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Government-supported Multifamily Loans

Government-supported Multifamily Loans

A+ Rated First Financial Gets Borrowers through Multifamily Loan Red Tape

Prominent in the lending industry since 1996, First Financial is well-versed in the intricacies of government supported loans for apartment buildings. No real estate investor should have to apply to these programs alone. Despite the government’s good intentions, qualifying for a government-supported multifamily loan involves complex criteria. Let First Financial help you decide which loan instrument works ideally for your situation.

Request More Information

It all starts with your information request. Since every situation is unique, we make sure to directly focus on and understand our customer’s individual needs. After submitting your request, within 24 hours we will reach out to you to discuss your commercial loan options. Since 1996, our loans have helped more than 50,000 customers stay current with what they want from a commercial lender.

If government-backed loans don’t meet your needs and situation, consider:

The federal government has worked for years to drive the cost down for low and moderate income individuals and families in both urban and rural areas. Housing is either offered directly through the government, or through public-private partnerships with the goal of increasing the supply of affordable housing in eligible areas.

Here is a quick overview of these government-backed apartment loan options:

Federal Housing Administration (FHA) Financing:

These apartment loans are mortgages guaranteed by the government’s Department of Housing and Urban Development (HUD). They are available if your apartment building in question has been operating with proven stability for at least 3 years, or if you wish to construct an even larger apartment project with a 35-40-year loan.

Freddie Mac Financing

This particular multi-family loan known as the Federal Home Loan Mortgage Corporation (usually referred to as Freddie Mac), must be secured by a first-position mortgage on a different housing entity. Instead of borrowers being lent money directly, with a Freddie Mac multifamily loan, the mortgage loans are bundled into a mortgage-backed security (MBS) for sale to investors. This is known as the U.S. secondary mortgage market.

Fannie Mae Financing

Funded through the Fannie Mae Delegated Underwriting Services (DUS) Program, this type of loan requires the apartment property to be stabilized, and have a minimum $750,000 loan amount (with fixed or floating rates). This lending concept incorporates shared risk with private lenders. These lending partners work with Fannie Mae’s underwriting guidelines and then purchase the mortgage in the future.

USDA Mortgages

These United States Department of Agriculture (USDA) loans are guaranteed mortgages that are specifically for properties in a rural-designated area. This means the land must have a population of less than 35,000, or be in a federally-recognized tribal land. Funds must be used for constructing, improving the land, and/or providing infrastructure for multi-family housing specifically for low to moderate income families or individuals. These USDA mortgages tend to have full recourse.

Get the First Financial Advantages!

The benefits of working with First Financial to secure a government-supported apartment loan are plentiful. We are adept at helping our customers maneuver through the intricate red tape involved with government-originated loans. Some of the perks of securing your apartment loan through First Financial include:

  • Amortizations from 30 years
  • High Loan-to-Values Percentages
  • Fixed Rates from less than 4%
  • Quick closings (45 days)
  • 24/7 Loan Officer Customer Service Assistance
  • Competitive Fees
  • Banking-level Security
  • Simple application process

Trends in Government-Backed Multifamily Financing

During the financial crisis, investors put any cash that was left into the most secure instruments they could find: Fannie Mae, Freddie Mac and FHA-backed loans and securities. That government guarantee shone like a like steady beacon in a sea of uncertainty.

By the fall of 2015, government entities held or insured $443 billion in multifamily and health care mortgages, seven percent more than held in 2014. These holdings amount to 43 percent of outstanding multifamily mortgage debt.[i]

As the market has rebounded, the GSEs and FHA have remained a large source of credit for the multifamily market. Still, with wages lagging in this recovery, we fully expect the government to back 40% or more of all multifamily financing over the next few years.

 

There is no question that navigating all of the different loans offered by the government can be time consuming and complicated. First Financial skips borrowers ahead by giving you access to loan specialists that can walk you through the entire process over the phone. Apply today!

[i] https://www.realpage.com/mpf-research/multifamily-lending-1q-2017/


First Financial

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