Freddie Mac Bond Credit Enhancement with 4% LIHTC Multifamily Loans

The Freddie Mac Bond Credit Enhancement with 4% LIHTC Multifamily Loan Program is the perfect solution for investors looking to finance properties with low income housing tax credits. This program provides investors with forward commitments provide bond credit enhancement post-construction or substantial rehab. In addition, this program offers immediate funding for acquisition and refinancing of properties that can maintain 90% occupancy for 90 days. Plus, this program has both fixed and variable-rate options, supports eligible mixed-use properties, and can support DSCRs as low as 1.15x. 
Through these options, the Freddie Mac Bond Credit Enhancement with 4% LIHTC Multifamily Loan program helps to preserve affordable housing options with flexible transaction structures, lower costs and certainty of execution.

Freddie Mac Bond Credit Enhancement with 4% LIHTC Multifamily Loans Highlights

Product Description:

• Forward Commitment: Provides investors with bond credit enhancement to construction or substantially rehabilitate affordable multifamily properties with 4% low income housing income housing credits
• Immediate Funding: Provides investors with bond credit enhancement in order to purchase or refinance apartment buildings that are affordable, stabilized and have 4% low income housing tax credits. Properties must have at least 7 years remaining in the LIHTC compliance period
• Preservation Rehabilitation: Offers bond credit enhancement in order to moderately rehab affordable multifamily properties with new 4% LIHTC and tenants in place

Terms:

Forward Commitment/ Immediate Funding: Minimum term of the lesser of the remaining LIHTC compliance period or 15 years and Maximum term of 35 years

Preservation Rehabilitation: Minimum term of the lesser of the remaining LIHTC compliance period or 15 years and Maximum term of 35 years. Maximum of 2 years for rehabilitation and stabilization will be included in the loan term

Amortization: Up to 35 years

Loan to Value:

• Variable-rate with cap hedge: 80% of adjusted value or 85% of market value
• Fixed-rate: 85% of adjusted value or 90% of market value

DSCR:

• Variable-rate with cap hedge: 1.20x
• Fixed-rate: 1.15x

Eligible Property Types:

• Forward Commitment: Garden, midrise, or high-rise multifamily buildings with 4% low- income housing tax credits that are going to be constructed or significantly renovated
• Immediate Funding: Garden, mid-rise, or high-rise multifamily properties with 4% low-income housing tax credits that maintain occupancy levels of 90% for at least 90 days
• Preservation Rehabilitation: Garden, mid-rise, or high-rise multifamily buildings with 4% low-income housing tax credits that require moderate rehabilitation and have tenants in place

Type of Funding:

• Forward Commitment: Offers investors a bond credit enhancement during construction. Also offers forward commitment to provide bond credit enhancement when the project moves from construction phase to permanent phase
• Immediate Funding: Provides borrowers with bond credit enhancement for both fixed and variable-rate tax-exempt bonds
• Preservation Rehabilitation: Offers borrowers bond credit enhancement for the purposes of acquiring or rehabilitating multifamily properties. Bond credit enhancement is based on future net operating income after rehabilitation

Prepayment Penalty: Fee Maintenance