The lender with which I'm employed, Hunt Mortgage Group, is an approved Small Balance Loan Seller/Servicer; one of only eleven lenders licensed to offer Freddie Mac Small Balance Loans and one of only a few selected to initially launch the program in 2014.
- Six fixed-rate and hybrid ARM loan options from which to choose
- Non-recourse
- Interest-only options available
- Up to 80% LTV in certain markets
- 30-year amortization
- Declining / step-down prepayment options
- Coupon pricing
- Certainty of execution
- Your servicing partner for the life of your loan
Loan Amount: $1 million to $6 million in all markets nationwide -- up to $7.5 million for properties with 75 units or less in certain markets
Loan Purpose: Acquisition or refinance, including cash-out refinance
Loan Terms:
20-year hybrid ARM with initial 5, 7 or 10-year fixed-rate period
5, 7 and 10-year fixed-rate terms
Amortization: 30 years
Interest-Only: Partial term interest only; full term interest-only available under certain circumstances.
1-3 years interest-only is available
Full-term interest-only is available for lower leverage deals - 65% LTV or less in Top and Standard markets / 60% LTV or less in Small and Very Small markets
Eligible Borrowers/ Borrowing Entities:
Up to $6 million - Individuals who are US citizens; limited partnerships; limited liability companies; Single Asset Entities; Special Purpose Entities; tenancy in common with up to five unrelated members; and Trusts (irrevocable trusts and revocable trusts with an individual guarantor)
Between $6 million and $7.5 million – Single Asset Entities
Recourse: Non-recourse with standard carve-out provisions required
Subordinate debt: Not Permitted
Net Worth and Liquidity:
Post-closing liquidity equal to 9 months of principal and interest payments
Net worth equal to the loan amount
Eligible Properties: Multifamily housing with five residential units or more, including:
Cooperatives in the five boroughs of New York City and Long Island
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
LIHTC properties with LURAs that are in either the final 24 months of the initial compliance period or the extended use period (investor must have exited)
Properties with local rent subsidies for 10% or fewer units where the subsidy is not contingent on the owner’s initial or ongoing certification of tenant eligibility
Properties with certain regulatory agreements that impose income and/or rent restrictions, provided all related funds have been disbursed
Ineligible Properties:
Seniors housing with resident services
Student housing (greater than 50% concentration)
Military housing (greater than 50% concentration)
Properties with project-based housing assistance payment contracts (including project-based Section 8 HAP contracts)
LIHTC properties with LURAs in compliance years 1 through 12
Historic Tax Credit (HTC) properties with a master lease structure
Tax exempt bonds Interest Reduction Payments (IRPs)
Occupancy: Property must be stabilized at:
90% physical occupancy for the trailing 3-month average prior to Underwriting or
85% physical occupancy for the trailing 3-month average prior to Underwriting if the subject property has any of the following characteristics:
i. Property is recently built or renovated in a Top Market
ii. Property is <30 units
iii. Acquisition with all of the following:
Sophisticated acquiring sponsorship and management relative to current ownership
Appraised occupancy and/or rents materially higher than subject’s current operations
Subject property has not experienced volatile historical occupancy swings
No history of serious crime at the subject property
Escrows:
Real estate tax escrow deferred for deals with an LTV ratio of 65% or less
Insurance escrow deferred
Replacement reserve escrow deferred
Fixed-Rate/Hybrid ARM LTV Ratios and Amortizing DCRs: LTV and DCR requirements vary based on the market tier in which the property resides: Top Market, Standard Market, Small Market or Very Small Market. To determine market tier, please submit inquiry below.
Top SBL Markets
Minimum Amortizing DCR = 1.20x
Maximum LTV = 80%
Standard SBL Markets
Minimum Amortizing DCR = 1.25x
Maximum LTV = 80%
Small SBL Markets
Minimum Amortizing DCR = 1.30x
Maximum LTV = 70% for refinance / 75% for acquisitions
Very Small SBL Markets
Minimum Amortizing DCR = 1.40x
Maximum LTV = 70% for refinance / 75% for acquisitions
-- Minimum 1.25x Amortizing DCR for loans greater than $6 million
Full Term Interest-Only Adjustments:
Prepayment: Declining / step-down and yield maintenance prepayment schedules are available