Freddie Mac Cash Loans for Affordable Housing Preservation

Permanent Debt for Restricted-Rent Property

The Optigo Cash Loan for Affordable Housing Preservation is Freddie Mac's straightforward permanent mortgage for affordable multifamily property. No bonds, no credit enhancement, no trustee. Freddie's lender funds the loan in cash, at capital markets pricing, and the deal closes like a conventional refinance.

The word preservation is doing specific work here. This product is for keeping existing affordable housing in service, not for building new units. If the property is regulated, occupied, and needs long-term debt, this is the execution.

Which Properties Qualify?

Garden, mid-rise, or high-rise multifamily that meets Freddie's affordability criteria and has held 90% occupancy for 90 days. Freddie names Section 8, Section 236, tax abatements, and other affordability components as qualifying restrictions, and it supports eligible mixed-use properties.

Terms confirmed against the Optigo Cash Loan for Affordable Housing Preservation term sheet, mf.freddiemac.com/docs/product/cashloans_afford_components.pdf, dated 02/25 and fetched July 31, 2026. Freddie states adjustments may be made depending on property, product, or market.

Why Is the Term Capped at 15 Years?

This is the constraint that surprises sponsors coming from HUD. Fifteen years is the ceiling, against 35 or 40 fully amortizing years on an FHA-insured loan. Amortization can run to 35 years, so the payment is not punishing, but there is a balloon and you will refinance inside a decade and a half.

Weigh that against what you get. Freddie closes faster, charges no mortgage insurance premium, and prices off the capital markets rather than a government insurance program. For an owner planning to sell or recapitalize before year 15, the shorter term costs nothing. For an owner who wants the debt to outlive them, HUD financing is the better instrument.

Where This Sits Among Freddie's Affordable Products

Freddie publishes several affordable executions and they do not overlap as much as the names suggest.

Cash loan for preservation. Stabilized restricted property, up to 15 years, 1.25x, 80% LTV. The general-purpose option.

Tax-Exempt Loan. Stabilized 4% LIHTC property with at least seven years of credits left. Up to 30 years, 1.15x, 40-year amortization. Better coverage and a longer term, but it requires the credits. See the tax-exempt loan page.

Bond credit enhancement. New construction, substantial rehab, or moderate rehab with tenants in place, tied to a tax-exempt bond issue. Covered on our LIHTC enhancement page.

The pattern is clear once you see it. Tax credits buy you coverage relief and term. A property whose affordability comes from a Section 8 contract or a tax abatement rather than LIHTC lands here, at conventional-style credit parameters.

What Does 1.25x Mean for Your Proceeds?

It means the affordability restriction alone does not buy you sizing relief. A Section 8 property underwrites at the same coverage as a market-rate deal, even though the HAP contract arguably makes the income stream more predictable. If your net operating income is $900,000, the loan has to service to $720,000 or less, and the 80% LTV test caps it from the other side. Whichever binds first is your number. Run it on our DSCR calculator.

How Do You Manage Rate Risk Before Closing?

Freddie's Index Lock lets you lock the Treasury index, the most volatile component of the coupon, separately from the spread. Other lock options are published alongside it. On an affordable deal with a long approval chain, locking the index early is often the difference between the sources and uses working and not working.

Send us the regulatory agreement, the rent roll, and three years of operating statements. We will size it against every Freddie affordable execution and against HUD.