Resource Center

Hi. This is Scott Croul, Senior Regional Underwriting Director for the Western Region. I manage the underwriting team and work with Western Region Producers to structure and approve your loans.

Did you know that the Seller/Servicer’s analysis is one of the most important items that should be a part of every complete underwriting package? Freddie Mac Underwriters especially need your analysis on Form 1116, the Real Estate Schedule for each sponsor. We rely on you to do more than just list the real estate projects for each sponsor.

The Real Estate Schedule should include your analysis of the:

• Leverage
• Cash flow
• Interest-only burn-off and
• Maturity risk of each project

It’s crucial that you confirm that all debt and property information is complete. You should review the Real Estate Schedule and identify weaknesses such as:

• Valuations based on aggressive below market capitalization rates.
• Low property occupancies.
• Debt service spikes resulting from conversion from interest only payments to amortizing payments.
• High levels of contingent liabilities.

Your analysis should cover the sponsor’s plans and resources available to cover any debt service shortfalls, and refinance any loans with pending maturities. You should also make a determination of risk to the sponsor from the contingent liabilities.

Remember to include information for both the borrower and the borrower principal. This means that you need to include information for each individual or entity that will execute the promissory note. For the borrower principal, the real estate schedule must provide details for any individual or entity that directly or indirectly controls the borrower. A borrower principal typically will have a 25 percent or more collective equity interest in the borrower.

Your thorough analysis means we can issue a faster commitment to you, and ensures a smooth process for your borrower.