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FREDDIE MAC OPTIGO®

Supplemental Loan Term Sheet

Our supplemental loan gives borrowers access to additional capital at a cost lower than refinancing. Take advantage of Freddie Mac’s flexible terms, streamlined underwriting and certainty of execution.

ADD-ON FUNDING WITHOUT REFINANCING

  • ELIGIBLE OPTIGO SELLER/SERVICERS
    • If the first loan has been securitized, the original Optigo Seller/Servicer for that first loan or currently servicing that first loan.
    • If the first loan has not been securitized, the Optigo Seller/Servicer currently servicing that first loan.
  • ELIGIBLE BORROWERS

    Original first loan borrower or lender-approved transferee.

  • ELIGIBLE LOANS1
    • Loans behind existing first loans:
      • Stabilized properties in good standing.
      • Purchased through the Conventional Cash Mortgage Purchase program, the Targeted Affordable Housing Cash Mortgage Purchase program, the Seniors Housing Cash Mortgage Purchase program, and Conventional Structured Transactions.
    • Prior loans (first loans and any prior supplemental loans in place) must have remaining terms of 3 years or more.
    • Minimum supplemental amount: $1 million.
  • TERMS

    Coterminous with first loan; must be at least 12 months after origination of the first loan or the most recent prior to the supplemental loan; not available during the last 3 years of the first loan.

  • PREPAYMENT PROVISIONS

    Structured as a yield maintenance loan.

  • RESERVE AND ESCROW REQUIREMENTS

    Origination of a supplemental loan may trigger collection of deferred reserves and escrows for that first loan. Deferred insurance escrows may be permitted under limited circumstances.

  • REFINANCE TEST

    Based on the sum of the debt service and unpaid principal balance of the first loan and all existing and proposed supplemental loans.

  • SERVICING FEE

    Calculation based on supplemental proceeds.

  • LOAN DOCUMENTS

    Subject to Freddie Mac’s then current loan documents and any applicable conditions set forth in the first loan and any existing supplemental loan documents.

Loan-to-Value (LTV) Ratios and Amortizing Debt Coverage Ratios (DCR)1

  • SUPPLEMENTAL LOAN BASE MAXIMUM LTV AND
    MINIMUM DCR

    FIXED-RATE LTV/DCR AND FLOATING-RATE LTV/DCR
    (DCR at comparable fixed-note rate)

  • ≥ 3-YEAR AND
    < 5-YEAR TERM

    Amortizing2: 75% / 1.35x.
    Partial-Term Interest-Only: 75% / 1.35x.
    Full-Term Interest-Only (including any supplemental loan with a full-term interestonly first loan): 65% / 1.45x.

  • ≥ 5-YEAR AND
    < 7-YEAR TERM

    Amortizing2: 75% / 1.30x.
    Partial-Term Interest-Only: 75% / 1.30x.
    Full-Term Interest-Only (including any supplemental loan with a full-term interestonly first loan): 65% / 1.40x.

  • > 7-YEAR TERM

    Amortizing2: 80% / 1.25x.
    Partial-Term Interest-Only: 80% / 1.25x.
    Full-Term Interest-Only (including any supplemental loan with a full-term interestonly first loan): 70% / 1.35x.

1All DCRs and LTVs are calculated based on the sum of the amortizing debt service and unpaid principal balance of the first loan and all existing and proposed supplemental loans.
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.


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.

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