Some great news was recently released from Freddie Mac that can drastically improve cashflow on multifamily properties $1MM+. On Freddie’s Small Balance Loans, pricing in Standard, Small and Very Small Markets has been reduced. The reductions are noted below. As you will notice, a significant reduction of 38 bps has occurred on their 5 year Hybrid ARM term in Standard Markets. Hybrid ARM products are becoming more popular as they offer a fixed to float Hybrid term with 20 year terms (still amortized over 30 years).
For your reference, a Standard Market is typically a multifamily property located in a county with a population more than 60k. Some of the even smaller cities/towns, will still qualify for Standard Market pricing since they are within a larger county. Smaller Markets are populations of 30k to 60k and Very Small Markets are with populations typically less than 30k.
As a reminder, Freddie Mac’s Small Balance Loans are all Non-Recourse (absolutely no tax returns needed) and in Top & Standard Markets, allow 80% LTV on either acquisitions or cash-out refinances. Interest Rates are also held for 35 days once we go once we go under Loan Application, which protects you from any increases so long as we submit to Freddie Mac within the 35 day window.
Reach out to Global today to obtain a quote on your multifamily property, and how you can take advantage of these great rate reductions before it’s too late!