The Federal Home Loan Mortgage Corporation, or Freddie Mac, is owned by and administered through the United States Government. Freddie Mac purchases mortgages from banks and creates securities, which are investments backed by these loans. Freddie Mac loans are ideal vehicles for people who want to purchase senior or student housing properties.
The Freddie Mac Senior Housing program is designed to be utilized by operators/owners of the following properties that cater to the needs of senior citizens:
- Assisted Living
- Independent Living
- Memory Care Facilities
- Skilled Nursing (limited)
- Any Combination
The loan program is intended for individuals who have prior experience operating such facilities and funds can be used to purchase or refinance properties. The terms of these loans can range between 5-30 years and the loan to value ratio (LTV) can vary between 60-75%. Fixed rate, floating rate and supplemental loans are available to borrowers.
Student housing properties associated with colleges or universities that meet certain eligibility requirements may qualify for a Freddie Mac Student Housing loan. These loans can be used to acquire or refinance properties. Eligible properties will have the following characteristics:
- Associated with schools that have a minimum of 8,000 students
- Located within two miles of a college/university or on a public transportation route
- Must have a minimum of one bathroom for every two bedrooms, and each apartment must have a full kitchen
The terms for these types of loans are between 5-30 years and generally funds of $5M to $100M are available. The replacement reserve deposit is approximately $150 per bedroom or $300 per unit and the maximum LTV (loan to value ratio) is between 70-80%.
Freddie Mac Loan Requirements for Senior and Student Housing Properties
Each type of Freddie Mac loan has its own lending requirements. When considering applying for a Freddie Mac loan, it’s important to keep the following provisions in mind.
- Eligible Borrower Definition
- Eligible Property Definition
- Tax & Insurance Escrow Account Requirements
- Application Fee
Let LSG Lending Advisors put our many years of loan experience to work for you in obtaining the right Freddie Mac product for your senior or student housing property.