Fannie Mae Cooperative Apartment Financing

Cooperative Apartment Building Financing insured by Fannie Mae

Cooperative buildings, in which the residents collectively own the property together, have been known to be notoriously difficult to finance. Fannie Mae multifamily came up with a possible solution to this with their Fannie Mae Cooperative Apartment Loan program. With funding that starts between $750,000 and $1 million, the program offers both fixed and variable rate options with terms between 5 - 30 years.

Just like its sibling, the Fannie Mae DUS Loan, the Fannie Mae Cooperative Apartment Loan offers competitive interest rates, is mainly non-recourse, and is fully assumable (with lender approval.) However, due to the higher risk of cooperative apartments, these loans have a somewhat lower maximum LTV allowance of 55%.

Sample Fannie Mae Terms For Multifamily Cooperative Apartment Loans

Size: $750,000 to $1 million minimum, no maximum

Terms: 5-30 year fixed-rate loan terms available

Amortization: Up to 30 years

MaximumLTV: 55%

MinimumDSCR: 1.00x (actual operations), 1.55 (market rents)

Recourse: Most loans are non-recourse with standard “bad boy” carve-outs

Prepayment Options: 1% or yield maintenance, whichever is greater

Commercial Limits: Some commercial space is allowed, but can vary based on the specific project

Eligible Properties:

  • Must typically be managed by a property management firm with experience managing similar properties
  • The cooperative organization must charge enough maintenance fees to achieve a balanced budget
  • The cooperative must maintain a reserve balance of at least 10% of the property's annual maintenance fees
  • In general. the Sponsor cannot own more than 40% of the property's units


  • Competitive interest rates
  • Most loans are non-recourse
  • Supplemental loans are allowed
  • 30- 180 day rate locks available after commitment (extended rate locks also available)
  • Loans are fully assumable with lender approval


  • Requires replacement reserves ($250 per unit minimum)
  • Typically requires 85% physical occupancy and 70% economic occupancy 90 days before closing
  • Requires third-party reports including an Appraisal, Property Condition Assessment, and a Phase I Environmental Assessment
  • Requires a $12,500 application deposit and a $3,000 processing fee