Renovation must start within 90 days of origination and must be complete within 33 months No seniors housing, student housing, or manufactured housing communities permitted REO (real-estate owned) properties in receivership or properties performing below market averages (especially those requiring improved management) are also eligible Properties must have no more than 500 total unitsĮligible properties are high-quality and only require moderate renovation Guarantors must have 1.5x the standard liquidity/net worth requirements. Recourse: Non-recourse with standard “bad boy” carve-outsĮligible Borrowers: Must have experience with the rehabilitation of multifamily properties. Minimum DSCR : 1.10x -1.15x (depending on market) ![]() Interest Rates: Floating-rate interest only loan Terms: 3 years with one 12-month extension (borrower's request), and another optional 12-month extension (based on Freddie Mac discretion) Size: Varies based on LTV and DSCR requirements, based on 7-year sizing note rate Sample Freddie Mac Terms for Value-Add Loans in 2023 ![]() To learn more, check out Freddie Mac’s official Value-Add Loan Product Sheet or keep reading below for an in-depth explanation of the Freddie Mac Value-Add Loan program. ![]() Plus, these loans are available for acquisitions and refinances, are interest-only, and are non-recourse, making them an excellent choice for investors looking to increase the marketability and profitability of their multifamily properties. If you're an investor or developer looking to make light upgrades to your property without going through the hassle of taking out an expensive construction loan, or, if you want to purchase a new property and make light renovations, the Freddie Mac Value-Add Loan could be a great option. Freddie Mac Value-Add Loans are specifically designed for properties with planned upgrades of between $10,000 and $25,000 per unit, and have LTV allowances of up to 85% and DSCR allowances of as low as 1.10x. Freddie Mac Insured Non-Recourse Loans for the Light Renovation of Multifamily Developments
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