FREDDIE MAC CONVENTIONAL FIXED-RATE LOAN
Non-recourse, assumable fixed rate financing for the acquisition or refinance of stabilized multifamily rental or cooperative properties.
Apartment Loan Amount
Generally $5 to $100 million
Freddie Mac Conventional Fixed-Rate Loans
Loan Amount
Generally $5 to $100 million (larger and smaller loans will be considered)
Loan Term
5, 7, and 10 year terms (up to 30 years if loan is not purchased for securitization)
Max Amortization
30 years
Max Loan to Value
80%
Minimum Coverage
1.25x
Borrower
- Borrower may generally be a limited partnership, corporation, limited liability company, or a tenancy-in-common (TIC) with 10 or fewer tenants in common
- General partnerships, limited liability partnerships, REIT’s and certain trusts may also be acceptable in limited circumstances, subject to additional requirements
- Borrower must generally be a Single Purpose Entity (SPE); however, on loans less than $5 million, upon Borrower’s request, a Borrower other than a TIC may be a Single Asset Entity (SAE) instead of an SPE
- If the Borrower is structured as a Tenancy in Common (TIC), each Tenant in Common must be a SPE
Interest Rate
Risk-based pricing, varying with LTV, DSC ratios, and geographic location
Prepayment Terms
Yield maintenance until securitized followed by 2 year lockout; defeasance thereafter. No prepayment premium for final 90 days. If loan is not securitized within first year, then yield maintenance applies until the final 90 days. Yield maintenance without defeasance is available for securitized loans for an additional cost.
Lock-out Period
2 years following securitization
Third Party Reports
MAI Appraisal, Physical Needs Assessment, and Environmental Phase I Assessment are required, plusnSeismic Report may be required for properties in Seismic Zones 3 and 4
Tax, Insurance, & Replacement Reserves
Tax and insurance escrows are generally required. Funded Repair & Replacement escrow is generally required.
Recourse Requirements
Non-recourse except for standard carve-out provisions
Lender Application Fee
$15,000; covers 3rd party reports and processing/ underwriting costs
Freddie Mac Application Fee
Greater of $2,000 or 0.1% of loan amount
Origination Fee
Competitive
Legal Fees
$8,000 to $12,000 varying with characteristics of the deal
Timing
45-60 days from the application to commitment; dependent on 3rd party report timing and Borrower’s submission of due diligence
Rate Lock
Early rate-lock option available for varying durations, typically ranging from 60 to 120 days until Freddie Mac purchase; Index Lock and Fast Track Early Rate-Lock options also available.
Assumability
Loan is assumable, subject to lender approval of proposed replacement Borrower. Fees include 1% assumption fee, part of which is paid to Freddie and a $5,000 processing fee to cover Lender’s underwriting expenses.
For current Freddie Mac conventional fixed-rate apartment loan mortgage rates, contact our multifamily lenders in DFW.
Call For a Quote:
(214) 679-9673
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