FREDDIE MAC OPTIGO®
NOAH Preservation Loan
PRESERVING NATURALLY OCCURRING AFFORDABLE HOUSING
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ELIGIBLE PROPERTY TYPES
Garden, mid-rise, or high-rise multifamily NOAH properties.
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ELIGIBLE OPTIGO LENDERS
TAH lenders.
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ELIGIBLE BORROWERS
501(c)(3) nonprofit organizations with affordable housing preservation as a stated part of its mission and a demonstrated history of successful property ownership.
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MINIMUM AFFORDABILITY
At least 50% of the units must have affordable rents at 60% / 80% / 100% / 120% area median income (AMI) based on market at the time of origination.
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MINIMUM 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.
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LOAN TERM1
Up to 15 years.
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MAXIMUM AMORTIZATION
Up to 30 years.
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MINIMUM DEBT COVERAGE RATIO (DCR)2
1.25x with 1.20x available subject to underwriting approval.
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MAXIMUM LOAN-TO-VALUE (LTV) RATIO2
80% LTV.
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TAX AND INSURANCE ESCROW
Required.
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FEES
- Application fee and Commitment fee.
- Servicing document review fee discounted to $1,500 per review for items disclosed prior to origination.
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PAYMENT STRUCTURE
Per Freddie Mac Commitment.
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PREPAYMENT PROVISIONS
Yield Maintenance or defeasance (to be determined at quoting stages based on transaction structure).
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NON-RECOURSE AND/OR GUARANTY
Per Freddie Mac Commitment.
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MODERATE REHABILITATION
Subject to underwriting approval.
1Loan terms may be up to 30 years which will be determined on a case-by-case basis.
2Underwriting parameters are maximum allowed by the program. Transactions will be screened on a deal-by-deal basis and parameters may be adjusted at the Freddie Mac Underwriting team’s discretion.
