Update to the Multifamily Refinance Test
June 2, 2014
We have updated our Refinance Test, to reflect the most recent quarterly market and interest rate information.
We made a few minor adjustments, including changing “Net Spread” to “Gross Spread” to clarify previous confusion, and the “Fail” label to “Warning” to emphasize that a loan not passing should start a discussion rather than end it. All other parameters and settings remain the same. This new version of the Refinance Test is required for new deals as of June 2.
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.
Resources for Your Reference
See our Refinance Test Customer Tutorial and our Entering Supplemental Loans into Refinance Test Tutorial in the Originate & Underwrite Program Plus Resources section of our website for additional guidance on the use of the test and evaluation of its results.