Multi Family Loans (5 units or more)

A home is important for anyone as it serves as more than just as a shelter; it also is an investment for many. Today, there are still many American families that cannot afford their own homes or simple housing for that matter, and this is where multi family loans play an important part. Provided by Fannie Mae, multi family loans are basically conventional mortgage loans on multi-family rental apartments. When we speak of conventional mortgages here, we are talking about loans that are based on the collateral and the credit of the borrower.

Multi family loans are a great option for those who do not want the same restrictions as Conduit loans. These loans offer flexible, customized and economical financing for apartments, co-operative housing and condominiums with 5 units or more. Fannie Mae however, does not lend the money directly to borrowers, but rather it lends the money through a nationwide network of lenders that offer a wide array of financing options to individuals. From low to moderate and middle income families, multi family loans let people buy affordable housing of their own, with easy repayment plans.

Fannie Mae was initially known as the Federal National Mortgage Association and was founded in 1938. However, in the 60’s it was privatized to become a federally chartered institution that serves as a semi-government agency. Owned by shareholders, Fannie Mae’s main objective is to give Americans the chance to buy their own homes through Delegated Underwriting and Servicing lenders and lending partners. Among aims of Fannie Mae is to supply multifamily loans with the best rates and prices.

There are different types of multi family loans. If for example the multi family property has four or less than four units, it is considered a residential loan, while five or more than five units are considered commercial multi family loans. The commercial loans have separate terms and conditions from residential loans as they factor in more variables into their rates. Therefore, a loan taken on a five unit or more apartment or house will normally come from a lender of commercial properties.