Supplemental Mortgage Loans

Learn about our subordinate financing options for multifamily properties with an existing Fannie Mae Mortgage Loan.

Term Sheet (PDF)


  • Lower cost than refinancing
  • Access to additional capital
  • Flexible loan terms
  • Certainty of execution
  • Speed in processing and underwriting


  • Stabilized Conventional Properties, Multifamily Affordable Housing Properties, Seniors Housing Properties, Student Housing Properties, and Manufactured Housing Communities
  • Subordinate to Pre-Existing Fannie Mae fixed rate or variable rate Mortgage Loans
  • Bond Credit Enhancement Mortgage Loans are eligible for Supplemental Mortgage Loans with prior approval of Fannie Mae
  • Lender must be the Servicer of the existing Fannie Mae Mortgage Loan
  • Fannie Mae must be the only lien holder on the Property.


  • A minimum of 5 years and a maximum of 30 years.
  • May be either coterminous or non-coterminous with the Maturity Date of the Senior Mortgage Loan.

Tier Dropping

Permitted if the Pre-Existing Mortgage Loan was designated as eligible for a Tier Dropping Supplemental Mortgage Loan and the combined UPB of the Pre-Existing Mortgage Loan and the Supplemental Mortgage Loan meet the minimum DSCR and maximum LTV requirements for a Tier 2 Mortgage Loan.


Up to 30 years.

Interest Rate

  • Fixed rate, if the Pre-Existing Mortgage Loan has a fixed rate; or
  • Variable rate, if the Pre-Existing Mortgage Loan has a fixed rate option.

Maximum LTV

As high as 70%, depending upon asset class and use of proceeds.

Minimum DSCR

As low as 1.30x, depending upon asset class and use of proceeds.

Supplemental Loan Timing

Supplemental Mortgage Loans are available 12 months after the closing of the last Pre-Existing Mortgage Loan.

Prepayment Availability

  • Supplemental Mortgage Loans may be voluntarily prepaid upon payment of yield maintenance for fixed rate loans and graduated prepayment for variable rate loans.
  • The Prepayment Premium Period End Date of a Supplemental Mortgage Loan need not coincide with the Prepayment Premium Period End Date of the senior Mortgage Loan.

Rate Lock

30- to 180-day commitments. Borrower may Rate Lock using the Streamlined Rate Lock option. 


30/360 and Actual/360.


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


Replacement Reserve, tax and insurance escrows are typically required, based on the resulting Underwriting Tier of the combined Pre-Existing Mortgage Loans and Supplemental Mortgage Loan.

Third-Party Reports

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


Supplemental Mortgage Loans are typically assumable with a concurrent assumption of the senior Mortgage Loans, subject to review and approval of the new borrower’s financial capacity and experience.