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Home | Freddie Mac | Floating-Rate
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FREDDIE MAC®

Floating-Rate

Arbor’s Floating Rate program is ideal for multifamily borrowers who want to take advantage of lower short-term rates with prepayment flexibility.

Loan Amount Generally $5 million to $100 million; however, larger or smaller loan amounts are considered.
Loan Term 5-, 7- and 10-year terms
Amortization Up to 30 years. Interest-only options also available.
Minimum DSCR 1.00 at the max note rate, floaters must also be sized to a fixed-rate equivalent at 1.25x.
Maximum LTV 7-year term or greater: 80%; 5-year term: 75%.
Rate Structure Borrower must purchase an interest rate cap from a third-party cap provider. No cap necessary for loans with an LTV ratio of less than 60%.
Eligible Properties Multifamily. Cooperatives not allowed.
Eligible Borrower On loans over $5 million must be Single Purpose Entity (SPE)
On loans less than $5 million, borrower other than a tenancy in common may be a Single Asset Entity
Tax & Insurance Escrows Generally required
Replacement Reserves Generally required
Recourse Non-recourse with standard exceptions for fraud and misrepresentation.
Commercial Space No more than 40% of effective gross income and no more than 40% of the property’s total square footage.
Required Reports Appraisal, Property Condition Assessment and Phase I Environmental, Zoning, Insect and Flood.
Prepayment Four main prepayment options are available with no premium for final 90 days
Assumable Subject to approval and 1%
Subordinate Financing Not allowed
Pricing Tiered Pricing Matrix. More favorable terms are available for higher DSCR and lower LTV.
Rate Lock Early rate-lock option available for varying durations, typically ranging from 60 to 120 days from rate-lock until Freddie Mac purchase; Sellers should consult with their regional Freddie Mac representative to determine eligibility.
Application Deposit $26,500. Covers all estimated underwriting costs (including application fee).
Legal/Closing Fee Arbor’s Counsel Fee to be determined at application
Good Faith Deposit 1% of the maximum mortgage amount, but not less than $25,000.

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