| Description
|
Non-recourse, assumable financing for the acquisition
or refinance of stabilized independent living (IL) and assisted
living (AL) properties. Properties that assist residents with Alzheimer’s
(ALZH) and/or Dementia are eligible for financing under Fannie Mae’s
Seniors Housing Program. AL and AL/ALZH properties must have at
least two years’ operating history at or above 90% physical
occupancy; IL must have 18 months of stabilized occupancy at or
above 90%. Newly constructed and stabilized Senior Housing facilities
are also eligible for Senior Housing program on a case-by-case basis.
Buildings must be fully sprinklered. At least 80% of the beds must
be private pay. Skilled nursing beds are not permitted. Properties
with high buy-in fees are not eligible. |
| Loan Amount |
Minimum $5,000,000, with exceptions on a case-by-case basis.
Supplemental Loans are available under the Seniors Housing Program. |
| Loan Terms |
10, 15, or 18 year balloons; 20 and 25 year fully amortizing. |
| Amortization |
25 years maximum. |
| Loan-to-Value Maximum |
Maximum 75% of appraised value, maximum of 80% for tax-exempt
bond financed transactions.
|
|
Coverage Minimum
|
1.35x for independent living; .45x for facilities with an assisted
living and/or Alzheimers component grater than 50%. Coverage for
properties with less than 50% AL or ALZH will be on a weighted average
basis. Coverage ratios are reduced by 5 basis points for tax-exempt
bond financed transactions; for example, 1.30x for independent living. |
| Borrower |
Domestic single asset borrowing entity is required. Ownership
and management must demonstrate at least five years’ experience
with properties of similar composition, and should have a minimum
of five properties in their portfolio. |
| Interest Rate |
Seniors Housing is priced as Enhanced Standard. Annual credit
enhancement fees range from 1.04% for independent living to 1.34%
for properties with greater than 50% AL/ALZH or tax-exempt bond
transactions at maximum allowable leverage. Fannie Mae will charge
an additional liquidity fee of 25 basis points per annum for variable
rate transactions. |
| Prepayment |
Yield Maintenance, Defeasance and Graduated Prepayment Premium. |
| Third Party
Reports
|
MAI appraisal, Physical Needs Assessment, Environmental Phase
I Assessment and Management and Operations Assessment are required
for all deals; Seismic Report is required for properties in Seismic
Zone 4. A Regulatory Compliance Report is required for AL and AL/ALZH
properties. |
| Reserves |
Tax and insurance escrows are required. Repair and Replacement
escrow funding is required, based on the greater of the engineer’s
Physical Needs Assessment or $300 per unit per year. |
| Application Fee |
Approximately $15,000, to cover third party reports. |
| Legal Fees |
$12,000 to $15,000, varying with characteristics of the deal.
|
| Timing |
For new borrowers, 90-120 days from commencement of the Pre-screen
process to commitment; dependent of 3rd party report timing and
borrower’s submission of due diligence. This timing can be
reduced by 30 days for repeat borrowers. |
| Rate Lock |
Rate lock occurs after borrower’s acceptance of commitment.
30- to 90- day commitments available. Extended Rate lock a rate
45 to 365 days in advance of closing. |
