Freddie Mac Optigo | 2026-08-09

Freddie Mac Refinance Test Results Belong in the Opening Checklist

Freddie Mac's July 2026 Refinance Test update is a reminder to surface refinance-risk discussions early.

Freddie Mac Multifamily posted a new Refinance Test for the second quarter of 2026, effective July 13, 2026 for all new loans except Small Balance Loans. The update sets the implied 10-year forward rate at 5.78%, with expense growth varying based on economic conditions and property characteristics, and with loan spread and cap rate growth assumptions unchanged from the prior quarter.

Freddie Mac's Refinance Test resources describe the tool as evaluating a borrower's ability to refinance a balloon balance at maturity. The stated purpose is to make results transparent early in underwriting and encourage discussion with Freddie Mac underwriting staff about deal parameters.

For closing counsel, the practical issue is not to turn a finance test into legal advice. It is to make sure refinance-test status is visible early enough to affect the closing plan. If a file may require underwriting discussion, revised proceeds, structure changes, or sponsor decisions, those items should not first appear when documents are otherwise ready to circulate.

A borrower-side opening checklist should identify whether the Refinance Test applies, who ran it, whether the loan passed, whether any follow-up with underwriting is pending, and whether the result affects title, authority, guarantor, opinion, or funding assumptions. This note is informational only and is not legal advice for any specific transaction.