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Freddie Mac Small Apartment Loans - Interest Only

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The Freddie Mac Small Hybrid ARM Apartment Loan program offers the most competitive rates and terms in the multifamily small loan space. Each loan is custom priced. Request a custom quote today.
  • Competitive low rates
  • Non-recourse
  • No yield maintenance
  • No replacement reserves
  • No balloon payment at the end of the fixed term

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Freddie Mac SBL Program - Interest Only Options

The Freddie Mac Small Apartment Loan Program (SBL) provides partial and full fixed term interest only options for qualified properties. The interest only term depends on:
In general, loans with an LTV below 60%-65% and a DSCR above 1.35-1.50 are eligible for interest only payments during the entire fixed term of the loan. Loans where the DSCR or LTV are outside of these parameters are eligible for partial term interest only payments, or ineligible based on Market and length of fixed term.
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Freddie Mac Small Apartment Loan Interest Only Options - Partial Term
Below are interest only options for properties were the LTV is greater than 65% and/or DSCR is less than 1.35. Adjustments to base interest rate are also shown.
 
Partial Term 5-Yr Fixed 7-yr Fixed 10-yr Fixed 5-yr Hybrid 7-yr Hybrid 10-yr Hybrid
Top Market 1-yr + 4bps 2-yr + 8bps 3-yr + 12bps 1-yr + 4bps 2-yr + 8bps 3-yr + 12bps
Standard Market 1-yr + 4bps 2-yr + 8bps 3-yr + 12bps 1-yr + 4bps 2-yr + 8bps 3-yr + 12bps
Small Market N/A 1-yr + 4bps 2-yr + 8bps N/A 1-yr + 4bps 2-yr + 8bps
Very Small Market N/A 1-yr + 4bps 2-yr + 8bps N/A 1-yr + 4bps 2-yr + 8bps
 
Below are full fixed term interest only options for properties were the LTV is less than 60%-65% and/or DSCR greater than 1.35-1.50. Adjustment to base interest rate is also shown.
 
Full Fixed Term Max LTV Min DSCR 5-yr Fixed 7-yr Fixed 10-yr Fixed 5-yr Hybrid 7-yr Hybrid 10yr Hybrid
Top Market 65% 1.35 +20bps +30bps +40bps +20bps +30bps +40bps
Standard Market 65% 1.35 +20bps +30bps +40bps +20bps +30bps +40bps
Small Market 60% 1.40 +20bps +30bps +40bps +20bps +30bps +40bps
Very Small Market 60% 1.50 +20bps +30bps +40bps +20bps +30bps +40bps
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What You Need to Know About the Freddie Mac SBL Interest Only Payment Option

The Freddie Mac SBL Program offers some of the most aggressive interest only payment options in the market. Interest only payment options are a great option for borrowers looking to increase cash flow. It's important to understand that while interest only payment options increase property cash flow to the borrower, for underwriting purposes the DSCR is based on a fully indexed payment (principal and interest). i.e. selecting an interest only option will not help the property qualify for a larger loan.
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