Freddie Mac Impact Gap Financing for NOAH Properties 

Additional Freddie Mac Insured Financing for the Acquisition of Naturally Occurring Affordable Properties

Nonprofit organizations working to preserve the supply of affordable housing in the U.S. need look no further than the Freddie Mac NOAH Preservation Loan for the financing they need. However, if they want additional funds to acquire or moderately rehabilitate a Naturally Occurring Affordable Housing (NOAH) property, they can pair their Freddie Mac NOAH Preservation Loan with Freddie Mac Impact Gap Financing, allowing them to achieve up to 97% combined loan-to-cost, with combined DSCRs as low as 1.05x. By utilizing the private funds of Impact Investors through Freddie Mac's reliable infrastructure, Impact Gap Financing gives nonprofits greater financial flexibility to acquire and improve affordable properties. 

To learn more, check out Freddie Mac’s official Impact Gap Financing Product Sheet or keep reading below for an in-depth explanation of the Freddie Mac Impact Gap Financing program.

Sample Freddie Mac Terms For Impact Gap Financing

Size:  Varies based on LTV and DSCR requirements. 

Use:  Financing for the acquisition or refinance of stabilized affordable multifamily properties with 4% Low-Income Housing Tax Credits (LIHTCs) with at least 7 years remaining in the LIHTC compliance period. 

Terms:  Must mature after Freddie Mac NOAH Preservation Loan

Amortization: Based on Exit Requirement (property must achieve 80% combined LTV by the end of the loan term)

Maximum LTC:  Combined maximum loan-to-cost of 97% (subject to payment structure and investor approval) 

Minimum DSCR:  1.05x combined DSCR (also subject to payment structure and investor approval) 

Eligible Properties:  Garden, mid-rise, or high-rise multifamily NOAH properties

Eligible Borrowers:  501(c)(3) nonprofit organizations with affordable housing preservation as a stated part of their mission and experience with successful property ownership. 

Payment Structure:  

Paid from 75% of surplus cash in the following order:

1. Interest

2. Principal payments (not to exceed half of remaining surplus cash after interest payment)


Borrower agrees to guaranty:

  • 100% interest debt service

  • 10% top loss of outstanding UPB at default required until the combined LTV is 85%

Prepayment Penalty:  5-year lockout, no prepayment penalty after

Affordability Requirements:  At least 50% of units need to have affordable rents at 60%, 80%, 100%, or 120% of the area median income (AMI) based on market at the time of origination


  • Moderate rehabilitation permitted (subject to investor approval)


  • Application fees, commitment fees, and other fees required