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Update to the Multifamily Refinance Test

June 26, 2014

We have updated our Refinance Test by changing the cap rate forecast. This change has been made to capture yield curve flatness and implied lower rates in the forecast beyond year five. It is the only governed assumption that has been changed.

This new version of the Refinance Test is required for new deals as of June 26.

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.

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