Mod Rehab Supplemental Mortgage Loan

Learn about our subordinate financing options for multifamily properties that have completed moderate rehabilitation.

Competitive Advantage (PDF)    Term Sheet (PDF)



  • The Mod Rehab Supplemental Mortgage Loan is excluded from the one Supplemental Mortgage Loan rule
  • Loan sizing is comparable to the first lien mortgage loan
  • Lower pricing than generally available on other Supplemental Mortgage Loans
  • Lower cost than refinancing
  • Access to additional capital
  • Certainty of execution
  • Speed in processing and underwriting


  • Stabilized Conventional, Multifamily Affordable Housing, Seniors Housing, and Student Housing Properties, and Manufactured Housing Communities
  • First Mortgage Loan identified as Moderate Rehabilitation
  • Existing Fannie Mae fixed-rate or adjustable-rate mortgage loans
  • Lender must be the servicer of the Fannie Mae Portfolio Mortgage Loan
  • Fannie Mae must be the only holder of debt secured by the Property


5-30 years; must be coterminous with the senior Mortgage Loan.


Up to 30 years.

Interest Rate

Fixed- and variable-rate options available.

Maximum LTV

As high as 75%, depending upon asset class and use of proceeds. May be higher for Multifamily Affordable Housing properties and assumptions.

Minimum DSCR

As low as 1.25x, depending upon asset class and use of proceeds. May be lower for Multifamily Affordable Housing properties.

Mod Rehab Supplemental Mortgage Loan Timing

Within 36 months of origination of the Mod Rehabilitation first lien mortgage loan. No one-year waiting period.

Rate Lock

30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option.


30/360 and Actual/360.


Non-recourse execution with standard carve-outs required for “bad acts” such as fraud and bankruptcy.


Replacement reserve, tax and insurance escrows are typically required, based on the resulting Tier of the combined Pre-Existing Mortgage Loan and Moderate Rehabilitation

Third-Party Reports

Standard third-party reports, including Phase I Environmental Site Assessment, and a Property Condition Assessment, may not be required if certain conditions are met.


Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience.


Permitted for fixed rate Moderate Rehab Supplemental Mortgage Loans.

Rehabilitation Requirements

Completed at least $8,000/unit of property improvements. As a best practice, at least 60% of renovation budget allocated to interior unit improvements.

Verification of Property Improvements

Lender must document all completed Rehabilitation Work and verify completion through a site inspection if the Rehabilitation Work was not performed pursuant to a Completion/Repair Agreement or a Rehabilitation Reserve Agreement.