Affordable Housing Building

Freddie Mac Affordable Housing 9% LIHTC Cash Loans


The LIHTC Program provides the private market with an incentive to invest in affordable rental housing. Federal housing tax credits are awarded to developers of qualified projects. Developers then sell these credits to investors to raise capital (or equity) for their projects, which reduces the debt that the developer would otherwise have to borrow. Because the debt is lower, a tax credit property can in turn offer lower, more affordable rents. Provided the property maintains compliance with the program requirements, investors receive a dollar-for-dollar credit against their Federal tax liability each year over a period of 10 years.


Forward Commitment Immediate Funding Preservation Rehabilitation
Product Description Forward Commitment Immediate Funding Preservation Rehabilitation Product Description Forward commitment for new construction or substantial rehabilitation of affordable multifamily properties with 9% LIHTC Financing for the acquisition or refinance of stabilized affordable multifamily properties with 9% LIHTC with at least 7 years remaining in the LIHTC compliance period Financing for the moderate rehabilitation of affordable multifamily properties with new 9% LIHTC and tenants in place
Type of Funding Funded or unfunded construction financing commitment; permanent financing at conversion Permanent financing Financing for acquisition/ rehabilitation (for a maximum of 24 months) based on projected post-rehabilitation net operating income (NOI); cash or letter of credit collateral required to collateralize gap between supportable debt on current NOI and loan amount (collateral held until stabilization); interest only during the rehabilitation/ stabilization period
Eligible Properties To-be-built or substantially rehabilitated garden, mid-rise or high-rise multifamily properties with 9% LIHTC Garden, mid-rise or high-rise multifamily properties with 9% LIHTC with 90% occupancy for 90 days Garden, mid-rise or high-rise multifamily properties with 9% LIHTC that are undergoing moderate rehabilitation with tenants in place
Minimum DSCR DSCR Calculator 1.15x 1.15x 1.15x
Max LTV 90% of market value 90% of market value 90% of market value
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 Yield Maintenance Yield Maintenance Yield Maintenance
Tax and Insurance Escrows Required Required Required
Securitization Available No Yes No
Early Rate-Lock NA Early rate-lock or Index Lock options available NA

Freddie Mac Affordable Housing Loans