Freddie Mac Small Apartment Loans - Prepayment Terms

To better help borrowers customize loan terms that best meet their financing and investment objectives, the Freddie Mac Small Loan Program provides multiple prepayment options to select from.

CREFCOA’s published interest rates for the Freddie Mac SBL program assume a yield maintenance prepayment penalty. Below are the adjustments to rates for the declining prepayment options.

• 5-year fixed term: 5-years
• 7-year fixed term: 7-years
• 10-year fixed term: 10-years
• Interest rate adjustment. There are no adjustments to the published interest rates.
• At the end of the fixed term, for hybrid loans, the prepayment premium is 1%. The 1% premium may be waived for borrowers that sell the property or refinance through Freddie Mac.

• 5-year fixed term: 5-4-3-2-1
• 7-year fixed term: 5-5-4-4-3-2-1
• 10-year fixed term: 5-5-4-4-3-3-2-2-1-1
• Interest rate adjustment. Add 5 bps for 5-year fixed term and 10 bps for 7-year and 10-year fixed terms to the published interest rates.
• At the end of the fixed term, for hybrid loans, the prepayment premium is 1%. The 1% premium may be waived for borrowers that sell the property or refinance through Freddie Mac.

• 5-year fixed term: 3-2-1-1-1
• 7-year fixed term: 3-3-2-2-1-1-1
• 10-year fixed term: 3-3-3-2-2-2-1-1-1-1
• Interest rate adjustment. Add 25 bps for 5-year fixed term and 40 bps for 7-year fixed term and 35 bps for 10-year fixed term to the published interest rates.
• At the end of the fixed term, for hybrid loans, the prepayment premium is 1%.

• 5-year fixed term: 3-1-0
• 7-year fixed term: None
• 10-year fixed term: None
• Interest rate adjustment. Add 45 bps for 5-year fixed term to the published interest rates.

At the end of the fixed term (for hybrid loan when the loan coverts to a floating rate term) there is a soft 1% prepayment penalty for the remainder of the loan term. It's a soft prepayment because the 1% penalty is waived if you sell the property or refinance the loan through the Freddie Mac SBL Program. If you refinance with another lender the 1% prepayment penalty applies.