Written & reviewed by Stephen A. Sobin, President of Select Commercial Funding LLC
Freddie Mac Optigo Program
Freddie Mac Value-Add Loan
The Freddie Mac Value-Add Loan is one of the Freddie Mac multifamily (Optigo) programs Select Commercial arranges nationwide. Its highlights and terms are below, and you can compare it on our Freddie Mac multifamily page or view today’s commercial mortgage rates.
Get a Free QuoteAbout the Value-Add Loan
Loan Term: Three years with one 12-month extension (per borrower’s request) and one optional 12-month extension (per Freddie Mac’s discretion)
Prepayment Penalty: Loan can be paid off at any time with 1% penalty. No penalty if the loan is refinanced with Freddie Mac. There is no lock out period.
A three year journey "Thanks Stephen for all of your hard work in getting our deal closed! I appreciate your professionalism and patience throughout a complicated process. You always were there for my partner and I whenever we had questions and needed answers quick. It was a pleasure to have worked with you and Select Commercial!"
Program Highlights & Terms
- Loan Size: Based on LTV and DSCR requirements
- Maximum LTV: 85%
- Minimum DSCR: Based on market. Ranges between 1.10x-1.15x Loan Purpose: Both acquisitions and refinances
- Loan Term: Three years with one 12-month extension (per borrower’s request) and one optional 12-month extension (per Freddie Mac’s discretion)
- Interest Rates: Floating rate and interest only. No interest rate cap
- Prepayment Penalty: Loan can be paid off at any time with 1% penalty. No penalty if the loan is refinanced with Freddie Mac. There is no lock out period.
- Eligible Borrowers: Sponsor must have experience with multifamily property rehabilitation; Sponsor must also have experience in the local market; 1.5x the standard minimum net worth and liquidity requirements for guarantors
- Eligible Property Types: Properties must be in good markets and have no more than 500 total units; Well-constructed properties requiring modest repairs; Real-estate owned properties in receivership that are capable of improved performance; Excluded properties include seniors housing, student housing and manufactured housing communities
- Rehabilitation: Rehab work must begin within 90 days of loan origination and be completed within 2 years and 9 months; Budget of $10,000 to $25,000 per unit is allowed; Sponsor can adjust budget up to 20% without additional approval; At least half of the budget should be spent on unit interiors; Completion Guaranty or rehabilitation escrow required; Borrower/Servicer reporting required
Terms are indicative and set by Freddie Mac underwriting for your specific property.
What Our Clients Say
“I spoke to several commercial lenders before finding Select Commercial. They got me a lower rate and their service was exceptional. If you need a multifamily loan, you need to talk to Stephen.”
Nathan B. · Philadelphia, PA“Select Commercial was very helpful with my multifamily mortgage. Stephen went over several options and we came up with the best lender to meet my needs. I got the funds and also lowered my payments.”
Gary M. · Portland, OR“I found selectcommercial.com and saw they specialized in apartment building loans. In the end, they were by far the best company I have used. Next time I know who to call first.”
Jerry T. · Long Island, NY“As a real estate attorney, I trust that Select Commercial will deliver apartment building loans and commercial mortgages in a timely manner. The rates and terms offered are excellent. I heartily recommend them.”
David S. · New York CityGet Your Freddie Mac Quote
No cost, no obligation. Written answers within 48 hours on multifamily loans from $1,500,000.
- No application or processing fees
- Written answers within 48 hours
- For 5+ unit and commercial properties, $1.5M and up