Fannie Mae Moderate Rehabilitation Supplemental Financing for Affordable Properties

Supplemental Loans for Moderately Rehabilitated Multifamily Affordable Housing (MAH) Developments Insured by Fannie Mae

Utilizing any of the amazing Fannie Mae supplemental-specific programs along with standard Fannie Mae apartment financing vehicles can yield pretty impressive results for multifamily investors. Fannie Mae seems to have a program for any specific scenario, and for investors who have recently finished rehabilitating a multifamily affordable housing property and need additional financing, the Fannie Mae Moderate Rehabilitation (Mod Rehab) Supplemental Mortgage Loan for Affordable Properties is exactly what the doctor ordered. With higher LTV allowances (up to 90% in some scenarios) and lower DSCR requirements (as little as 1.15x for some properties) than their conventional counterparts, these loans are perfectly tailored to benefit borrowers and investors without compromising the affordability aspect. Plus, like many Fannie Mae products, these loans are fully assumable with lender approval.

Sample Fannie Mae Terms For Moderate Rehabilitation Supplemental Loans for Affordable Properties 2021

Size: Varies

Terms: 5-30 years, must end at the same time as the original mortgage loan

Amortization: Up to 35 years

Interest Rates: Fixed and variable-rate loan options available

Maximum LTV: LTV of up to 85% (varies based on specific property type, and may be up to 90% for earn-outs and other, specific situations)

Minimum DSCR: As low as 1.15x (depending on specific property type)

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

Rehab Requirements: Property improvements must average at least $8,000/unit, and at least 60% of the budget should be allocated to improving interior units

Eligible Properties:

  • Must already have an original Fannie Mae mortgage for moderate rehabilitation
  • Fannie Mae must be the only debt-holder on the property
  • The lender must be a servicer of the original Fannie Mae mortgage loan


  • Fast underwriting and approval process
  • Competitive interest rates
  • Loans are non-recourse
  • 30-180 day rate locks (streamlined rate locks also available)
  • Lower cost than refinancing
  • Not subject to Fannie Mae's "one supplemental loan" rule
  • No waiting period can be originated within 36 months of the original moderate rehabilitation loan


  • Requires third-party reports including a property condition assessment and a Phase I Environmental Assessment (may not be required in certain circumstances)
  • Fannie Mae must be the only debt-holder on the property