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Freddie Mac 9% LIHTC Cash Loans
Freddie Mac Cash Loans for Affordable Properties With 9% Low-Income Housing Tax Credits (LIHTCs)
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.
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
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.
LTVs of up to 90% market value supported
Eligible mixed-use properties supported
Early rate locks and index locks available for immediate funding
Requires application fees, commitment fees, Delivery Assurance Fees, and other fees
Early rate-locks not available for forward commitments and preservation rehabilitation finning
Terms:
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:
Prepayment Penalty: Yield maintenance
Advantages:
Disadvantages: