Commercial Space Limitations for Freddie Mac Small Balance Loans
The Freddie Mac Optigo Small Balance Loan program permits commercial space up to 25% of a property’s gross income. However, this is not necessarily a hard and fast rule, and exceptions are made on occasion. Despite this, to qualify for an exception, borrowers will generally have to prove that the commercial space is likely to remain continuously occupied and that its use will provide a significant benefit to the building’s residents, as well as the surrounding community. For instance, a grocery store or daycare center located on the first floor of a building might be considered beneficial, while a bar would likely not be.