Impact Gap Financing

Impact Gap Financing provides the infrastructure to enable Impact Investors to invest directly in NOAH properties and close capital gaps between Sponsor-provided equity and the Freddie Mac NOAH Preservation Loan.

Impact Investors may work with Borrowers directly, with a Freddie Mac Multifamily Optigo lender, or with Freddie Mac, who can help match them to potential properties and Borrowers.

Nonprofits will work with an Optigo lender who will make both the Freddie Mac NOAH Preservation Loan and the Impact Gap Loan simultaneously, providing a one-stop shop for comprehensive debt financing up to 97% loan-to-cost to go with a minimum 3% Borrower equity contribution.

For the Optigo Seller to make the Freddie Mac NOAH Preservation Loan and the Impact Gap Loan together, the Impact Investor must be identified for the Impact Gap Loan prior to receiving a soft quote, and the following must be in place prior to interest rate-lock on the NOAH Preservation Loan:

1. Impact Investor must execute and deliver a commitment to the Freddie Mac Seller to purchase the Impact Gap Loan.
   1. Freddie Mac will perform confirmatory due diligence and provide a back-up commitment to purchase in the event the Impact Investor fails to purchase the Impact Gap Loan.
2. Impact Investor must deposit funds in escrow to fully collateralize its commitment to purchase the Impact Gap Loan.

The Impact Gap Loan will be made on Freddie Mac form Impact Gap Loan documents, including the Impact Gap Loan commitment, loan agreement, note, guaranty, security instrument and escrow agreement.

Garden, mid-rise, or high-rise multifamily NOAH properties.

TAH lenders.

501(c)(3) nonprofit organizations with affordable housing preservation as a stated part of its mission and a demonstrated history of successful property ownership.

At least 50% of the units must have affordable rents at 60% / 80% / 100% / 120% area median income (AMI) based on market at the time of origination.

Up to 30 years.

Up to 30 years.

1.25x with 1.20x available subject to underwriting approval.

80%.

Required.

• Application fee and Commitment fee.
• Servicing document review fee discounted to $1,500 per review for items disclosed prior to origination.

Per Freddie Mac Commitment.

Yield Maintenance or defeasance.

Per Freddie Mac Commitment.

Subject to underwriting approval.

Garden, mid-rise, or high-rise multifamily NOAH properties.

TAH lenders.

501(c)(3) nonprofit organizations with affordable housing preservation as a stated part of its mission and a demonstrated history of successful property ownership.

At least 50% of the units must have affordable rents at 60% / 80% / 100% / 120% area median income (AMI) based on market at the time of origination.

Must mature after Freddie Mac NOAH Preservation Loan.

Based on Exit Requirement (achieve 80% combined LTV by the end of the loan term).

Combined minimum: 1.05x subject to payment structure (below) and Investor approval.

Combined maximum loan to cost: 97% subject to payment structure below and Investor approval.

Required, serviced by Freddie Mac.

As determined by Impact Investor (may include investor origination and servicing fees).

Paid from 75% of surplus cash³ in the following order:

1. Interest.
2. Principal payments (not to exceed half of remaining surplus cash after interest payment).

5-year lockout; no prepayment penalty following lockout

Borrower agrees to guaranty:

• 100% interest debt service.
• 10% top loss of outstanding UPB at default required until the combined LTV is 85%.

Permitted, subject to Impact Investor approval.