MCLEAN, VA–(Marketwired – Aug 3, 2015) – Freddie Mac (OTCQB: FMCC) Multifamily today expanded its credit risk transfer program by announcing a new type of mortgage-backed securities for several families, SB Certificates that are supported by small loans taken out by Freddie Mac and issued by a third party. The Company plans to guarantee approximately $108 million in the first round of SB1 certificates (SB1 certificates), which are expected to cost the week of August 3, 2015 and retire on August 18, 2015 or around August 18, 2015. The maximum loan amount for the SBL program is $7.5 million, the minimum amount is $750,000. All loans are limited by the LTV and DSCR requirements, which vary depending on the market in which the property is located. Loans between $750,000 and $1 million and loans of $6 million are subject to additional restrictions. Group buildings with five or more residential units, including residences for seniors without residences, real estate with rental housing, income tax credits limited to land use during the last 24 months of the initial compliance or extension period, and property benefiting from tax relief can benefit from loans of up to $7.5 million in all markets. According to Freddie Mac Multifamily, the flexible loan offer offers six different financing solutions for hybrid products (fixed-to-float) and fixed-price products with amortization of 30 years and up to 80% value credit in some markets. Borrowers should generally be single-profit businesses (SAEs), but there is some flexibility. Non-profit organizations are not allowed.
Loans of less than $6 million may also be offered to individuals (U.S. citizens only), securitization companies (SPEs), single limited partnerships (LPs), trusts (irrevocable trusts and revocable trusts with a single guarantor) and joint rental offices (with no more than 5 independent members). Loans over $6 million must be individual asset units. In addition, capital income must have total net assets of at least 100% of the loan amount (excluding pension accounts) and liquidity after closings, corresponding to a minimum of 9 months of capital and interest financing. Good credits are also needed, usually 650 euros. Penalties in advance remain at 1% during the sliding interest rate period of the loan. Benefits: Fewer forms, can get better prices and a larger credit size. Can also reduce transaction costs. Freddie Mac SBL portfolio executions offer benefits to borrowers who borrow more than one SBL loan in high-end, standard markets.