| Pricing - Fannie Mae offers very competitive pricing on most quality assets in any number of markets, which are well inside current CMBS pricing on good quality assets (pricing dependent upon on structure: LTV, DSC, I/O, Risk, etc.). |
| Supplemental Loans - Of great importance to most of our clients is the structural benefit that with Fannie Mae, after the first anniversary of the loan, the borrower can obtain supplemental financing (based upon improved property net operating income) on top of the original financing (permitted two times over the life of the loan and a third time if the property is sold and the loan is assumed) that is priced at the prevailing Fannie rates for first liens. |
| Yield Maintenance Option - While on the conduit side there might be a cost to convert to Yield Maintenance, there is no cost to convert to Yield Maintenance with Fannie Mae…in fact, Fannie Mae quotes are given assuming the prepayment option is Yield Maintenance. The typical Yield Maintenance term is six months less than the loan term, after which the loan carries a 1% prepayment penalty until the last 90 days in which the loan is prepayable at par. |
| Prepayment Flexibility - In addition to Yield Maintenance, Fannie Mae also offers the following prepayment structures: (1) graduated prepayments that can be structured in a variety of ways to include a declining prepayment penalty over the term and in some cases a shorter initial lockout period; and (2) although Fannie Mae does not structure many loans with defeasance, they do have a very borrower-friendly defeasance product where a single Fannie Mae debt instrument can be purchased to defease a loan. |
| Extended Rate Lock - While 30-day rate locks are offered free of charge, Fannie Mae also offers "Extended Rate Lock" options varying from 45 days to 12 months with other options in-between (60–90 days, 6 months, and 9 months at various attractive pricing levels). |
| Shorter Term Options - Fannie Mae loans are priced very competitively for 5 and 7 year fixed-rate options. Pricing for these shorter term programs have no "add-ons" as you find in many CMBS programs. Combining shorter term options with prepayment flexibility creates some very attractive options. |
| Portfolio Options - Fannie Mae is very creative in structuring and pricing large portfolios. Floating-rate, fixed-rate, asset substitution, prepayment flexibility and competitive pricing makes Fannie Mae a great alternative for larger transactions. |
| Single Asset Substitution - Fannie Mae also has a "Single Asset Substitution" option allowing a borrower the flexibility of a one-time option to release the lien on the original mortgage property (via a sale or exchange) and replace it with another asset while keeping the original favorable financing in place. |
