Freddie Mac Loans for Naturally Occurring Affordable Housing
Freddie Mac NOAH Loans Allow Nonprofits to Acquire Naturally Occurring Affordable Housing Properties
If you represent a non-profit committed to preserving the supply affordable housing for Americans who need it, then Freddie Mac's NOAH Preservation Loan could be a great opportunity to fulfill your organization's mission. NOAH Preservation Loans offer LTV allowances of up to 80% and DSCRs as low as 1.20x. Plus, these loans have flexible terms up to 15 years and flexible amortizations up to 30 years, giving eligible nonprofits a variety of options in their quest to preserve affordable properties for lower-income families.
Sample Freddie Mac Terms For NOAH Preservation Loans
Size: Varies based on LTV and DSCR requirements.
Use: Providing the financing for eligible nonprofits to acquire Naturally Occurring Affordable Housing (NOAH) properties in order to preserve their affordability for tenants.
Terms: Up to 15 years
Amortization: Up to 30 years
Maximum LTV: 80%
Minimum DSCR: 1.25x, 1.20x available with underwriting approval
Prepayment Penalty: Yield maintenance or defeasance (based on transaction structure)
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.
Recourse: To be determined by Freddie Mac at commitment
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
Nonprofit must meet at least one of the following:
- Have an equity partner providing mission-focused equity
- Contribute 100% of the equity themselves (leveraging soft debt as necessary)
- Use the Freddie Mac Impact Gap Financing offering
- Moderate rehabilitation permitted upon underwriting approval
- LTV allowances up to 80%
- DSCRs as low as 1.20x
- Application fees, commitment fees, and other fees required
- Servicing document review fee (discounted to $1,500 per review for items disclosed before origination)