The LIHTC Program provides the private market with an incentive to invest in affordable rental housing. Federal housing tax credits are awarded to developers of qualified projects. Developers then sell these credits to investors to raise capital (or equity) for their projects, which reduces the debt that the developer would otherwise have to borrow. Because the debt is lower, a tax credit property can in turn offer lower, more affordable rents. Provided the property maintains compliance with the program requirements, investors receive a dollar-for-dollar credit against their Federal tax liability each year over a period of 10 years.
| Forward Commitment | Immediate Funding | Preservation Rehabilitation | |
| Product Description | Forward Commitment Immediate Funding Preservation Rehabilitation Product Description Forward commitment for new construction or substantial rehabilitation of affordable multifamily properties with 9% LIHTC | Financing for the acquisition or refinance of stabilized affordable multifamily properties with 9% LIHTC with at least 7 years remaining in the LIHTC compliance period | Financing for the moderate rehabilitation of affordable multifamily properties with new 9% LIHTC and tenants in place |
| Type of Funding | Funded or unfunded construction financing commitment; permanent financing at conversion | Permanent financing | Financing for acquisition/ rehabilitation (for a maximum of 24 months) based on projected post-rehabilitation net operating income (NOI); cash or letter of credit collateral required to collateralize gap between supportable debt on current NOI and loan amount (collateral held until stabilization); interest only during the rehabilitation/ stabilization period |
| Eligible Properties | To-be-built or substantially rehabilitated garden, mid-rise or high-rise multifamily properties with 9% LIHTC | Garden, mid-rise or high-rise multifamily properties with 9% LIHTC with 90% occupancy for 90 days | Garden, mid-rise or high-rise multifamily properties with 9% LIHTC that are undergoing moderate rehabilitation with tenants in place |
| Minimum DSCR DSCR Calculator | 1.15x | 1.15x | 1.15x |
| Max LTV | 90% of market value | 90% of market value | 90% of market value |
| Loan Term | Maximum term: 35 years | Maximum term: 35 years | Maximum term: 35 years |
| Construction Loan Term | Maximum forward commitment term: 36 months plus a free 6-month extension during construction period | NA | NA |
| Max Amortization | 35 years | 35 years | 35 years |
| Prepayment | Yield Maintenance | Yield Maintenance | Yield Maintenance |
| Tax and Insurance Escrows | Required | Required | Required |
| Securitization Available | No | Yes | No |
| Early Rate-Lock | NA | Early rate-lock or Index Lock options available | NA |
Program Plus Freddie Mac Loans
| Program Plus Options | |
|---|---|
| Fixed Rate Loans | Floating Rate Loans |
| Lease-Up Loans | Manufactured Housing Community Loans |
| Revolving Credit Facility | Student Housing Loans |
| Supplemental Loans | Value-Add Loans |
Affordable Housing Freddie Mac Loans
Other Freddie Mac Loans
| Other Freddie Loan Types | |
|---|---|
| Student Housing Loans | Small Balance Loans |
| Freddie Mac Single-Family Rental (SFR) Pilot Program | |
