How to determine if you qualify for a Fannie Mae commercial mortgage

Fannie Mae headquarters

Fannie Mae is a government-sponsored enterprise that provides commercial real estate loans for multifamily properties and apartment buildings with five or more individual units. Fannie Mae Multifamily loans have the advantage of offering long fixed terms, 30-year amortization and very competetive interest rates. Fannie Mae Multifamily loans have fairly stringent guidelines that a borrower must meet.

Things You'll Need

• Personal financial statement
• Mortgage calculator
• Credit reports
• Schedule of real estate owned

Instructions

1. Look at your credit reports. You must have a minimum 680 FICO score from all three credit bureaus to qualify.

2. Examine your schedule of real estate to see if you have sufficient investment property ownership/management experience.

   If this is a refinance transaction and you have owned the property for at least two years then you meet this requirement.

   If this is a purchase transaction you must currently own or have owned and/or managed for at least two years a similar or larger sized property in the same geographic market as the one you want to purchase to meet this requirement.

3. Look at your personal financial statement to determine if you have enough liquid assets in reserve.

   For either a purchase or a refinance transaction you will need to have a minimum amount of liquid assets left in reserves after the loan closes that is equal to nine months of principal and interest mortgage payments.

   Use your mortgage calculator to determine your monthly payment, then multiply that payment by nine. The resulting figure will be the minimum amount of reserves required.

4. Check your personal financial statement to determine if you have a net worth that is equal to or greater than the desired loan amount.

   Add up all of your assets to get a total figure.

   Add up the debt owed on all your liabilities and deduct that figure from your total assets, and the resulting figure is your net worth.

Resources

• eFannieMae: MultiFamily Business