Freddie Mac Fixed Rate Conventional Multifamily Loans

The Freddie Mac Fixed Rate Conventional Loan offers multifamily investors incredibly attractive financing and loan terms. Freddie Mac Fixed-Rate Conventional Loans can be utilized to finance standard multifamily properties, student housing, seniors housing, cooperative housing developments, and targeted affordable housing properties, including Section 8 housing. These loans are non-recourse so investors don’t have to personally guarantee the loan (except for standard bad boy carve outs). Through this program, we can help you find flexible terms and amortizations of up to 30 years and can offer financing up to $100 million.

Freddie Mac Fixed Rate Conventional Multifamily Loan Highlights

Loan size: $5-$100 million (will consider smaller and larger loans on a case by case basis)

Use: Acquisition or Refinance

Term Length: 5- to 10-year terms (up to 30 years if loan is not purchased for securitization)

Amortization: Up to 30 years

Interest Only: Yes

Maximum LTV:

5 Year Loan

• Amortizing: 75% LTV
• Partial Term Interest-Only: 75% LTV
• Full Term Interest-Only: 65% LTV

7 Year Loan

• Amortizing: 80% LTV
• Partial Term Interest-Only: 80% LTV
• Full Term Interest-Only: 70% LTV

10 Year Loan

• Amortizing: 80% LTV
• Partial Term Interest-Only: 80% LTV
• Full Term Interest-Only: 70% LTV

Minimum DSCR:

5 Year Loan

• Amortizing: 1.30% DSCR
• Partial Term Interest-Only: 1.30% DSCR
• Full Term Interest-Only: 1.40% DSCR

7 Year Loan

• Amortizing: 1.25% DSCR
• Partial Term Interest-Only: 1.25% DSCR
• Full Term Interest-Only: 1.35% DSCR

10 Year Loan

• Amortizing: 1.25% DSCR
• Partial Term Interest-Only: 1.25% DSCR
• Full Term Interest-Only: 1.35% DSCR

Recourse Requirements: Non-recourse except for industry standard “bad boy” carve-outs

Prepayment Penalties: Yield maintenance until securitized followed by 2-year lock out; defeasance thereafter. No prepayment premium for final 90 days. If loan is not securitized within first year, then yield maintenance applies until the final 90 days. Yield maintenance without defeasance is available for securitized loans at an additional cost.

Loan Assumability: Loans are assumable with lender’s permission. A fee of 1% assumption fee will be payable to Freddie Mac.

Tax and Insurance Escrow: Typically Required

Replacement Reserves: Typically Required

Eligible Borrowers:

• Borrowing entity can be any of the following: limited partnership, corporation, limited liability company, or a tenancy in common (TIC) with 10 or fewer tenants in common
• Other structures such as general partnerships, limited liability partnerships, REITs and certain trusts may also be acceptable in limited circumstances.
• Borrower must usually be a Single Purpose Entity. However, on loans less than $5 million, a borrower other than a TIC may be a Single Asset Entity instead of a SPE
• If the borrower is structured as a TIC, each tenant in common must be an SPE

Eligible Property Types:

• Standard multifamily housing
• Student housing
• Senior housing
• Manufactured housing communities
• Cooperative housing
• Targeted Affordable Housing