FREDDIE MAC DIRECT PURCHASE LIHTC LOANS
Financing and Refinancing Lenders for Tax-excempt Low Income Housing Tax Credits in Dallas Fort Worth and the North Texas Region.
Apartment Loan Amount
Minimum $3 million
Freddie Mac Direct Purchase of Tax-Exempt Loans
Description
Forward Commitments or Immediate financing for the acquisition or refinance of affordable multifamily properties with 4% Low Income Housing Tax Credits (LIHTC) with at least 7 years remaining in the tax credit benefit period
Affordability Requirements
Low-income qualifying restrictions; 20% or more units rented to families earning at or below 50% of Area Median Income (AMI), or 40% or more units rented to families earning at or below 60% of AMI; however, other affordability types will be considered. (May include bond refunding, substitution, or new issue transactions with 80-20 bonds, combination bonds, Section 8, Section 236 tax abatements and LIHTC)
Loan Amount
Minimum $3 million
Loan Term
For LIHTC transactions, the minimum term is equal to the lesser of the remaining LIHTC period (as long as there are at least 7 years remaining in the initial tax credit benefit period) or 15 years and the maximum term is 18 years
Amortization
Up to 35 years
Loan-to-Value
Maximum 85% of adjusted value or 90% of market value
Debt Service
1.15x (if greater than 90% LIHTC)
Borrower
The Borrower must be a domestic single asset borrowing entity and single purpose entity (SPE)
Interest Rate
Risk-based pricing, varying with LTV, DSC ratios and transaction specific components Adjustments may be made based on the property, product, and/or market
Prepayment
Minimum 10 years prepayment protection
Third Party Reports
MAI appraisal, Physical Needs Assessment or Plan and Cost Review as Applicable, Environmental Phase I, Zoning, and Moisture Management reports are required; Seismic Report may be required for properties in Seismic Zones 3 and 4
Reserves
Tax and insurance escrows are required per the TAH Guide; Funded Repair and Replacement escrow is required based on engineer’s Physical Needs Assessment; For Loans at less than 70% of value with no deferred maintenance, funding of repair and replacement reserve can be waived, with Freddie Mac approval.
Application and Due Diligence Fees
- $2,500 non-refundable Application Fee to cover internal underwriting costs
- $12,500 Due Diligence Fee to cover third party reporting and the greater of
- $3,000 or 0.1% to Freddie Mac as a non-refundable Application Fee
Release of Credit Enhancement Requirements / Stabilization
- Stabilization and/or release of credit enhancement will occur once the property has achieved 1.25x amortizing DCR for 3 months and met other standard conditions as set forth by Freddie Mac.
- If stabilization is not reached within 12 months, then the credit enhancement, if available, will be used to resize the loan and recast the payments.
- Minimum 90% occupancy and underwritten NRI must be achieved for 3 consecutive months. Income must be based on the certified rent roll or trailing 1-month collections.
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.
Origination Fee
Minimum origination fees will vary depending on the loan characteristics
Good Faith Deposit/ Delivery Assurance Fee
Will vary depending on the loan characteristics, currently estimated at 2% (refundable)
Freddie Forward Commitment Fee
Minimum commitment fees will vary depending on the loan characteristics and be provided by Freddie during the quote process. Currently estimated at 15 basis points per year of the Forward Commitment
Legal Fees
Varying with characteristics of the deal
Timing
60 days from application to commitment, dependent on 3rd party report timing and Borrower’s submission of due diligence
Rate Lock
Rate lock occurs after commitment is issued;
Assumability
Loan is assumable, subject to Freddie Mac and Servicer approval of the proposed replacement Borrower; Fees include one percent transfer fee, part of which is paid to Freddie Mac, and a processing fee to cover underwriting expenses to Freddie Mac and the Servicer
For current Freddie Mac Low-Income Housing loan mortgage rates, contact our multifamily lenders in Dallas
Call For a Quote:
(214) 679-9673
Related Fannie Mae Loan Options
FANNIE GREEN
FANNIE HYBRID ARM
