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Interest-Only Loans

June 6, 2019 By Janover Ventures

Interest-Only Loans in Relation to the Freddie Mac SBL Program

Interest-only (I/O) loans consist of payments of only interest, and not principal. These loans are not amortizing, and do not decrease the unpaid principal balance (UPB) of a loan. Therefore, any equity gains during the term of an interest-only loan will occur as the result of property appreciation. I/O loans can be extremely beneficial to property investors, as they greatly increase cash flow and DSCR.

In addition to full-term interest-only financing, some loans offer shorter, interest-only periods, usually at the beginning of the term of a loan. This is the case for Freddie Mac Small Balance Loans, as they generally offer either, 1, 2, or 3-year I/O periods. The SBL program also offers full-term interest-only loans, though these loans have stricter LTV and DSCR requirements.

Filed Under: Freddie Mac SBL, Freddie Small Balance Loans, Glossary Tagged With: Freddie Mac Multifamily, Freddie Mac SBL, Freddie Mac Small Balance Loans, Interest Only Apartment Loans, Interest Only Multifamily Loans

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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