student housing mortgages - commercial loan direct

Student Housing Loan Programs


How do I finance a student housing project? Commercial Loan Direct's Dedicated Student product provides attractive terms and competitive prices for the purchase or refinance of properties that, because of construction and location, specifically cater to a student tenant base and are not readily convertible to conventional multifamily housing. CLD offers these student housing financing programs nationwide via its correspondent relationship with Fannie Mae and FHA. CLD can also offer bridge loans over one million dollars to stabilize student housing properties that would be taken-out via Fannie Mae or FHA (through CLD). Furthermore, CLD can originate student housing loans in smaller communities through its USDA apartment loan program.


Dedicated Student Housing Mortgages

 

Fannie Mae Mortgages

Loan Type *Property Type Min Loan Amount Max LTV Term Length Amortization
Fannie Mae (FNMA) A, AH, C, MH, SH, ST $750,000 80% 3-30 Years 15-30 Years
*A = Apartment AH = Affordable Housing C = Cooperative Housing MH = Manufactured Housing SH, = Senior Housing ST = Student Housing
Fannie Mae Info Fannie Mae Rates

Fixed-Rate Mortgage: The Fixed-Rate product is for the purchase or refinance of existing, stabilized properties including: traditional, affordable housing, seniors housing, student housing, and manufactured housing communities. Maximum LTV is 80% for purchases and 75% for refinances with a 1.25x DSCR requirement. Loan terms are from 5-15 years.

Structured Adjustable-Rate Mortgage: The Structured ARM product is for the purchase or refinance of existing, stabilized traditional and manufactured housing communities. Senior housing, student housing, and moderate rehabilitation mortgages may be eligible on a case-by-case basis. Affordable housing, bond credit enhancements and substantial rehabilitation are not eligible. The minimum loan amount is $25 million, maximum LTV is 75%, minimum DSCR is 1.0x and terms range from 5-10 years.

Adjustable Rate Mortgage 7-6: The ARM 7-6 product is for the purchase or refinance of existing, stabilized properties including: traditional, affordable housing, seniors housing, student housing, and manufactured housing communities. Maximum LTV is 80% for purchases and 75% for refinances with a 1.00x DSCR requirement at the loan cap rate. Loan terms are 7 years with a 1 year lock-out period and a 1% prepayment premium thereafter.

Student Housing Financing: The Student Housing product provides financing options for the finance or refinance of stabilized student housing properties, which is defined as a conventional multifamily property where 20% or more of the units are leased to undergraduate and/or graduate students, or a property that is specifically built or leased for student housing. Properties may be rented on a per-unit or per-bed basis. Maximum LTV is 75%, minimum DSCR is 1.30x.

Supplemental: The Supplemental Loans product is subordinate financing for properties with a pre-existing fixed or adjustable Fannie Mae Mortgage Loan that has been in place for a minimum of 12 months. Maximum LTV is 75% and minimum DSCR is 1.30x. New third party reports may not be required and early rate lock is available for a fee.

Choice Refinance Program: The Choice Refinance product is a streamlined refinance process with more limited documentation for existing DUS Cash or MBS mortgages to be refinanced by the same Lender. Properties must be stabilized and well-maintained and mortgages must be in good standing.

 

Freddie Mac Mortgages

Loan Type Property Type * Min Loan Amount Max LTV Term Length Amortization
FHLMC A, AH, MH, SH $1,000,000 80% 5-30 Years 30 Years
*A = Apartment AH = Affordable Housing MH = Manufactured Housing SH = Senior Housing
Freddie Mac Info Freddie Mac Rates

Fixed-Rate Loan: The fixed rate product may be used for the acquisition or refinance of all major multifamily project types. Typical loan amounts are $5-100 million and may include interest-only options. Maximum available LTV is 80% and minimum debt service coverage ratio is 1.25x.

Floating-Rate Loan: The fixed rate product may be used for the acquisition or refinance of all major multifamily project types except for cooperative housing. Typical loan amounts are $5-100 million and may include interest-only options. Maximum available LTV is 80% and minimum debt service coverage ratio is 1.25x.

Student Housing Mortgage: The student housing product is for the acquisition or refinance of purpose-built student housing with 12 month and parental guaranteed leases preferred. Residence halls or other multiple occupancy rooms with a shared common bathroom and centralized food service areas or dining halls do not qualify. Typical loan amounts are $5-100 million and may include interest-only options. Maximum available LTV is 80% and minimum debt service coverage ratio is 1.30x.

Lease-Up Loan: The lease-up product is for traditional multifamily properties only with substantially complete construction that is in need of stabilization; this is not available for student, senior, or affordable housing. Maximum leverage is a 75% LTV with a 1.30x debt service coverage ratio (with a letter of credit or reserve); otherwise, there is a max LTV of 65% and debt service coverage ratio of 1.25x.

Revolving Credit Facility: The revolving credit product is a 5 year secured line-of-credit on any of the major multifamily property types; borrower can move assets in and out of the facility for rehabilitation/upgrade, acquisition, or refinance. Typical loan amounts are $100 million+ and are interest-only. Maximum available LTV is 75% and minimum debt service coverage ratio is 1.45x.

Supplemental Loan: The supplemental loan product is for stabilized properties with Freddie Mac first lien mortgages in place. Loan amounts are $1 million+ and may include interest-only options. Maximum available LTV is 80% and minimum debt service coverage ratio is 1.25x.

Value-Add Loan: The value-add loan is an acquisition loan offering a short-term, cost-effective financing option for moderate property upgrades. It has a floating interest-only rate with an 80% max LTV and a debt service coverage ratio based on 7-year fixed rate at current pricing.

Small Balance Loans: The Freddie Mac small balance program provides financing of small balance loans using hybrid ARM or fixed-rate loan products, offering partial-term and full-term interest-only. This program also features a streamlined process and competitive pricing. The loan amount for this program is $1 million to $5 million.

 

FHA Mortgages

Loan Type Property Type * Min Loan Amount Max LTV Term Length Amortization
FHA / HUD A, AH, C, H, MC, SH, SNF $5,000,000 83.3% 35-40 Years 35-40 Years
*A = Apartment AH = Affordable Housing C = Cooperative H = Hospitals MC= Memory Care SH = Senior Housing SNF= Skilled Nursing Facilities
FHA Info FHA Rates

Rental Housing - Section 207: Section 207 is no longer used for new construction and substantial rehabilitation; developers and lenders prefer Section 221(d)(4), which has more favorable terms. It is, however, the primary product for the Section 223(f) refinancing program. In fiscal year 2013, the Department did not insure any mortgages under this section.

Rental Housing for Urban Renewal and Concentrated Development Areas - Section 220: Section 220 facilitates multifamily housing projects in urban renewal areas, code enforcement areas, and other designated revitalization areas. This program is eligible for the Multifamily Accelerated Processing (MAP). In 2013, FHA insured 4 projects with 788 units, totaling $111.3 million and averaging $27,825,000 per project.

Rental & Cooperative Housing - 221(d)(4): Section 221(d)(4) facilitates the construction or substantial rehabilitation of rental and cooperative housing for moderate-income and displaced families. The program allows for long-term mortgages (up to 40 years). This program is eligible for Multifamily Accelerated Processing (MAP). In Fiscal year 2013, FHA insured 160 projects with 24,997 units, totaling $2.47 billion and averaging $15.4 million per project.

Existing Multifamily Rental Housing - Sections 207/223(F): Sections 207/223(f) facilitate the purchase or refinance of existing multifamily rental housing. Projects that require substantial rehabilitation are not eligible for these programs and must apply for the 221(d)(4) program. Critical repairs must be completed before the loan endorsement. Section 223(f) is eligible for Multifamily Accelerated Processing (MAP). In fiscal year 2013, FDA insured 740 projects with 126,388 units, totaling $7.7 billion for an average project size of $10.4 million.

Supplemental Multifamily Loans - Section 241(a): Section 214(a) facilitates supplemental mortgages for projects already insured by an FHA program. This extends the original loan’s economic life and can be used for repairs, additions, or improvements to multifamily projects and group practice facilities, hospitals, or nursing homes. Major equipment for insured medical facilities may be covered by a mortgage under this program. In fiscal year 2013, FHA insured 3 projects with 398 units, totaling $16.9 million for an average of $5.6 million.

Risk-Sharing Program - Qualified Participating Entities (QPE) - Section 542(b): Section 214(a) facilitates supplemental mortgages for projects already insured by an FHA program. This extends the original loan’s economic life and can be used for repairs, additions, or improvements to multifamily projects and group practice facilities, hospitals, or nursing homes. Major equipment for insured medical facilities may be covered by a mortgage under this program. In fiscal year 2013, FHA insured 3 projects with 398 units, totaling $16.9 million for an average of $5.6 million.

Housing Finance Agency Risk-Sharing - Section 542(c) : Section 542(c) provides credit enhancement for mortgages of multifamily projects with loans underwritten, and serviced by HFAs. This is a risk-sharing program. In fiscal year 2013, FHA insured mortgages for 54 projects with 5,009 units, totaling $355 million, for an average of $6.6 million per project.

In its prequalifying review, Commercial Loan Direct will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts and actual fees and expenses may vary from the prequalifying estimates. A prequalifying estimate is not a commitment to make a loan.

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