Interested in Agency Lending? Check out our Borrower Guide to see where you stack up

08/27/2021

Fannie Mae and Freddie Mac (“the Agencies”) have some of the most competitive lending terms available to borrowers. What’s not to love about government-backed loans, desirable terms, and program flexibility? As an investor interested in Fannie Mae or Freddie Mac financing, you may be wondering if you qualify. Take a look at our breakdown of some of the borrower qualifications below.

Minimum Required Net Worth and Liquidity

To qualify for Fannie Mae Small Loans and Freddie Mac Optigo Small Balance Loans (SBL) programs, borrowers must have a combined net worth equal to or greater than the loan amount. Liquidity must be equal to or greater than 9 monthly payments of principal and interest.

Minimum Required Credit Score

An individual borrower must have a (FICO) Credit Score of 680 or better. However, if there are multiple borrowers, there is some additional flexibility – if you have questions about this, one of our experts would be happy to chat.

Owning/Operating Experience Required

Freddie Mac: The borrower is required to have ownership and control in either a minimum of three multifamily properties with at least one for a minimum of the preceding two years, or at least one multifamily property for the preceding five years.

Fannie Mae: The borrower is required to have at least two years’ experience with at least one multifamily property of similar size to the subject property.

Citizenship Requirement

Borrowers or key principals must:

  • Be a citizen residing in the United States

  • Be a permanent legal resident of the United States OR
  • Meet the specific foreign key principal requirements (wondering what these requirements are? Once again, just reach out and we can talk through it with you.)
  • If an entity is requesting the loan, it must be organized in the United States.

Additional Requirements

Felonies: Fannie Mae and Freddie Mac rarely lend to borrowers with past litigation or criminal records related to finances. Guarantors must not be involved in any criminal activity including:

  • Bankruptcy

  • Foreclosure
  • Deed in lieu of foreclosure
  • Other liquidation proceedings

Location Limitations: Fannie Mae and Freddie Mac want borrowers to be actively involved with the operations of their property. If the borrower doesn’t live within 100 miles of the property, a third-party property manager or on-site professional will be required. 

Stabilization: The property must be stabilized (at least 90% occupancy for 90 days).

For in-depth specifics on the borrower guidelines, download our Program Comparison Guide. For inquiries, talk to one of our multifamily experts or get an instant quote through our instant quote tool.

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