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GENERAL: 800.ARBOR.10

FREDDIE MAC®

Small Balance Loan (SBL) Coop Program

Financing for the refinance of small balance loans (SBLs) cooperatives (co-ops), providing liquidity, stability, and certainty of execution to the affordable rental housing market nationwide.

Loan Amount $1,000,000 to $7,500,000 million.
Loan Terms 10 years.
Amortization Up to 30 years.
Interest Only 3 years at no cost, full-term interest-only may be available.
Minimum DSCR 1.70x as rental; 1.05x as cooperative.
Maximum LTV 50% for market rate rental. 40% for cooperative.
Rate Structure 10 years fixed-rate.
Eligible Properties Multifamily housing with seven residential units or more.
Ineligible Properties Timeshares, resorts, hotels, rental pools and student housing co-ops, seniors housing, student housing, and military housing.
Eligible Borrower Single Asset Cooperative Corporations only.
Occupancy Including both investor and sold units, 85% physical occupancy and 80% economic for 90 days prior to commitment date.
Market The five boroughs of New York City and Long Island.
Tax & Insurance Escrows Real Estate taxes, Insurance escrow and Replacement reserve escrow deferred.
Replacement Reserves Underwritten based on the property condition per SBL Physical Risk Report (Form 1104).
Recourse Non-recourse with standard exceptions for fraud and misrepresentation.
Commercial Space No more than 25% of effective gross income and no more than 25% of property’s total square footage. Final determination by Freddie Mac.
Required Reports Appraisal, Property Condition Assessment, Phase I Environmental, Zoning, Insect and Flood.
Investor/Sponsor Units The total number of investor or sponsor units is limited to 25% of the total number of units. Any single investor/sponsor owning more than 20% of the units in the Co-op must submit financial statements.
Physical Condition
  • Stable operating properties only
  • Critical Repairs: must address prior to closing
  • All other repairs: must address within 12 months post-closing and escrowed at 100% if they exceed 5% of loan amount
Prepayment Declining schedules and yield maintenance available for all loan types.
Cash Reserves The Co-op’s reserves must be at least 20% of the annual maintenance fee collection.
Maintenance Charges The debt service resulting from the proposed loan must not require a maintenance fee charge increase of more than 20%.
Subordinate Financing Unsecured line of credit financing of up to 15% of the UPB allowed from a nationally charted bank for the purposes of repairs and maintenance of improvements.
Pricing Below top-tier market per pricing grid.
Rate Lock Standard delivery 12 days. Early rate-lock 2-3 days.
Application Deposit $12,500. Covers all estimated underwriting costs (including application fee).
Legal/Closing Fee Arbor’s Counsel Fee to be determined at application.
Good Faith Deposit 1% of loan amount due at rate lock.

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