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Replacement Reserves

June 6, 2019 By Janover Ventures

Replacement Reserves in Relation to the Freddie Mac SBL Program

Replacement reserves are funds allocated for the repair and replacement of parts of a commercial building; in particular, those that will need to be replaced multiple times over the useful life of the structure. All Freddie Mac Multifamily loans, including loans issued through the Optigo Small Balance Loan program, require replacement reserves. In general, properties eligible for SBL financing will need to set aside $200-$300/unit on an annual basis. For instance, a 10-unit apartment building would likely have to allocate $2,000 to $3,000 each year for replacement reserves.

Filed Under: Freddie Mac Multifamily, Freddie Mac SBL, Glossary Tagged With: Freddie Mac Apartment Loans, Freddie Mac Multifamily, Freddie Mac Optigo, Freddie Mac SBL, Freddie Mac Small Balance Loans, Replacement Reserves

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Knowledge Base

Frequently Asked Questions

Glossary

Application

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Third Party Reports

Appraisal Process

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