Freddie Mac Small Apartment Loans - Market Tiers

There are five Regions (Western, South Central, North Central, Southeast and Northeast) under the Freddie Mac SBL Program. Interest rates vary slightly by Region.

Further, Freddie Mac breaks down markets by Tiers. There are four Market Tiers under the Freddie Mac SBL Program. Every county in the country is designated as either a Top, Standard, Small or Very Small Market. In general, counties in larger cities are designated as Top or Standard Markets while counties in smaller cities are designated as Small or Very Small Markets. Further, Tier designation is based on the size of the rental population, determined by Census Bureau, and not necessarily population.

Rates and terms vary based on what Market Tier and Region the property is located in.

Counties in the following MSAs: Miami, Palm Beach, Brevard, San Francisco, San Diego, Los Angeles, San Jose, Seattle, New York, Chicago, Washington D.C., Boston, Minneapolis, Denver, Portland, Stamford and Sacramento.

Counties with a rental population of greater than 60,000. Example cities include: Dallas, Cincinnati, Jacksonville, Phoenix, Las Vegas, Albuquerque, Charlotte, San Antonio, St. Louis, Philadelphia, Columbus, Pittsburgh, Baltimore, Houston, Atlanta, Orlando and Indianapolis.

Counties with a rental population less than 30,000 - 60,000. Example cities include: Augusta, Fort Wayne, Amarillo, Baton Rouge, Fayetteville, Boise City, Boulder, Shreveport, Green Bay, Savannah, Wichita, Fargo, Naples, Des Moines and Colorado Springs.

Counties with a rental population between 1,000 - 60,000. Example cities include: Bowling Green, Charlottesville, Elk City, Wheeling, Corvallis, Idaho Falls, Charleston Brunswick, Bismarck, Appleton, Great Falls, Flagstaff, Florence, Sioux City, Midland, Odessa and Cedar Rapids.

When comparing loan programs, it's important to understand how Freddie Mac SBL Market Tiers affect loan terms. Properties located in larger markets (Top and Standard Tiers) qualify for more aggressive terms than properties located in secondary and tertiary markets (Small and Very Small Tiers). In general, properties located in Small and Very Small Markets will have slightly higher rates, lower LTV, higher DSCR and fewer years of interest only payments.

In general, the Freddie Mac SBL Program is the go-to program. However, properties located in tertiary markets may qualify for more competitive terms through the Fannie Mae Multifamily Loan program because rates and terms generally don't vary by the size of market with Fannie Mae.

Not sure what Market Tier your property falls into, request a quote or contact CREFCOA to learn more.