ATAX Tax-Exempt Construction to Perm Financing
Multifamily Tax-Exempt Loans for New Construction or Acquisition/Rehab
Projects utilizing the 4% LIHTC – ATAX Construction Loan to Freddie Mac
Optigo® Tax-Exempt Loan (TEL) Forward Commitment
- For Profit and Non-Profit sponsors on 4% LIHTC transactions
Target size of at least $8 million
New Construction or acquisition/rehabilitation of affordable housing projects that can be financed in conjunction with the 4% LIHTC.
Typically, 3 year interest only with one six month extension.
Not prepayable during construction.
Full recourse on construction debt through conversion.
New construction or acquisition/rehab projects using the 4% LIHTC and private activity bond allocation.
- Variable rate or fixed rate available during construction/stabilization. Variable rate generally 375bp (3.75%) over SOFR with a 0.25% floor on SOFR. Fixed rate generally 350 bps (3.50%) over 3 year LIBOR swap rate.
- Interest only during construction/stabilization.
- Fixed rate on Freddie Mac TEL forward locked at initial closing.
Construction Loan LTC
- Ranges from 90-100% LTC depending on sponsor and market.
- Will bridge against LIHTC equity pay-ins.
Freddie Mac TEL
Financing for stabilized affordable multifamily properties with 4% Low-Income Housing Tax Credits (LIHTC) with at least 7 years remaining in the LIHTC compliance period
Eligible Property Types
Garden, mid-rise or high-rise multifamily properties with 4% LIHTC with 90% occupancy for 90 days.
Up to 30 years.
Type of Funding
Forward fixed-rate financing to take out construction financing.
Minimum Debt Coverage Ratio (DCR)
Maximum Loan-to-Value (LTV)
Up to 35 years (40 years in select markets)
Permitted; supplemental loans are available
Tax and Insurance Escrows
Application fee, commitment fee, plus other fees as applicable
Transactions will be priced at a spread to 10-year Treasuries
Yes, using Freddie Mac’s M-L Deals
Minimum 10 years’ prepayment protection
Carve-out provision applies