Affordable Housing Building

Freddie Mac Bond Credit Enhancement with 4% LIHTC


This program provides financing for affordable multifamily properties funded by the sale of fixed-or variable-rate tax-exempt bonds and that have received Low-Income Housing Tax Credits (LIHTC).


Forward Commitment Immediate Funding Preservation Rehabilitation
Product Description Bond credit enhancement for new construction or substantial rehabilitation of affordable multifamily properties with 4% LIHTC Bond credit enhancement for the acquisition or refinance of stabilized affordable multifamily properties with 4% LIHTC with at least 7 years remaining in the LIHTC compliance period Bond credit enhancement provided for the moderate rehabilitation of affordable multifamily properties with new 4% LIHTC and tenants in place
Type of Funding Bond credit enhancement available during construction phase (funded forward); letter of credit collateral required during construction phase; bond credit enhancement during permanent phase following successful conversion.
Forward commitment to provide bond credit enhancement upon successful conversion from construction phase to permanent phase (unfunded forward)
Bond credit enhancement for fixed- or variable-rate tax exempt bonds Bond credit enhancement for acquisition/rehabilitation based on projected post rehab net operating income (NOI); cash or letter of credit collateral required to fund gap between supportable debt on current NOI and bond mortgage loan amount (collateral held until stabilization); interest only available during the rehabilitation/stabilization period
Eligible Properties To-be-built or substantially rehabilitated garden, mid-rise or high-rise multifamily properties with 4% LIHTC Garden, mid-rise or high-rise multifamily properties with 4% LIHTC that maintain 90% occupancy for 90 days Garden, mid-rise or high-rise multifamily properties with 4% LIHTC undergoing moderate rehabilitation with tenants in place
Minimum DSCR DSCR Calculator 1.15x 1.15x 1.15x
Max LTV 90% 90% 90%
Loan Term Maximum term: 35 years Maximum term: 35 years Maximum term: 35 years
Construction Loan Term Maximum forward commitment term: 36 months plus a free 6-month extension during construction period NA NA
Max Amortization 35 years 35 years 35 years
Prepayment Fee Maintenance Fee Maintenance Fee Maintenance
Subordinate Financing Permitted Permitted Permitted
Tax & Insurance Escrows Required Required Required

Freddie Mac Affordable Housing Loans