Has anyone tried a Freddie Mac MuliFamily Small Balance Loan

8 Replies

Has anyone tried getting a Freddie Mac MuliFamily Small Balance Loan?  I am looking for an investment opportunity in the Mecklenburg county area of North Carolina and need Funding. I am try not to go with Hard Money because of the high interest rates. I was reading one of Mindy Jensen's blog posts and seen the Freddie Mac Multi Family Small loan add.  Any information and tips would be highly appreciated.  This would be my first commercial loan  I do not have any Residential loans

http://www.freddiemac.com/multifamily/new_standard/sbl/

With no experience it will be hard to get unless you bring in partners. You may get by if you have good net worth and liquidity and have a solid and experienced property manager. Freddie Mac SBL is for loan amounts over $1mm and they will want 90%+ occupancy with no major deferred maintenance. If they building is out dated, that may be ok. 

Hey there @Derrick Ward I do have experience with this loan.  There are a number of requirements and checkbox line items that need to be considered.  If you provide more details I would be glad to offer any value I can.

Keep in mind that these loans have great interest rates compared to the open market but are generally strict on standards and tend to be harder to close.  There will be a net worth and liquidity threshold but I can elaborate further if you give more details.  The 1 million - 5 million range on the loan is also fairly flexible and can deviate slightly.

Best of luck!

Originally posted by @Todd Dexheimer :

With no experience it will be hard to get unless you bring in partners. Thanks Todd that's helpful information. I plan on syndicating my 1st Commercial multi-family, but I don't plan on going as big as close to 1$ Million 

Originally posted by @Gus Ross :

Hey there @Derrick Ward I do have experience with this loan.  Gus thank you for the information and for offering to give me some pointers!  I do not plan on syndicating that high of a priced deal. The highest I am planning for my first commercial multi family is $300,000.  But it's good to know this information for my second one!

@Derrick Ward you will need to contact local lenders. I will call a dozen or so local community banks. The ones with just a few branches in your city, not national banks

@Todd Dexheimer :. Thanks Todd for the direction I am really trying to avoid hard money lenders!

@Derrick Ward , what is your exit strategy for your investment? Freddie SBL may be ideal for the long-term holder, but if you're looking to do a flip / want to sell sooner than 7/10 years, it may not be the best option for you. These loans can come with great interest rates and LTV, but costly pre-payment penalties.

Any more detail about your deal would help us give more specific advice!

Originally posted by @Andrew Beauchemin  - I would want to keep the apartment building long term, so looking at a $1 mil deal I would have to syndicate it with other investors, and structure the deal to pay them off at some point.  I do not have a deal of that magnitude yet.  I am currently looking in the Mecklenburg county market in North Carolina.

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