![]() ![]() Single-Family Loans Also Allow for Commercial Space These rules generally apply to both traditional Freddie Mac financing, as well as for loans issued under the increasingly popular Freddie Mac Small Balance Loan (SBL) program. ![]() In general, both the GSE and the lender must believe that the commercial use will contribute to, rather than detract from, the overall income of the property, and ideally, will increase the property’s DSCR (debt service coverage ratio) over time. When looking to finance a mixed-use property with a Freddie Mac or Fannie Mae multifamily loan, the exact use of the commercial space matters. In contrast, Fannie Mae requires that no more than 20% of a building’s net rental space be allocated for commercial purposes and that no more than 20% of a property’s effective gross income comes from commercial space. Freddie Mac requires that the property’s commercial income does not exceed 25% of the property’s gross income. Both Freddie Mac and Fannie Mae Allow Some Commercial Spaceīoth Freddie Mac and Fannie Mae provide financing for mixed-use multifamily properties, under certain conditions. ![]()
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