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Seniors Housing Mortgage

Offers flexible loan terms for a variety of seniors housing property types

Key Benefits

  • Specifically designed for the purchase or refinance of seniors housing
  • Offers multiple financing options with flexible loan terms
  • Includes independent living properties, assisted living properties, and senior properties with a limited amount of skilled nursing or dementia care

At-a-Glance

Seniors Housing Mortgage Options and Requirements for our Capital Markets ExecutionSM (CME)
Loan Terms 5 to 10 years (up to 30 years for fixed-rate loans if using our portfolio execution)
Eligible Borrowers/Borrowing Entity
  • Experienced owner/operator of comparable facilities.
  • If the loan is less than $5 million, the borrower may be a Single Asset Entity (SAE) with some additional restrictions and may be a limited partnership, general partnership (no individuals may be general partners), limited liability company, corporation, or real estate investment trust (must be a corporation, not a trust).
  • If the loan is $5 million or more, the borrower may be a limited partnership, a corporation, or a limited liability company and must be a Single Purpose Entity (SPE); see Section 6.13 of the Loan Agreement for basic SPE requirements.
  • If the borrower is structured as a Tenancy In Common (TIC), each Tenant in Common must be an SPE. (Note: TICs are not encouraged.)
Eligible Property Types
  • Independent living properties
  • Assisted living properties
  • Properties with a limited amount of skilled nursing or dementia care (in combination with independent living and/or assisted living units)

Eligible Mortgages
  • Fixed-rate mortgages
  • Standard and capped floating-rate mortgages
  • Supplemental mortgages (subject to requirements in the CME Loan Agreement) and other options
Financing Options
  • Acquisition or refinance mortgages
  • Bond credit enhancements
  • Structured transactions (including multiple-loan pools and our Revolving Credit Facility) and Targeted Affordable Housing transactions
Replacement Reserve Escrow Generally required
Tax and Insurance Escrow Generally required
Early Rate-Lock Options (for Fixed-Rate Mortgages) Available for extended periods; Sellers should consult with their regional Freddie Mac representative to determine eligibility
Application Fee Greater of $5,000 or 0.15% of loan amount
Other Options and Requirements Please refer to the Fixed-Rate Mortgage or Floating-Rate Mortgage  term sheets for additional information

Loan-to-Value (LTV) Ratio and Amortizing1 Debt Coverage Ratio (DCR)

Seniors Housing – Independent Living Base Conventional Maximum LTV/Minimum DCRFixed-Rate LTV/DCRFloating-Rate LTV/DCR (DCR at max note rate)
AmortizingPartial-Term Interest-Only2 Full-Term Interest-Only Amortizing  Partial-Term Interest-Only2  Full-Term Interest-Only  
Acquisitions
≥ 5-Year and < 7-Year Term 65% / 1.35x Ineligible 60% / 1.50x 65% / 1.10x Ineligible 60% / 1.25x
7-Year Term 75% / 1.30x 75% / 1.30x 60% / 1.45x 75% / 1.10x 75% / 1.10x 60% / 1.25x
> 7-Year Term 75% / 1.30x 75% / 1.30x 60% / 1.45x 75% / 1.10x 75% / 1.10x 60% / 1.25x
Refinances with No Cash Out
≥ 5-Year and < 7-Year Term 65% / 1.35x Ineligible 60% / 1.50x 65% / 1.10x Ineligible 60% / 1.25x
7-Year Term 75% / 1.30x Ineligible 60% / 1.45x 75% / 1.10x Ineligible 60% / 1.25x
> 7-Year Term 75% / 1.30x 75% / 1.30x 60% / 1.45x 75% / 1.10x 75% / 1.10x 60% / 1.25x
Cash-Out Refinances
≥ 5-Year and < 7-Year Term 60% / 1.40x Ineligible 60% / 1.55x 60% / 1.15x Ineligible 60% / 1.30x
7-Year Term 70% / 1.35x Ineligible 60% / 1.50x 70% / 1.15x Ineligible 60% / 1.30x
> 7-Year Term 70% / 1.35x 70% / 1.35x 60% / 1.50x 70% / 1.15x 70% / 1.15x 60% / 1.30x

 

Seniors Housing – Assisted Living
(> 50% Assisted Living Units) Base Conventional Maximum LTV/Minimum DCR		Fixed-Rate LTV/DCRFloating-Rate LTV/DCR (DCR at max note rate)
AmortizingPartial-Term Interest-Only2 Full-Term Interest-Only   Amortizing  Partial-Term Interest-Only2  Full-Term Interest-Only  
Acquisitions
≥ 5-Year and < 7-Year Term 65% / 1.45x Ineligible 60% / 1.60x 65% / 1.20x Ineligible 60% / 1.35x
7-Year Term 75% / 1.40x 75% / 1.40x 60% / 1.55x 75% / 1.20x 75% / 1.20x 60% / 1.35x
> 7-Year Term 75% / 1.40x 75% / 1.40x 60% / 1.55x 75% / 1.20x 75% / 1.20x 60% / 1.35x
Refinances with No Cash Out
≥ 5-Year and < 7-Year Term 65% / 1.45x Ineligible 60% / 1.60x 65% / 1.20x Ineligible 60% / 1.35x
7-Year Term 75% / 1.40x Ineligible 60% / 1.55x 75% / 1.20x Ineligible 60% / 1.35x
> 7-Year Term 75% / 1.40x 75% / 1.40x 60% / 1.55x 75% / 1.20x 75% / 1.20x 60% / 1.35x
Cash-Out Refinances
≥ 5-Year and < 7-Year Term 60% / 1.50x Ineligible 60% / 1.65x 60% / 1.25x Ineligible 60% / 1.40x
7-Year Term 70% / 1.45x Ineligible 60% / 1.60x 70% / 1.25x Ineligible 60% / 1.40x
> 7-Year Term 70% / 1.45x 70% / 1.45x 60% / 1.60x 70% / 1.25x 70% / 1.25x 60% / 1.40x

 

Seniors Housing – Skilled Nursing
(Max 20% of Beds) Base Conventional Maximum LTV/Minimum DCR		Fixed-Rate LTV/DCRFloating-Rate LTV/DCR (DCR at max note rate)
AmortizingPartial-Term Interest-Only Full-Term Interest-Only   Amortizing  Partial-Term Interest-Only  Full-Term Interest-Only  
Acquisitions
< 7-Year Term 65% / 1.50x Ineligible Ineligible 65% / 1.25x Ineligible Ineligible
≥ 7-Year Term2 75% / 1.45x Ineligible Ineligible 75% / 1.25x Ineligible Ineligible
Refinances with No Cash Out
< 7-Year Term 65% / 1.50x Ineligible Ineligible 65% / 1.25x Ineligible Ineligible
≥ 7-Year Term2 75% / 1.45x Ineligible Ineligible 75% / 1.25x Ineligible Ineligible
Cash-Out Refinances
< 7-Year Term 60% / 1.55x Ineligible Ineligible 60% / 1.30x Ineligible Ineligible
≥ 7-Year Term2 70% / 1.50x Ineligible Ineligible 70% / 1.30x Ineligible Ineligible

1 The DCR calculated for the partial-term interest-only and full-term interest-only period uses an amortizing payment.

2 For partial-term interest-only loans, there must be a minimum amortization period of 7 years for loans with terms greater than 7-years. Acquisition loans with 7-year terms may have up to 1 year of partial-term interest-only. For terms of 10 years or more, Sellers should contact their Freddie Mac representative to determine the allowable term of partial-term interest-only.

The information in this document is not a replacement or substitute for information found in the Freddie Mac Multifamily Seller/Servicer Guide. Terms set forth herein are subject to change without notice.

© 2013 Freddie Mac

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