Freddie Mac has announced that it now offers greater flexibility for newly originated multifamily mortgages in the form of a Float-to-Fixed-to-Float Option.Under the new feature, "borrowers can take advantage of low short-term floating rates to maximize cash flows early in the life of the mortgage, lock in a fixed rate for the remainder of the term up front in order to eliminate the risk of rising rates in the future, and use up to an additional year of floating-rate debt at the end of the loan to arrange an exit strategy," Freddie Mac said. The government-sponsored enterprise said the new option allows for an initial floating-rate period of one or two years, during which the rate is based on the one-month Freddie Mac Reference Bill index. The combined term of the initial floating-rate period and the fixed-rate period can be five to 15 years. The fixed rate is based on Treasury securities with maturities similar to the combined term, the GSE said. The final floating rate will be set at a fixed spread above the prevailing one-month Reference Bill rate. Freddie Mac can be found online at http://www.freddiemac.com.

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