Tax-Exempt Bond Credit Enhancement

• Low borrowing cost, “AA+” rating keeps the interest rates on bonds low
• Supports affordable rental housing stock
• Flexible structures
• Certainty and speed of execution

• Multifamily Affordable Housing (MAH) properties with 4% Low-Income Housing Tax Credit (LIHTC) rent restrictions
• New money issues, refundings, or credit substitutions

10 - 30 years (minimum 15 years for new construction and substantial rehabilitation).

Up to 35 years.

Fixed-rate.

90% for 4% LIHTC properties with at least 90% of the units meeting affordability requirements.

85% for 4% LIHTC properties with less than 90% of the units meeting affordability requirements.

80% for refundings.

1.15x for 4% LIHTC properties with at least 90% of the units meeting affordability requirements.

1.20x for 4% LIHTC properties with less than 90% of the units meeting affordability requirements and for refundings.

Flexible prepayment options available.

Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available Property cash flow after payment of senior liens and Property operating expenses.

Non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy.

Replacement reserve, tax, and insurance escrows are typically required.

Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.

The Credit Enhancement Instrument issued by Fannie Mae is provided in accordance with the terms of a Reimbursement Agreement between the borrower and Fannie Mae, among other documents.