The hybrid ARM features loan amounts of up to $3 million or $5 million, depending on the market and number of units
Fannie Mae has selected Hunt Mortgage Group to offer its newly enhanced hybrid adjustable-rate mortgage (ARM) for small loans.
The hybrid ARM is a flexible financing tool that offers significant proceeds and various loan term options to provide liquidity to support the small-loans market. The product is for conventional small mortgage loans and manufactured-housing communities.
With options for a fixed rate in the first five, seven, or 10 years, the hybrid ARM is fully amortizing and automatically converts to an ARM for the rest of the loan term without a balloon payment at maturity. The product features loan amounts of up to $3 million or $5 million, depending on the market and number of units.
The initial fixed-rate terms are followed by adjustable rate terms of 25, 23, or 20 years. The 30-year loan has the six-month LIBOR as its index during the adjustable rate term, while the margin is 0.80% in addition to a guaranty fee and servicing fee.
"This exciting newly enhanced product offers commercial small loan borrowers the full flexibility and certainty of execution enjoyed under Fannie Mae's DUS model," said Rick Warren, senior managing director at Hunt Mortgage Group. "The program offers small-loan borrowers flexible, long-term financing with attractive prepayment options and competitive pricing."
Related stories:
Hunt Mortgage Group adds SVP to affordable housing group
Enhanced ARM option announced for small-loan multifamily borrowers
