Multifamily Refinance Test Updated
Aug 27, 2014
We have updated our Refinance Test with new data. The changes are primarily driven by interest rate shifts; no parameters have been altered in the test. As a result of the new data, the test is slightly less restrictive on debt coverage ratio (DCR) and slightly more restrictive on loan-to-value (LTV) ratio.
Also in this release, we have changed the cell label for “Current Market Cap Rate” to “Appraiser’s Cap Rate.” The formula in this cell is set to equal the property cap rate; however, when available, users should enter the appraiser's cap rate. When it is not available, users should leave it equal to the property cap rate.
This new version of the Refinance Test is required for all new deals as of September 1.
The June 2 version of the Refinance Test is also available and may be used for loans under application prior to September 1 which rate lock prior to September 30.
Using the Results of the Refinance Test
As always, if a loan does not pass the test, we encourage you to discuss the parameters with your underwriter as the results do not necessarily mean Freddie Mac will not buy the loan.
Resources for Your Reference
Visit the Refinance Test and Resources page to access both versions of the Refinance Test and these related resources: