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FREDDIE MAC LEASE-UP LOANS

Financing and Refinancing Lenders for new construction and Interest-Only IO lease-up loans for multi-housing apartments.

Apartment Loan Amount

Situation dependent. Contact us for a custom quote.

Freddie Mac Lease-Up Loans in Texas

Description

For refinancing or acquiring newly constructed properties.

Eligibility

Borrowers must have experience with new construction and/or lease-up properties, and generally have strong financial capacity and real estate management expertise with good performance and credit history.

Eligible Property Types

  • Well-constructed properties, exhibiting strong lease-up trends, and located in good locations and markets
  • Student housing, seniors housing and manufactured housing community transactions are not eligible
  • Stabilization expected within 12 months of funding

Loan Types

  • Fixed- and floating-rate loans
  • Interest-only (I/O) available during the lease-up period

Markets

Targeting strong markets and locations

LTV and DSCR

  • Maximum LTV on refinance is 75% (as-stabilized) and on an acquisition 70% (as-stabilized)
  • Minimum DSCR on a refinance and acquisition is 1.30x.

Minimum Cash Equity Requirement

15% on a refinance and 25% on an acquisition

Minimum Credit Enhancement Requirements

  • A Lease-Up Credit Enhancement is required for all Lease-Up transactions
  • The form of the Lease-Up Credit Enhancement will be determined by Freddie Mac
  • The Lease-Up Credit Enhancement must be at least 5% of the unpaid principal balance (10% if the Lease-Up Credit Enhancement is a guaranty, subject to additional conditions)
  • Release of Lease-Up Credit Enhancement will occur once the property has achieved the required amortizing DCR based on average performance of the past 3 months, net rental income for the past 1 month meets or exceeds the level necessary to reach the required amortizing DCR, and has met other standard conditions as set forth by Freddie Mac
  • If the required DCR is not reached within 12 months, the Lease-Up Credit
  • Enhancement will be used to resize the loan and recast the payments.

At Rate Lock

  • 50% occupied
  • 60% leased
  • 60% or more Certificates of Occupancy issued

At Closing

  • 05x IO DSCR on a refinance; 1.00x IO DSCR on an acquisition
  • 65% occupied
  • 75% leased
  • 100% of Certificates of Occupancy issued

At Stabilization

  • Minimum 90% occupied
  • 25x amortizing DSCR for 3 consecutive months

Appraisal Report

The appraisal report must provide the as-is and as-stabilized values for the property

Premier Sponsors and Markets

Additional flexibility available on a case-by-case basis through an assessment of the sponsor and market as determined by Freddie Mac.

For current Freddie Mac interest-only lease-up apartment mortgage rates, contact our multifamily lenders in Dallas Ft. Worth.

Call For a Quote:

(214) 679-9673

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