Offers an additional financing option in conjunction with a newly originated or seasoned multifamily mortgage
- Split and seasoned supplemental options available
- With a seasoned supplemental mortgage, obtain financing in addition to an existing mortgage without the cost of a full refinance
- Both fixed- and floating-rate supplemental loans available
- Supplemental financing behind seasoned securitized mortgages is a unique advantage of the Freddie Mac Capital Markets ExecutionSM (CME)
|Product Summary||Split Supplemental Mortgage||Seasoned Supplemental Mortgage|
|Description||A supplemental mortgage placed at the same time as a newly originated Freddie Mac first mortgage||A supplemental mortgage placed at least 12 months after origination of the first mortgage or the previous supplemental mortgage; more than one seasoned supplemental mortgage is permitted|
|Eligible Borrowers||Original borrower, Freddie Mac-approved transferee (for portfolio mortgages), or servicer-approved transferee (for CME mortgages)|
|Eligible Seller/Servicers||All Program Plus® Seller/Servicers approved for the property’s location||Program Plus Seller/Servicer currently servicing the first mortgage, or in the case of a CME first mortgage, the Program Plus Seller/Servicer that originated the CME first mortgage|
|Standard Loan Terms||Coterminous with first mortgage; 30-year maximum||Coterminous with first mortgage or may exceed first mortgage by up to 24 months|
|Prepayment Provisions||Structured as a yield maintenance loan|
Loan-to-Value (LTV) Ratios and Amortizing2 Debt Coverage Ratios (DCRs)
|Supplemental Loans (Split or Seasoned3) Base Maximum LTV and Minimim DCR||Fixed-Rate LTV/DCR||Floating-Rate LTV/DCR (DCR at max note rate)|
|Amortizing||Partial-Term Interest-Only4||Full-Term Interest-Only (using amortizing payment)||Amortizing||Partial-Term Interest-Only4||Full-Term Interest-Only (using amortizing payment)|
|≥ 5-Year and < 7-Year Term||70% / 1.30x||Ineligible||60% / 1.45x||70% / 1.05x||Ineligible||60% / 1.20x|
|7-Year Term||80% / 1.25x||80% / 1.25x||65% / 1.40x||80% / 1.05x||80% / 1.05x||65% / 1.20x|
|> 7-Year Term||80% / 1.25x||80% / 1.25x||65% / 1.40x||80% / 1.05x||80% / 1.05x||65% / 1.20x|
|≥ 5-Year and < 7-Year Term||65% / 1.35x||Ineligible||60% / 1.50x||65% / 1.10x||Ineligible||60% / 1.25x|
|7-Year Term||75% / 1.30x||Ineligible||60% / 1.45x||75% / 1.10x||Ineligible||60% / 1.25x|
|> 7-Year Term||75% / 1.30x||75% / 1.30x||60% / 1.45x||75% / 1.10x||75% / 1.10x||60% / 1.25x|
1 All LTVs and DCRs are calculated based on the sum of the debt service and unpaid principal balance of the first mortgage and all existing and proposed supplemental mortgages. LTVs and DCRs for a split supplemental mortgage are the same as the first mortgage.
2 The DCR calculated for the partial-term interest-only and full-term interest-only period uses an amortizing payment.
3 A seasoned supplemental mortgage is not allowed if fewer than 3 years is remaining on the first mortgage; if fewer than 5 years remains on the first mortgage, add 5 bps to the DCR.
4 For partial-term interest-only loans, there must be a minimum amortization period of 7 years for loans with terms greater than 7 years. Acquisition loans with 7-year terms may have up to 1 year of partial-term interest-only. For terms of 10 years or more, Sellers should contact their Freddie Mac representative to determine the allowable term of partial-term interest-only.
The information in this document is not a replacement or substitute for information found in the Freddie Mac Multifamily Seller/Servicer Guide. Terms set forth herein are subject to change without notice.