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Freddie Mac Tax Exempt Bond Securitization

Freddie Mac Tax Exempt Bond Securitization

The TEBS product is a structure in which a Sponsor transfers privately placed tax-exempt multifamily housing revenue bonds (and possibly related taxable bonds or loans) to FHLMC in exchange for FHLMC senior Class-A M certificates that are sold to investors and Subordinate Class-B M Certificates that are retained by the Sponsor.

Tax-Exempt Bond Securitization (TEBS)
Description

The TEBS structure is a proprietary execution offered by Freddie Mac through which a Sponsor transfers privately placed tax-exempt multifamily housing revenue bonds (and possibly related taxable bonds or loans) to Freddie Mac in exchange for Freddie Mac senior Class-A M Certificates that are sold to investors andSubordinate Class-B M Certificates that are retained by the Sponsor

Freddie Mac’s Class-A M Certificates are fully guaranteed tax-exempt or taxable securities supported by pools of unenhanced tax-exempt multifamily housing revenue bonds or related taxable bonds or loans. In the event that the senior Class-A M Certificates bear interest at a variable rate, Freddie Mac may also provide a liquidity facility in the form of a guarantee of the purchase price of the senior certificates if tendered for purchase by an investor
Benefits
  • Off-balance-sheet option with portfolios of unenhanced multifamily bonds
  • Enhanced yields through Class-B M Certificates
  • Reduction of risk with risk capped at subordination level of the Class-B M Certificates
Minimum Pool Size Generally $100 million
Subordination Level (Size of B Piece) On average 15% of total pool size, but can vary based on collateral quality and Sponsor needs
Eligible Sponsors Freddie Mac Targeted Affordable Housing Seller/Servicers and other well-capitalized financial institutions on a case-by-case basis
Eligible Properties Multifamily properties
Minimum DSCR DSCR Calculator 1.05
Max LTV (For Each Asset) 95%
Liquidity Facility Options In the event that the senior Class-A M Certificates bear interest at a variable rate, Freddie Mac may also provide a liquidity facility; several options exist, depending upon Sponsor preference
Hedging If the Class-A M Certificates are variable-rate certificates, the Sponsor must purchase an interest rate hedge from an approved Freddie Mac counterparty

Program Plus Freddie Mac Loans

Program Plus Options
Fixed Rate Loans Floating Rate Loans
Lease-Up Loans Manufactured Housing Community Loans
Revolving Credit Facility Student Housing Loans
Supplemental Loans Value-Add Loans

Affordable Housing Freddie Mac Loans

Affordable Housing Options
9% LIHTC Cash Loans Bond Credit Enhancement with 4% LIHTC
Bond Credit Enhancement with Other Affordability Components Cash Loan with Other Affordability Components
Direct Purchase of Tax-Exempt Mortgages Preservation Rehabilitation Financing
Supplemental Loans Tax-Exempt Bond Securitization (TEBS)
Variable Liquidity Pricing

Other Freddie Mac Loans

Other Freddie Loan Types
Student Housing Loans Small Balance Loans
Freddie Mac Single-Family Rental (SFR) Pilot Program

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