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 $1 million to $7.5 million.
Up to $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’s approval of an exception request.
|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.
|Amortization||Up to 30 years. Interest-only options also available.|
1.20 in Top Markets; 1.25 in Standard Markets; 1.30 in Small Markets;
1.40 in Very Small Markets;
Minimum 1.25x amortizing DCR for loans greater than $6 million.
80% in Top and Standard Markets;
75% if acquisition in Small/Very Small Markets;
70% refinance in Small/Very Small Markets.
|Full-Term Interest Only DSC/LTV Thresholds||
|Rate Structure||Fixed and hybrid ARM loan terms available.|
|Eligible Properties||Multifamily, minimum five residential units.|
|Eligible Borrower||Up to $6 million – Individuals who are U.S. citizens; LPs; LLCs; SAEs; SPEs;
TICs with up to 5 unrelated members; and trusts (irrevocable trusts and revocable trusts with warm-body guarantor).
Between $6 million and $7.5 million – Single-Asset Entities
|Occupancy Requirement||Property must generally be stabilized at 90% physical occupancy for the trailing 3-month average prior to Underwriting or 85% for the trailing 3-month average prior to Underwriting under certain scenarios.|
|Tax & Insurance Escrows||Real estate tax escrow deferred for deals with 65% LTV or less. Insurance
escrow deferred. Replacement reserve escrow deferred.
|Replacement Reserves||Underwritten at a minimum $200 per unit per annum.|
|Commercial Space||Allowed up to 40% of total net rental income; no more than 40% of building’s
|Recourse||Non-recourse with standard carve-out provisions required.|
|Prepayment||Declining schedules and yield maintenance available for all loan types. All prepayment options are open for prepayment without penalty 3 months prior to maturity.|
|Assumable||Subject to approval and 1% fee.|
|Pricing||Tiered Pricing Matrix. More favorable terms available for higher DSC and lower LTV.|
|Rate Lock||60, 90, 120, 150, 180 day extended delivery options available.|
|Freddie Mac Fee||A non-refundable application fee (0.1% of loan amount in all markets except Top
Markets) will be collected at time of rate lock.
|Good Faith Deposit||1% of loan amount due upon acceptance and execution of the SBL Rate Lock Application; refundable post-closing.|
|Top Markets||New York-Kings-Queens-Bronx-Richmond-Rockland-Westchester-Orange-Suffolk-Nassau-Bergen-Essex-Hudson-Somerset-Middlesex-Passaic-Union-Monmouth-Morris (NY-NJ-PA); Middlesex-Norfolk-Suffolk-Essex-Plymouth (MANH); 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 (CA); San Francisco-Sacramento-Contra Costa-Marin (CA); Alameda-Orange-Santa Clara-San Mateo (CA); 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)|