Fannie Mae’s New Sponsor-Dedicated Workforce (SDW) Housing Product Initiative
As part of its focus on mission-driven lending, Fannie Mae recently introduced a new loan product designed to expand affordability and increase accessibility in communities across the country. The government-sponsored agency’s new Sponsor-Dedicated Workforce (SDW) Housing product provides financing for the creation and preservation of affordable workforce housing in underserved communities without the necessity of government subsidy.
SDW: An Attractive Opportunity for Affordable Housing
SDW provides life-of-loan financing for affordable properties. It is designed to support socially responsible housing providers and empowers conventional borrowers to create or preserve ongoing affordability for U.S. renters.
Fannie Mae’s new product initiative offers several key benefits, including:
- Competitive pricing
- Lower interest rate
- Flexible loan terms
- Straightforward rent monitoring process without third-party compliance requirements
Borrowers can also choose to add on savings from other Fannie Mae Multifamily loan programs, including:
Who Is Eligible for an SDW Loan?
SDW is specifically designed for financing existing, stabilized properties and includes rent restrictions. A minimum of 20% of units must be affordable at up to 80% area median income (AMI), or in certain metros up to 100%-120% AMI. The portion of the property’s units included in the SDW program must have workforce housing rents held for the life of the loan.
The rent-restricted units must be proportionally distributed according to the total number of each bedroom size available across the mortgaged property. Rent affordability levels must be identified and in place by the mortgage loan origination date. The property must also be compliant with rent affordability levels within 12 months of the mortgage loan origination date.
Both aimed at tackling affordability barriers, SDW and Sponsor-Initiated Affordability (SIA) Workforce Housing have primary differences. SDW requires only rent preservation, while SIA requires rent and income preservation. However, both are life-of-loan products.
The SDW product does not have a minimum or maximum loan amount. Terms range from five to 30 years. Fixed- and variable-rate options are available. Structured ARM loans with less than a two-year lockout period are not eligible for SDW pricing incentives. Supplemental mortgage loans are available.
Partner with Arbor on Workforce Housing Development
Arbor is committed to removing the barriers to affordable housing in our communities. Working together with our partner, Fannie Mae, we help conventional borrowers create and/or preserve ongoing affordability for renters in the U.S. with flexible SDW financing and life-of-loan servicing.
A nationwide real estate investment trust and direct lender, Arbor provides loan origination and servicing for multifamily, affordable housing, and other diverse commercial real estate assets. We have been a Top 10 Fannie Mae DUS® Multifamily Lender for 17 consecutive years.
Our strong team of commercial real estate experts has decades of experience guiding clients through the complexities of multifamily borrowing. Contact one of Arbor’s loan originators today to learn more about the SDW Housing Product Initiative from Fannie Mae.
Interested in the multifamily real estate investment market? Contact Arbor today to learn about our array of multifamily and single-family rental financing options and view our other market research and multifamily posts in our research section.