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What is the Required DSCR for the Freddie Mac SBL Program?

June 6, 2019 By Janover Ventures

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

Filed Under: Freddie Mac SBL, Freddie Small Balance Loans, Frequently Asked Questions Tagged With: Freddie Mac Multifamily, Freddie Mac Optigo, Freddie Mac SBL, Freddie Mac SBL DSCR

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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