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Non-Recourse, Fixed and Adjustable-Rate Apartment Financing

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Freddie Mac Small Balance Loans Under $1 Million: What You Need to Know

April 29, 2019 By Janover Ventures

Additional Requirements for SBL Loans Under $1 Million

Unlike many types of multifamily financing, the Freddie Mac SBL program offers loans as low as $750,000. However, these ‘smaller’ Small Balance Loans come with additional requirements, due to the additional risk and expense they carry. Additional requirements include:

  • Loans must be in a Top Market or Standard Market
  • Eligible borrowers include:
    • Previous Freddie Mac Multifamily borrowers
    • Borrowers taking out multiple loans simultaneously
    • Borrowers who will are likely to engage Freddie Mac for 2+ additional loans within the next 12 months
    • Borrowers with significant multifamily experience in the area (2+ years local multifamily experience and 2+ multifamily properties owned)
    • Loans that were initially approved for $1 million+ but were later constrained by property NOI or other factors
  • Properties must underwrite a vacancy of at least 5% and an expense ratio of at least 30%

Additionally:

  • 10-15 bps will be added loans in Top Markets, while 15-20 bps will be added to loans in Standard Markets
  • Cash-out refinances for these loans are typically subject to stricter leverage requirements (LTV/DSCR)
  • Seller/servicers may not market Small Balance Loans less than $1 million
  • Freddie Mac generally requires 3 additional business days for commitments and inspections

Filed Under: Freddie Mac Multifamily Loans, Freddie Mac SBL Tagged With: Apartment Loans, Freddie Mac SBL, Freddie Mac Small Balance Loans, Multifamily Loans, Non-Recourse Apartment Loans, Small Multifamily Loans

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Multifamily.Loans, Inc. is a Janover Ventures company. Please visit some of our family of sites at: Multifamily.loans, Commercial Real Estate Loans, CMBS.loans, SBA7a.loans, Home.loans, HUD.loans, HUD 232, HUD 223f, HUD 223a7, SBA Express Loans, SBA 504 Loans, and OpportunityZones.Help.

 

 

 


Janover Ventures, LLC.
7601 N Federal Hwy. Ste B140
Boca Raton Florida 33487

Call: (800) 567-9631
Email: hello@multifamily.loans

 

Information

Loan Facts

Terms, Qualifications, and Guidelines

Term Sheet

Interest Rates

Portfolio Loans

 

Knowledge Base

Frequently Asked Questions

Glossary

Application

Application Process

Third Party Reports

Appraisal Process

Environmental Assessments

Property Condition Reports