Apartment Loan Overview
Freddie Mac fixed-rate apartment loans offer multifamily housing investors a flexible, fixed-rate apartment financing solution for the acquisition or refinance of multifamily housing properties.
• Provides, in most cases, a streamlined, yet still flexible, path to funding
• Offers borrowers a variety of options to suit their loan characteristics and only pay for what they need
Freddie Mac Fixed Rate Apartment Loans Terms
Eligible borrowers for Freddie Mac fixed-rate apartment loans are as follows:
- 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) (see Section 6.13 of the Loan Agreement for basic SPE requirements); 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 an SPE.
Loan-to-Value (LTV) Ratios and Amortizing1 Debt Coverage Ratios (DCRs)
|FIXED-RATE BASE CONVENTIONAL MAXIMUM LTV AND MINIMUM DCR2||(For specific product adjustments, refer to individual term sheet)|
|Amortizing||Partial-Term Interest-Only3||Full-Term Interest-Only|
|Acquisitions and Refinances|
|≥ 5-Year and < 7-Year Term||75% / 1.30x||75% / 1.30x||65% / 1.40x|
|7-Year Term||80% / 1.25x||80% / 1.25x||70% / 1.35x|
|> 7-Year Term4||80% / 1.25x||80% / 1.25x||70% / 1.35x|
1 The DCR calculated for the partial-term interest-only and full-term interest-only period uses an amortizing payment.
2 Adjustments may be made depending on the property, product, and/or market.
3 For partial-term interest-only loans, there must be a minimum amortization period of 5 years for loans with terms greater than 5 years. Acquisition loans with 5-year terms may have up to 1 year of partial-term interest-only. For terms of 10 years or more, no more than 5 years of interest-only is permitted.
4 The maximum term for loans purchased for securitization is 10 years; terms of greater than 10 years are available for loans not purchased for securitization.