FREDDIE MAC®
Small Balance Loan Program
Arbor’s Freddie Mac Small Balance Loan program streamlines the entire loan process for multifamily acquisition and refinancing loans ranging from $1M to $7.5M.
Loan Amount |
$1 million – $7.5 million in all markets Note: Deals greater than $6 million and up to $7.5 million in Small and Very Small Markets may be permitted subject to Freddie Mac’s approval. |
Markets | Nationwide |
Unit Limitations |
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Loan Term | Fixed-rate loan terms of 5, 7, or 10 years; hybrid ARM loan terms of 20 years with initial 5, 7 or 10 years fixed rates |
Amortization | Up to 30 years; interest-only options also available |
Minimum DSCR | 1.20 in Top Markets; 1.25 in Standard Markets; 1.30 in Small Markets; 1.40 in Very Small Markets. |
Maximum LTV |
To determine market tier, please consult with your Arbor Relationship Manager |
Full-Term Interest Only DSC/LTV Thresholds |
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Rate Structure | Fixed and hybrid ARM loan terms available |
Eligible Properties | Multifamily housing, with five residential units or more, including:
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Eligible Borrower | Limited partnerships; Limited Liability Companies (LLCs); Single Asset Entities; Special Purpose Entities; tenancy in common with up to five unrelated members; and irrevocable trusts with an individual guarantor |
NET WORTH AND LIQUIDITY |
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Occupancy Requirement | Property must generally be stabilized at 90% physical occupancy for the trailing 3-month average prior to Underwriting |
Tax & Insurance Escrows |
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Replacement Reserves | Underwritten at a minimum of $200 per unit per annum; replacement reserve escrow is required for properties with greater than 50 units, subject to acceptable property condition |
Commercial Space | Allowed up to 40% of total Gross Potential Rent; no more than 40% of Net Rentable Area |
Recourse | Nonrecourse with standard carve-out provisions required |
Prepayment | Declining schedules and yield maintenance available for all loan types; all prepayment options open for prepayment without penalty three months prior to maturity |
Assumable | Subject to approval and 1% fee |
Rate Lock | 60-, 90-, 120-, 150-, 180-day extended delivery options available |
Freddie Mac Fee | Nonrefundable application fee (0.1% of loan amount in all markets except top markets) collected at time of rate lock |
Good Faith Deposit | 1% of loan amount due upon acceptance and execution of the Small Balance Loan (SBL) Rate Lock Application; refundable post-closing |
Top Markets | New York-Kings-Queens-Bronx-Richmond-Rockland-Westchester-Suffolk-Nassau-Bergen-Essex-Hudson-Somerset-Middlesex-Passaic-Union-Monmouth-Morris (NY-NJ-PA); Middlesex-Norfolk-Suffolk-Essex-Plymouth (MA-NH); District of Columbia-Montgomery-Prince George’s-Arlington-Alexandria-Fairfax-Fairfax City-Falls Church City (DC-VA-MD-WV); Dallas (TX); Cook-Lake-DuPage (IL-IN-WI); Los Angeles-San Francisco-Sacramento-Contra Costa-Marin-Alameda-Orange-Santa Clara-San Mateo-San Diego (CA); Denver-Jefferson-Arapahoe-Adams (CO); Fairfield (CT); Miami-Broward-Palm Beach (FL); Dakota-Ramsey-Hennepin-Anoka (MN-WI); Washington-Clackamas-Clark-Multnomah-King-Pierce-Snohomish (OR-WA) |
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