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Download Term Sheet
FREDDIE MAC OPTIGO®
9% LIHTC Cash Loan
Get a cash loan for affordable multifamily properties with 9% Low-Income Housing Tax Credits (LIHTCs). We can help with these properties—whether it’s for new construction, a moderate or major renovation, or the acquisition or refinancing of stabilized properties.
LOW-INCOME TAX CREDITS FOR AFFORDABLE HOUSING LOANS
Forward Commitment
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ELIGIBLE PROPERTY TYPES
To-be-built or substantially rehabilitated garden, mid-rise or high-rise multifamily properties with 9% Low-Income Housing Tax Credit (LIHTC).
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TERMS
- Minimum term: Lesser of 15 years or the remaining LIHTC compliance period; 15 years with HUD Risk Sharing.
- Maximum term: 35 years.
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CONSTRUCTION LOAN TERMS
Maximum forward commitment term: 36 months plus a free 6-month extension during construction period.
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PRODUCT DESCRIPTION
Forward commitment for new construction or substantial rehabilitation of affordable multifamily properties with 9% LIHTC.
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TYPE OF FUNDING
Funded or unfunded construction financing commitment; permanent financing at conversion.
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MINIMUM DEBT COVERAGE RATIO1 (DCR)
1.15x.
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MAXIMUM LOAN-TO-VALUE (LTV) RATIO1
90% of market value.
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MAXIMUM AMORTIZATION
35 years.
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PREPAYMENT PROVISIONS
Yield maintenance.
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TAX AND INSURANCE ESCROWS
Required.
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FEES
Application fee, commitment fee, Delivery Assurance Fee, plus other fees as applicable.
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SECURITIZATION AVAILABLE
No.
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EARLY RATE-LOCK (ERL) OPTIONS
Not applicable.
Immediate Funding
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ELIGIBLE PROPERTY TYPES
Garden, mid-rise,or high-rise multifamily properties with 9% LIHTC with 90% occupancy for 90 days.
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TERMS
- Minimum term: Lesser of 15 years or the remaining LIHTC compliance period; 15 years with HUD Risk Sharing.
- Maximum term: 35 years.
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CONSTRUCTION LOAN TERMS
N/A.
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PRODUCT DESCRIPTION
Financing for the acquisition or refinance of stabilized affordable multifamily properties with 9% LIHTC with at least 7 years remaining in the LIHTC benefit period.
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TYPE OF FUNDING
Permanent financing.
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MINIMUM DEBT COVERAGE RATIO1 (DCR)
1.15x.
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MAXIMUM LOAN-TO-VALUE (LTV) RATIO1
90% of market value.
-
MAXIMUM AMORTIZATION
35 years.
-
PREPAYMENT PROVISIONS
Yield maintenance.
-
TAX AND INSURANCE ESCROWS
Required.
-
FEES
Application fee, commitment fee, plus other fees as applicable.
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SECURITIZATION AVAILABLE
Yes.
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EARLY RATE-LOCK (ERL) OPTIONS
Early rate-lock or Index Lock options available.
Preservation Rehabilitation
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ELIGIBLE PROPERTY TYPES
Garden, mid-rise or high-rise multifamily properties with 9% LIHTC that are undergoing moderate rehabilitation with tenants in place.
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TERMS
- Minimum term: Lesser of 15 years or the remaining LIHTC compliance period; 15 years with HUD Risk Sharing.
- Maximum term: 35 years.
- Rehabilitation and stabilization period (at a maximum of 24 months) will be included in the loan term.
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CONSTRUCTION LOAN TERMS
N/A.
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PRODUCT DESCRIPTION
Financing for the moderate rehabilitation of affordable multifamily properties with new 9% LIHTC and tenants in place.
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TYPE OF FUNDING
Financing for acquisition/ rehabilitation (for a maximum of 24 months) based on projected post-rehabilitation net operating income (NOI); cash or letter of credit collateral required to collateralize gap between supportable debt on current NOI and loan amount (collateral held until stabilization); interest only during the rehabilitation/stabilization period.
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MINIMUM DEBT COVERAGE RATIO1 (DCR)
1.15x.
-
MAXIMUM LOAN-TO-VALUE (LTV) RATIO1
90% of market value.
-
MAXIMUM AMORTIZATION
35 years.
-
PREPAYMENT PROVISIONS
Yield maintenance.
-
TAX AND INSURANCE ESCROWS
Required.
-
FEES
Application fee, commitment fee, plus other fees as applicable.
-
SECURITIZATION AVAILABLE
No.
-
EARLY RATE-LOCK (ERL) OPTIONS
Not applicable.
1Adjustments may be made depending on the property, product and/or market.
The LIHTC Program, based on Section 42 of the Internal Revenue Code, was enacted by Congress in 1986 to provide the private market an incentive to invest in affordable rental housing. Federal housing tax credits are awarded to developers of qualified projects. Developers then sell these credits to investors to raise capital (or equity) for their projects, which reduces the debt the developer would otherwise have to borrow. Because the debt is lower, a tax credit property can in turn offer more affordable rents. Provided the property maintains compliance with the program requirements, investors receive a dollar-for-dollar credit against their Federal tax liability each year over a period of 10 years.
In its prequalifying review, Lument will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts and actual fees and expenses may vary from the prequalifying estimates. A prequalifying estimate is not a commitment to make a loan.