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.
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.
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.
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.
Borrowers or key principals must:
Be a citizen residing in the United States
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:
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).