When might someone assume my Fannie Mae Small Balance Loan?

[Ron K.]

Hi all,

I refinanced a multifamily in September of 2019 with a Fannie Mae Small Balance Loan.  All along, it looked like the rate would be about 3.75%, but I was told I couldn't lock. Then right at closing, I was told, rates went down too far, so they changed a grid or something, and my rate was 4.8%.  I bought it down to 4.6%, but at that point, it was too late (or so I thought) to back out, since I had so many non-refundable costs, and I need the equity out for another purchase.

Looking at it now, because of the Yield Maintenance, I can't sell or refinance until my 12 year term is over.  My current YM penalty is about $400,000 !   I learned many lessons from this, but what's done is done.  It's a fine property, and cash flow is improving year after year, but I would love to sell in a year or two and getting better use of the equity (since I won't be able to refinance).

I'm trying to understand at what conditions someone would assume my loan..

Would I need the treasury to go up another point or so, for Multifamily rates, in a 2nd tier marker to be above 4.6%?

With appreciation, at the price I would want to sell, the loan would only be 55-60 LTV, so the buyer would need another loan anyway.

Just trying to see if people actually do assume Fannie Mae loans in these types of situations so I could see if there is some point, I'd be able to my equity out of the property.

Thanks,

Ron