LTV Requirements for Freddie Mac Small Balance Loans

LTV, or loan to value ratio, is one of the most important metrics for multifamily mortgages. Fortunately for borrowers, the Freddie Mac SBL program allows generous LTVs up to 80% for eligible borrowers in Top and Standard Markets. However, LTV requirements increase for borrowers who want financing for properties in Small or Very Small Borrowers, as well as those who are seeking full-term interest-only (I/O) financing. Specifically, the Freddie Mac Small Balance Loan program allows LTVs of:

• Top Markets: 80% for purchases and refinances
• Standard Markets: 80% for purchases and refinances, 65% for full-term I/O
• Small Markets: 75% for purchases and 70% for refinances, 60% for full-term I/O
• Very Small Markets: 75% for purchases and 70% for refinances, 60% for full-term I/O

LTV Calculator

Related Questions

What is the maximum loan amount for the Freddie Mac SBL Program?

The maximum loan amount for the Freddie Mac SBL Program is $7.5 million. Loans of more than $6 million require additional requirements, including a minimum DSCR of 1.25x and the formation of a Single Asset Entity (SAE).

Source: www.multifamily.loans/apartment-finance-blog/freddie-mac-sbl-program

Source: apartment.loans/posts/freddie-mac-small-balance-loans-between-6-million-to-7-5-million-what-you-need-to-know

What is the minimum loan amount for the Freddie Mac SBL Program?

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

For loans under $1 million, additional requirements include:

• 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

For loans over $6 million, additional requirements include:

• Loans must be in a Top & Standard Markets
• No more than 100 units
• Borrowers must order additional third-party reports, including a survey report and a zoning report
• Minimum DSCR of 1.25x
• Borrowers must form a Single Asset Entity (SAE)

What is the maximum loan-to-value (LTV) ratio for the Freddie Mac SBL Program?

The maximum loan-to-value (LTV) ratio for the Freddie Mac Small Balance Loan (SBL) program is 80% for purchases and refinances in Top and Standard Markets. For Small and Very Small Markets, the maximum LTV is 75% for purchases and 70% for refinances. For full-term interest-only (I/O) financing, the maximum LTV is 65% in Standard Markets and 60% in Small and Very Small Markets.

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

Source: https://www.multifamily.loans/apartment-finance-blog/freddie-mac-sbl-program

Source: https://apartment.loans/freddie-mac

What is the minimum loan-to-value (LTV) ratio for the Freddie Mac SBL Program?

The minimum loan-to-value (LTV) ratio for the Freddie Mac SBL Program depends on the market size of the property. For Top and Standard Markets, the LTV is 80% for purchases and refinances. For Small and Very Small Markets, the LTV is 75% for purchases and 70% for refinances, and 60% for full-term interest-only (I/O) financing.

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

What are the eligibility requirements for the Freddie Mac SBL Program?

The eligibility requirements for the Freddie Mac SBL Program include:

• Collateral
• Rigorous assessment
• B-piece purchase
• Loss sharing
• Repurchasing of delinquent SBLs
• Origination of at least $50 million per quarter

For more information, please refer to the Freddie Mac SBL Program Guidelines.