Fannie Mae Hybrid ARM Financing

Fannie Mae Adjustable Rate Loans for Apartment Buildings and Other Multifamily Properties

Fannie Mae Hybrid ARM Loans

For any multifamily developer or investor looking for hybrid ARM financing for their property, Fannie Mae's Hybrid ARM Loan will provide the funding they need. Fannie Mae Hybrid ARM Loans come standard with 30-year terms split into 5, 7, or 10-year fixed-rate period options, after which the loan converts to an adjustable interest rate for the remainder of the term length. These loans have an LTV allowance of up to 80%, are non-recourse, and fully assumable with lender approval. And, unlike many other kinds of Fannie Mae loans, Hybrid ARMs don't have hefty application and underwriting fees.

Sample Fannie Mae Terms For Hybrid ARM Multifamily Loans

Size: Varies, typically $3 million maximum in smaller markets and $5 million maximum in larger markets

Terms: 30 years, with a 5, 7, or 10-year fixed-rate term, which then converts to an adjustable-rate for the rest of the loan

Amortization: Up to 30 years

Interest Rates: Adjustable-rate term based on 6-month LIBOR rate

Interest Rate Cap: Adjustable interest rate cannot exceed the initial interest rate by more than 5%, the rate cannot be adjusted more than 1% up or down during each adjustment period

MaximumLTV: Up to 80%

MinimumDSCR: 1.25x (may vary based on market location)

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

Prepayment Options: Yield maintenance or declining prepayment premiums during fixed-rate term, no prepayment fees during the adjustable-rate term

Eligible Properties:

  • Properties must have between 5 and 50 units
  • Properties must be stabilized and can include manufactured housing communities
  • For acquisitions or refinances, the loan must be the first lien


  • Competitive interest rates
  • Less fees than comparable Fannie Mae loans
  • Loans are non-recourse
  • Flexible prepayment options
  • 30- 180 day rate locks available (streamlined and early rate locks also available)


  • Requires third-party reports including a property appraisal, property condition assessment, and a Phase I Environmental Assessment
  • Replacement reserves are required
  • Supplemental financing is not available