Freddie Mac SBL drops certain credit restrictions in NYC
February 4, 2022
Great news for the NYC market! Effective immediately, Freddie Mac Small Balance Loans (SBL) has removed certain credit restrictions that were implemented due to COVID-19 and rent stabilization law changes. These SBL program updates should have a positive impact on the maximum loan proceeds available for NYC borrowers.
Here is a summary of changes:
- Rent-stabilized properties in New York no longer require a stress test for hybrid arm loans nor require replacement reserves to be underwritten to a minimum of $300/unit.
- Kings County (Brooklyn) has been removed as a market of concern, meaning it is no longer subject to a 5% maximum LTV reduction, 0.05x minimum DSCR increase, or additional minimum DSCR adder of 0.05x for properties that have been constructed or substantially rehabbed in the past 3 years.
Though this announcement is exciting, lenders will continue to monitor and factor into their underwriting the property condition as well as current market conditions including the level of concessions, vacancies, and any decline in rents.
If you’re looking to take advantage of the reduction in credit restrictions from Freddie Mac SBL in the NYC Market – connect with one of our MultiFi partners today!
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Nick has closed over 400 multifamily loans, with 100+ being in the Fannie Mae and Freddie Mac small loan space. In addition to his extensive professional experience, Nick received his BA in Risk Management with a Real Estate concentration from Penn State’s Smeal College of Business. His combined education and agency finance background will surely be on display as he goes above and beyond to deliver the best all-around lending experience.Read more by Nick Stambaugh