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Fannie Mae Hybrid Adjustable Rate Mortgage FAQs

If you are interested in a Fannie Mae Hybrid Adjustable Rate Mortgage, it's important to understand your options. Below you will find frequently asked questions concerning Hybrid Adjustable Rate Mortgages to help you with your lending decision. See below to find out about terms and amortization, top benefits, eligible properties, and more. 

Fannie Mae Hybrid Adjustable Rate Mortgage Questions

Questions & Answers

What are the available terms and amortization?

The term available is 5-, 7- or 10-year fixed rate term followed by 25-, 23-, or 20-year adjustable rate term with an amortization of up to 30 years

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What is the maximum LTV?

The maximum loan-to-value is up to 80%

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What is the minimum Debt Service Coverage?

1.25x Actual Amortizing DSCR, if the Hybrid ARM is secured by a property located outside of a strong market, the maximum loan amount must be determined by using a minimum 1.0x DSCR sufficient to cover a debt service constant that equals the sum of the interest rate during the fixed rate term; plus 2.5%

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Is this loan non-recourse?

Yes, this is a non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy

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What are the benefits?

  • Competitive interest rates
  • Low cost of execution
  • Delegated Model provides Lenders and Borrowers speed and certainty of execution
  • No Underwriting Floor or Fixed Rate test in Strong Markets
  • Flexible prepayment terms

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What property types are eligible?

  • Properties with loan amount $3 million or less in Nationwide Markets or $5 million or less in Eligible MSAs
  • Properties with 5-50 units and loan amount $5 million or less, regardless of location
  • Existing, stabilized multifamily properties, including Conventional properties and Manufactured Housing Communities
  • Loans for acquisition or refinance

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