Quarterly Update to the Multifamily Refinance Test
February 21, 2013
Freddie Mac Multifamily is providing our quarterly update to the Refinance Test, reflecting the quarterly update of market and interest rate information. When using the new version of the Refinance Test, you will notice that some results are more restrictive than the prior quarter, reflecting the recent slight rise in interest rates, as well as market perceptions of higher future interest rates and their ripple effect on terminal cap rates.
New Test Now Available – Required for New Loans Effective March 1
- The new version of the Refinance Test is required for new deals as of March 1, 2013.
- The current version [dated November 8] of the Refinance Test will continue to apply to all loans that are under application with the Seller/Servicer (money up) and are rate locked by March 31.
- Both versions of the refinance test will remain available until March 31 on our Multifamily Refinance Test page, which is available through a Quick Link on the Originate & Underwrite page.
Using the Results of the Refinance Test
As always, when a loan does not pass the test, this is simply an indicator for you to discuss the parameters sooner with your underwriter. It does not necessarily mean Freddie Mac will not buy the loan.