Freddie Mac Multifamily Housing Affordable Debt Transactions

Freddie Mac's Multifamily Affordable Sales and Investments department finances investment-grade multifamily housing by leveraging the financing tools available through Freddie Mac's multifamily flow programs and coupling those programs with creative and innovative financing structures designed to meet the varied needs of our Program Plus® Seller/Servicers, as well as other non-Program Plus clients. Bond credit enhancements, revolving lines of credit, fixed- and floating-rate securitizations with an implied AAA rating and portfolio cash fundings are among the many types of affordable debt transactions available. We can customize your transactions to suit your needs.

Eligible Sellers

Program Plus Seller/Servicers as well as approved non-Program Plus clients

Eligible Borrowers

Any creditworthy borrowing entity is eligible

Eligible Properties

Quality, investment-grade multifamily garden, mid-rise, high-rise properties and mixed-use properties with substantial multifamily income, including senior housing communities with limited skilled nursing and dementia care

Maximum Loan Amount

None

Minimum Transaction Size

$100 million with slightly smaller transactions considered on a case-by-case basis

Maximum Transaction Size

None

Eligible Mortgage Products

Newly originated and seasoned fixed-rate, variable-rate and rate-reset mortgage portfolios

Term

Not to exceed 30 years

Amortization

Interest-only, balloon and fully amortizing mortgages are acceptable/available

Maximum Loan-to-Value (LTV)

Generally 80%, but higher loan-to-value (LTVs) acceptable with additional credit support. LTV will be determined by Freddie Mac

Minimum Debt Coverage Ratio (DCR)

Generally 1.25x, but lower debt coverage ratios (DCRs) acceptable with additional credit support. DCR will be determined by Freddie Mac

Prepayment Provisions

Generally yield maintenance, but other forms of prepayment protection or no form of prepayment protection can be structured

Recourse

Nonrecourse except for standard recourse carve-outs

Stabilization

Generally fully stabilized assets collateralize the debt, but a limited percentage of unstabilized assets may be considered on a case-by-case basis. Stabilization is defined as 90% occupancy maintained for the 90-day period prior to sale of the loan

Subordinate Financing

Permitted on certain products on a case-by-case basis

Supplemental Mortgages

Permitted on certain products subject to the guidelines of Freddie Mac's Multifamily Supplemental Mortgage product

Transfers/Assumptions

One-time assumption/transfer allowed during life of the loan (except for credit facilities)

Third-Party Reports

Required on all properties

Replacement Reserves

Generally required

Tax and Insurance Escrows

Generally required

Fees

• Guarantee fee
• Transaction fee
• Mortgage review fee
• Outside counsel fee, if applicable

Freddie Mac Guarantee

• For fixed-rate PCs, we guarantee the timely payment of interest at the applicable PC coupon and the timely payment of scheduled principal from the underlying mortgages.
• For ARM PCs, we guarantee the timely payment of interest of the applicable PC coupon and the full and final payment of principal. We do not guarantee the timely payment of scheduled principal on ARM PCs.