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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 tracks 90 day LIBOR at a cost significantly below available conventional variable
rate financing.
Multifamily apartments, manufactured housing
communities and senior housing. Properties in DMBS pools must have common control, not ownership.
5, 7 or 10 years.
$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.
Amount equal to the lesser of:
- 75% of appraised value; or
- 1.00 debt service coverage; or
- 103% of the loan amount calculated as if the loan were a fixed rate.
Priced
at a fixed margin over the DMBS rate, as determined by market rates at 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.
Up to 30 year schedule.
Must be purchased separately prior to rate lock and closing.
Loans may convert to fixed rate at any DMBS rollover date with nominal fee.
None, except for standard exceptions to non-recourse, which are the responsibility
of the Key Principal(s).
Assumable, subject to lender approval
and a 1% transfer fee.
Fannie Mae Supplemental Loans (second
mortgages) available 12 months after initial loan closing.
Fee Maintenance
schedule with a minimum of 1%. Loans can be structured with 1% prepayment premium throughout the life of the loan for a slightly
higher pay rate.
Monthly escrows for real estate taxes, property insurance
and replacement reserves.
Based on estimated underwriting costs
for appraisal, architectural/engineering report, environmental assessment and other loan processing costs.
Standard transaction costs, including lender legal fees, title and survey (where
applicable).
Include the following in your request
for a loan quote:
- Property description and location map
- Representative color photographs
- Current rent roll and year-to-date operating statement
- Operating history - prior 3 years, if available
- Current year operating budget
- Existing debt and cost basis
- Sponsor resume
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