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Finally, no more debt service reserves!

Freddie Mac announces the elimination of SBL debt service reserves

COVID-19 Debt Service Reserves (DSRs), which were established to ensure the payment of principal and interest on loans collateralized by properties negatively impacted by the pandemic, are now a thing of the past for multifamily small loans. Effective today, Freddie Mac has eliminated the requirement of a 6-to-12-month DSR for loans originated through their Freddie Mac Optigo® Small Balance Loans Program.

Per Freddie Mac’s announcement, this change comes as a result of continued recovery in the multifamily market and improved performance of their small loan portfolio in terms of occupancy and rental collections. Fannie Mae announced the elimination of DSRs for all loans originated through their Small Loan Program in late May.

This announcement is another encouraging sign for the small multifamily market and competitiveness of Fannie Mae and Freddie Mac’s small loan programs heading into 2022. Here are Insights we shared on two other recent announcements also expected to have a positive impact on the programs: 130% increase to the FHFA’s housing goal related to 5-50 unit properties and $16B increase to multifamily loan purchase caps.


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