Commercial Real Estate Division
Commercial Real Estate - Freddie mac
Freddie Mac Multifamily Small Loan Program Guidelines:
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Eligible Properties:
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5+ unit multifamily. A and B class assets with C class assets considered on a deal by deal basis. No restricted markets; however, eligibility may vary for sub markets considered as being higher risk. Non-contiguous properties are acceptable if they are being operated as one and each property meets the minimum LTV, DSCR and occupancy requirements.
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Ineligible Properties:
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Properties with a HAP contract or LURA are eligible on a deal by deal basis. Section 8 voucher acceptable. Properties with a specific tenant concentration (e.g. students, military) greater than 40%.
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Loan Size:
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$1,000,000 - $6,000,000. With Freddie Mac approval, loans between $6MM and $7.5MM are available in Top and Standard Markets, provided they meet the following additional criteria:
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​75 units or less
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1.25 minimum DSCR
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Single Asset Entity (SAE) borrower with enhanced borrower covenants and quarterly reporting
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Enhanced third reports, e.g. full appraisal, zoning report, survey
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Maximum Loan-to-Value:
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​​80% LTV.
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Maximum CLTV:
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100% is possible with Joint Venture
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Eligible Locations:
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All 50 states, Puerto Rico, U.S. Virgin Islands, and Guam.
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Fixed Rate Term:
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5, 7 and 10 years
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Interest Only Available
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Amortization:
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30 years.
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Minimum DSCR:
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1.25. 1.20 in Major Markets.
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Prepayment Penalty:
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5 year fixed term: 5,4,3,2,1. Can be reduced with rate increase.
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7 year fixed term: 5,5,4,4,3,2,1. Can be reduced with rate increase.
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10 year fixed term: 5,5,4,4,3,3,2,2,1,1. Can be reduced with rate increase.
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Guarantee:
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Non-recourse for most loans subject to standard carve-outs.
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Assumable:
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Yes, subject to lender approval.
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Escrows:
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Tax and insurance required on higher leveraged loans.
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Third Party Reports:
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Appraisal, Market Study, Phase I Environmental, Engineering Report and Seismic where applicable.
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Sponsor Requirements:
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650 minimum credit score
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Collective net worth of key principals must exceed loan amount
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Minimum liquidity of nine months debt service
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Local ownership no prior multifamily experience required
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Absentee ownership requires two years comparable multifamily ownership experience