Freddie Mac Preservation Rehabilitation Multifamily Loans

The Freddie Mac Preservation Rehabilitation Multifamily Loans program provides investors with a great financing solution to renovate affordable housing properties with low income housing tax credits. This product can be used with bond credit enhancements with 4% LIHTC, tax-exempt loans with 4% LIHTC and 9% LIHTC cash loans. These loans offer terms of up to 15 years, amortizations up to 30 years, LTV up to 80% of market value, and DSCRs as low as 1.25x.

Freddie Mac Preservation Rehabilitation Multifamily Loan Highlights

Product Description:

• Tax-Exempt Financing with 4% LIHTC: Provides investors with tax-exempt financing in order to moderately rehabilitate affordable multifamily properties with a new 4% LIHTC and tenants in place
• Tax-Exempt Financing with 9% LIHTC: Provides investors with tax-exempt financing in order to moderately rehabilitate affordable multifamily properties with a new 9% LIHTC and tenants in place

Eligible Property Types:

• Tax-Exempt Financing with 4% LIHTC: Must be either garden, mid-rise, or high-rise multifamily properties. Must have 4% Low-Income Housing Tax Credits and be undergoing moderate rehabilitation with tenants in place
• Tax-Exempt Financing with 9% LIHTC: Must be either garden, mid-rise, or high-rise multifamily properties. Must have 4% Low-Income Housing Tax Credits and be undergoing moderate rehabilitation with tenants in place

Funding Type: Provides investor with tax-exempt financing for the acquisition and rehabilitation of multifamily properties based on projected post-rehabilitation net operating income

Terms:

• Minimum term: Lesser of the remaining LIHTC compliance period or 15 years; 15 years with HUD Risk Sharing
• Maximum term: 35 years
• A maximum of 2 years for rehabilitation and stabilization period will be included in loan term

Amortization: Up to 35 years

LTV:

• Tax-Exempt Financing with 4% LIHTC:
• 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
• Tax-Exempt Financing with 9% LIHTC: 90% of market value

DSCR:

• Tax-Exempt Financing with 4% LIHTC:
• Variable rate with cap hedge: 1.20x
• Fixed rate: 1.15x
• Tax-Exempt Financing with 9% LIHTC: 1.15x

Prepayment Penalty:

• Tax-exempt Financing with 4% LIHTC- Fee maintenance
• Tax-exempt Financing with 9% LIHTC- Yield maintenance

Other Terms:

• Subordinate financing is permitted
• Escrows for taxes and insurance are required