Freddie Mac Tax-Exempt Bond Securitization Multifamily Loans

The Freddie Mac Tax-Exempt Bond Securitization (TEBS) Multifamily Loans program provides liquidity to tax-exempt bondholders investing in the multifamily affordable housing market. Through the TEBS program, the sponsor transfers portfolios of unrated bonds to Freddie Mac in exchange for rated M-class certificates. The sponsor will typically receive Class A- M-Certificates (which are sold to other investors) and subordinate Class-B M Certificates (which are typically kept by the sponsor). This program helps sponsors and investors reduce risk, enhance liquidity, manage balance sheets and improve yields.

Freddie Mac Tax-Exempt Bond Securitization Multifamily Loan Highlights

Product Description: The program allows the sponsor to transfer privately placed tax-exempt multifamily housing revenue bonds to Freddie Mac in exchange for:

• Freddie Mac senior Class-A M Certificates that are typically sold to other investors
• Subordinate Class-B M Certificates that are usually kept by the sponsor

Amount: Typically equal to or greater than $100 million

Eligible Sponsors:

• Freddie Mac Multifamily Optigo Targeted Affordable Housing Seller/Servicers
•  Other well-capitalized financial institutions will be considered on a case-by-case basis

Eligible Property Types: Multifamily properties

LTV: Maximum 95% per Freddie Mac underwriting

DSCR: Minimum 1.05x

Subordination Level: Usually about 15% of total pool size. However, the number can vary based on quality of the collateral and sponsor needs

Properties require the following documentation (others may be required as well by Freddie Mac underwriting):

• Appraisals
• Market studies
• Rent rolls
• Financial statements (both current and historical)
• Sponsor organizational documents
• Surveys
• Title policy
• Insurance reviews
• Bond amortization schedules