Changes in Freddie Mac Credit Requirements for Multifamily Mortgage Loans

Freddie Mac is revising its credit requirements for its multifamily mortgage loan programs effective as of February 2, 2009. Although the term sheets have not yet been updated on the Freddie Mac website, we have been told that the changes will include increasing the minimum debt coverage ratios and decreasing the maximum loan to value ratios on various types of loans. The Freddie Mac website states that “Loans under quote or under application with Freddie Mac prior to February 2, 2009 may be subject to the new credit parameters effective immediately at the discretion of Freddie Mac or the Seller/Servicer.” One source, however, suggests that there is a grandfathering policy for loans that are under application by February 1, 2009 and that meet certain other standards (e.g., if the loan closes by May 1, 2009 for Targeted Affordable Housing loans, and if the borrower rate locks or closes prior to March 2, 2009 for Conventional Loans). If you have applied for or are considering a Freddie Mac loan, check with your Freddie Mac regional adviser or your mortgage broker now to see what loan terms and conditions will apply.