In certain ways, the Freddie Mac Multifamily business is similar to the Single-Family business. Both buy and securitize mortgages originated by a network of approved lenders; we do not lend money directly to borrowers. By selling mortgage loans to us, lenders receive money that they can use to make loans to additional borrowers. That, basically, is where the similarities end.
What are the main differences between our Multifamily and Single-Family businesses:
|Property size||5 or more units||1 to 4 units|
|Freddie Mac-approved lenders||About 30||More than 1,700|
|Loan size||$1 million to $100s millions – no current limit||Legislated limit of $424,100 ($636,150 in high-cost areas) for a 1-unit home|
|Underwriting process||Manual – each loan is unique||Typically automated|
|Number of parties involved||Many, sometimes including government agencies||One borrower|
|Source of mortgage payments||Income from rents||Borrower’s personal income|
|Servicing involvement||Active in monitoring each loan’s performance||Involved in a loan’s performance if it becomes delinquent|
Freddie Mac finances all types of multifamily rental properties.
Garden-style: 1-, 2-, or 3-story apartment development built in a garden-like setting in a suburban, rural, or urban location; buildings may or may not have elevators
Walk-up: 4- to 6-story building without an elevator
Mid-rise: Multi-story building with an elevator, typically in an urban area
High-rise: Building with 9 or more floors and at least 1 elevator
Manufactured housing community: Community in which the operator leases ground sites to owners of manufactured homes
Special-purpose housing: Property of any style intended for a certain population segment