Small Balance Loan
Arbor’s Freddie Mac Small Balance Loan program streamlines the entire loan process for multifamily acquisition and refinancing loans ranging from $1 million to $6 million.
$1,000,000 to $6,000,000
Between $6 million and $7.5 million for properties with 75 units or less in Top and Standard SBL Markets
|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.|
|Minimum DSC||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.
|Maximum LTV||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||Minimum DSC 1.35 / Maximum LTV 65% in Top Markets;
Minimum DSC 1.40 / Maximum LTV 65% in Standard Markets;
Minimum DSC 1.40 / Maximum LTV 60% in Small Markets;
Minimum DSC 1.50 / Maximum LTV 60% in Very Small Markets.
|Rate Structure||Fixed and hybrid ARM loan terms available.|
|Eligible Property||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 and 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.|
|Recourse||Non-recourse with standard carve-out provisions required.|
|Commercial Space||Allowed up to 40% of total net rental income; no more than 40% of building’s square footage.|
|Appraisal, Physical Risk Report||Appraisal, Properly Condition Assessment, Phase I Environmental, Zoning (on loans above $6M), Insect and Flood|
|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||A non-refundable application fee (0.1% of loan amount in all markets except Top Markets) will be collected at time of rate lock. 60, 90, 120, 150, 180 day extended delivery Options available.|
|Good Faith Deposit||1% of loan amount due upon acceptance and execution of the SBL Rate Lock Application; refundable post-closing.
2% of loan amount for Early Rate locks
|Top Markets||New York-Newark-Jersey City (NY-NJ-PA), Boston-Cambridge-Newton (MANH), Washington, DC-Arlington-Alexandria (DC-VA-MD-WV), ChicagoNaperville-Elgin (IL-IN-WI), Los Angeles-Long Beach-Anaheim (CA), San Francisco-Oakland-Hayward (CA), San Jose-Sunnyvale-Santa Clara (CA), San Diego-Carlsbad (CA), Denver-Aurora-Lakewood (CO), Bridgeport-StamfordNorwalk (CT), Miami-Fort Lauderdale-West Palm Beach (FL), Minneapolis-St. Paul-Bloomington (MN-WI), Portland-Vancouver-Hillsboro (OR-WA), and SeattleTacoma-Bellevue (WA)|