Net worth needs to be at least the loan size.Often these are high net worth individuals who do not want to put all of their personal assets and bank accounts at risk with a recourse loan that will require personal guarantees.įreddie Mac Apartment Loan Terms and Requirements: Non-recourse financing makes it much more desirable for the borrower to raise part of the down payment from investors. The loan is made to an ownership entity like a Limited Liability Company (LLC) or Limited Partnership (LP), not to the individual. This means that there are no personal guarantees required.
One of the best features of a Freddie Mac Multifamily Loan is that it is non-recourse. Prior multifamily property ownership is not required. A minimum net worth equal to the loan size is required along with the equalivant of 12 months of loan payment in savings after the loan is closed. Thus, some borrowers will qualify for Freddie Mac financing if their property is strong, and yet their personal income is not very strong. With Freddie Mac loans, the strength of the property is more important than the financial strength of the borrower. These loans are easier to qualify for than conventional multifamily bank loans in that the minimum credit score is 660, and tax returns are not required. Cash out refinancing up to 80% LTV is not a problem. Loans for Student Housing and Senior Housing are also available.įreddie Mac multifamily loans are amortized for a period of 30 years, and have a fixed rate period of 5, 7 or 10 years.įreddie Mac multifamily loans go up to 80% loan to value. A great benefit is up to 10 years interest only loans. Freddie Mac not only has market rate loans, but give a hefty discount to the interest rate for affordable rent apartment properties. Freddie Mac loans are sold in mortgage pools for securitization on Wall Street. A great benefit of Freddie Mac loans is their low interest rates. The first part of this article is on the market rate Freddie Mac loan. Our conservative borrowers prefer paying interest and principal payments, which lower their principal balance each month. During the interest only period, all of the monthly payment is going toward interest resulting in a much lower monthly payment. They know that as long as they can raise their rents over time, their property value is going to go up significantly – so they are not concerned about not paying down the mortgage. We will also answer the following questions: What types of loans does Freddie Mac offer? Why does Freddie Mac have the best interest only program? Many of our borrowers are cash flow based and prefer the benefits of a low rate interest only loan. In this article, we are going to look at the great benefits of a Freddie Mac Multifamily financing and the loan guidelines. These loans are stated income in nature and non-recourse. Up to 10 years interest only payments are available. Rates can be fixed from 5 to 10 years with a 30 year amortization.
Freddie Mac apartment/multifamily financing is one of Apartment Loan Store's lowest rate apartment loan programs. These loans are sold to Freddie Mac for securitization in mortgage pools on Wall Street. Freddie Mac’s multifamily loan program includes market rate, senior housing, student housing and affordable housing.įreddie Mac Apartment Loan Terms and Requirements: Minimum Loan $1,000,000ĩ – 12 months post closing liquidity requiredįreddie Mac Multifamily Financing has some of the lowest rates for 5-plus unit multifamily properties.
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