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Last updated on Jan 3, 2023
3 min read

Freddie Mac 9% LIHTC Cash Loans

Freddie Mac Cash Loans for Affordable Properties With 9% Low-Income Housing Tax Credits (LIHTCs)

In this article:
  1. Freddie Mac Cash Financing for 9% LIHTC Properties 
  2. Sample Freddie Mac Terms for 9% LIHTC Cash Loans in 2023
  3. Get Financing
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Freddie Mac Cash Financing for 9% LIHTC Properties 

If you're interested in a building, acquiring, or substantially renovating an affordable property with 9% Low-Income Housing Tax Credits (LIHTCs), then you'll definitely want to take a look at the Freddie Mac 9% LIHTC Cash Loan.

Freddie's 9% LIHTC Cash Loans are available for forward commitments, immediate fundings, and preservation rehabilitation financing, giving LIHTC developers and investors a wide degree of versatility and flexibility. These loans permit LTVs of up to 90% of a property's market value, have DSCRs of as low as 1.15x, and amortizations of up to 35 years. Plus, like many other kinds of Freddie Mac Multifamily products, 9% LIHTC Cash Loans support eligible mixed-use properties.

To learn more, check out Freddie Mac’s official 9% LIHTC Cash Loan Product Sheet or keep reading below for an in-depth explanation of the 9% LIHTC Cash Loan program.

Sample Freddie Mac Terms for 9% LIHTC Cash Loans in 2023

Size: Varies based on LTV and DSCR requirements. 

Uses/Description:  

  • Forward commitment: Funded or unfunded construction forward commitment for the new construction or substantial rehab of affordable developments with 9% LIHTC.

  • Immediate funding: Permanent financing for acquisitions and refinances of stabilized affordable developments with 9% LIHTC. Must have 7+ years left in the LIHTC compliance period.

  • Preservation rehabilitation: Financing for the moderate rehab of affordable properties with new 9% LIHTCs and tenants in place. Loans require cash or a letter of credit collateral in order to fund the gap between the supportable debt (based on current net operating income) and actual mortgage amount. Loans are interest-only during max. 24-month rehab period.

  • Terms:  

    • Minimum term: Remaining LIHTC compliance period or 15 years, whichever is less; 15 years with HUD Risk Sharing

    • Maximum term: 35 years; rehabilitation/stabilization period (maximum of 24 months) will be included in loan term

    • Construction Loan Term:  Maximum forward commitment of 36 months, with a free 6- month extension

      Amortization:  Up to 35 years 

      Interest Rate:  Fixed and floating-rate options available 

      Interest-Rate Caps:  Required 

      Maximum LTV: 90% of market value

      Minimum DSCR:  1.15x

      Eligible Properties:  

      • Forward commitment: Not-yet-built or substantially renovated garden, mid-rise or high-rise affordable properties with 9% Low-Income Housing Tax Credit (LIHTC).

      • Immediate funding: Garden, mid-rise, or high-rise affordable properties with 9% LIHTC (must have at least 90% occupancy for 90 days.)

      • Preservation rehabilitation: Garden, mid-rise or high-rise affordable properties with 9% LIHTC that are undergoing moderate renovations with tenants in place.

      • Prepayment Penalty:  Yield maintenance

        Advantages:

        • LTVs of up to 90% market value supported

        • Eligible mixed-use properties supported

        • Early rate locks and index locks available for immediate funding

        • Disadvantages:

          • Requires application fees, commitment fees, Delivery Assurance Fees, and other fees

          • Early rate-locks not available for forward commitments and preservation rehabilitation finning

          In this article:
          1. Freddie Mac Cash Financing for 9% LIHTC Properties 
          2. Sample Freddie Mac Terms for 9% LIHTC Cash Loans in 2023
          3. Get Financing

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