Freddie Mac Hybrid Small Apartment Loans Tailored for Small & Multifamily Borrowers

Freddie Mac hybrid small apartment loan is the industry’s most competitive small apartment loan program for financing large multifamily loans, particularly loans worth of $10million. Freddie Mac hybrid small apartment loan program is helping to be competitive in the small balance market, and has been accepted by borrowers with open arms.

One of the most substantial obstacles to originating small balance loans is the cost to the borrower. Third party reports and lender legal don’t vary much with the loan size, leaving fixed origination costs for a $1million loan very similar to those of a $10million loan. Freddie Mac hybrid small apartment loans have therefore coming with a streamlined small balance loan program with substantially compressed fixed costs and rates as competitive as those for large loans.

How to Qualify for Freddie Mac Hybrid Small Apartment Loans?

Loan Amount: $750,000 minimum  to $7.5 million maxium

Loan Uses: Acquisitions or Refinances

Loan Terms on Freddie Mac Hybrid Small Apartment Loans:

• 20-year hybrid ARM with initial 5,7, or 10 year fixed rate period, or    
• 5, 7 or 10-year fixed rate loan
• ARMs typically based on 6-month LIBOR with up to 1% rate adjustments every 6 months. Lifetume cap set 5% over starting rate

Amortization: Up to 30 years, partial interest-only options available, full-term interest-only options may also be available in certain circumstances.

Interest Rates:

• Top Markets: From 3.90% 5 Years Fixed, 4.35% 7 years fixed, 4.60% 10 years fixed
• Standard Markets: From 4.48% 5 years fixed, 4.70% 7 years fixed, 4.98% 10 years fixed
• Small/Very Small Markets: Add 20bps to standard market pricing

Eligibal Properties for Freddie Mac Hybrid Small Apartment Loans:

• Multifamily: 5+ unit market-rate multifamily properties. For loans larger than $6million, properties with more than 100 units must be approved by Freddie Mac
• Non-Contiguous Properties: Allowed if within same zip code and manageable as a single asset
• Occupancy: 90% for past 90 days (exceptions down to 85% and down to 30 days for new construction). 85% occupancy may also apply to properties with 30+ units, or acquisitions with no history of serious crime, or that have been recently taken over by sophisticated management.
• Mixed Use: Aviable subject to no more than 40% non-residential income and no more than 40% of net rentable area.
• Affordable: Low income housing tax credit properties with land use restriction agreements that are in either the final 24 months of the initial compliance period or the extended use period. Or, properties with tenant-based housing vouchers, and properties with local rent subsidies for 10% or fewer units where the subsidy is not contingent on the owner’s initial or ongoing certification of tenant eligibility are also eligible.

Ineligible Criteria:

• Seniors housing with residential services
• Student housing greater than 50% concentration
•  Military housing greater than 50% concentration
• Properties with housing assistance program section-8 contracts and other project-based housing assistance payment contracts
• LIHTC properties with LURAs in compliance years 1-12
• Tax-exempt bonds interest reduction payments
•  Historic tax credit properties with a master lease structure

Want to pre-qualify for Freddie Mac hybrid small apartment loans? Get in contact with the expert loan advisors from ALB Commercial Capital! We look forward to answer all your questions? Give us a call today!