Freddie Mac Moderate Rehab Multifamily Loan

Our Multifamily Loan Benefits

Multifamily Loan rates start as low as 5.56% (as of May 30th, 2024)
• A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Financing up to 80% LTV
• Terms and amortizations up to 30 years
• Long term fixed rates
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation

Freddie Mac Multifamily Loan

Does your apartment building need some renovations? If so, Freddie Mac’s Moderate Rehab Loan may be the perfect solution for you. This program provides investors with the necessary funds to renovate their properties at the lowest possible cost. During the renovation process, borrowers can take out an interest only floating rate loan, and rather than accruing interest on unused funds loan proceeds are advanced monthly as requested. This program allows each borrower to achieve his or her financial needs as terms on Freddie Mac Moderate Rehab loans are very negotiable and versatile. These loans have been specifically crafted for investors planning on putting between $25,000 and $60,000 per unit into the property. This program will finance up to 80% LTV of the property’s as is value, offers flexible loan terms and amortizations, and an up to 36-month interest-only period during rehabilitation. Freddie Mac Moderate Rehab Multifamily Loans offer a flexible liquidity option for experienced sponsors who have successfully completed similar rehabilitation projects and who are familiar with Freddie Mac’s loan process.

Freddie Mac Moderate Rehab Multifamily Loan Highlights

Loan Size:  Varies, based on LTV and DSCR requirements 


Loan Structure:

  • Loan type: Either float-to-float or float-to-fixed
  • Conversion: Interim Phase is floating, followed by either floating or fixed Permanent Phase. The interest rate is determined at loan origination

Use:  Financing for moderate rehabilitation of multifamily properties 

Terms:  Varies, typically float-to-fixed-rate structure. Various combinations of floating and fixed-rate structures can be considered on an individual basis. Loans are interest-only during rehabilitation. 

Interest-Rate Cap: Required if the loan is not converted to fixed-rate. 

Amortization:  Varies 

Maximum LTV:

  • Can lend up to 80% of as-is value. If applicable, this will need to be supported by acquisition price.
  • Similar to construction financing, there will be periodic draws of unfunded loan proceeds to reimburse the sponsor for up to 80% of the renovation costs on a monthly or quarterly basis, as work is completed.
  • Appraisal has to show 80% as improved LTV (with fully funded renovation proceeds)


Minimum DSCR:

  • 1.20x interest-only “as-is” at initial sizing
  • As improved underwritten net operating income per appraisal needs to demonstrate a minimum of a 1.30x amortizing DSCR This will be subject to an appraisal support.


Recourse: Loans are non-recourse with standard carveouts for “bad boy” acts


Prepayment Options: 
Float to Float
During interim phase there is a 2% prepayment premium. Afterwards standard Freddie Mac prepay structures are available
Float to Fixed
During interim phase there is a Yield Maintenance prepayment penalty. Afterwards standard Freddie Mac prepay structures are available


Eligible Borrowers:  Freddie Mac likes to see that their borrowers have enough net worth, liquidity and experience in the successful completion of similar rehab projects. 

Eligible Properties: 

  • Conventional properties planning between $25,000 and $60,000 in repairs/renovations per unit. Minimum of $7,500 per unit set aside for interior renovations
  • Property DSCR must not go under 1.0x during the rehab process
  • Seniors housing, student housing, manufactured housing communities, mezzanine financing, and preferred equity with hard pay are not eligible


Rehab Timeline:  All rehabilitation work needs be finished within 36 months from loan origination


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