In October 2014, Freddie Mac launched a new (SBL) Small Balance Loan Program directed at multi-unit homes. The goal was to create a platform for financing loans between $1 million to $5 million. For the small homeowners market, this means higher liquidity and stability, allowing for more efficient investments and higher returns in future properties.
Product Highlights
- Non-recourse
- Highly competitive rates with fixed lender closing costs
- Lending platform for all markets up to 80% LTV, I/O available
- Flexible prepayment options
- Streamlined process
Small Balance Loan Program and Credit Features
| MARKETS: | Nationwide |
| LOAN AMOUNT: | $1 million to $5 million |
| LOAN PURPOSE: | Acquisition or refinance |
| MAXIMUM LOAN TO VALUE (LTV): | 80% |
| FULL LEVERAGE PRICING: | 3.25% to 3.85%: 5-year fixed 3.85% to 4.20%: 7-year fixed 3.90% to 4.40%: 10-year fixed |
| AMORTIZATION: | Up to 30 years (interest only also available) |
| TERM: | Five, seven, 10-year fixed / 20-year hybrid arms available |
| PREPAYMENT PROVISIONS: | Step-down, yield maintenance and defeasance prepayment options |
| RECOURSE: | Non-recourse with standard carve-out provisions required |
| ELIGIBLE PROPERTIES: | Conventional multifamily housing with five residential units or more, including conventional housing with tax abatements, Section 8 vouchers and student housing under 50% concentration |
| OCCUPANCY REQUIREMENT: | Minimum 90% average physical occupancy required over trailing three-month underwriting period |
| ESCROWS / IMPOUNDS: | Replacement reserves waived; insurance waived; property taxes required, unless LTV is 65% or less |
| MINIMUM FICO SCORE: | 650 |
| NET WORTH & LIQUIDITY: | Net worth: Equal to the loan amount Liquidity: Equal to nine months of principal and interest |
| RATE LOCK DEPOSIT: | 1% for 60 and 120 days |
At Edward Voccola LLC, a team of qualified professionals who have extensive experience in the mortgage industry are ready to help finance your commercial real estate needs. We can connect you with the capital without the hassle of paperwork and long closing periods that banks require. Our aim is to get you the loan with the most favorable conditions so you can focus on expanding your business. If you have any questions please call us at (617) 233-5555.