Commercial Loan Definitions

What is a Freddie Mac Apartment Loan?

Freddie Mac Apartment Loans The Federal Home Loan Mortgage Corporation (“Freddie Mac” or FHLMC) has multifamily mortgage products available for conventional (“market-rate”) properties, seniors housing, student housing, cooperative and targeted affordable housing. Through it’s various programs, Freddie Mac offers mortgages to experienced multifamily investors that focus on low- to median-income tenants. Like CMBS and Fannie Mae loans, these mortgages are pooled, securitized, and sold to investors. Freddie Mac loans are priced based on the corresponding treasury and a spread, which takes into account the loan amount, term, LTV, and property location. Pricing consideration...

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What is a Fannie Mae Apartment Loan

A The Federal National Mortgage Association (FNMA or “Fannie Mae”) mortgage is an adjustable or fixed-rate loan product available for various types of multifamily properties. The underwriting and application process is standardized and performed by Delegated Underwriting and Services (DUS) lenders. Through it’s two major programs (Small Loan Program and DUS Program), Fannie offers multifamily mortgages starting at $750, 000. Like CMBS mortgages, these loans are pooled, securitized, and sold to investors, but typically serviced by the originator. Fannie Mae loans are priced based on the corresponding treasury and a spread, which takes into account the loan amount, term, L...

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What is an FHA Apartment Loan under HUD?

In addition to its healthcare and special needs programs, the Federal Housing Authority (FHA) branch of the US Department of Housing and Urban Development (HUD) offers government guarantees on various types of multifamily mortgages through its Office of Multifamily Housing Programs. These loans are available for conventional apartments, low-income housing, manufactured housing communities, cooperative housing, and seniors housing. This type of loan is only for very seasoned commercial real estate investor/owners because of the extensive paperwork, reporting, reserves, and experience requirements. * Although $1 million is technically the minimum some lenders will underwrite at,...

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What is a CMBS Loan?

A Commercial Mortgage-Backed Securities (CMBS or conduit) mortgage is a fixed-rate, non-recourse loan product that uses flexible underwriting standards and larger commercial real estate properties as collateral. Several of these mortgages are pooled together, securitized into bonds, and sold to investors. However, this doesn’t affect the borrower; the loan is serviced similarly to any other loan product. The financial institution that offers the loans to borrowers will initially fund the loans with its own money at closing, then pool the loans together and securitize them (i. e. turn them into bonds). The rating agencies (i. e. Moody’s, Fitch, Kroll, S&P, DBRS, and Morningstar) then ...

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