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Freddie Mac Small Apartment Loans - $1 Million-$7.5 Million

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Apartment Loan Rates
Freddie Mac Apartment Rates
Fixed Interest Rate Amort Max LTV
5-yr 3.01% - 3.25% 30-yr 80%
7-yr 3.21% - 3.45% 30-yr 80%
10-yr 3.36% - 3.65% 30-yr 80%
Learn More Freddie Mac SBL
Apartment Loan Quick Links
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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

The Freddie Mac Small Balance Loan (SBL) Program dominates the 5+ unit multifamily loan space and has changed the way borrowers obtain apartment loans by providing more financing options, better terms, lower rates, and a quicker, simplified loan process.
Freddie Mac Small Apartment Loan Program Highlights
  • Available nationwide
  • Up to 80% LTV
  • 30 year amortization
  • 5, 7 and 10 year fixed rate options available
  • Converts to ARM at the end of the fixed term
  • No underwriting floor rate maximizes proceeds
  • Cash out to 80% in Top and Standard Markets
  • Tax returns not required
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 Declining or YM
7 Year 13 Year 20 Year 30 Year 80% 2 Year Declining or YM
10 Year 10 Year 20 Year 30 Year 80% 3 Year Declining or YM

Freddie Mac Apartment Loan Hybrid Small Program Term Notes

  • $1,000,000 minimum loan size
  • Interest only rate adjustments
  • 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 - 325 bps over the 6-month LIBOR
  • 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 SBL 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.
Eligible Properties 5+ unit multifamily. No restricted markets; however, eligibility may vary for sub markets considered as being higher risk. Non-contiguous properties (Linked Program) are acceptable if they are being operated as one and each property meets the minimum LTV, DSCR and occupancy requirements. Residential commercial mixed-use properties are eligible if gross rents and gross rentable sq ft are less than 40% of total gross.
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 25%. Tenant concentration greater than 25% but less than 50% eligible on an exceptions basis.
Markets There are four Market Tiers under the Freddie Mac SBL Program. Every county in the country is designated as a Top, Standard, Small or Very Small Market. In general, counties in larger cities are designated as Top or Standard Markets while counties in smaller cities are designated as Small or Very Small Markets. Further, Tier designation is based on the size of the rental population, determined by Census Bureau, and not necessarily population.
Regions There are five Regions (Western, South Central, North Central, Southeast and Northeast) under the Freddie Mac SBL Program. Interest rates vary slightly by Region.
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 1.20-1.40 depending on Market Tier.
Underwriting Floor Rate No underwriting floor rate.
Maximum LTV 75%-80% depending on Market Tier.
Minimum Occupancy 85%-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 Yield maintenance or declining prepay options.

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 if selling the property or refinance with a Freddie Mac.

Guarantee Non-recourse subject to standard carve-outs.
Assumable Yes, subject to lender approval and a 1% assumption fee.
Escrows Real estate tax escrow deferred for loans less than 65% LTV. Insurance escrow deferred. Replacement reserves deferred.
Replacement Reserves Not required.
Subordinate Debt Not permitted.
Rate Lock At application.
Sponsor Requirements
  • 680 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
  • Non-local ownership requires one year comparable multifamily ownership experience. Exceptions available in Top, Standard or Small Markets if non-local with strong mitigates
  • Foreign nationals with 2x program minimum net worth and liquidity and has US multifamily experience
Borrowing Entity
  • Single asset entity required
  • Trusts and corporations only eligible on an exception basis
  • Tenants in Common (TIC) eligible with no more than 5 co-tenants and each co-tenant is a single asset entity
Principals Required To Be Underwritten
  • Any member or limited partner with more than a 25% interest in the borrower
  • All managers of the borrowing entity
  • All general partners of the borrower
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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 properties - some exclusions for properties located in Top Markets.
  • No underwriting interest rate floors in major markets maximizes loan dollars.
  • Asset quality and condition are important.
  • Lender legal is required on every loan.
  • Non-local 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 higher coverage requirements than traditional banks require.
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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.