Freddie Mac Premier and Standard Lease-Up Executions

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Freddie Mac offers the Premier and standard lease-up executions as ways to capture business for construction take-out loans. Both utilize our extended early rate-lock delivery to target qualifying loans on conventional newly constructed or substantially renovated properties in lease-up. Premier Lease-Up is a new option that improves many of the key aspects of our traditional standard lease-up execution. The main components of the two options are listed here for comparison.

Freddie Mac retains discretion to determine if a loan qualifies for Premier or standard lease-up. Premier Lease-Up requires excellent sponsor financial capacity, management ability, and experience in similar projects, as well as a superior property, location, market, and leasing velocity. Please work with your regional representative to establish the appropriate execution. Additionally, borrowers who wish to lock a rate earlier in the construction phase, even prior to the start of construction, may want to consider our Conventional Forward Commitment.

	Standard Lease-Up	Premier Lease-Up
Eligibility	Conventional newly constructed or substantially renovated properties in lease-up. Average to above average sponsorship, property, location, market, exhibiting strong lease-up, and not more than 90% loan to cost.	Conventional newly constructed or substantially renovated properties in lease-up. Excellent sponsorship, property, location, market, exhibiting strong lease-up, and not more than 90% loan to cost.
Rate-Lock	Lock at breakeven occupancy and 100% certificates of occupancy issued.	Lock at minimum 40% occupancy, 50% leased and 50% certificates of occupancy issued. (High-rises must also have 100% complete exterior, shell and mechanical systems.)
Rate-Lock Term	Up to 12 months	Up to 18 months
Good Faith Deposit	3%	3% up to 12 months. 4% if more than 12 months.
Closing/Origination	Close at 90% occupancy for 90 days. 100% certificates of occupancy issued.	Close at rent level and occupancy % equivalent to a minimum 1.05 amortizing DCR. This minimum rent level and occupancy % are determined by Freddie Mac prior to rate-lock and set in the ERL Application. Occupancy % cannot be below 65%. Require a certificate of substantial completion and no less than 85% of certificates of occupancy issued. If less than 100% certificates of occupancy, then completion guaranty also required.
Loan Enhancement At Closing	Letter of credit, sized based on the shortfall in annualized NOI between the underwritten stabilized level and the lower actual level at origination, divided by the cap rate, multiplied by the LTV.	Letter of credit, sized based on 3x shortfall in annualized NOI between the underwritten stabilized level and the lower actual level at origination.
Term of Loan Enhancement	Up to 24 months to reach stabilization.	Up to 24 months to reach stabilization.
Release of Loan Enhancement	Must achieve underwritten occupancy and rent levels for 6 months.	Must achieve underwritten occupancy and rent levels for 6 months.