Revolving Credit Facility. Flexible Funds for Flexible Needs

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1 Revolvig Credit Facility Flexible Fuds for Flexible Needs

Freddie Mac Multifamily Revolvig Credit Facility Compellig Reasos To choose the Revolvig Credit Facility Success i

ad certaity of executio. That s why Freddie Mac Multifamily created the Revolvig Credit Facility.

tailored to meet your specific eeds, from short-term repositioig of trasitioal assets to portfolio acquisitios.

2 Freddie Mac Multifamily Revolvig Credit Facility Compellig Reasos To choose the Revolvig Credit Facility Success i maagig multifamily property portfolios depeds o havig the right fudig attractive spreads, highly-customizable terms ad certaity of executio. That s why Freddie Mac Multifamily created the Revolvig Credit Facility. Our Revolvig Credit Facility is a highly flexible, orecourse, 5-year iterest-oly real estate secured lie of credit tailored to meet your specific eeds, from short-term repositioig of trasitioal assets to portfolio acquisitios. The facility lets you lock i credit ad pricig terms before idetifyig properties ad the, oce locked, spreads remai set for the life of the facility. The facility allows you to borrow-up, exted up to two additioal years ad expad your debt as eeded. Plus, the facility offers optios to accommodate assets with or without commo owership, allowig for differet equity structures. 2

3 Freddie Mac Multifamily Revolvig Credit Facility Uique Beefits What sets us apart A borrower ca move assets i ad out of the facility without havig to substitute assets Asset types ca be comigled withi the same facility No iterest rate cap is required Every six moths the borrower may borrow-up for additioal proceeds at first-mortgage-rate pricig With a cross-collateralized ad cross-defaulted facility, stroger assets ca carry weaker oes with o maximum LTV, miimum DSCR or occupacy requiremets at the property level Assets ca be released without a asset release fee whe a borrower refiaces with a Freddie Mac securitized product No commo owership is required, ad a borrower may be either a Sigle Asset Etity or a Sigle Purpose Etity People Are Talkig... This is a icredibly useful tool for our cliets who eed to maage their leverage poits as they grow their portfolios. Havig the ability to access trapped equity without refiacig is very useful as is the ability to pay dow to target leverage levels oce equity is raised. There is othig else i the market as flexible with a seamless exit through a securitized loa executio. This facility is a game chager. Chris Black KeyBak (Seller/Servicer) Freddie Mac proved to be a terrific capital parter o this trasactio. They worked proactively with us every step of the way, ad i particular, Freddie Mac provided excellet marketig assistace i helpig Hut Mortgage Group educate our cliet o the beefits of a structured trasactio. This was the first structured trasactio completed by our cliet. Bill Hyma Hut Mortgage Group (Seller/Servicer) HFF closed three credit facilities for Abacus Capital Group because of Freddie s ability to customize a structure that accommodates our cliet s busiess eeds. Freddie s committed capital mitigates the risk from a potetial disruptio i the capital markets, ad eables Abacus to acquire assets whe other buyers may ot be able to access adequate acquisitio fiacig. Moa Carlto HFF (Seller/Servicer) Our structured credit facility provides a advatage as we cotiue to grow our portfolio i the highly competitive acquisitio eviromet. The stadardizatio of the loa documets at the establishmet of the facility, coupled with the speed ad flexibility of the uderwritig process allows us to close o acquisitios much more quickly tha we ca with covetioal agecy products, ofte makig us a more attractive buyer tha our competitio. Kevi Roach ROCO Real Estate (Borrower) 3 4

4 Freddie Mac Multifamily Revolvig Credit Facility Freddie Mac Multifamily Revolvig Credit Facility The Structure Build it your way Here s a example of how Freddie Mac s Revolvig Credit Facility ca work. The borrower is usig the facility to grow its portfolio ad chooses a $100 millio Revolvig Credit Facility with a $50 millio expasio optio. Debt $150M Add Additioal Assets, Expad Facility ad Draw More Debt $100M $50M Add Assets to Facility ad Draw Debt Borrow-Up After NOI or Value Icreases available every 6 moths Release Assets ad Pay Dow Debt Add Additioal Assets ad Draw More Debt Exted Facility, Release Assets by Sellig or Refiacig, Pay Dow Debt ad Collapse the Facility as Assets are Rl Released $95M $100M $85M $95M $150M Debt Floatig Rate: Flexibility to Expad, Pay Dow Debt, ad Add or Release Assets Throughout Term $0 5-Year Term (Plus Two 1-Year Extesio Optios) 6-Year Term 7-Year Term Lock Your Spreads for 5 Years The Revolvig Credit Facility lets you lock credit terms ad spreads prior to idetifyig properties Borrow-Up With improved NOI or value, you may borrow-up for additioal proceeds at first mortgage pricig Assets Ca Be Released without a Asset Release Fee Whe the property is refiaced with a Freddie Mac Multifamily securitized product No Substitutio Requiremets Add or release assets without havig to substitute assets Expad the Facility The facility allows you to expad your debt as eeded No Need to Idetify Maturities Up Frot Partially cotract the facility upo assets exit 5 6

Freddie Mac Multifamily Revolvig Credit Facility Freddie Mac Offers better optios

Our people are the best i multifamily property fudig, hads dow!

overcome the hurdles ad deliver flexible terms with competitive pricig to meet a

Borrowers Who Wat to Kow More Cotact oe of our approved Seller/Servicers at

com/multifamily/leders Laure Garre Productio Vice Presidet (703) 903-4170

5 Freddie Mac Multifamily Revolvig Credit Facility Freddie Mac Offers better optios Our Experts Guide you through the process Whe it comes to multifamily fiace, Freddie Mac gets it doe. We work closely with our Sellers to tackle complicated trasactios, provide certaity of executio ad fud quickly. Cotact your Freddie Mac Multifamily represetative today we re here to help. Our people are the best i multifamily property fudig, hads dow! The Structured Trasactios Productio Team is costatly pushig to create the ew, overcome the hurdles ad deliver flexible terms with competitive pricig to meet a borrower s uique eeds. Borrowers Who Wat to Kow More Cotact oe of our approved Seller/Servicers at freddiemac.com/multifamily/leders Laure Garre Productio Vice Presidet (703) laure_garre@freddiemac.com Deise G. Hoga Productio Director (703) deise_hoga@freddiemac.com David Quadt Productio Associate Director (703) david_quadt@freddiemac.com Mark Shutello Seior Producer (703) mark_shutello@freddiemac.com Doug Smith Producer (703) douglas_smith@freddiemac.com Sadro Cimic Productio Associate (703) sadro_cimic@freddiemac.com 7 8

6 Freddie Mac Multifamily Revolvig Credit Facility Freddie Mac Multifamily Revolvig Credit Facility Flexible Terms For your portfolio strategy Stadard Terms Freddie Mac Fees Term 5-year iterest-oly Two 1-year extesio optios Legal Deposit Based o deal complexity, typically $45,000 Commitmet Amout Guarator Fiacial Coveats Iterest Rate Type Collateral Crossed Facility Ucrossed Facility $100 millio preferred miimum Up to 50% of iitial commitmet amout i expasio rights Net worth ad liquidity requiremets set relative to the facility Floatig Typical LTV Rage 55% 70% Miimum DSCR First-lie mortgages of Covetioal, Seiors Housig, Studet Housig, Targeted Affordable Housig (TAH) ad Maufactured Housig Commuities (MHC) LTV/DSCR sublimits measured at the facility level with o limits at the property level No miimum occupacy requiremet Each property is evaluated idividually ad must meet the sublimit requiremets idividually No miimum occupacy requiremet Miimum DCR varies by product type: Covetioal multifamily: 1.45x Maufactured housig commuities: 1.50x Seiors assisted livig: 1.60x Seiors idepedet livig: 1.50x Seiors with skilled ursig facility: 1.65x Studet housig: 1.50x TAH: 1.40x Ucrossed pools: Commitmet Fee ad Property Additio Fee Extesio Fee Uused Commitmet Fee Seasoig Fee Asset Release Fee Commitmet fee: 5 basis poits Additio fee: 10 basis poits $50,000 for each extesio year 20 basis poits charged aually o the differece betwee the commitmet amout ad UPB draw 50 basis poits charged aually at the asset level begiig i the fourth year the asset is i the facility SECURITIZED PRODUCT EXIT PROPERTY SALE ALL OTHER EXITS No release fee 1% of the allocated loa amout; waived if ew buyer fiaces with a Freddie Mac securitized product Years 1 to 3 of facility: 2% of the allocated loa amout After year 3 of facility: 1% of the allocated loa amout The iformatio i this documet is ot a replacemet or substitute for iformatio foud i the Freddie Mac Multifamily Seller/Servicer Guide. Terms set forth herei are subject to chage without otice. Uderwritig Rate (for most markets) Iterest Rate Caps Idex floor (150 bps) + stress rate (100 bps) + gross spread Not required 9 10

CHAPTER 2 PRICING OF BONDS

CHAPTER 2 PRICING OF BONDS CHAPTER SUARY This chapter will focus o the time value of moey ad how to calculate the price of a bod. Whe pricig a bod it is ecessary to estimate the expected cash flows ad