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Download Term Sheet
FREDDIE MAC OPTIGO®
Fixed-Rate Loan
With our fixed-rate loan, you get a flexible, streamlined financing solution and certainty of execution for the acquisition or refinance of multifamily housing properties. Borrowers have a variety of options to suit their individual needs.
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, 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); however, on loans less than $5 million, upon borrower’s request, a borrower other than a TIC may be a Single Asset Entity instead of an SPE.
- 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, cooperative housing and Targeted Affordable Housing Cash (e.g., LIHTC Year 4-10 and 11-15, Section 8) Loans. 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
Generally, $5 million to $100 million (larger and smaller loans will be considered).
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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. Optigo lenders should consult with their regional Freddie Mac representative to determine eligibility.
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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 LTV AND
MINIMUM DCR2(For specific product adjustments, refer to individual term sheets.)
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≥ 5-YEAR AND
< 7-YEAR TERMAMORTIZING: 75% / 1.30x.
PARTIAL-TERM INTEREST-ONLY3: 75% / 1.30x.
FULL-TERM INTEREST-ONLY: 65% / 1.40x. -
7-YEAR TERM
AMORTIZING: 80% / 1.25x.
PARTIAL-TERM INTEREST-ONLY3: 80% / 1.25x.
FULL-TERM INTEREST-ONLY: 70% / 1.35x. -
> 7-YEAR TERM
AMORTIZING: 80% / 1.25x.
PARTIAL-TERM INTEREST-ONLY3: 80% / 1.25x.
FULL-TERM INTEREST-ONLY: 70% / 1.35x.
1The DCR calculated for the partial-term interest-only and full-term interest-only period uses an amortizing payment.
2Adjustments may be made depending on the property, product and/or market.
3For partial-term interest-only loans, there must be a minimum amortization period of 5 years for loans with terms greater than 5 years.
Acquisition loans with 5-year terms may have up to 1 year of partial-term interest-only. For terms of 10 years or more, loans may have interest only in an amount equal to no more than half of the loan term.
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.