Freddie Mac Fixed Rate Apartment Loans

Long-term Multifamily Loans With Low Fixed Rates Insured By Freddie Mac

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.

Key Benefits

• 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 Properties
Standard multifamily housing, purpose-built student housing, seniors housing, cooperative housing, and Targeted Affordable Housing cash (e.g., LIHTC Year 4-10 and 11-15, Section 8) loans. Loans may be used for an acquisition or refinance.
Eligible Borrowers

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 Amounts
Generally $5 to $100 million (larger and smaller loans will be considered)
Loan Terms
5- to 10-year terms (up to 30 years if loan is not purchased for securitization)
Maximum Amortization
30 years
Amortization Calculations
Actual/360 standard; 30/360 available
Lockout Period
2 years
Prepayment Provisions
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 for the life of the loan. Yield maintenance without defeasance is available for securitized loans for an additional cost.
Tax & Insurance Escrow
Generally required
Replacement Reserve
Generally required
Personal Liability
Fannie Mae fixed-rate apartment loans are non-recourse except for standard carve-out provisions
Supplemental Loans
Supplemental Loans are permitted, subject to requirements specified in the Loan Agreement. See Fannie Mae Supplemental Loans for additional details.
Application Fee
Greater of $2,000 or 0.1% of loan amount
Rate Lock Options
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. Sellers should consult with their regional Freddie Mac representative to determine eligibility.
Refinance Test
No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a loan-to-value (LTV) ratio of 65% or less; all partial-term interest-only loans must pass the Refinance Test

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.