Freddie Mac Bond Credit Enhancement with Other Affordability Components Multifamily Loans

This Freddie Mac Bond Credit Enhancement with Other Affordability Components Multifamily Loans program provides investors with a great financing solution in order to preserve affordable housing. This program offers incredibly flexible transaction structuring, certainty of execution at lower cost to the borrower. The program can be used for different fixed- or variable-rate multifamily housing bonds including: bond refundings, substitutions, or new issue transactions with 80-20 bonds, taxable bonds in combination with tax-exempt bonds, 501(c)(3) bonds, Section 8, Section 236, or tax abatements. With terms between 10- 30 years, amortization up to 30 years and LTV up 90% of adjusted value, this Freddie Mac Bond Credit Enhancement program is definitely worth a look for investors in the affordable housing space.

Freddie Mac Bond Credit Enhancement with Other Affordability Components Multifamily Loan Highlights

Use: Offers both new credit enhancement facility and replacement of existing credit enhancement facility. Eligible for tax-exempt bonds for refundings, substitutions and acquisitions

Terms: 10 to 30 years

Amortization: Up to 30 years

LTV:

• 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: 1.25x
• Fixed-rate: 1.25x

Eligible Property Types: Garden, mid-rise and high-rise apartment buildings

Occupancy: Must have occupancy of at least 90% for 90 days

Prepayment Penalty: Fee maintenance

Recourse: Non-recourse except for standard carveouts for “bad boy” acts

Other Terms:

• Subordinate debt is permitted
• Escrows for taxes and insurance are required
• Appraisal, environmental and engineering reports are required