LOS ANGELES—Freddie Mac's Fast Track Early Rate-Lock program has an advantage over banks because it can lock in a rate for a longer period of time, according to Allan Freedman, SVP with Berkadia Commercial Mortgage. In an earlier story, GlobeSt.com reported that Freedman helped to secure $79.5 million in financing through the program to refinance a nine-property multifamily portfolio in Los Angeles.

“The Fast Track program was an ideal fit for the client's needs, as it streamlined the process, minimized documentation requirements and allowed them to quickly secure financing given interest rate volatility,” Freedman tells GlobeSt.com. The Fast Track program allows borrowers to lock in the rate and the loan amount quickly after application. In this specific case, Freedman was able to lock in the rate only a few days after signing the application.

In addition to the rate-lock, Freddie Mac was the clear better option in this case becasue it waived prepayment penatlies. “There was competition from the banks, and the borrower faced an existing prepayment penalty that didn't burn off until the end of the year,” says Freedman. “Freddie Mac ultimately had the advantage, as they could lock the rate for an extended period of time—something the banks could not do—and waived the prepayment penalty portion.”

Freedman locked in an interest rate of approximately 4% for the nearly $80 million fixed-rate loan, which had a 10-year term and a 3.5-month early rate lock. The loan has a 65% loan-to-value and a 30-year amortization schedule with some prepayment penalties waved.