Freddie Mac Small Balance Loans

Non-Recourse, Fixed and Adjustable-Rate Apartment Financing

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DSCR Requirements for Freddie Mac Small Balance Loans

DSCR, or debt service coverage ratio, is one of the most important metrics that lenders use to determine a borrower’s eligibility for multifamily and commercial financing. Minimum DSCR requirements for the Freddie Mac Optigo Small Balance Loan program start at just 1.20x, but can go up to 1.50x for certain borrowers. In general, DSCR requirements are larger for smaller markets, as well as for property refinances. The specific DSCR requirements for Small Balance Loans are detailed below:

  • Top Markets: 1.20x DSCR for hybrid ARM and fixed-rate loans, 1.35x DSCR for full-term interest-only financing  
  • Standard Markets: 1.25x DSCR for hybrid ARM and fixed-rate loans, 1.40x DSCR for full-term interest-only financing
  • Small Markets: 1.30x DSCR for hybrid ARM and fixed-rate loans, 1.40x for full-term interest-only financing
  • Very Small Markets: 1.40x DSCR for hybrid ARM and fixed-rate loans, 1.50x for full-term interest-only financing

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