Freddie Mac Expands Loan Options — Higher 95% LTV Now Allowed on 2–4 Unit Primary Residences

Homebuyers in St. Louis who are interested in house hacking or purchasing multi-unit properties just received some good news. Freddie Mac has announced that it will soon begin allowing loan-to-value (LTV) ratios up to 95% on 2–4 unit primary residences — a major increase from the previous 80–85% maximums.

In simple terms, this means you may now be able to buy a duplex, triplex, or fourplex in Missouri with as little as 5% down, as long as you live in one of the units.

This change comes at an interesting time. Housing affordability has been a challenge across St. Louis and much of the country due to high prices and elevated mortgage rates. Still, Freddie Mac appears to be opening the door to more flexible financing options — potentially to boost market activity and stay competitive with private lenders and FHA loans, which already allow higher LTVs.

What’s Changing With the New Freddie Mac Guidelines?

Beginning with settlements on or after September 29th, 2025, borrowers will be able to access:

This also applies to CLTV and HTLTV, meaning second mortgages like HELOCs can layer behind the first up to that same 95%.

However, this only applies to:

• Primary residences (you must live in one of the units initially)

• Purchase loans or rate-and-term refinances

It does not apply to cash-out refinances, which will remain capped at 75% LTV. That’s a smart move considering today’s market — nobody wants to repeat past lending mistakes.

Why Would Freddie Mac Relax Guidelines Right Now?

It may seem unusual for a major mortgage investor to loosen requirements during an affordability crisis, but there are a few likely reasons:

• Staying Competitive: FHA already allows up to 96.5% LTV on 2–4 unit properties. Freddie may be closing the gap.

• Appealing to House Hackers: Buying a multi-unit home and renting out the extra units is a popular strategy for first-time buyers.

• Preparing for a Possible IPO: As Freddie Mac considers going public, expanding lending options could help boost loan volume and market share.

• Aligning with Fannie Mae: Fannie already updated its guidelines in October 2023 — now Freddie is following suit.

What This Means for St. Louis Homebuyers and Investors

Across St. Louis County, St. Charles, Jefferson County, and surrounding Missouri markets, affordable multi-family options are limited — but still attainable. With just 5% down, buyers can now:

✅ Purchase a duplex and live in one side while renting out the other
✅ Qualify for financing without needing a jumbo or non-QM loan
✅ Keep monthly payments in line with standard conforming rates — not high-cost alternatives
✅ Build wealth through rental income from day one

As a local, top-rated St. Louis mortgage broker, I work with several lenders that are already preparing to honor these updated guidelines as soon as they go live. Carlson Mortgage has access to **some of the lowest rates in Missouri — with no broker fees, no processing fees, and no points.

If you’re considering buying a multi-unit property or want to explore financing options before these new rules officially launch, now is the perfect time to run your numbers.

Ready to get pre-approved or review scenarios? Contact us directly:

📞 314-329-7314
🌐 www.carlsonstl.com
📧 info@carlsonstl.com 

Looking to Purchase or Refinance?

At Carlson Mortgage, we’re dedicated to helping St. Louis residents navigate the mortgage process and find the perfect loan for their needs. Our experienced mortgage brokers can help you find the right mortgage to fit your needs and budget and will help you make informed decisions about buying a home. Call or text us at (314) 329-7314 or fill out our loan application at www.carlsonstl.com/apply for a purchase or a refinance mortgage.