Apartment Building

Freddie Mac Small Balance Loans

The Freddie Mac small balance program provides financing of small balance loans using hybrid ARM or fixed-rate loan products, offering partial-term and full-term interest-only. This program also features a streamlined process and competitive pricing.

Small Balance Loan Options and Requirements
Loan Size$1million - $5 million
Loan PurposeAcquisition or refinance
  • 20-year hybrid ARM with initial 5-, 7-, or 10-year fixed-rate period
  • 5-, 7-, or 10-year fixed-rate loan
Max AmortUp to 30 years
Min DSCR DSCR Calculator1.20x
Interest OnlyPartial interest-only; full-term interest-only may be available
Prepayment OptionsDeclining schedules and yield maintenance available for all loan types; defeasance available for fixed-rate loans only—
Third Party Subordinate FinancingPermitted subject to certain restrictions; combined loan-to-value (LTV) ratio cannot exceed 80% or go below combined debt-service coverage ratio (DCR) of 1.25x
RecourseRecourse Non-recourse with standard carve-out provisions required
Eligible PropertiesConventional multifamily housing with five residential units or more, including conventional housing with tax abatements and Section 8 vouchers, and cooperatives in the five boroughs of New York City and Long Island
Occupancy Financing Yes, subject to requirements specified in the Loan Agreement
Lock Options60- to 120-day rate-lock period available