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Freddie Mac Student Housing MortgageSM

Financing for the acquisition or refinance of purpose-built student housing

Key Benefits

  • Flexible loan terms including both 30-year amortization and the potential for full-term interest-only
  • May consider shorter student lease terms and combined student body of multiple schools to meet eligibility requirements

At a Glance

Student Housing Mortgage Options and Requirements for our Capital Markets ExecutionSM (CME)
Loan Terms 5-10 years (up to 30 years for fixed-rate loans if using our portfolio execution)
Loan Amount

Generally $5 to $100 million (larger and smaller loans will be considered)
Maximum Amortization

30 years
Eligible Borrowers/Borrowing Entity
  • Experienced owner/operator of student housing properties.
  • 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.
Financing Options Acquisition or refinance
Eligible Property Types
  • Purpose-built student housing properties. Must have a minimum of one bathroom for every two bedrooms. Each apartment must have a separate full kitchen.
  • Stabilized garden, mid-rise and high-rise apartment properties that are greater than 50% occupied by student tenants
  • Supporting college/university has 8,000 or more students; student housing properties located within close proximity to multiple schools that have a combined student body of 8,000 students or more will be considered
  • Property is located less than two miles from college/university or on a public transportation route
Ground Lease Ground lease for land owned by a college or university may be permitted with prior approval
Lease Parameters
  • Individual tenant lease by the apartment, bedroom, or by the bed
  • Rent under a master lease may be permitted with prior approval
Lease Terms 12-month lease is preferred, although a shorter lease (no less than nine months) will be considered
Lease Guaranty Parental guaranty is preferred
Recourse Requirements Non-recourse except for standard carve-out provisions
Supplemental Mortgages Available subject to requirements in the CME Loan Agreement and current Freddie Mac program and product requirements at the time of the supplemental mortgage request
Exclusions Residence halls or other multiple occupancy rooms with a shared common bathroom and centralized food service areas or dining halls
Tax & Insurance Escrow Generally required
Replacement Reserve Deposit Generally required
Application Fee Greater of $2,000 or 0.1% of loan amount
Early Rate-Lock Options (for Fixed-Rate Mortgages) Available for extended periods; Sellers should consult with their regional Freddie Mac representative to determine eligibility
Other Options and Requirements Please refer to the  Fixed-Rate Mortgage or Floating-Rate Mortgage term sheets for additional information.


Loan-to-Value (LTV) Ratios and Amortizing1 Debt Coverage Ratios (DCRs)2

Student Housing Base Conventional Maximum LTV and Minimum DCRFixed-Rate LTV/DCRFloating-Rate LTV/DCR (DCR at max note rate)
AmortizingPartial-Term Interest-Only3Full-Term Interest-Only Amortizing Partial-Term Interest-Only3 Full-Term Interest-Only
Acquisitions
≥ 5-Year and < 7-Year Term 70% / 1.35x Ineligible 60% / 1.50x 70% / 1.10x  Ineligible 60% / 1.25x
 7-Year Term 80% / 1.30x 80% / 1.30x 65% / 1.45x 80% / 1.10x 80% / 1.10x 65% / 1.25x
> 7-Year Term 80% / 1.30x 80% / 1.30x 65% / 1.45x 80% / 1.10x 80% / 1.10x 65% / 1.25x
Refinances with No Cash Out
≥ 5-Year and < 7-Year Term 70% / 1.35x Ineligible 60% / 1.50x 70% / 1.10x Ineligible 60% / 1.25x
 7-Year Term 80% / 1.30x Ineligible 65% / 1.45x 80% / 1.10x Ineligible 65% / 1.25x
> 7-Year Term 80% / 1.30x 80% / 1.30x 65% / 1.45x 80% / 1.10x 80% / 1.10x 65% / 1.25x
Cash-Out Refinances
≥ 5-Year and < 7-Year Term 65% / 1.40x Ineligible 60% / 1.55x 65% / 1.15x Ineligible 60% / 1.30x
 7-Year Term 75% / 1.35x Ineligible 60% / 1.50x 75% / 1.15x Ineligible 60% / 1.30x
> 7-Year Term 75% / 1.35x 75% / 1.35x 60% / 1.50x 75% / 1.15x 75% / 1.15x 60% / 1.30x

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

2 Adjustments may be made depending on the property, product, and/or market. For properties with less than 2 years of leasing operations, subtract 5% from the LTV and add 0.05 to the DCR.

3 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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