Berkadia | Fannie Mae Credit Facilities

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FANNIE MAE CREDIT FACILITIES Fannie Mae Multifamily provides a credit facility execution that allows a borrower to arrange flexible financing terms for a portfolio of properties on a crosscollateralized and cross-defaulted basis, with property addition, property release, property substitution, and borrow-up capabilities for all asset classes. Why Berkadia? Berkadia currently services 25 active Fannie Mae credit facilities and bulk deliveries totaling $4.6 billion in unpaid principal balances We have consistently been ranked among the top Fannie Mae structured debt providers In addition to conventional, Berkadia has closed credit facilities comprised of seniors, affordable (MAH) and manufactured housing assets In 2021, Berkadia was Fannie Mae’s #3 DUS lender and ranked #1 in combined Freddie Mac, Fannie Mae and FHA origination volume

Features of Fannie Mae Credit Facilities: • MBS execution that allows ultimate flexibility in portfolio management • Allows opportunistic sale or release of properties • Expansion feature allows easy addition of properties • Recognize portfolio improvements with first lien borrow-ups • Retain favorable interest rates with property substitutions • Ladder maturities with multiple tranches of debt • Pre-negotiated loan documents provide for certainty of execution and fast closings for facility expansions

Recent Examples: • $204.6M Sponsor Initiated Affordabilty (SIA) facility with a 1.20x DSCR and 35-year amortization • $158M initial advance with 7, 10, 12 yr., and SARM tranches; funding after multiple borrow ups and conversions totaled $242M • $226M in funding, including multiple borrow-ups, for the same client across multiple conventional and MAH credit facilities closed over several years • $989M in funding for a large manufactured housing client across four credit facilities closed in 2017, 2018 and 2020

For more information: Please reach out to your Berkadia mortgage banking professional or visit Berkadia.com.


THE CREDIT FACILITY OPTION CREATES SIGNIFICANT FLEXIBILITY: A CASE STUDY Opportunity

Strategy

A large regional borrower with limited Fannie Mae

The borrower anticipates holding most of the

experience has partnered with a large pension fund

assets long term but would like the flexibility

to acquire small portfolios. The initial acquisition is

to opportunistically sell as needed. Ideally, the

a portfolio of five value-add, market-rate properties

borrower expects to obtain additional financing

valued at $250 million and they intend to grow the

when NCF improvements are realized.

partnership to $500 million over three years.

Solution 12/11.5 Fixed-Rate 10/9.5 Fixed-Rate 10-year Structured ARM 7/5 Fixed-Rate 5/3 Fixed-Rate

Property improvements generate additional NCF and value

Borrower finances initial acquisition with three tranches of debt

Initial advance

Borrower releases trapped equity by borrowing up against portfolio improvements

Borrow-up

Result

Borrower adds five properties

Addition

Borrower sells three properties and pays down the variable-rate debt tranche

Borrower releases a property and adds a new one up to 180 days later

Substitution

Release

The Fannie Mae Advantage

Because we matched the credit facility structure

• No maximum facility amount

and features to the borrower’s strategy, they

• No unused capacity

mitigated their exposure to interest rate risk and realized huge savings over the term of the facility.

• No rebalancing • No penalty fees for long-term debt


Credit Facility Size Term

Minimum initial advance of $100 million with unlimited expansion capacity. Flexible credit facility and loan terms. Generally, credit facility term exceeds initial loan terms by five years.

Interest Rate

Fixed, variable, or a combination of fixed and variable tranches. Variable-rate advances may be converted to fixed rate. An interest rate cap or other interest rate hedge is generally required for variablerate advances.

Minimum Facility LTV/DSCR

Up to 75%, depending upon asset class and product type. DSCR starts at 1.25x. Credit facilities that only include multifamily affordable housing properties allow up to 80% and may start at 1.25x.

Structuring Options/Features

• No rebalancing required. • No unused capacity fees. All structuring options/features subject to the terms of the Master Credit Facility Agreement.

Prepayment Availability

Flexible prepayment options available, including partially pre-payable debt, yield maintenance and declining prepayment premium.

Borrower Entity

A single purpose, bankruptcy-remote entity is required for each borrower in any general partner, managing member, or sole member that is an entity. Borrowers must have common sponsorship.

Timing of Rate Lock and Closing

The time frames for rate lock and closing are subject to the number of properties, property-specific issues, locations, complexity of ownership issues, complexity of closing or execution requirements, and the level of document negotiation. The minimum closing time frame for a new credit facility is 60 days from signed term sheet/loan application. For collateral additions and substitutions, the closing time frame is 30 days from signed application.

Origination Fees

The lenders origination fee must be approved by Fannie Mae and is determined on a case-by-case basis prior to application based on the size and makeup of the collateral pool for the initial advance. Fannie Mae charges a structuring fee of 10 basis points on each advance. Other fees (e.g. due diligence, substitution, release, assumption, and review) will apply.


STRUCTURED TRANSACTION EXPERTS

​Dan Brendes

SVP, Head of GSE Lending 301.202.3551 dan.brendes@berkadia.com

​ mily Schultz E Managing Director 301.202.3562 emily.schultz@berkadia.com

​ teven Long S SVP, Agency Structured Transactions 312.845.8563 steven.long@berkadia.com

​ avid Leopold D SVP, Head of Affordable Housing 301.202.3547 david.leopold@berkadia.com

​ iz Diamond L Managing Director, Head of Affordable Originations 415.646.7704 liz.diamond@berkadia.com

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