Freddie Mac is a government-sponsored enterprise (GSE) tasked with increasing the amount of money available for mortgage lending in the United States, and thereby increasing the ease at which ordinary Americans can find housing. To do so, Freddie Mac purchases mortgages from lenders, pools them into mortgage-backed securities (MBS) and sells them to investors on the secondary market. This allows lenders to make more loans, stimulating the economy and promoting home ownership.

While Freddie Mac’s initial focus was single-family loans, the agency also purchases mortgages for multifamily properties, helping to increase the rental housing supply across the country. In particular, Freddie Mac focuses much of its attention on guaranteeing loans for affordable properties, though it also finances senior living and student housing properties, as well as manufactured housing communities.

In 2018, Freddie Mac purchased and guaranteed a record-setting $78 billion in multifamily loans, making it the largest multifamily lender in the United States (as it has been for several years in a row). In 2018, Freddie Mac financed approximately 860,000 rental units, over 90% of which are considered affordable for low and medium income residents. In contrast, Fannie Mae, the nation’s second-largest multifamily lender, purchased and guaranteed just over $65 billion in loans.

For Investors with good credit and a sufficient net worth (i.e. a net worth as large as the loan, with at least 10%-15% liquidity), agency loans from Freddie Mac or Fannie Mae are often the best option. Agency loans are almost always non-recourse, and offer competitively low interest rates, as well as LTVs up to 80% and amortizations up to 30 years. Loan amounts are much more flexible, too; for instance, Freddie Mac’s Small Balance Loan (SBL) program offers loans in amounts as low as $750,000 with fixed and adjustable-rate terms up to 10 years and 30-year amortizations.

Freddie Mac offers several types of multifamily loans, including the Small Balance Loan (SBL) program, Conventional loans, and Supplemental Loans. The SBL program offers loans in amounts as low as $750,000 with fixed and adjustable-rate terms up to 10 years and 30-year amortizations. Freddie Mac Conventional loans offer loans between $5 million and $100 million with fixed-rate and floating-rate programs. Lastly, Freddie Mac Supplemental Loans offer additional funding for current borrowers.

For more information, please see the following sources:

• Fannie Mae and Freddie Mac Loans from Multifamily.loans
• How to Purchase an Apartment Property from Apartment.loans
• Agency Loans for Multifamily Properties: What Borrowers Need to Know from Multifamily.loans

To qualify for a Freddie Mac multifamily loan, borrowers must typically have good credit (typically a 660-680 minimum FICO score), and a net worth of at least 100% of the loan amount, not including retirement accounts. They should also have liquidity of at least 10% of the total loan amount. Additionally, lenders and agencies like to see borrowers with some type of multifamily ownership or management experience, though this is also sometimes negotiable, depending on the individual deal.

When it comes to the property itself, most Freddie Mac loan products permit up to 80% LTV, with DSCRs as low as 1.25x. Some loans, like the Freddie Mac Small Balance Loan (SBL) provide substantially better terms to properties in larger MSAs.

The benefits of a Freddie Mac multifamily loan include:

• Highly competitive pricing.
• Early rate lock.
• Up to 80% LTV.
• Partial-term and full-term interest-only available.
• Supplemental loans are available.
• Non-recourse.

Freddie Mac is a government-sponsored enterprise (GSE) tasked with increasing the amount of money available for mortgage lending in the United States, and thereby increasing the ease at which ordinary Americans can find housing. In 2018, Freddie Mac purchased and guaranteed a record-setting $78 billion in multifamily loans, making it the largest multifamily lender in the United States.

Source: www.multifamily.loans/freddie-mac-multifamily-loans, www.multifamily.loans/apartment-finance-blog/agency-loans-for-multifamily-properties-what-borrowers-need-to-know, apartment.loans/posts/what-is-freddie-macs-role-in-multifamily-financing

Freddie Mac multifamily loans require financially strong borrowers and have a maximum loan-to-value (LTV) allowance of 80%. The minimum debt service coverage ratio (DSCR) is 1.20-1.25. Interest-only options are available, and yield maintenance is permitted for prepayment. Selective of the properties they will finance.

Source: www.multifamily.loans/freddie-mac-multifamily-loans and www.commercialrealestate.loans/freddie-mac-loans