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Freddie Mac Small Apartment Loans - Prepayment Terms

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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 Prepayment Terms

To better help borrowers customize loan terms that best meet their financing and investment objectives, the Freddie Mac Small Loan Program provides multiple prepayment options to select from.
Crefcoa's published interest rates for the Freddie Mac SBL Program assume a yield maintenance prepayment penalty. Below are the adjustments to rates for the declining prepayment options.
Yield Maintenance Prepayment Term
5-year fixed term: 5-years

7-year fixed term: 7-years

10-year fixed term: 10-years

Interest rate adjustment. There are no adjustments to the interest rate.
Declining Prepayment Term
5-year fixed term: 5-4-3-2-1

7-year fixed term: 5-5-4-4-3-2-1

10-year fixed term: 5-5-4-4-3-3-2-2-1-1

Interest rate adjustment. Add 15 bps for 5-year fixed term and 20 bps for 7-year and 10-year fixed terms.
Declining Prepayment Term Option 1
5-year fixed term: 3-2-1-1-1

7-year fixed term: 3-3-2-2-1-1-1

10-year fixed term: 3-3-3-2-2-2-1-1-1-1

Interest rate adjustment. Add 20 bps for 5-year fixed term and 40 bps for 7-year and 10-year fixed terms.
Reduced Declining Prepayment Term Option 2
5-year fixed term: 3-1-0

7-year fixed term: None

10-year fixed term: None

Interest rate adjustment. Add 45 bps for 5-year fixed term.

What You Need to Know About the Freddie Mac SBL Prepayment Penalties

At the end of the fixed term (when the loan coverts to a floating rate term) there is a soft 1% prepayment penalty for the remainder of the loan term. It's a soft prepayment because the 1% penalty is waived if you sell the property or refinance the loan through the Freddie Mac SBL Program. If you refinance with another lender the 1% prepayment penalty applies.
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