Freddie Mac NOAH Preservation Loan

Freddie Mac Loans for Naturally Occurring Affordable Housing

If you represent a non-profit committed to preserving the supply affordable housing for Americans who need it, then Freddie Mac's NOAH Preservation Loan could be a great opportunity to fulfill your organization's mission. NOAH Preservation Loans offer LTV allowances of up to 80% and DSCRs as low as 1.20x. Plus, these loans have flexible terms up to 15 years and flexible amortizations up to 30 years, giving eligible nonprofits a variety of options in their quest to preserve affordable properties for lower-income families. 

To learn more, check out Freddie Mac’s official NOAH Preservation Loans Product Sheet or keep reading below for an in-depth explanation of the Freddie Mac NOAH Preservation Loan program.

Sample Freddie Mac Terms for NOAH Preservation Loans in 2024

Size:  Varies based on LTV and DSCR requirements. 

Use:  Providing the financing for eligible nonprofits to acquire Naturally Occurring Affordable Housing (NOAH) properties in order to preserve their affordability for tenants. 

Terms:  Up to 15 years

Amortization: Up to 30 years

Maximum LTV:  80% 

Minimum DSCR:  1.25x, 1.20x available with underwriting approval

Prepayment Penalty:  Yield maintenance or defeasance (based on transaction structure)

Eligible Properties:  Garden, mid-rise, or high-rise multifamily NOAH properties

Eligible Borrowers:  501(c)(3) nonprofit organizations with affordable housing preservation as a stated part of their mission and experience with successful property ownership. 

Recourse:  To be determined by Freddie Mac at commitment

Affordability Requirements:  At least 50% of units need to have affordable rents at 60%, 80%, 100%, or 120% of the area median income (AMI) based on market at the time of origination

Equity Requirements: 

Nonprofit must meet at least one of the following:

• Have an equity partner providing mission-focused equity

• Contribute 100% of the equity themselves (leveraging soft debt as necessary)

• Use the Freddie Mac Impact Gap Financing offering

Advantages:

• Moderate rehabilitation permitted upon underwriting approval

• LTV allowances up to 80%

• DSCRs as low as 1.20x

Disadvantages:

• Application fees, commitment fees, and other fees required

• Servicing document review fee (discounted to $1,500 per review for items disclosed before origination)