Freddie Mac Supplemental Loans

Second Debt Without Refinancing the First

A supplemental loan is how you pull equity out of a multifamily property that already carries a Freddie Mac first mortgage, without paying yield maintenance to unwind that first mortgage. Values went up, the rent roll matured, and the original loan is now conservative against today's NOI. The supplemental sits behind it and takes the loan-to-value back up to where the market will support.

The alternative is refinancing, and on a fixed-rate agency loan with years of call protection left, that math rarely works. Freddie's framing is exact: additional capital at a cost lower than refinancing.

What Is the One Real Freddie Advantage Here?

Supplemental financing behind a securitized loan. Once a first mortgage has been pooled into a K-deal, most lenders will not go behind it. Freddie will, and its own term sheet calls this a unique advantage of the execution. If your first loan is securitized and you want to add debt, the list of people who can help you is short.

How Much You Can Borrow

Sizing is measured on the combined position, not on the supplemental alone. Every LTV and coverage figure below is calculated from the sum of the amortizing debt service and the unpaid principal balance of the first loan plus all existing and proposed supplementals.

Sized from the Optigo Supplemental Loan term sheet, mf.freddiemac.com/docs/product/supplemental.pdf, dated 11/25 and fetched July 31, 2026. Coverage on interest-only periods is calculated using an amortizing payment. Partial-term interest-only loans require at least two years of amortization; anything less is treated as full-term interest only.

When Can You Get One?

At least 12 months after the origination of the first loan, or after the most recent prior supplemental. There is no limit on how many you stack, but each one restarts that 12-month clock. Prior loans must have three or more years of remaining term, and a supplemental is not available during the last three years of the first loan.

That last constraint catches people. A borrower two and a half years from maturity, watching values peak, cannot take a supplemental. The window closed.

Which Lender Do You Have to Use?

Not the one with the best quote. If the first loan has been securitized, it must be the original Optigo lender for that loan or the Optigo lender currently servicing it. If it has not been securitized, it must be the current servicer. Your negotiating leverage on a supplemental is genuinely narrower than on a new first mortgage, which is worth remembering when you pick the servicer on the original deal.

The Terms Around the Money

Supplementals are coterminous with the first loan. Fixed-rate supplementals are structured as yield maintenance loans; floating-rate supplementals follow the Optigo floating-rate loan terms. Eligible collateral is a stabilized property in good standing whose first loan came through the cash loan programs for conventional, targeted affordable, seniors housing, or conventional structured transactions.

Two items are easy to overlook in the sources and uses. Originating a supplemental may trigger collection of reserves and escrows that were deferred under the first loan, and the servicing fee is recalculated on the supplemental proceeds. Deferred insurance escrows may be permitted in limited circumstances.

Supplemental or Cash-Out Refinance?

Run both. Price the prepayment penalty on the first loan against the blended rate you would carry with a supplemental on top. Yield maintenance on a low-coupon agency loan in a higher-rate market can be a very large number, which is usually what makes the supplemental win. Our debt yield calculator and DSCR calculator will show you where the combined position lands.

Fannie Mae runs a parallel product with different parameters, including terms that need not be coterminous. Compare it on our Fannie Mae supplemental loans page before you assume the agencies are interchangeable here. They are not.

Tell us what the first loan looks like and what the property does today. We will size the supplemental against a refinance and show you both.