Freddie Mac Small Balance Multifamily Loan

Freddie Mac Small Balance Multifamily Loan

Nationwide

3 to 4.75% Fixed

Financing for acquisition or refinance of small balance loans, offering partial-term and full-term interest-only

Streamlined processes loan documents, underwriting, closing and funding

Loan Amount

• Up to $7.5 million 
• $6 million to $7.5 million deals in small markets subject to Freddie’s approval 

Unit Limitations:

• Loan ≤$6 million no max unit limitations
• Loan >$6 million and ≤$7.5 million up to 100 units (exceptions permitted above 100 units)

Loan Purpose: Acquisition or refinance

Loan Terms: 20-year hybrid ARM with initial 5, 7, or 10-year fixed rate period

Amortization: up to 30 years

Partial-term interest-only; full-term interest only may be available

Declining Prepayment schedules and yield maintenance for all loan types – please refer to the chart below

Eligible Borrowers up to $6 million: limited partnerships, LLCs, Single Asset Entities (SAE), Special Purpose Entities (SPE); $6 million to $7.5 million: Single Asset Entities

Non-recourse standard carve-out provisions required

Net Worth and Liquidity

• Net worth: Equal to loan amount (cumulative net worth for key principals)
• Liquidity: Equal to 10% of loan amount (cumulative liquidity for key principals)

Eligible Properties: Multifamily housing with five+ residential units including:

• Properties with tax abatements
• Seniors housing with no resident services
• Properties with space for certain commercial (non-residential) uses
• Properties with tenant-based housing vouchers (section 8)
• Low-Income Housing tax Credit (LIHTC) properties with Land Use Restriction Agreements (LURAs) in final 24 months of initial compliance period or extended use period (investor must have exited)
• Properties with local rent subsidies for 10% or fewer units where subsidy not contingent on owner’s initial or ongoing certification of tenant eligibility
• Properties with regulatory agreements that impose income and/or rent restrictions provided all related funds disbursed

Occupancy: Property stabilized at 90% physical occupancy for trailing 3-month average prior to Underwriting or 85% for trailing 3 month average prior to Underwriting under certain scenarios

Escrows

• Real estate tax escrow deferred for deals with LTV ratio of 65% or less
• Insurance escrow deferred
• Replacement reserve escrow deferred

Rate Lock: 60- to 180-day rate lock period available

Fixed-Rate / Hybrid ARM LTV Ratios and Amortizing DCRs: 

	Minimum Amortizing DCR**	Maximum LTV
Top SBL Markets	1.20x*	80%
Standard SBL Markets	1.25x	80%
Small SBL Markets	1.30x	70%*
Very Small SBL Markets	1.40x	70%*

*Maximum 75% LTV for Acquisitions

**Minimum 1.25x Amortizing DCR for loans $6 Million+, Top Markets

Ask Eagle to determine your  market tier.

Full-Term IO or Full-Term IO during Fixed-Rate Period of Hybrid ARM

	Add to the Baseline	Maximum LTV
Top and Standard SBL Markets	0.15x	65%
Small and Very Small SBL Markets	0.10x	60%

Prepayment Provisions Fixed Rate:

	5-Year	7-Year	10-Year
Option 1	54321	5544321	5544332211
Option 2	32111	3322111	3332221111
Option 3	(YM or 1%)	(YM or 1%)	(YM or 1%)
Option 4	31000	N/A	N/A

Hybrid ARMs:

	5 + 15 Year	7 + 13 Year	10 + 10 Year
Option 1	5432,1%	5544321,1%	5544332211,1%
Option 2	32111,1%	3322111,1%	3332221111,1%
Option 3	(YM or 1%), 1%	(YM or 1%), 1%	(YM or 1%), 1%
Option 4	31000,0%	N/A	N/A

• Fixed rate yield maintenance (YM) – Higher of YM or 1% of unpaid principal balance during YM period
• Hybrid ARM yield maintenance (YM) – Higher of YM or 1% of unpaid principal balance during fixed rate period. Prepayment during the floating rate period is 1%

Note: Hybrid ARM consists of an initial fixed-rate period followed by a floating-rate period. During floating-rate period the coupon is based on 6 month LIBOR +325 margin. Every six months, the floating rate may increase or decrease by 1%, never be less than a floor of the initial fixed interest rate and never be greater than a maximum lifetime cap of the initial fixed interest rate +5%.Let’s move

Let’s Move your project forward…

Please click blue Freddie MAC Small Balance Multifamily Loan Link for FREE PRE APPROVAL LOI within 24 business hours. With a few clicks of your mouse it TAKES LESS THAN 3 MINUTES TO GET STARTED NOW. No upfront fees, credit cards, Social Security Numbers or credit checks required.