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Download Term Sheet
FREDDIE MAC OPTIGO®
Bond Credit Enhancement with Other Affordability Components
Our Bond Credit Enhancement program provides for the preservation of the affordable housing stock with flexibility in transaction structuring and certainty of execution.
The program is for fixed-or variable-rate multifamily housing bonds including bond refundings, substitutions, or new issue transactions with 80-20 bonds, taxable bonds in combination with tax-exempt bonds, 501(c)(3) bonds, Section 8, Section 236, or tax abatements.
CREDIT ENHANCEMENTS FROM TAX-EXEMPT BONDS
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ELIGIBLE PROPERTY TYPES
Garden, mid-rise and high-rise multifamily properties with minimum occupancies of 90% for 90 days.
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TERMS
10 to 30 years.
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ELIGIBLE TRANSACTIONS
New credit enhancement facility or replacement of existing credit enhancement facility for tax-exempt bonds for refundings, substitutions and acquisitions.
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MAXIMUM AMORTIZATION
30 years.
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MINIMUM DEBT COVERAGE RATIO1 (DCR)
- Variable-rate with cap hedge: 1.25x.
- Fixed-rate: 1.25x.
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MAXIMUM LOAN-TO-VALUE (LTV) RATIO1
- Variable-rate with cap hedge: 80% of adjusted value or 85% of market value.
- Fixed-rate: 85% of adjusted value or 90% of market value.
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PREPAYMENT PROVISIONS
Fee maintenance required.
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SUBORDINATE DEBT
Permitted.
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RECOURSE REQUIREMENTS
Non-recourse except for standard carve-out provisions.
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APPRAISAL, ENVIRONMENTAL AND ENGINEERING REPORT
Required.
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PROPERTY ANDREAL ESTATE TAX ESCROW
Required.
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FEES
Application fee, commitment fee, credit facility fee, outside counsel fees, plus other fees as applicable.
1Adjustments may be made depending on the property, product and/or market.
In its prequalifying review, Lument will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts and actual fees and expenses may vary from the prequalifying estimates. A prequalifying estimate is not a commitment to make a loan.