Variable Liquidity Pricing
Financing for affordable multifamily properties with Tax-Exempt Bond Securitizations (TEBS) and Targeted Affordable Housing Retail Transactions
Targeted Affordable Housing Offerings
- 9% LIHTC Mortgage
- Bond Credit Enhancement – 4% LIHTC
- Bond Credit Enhancement With Other Affordability Components
- Cash Mortgages With Other Affordability Components
- Moderate Rehabilitation
- Tax-Exempt Bond Securitization (TEBS)
- Variable Liquidity Pricing
At-a-Glance
| Product Summary | Variable Liquidity Pricing |
|---|---|
| Eligibile Transactions | Properties with tax-exempt bonds |
| Upfront Liquidity Fee | 50 bps |
| Ongoing Liquidity Fee Structure | Fixed component + variable component |
| Fixed Component | Amount to be set based on market conditions. Borrowers may contact a Freddie Mac Multifamily Seller/Servicer for more information; Freddie Mac Sellers can contact their Freddie Mac representative. |
| Variable Component ("Spread") | Amount (if any) by which the 90-day LIBOR exceeds the 3-month T-Bill rate. Minimum spread will always be > 0 bps. |
| Spread Reset | Quarterly |
| Liquidity Contract Duration | 5 years initially with one additional 5-year quote |
| Credit Enhancement Duration | 10 years up to 35 years |
| Repricing of Fixed Component | If there is no event of default, a new fixed component will be proffered by Freddie Mac for the ensuing 5-year contract period six months prior the end of each 5-year contract period. The new fixed component will be established by Freddie Mac based on then-current economic conditions. |
| Underwritten Interest Rate for use in Debt Coverage Ratio Computation [For Retail Transactions Only] |
Cap Primary Test: 52-week SIFMA Index + 200 bps stress + fee stack* (not including liquidity fee) + 185 bps for variable liquidity Cap Secondary Test: cap strike rate + fee stack* (not including liquidity fee) + actual variable liquidity pricing at the time of underwriting (includes fixed component + variable component) |
| Loan-to-Value Ratio [For Retail Transactions Only] |
Cap: 80% of adjusted or 85% of market |
Note: For discussions on swap underwriting terms, please contact your Freddie Mac TAH representative.
*Fee stack typically consists of the Freddie Mac spread + servicing fee + remarketing agent fee + trustee fee + issuer fee.
For More Information
- Contact Us
- Download the Variable Liquidity Pricing term sheet
- See the Variable Liquidity Pricing – How It Works.
The information in this document is not a replacement or substitute for information found in the Multifamily Seller/Servicer Guide.