Freddie Mac Standard Housing Program

Freddie Mac Standard

Housing

Program

Description: Non-recourse, assumable financing for the acquisition or refinance of stabilized senior housing assets.

Eligible Properties:  independent living (IL), congregate care, and assisted living (AL) properties; Properties that include some set-aside for skilled nursing or residents with Alzheimer’s (ALZ) and/or Memory Care (MC) are eligible for financing at Freddie Mac’s discretion.

Seasoning and Occupancy:

-          The property must be fully completed and have been in operations for a minimum of 12 months, with at least 90% physical occupancy for 90 consecutive days.

-          Under certain circumstances, Freddie Mac may accept a shorter stabilized operating history if the borrower provides performance escrows or other acceptable collateral

Loan Amount      Minimum $5,000,000, with exceptions, Supplemental Loans are also available

Loan Terms          5-, 7-, 10-, 15-, or 18-year balloons; 20-,25-, and 30-year fully amortizing

Amortization       30 years maximum

Borrower             A single asset and single purpose entity, either for-profit or non-profit

Ownership/Management               Must demonstrate at least five years’ experience with properties of similar

composition, and should have a minimum of five properties in their portfolio.

LTV Constraints

              1 – 75% for IL and AL Properties

              2 – 70 - 75% for partial interest only for IL and AL properties

              3 – 70% for full term IO mortgages on IL properties

              4 – 70% for full term IO mortgages on AL properties

DSC Coverage

              1.30x for independent living

              1.40x for facilities with assisted living and/or ALZ/MC component greater than 50%

              1.45x for standalone ALZ / MC facilities  

              1.50x for properties containing Skilled Nursing

Prepayment                                     Yield Maintenance, Defeasance, and Graduated Prepayment Premium

Escrows for taxes, insurance & mortgage insurance premium are required

Replacement Reserves                    Required based on long term physical needs

Rate Lock Deposit                            Typically 1.00% of mortgage amount, refunded

Application Submitted – will include:

o   Final Appraisal

o   Property Capital Needs Assessment

o   Phase 1 Environmental Assessment

o   Financials and/or credit information on sponsor and management company

o   Three years of complete financials for the project and borrowing entity

o   *** A Regulatory Compliance Report is required for all licensed properties ***

o   Past due accounts payable and outstanding liabilities

o   Management Documents

o   Evidence of site control/last arm’s length transaction

o   Legal Documents (organizational docs, title)

o   Rent Rolls