Funding a multifamily property purchase through Fannie Mae or Freddie Mac involves navigating their specific loan programs designed for multifamily real estate. Both entities offer financing options that cater to different types of multifamily investments, from small residential buildings to larger apartment complexes. Here's a step-by-step guide on how to secure funding from Fannie Mae or Freddie Mac:

Understand the Loan Programs

Fannie Mae:

• Fannie Mae Multifamily Loans: Offered through the Fannie Mae Delegated Underwriting and Servicing (DUS) program. Suitable for properties with 5 or more units.
• Loan Types: Includes Fixed-Rate Loans, Variable-Rate Loans, and Credit Facility Loans.
• Target Properties: Apartments, mixed-use properties, student housing, and senior living facilities.

Freddie Mac:

• Freddie Mac Multifamily Loans: Provided through the Freddie Mac Multifamily Seller/Servicer network. Designed for properties with 5 or more units.
• Loan Types: Includes Fixed-Rate Loans, Floating-Rate Loans, and Structured Financing.
• Target Properties: Apartments, affordable housing, manufactured housing communities, and more.

Qualify for a Loan

Eligibility Criteria:

• Property Requirements: Multifamily properties with at least 5 units.
• Borrower Qualifications: Typically, you need a strong credit history, experience in property management or ownership, and sufficient net worth and liquidity.
• Property Condition: The property must be in good condition and meet local building codes.

Financials:

• Credit Score: Both Fannie Mae and Freddie Mac require a strong credit score, typically 680 or higher.
• Income: Demonstrate the ability to cover debt service and operating expenses.
• Experience: Often, lenders prefer borrowers with experience in managing multifamily properties.

Prepare Documentation

Common Documents:

• Loan Application: Begin with our Quick-App.
• Financial Statements: Provide personal and business financial statements.
• Tax Returns: Submit personal and business tax returns for the past few years.
• Property Details: Offer a detailed description of the property, including its current condition and income potential.
• Operating Statements: Include historical and projected operating statements for the property.

Choose a Lender

Approved Lenders:

• Fannie Mae: We work with Fannie Mae DUS lenders. These are approved lenders who can underwrite and service loans according to Fannie Mae’s guidelines.
• Freddie Mac: We Choose from Freddie Mac’s network of approved Multifamily Seller/Servicers.

Submit Application and Undergo Due Diligence

Application Process:

• Submit Application: Provide all required documentation to us.
• Due Diligence: We and the lender will conduct due diligence, including property appraisals, environmental assessments, and financial analysis.

Underwriting:

• Property Appraisal: An independent appraisal to determine the property’s market value.
• Inspection: Property inspections to assess condition and identify potential issues.
• Credit Review: Assessment of your creditworthiness and financial stability.

Loan Approval and Closing

Approval:

• Review: The lender will review all documentation and perform a thorough analysis.
• Commitment Letter: Once approved, you will receive a loan commitment letter outlining the terms and conditions.

Closing:

• Documentation: Finalize and sign all loan documents.
• Funding: Upon closing, funds are disbursed, typically to be used for purchasing and potentially renovating the property.

Loan Servicing and Management

Post-Closing:

• Servicing: Follow the terms of the loan agreement, making timely payments according to the loan schedule.
• Property Management: Efficient management of the property is crucial for maintaining loan compliance and achieving financial success.

Considerations and Tips

Understand the Terms: Carefully review the loan terms, including interest rates, amortization schedules, and any prepayment penalties.

Stay Informed: Keep up with changes in Fannie Mae and Freddie Mac guidelines, as they may impact loan options and eligibility.

Professional Advice: Consult with financial advisors or real estate professionals who specialize in multifamily investments to guide you through the process.

By following these steps and working with us, you can successfully fund a multifamily property purchase through Fannie Mae or Freddie Mac, leveraging their competitive financing options to support your investment goals.