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The Freddie Mac Student Housing program is for student housing properties with colleges or universities that have 8,000 or more students, and the property is located within two miles of the university. This program is for the acquisition or refinance of this type of property. The terms range from 5-10 years and generally between $5 to $100 million. The maximum amortization allowed is 30 years. The Replacement Reserve Deposit is a minimum $150 per bedroom or $300 per unit. The maximum LTV is 80% for partial-term interest only, and 70% for full-term interest only.
Term Sheet for Freddie Mac Student Housing
| Term |
5-10 years (up to 30 years for fixed-rate loans if loans is not purchased for securitization). |
| Amount |
Generally, $5 million - $100 million (larger and smaller loans will be considered). |
| Maximum Amortization |
30 years. |
| Financing Options |
Acquisition or refinance. |
| Ground Lease |
Ground lease for land owned by a college or university may be permitted with prior approval.
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| Lease Parameters |
- Individual tenant lease by the apartment, bedroom, or by the bed.
- Rent under a master lease may be permitted with prior approval.
|
| Lease Parameters |
12-month lease is preferred, although a shorter lease (of nine months or more) will be considered. |
| Lease Guaranty |
Parental guaranty is preferred. |
| Recourse Requirements |
Non-recourse except for standard carve-out provisions. |
| Supplemental Loans |
Available subject to requirements in the Loan Agreement and current Freddie Mac program and product requirements at the time of the supplemental loan request. |
| Exclusions |
Residence halls or other multiple occupancy rooms with a shared common bathroom and centralized food service areas or dining halls. |
| Tax and Insurance Escrows |
Generally required. |
| Replacement Reserve Deposit |
Generally a minimum of $150 per bedroom or $300 per unit. |
| Application Fee |
Greater of $2,000 or 0.1% of loan amount. |
| Early Rate-Lock options (for Fixed-Rate Loans) |
Early rate-lock and Index lock options available, if eligible.
|
| Other Options and Requirements |
Refer to the Fixed-Rate Loan or Floating-Rate Loan term sheets for additional information. |
| Refinance Test |
No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a loan-to-value (LTV) ratio of 65% or less. All partial-term interest-only loans must pass the Refinance Test. |
| Eligible Borrowers |
- Borrower may be a limited partnership, corporation, limited liability company, or a tenancy in common (TIC) with 10 or fewer tenants in common.
- General partnerships, limited liability partnerships, real estate investment trusts (REITs), and certain trusts may also be acceptable in limited circumstances, subject to additional requirements.
- Borrower must generally be a Single Purpose Entity (SPE). 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 a SPE.
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| Eligible Property Types |
- Purpose-built student housing properties must have a minimum of one bathroom for every two bedrooms and each apartment must have a separate full kitchen.
- Stabilized garden, mid-rise and high-rise apartment properties that are greater than 50% occupied by student tenants.
- Supporting college/university has 8,000 or more students or student housing properties located within close proximity to multiple schools that have a combined student body of 8,000 or more will be considered.
- Property is located less than two miles from college/university or on a public transportation route.
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