Fannie Mae Student Housing Financing

Multifamily Loans for Student Housing Developments insured by Fannie Mae

When it comes to multifamily markets, student housing tends to consistently be in high demand. If you're an investor looking to capitalize on that demand, a Fannie Mae Student Housing Loan could be a perfect financing solution. Designed for properties with a student population concentration of 80% or higher and boasting the most common perks of many Fannie Mae multifamily loan options, Fannie Mae student housing loans offer competitive interest rates, are mainly non-recourse, and are fully assumable (with lender approval). Starting at $1 million and with a maximum LTV allowance of 75%, these loans have been known to be a little complex to obtain -- without the right help.

Sample Fannie Mae Student Housing Loan Terms

Size: $1 million+ (no set maximum)

Terms: 5- 30 year fixed and variable loan terms available, interest-only terms may also be available in certain situations

Use: Acquisitions or refinances

Amortization: Up to 30 years

MaximumLTV: 75%, 70% for cash-out refinances (when available)

MinimumDSCR: 1.30x for fixed-rate loans, 1.05x for variable-rate loans (subject to fixed-rate test)

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

Prepayment Options: Yield maintenance or 1% prepayment penalty, whichever is larger

Eligible Properties:

  • 40% or more units must be leased to undergraduate or graduate students
  • Must not be located on University-owned land (with the exception of Dedicated Student Housing Properties)

Eligible Borrowers: Must typically be a Single Purpose Entity (SPE), though some lenders allow general or limited partnerships, limited liability companies, corporations, trusts, or individuals.

Timing: Loans typically close 45-60 days after initial application

Dedicated Student Housing Properties:

  • Must have at least 80% of the units leased to graduate or undergraduate students
  • Need to be located near a college/university campus with at least 10,000 students enrolled, and at least 50% of those students enrolled full-time
  • Have at least 80% of leases with 12-month terms (guaranteed by parents), or leased by student tenants with the financial capability to pay their lease
  • Needs to be within 2 miles of campus or a college/university transportation line
  • Must be operated for one school year and be in its second year of operations
  • Can be located on university-owned land (provided key principal has at least 5 years of experience and "operates at least one other Dedicated Student Housing Property" on college or university-owned land)


  • Very competitive interest rates
  • Up to 75% LTV
  • Most loans are non-recourse
  • Interest-only loans are permitted in some situations
  • Supplemental loans allowed after 12 months
  • Loan underwriting may be based on a per bedroom rate, leading to a higher loan amount than for a comparable (non-student housing) multifamily property
  • 30-90 day rate locks available after commitment, with 6-month extended rate locks also available before closing (1 year-rate locks available in some cases)
  • Loans are fully assumable (with lender approval)


  • Requires third-party reports, including an Appraisal, Phase I Environmental Assessment, and Physical Needs Assessment. May also include reports such as Flood Inspections, Property Surveys, and Site Inspections.
  • Typical lender closing costs are about $12,500 (including third-party reports)
  • Also typically requires about $7,500- $12,500 in legal costs
  • Replacement reserves of $250/unit per year are required
  • Student Housing Properties require at least 40% student occupancy (may be up to 80% undergraduate-only occupancy for some lenders), and often also require a minimum overall tenant occupancy of 90%
  • Owner/operators must be U.S. citizens, with liquid assets that can cover at least 6 months of mortgage payments after closing
  • Owner/operators must have a proven track record in the student housing industry
  • Student tenants must typically sign 12-month leases guaranteed by parents or must be currently employed and have good credit
  • Typically requires a 2% rate lock deposit paid at rate lock (refunded after Fannie Mae purchases the loan, usually about 30 days post-closing)