FREDDIE MAC STUDENT HOUSING CONSTRUCTION LOANS
Financing and Refinancing loans for ground-up new construction student housing.
Apartment Loan Amount
Generally $5 to $100 million
Freddie Mac Conventional Student Housing Construction Loans in Texas
Description
Financing for the acquisition or refinance of purpose-built student housing. May consider shorter student lease terms and combined student body of multiple schools to meet eligibility requirements.
Eligible Properties
- Purpose-built student housing properties; must have a minimum of one bathroom for every two bedrooms, and each apartment must have a separate full kitchen
- Stabilized garden, mid-rise, and high-rise apartment properties that are greater than 50% occupied by student tenants
- Supporting college/university has 8,000 or more students; student housing properties located within close proximity to multiple schools that have a combined student body of 8,000 students or more will be considered
- Property is located less than two miles from college/university or on a public transportation route
Exclusions
Residence halls or other multiple occupancy rooms with a shared common bathroom and centralized food service areas or dining halls
Ground Lease
Ground lease for land owned by a college or university may be permitted with prior approval
Lease Parameters
Individual tenant lease by the apartment, bedroom, or by the bed. Rent under a master lease may be permitted with prior approval.
Lease Terms
12 month lease is preferred, although a shorter lease (of nine months or more) will be considered
Lease Guaranty
Parental guaranty is preferred
Loan Amount
Generally $5 to $100 million (larger and smaller loans will be considered)
Loan Term
5-10 years (up to 30 years for fixed-rate loans if loan is not purchased for securitization)
Max Amortization
30 years
Max Loan to Value
80%
Minimum Coverage
1.30x
Interest Rate
Risk-based pricing, varying with LTV, DSC ratios, and geographic location
Third Party Reports
MAI Appraisal, Physical Needs Assessment, and Environmental Phase I Assessment are required, plus Seismic Report may be required for properties in Seismic Zones 3 and 4
Tax, Insurance, & Replacement Reserves
Tax and insurance escrows are generally required. Funded Repair & Replacement escrow is generally a minimum of $150 per bedroom or $300 per unit.
Recourse Requirements
Non-recourse except for standard carve-out provisions
Lender Application Fee
$15,000; covers 3rd party reports and processing/underwriting costs
Freddie Mac Application Fee
Greater of $2,000 or 0.1% of loan amount
Origination Fee
Competitive
Legal Fees
$8,000 to $12,000 varying with characteristics of the deal
Rate Lock
Early rate-lock and Index Lock options available
Assumability
Loan is assumable, subject to lender approval of proposed replacement Borrower. Fees include 1% assumption fee, part of which is paid to Freddie and a $5,000 processing fee to cover Lender’s
underwriting expenses.
Supplemental Loan Availability
Yes, subject to requirements specified in the Loan Agreement and current Freddie Mac Program and product requirements at the time of the supplemental loan request
Borrower
- Borrower may generally be a limited partnership, corporation, limited liability company, or a tenancy-in-common (TIC) with 10 or fewer tenants in common
- General partnerships, limited liability partnerships, REIT’s and certain trusts may also be acceptable in limited circumstances, subject to additional requirements
- Borrower must generally be a Single Purpose Entity (SPE); however, on loans less than $5 million, upon Borrower’s request, a Borrower other than a TIC may be a Single Asset Entity (SAE) instead of an SPE
- If the Borrower is structured as a Tenancy in Common (TIC), each Tenant in Common must be a SPE
For current Student Housing Construction loan mortgage rates, contact our Freddie Mac lenders in Texas.
Call For a Quote:
(214) 679-9673
Related Fannie Mae Loan Options
FANNIE GREEN
FANNIE HYBRID ARM
