FREDDIE MAC®
Student Housing
Arbor’s Student Housing product provides attractive terms and competitive prices for the purchase or refinance of properties that, because of construction and location, specifically cater to a student tenant base and may or may not be readily convertible to conventional multifamily housing.
| Loan Amount | Generally, $5 million to $100 million (larger and smaller loans will be considered) |
| Amortization | 5 to 10 years. Up to 30 years for fixed-rate loans if loan is not purchased for securitization. Interest-only options available. |
| Minimum DSCR | 1.30/1.35 if cash-out. Refer to: freddiemac.com/multifamily/product/pdf/student_housing.pdf for grid. |
| Maximum LTV | 80%. Refer to: freddiemac.com/multifamily/product/pdf/student_housing.pdf for grid. |
| Rate Structure | Fixed and floating rate options available. |
| Eligible Properties | Specifically cater to a student tenant base. Not readily convertible to conventional multifamily housing. Must be greater than 50% student occupied. 12-month leases and parental guarantees are preferred. Food services not permitted. Must have minimum of 1 bathroom for every 2 bedrooms, and each apartment must have a separate full kitchen. Property must be located less than 2 miles from campus or on bus route. |
| Occupancy Requirement | 90% physical occupancy for a minimum of 90 consecutive days prior to loan closing and as of the delivery date. |
| Tax & Insurance Escrows | Monthly deposits required. May be waived if certain criteria are met. |
| Replacement Reserves | Underwritten at a minimum of $150 per bedroom or $300 per unit per annum. Must be funded. |
| Recourse | Non-recourse with standard exceptions, including for fraud and misrepresentation. |
| Commercial Space | No more than 40% of effective gross income and no more than 40% of property’s total square footage. |
| Student Population Requirement | Minimum 8,000 students. |
| Required Reports | Appraisal, Property Condition Assessment and Phase I Environmental, Zoning, Insect and Flood. |
| Prepayment | Defeasance for fixed-rate loans. Four main prepayment options available for floating-rate loans. No premium for final 90 days. |
| Assumable | Subject to approval and 1% fee. |
| Subordinate Financing | Not allowed. |
| Supplemental Loans Available | Subject to requirements in the Loan Agreement and Freddie Mac. |
| Pricing | Tiered Pricing Matrix. More favorable terms available for higher DSC and lower LTV. |
| Rate Lock | Early rate-lock and Index Lock options available. |
| Application Deposit | $26,500. Covers all estimated underwriting costs (including application fee). |
| Legal/Closing Fee | Arbor’s Counsel Fee to be determined at application. |
| Good Faith Deposit | 2% of loan amount due at rate lock for early rate-lock transactions refundable post-closing. |
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