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GENERAL: 800.ARBOR.10

FREDDIE MAC®

Supplemental

The Freddie Mac Supplemental Mortgage offers an additional option in conjunction with a newly originate or seasoned conventional multifamily mortgage.

Loan Amount $1,000,000 minimum.
Loan Term Seasoned – Must be coterminous with original mortgage or may exceed original mortgage by up to 24 months.
Requirements
  • The Freddie Mac first mortgage must have been an Arbor transaction
  • At least 12 months must elapse between the closing of the first mortgage or the closing of the previous supplemental mortgage
  • The term of the supplemental mortgage must be at least 3 years
Acceptable Transactions
  • Fixed or floating regardless of the rate structure on the pre-existing loan
  • Supplemental Loans are allowed on conventional deals, but restricted to DSCR of 1.25 and LTV of 80% for acquisitions and DSCR of 1.30 and LTV of 75% for cash-out refinances. Subject to Freddie Mac credit posture at time of application
Workings
  • Origination of a supplemental mortgage behind a securitized mortgage will trigger collection of any deferred reserves for that first mortgage
  • Real estate tax reserve, even if not required for the first mortgage
  • A new title insurance policy is required
  • No new survey is required, provided the title meets certain requirements
  • A new third-party appraisal report is required. An environmental database review is required. A new engineering report may be required, as determined by Freddie Mac
Limitations
  • Unlimited; however, subject to all terms and conditions
  • Less than 5 years left on term of first, the Supplemental Loan sizing is subject to additional exit risk analysis
Minimum DSCR 1.25 for acquisition, 1.30 for cash-out refinance.
Maximum LTV Initial LTV unless otherwise noted.
Eligible Borrower Original Borrower or lender-approved transferee.
Prepayment Yield maintenance.
Assumable Subject to approval and 1% fee (non-recourse loans only).
Application Fees $12,500
Origination Fee Par pricing is not available.

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