Freddie Mac Floating-Rate Loans

Freddie Mac Floating-Rate Conventional is a similarly flexible loan program but tends to be more well-suited when a property is expected to be refinanced or sold within a short time frame. The loans are frequently used as bridge financing when making acquisitions, and they’re also used for multi-use projects. Floating-rate conventional loans normally come with some of the lowest interest rates that Freddie Mac offers, although the rate can fluctuate (including increase) as market interest rates change. The flexible terms also allow projects to have a certain amount of commercial space, which makes it one of the select Freddie Mac programs that accommodates multi-use projects. It’s also a suitable option for standard housing projects, affordable housing, senior housing, student housing, and manufactured housing. Affordable housing can’t be financed this way. Loan commitment can be completed in just 45 days, and usually falls within the same range as fixed-rate loans. When to use: Short-term projects can take advantage of the lower interest rates, while mitigating potential risk of rate increases in coming years. These loans are frequently used when temporary financing is needed for a purchase, or renovation before selling.

Freddie Mac Small Balance Loans

Freddie Mac Small Balance makes financing available for smaller multi-unit residential properties. The program was created to compete with Fannie Mae’s programs and is often more affordable than privately insured loans. These loans are available for properties that have at least five units, and they’re primarily used to purchase or refinance smaller multifamily buildings. Many individuals use these loans as they break into the multifamily rental market. When to use: Anyone purchasing a smaller multifamily property might use these loans. They tend to be especially attractive options when purchasing in major metropolitan markets, where values for even smaller properties can be in the millions.

Freddie Mac Green Advantage Loans

Freddie Mac Green Advantage is an environmentally focused program that can complement many of Freddie Mac’s other programs. It’s compatible with conventional, affordable, and senior housing. In order to qualify for the Green Advantage program, investors must obtain a “Green Assessment” and commit to reducing water/sewage usage by 25%. In exchange, the program allows for higher LTV values and higher DSCR ratios. Investors also can receive a rebate of up to $3,500 for the assessment. When to use: Any investor may use the Green Advantage program in order to make their buildings more environmentally friendly, and the program can be combined with other incentives. Reducing water/sewage is particularly helpful when a landlord pays the building’s water bill.

Freddie Mac Student Housing Loans

The Freddie Mac Student House was created as a response to the student housing boom seen in recent decades. The program offers favorable terms for investors looking to enter or expand within this sector of the real estate market. When to use: Such substantial loan amounts make the Freddie Mac Student Housing program suitable for mid-sized and large student housing apartments or townhomes.

Freddie Mac Senior Housing Loans

Freddie Mac Senior Housing was created to promote investment in specialized housing for older Americans. These loans can be used for independent living, assisted living, skilled nursing, memory care, and age-in-place properties. Because senior housing projects are often sizeable and have specific design considerations, building or purchasing these properties often requires substantial capital. Senior Housing loans provide access to capital with still-favorable terms. When to use: Freddie Mac Senior Housing loans are frequently used to finance senior housing projects, which have special considerations and costs that are outside what many other loan programs allow.

Freddie Mac Manufactured Housing Loans

Freddie Mac Manufactured Housing makes financing available for multi-unit manufactured housing developments. Mobile home parts and other manufactured housing developments may be financed through the program. When to use: The long terms and high loan-to-value ratios make these loans attractive options when financing manufactured housing developments. Spreading out repayment over 10+ years keeps DSCR ratios lower, and affords more revenues can go toward improvements or disbursements.

Freddie Mac Supplemental Loans

Freddie Mac Supplemental program provides additional financing available with terms that are much like these other programs. The loans make funding available for expenses beyond the purchase price of a building. Freddie Mac offers two different types of supplemental loans, with the difference lying in when the loans are taken out. Split Supplemental Loans originated simultaneously with the primary Freddie Mac mortgage. Seasoned Supplemental Loans are originated at least 12 months after a primary mortgage is originated. When to use: Supplemental loans may help manage unexpected costs, significant repairs, or major improvements. They also can ease cash flow in certain situations.