FREDDIE MAC OPTIGO®
Fixed-Rate Loan
FAST AND FLEXIBLE FUNDING FOR A WIDE ARRAY OF PROPERTIES
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ELIGIBLE BORROWERS
- Borrower may 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, real estate investment trusts (REITs) and certain trusts may also be acceptable in limited circumstances, subject to additional requirements.
- Borrower must usually be a Single Purpose Entity (SPE) (see Section 6.13 of the Loan Agreement for basic SPE requirements).
- If the borrower is structured as a TIC, each tenant in common must be an SPE.
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ELIGIBLE PROPERTIES
Standard multifamily housing, student housing, seniors housing, manufactured housing communities and Targeted Affordable Housing (e.g., cash LIHTC Year 4-10 and 11-15, Section 8 loans), conventional structured transactions. Loans may be used for acquisition or refinance.
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TERMS
5- to 10-year terms (up to 30 years if loan is not purchased for securitization).
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AMOUNT
Minimum $10 million.
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MAXIMUM AMORTIZATION
30 years.
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AMORTIZATION CALCULATIONS
Actual/360 standard; 30/360 available.
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LOCK-OUT PERIOD
2 years following securitization.
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PREPAYMENT PROVISIONS
Yield maintenance until securitized followed by 2-year lock out; defeasance thereafter. No prepayment premium for final 90 days. If loan is not securitized within first year, then yield maintenance applies until the final 90 days. Yield maintenance without defeasance is available for securitized loans at an additional cost.
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TAX AND INSURANCE ESCROW
Generally required.
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REPLACEMENT RESERVE DEPOSIT
Generally required.
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RECOURSE REQUIREMENTS
Non-recourse except for standard carve-out provisions.
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SUPPLEMENTAL LOAN AVAILABILITY
Yes, subject to requirements specified in the Loan Agreement.
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APPLICATION FEE
Greater of $2,000 or 0.1% of loan amount for conventional first mortgages; seniors housing loans are > $5,000 or 0.15% of loan amount; supplemental loans are > $5,000 or 0.1% of loan amount and Targeted Affordable Housing loans are > $3,000 or 0.1% of loan amount.
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LOCK OPTIONS
Early rate-lock option available for varying durations, typically ranging from 60 to 120 days until Freddie Mac purchase; Index Lock option is also available.
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REFINANCE TEST
No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a Loan-to-Value (LTV) ratio of 60% or less.
Loan-to-Value (LTV) Ratios and Amortizing1 Debt Coverage Ratios (DCR)
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FIXED-RATE BASE CONVENTIONAL
MAXIMUM LTV⁴ AND
MINIMUM DCR2(For specific product adjustments, refer to individual term sheets.)
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≥ 5-YEAR AND
< 7-YEAR TERMAMORTIZING: 75% / 1.25x.
PARTIAL-TERM INTEREST-ONLY3: 75% / 1.25x.
FULL-TERM INTEREST-ONLY: 65% / 1.25x. -
7-YEAR TERM
AMORTIZING: 80% / 1.25x.
PARTIAL-TERM INTEREST-ONLY3: 80% / 1.25x.
FULL-TERM INTEREST-ONLY: 65% / 1.25x. -
> 7-YEAR TERM
AMORTIZING: 80% / 1.25x.
PARTIAL-TERM INTEREST-ONLY3: 80% / 1.25x.
FULL-TERM INTEREST-ONLY: 70% / 1.25x.
1 The DCR calculated for the partial-term interest-only and full-term interest-only period uses an amortizing payment.
2 Adjustments may be made depending on the property, product and/or market.
3 For partial-term interest-only loans, there must be a minimum amortization period of 2 years. All mortgages with <2 years of Amortization must
meet the requirement for full-term Interest Only Mortgages.
4 Maximum combined maturity LTV for Partial Interest Only loans is 70%, and subject to adjustment for certain property and loan types.
