I'm currently looking a multifamily deal where the seller is adamant about the buyer assuming their loan. The purchase price is $3.2m and the balance on the loan is $2m. Does anyone have experience assuming a Freddie Mac loan that can give me some insight as to how I would underwrite this into the deal? Are there any points I would Pay to assume the loan? Would I need to come up with $1.2m in Equity for the difference in this case? Would the lender allow the buyer to have supplemental loans up to 75% LTV? Any help would be greatly appreciated - the deal has me curious!
I’m assuming this is a Freddie Small Balance Loan. If so, generally it is 1% to assume the loan. Also, Freddie SBL will not allow secondary debt so your leverage will be your leverage until you refinance. Depending on market you can refi up to 80% after 2 years of additional seasoning. How long has buyer had this loan in place? You need to calculate what the Yield Maintenance cost would be.
PM me if interested, I’d be more than happy to help strategize a plan for you.
Awesome, thanks for your insight man. The seller got this loan in Feb of last year and is adamant about assuming. It appears what you’re saying is if the purchase price is $3.2m and balance is $2m, then I would have to come up with $1.2m. Am I understanding this correctly?