FREDDIE MAC®
Floating-Rate
Arbor’s Floating Rate program is ideal for multifamily borrowers who want to take advantage of lower short-term rates with prepayment flexibility.
| Loan Amount | Generally $5 million to $100 million; however larger or smaller loan amounts are considered. |
| Loan Term | 5, 7 and 10 year terms. |
| Amortization | Up to 30 years. Interest-only options also available. |
| Minimum DSCR | 1.00 at the max note rate, floaters must also be sized to a fixed rate equivalent at a 1.25x |
| Maximum LTV | 7 year term or greater: 80%; 5 year term: 75%. |
| Rate Structure | Floating-rate option available; borrower must purchase an interest rate cap from a third party cap provider. |
| Eligible Properties | Multifamily. Cooperatives not allowed. |
| Eligible Borrower | Single Purpose Entity. |
| Tax & Insurance Escrows | Monthly deposits required. May be waived if certain criteria are met. |
| Replacement Reserves | May be waived if certain criteria are met. |
| Recourse | Non-recourse with standard exceptions for fraud and misrepresentation. |
| Commercial Space | No more than 40% of effective gross income and no more than 40% of property’s total square footage. |
| Required Reports | Appraisal, Properly Condition Assessment and Phase I Environmental, Zoning, Insect and Flood. |
| Prepayment | Four main pre-payment options available with no premium for final 90 days. |
| Assumable | Subject to approval and 1%. |
| Subordinate Financing | Not allowed. |
| Pricing | Tiered Pricing Matrix. More favorable terms available for higher DSC and lower LTV. |
| Rate Lock | Early rate-lock option available for varying durations, typically ranging from 60 to 120 days from rate-lock until Freddie Mac purchase; Sellers should consult with their regional Freddie Mac representative to determine eligibility. |
| Application Deposit | $26,500. Covers all estimated underwriting costs (including application fee). |
| Legal/Closing Fee | Arbor’s Counsel Fee to be determined at application. |
| Good Faith Deposit | 2% of loan if over $5,000,000 amount due at rate lock for early rate-lock transactions, but refundable post-closing or post-purchase of the loan by Freddie Mac. |
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