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Download Term Sheet
FREDDIE MAC OPTIGO®
NOAH Preservation Loan
Our Naturally Occurring Affordable Housing (NOAH) Preservation Loan provides qualifying nonprofits with important underwriting flexibilities, fee reductions and rehab allowances. This gives them the competitive advantage they need to acquire the property and helps them better leverage their nonprofit status and local programs to preserve long-term affordability.
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.
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.