Freddie Mac Small Balance Loan
Like most other types of multifamily financing, Freddie Mac Small Balance Loans have minimum occupancy requirements that must be met in order for a borrower to be approved. For most properties, this is set at 90% physical occupancy for 90 days before the loan is underwritten.
However, 85% physical occupancy is allowed under certain circumstances, including:
- The property has less than 30 units
- The property is located in a Top Market, and is either a new property or has been renovated recently
- For acquisitions, the property must:
- Have a general history of stable occupancy
- Be relatively crime free (on a historical basis)
- Have appraised rents/occupancy higher than current rents/occupancy (i.e. room to improve profitability)
- Have an owner/property manager acquiring/managing the property with more experience than the current owner/management