Freddie Mac Student Housing Value-Add Financing 

Freddie Mac Insured Non-Recourse Loans for the Light Renovation of Student Housing Developments

Across the U.S., the student housing market is booming-- but to stay competitive, investors need to make sure their properties are modern, livable, and comfortable-- and sometimes, that requires a little bit of work. So, if you're interested in purchasing or refinancing a student housing property in order to make some light repairs or renovations, the Freddie Mac Student Housing Value-Add Loan could be the perfect choice. Student Housing Value-Add Loans offer LTV allowances of up to 85%, are interest-only, and are non-recourse, making them an incredibly attractive option for developers looking to make their student housing properties more profitable. 

To learn more, check out Freddie Mac’s official Student Housing Value-Add Loan Product Sheet or keep reading below for an in-depth explanation of the Freddie Mac Student Housing V Loan program.

Sample Freddie Mac Terms For Student Housing Value-Add Loans

Size:  Varies based on LTV and DSCR requirements 

Use:  Acquisitions and refinances of eligible Student Housing properties requiring moderate upgrades of $10,000 to $25,000 per unit

Terms:  3 years with one 12-month extension (borrower's request), and another optional 12-month extension (based on Freddie Mac discretion) 

Interest Rates:  Floating-rate interest only loan

Interest-Rate Caps:  Not required 

Maximum LTV: Up to 85%

Minimum DSCR:  1.20x 

Recourse:  Non-recourse with standard “bad boy” carve-outs

Eligible Borrowers:  Must have experience owning and operating similar Student Housing developments. Guarantors must have 1.5x the standard liquidity/net worth requirements.  

Eligible Properties: 

  • Properties must have no more than 250 units or 625 beds

  • Eligible properties are high-quality and only require light renovation

  • REO (real-estate owned) properties in receivership or properties performing below market averages (especially those requiring improved management) are also eligible

  • School must have at least 15,000 minimum enrollment

  • Properties must be located within 2 miles of campus, with easy access to campus via walking or public transportation

Other Rehab Requirements: 

  • Renovation must start within 90 days of origination and must be complete within 33 months

  • Planned upgrades must be between $10,000 and $25,000 per unit or $4,000 to $10,000 a bed

  • At least 25% and up to 50% of budget can be spent on unit interiors

Refinancing Test:  Not required

Assumability:  Not assumable 

Prepayment Penalty:  Loan can be paid off at any time with 1% penalty. No penalty if the loan is refinanced with Freddie Mac. 


  • Budget can be increased up to 20% without approval

  • Up to 75% of funds can be spent on exteriors

  • Eligible mixed-use properties supported

  • No refinancing test required


  • Appraisal must include as-stabilized values

  • Replacement reserves are generally required

  • Loans are not assumable

  • Additional rehabilitation escrow or completion guaranty required

  • Application fee and good faith deposit also required