SoftQuotes' Freddie Mac Small Balance Loan (SBL) program rates:
Find Freddie Mac Small Balance Loan (SBL) rates, loan amounts and program guidelines specific to your market. Click here to find your city.
The Freddie Mac Multifamily Small Balance Loan (SBL) program is designed for loan amounts between $1 million and $7.5 million (limited to $6 million in smaller markets) for apartment buildings with 5 to 50 units. They offer 5, 7 & 10 year fixed rate and hybrid ARM options. These loans are non-recourse (with standard carve outs) and can go up to 80% loan-to-value (LTV) in certain markets. Loans can be structured with up to 30 year amortization or interest-only payment options. Borrowers can opt for yield maintenance or declining (step-down) prepayment penalties. Loan rate is locked at application and the program's streamlined loan documents and third party reports allow for a more cost effective and friendly process.
Full term interest-only payment options are available for a 0.10%-0.15% add to rate, but are limited to 65% loan-to-value (LTV) for Top and Standard markets and 60% loan-to-value (LTV) for Small and Very Small markets. Partial-term interest-only payment option periods are 1 year on a 5-year term, 2 years for a 7-year term and 3 years on a 10-year term in Top and Standard markets. For Small and Very Small markets the partial-term interest only option periods are 1 year on a 7-year term and 2 years on a 10-year term. Partial-term interest-only payment options are a 0.04% add to rate for each year of interest-only payment option.
Freddie Mac SBL offers up to 0.40% rate discounts for properties that meet affordability criteria. These discounts are provided as part of their mission driven approach to creating liquidity and supporting affordability in workforce housing. Discounts start with properties that have 50% of their units with rents at or below 80% of market rent.
The Freddie Mac SBL program takes a streamlined approach to third party reports. Only two reports are required for underwriting; an MAI appraisal and a consolidated property report that includes environmental, seismic and property condition assessments. The consolidated property report saves the borrower from having to obtain and pay for 3 separate reports that would normally review the property's environmental, seismic and property condition. In areas that are prone to earthquakes, a separate seismic report might be required.
The Freddie Mac SBL program allows borrowers to lock the rate on their loan with no rate lock fee. To effectively lock your rate, your application and supporting documentation along with third party reports must be submitted for underwriting within 35 days of term sheet execution.
The Freddie Mac SBL program was designed to minimize borrower's financing costs on small balance loans. Typical closing costs for a Freddie Mac Small Balance Loan are approximately $15,000. This cost is comprised of the following expenses: $995 underwriting fee, $3,500 third party appraisal (estimate), $2850 consolidated property report, $5,500 lender's legal expense, $600 property inspection, $0-$900 records search (depending on municipality), $45 flood certification and specific charges relating to title and escrow (varies by state).
Choose your state to find detailed Freddie Mac multifamily loan information specific to your city.