Non-recourse, fixed and adjustable rate financing for the acquisition or refinance of stabilized Student Housing properties where greater than 40% of the units are leased to undergraduate or graduate students.
Up to 30 years
Loan to Value Maximum
Maximum 75% of appraised value
1.30x fixed rate/1.05x adjustable rate
Domestic, single asset borrowing entity is required
Fixed and variable rates, varying with LTV and DSC ratios
Yield Maintenance with no lockout
Third Party Reports
MAI Appraisal, Physical Needs Assessment, and Environmental Phase I Reports are required; Seismic Reports may be required for properties in Seismic Zones 3 and 4
30/360 and Actual/360
Non-recourse execution with standard carve-outs required for “bad acts” such as fraud and bankruptcy.
Tax and Insurance escrow are required; Funded Repair and Replacement escrow is required, based on 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
$15,000 to cover third party reports and processing/underwriting costs
$8,000 - $12,000, varying on characteristics of the deal
45-60 days from application to commitment, dependent on 3rd party report timing and borrower’s submission of due diligence
Typically, lock occurs after commitment is issued; Early Rate Lock option is available, allowing rate lock within 1 week after application
Loan is typically assumable, subject to lender approval of proposed replacement borrower; Fees include one percent assumption fee, part of which is paid to Fannie Mae, and a $3,000 processing fee to cover lender’s underwriting expenses
Ineligible Property Characteristics
A property that offers food service and/or is located on university-owned land (except for a Dedicated Student Housing Property as described below).
Dedicated Student Housing Specific Requirements*:
a) Near a campus with at least 10,000 students,
b) Within 2 miles of campus or on public/university transportation line,
c) have operated for at least 1 full school year (i.e. August/September through April/May), and
d) be in its 2nd full year of operations
e) 80% of all lease terms must be a minimum of 12 months leases terms with parental guaranties or be leased by students having the financial ability to pay for the required rent (whether through employment or other documented financial means).
*Not required for student concentration below 80%