Freddie Mac Multifamily Loans :: $1 million to $6 million

More choices, simpler process, and a higher certainty of execution with the ability to lock rate at application.

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Loan Amount: $1 million to $6 million in all markets nationwide -- up to $7.5 million for properties with 100 units or less in certain markets (some exceptions permitted for proprieties with more than 100 units)

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.

• Partial term 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

Full Term Interest-Only Adjustments: Full-Term IO or Full-Term IO during Fixed-Rate Period of Hybrid ARM

• Top and Standard Markets: Add 0.15x to DSCR // Maximum LTV = 65%

• Small and Very Small Markets: Add 0.10x to DSCR // Maximum LTV = 60%

To determine your market tier (i.e, Top, Standard, Small or Very Small), click on button below

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

Prepayment: Declining / step-down and yield maintenance prepayment schedules are available