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
Affordable Housing Mortgages
