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Freddie Mac

Conventional Float-to-Fixed Rate Loan (Two-Plus-Seven)


Must be well-qualified and preferably have Freddie Mac borrower experience.

  • 2 years.
  • IO, no cap required, locked-out/no prepayments.
  • No supplemental loans during floating-rate period.
  • 7 years.
  • IO subject to 7-year fixed-rate IO credit parameters with defeasance.
  • Amortizing loan with defeasance.
  • Securitization-ready.
  • Compliant with current credit parameters.
  • Sized based on fixed rate.
  • Must pass Refinance Test using aggregated term (2 years floating plus 7 years fixed) with 2 years of IO.

Terms (subject to revisions due to market fluctuations)

  • Floating rate: 30-day Average SOFR + 20 bps.
  • Fixed rate: 7-year UST + 7-year fixed pricing + 20 bps.
  • Fixed rate is locked when the floating-rate spread is locked. Index locks also available during underwriting.
  • No future rate adjustments.

  • Conversion of floating rate to fixed rate is automatic.
  • Permits additional loan proceeds via a supplemental mortgage (pari passu). Any additional proceeds will be priced at then first-mortgage pricing.
  • Freddie Mac must receive request for additional proceeds no less than 150 days prior to conversion.
  • For securitization purposes, updated third-party reports required prior to fixed rate period conversion. Third- party reports paid by Freddie Mac unless additional proceeds are requested.
  • If original loan fails to meet Freddie Mac’s credit parameters at conversion, Freddie Mac retains the right to restructure the transaction via a split note at time of securitization.
  • Supplemental loans are allowed beginning the second year of the fixed-rate period.


This sheet sets out the general guidelines of a loan program and is designed solely as an aid to prospective borrowers and other clients. It does not represent or imply a contract or a commitment to lend funds. A commitment to lend funds may only be made by a written letter issued by NewPoint to a prospective borrower. This term sheet is subject to change at any time without notice at the sole discretion of NewPoint Real Estate Capital LLC.