For most properties, the minimum occupancy rate for Freddie Mac SBL loans is set at 90% physical occupancy for 90 days before the loan is underwritten. However, 85% physical occupancy is allowed under certain circumstances, including:

• The property has less than 30 units
• The property is located in a Top Market, and is either a new property or has been renovated recently
• For acquisitions, the property must:
  • Have a general history of stable occupancy
  • Be relatively crime free (on a historical basis)
  • Have appraised rents/occupancy higher than current rents/occupancy (i.e. room to improve profitability)
  • Have an owner/property manager acquiring/managing the property with more experience than the current owner/management

For most properties, Freddie Mac Small Balance Loans have a minimum occupancy requirement of 90% physical occupancy for 90 days before the loan is underwritten. However, 85% physical occupancy is allowed under certain circumstances, including:

• The property has less than 30 units
• The property is located in a Top Market, and is either a new property or has been renovated recently
• For acquisitions, the property must:
  • Have a general history of stable occupancy
  • Be relatively crime free (on a historical basis)
  • Have appraised rents/occupancy higher than current rents/occupancy (i.e. room to improve profitability)
  • Have an owner/property manager acquiring/managing the property with more experience than the current owner/management

In addition, all buildings must be managed by the same property manager and no unit within the property may be occupied by the owner.

The maximum loan-to-value ratio for Freddie Mac SBL loans is 80% for purchases and refinances in Top and Standard Markets. For Small and Very Small Markets, the maximum loan-to-value ratio is 75% for purchases and 70% for refinances. For full-term interest-only financing, the maximum loan-to-value ratio is 65% for Standard Markets and 60% for Small and Very Small Markets.

Source: apartment.loans/posts/what-is-the-required-ltv-ratio-for-the-freddie-mac-sbl-program

The maximum loan amount for Freddie Mac SBL loans is $7.5 million. Source

The minimum loan amount for a Freddie Mac SBL Link Loan is $2 million, regardless of the number of units.

Freddie Mac Small Balance Loans Under $1 Million: What You Need to Know

• Loans must be in a Top Market or Standard Market
• Eligible borrowers include:
  • Previous Freddie Mac Multifamily borrowers
  • Borrowers taking out multiple loans simultaneously
  • Borrowers who will are likely to engage Freddie Mac for 2+ additional loans within the next 12 months
  • Borrowers with significant multifamily experience in the area (2+ years local multifamily experience and 2+ multifamily properties owned)
  • Loans that were initially approved for $1 million+ but were later constrained by property NOI or other factors
• Properties must underwrite a vacancy of at least 5% and an expense ratio of at least 30%
• 10-15 bps will be added loans in Top Markets, while 15-20 bps will be added to loans in Standard Markets
• Cash-out refinances for these loans are typically subject to stricter leverage requirements (LTV/DSCR)
• Seller/servicers may not market Small Balance Loans less than $1 million
• Freddie Mac generally requires 3 additional business days for commitments and inspections

Freddie Mac Small Balance Loans Between $6 Million to $7.5 Million: What You Need to Know

• SBL loans above $6 million are generally only permitted in Top & Standard Markets
• Plus, they can have no more than 100 units, and will require a borrower to order additional third-party reports, including a survey report and a zoning report
• Finally, loans of more than $6 million also require a minimum DSCR of 1.25x, and require that borrowers form a Single Asset Entity (SAE)