First Tax-Exempt Loan in NYC

April 09, 2018

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.

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