Conventional Structured Transactions
Offer an efficient form of execution for active multifamily investors who are able to pool together similar assets
Key Benefits
- Three products: Revolving Credit Facility, Multi-Asset Flow Facility and Multi-Asset Crossed Facility
- Built-in pricing and pre-negotiated loan documents
- Ability to lock credit terms and/or interest rates prior to identifying properties to be purchased
At-a-Glance Comparison
| Product Summary | Revolving Credit Facility | Multi-Asset Flow Facility | Multi-Asset Crossed Facility |
|---|---|---|---|
| Product Description | Secured line-of-credit; borrower can move assets in and out of the facility while adhering to the defined facility-level parameters | Borrower fills the facility with individual loans at defined credit parameters per the products selected, over a 12- to 24-month period | Immediate funding for acquisition or refinance of portfolio of assets |
| Type of Funding | Continuous funding as assets are moved in and out of the facility | Funding up to 15 days after closing; use of funding over 12- to 24-months after origination | Funding is up to 15 days after lender closing |
| Collateral | Conventional first lien mortgages (multifamily, seniors housing and/or student housing, except for cooperatives) for acquisition rehabilitation/upgrade, acquisition, or refinance; no minimum occupancy requirement | Conventional first lien mortgages (multifamily, seniors housing, student housing) for acquisition rehabilitation/upgrade, acquisition, or refinance | Conventional first lien mortgages (multifamily, seniors housing, student housing) for acquisition rehabilitation/upgrade, acquisition, or refinance |
| Available for Securitization | No | Yes | Yes |
| Minimum DCR / Maximum LTV | See chart below | Per defined parameters of product selected | Per defined parameters of product selected |
| Fixed or Floating | Floating-rate | Both available | Both available |
| Cross-collateralization | Under one or more notes, assets will be cross-collateralized and cross-defaulted | Individual loans will be non-crossed (noncoterminous) but will consider a crossed feature on an exception basis (coterminous) | Loans will be cross-collateralized/defaulted (coterminous) |
| Assumptions | Non-assumable (facility and mortgage level) | Underlying mortgages assumable if removed from facility; facility not assumable | Underlying mortgages assumable if removed from facility; facility not assumable |
| Other Features |
5 year term plus 1-year extension; ability to ramp up and wind down the commitment |
Substitutions, assumptions, and supplemental loan features may be available depending upon combination of products selected | Substitutions, assumptions, and supplemental loan features may be available depending upon combination of products selected |
| Annual Valuation | Applicable | May be applicable | May be applicable depending on negotiated terms |
| Pricing | Floating-rate, full-term interest-only over the 1-month or 3-month LIBOR; no interest rate cap or hedge requirements; additional fees for each asset after 2 years of seasoning | Fixed-rate, floating-rate, capped floating rate, acquisition rehabilitation, acquisition upgrade, acquisition, refinance, extended early rate-lock, or standard delivery | Floating-rate, or a combination of fixed- and floating-rate |
| Fees | Transaction fee, mortgage review fee, collateral addition fee, substitution/release fee, unused facility fee, seasoning fee, termination fee, legal fee | Transaction fee, mortgage review fee, collateral addition fee, substitution/ assumption/release fee, legal fee | Transaction fee, mortgage review fee, collateral addition fee, substitution/ assumption/release fee, legal fee |
|
Borrower Profile
|
Active borrowers with regional and/or national presence, high net worth and liquidity (relative to the facility) | ||
Loan-to-Value (LTV) Ratio and Interest-Only Debt Coverage Ratio (DCR)
| Revolving Credit Facility | Floating-Rate Full-Term Interest-Only |
|---|---|
| Maximum LTV / Minimum DCR | |
| Multifamily Housing | 75% / 1.45x |
| Student Housing | 75% / 1.50x |
| Seniors Housing – Independent Living | 75% / 1.50x |
| Seniors Housing – Assisted Living1 | 75% / 1.60x |
1 With no skilled nursing beds.
In addition to the above referenced products, the Structured Transactions team can execute efficiently on crossed or uncrossed bulk pools of loans that include the following features:
- Assets located in three or more regions
- Large aggregate balance pools that consist of at least ten or more loans
- All single-sponsor securitizations
With respect to these transactions, Sellers are encouraged to call either their Freddie Mac regional representative or one of our Structured Transactions specialists. Freddie Mac will always look to enhance the customer experience by offering the most efficient execution whether the loan opportunity comes to us through the regional offices or the Structured Transactions group, leveraging our core competencies and skill sets that exist across the organization.
- Contact Us
- Download the Conventional Structured Transactions term sheet.
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.