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April 09, 2018

First Tax-Exempt Loan in NYC

Freddie Mac recently teamed up with JLL and the New York City Housing Development Corporation (NYC HDC) to refinance Eleven33, a Brooklyn affordable housing community with half of the units for low-income renters. Freddie Mac provided 90 percent of the financing through a $61.2 million tax-exempt loan (TEL) and a $15.6 million taxable loan.

NYC HDC, the governmental lender, will get a risk-adjusted return on its $6.8 million financing — allowing them to put money back into the city’s affordable housing. JLL is the lending Seller/Servicer on the deal.

“We’re excited because it’s our first TEL in New York — and a new execution for us with credit risk share from NYC HDC,” said Shaun Smith, Freddie Mac Multifamily senior director of Targeted Affordable Production.

The TEL has a 10-year term, 9.5-year yield maintenance, with 3-year interest only, followed by a 35-year amortization. The taxable and tax-exempt loans paid off an existing $46 million Freddie Mac variable-rate bond credit enhancement from 2012.

Read more in a Commercial Observer article highlighting the deal.

Why a Freddie Mac Multifamily TEL?

Our TELs help Borrowers save time and money when they buy or refinance affordable multifamily properties financed with tax-exempt debt. Our streamlined TEL means fewer documents, fewer participants and lower costs than traditional bond credit enhancements.

We offer fixed- and variable-rate financing and forwards, as well as our latest float-to-fixed option (Flex TEL) to increase cash flow.

Our breadth of experience with TEL continues to grow: 214 loans to date, $3.2 billion and counting, in 33 states and D.C.

Duty to Serve

This is part of our commitment with the Federal Housing Finance Agency to preserve affordable housing and help underserved regions through Duty to Serve.

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