FREDDIE MAC OPTIGO®
Floating-Rate Loan
LOW RATES, CUSTOMIZED TERMS AND CERTAINTY OF EXECUTION
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ELIGIBLE BORROWERS
- 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, REITs and certain trusts may also be acceptable in limited circumstances, subject to additional requirements.
- Borrower must generally be a Single Purpose Entity (SPE) (see Section 6.13 of the Loan Agreement for basic SPE requirements); however, on loans less than $7.5 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 PROPERTY TYPES
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. Floating-rate loans are not available for cooperative housing.
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TERMS
5-, 7- and 10-year terms.
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AMOUNT
Generally, $7.5 million to $100 million (®aller and larger loans will be considered).
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PRICING INDEX
30-day Average SOFRs.
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EARLY RATE-LOCK OPTION
Early rate-lock option available for varying durations, typically ranging from 60 to 120 days from rate-lock until Freddie Mac purchase
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INTEREST-ONLY PERIOD
Partial-term and full-term interest-only available; see chart below and related footnotes.
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INTEREST RATE CAP
Expanded the number of cap options available. Borrower may obtain its own cap coverage from a third-party provider (see our Approved Counterparties List for a list of approved providers, which we have increased); see the Interest-Rate Cap Options for Floating-Rate Cash Loans with a 7-Year Term example.
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MAXIMUM AMORTIZATION
30 years.
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AMORTIZATION CALCULATIONS
Actual/360.
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LOCK-OUT/PREPAYMENT PROVISIONS
Four lock-out/prepayment options available (see chart below) with no premium for final 90 days; other options are available for loans that are not intended to be securitized. For more information; contact your Lument representative.
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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; supplemental and 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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REFINANCE TEST
No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a LTV ratio of 60% or less.
Lock-out/Prepayment Provisions
You can choose from four prepayment provisions when structuring Freddie Mac standard, capped, or uncapped floating-rate loans. Each option offers no prepayment premium for the last 90 days of the loan term.
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PREPAYMENT PREMIUM
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OPTION 1
- Year 1: Locked Out.
- Year 2: 1%.
- Year 3: 1%.
- Year 4: 1%.
- Year 5: 1%.
- Year 6: 1%.
- Year 7: 1%.
- Year 8: 1%.
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OPTION 2
- Year 1: 3%.
- Year 2: 2%.
- Year 3: 1%.
- Year 4: 1%.
- Year 5: 1%.
- Year 6: 1%.
- Year 7: 1%.
- Year 8: 1%.
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OPTION 3
- Year 1: 5%.
- Year 2: 4%.
- Year 3: 3%.
- Year 4: 2%.
- Year 5: 1%.
- Year 6: 1%.
- Year 7: 1%.
- Year 8: 1%.
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OPTION 4 (only for 10-yr capped floating-rate loan)
- Year 1: 7%.
- Year 2: 6%.
- Year 3: 5%.
- Year 4: 4%.
- Year 5: 3%.
- Year 6: 2%.
- Year 7: 1%.
- Year 8: 1%.
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 TERM
- AMORTIZING: 75% / 1.25x.
- PARTIAL-TERM INTEREST-ONLY3: 75% / 1.25x.
- FULL-TERM INTEREST-ONLY: 65% / 1.35x.
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≥ 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. Adjustments may be made depending on the property, product and/or market.
2For 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.
