Freddie Mac

Freddie Mac is a government-sponsored enterprise, or GSE, that was created in 1970 to help increase the availability of mortgage money in the United States. The company buys mortgages from lenders, pools them, and sells securities backed by the mortgages. This helps to keep mortgage interest rates low and provides liquidity to the mortgage market. Freddie Mac has been involved in the mortgage market for more than 40 years, and during that time, has helped millions of American homeowners purchase or refinance their homes. The company has also been a major player in the development of the secondary mortgage market, which helps to keep mortgage interest rates low and provides liquidity to the market. Today, Freddie Mac is the second-largest provider of mortgage money in the United States. The company has helped more than 30 million American homeowners purchase or refinance their homes, and it continues to play a major role in the mortgage market.
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Freddie Mac Loan Overview

Freddie Mac loans are highly sought after by investors. Like, they are government-sponsored and have modest interest rates, low down payments, and flexible terms. This keeps repayments low and makes the purchase of commercial real estate affordable. A Freddie Mac loan is only eligible for the acquisition or refinancing of certain property types, including student accommodation, apartments, affordable housing, and market-rate properties. One benefit of Freddie Mac loans is that they are backed by the U.S. government, which means that lenders are guaranteed their money back in the case of default.

Benefits of Freddie Mac Loans

• Low interest rates – One of the biggest benefits of Freddie Mac multifamily loans is the low interest rates that are typically offered. This can help to reduce the overall cost of the loan, which can be helpful for property owners and developers. 

• Fast approval times – Another benefit of Freddie Mac multifamily loans is the fast approval times. This can help to speed up the process of getting the loan approved, which can be helpful for those who are in a hurry to get the loan funded. Typically, a borrower and lender can close a Freddie Mac loan in 45 to 90 days.

• Flexible terms – Freddie Mac multifamily loans also offer flexible terms, which can help to make the loan more customizable to the needs of the borrower. Freddie Mac Loan terms can very in length, rate type, prepayment penalties, and interest only terms.

Freddie Mac Multifamily Products


Competitively priced loan products that can be used for the acquisition, refinance, or rehabilitation of multifamily properties.

Small Balance Loans

Loans for multifamily properties comprised of between 5 and 50 units, ranging between $1M to $7.5M

Targeted Affordable Housing

Loans for properties in underserved areas that are affordable to families with very low incomes. These include properties that are encumbered by rent restrictions for a period of time such as a Land Use Regulatory Agreement (LURA), Housing Assistance Payment (HAP) contract, or Low Income Housing Tax Credit (LIHTC).

Senior Housing

Loans including independent living properties, assisted living properties, and properties with skilled nursing or memory care. 

How does Freddie Mac differ from Fannie Mae?

Although Fannie Mae and Freddie Mac are both Government Sponsored Entities, their operations are not entirely identical. First, Freddie Mac formally underwrites every deal that they close whereas Fannie Mae enrolls the help of DUS (Delegated Underwriting & Servicing) Lenders for their underwriting. Second, Fannie Mae is publicly traded while Freddie Mac is government-owned. Finally, the factors that go into rate calculation differ between the two. Freddie Mac interest rates have a higher investor spread than Fannie Mae rates. On the other hand, Fannie Mae rates require Guarantee and Servicing fees to pay their DUS Lenders.

What are the terms of a Freddie Mac Multifamily Loan?

Loan size From $1 million and up
Terms Floating and fixed-rate options with 3,5,7,10+ year terms
LTV Up to 80%
Minimum DSCR From 1.25 for market rate properties
Amortization period Up to 30 years
Recourse Non-recourse with standard "bad boy" carve-outs

Terms of Freddie Mac Loans in 2022

Continuing 2022 similarly to 2021, the FHFA will still require that at least 50% of the total volume for Fannie Mae and Freddie Mac be designated as mission-driven, affordable housing. Differing from 2021, the requirement for 2022 is that at least 25% of this multifamily business be affordable to residents at or below 60% of the area median income (AMI). In 2021, this requirement was set at 20%.

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