Fannie Mae DUS® Bond Credit Enhancement Loan

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Fannie Mae provides credit enhancement for tax-exempt multifamily housing revenue bonds that have low- and moderate-income occupancy restrictions; Fixed rate bonds can be enhanced; Enhancement is rated AA, and can be used in either a new bond issuance, “Refunding,” or a “Credit Substitution”

Loan Amount Minimum

Loan Terms
10 to 30 years

Up to 30 years

Loan to Value Maximum
The greater of 90% of market value or 80% of adjusted value for properties with LIHTC units equal to or above 90%; the greater of 85% of market value or 75% of adjusted value for all others

Coverage Minimum
1.15x for properties with LIHTC units equal to or above 90%; 1.20x for all others

Domestic single asset borrowing entity is required

Interest Rate
Risk-based pricing, varies with LTV and DSC ratios

Third Party Reports
MAI appraisal, Physical Needs Assessment, and Environmental Phase I Assessment are required for all deals; Seismic Report is required for properties in Seismic Zone 3 or 4 with other characteristics; A market study may also be required

Tax and insurance escrows are required; Repair and Replacement escrow funding is required based on engineer’s Physical Needs Assessment; For loans at less than 65% of value with no deferred maintenance, funding of repair and replacement reserve can be waived, at lender’s discretion