Apartment Building

Freddie Mac Lease-Up Loans


Listed below are the comparisons of the premier lease-up and standard lease-up Freddie Mac programs. On newly constructed properties, lock in a rate and fund a loan before the collateral is fully stabilized.

Premier Lease-UpStandard Lease-Up
Description Financing for newly constructed properties in Tier 1 and Tier 2 markets for qualifying sponsors Financing for newly constructed properties that do not meet our Premier Lease-Up requirements and parameters
Types of Loans- Fixed- and floating-rate loans
- Interest-only available during the lease-up period as provided for in credit policy
Eligible Properties- Conventional newly constructed multifamily properties in lease-up
- Non Eligible properties include student housing, seniors housing, manufactured housing, and affordable housing
Max LTV 65% 75%
Min DSCR DSCR Calculator 1.25x 1.30x
Minimum Credit Enhancement Requirements None Letter of credit or reserve sized to:
  • 5% of the underwritten value for loans with LTVs less than or equal to 70%
  • 10% of the underwritten value for loans with LTVs greater than 70%
Rate Lock
  • Greater than or equal to 40% of units occupied
  • Greater than or equal to 50% of units leased
  • Greater than or equal to 50% of units issued Certificates of Occupancy
  • Greater than or equal to 50% of units occupied
  • Greater than or equal to 60% of units leased
  • Greater than or equal to 60% of units issued Certificates of Occupancy
Appraisal Report The appraisal report must provide the as-is and as-stabilized value for the property; the underwritten value will be based on the as-stabilized value (unless there is an adjustment for something other than construction or income until stabilization)
Funding Requirements
  • 1.0x interest-only DCR (or amortizing DCR, if applicable)
  • Greater than or equal to 55% of units occupied
  • Greater than or equal to 65% of units leased
  • All units issued Certificates of Occupancy
  • 1.05x interest-only DCR (or amortizing DCR, if applicable)
  • Greater than or equal to 65% of units occupied
  • Greater than or equal to 75% of units leased
  • All units issued Certificates of Occupancy
Release of Credit Enhancement Requirements Not applicable
  • Minimum 90% occupancy and underwritten net rental income must be achieved for three consecutive months
  • Expenses must be based on the greater of:
    • Underwritten expenses at the time of origination, or
    • Annualized, actual expenses from the time the property reached underwritten occupancy at stabilization
  • Stabilization and/or release of credit enhancement will occur once the property has achieved 1.25x amortizing, policy compliant DCR for 3 months
  • No new third-party reports required
  • Up to 12 months to reach stabilization; if the property does not achieve the 1.25x stabilized DCR during this time frame, then the credit enhancement will be used to resize the loan and recast the payments

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