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Freddie Mac Small Apartment Loans - $1 Million-$5 Million

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Apartment Loan Rates
Freddie Mac Apartment Rates
Fixed Interest Rate Amort Max LTV
5-yr 4.54% - 4.78% 30-yr 80%
7-yr 4.68% - 4.92% 30-yr 80%
10-yr 4.83% - 5.07% 30-yr 80%
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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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Best Program For You
Which Program is Best
Which one of our apartment loan programs is best for you? By providing some basic information about yourself, your property and what you are looking for in an apartment loan, we can help you decide which one of our programs is best for you.
Why Choose Crefcoa
Why Choose
Crefcoa has the knowledge, expertise and strategic relationships required to provide you with the most competitive rates and terms for your commercial or multifamily property.
  • Multiple program options
  • Competitive rates and terms
  • Knowledge and expertise
  • Certainty of execution
  • Convenient electronic loan process

Freddie Mac Multifamily Small Balance Loan Program

Known for providing highly competitive multifamily financing for loan sizes above $5 million, Freddie Mac has entered the small loan space with its aggressive Hybrid ARM Small Balance Apartment Loan program. The Small Balance program was designed with program features and benefits to compete directly with Fannie Mae's Small Apartment Loan program and programs offered by leading national banks. The Freddie Mac Hybrid Small ARM Apartment Loan program fills a gap in the small multifamily loan space ($1MM-$7.5MM) for borrowers seeking competitively priced, non-recourse debt without yield maintenance, or a balloon payment at the end of the fixed term.
Freddie Mac Small Balance Apartment Loan Program Highlights
  • Non-recourse
  • No yield maintenance - step down prepay
  • Converts to ARM at end of fixed term
  • Highly competitive interest rates
  • Up to 80% LTV
  • 30 year amortization
  • Full term interest only available
  • No replacement reserves
  • No underwriting floor rate maximizes proceeds
  • Tax returns not required
  • Assumable
  • Cash out refinances
HYBRID ARM Program Program Terms

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Fixed Term ARM Term Term Amort LTV Interest Only Prepay
5 Year 15 Year 20 Year 30 Year 80% 1 Year 5,4,3,2,1
7 Year 13 Year 20 Year 30 Year 80% 2 Year 5,5,4,4,3,2,1
10 Year 10 Year 20 Year 30 Year 80% 3 Year 5,5,4,4,3,3,2,2,1,1

Freddie Mac Apartment Loan Hybrid Small Program Term Notes

  • $1,000,000 minimum loan size
  • No interest rate pricing adjustment for standard term interest only
  • Full term interest only available for loans with DSCR > 1.40 and LTV < 65%
  • 1% prepay for remainder of the ARM term (waived for acquisitions subject to Freddie Mac approval)
  • ARM index - 6-month LIBOR
  • Margin - 275 bps for 7 and 10 year fixed terms and 325 bps on 5-yr fixed term
  • Lifetime floor rate set at initial start rate
  • Lifetime interest rate ceiling cap set at 500 bps above start rate
  • 1% periodic rate adjustment every 6 months
  • Actual/360 interest payments

Freddie Mac Multifamily Small Loan Program Guidelines

Loan Size $1,000,000 - $6,000,000. With Freddie Mac approval, loans between $6MM and $7.5MM are available in Top and Standard Markets for properties with 100 units or less.
  • 100 units or less
  • 1.25 minimum DSCR
  • Single Asset Entity (SAE) borrower with enhanced borrower covenants and quarterly reporting
  • Enhanced third reports, e.g. full appraisal, zoning report, survey
Eligible Properties 5+ unit multifamily. A and B class assets with C class assets considered on a deal by deal basis. No restricted markets; however, eligibility may vary for sub markets considered as being higher risk. Non-contiguous properties are acceptable if they are being operated as one and each property meets the minimum LTV, DSCR and occupancy requirements.
Ineligible Properties Properties with a HAP contract or LURA are eligible on a deal by deal basis. Section 8 voucher acceptable. Properties with a specific tenant concentration (e.g. students, military) greater than 40%.
Top Markets Boston, New York, Northern New Jersey, Long Island, Chicago, Baltimore, Washington DC, Minneapolis, Philadelphia, Los Angeles, San Diego, San Francisco, Orange County, San Jose, Sacramento, Seattle, Portland, Salt Lake City, Denver, Miami-Fort Lauderdale.
Fixed Terms 5, 7 and 10 years.
ARM Terms 5 year fixed + 15 year ARM.
7 year fixed + 13 year ARM.
10 year fixed + 10 year ARM.
ARM Details Index: 6 month LIBOR.
Interest rate floor equal to start rate.
Lifetime cap set at 500 bps above the start rate.
1% periodic rate adjustments every 6 months.
Amortization 30 years.
Minimum DSCR 1.25. 1.20 in Major Markets.
Underwriting Floor Rate No underwriting floor rate in major markets.
Maximum LTV 80%.
Minimum Occupancy 90%.
Interest Only 1 year for 5 year fixed term.
2 year for 7 year fixed term.
3 year for 10 year fixed term.
Full term for loans with a DSCR > 1.40 and LTV < 65%.
Interest Accrual Actual/360.
Prepayment Penalty 5 year fixed term: 5,4,3,2,1. Can be reduced with rate increase.
7 year fixed term: 5,5,4,4,3,2,1. Can be reduced with rate increase.
10 year fixed term: 5,5,4,4,3,3,2,2,1,1. Can be reduced with rate increase.
1% prepay during ARM term - can be waived with Freddie Mac approval for acquisitions.
Guarantee Non-recourse subject to standard carve-outs.
Assumable Yes, subject to lender approval.
Impounds Real estate tax escrow deferred for loans less than 65% LTV. Insurance escrow deferred.
Replacement Reserves Not required.
Subordinate Debt Not permitted.
Rate Lock At commitment.
Sponsor Requirements
  • 650 minimum credit score
  • Collective net worth of key principals must exceed loan amount
  • Minimum liquidity of nine months debt service
  • Local ownership no prior multifamily experience required
  • Absentee ownership requires two years comparable multifamily ownership experience
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What You Need to Know About the Freddie Mac Small Apartment Loan HYBRID ARM Program

Program descriptions, highlights and underwriting guidelines are helpful when considering if an apartment loan program is right for you and your property. However, they don't always tell the whole story. Below is what you need to know about the Freddie Mac's Small Apartment loan program that program guidelines and highlights don't tell you.
  • Unlike Fannie Mae, Freddie Mac lenders aren't delegated to close and sell loans to Freddie Mac without review. i.e. Freddie Mac must review and approve every loan.
  • Freddie Mac doesn't have a "one size fits all" pricing model. Interest rates vary depending on location, LTV, DSCR, interest only, and prepay option.
  • Unlike other secondary market programs (Fannie Mae Multifamily, CMBS and even Freddie Mac's Multifamily program), the Small Loan program's fixed interest rate is not tied to either a Treasury or SWAP, rather a Coupon bond.
  • A regional manager for Freddie Mac will personally perform a site inspection of the subject property for most Class B and C assets.
  • No underwriting interest rate floors in major markets maximizes loan dollars.
  • Asset quality and condition are important.
  • Lender legal is required on every loan.
  • Absentee ownership requires professional third party management.
  • Various lien, litigation and bankruptcy searches are required for Borrowing Entities and Key Principals.
  • Insurance for secondary market programs (Fannie, Freddie, HUD CMBS) typically require more coverage than traditional banks require; therefore, resulting in a higher insurance expense.
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Program availability -- including LTV, DSCR, and loan size -- may vary depending on property location, economic conditions, exposure, and other variables that may negatively influence risk. Loan programs and program guidelines (including, without limit, fees, rates and features) are subject to change.

Freddie Mac and Freddie Mac Multifamily are registered trademarks of Freddie Mac.