Download ARM 7-6 Term Sheet

ARM 7-6 Term Sheet
Fannie Mae’s 7-6 ARM product offers an initial low rate interest option with the ability to
convert to a fixed rate loan and attain Supplemental Financing.
ELIGIBLE PROPERTIES
A Standard DUS Mortgage can be used
for the acquisition or refinance of
multifamily properties.
ELIGIBLE BORROWERS
Any creditworthy single-asset U.S.
borrower with all U.S. principals is
eligible. Foreign borrowers may also
have ownership interests, subject to
proper structuring of the borrowing entity.
THIRD PARTY REPORTS
Standard third-party reports – Appraisal,
Phase I Environmental Assessment, and a
Physical Needs Assessment – are
required
ACCRUAL BASIS
Actual/360
LOAN TERM
7 year Term
RATE LOCK
30-day commitments are available.
Extended Rate Lock feature is also
available.
MAXIMUM LTV
80%
MINIMUM DSCR
1.00x at the lifetime cap rate
RECOURSE REQUIREMENTS
Non-Recourse execution. Standard
carve-outs to non-recourse for “bad acts”
such as fraud are required.
PROPERTY SEASONING
New properties must have stabilized
(typically 90% occupancy) for 90 days
prior to funding. Pillar can offer bridge
financing through its affiliate Guggenheim
Commercial Real Estate.
ESCROWS
Replacement reserve, tax and insurance
escrows are typically required for higher
leverage transactions
To learn more about the DUS product line,
contact a Pillar representative
INTEREST RATES
Variable rate based on 30 day LIBOR.
Maximum monthly interest rate adjustment
of 1%. Maximum lifetime cap rate
established at rate lock.
LOAN AMOUNT
$3 million minimum, no maximum
AMORTIZATION
Up to 30 years
CONTACT
CONVERSION TO FIXED RATE
Any time beginning with the first day of the
second loan year and ending on the first
day of the sixth loan year the borrower
may convert to a fixed rate loan. No
prepayment charged upon conversion.
PRICING
Pricing is tiered and based on the risk
attributes of the loan.
ASSUMPTION
DUS Loans are typically assumable,
subject to Pillar’s review and approval of
the new borrower’s financial capacity.
PREPAYMENT PROVISIONS
One-year lockout followed by a 1%
prepayment premium thereafater. No
prepayment penalty last 3 months of loan
term
SUPPLEMENTAL FINANCING
Available
This term sheet is only for the purpose of setting forth a basis upon which the parties may be agreeable to proceed toward the contemplated transaction, and is not intended to be a legally binding contract
or to impose any liabilities or obligations on any party. The terms reflected in this term sheet are subject to change at any time in Pillar’s and/or its affiliates’ sole discretion (due to market conditions or
otherwise) and do not constitute a binding offer to enter into the contemplated transaction. The contemplated transaction is subject to negotiation and execution of definitive documentation acceptable to
the parties, and it is understood that this term sheet is not intended to set forth all of the terms of such definitive documentation.