Fannie Mae MBS as Tax-Exempt Bond Collateral (M.TEB)
For properties with LIHTCs, 80-20s, and the refunding of existing bonds, M.TEB execution allows LTVs of up to 90% and incredibly competitive interest rates.
Fannie Mae-Issued Taxable and Tax-Exempt Bonds for Financing the Rehabilitation of Affordable Multifamily Developments
Financing the rehabilitation of Multifamily Affordable Housing (MAH) properties usually leaves investors in need of more than the typical Fannie Mae Apartment loans. For many investors, the Fannie Mae MBS as Tax-Exempt Bond Collateral (M.TEB) is becoming an increasingly popular option. This financing vehicle allows for incredibly attractive LTV allowances of up to 90% and interest-only loan options, making it a flexible and affordable option for many investors. Additionally, M.TEB execution is available for both existing bond refunding and new bond issues for properties using 4% Low-Income Housing Tax Credits (LIHTCs) and even 80-20s (deals in which 20% of the property is set aside for low-income residents).
2022 Sample Fannie Mae Terms For MBS as Tax-Exempt Bond Collateral (M.TEB)
Size: No minimum or maximum loan size
Terms: 10-30 years
Amortization: Up to 35 years
Interest Rates: Fixed, variable-rate, and interest-only loan options available
Maximum LTV: Up to 90%
Minimum DSCR: 1.00x for Structured ARM, 1.15x for fixed-rate
Prepayment Penalty: Yield maintenance and declining prepayment premium options available
Eligible Properties:
- 4% LIHTC Properties
- 80-20s (deals in which 20% of the property is set aside for low-income residents)
- Refunding of existing bonds
- Competitive interest rates (typically 0.20-0.25% better pricing than regular bond credit enhancement)
- Up to 90% LTV allowance
- Up to 35-year amortization
- Interest-only options
- Flexible structure and certainty of execution
- Wide investor base
- Tax-exempt or taxable interest allowed
Advantages: