Is Freddie Mac SBL 12 month debt service reserve going away anytime soon?
We just entered year 6 on our loan on an apartment building, but if we refinance through Freddie Mac SBL program (which is our current loan) there is a mandatory 12 month reserve of principal and interest and no clear answer on when the funds are returned. It's a lot of cash to tie up for an indefinite period of time.
[{"id": "h9xfiyq", "text": "It\u2019s already removed for non SBL loans", "replies": [], "depth": 1}, {"id": "ha37etq", "text": "Have you considered other agency financing options? fnma? Portfolio lenders (i.e. banks) typically far more flexible than conduits as it pertains to reserves, cash mgmt (lockboxes) covenants, etc.", "replies": [{"id": "ha3ezgm", "text": "Yes, but the 1% pre-pay penalty is waived if I stay with Freddie Mac, and my state has a mortgage recording tax which can be avoided if the new mortgage is \"assigned\" to the new lender at closing, which may or may not happen if I don't go with Freddie Mac. So there is a 2% \"savings\" for putting up with Freddie Mac......", "replies": [{"id": "ha3l7zb", "text": "When does the loan mature? Prepay typically does not apply within 90 days of maturity. Furthermore, weigh and \"savings\" percentage against one year of p&amp;i (30 year amort, ~4% rate probably around 5%, albeit this isn't truly lost).\n\nFurthermore, new loan is a new loan, whether its granted through freddie fannie etc (unless youre working with a portfolio lender who can grant a term extension).\n\nPros &amp; cons my friend. I'd advise speaking with an agency lending shop originator and telling them your concerns. I'm sure they'd point you in the right direction if you provide them the specifics.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]