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Freddie Mac

Conventional Floating Rate

ELIGIBLE BORROWERS

Borrower may generally be a limited partnership, corporation, limited liability company, or a tenancy in common (TIC).

General partnerships, limited liability partnerships, REITs and certain trusts may also be acceptable in limited circumstances, subject to additional requirements.

Borrower must generally be a Single Purpose Entity (SPE) (see Section 6.13 of the Loan Agreement for basic SPE requirements); however, on loans less than $5 million, upon borrower’s request, a borrower other than a TIC may be a Single Asset Entity instead of an SPE.

If the borrower is structured as a TIC, each tenant in common must be an SPE.

ELIGIBLE PROPERTIES TYPES

Standard multifamily housing, student housing, seniors housing, manufactured housing communities and Targeted Affordable Housing (e.g., cash LIHTC Year 4-10 and 11-15, Section 8 loans); conventional structured transactions; Floating-rate loans are not available for cooperative housing.

TERMS

5-, 7-, and 10-year terms.

AMOUNT

Generally, $5 million to $100 million (smaller and larger loans will be considered).

PRICING INDEX

30-day Average SOFR.

EARLY RATE-LOCK OPTION

Early rate-lock option available for varying durations, typically ranging from 60 to 120 days from rate-lock until Freddie Mac purchase.

INTEREST-ONLY PERIOD

Partial-term and full-term interest-only available.

INTEREST RATE CAP

Expanded the number of cap options available. Borrower may obtain its own cap coverage from a third-party provider (see our Approved Counterparties List for a list of approved providers, which we have increased); see the Interest-Rate Cap Options for Floating-Rate Cash Loans with a 7-Year Term example. No cap necessary for loans with a Loan-to-Value (LTV) ratio of less than 60%.

MAXIMUM AMORTIZATION

30 years.

AMORTIZATION CALCULATIONS

Actual/360.

LOCK-OUT/PREPAYMENT PROVISIONS

Four lock-out/prepayment options available (see chart below) with no premium for final 90 days; other options are available for loans that are not intended to be securitized; Borrowers should contact a Freddie Mac Multifamily Optigo Seller/Servicer for more information; Optigo Sellers should contact their Freddie Mac representative.

TAX AND INSURANCE ESCROW

Generally required.

REPLACEMENT RESERVE DEPOSIT

Generally required.

RECOURSE REQUIREMENTS

Non-recourse except for standard carve-out provisions.

SUPPLEMENTAL LOAN AVAILABILITY

Yes, subject to requirements specified in the Loan Agreement.

APPLICATION FEE

Greater of $2,000 or 0.1% of loan amount for conventional first mortgages; supplemental and seniors housing loans are > $5,000 or 0.15% of loan amount; supplemental loans are > $5,000 or 0.1% of loan amount and Targeted Affordable Housing loans are > $3,000 or 0.1% of loan amount.

REFINANCE TEST

No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a LTV ratio of 60% or less.

LOCK-OUT/PREPAYMENT PROVISIONS
  • Option 1
    • Year 1 - Locked Out
    • Year 2 - 1%
    • Year 3 - 1%
    • Year 4 - 1%
    • Year 5 - 1%
    • Year 6 - 1%
    • Year 7 - 1%
    • Year 8 - 1%
  • Option 2
    • Year 1 - 3%
    • Year 2 - 2%
    • Year 3 - 1%
    • Year 4 - 1%
    • Year 5 - 1%
    • Year 6 - 1%
    • Year 7 - 1%
    • Year 8 - 1%
  • Option 3
    • Year 1 - 5%
    • Year 2 - 4%
    • Year 3 - 3%
    • Year 4 - 2%
    • Year 5 - 1%
    • Year 6 - 1%
    • Year 7 - 1%
    • Year 8 - 1%
  • Option 4*
    • Year 1 - 7%
    • Year 2 - 6%
    • Year 3 - 5%
    • Year 4 - 4%
    • Year 5 - 3%
    • Year 6 - 2%
    • Year 7 - 1%
    • Year 8 - 1%

*Only for 10-year capped floating-rate loan. 

LOAN-TO-VALUE RATIOS AND AMORTIZING DEBT COVERAGE RATIOS
  • ≥ 5-Year & < 7-Year Term
    • Amortizing – 75% / 1.25%
    • Partial-Term IO – 75% / 1.25%
    • Full-Term IO – 65% / 1.35%
  • ≥ 7-Year Term
    • Amortizing – 80% / 1.25%
    • Partial-Term IO – 80% / 1.25%
    • Full-Term IO – 70% / 1.35

This sheet sets out the general guidelines of a loan program and is designed solely as an aid to prospective borrowers and other clients. It does not represent or imply a contract or a commitment to lend funds. A commitment to lend funds may only be made by a written letter issued by NewPoint to a prospective borrower. This term sheet is subject to change at any time without notice at the sole discretion of NewPoint Real Estate Capital LLC.