FREDDIE MAC SMALL BALANCE MULTIFAMILY LOAN

[Brent Shryock]

As a mortgage banker, I often get asked about the Freddie Mac Small Balance Loan Program for Multifamily Properties.  Its a great program so here is an overview for people that are interested in learning more.

Freddie Mac likes to see some sponsorship experience in Multifamily as well as strong financial strength. 

Highlights:

Product is offered Nationwide. 

LTV Up to 80% in Top Markets/Standard Markets

Loan Size: $1M-$5M

Recourse: Non-Recourse

Occupancy Requirements:  Trailing 3 Months minimum - 90% Occupancy

Prepayment Options: Standard Step Down or Yield Maintenance 

A few things to note:

The sponsorship must have a minimum of 9 Months of Debt Service of liquidity and a net worth of at least the loan amount.  Also, there are credit score requirements for the principals. 

[Ryan Goldfarb]

@Brian Simmons - 

For an appraisal on a refi, they'll generally lean into the historical operations as their primary data points with support from comps on the income and expense side. 

On an acquisition, they might lean a little bit more into a borrower budget if the operator has experience in the market, but they'll still look to comps for support. In a more rural area, they'll have fewer data points and, thus, less latitude to deviate. 

In general, appraisers will get a little more aggressive in higher tier markets and for experienced operators.