA- rating from Standard and Poor’s and its special status as a Fannie Mae affordable housing lender, MHP can offer Fannie Mae’s best available pricing for every project.

“Fannie Mae is the largest provider of conventional multi-family loans in the country, with a reputation for fast and reliable executions that are attractively priced,” said Mark Curtiss, MHP’s Managing Director. “With Fannie Mae’s capital resources and our experience in financing thousands of affordable housing units in developments of all types, sizes and locations, we‘re excited to have these new financing tools available to meet our borrowers’ short- and long-term financing needs.”

Fannie Mae financing can be used for all types of multifamily activities on stabilized properties, including permanent take-outs for new construction, refinancing of an existing property, acquisitions including post-purchase rehabilitation, and short-term financing prior to recapitalization.

Key features of MHP’s ability to offer Fannie Mae loan products include:

• Non-recourse obligations in most cases.
• $1 million minimum loan amount and no maximum loan amount

• The application and underwriting process follows MHP’s standard process, using MHP’s application materials and approval timeframes.

• Flexible prepayment options, with the borrower able to select the yield maintenance period for fixed rate loans, and graduated prepayment options for variable rate loans.

• Forward rate lock commitments of up to 30 months are available.

• Fixed-rate affordable developments using federal Low Income Housing Tax Credits are underwritten with loan-to-values (LTV) of up to 90 percent and debt service coverage (DSC) as low as 1.15x.

• Better pricing for lower leverage and higher cash flow loans due to Fannie Mae’s tiered pricing structure.

• To support green retrofitting of affordable properties, Fannie Mae’s Green Finance PLUS product provides additional proceeds – typically 4-5 percent more – through a maximum LTV boost and a reduction in the minimum DSC.

• Access to Fannie Mae’s new ARM 7-4, a low-cost, adjustable rate financing product that is ideal for owners looking to acquire a property and/or arrange for flexible financing while the property is being positioned for more extensive rehab or re-syndication. Features include current actual interest rates near 3 percent and a maximum lifetime interest rate under 6 percent. Loan is convertible to fixed-rate after one year with no pre-payment due at conversion, and minimal re-underwriting. One-year lockout for voluntary prepayments, pre-payable any time after that with a 1 percent premium payment.

• Variable rate loans available up to 80 percent LTV and DSC as low as 1.00x.

MHP is a self-supporting public agency that uses private funds to create and preserve affordable housing. Since 1990, MHP has provided over $1.1 billion in loans and commitments for the financing of over 22,550 units of rental housing.

For more information about MHP’s new financing options through Fannie Mae, contact Senior Loan Officer Megan Mulcahy at mmulcahy@mhp.net or 617-330-9944 x269.