Freddie Mac TAH Express Loan Program

The Ideal financing solution for investors looking to purchase or refinance Targeted Affordable Housing (TAH) properties

Freddie Mac TAH Express Loans

For investors or developers who are looking to acquire, refinance, or preserve a smaller Targeted Affordable Housing (TAH) property (a stabilized property with an affordability component such as a section 8 voucher or HAP contract), Freddie Mac's TAH Express Loan may be just the right multifamily financing product for the job. The TAH Express Loan program, which can provide up to $10 million in apartment financing, offers eight fixed and floating-rate loan options, with partial and full-term interest-only loans also available.

Freddie Mac TAH Express Loans come with some generous underwriting terms, like an LTV allowance of up to 80% and permitted DSCRs as low as 1.20x. As if that wasn’t impressive enough, TAH Express Loans were created to have a streamlined underwriting process with less required documentation, making these loans a great divergence from the hassle of the typical multifamily loan application and approval process.

Why choose the Freddie Mac Targeted Affordable Housing Express loan?

The Freddie Mac TAH Express loan is more often than not the ideal loan product for investors looking to purchase or refinance targeted affordable housing properties that aren’t eligible for financing through the Freddie Mac Small Balance Loan program. The range of eligible property types includes stabilized properties with long-term HAP contracts, Section 8 vouchers, agreements that impose rent or income restrictions, tax abatements, and LIHTC properties over the 11th year of their compliance period. Targeted Affordable Housing Express loans are issued with a maximum loan size of up to $10 million.

TAH express loans term options include 5, 7, 10, or 15-year fixed-rate loans or 5, 7, or 10-year floating-rate loans. The loans come with amortizations of 30 years. Leverage and debt service requirements depend upon the market in which a property is located; for example, for Top Markets 80% maximum LTV and 1.20x minimum DSCR is permitted, while for Very Small Markets 70% maximum LTV and 1.35x minimum DSCR is allowed (with plenty of flexibility in between).

The benefits of the Targeted Affordable Housing Express program go beyond the loan terms. Freddie Mac simplified the application and underwriting process for these non-recourse, assumable multifamily loans tremendously. Typically, TAH loans require reduced paperwork, utilize simplified loan documents, require no borrower legal council or replacement reserve escrow, and have low transaction costs.

Freddie Mac Targeted Affordable Housing Express Loan Guidelines

Loan Size - $1,000,000 - $10,000,000.

Eligible Properties - Stabilized Multifamily properties with one or more of the following affordability components:

  • LIHTC properties in or past the 11th year of their compliance period
  • Long-term HAP Contracts
  • Regulatory Agreements (LURA) with rent/income restrictions
  • Tax Abatements
  • Section 8 vouchers

Ineligible Properties

  • Senior housing (AL, IL, ALC, SN) with resident service
  • Student housing (greater than 50% concentration)
  • Military housing (greater than 50% concentration)
  • LIHTC with LURAs that have not made it past at least 11 compliance years
  • Historic Tac Credit properties with a master lease structure

Fixed Terms

  • 5-year
  • 7-year
  • 10-year
  • 15-year

ARM Terms

  • 5 year fixed + 15 year ARM.
  • 7 year fixed + 13 year ARM.
  • 10 year fixed + 10 year ARM.

ARM Details - Based on the 6 month LIBOR index. The Interest rate floor is equal to the start rate, with a lifetime cap set at 500 bps above the start rate and 1% periodic rate adjustments every 6 months.

Amortization - 30 years.

Minimum DSCR - 1.20-1.35 depending on Market Tier.

LTV - 75%-80% depending on Market Tier.

Minimum Occupancy - Property must be stabilized at:

1) 90% physical occupancy for the trailing three-month average prior to underwriting.


2) 85% physical occupancy for the trailing 3-month average prior to underwriting if the subject property meets any of the following criteria:

  • Property is recently built or renovated in a Top Market
  • Property has less than 30 units

Acquisition with all of the following:

  • Experienced sponsor and management relative to the current ownership
  • Appraised occupancy and/or rents materially higher than subject's current operations
  • The subject property has not experienced volatile historical occupancy swings
  • No history of serious crime at the subject property

Interest Only -

  • 1 year for 5-year fixed term.
  • 2 year for 7-year fixed term.
  • 3 year for 10-year fixed term.
  • Full term for loans with a DSCR greater than 1.40 and an LTV less than 65%.

Interest Accrual - Actual/360.

Prepayment Penalty - Yield maintenance or declining prepay options (that can be reduced with rate increase).

  • 5 year fixed term: 5,4,3,2,1.
  • 7 year fixed term: 5,5,4,4,3,2,1.
  • 10 year fixed term: 5,5,4,4,3,3,2,2,1,1.
  • 1% prepay penalty during ARM term that can be waived if selling the property or refinancing through Freddie Mac.

Guarantee - Non-recourse with standard “bad boy” carve-outs.

Assumable - Yes, with lender approval and a 1% assumption fee.


  • Real estate tax escrow deferred for loans with less than 65% LTV.
  • Insurance escrow deferred.

Replacement Reserves - Not required.

Subordinate Debt - Not permitted.

Rate Lock - At application.

Sponsor Requirements

  • A credit score of no less than 650
  • The collective net worth of key principals must exceed the loan amount
  • Minimum liquidity of nine months of debt service
  • Prior affordable housing experience

Borrowing Entity

  • Single asset entity required
  • Trusts and corporations only eligible by exception at the lender’s discretion
  • Tenants in Common (TIC) eligible (no more than 5 co-tenants, each co-tenant must be a single asset entity)

Principals Required To Be Underwritten

  • Any member or limited partner with more than a 25% interest in the borrower
  • All managers of the borrowing entity
  • All general partners of the borrower

Freddie Mac TAH Express Loan Prepayment Terms

Aiming to meet their promise of more flexible loan terms that best meet the needs of their customers, many Freddie Mac multifamily loan programs provide an array of different prepayment options to choose from. With the TAH program, borrowers can choose between yield maintenance and three different declining prepayment options. The prepayment schedules are as follows:

  • Yield Maintenance Prepayment Term - Interest rate adjustment. There are no adjustments to the interest rate.
    • 5-year fixed term: 5-years
    • 7-year fixed term: 7-years
    • 10-year fixed term: 10-years
  • Declining Prepayment Term - Interest rate adjustment. Add 15 bps for 5-year fixed term and 20 bps for 7-year and 10-year fixed terms.
    • 5-year fixed term: 5-4-3-2-1
    • 7-year fixed term: 5-5-4-4-3-2-1
    • 10-year fixed term: 5-5-4-4-3-3-2-2-1-1
  • Declining Prepayment Term Option 1 - Interest rate adjustment. Add 35 bps for 5-year fixed term and 40 bps for 7-year and 10-year fixed terms.
    • 5-year fixed term: 3-2-1-1-1
    • 7-year fixed term: 3-3-2-2-1-1-1
    • 10-year fixed term: 3-3-3-2-2-2-1-1-1-1
  • Reduced Declining Prepayment Term Option 2 - Interest rate adjustment. Add 45 bps for 5-year fixed term.
    • 5-year fixed term: 3-1-0
    • 7-year fixed term: None
    • 10-year fixed term: None

Freddie Mac Market Tiers

Under Freddie Mac’s multifamily division, the nation is divided into five regions comprised of the Northeast, Southeast, Western, North Central, and South Central. Each of the 5 regions has their own unique interest rates, and are further split into markets. There are 4 defined “tiers” of markets in the small balance loan program.

Freddie Mac has given every county in the United States a market tier designation. Each county is designated as either a Top, Standard, Small, or Very Small market. The designation is based on the size of the rental population, as determined by data from the the U.S. Census Bureau.

When shopping around for apartment financing, it's important to understand how market tiers affect loan terms. For example, subject properties that are located in Top and Standard market tiers qualify for more aggressive loan terms than those located in the Small and Very Small tiers. Subject properties in Small and Very Small markets will have slightly higher interest rates, higher DSCR, lower LTV and fewer years of interest-only payments.

For more information on how a property’s region and market tier will affect small balance loan terms, please contact us here at Apartment.Loans for a risk free consultation with one of our multifamily loan specialists.

Freddie Mac Market Tiers Defined:

  • Top Markets: Certain (but not all) counties in the following MSA’s: Miami, New York, Los Angeles, Chicago, Washington D.C., San Francisco, Boston, Seattle, San Diego, Denver, Portland, Minneapolis, San Jose and Stamford.
  • Standard Markets: Greater than 60k rental population which includes most MSA’s of significant size.
  • Small Markets: Rental population between 30k and 60k
  • Very Small Markets: Rental population under 30k.

If you would like to learn more about the FRMC Targeted Affordable Housing (TAH) Express loan, please reach out to us at to speak with a multifamily housing loan specialist.