Freddie Mac Tax-Exempt Loans for Affordable Housing Developments

Freddie Mac Insured Loans for the Acquisition or Refinancing of Affordable Multifamily Properties

If you're considering purchasing, refinancing or renovating an affordable housing property with 4% Low-Income Housing Tax Credits (LIHTCs), a Freddie Mac Tax-Exempt Loan could be a fantastic option. Freddie Mac Tax-Exempt Loans offer fixed-rate terms of up to 30 years and floating-rate terms of up to 10 years, as well as both interest-only and float-to-fixed rate loan options. Plus, these loans offer maximum LTV allowances of up to 90% of a property's market value and DSCRs as low as 1.15x for fixed-rate financing, and LTVs of up to 85% and DSCRs as low as 1.20x for floating-rate loans. Freddie Mac Tax-Exempt Loans also support eligible mixed-use properties and permit subordinate financing, making them an incredibly flexible tool for affordable property developers and investors. 

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

Sample Freddie Mac Terms For Tax-Exempt Loans

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 (LIHTC) with at least 7 years remaining in the LIHTC compliance period. 


Fixed-rate, floating-rate, and fixed-to-floating rate options, minimum loan term is typically 7 years. Maximum terms include: 

  • Fixed-rate loans: Up to 30 years

  • Floating-rate loans: Up to 10 years

  • Construction loans: Up to 36-months

Interest Rate:  

  • Fixed-rate loans: Priced on a spread to 10-year Treasuries

  • Floating-rate loans: Based on 30-day SIFMA or 1-month LIBOR index

Amortization: Up to 35 years

Maximum LTV:  

  • Fixed-rate loans: 85% of adjusted value or 90% of market value

  • Floating-rate loans: 80% of adjusted value or 85% of market value with interest rate hedge

Minimum DSCR:  1.15x for fixed rate, 1.20 for floating-rate, with interest rate hedge

Prepayment Penalty:  Minimum 10 years prepayment protection, then typically yield maintenance 

Subordinate Loans:  Permitted, supplemental financing not available 

Timing:  Loans typically take between 75 and 90 days to close, with some lenders closing in as little as 30 days 

Assumability:   Loans are assumable with lender approval and a 1% fee 


  • Avoids the risk and hassle of bond issuing

  • Interest-only loan options

  • Eligible mixed-use properties supported

  • Immediately funding and forwards

  • Subordinate financing allowed

  • Fixed, floating, and float-to-fixed rate options

  • Freddie Mac GAP financing may be available

  • Rate locks available after commitment (early rate locks may also be available)


  • Appraisal, Phase I Environmental Report, Physical Needs Assessment, Zoning, and Moisture Management reports are required; a Seismic Report may be required for properties in Seismic Zones 3 and 4

  • Application fees, commitment fees, and other fees required

  • Replacement reserves required

  • No supplemental loans allowed

  • 2% rate lock fee typically required (refunded after property reaches stabilization)

  • Freddie Mac fee of $2,000 or 0.1% of loan amount (whichever is larger) also typically required