Freddie Mac Multifamily Minimum Occupancy Requirements, Explained
The minimum occupancy requirements for Freddie Mac multifamily loans vary by loan type but are typically 90% occupancy for 90 days before loan closing.
Despite this requirement, for its Small Balance Loan program (SBL) Freddie Mac allows properties to have 85% physical occupancy under certain conditions. These conditions include:
Aquisitions and Refinances:
The property is located in a Top Market (as defined by the SBL program) and is either newly constructed or recently renovated.
The subject property has less than 30 units.
Acquisitions:
Property needs to have stable historical occupancy.
Must be managed by either a manager-owner or separate project manager with more multifamily property management experience than the current property owner and/or management company. acquiring/managing the property with more experience than the current owner/management
The property needs to have relatively low crime, as demonstrated by historical records
There must be room for current rent growth (i.e. rents are currently lower than market rents for similar properties based on an appraisal conducted by a licensed appraiser.)