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Freddie Mac Small Balance Loan (SBL)

Freddie Mac SBL Rates

SoftQuotes' Freddie Mac Small Balance Loan (SBL) program rates:

Fixed Rate Terms
Interest Rates
5 Year Fixed 2.99% - 4.02%
7 Year Fixed 3.15% - 3.83%
10 Year Fixed 3.38% - 4.02%

Find Freddie Mac Small Balance Loan (SBL) rates, loan amounts and program guidelines specific to your market. Click here to find your city.

Additional rate discounts for affordability and energy efficiency. Longer term fixed rates available. Rates based on yield maintenance prepayment penalty. This is not an offer or commitment to lend. Rates updated on 12/04/2021.

Freddie Mac SBL Program Overview

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.


Loan Structure

  • Loan Amounts: $1 million to $7.5 million ($6 million in small / very small markets)
  • Terms: Fixed rate (5, 7 & 10 year) with balloon, or Hybrid ARM (fixed rate 5, 7 & 10 year) with a 20 year term.
  • Amortization: Up to 30 year / full term Interest Only / partial term Interest Only
  • Prepayment Penalties: Yield Maintenance or Step Down

Program Guidelines

  • LTV: Maximum loan-to-value (LTV) is; 80% in Top and Standard markets and 75% in Small and Very Small arkets, with refinances capped at 70% for Small and Very Small markets.
  • DSCR: Minimum debt service coverage ratio (DSCR) is; 1.20x in Top markets, 1.25x in Standard markets, 1.30x in Small markets and 1.40x in Very Small markets. Minimum DSCR of 1.25x for loan amounts between $6 million and $7.5 million.
  • Occupancy: Required minimum physical occupancy of 90% for the last 90 days.
  • Liquidity and Net Worth: Minimum liquidity totaling 9 months of loan payments and a minimum net worth that meets or exceeds the loan amount.
  • Replacement Reserves: $200 - $300 per unit depending on condition of improvements.
  • Eligible Borrowing Entities: LPs / LLCs / Single Asset Entities / Special Purpose Entities / TIC (with up to 5 unrelated members) / Irrevocable trust with individual guarantor.
  • Ineligible Properties: Senior housing with senior care services / properties with greater than 25% concentration of students / properties with greater than 25% concentration of military personnel / properties subject to project-based housing assistance payment contracts / some LIHTC and HTC properties / properties with IRPs.

Interest-Only Payment Options

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.


Affordability Discounts

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.


Third Party Reports

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.


Rate Locks

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.


Closing Costs

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).


Freddie Mac Multifamily Market Finder

Choose your state to find detailed Freddie Mac multifamily loan information specific to your city.