Apartment (Multi-Family) Mortgage Programs:

HUD/FHA Loan Programs

Advantages of Multi-Family FHA Loan Programs

• Non-recourse
• Up to 40 years, fully amortizing terms
• Relatively low, fixed interest rates
• High loan-to-value
• Assumable (subject to approval)
• Ability to obtain construction and permanent loan at same interest rate through the Government National Mortgage Association (Ginnie Mae) mortgage-backed securities program

Disadvantages of Multi-Family FHA Loan Programs

• Slow process
• Construction loans regulate wages (additional cost)
• Distribution of cash flow limited to semiannual "surplus cash"
• Cash out to borrower on refinancing prohibited at LTVs greater than 80%

Fannie Mae

Fannie Mae purchases loans made by lenders, thereby creating a secondary loan market.
Advantages of Multi-Family Fannie Mae Loan Programs

• Non-recourse
• Competitive interest rate pricing
• Faster and more efficient processing
• No regulation of construction wages
• No restrictions on cash out
• Nationwide and constant availability

Disadvantages of Multi-Family Fannie Mae Loan Programs

• Participation and availability is effectively limited to DUS lender franchise
• Underwriting criteria more demanding and exclusive
• Generally lower loan-to-values
• Yield maintenance prepayment penalty

Other Programs:

• Stated (no tax returns) Multifamily loans
• Repositioning Loans
• Rehab Loans
• Hard / Private Money Financing