Written by Fernando Martin| December 19, 2018

Freddie Mac Small Balance Program

Key Benefits of the Freddie Mac Small Balance Program are as follows.

Financing of small balance loans using hybrid ARM or fixed-rate mortgage products, offering partial-term and full-term interest-only, A Streamlined processes during pricing, underwriting, closing and funding as well as Competitive pricing and Streamlined loan documents

Property types eligible are as follows:

Conventional multifamily housing with five residential units or more, including conventional housing with tax abatements and Section 8 vouchers.

Loan amounts range from $1-5MMMax LTV is 80%Term length ranges from 5-10 years.The terms are fixed that either balloon or roll over to a 20 year hybridAmortization goes up to 30 yearsThe prepayment penalty is yield maintenance, 5% declining, or 3% decliningSmall Balance loans are Non-recourseThe borrower Can rate lock up to 120 days in advance of closingAdditional loan features are as follows: The borrower can choose to have cash out, , small balance loans are assumable, replacement reserves and insurance escrow is waived, tax escrow is waived for LTVs at 65% or lower, credit score is a minimum of 650 or better, last but not least, the borrower’s net worth needs to be equal to the loan amount and their liquidity needs to be equal to 9 months of debt service payments.

For more information on Freddie Mac loans please visit our Freddie Mac Loans page.