Greystone announced that it will sell loans under Freddie Mac’s new Small Balance Loan (SBL) offering, which the government-sponsored enterprise (GSE) is calling a “game changer” for the small loan market.
The new platform offers fixed-rate and hybrid adjustable-rate mortgage loans ranging from $1m to $5m on multifamily acquisitions or refinancings.
“This designation enables Greystone to offer more financing options for small loans, an important segment representing affordable rental housing, and we look forward to growing our relationship with Freddie Mac over time,” said Rick Wolf, senior managing director and head of Greystone’s small loan lending group, in a statement.
Among the terms and stipulations of the program, properties with at least five units will be eligible for partial or full term interest-only loans up to 80% loan-to-value, with a 1.25x debt service coverage ratio minimum (1.20x in top markets) and a 60- to 120-day rate lock.
Earlier this month Freddie Mac announced that Arbor Commercial Mortgage and Hunt Mortgage Group were also approved to sell the SBLs, launching the program to “meet the long-term debt capital needs of small rental property borrowers nationwide… increase liquidity in the small balance space and provide stability in this somewhat underserved market.”
At the time, Freddie Mac’s director, Nashwa Moussa, called the program “a game changer for seller/servicers, borrowers and investors.”
“Unlike the larger loan market where GSE presence is strong, the small loan market has limited secondary lending support and is often subject to volatility and greater instability during market downturns and dislocations,” she stated. “With this in mind, Freddie Mac Multifamily and my SBL team set out nearly eight months ago to develop a comprehensive, competitive SBL offering.”
Greystone, headquartered in New York with offices across the US, provides mortgage finance solutions across multiple platforms, including FHA, Fannie Mae, Freddie Mac, USDA, CMBS, bridge, mezzanine and other proprietary loan programs. Greystone loans are offered through Greystone Servicing Corporation, Greystone Funding Corporation and/or other Greystone affiliates.