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Last updated on Jan 3, 2023
2 min read

Freddie Mac NOAH Preservation Loan

NOAH Preservation Loans help nonprofits acquire Naturally Occurring Affordable Housing (NOAH) properties in order to keep rents affordable. NOAH Loans have LTVs up to 80% and DSCRs as low as 1.20x, flexible terms up to 15 years and flexible amortizations up to 30 years.

In this article:
  1. Freddie Mac Loans for Naturally Occurring Affordable Housing
  2. Sample Freddie Mac Terms for NOAH Preservation Loans in 2023
  3. Get Financing
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$5.6M offered by a Bank at 6.1%$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1.4M offered by a Credit Union at 6.1%Click Here to Get Quotes!

Freddie Mac Loans for Naturally Occurring Affordable Housing

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. 

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

Sample Freddie Mac Terms for NOAH Preservation Loans in 2023

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

Equity Requirements: 

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

  • Advantages:

    • Moderate rehabilitation permitted upon underwriting approval

    • LTV allowances up to 80%

    • DSCRs as low as 1.20x

    • Disadvantages:

      • Application fees, commitment fees, and other fees required

      • Servicing document review fee (discounted to $1,500 per review for items disclosed before origination)

      In this article:
      1. Freddie Mac Loans for Naturally Occurring Affordable Housing
      2. Sample Freddie Mac Terms for NOAH Preservation Loans in 2023
      3. Get Financing

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