LIHTC permanent loans and forward commitments compared

The permanent loan is the one piece of a tax credit stack that pays interest for decades, so its size sets how much soft money the deal needs. And because it is usually committed before construction, its terms ripple back into the construction loan, the equity pay-in and the bond structure.

How every lender sizes it

All of these programs land on the same arithmetic, with different limits:

1. Underwritten NOI at the lower of restricted rents (after utility allowances) and market rents, less vacancy, operating expenses, replacement reserves and any lender-required items.
2. Coverage: maximum annual debt service = NOI / minimum DSCR.
3. Loan constant from the locked rate and amortization period turns that payment into a loan amount.
4. Caps: loan-to-value, loan-to-cost, and for FHA and USDA, statutory per-unit limits.
5. The lowest result wins.

The supportable debt calculator runs the first three steps. For FHA loans, add the mortgage insurance premium to the constant.

The comparison

Only terms read from the program’s own documents are in this table. Where a program’s sheet doesn’t publish a number, the cell says so.

Program	What it finances	Verified terms	Source
Freddie Mac Tax-Exempt Loan (TEL), TAH	Stabilized 4% LIHTC acquisition or refinance, and forwards	Term up to 30 years; min DCR 1.15x; max LTV lower of 85% of adjusted value or 90% of market value; amortization up to 40 years; forward commitment term up to 48 months; subordinate financing allowed	TEL term sheet, 02/25
Fannie Mae M.TEB	Fannie MBS used as collateral for tax-exempt bonds on 4% deals, new issues or refundings	Term 10 to 30 years; amortization 35 years; max LTV 90% (at least 90% of units affordable), 85% (fewer) or 80% (refundings); min DSCR 1.15x or 1.20x; yield maintenance or declining premium; non-recourse. All Fannie MAH terms	M.TEB term sheet
Fannie Mae unfunded forward commitments (4% and 9%)	Rate-locked permanent loan funded at conversion; third party provides construction loan	36-month lock plus one (9%) or up to two (4%) 6-month extensions; 1% good faith deposit; conversion at 90% occupancy for 90 days; term 10 to 30 years; amortization up to 35 years; 9%: 90% LTV, 1.15x DSCR. All Fannie MAH terms	9% term sheet, 4% term sheet
FHA 221(d)(4)	New construction or substantial rehab, single close construction-to-permanent, non-recourse	MIP 25 bps for applications submitted or amended on or after Oct 1, 2025; statutory per-unit limits re-based by Pub. L. 119-101 sec. 211	90 FR 45789; Pub. L. 119-101
FHA 223(f)	Acquisition or refinance of a stabilized property, including LIHTC resyndications with moderate rehab	MIP 25 bps for applications submitted or amended on or after Oct 1, 2025	90 FR 45789
FHA 223(a)(7)	Streamlined refinance of an existing FHA-insured loan	Term up to 12 years beyond the unexpired term of the existing loan; documented as an amendment to the existing insurance contract; MIP 25 bps for applications submitted or amended on or after Oct 1, 2025	12 U.S.C. 1715n(a)(7); 90 FR 45789
USDA Section 538 guaranteed	Rural rental housing; permanent loans, or construction-and-permanent	Guarantee up to 90% (Option One permanent); term 25 to 40 years (3565.209); loan up to 97% (nonprofit or public borrower) or 90% (other borrowers) of the lesser of development cost or value (3565.204); tenant income at move-in up to 115% of AMI; per-unit limits tied to National Housing Act 207(c)	7 CFR Part 3565
Bank or CDFI permanent loan	Smaller deals, rural deals, mixed-income, deals needing flexibility	Set by each lender	Lender term sheet
FHLB Affordable Housing Program (AHP)	Grant or subsidized-rate advance layered onto any of the above through a member bank	Each FHLBank contributes the greater of 10% of prior-year net earnings or its share of $100 million; rental: at least 20% of units for households at or below 50% AMI; 15-year retention period	12 CFR Part 1291

Two 2026 changes affect the table. FHA’s mortgage insurance premium is now 25 basis points for all multifamily programs, for applications submitted or amended on or after October 1, 2025 that were not yet initially endorsed, down from tiered rates that ran as high as market-rate levels (90 FR 45789). And the 21st Century ROAD to Housing Act re-based FHA’s statutory per-unit limits and indexed them to a Census multifamily construction price index (Pub. L. 119-101 sec. 211, enacted July 11, 2026); check HUD’s implementing notice for the current dollar figures. Section 538’s per-unit cap points to the same 207(c) limits.

Forward commitments, step by step

1. Application and early rate lock, usually at or before construction closing. The lender underwrites the completed, stabilized property.
2. Deposit or fee. Lenders take a good-faith deposit and often a standby or commitment fee. Read the sheet for which part is refundable.
3. Construction by a separate lender (or by the same lender on a construction-to-permanent forward).
4. Conversion tests: completion, a period of sustained occupancy and DSCR at actual rents, final cost certification, and often evidence that Forms 8609 are issued or applied for.
5. Outside date and extensions. Freddie Mac’s TEL forward runs up to 48 months; extensions usually cost a fee. If the property isn’t ready, the loan may fund at a reduced “rebalanced” amount sized to actual NOI.

The developer’s risk is the gap between the locked loan amount and the amount at conversion. If utility allowances, insurance or taxes come in higher than underwritten, NOI falls and so does the loan. The shortfall typically lands on the deferred developer fee.

Choosing between them

If the deal…	Look first at
Is a 4% bond deal and you want one lender from construction through permanent	Freddie TEL forward, FHA 221(d)(4), or a bank drawdown bond that converts
Uses short-term cash-collateralized bonds to pass the bond test	A taxable GSE or FHA permanent loan, with the bonds redeemed at conversion
Is a stabilized resyndication	Freddie TEL, FHA 223(f), Fannie MAH
Already has an FHA-insured loan	223(a)(7) to lower the rate without a new underwrite
Is rural and small	USDA 538, a CDFI, or a community bank
Needs a few hundred thousand dollars more subsidy	FHLB AHP through a member bank

FHA timing and LIHTC

FHA-insured construction loans process under HUD’s MAP Guide, which runs longer than a GSE forward. That matters for a 9% deal racing a placed-in-service deadline and for 4% deals whose bond cap award expires. The HUD MAP Guide (Handbook 4430.G) is at hud.gov; read the current edition for LTV and coverage limits by loan type before modeling.

Section 8 and other contract rents

Where a property has project-based rental assistance, lenders underwrite to the contract rents, which can exceed LIHTC rent limits because Section 8 payments are excluded from LIHTC gross rent (IRC 42(g)(2)(B)(i)). Lenders also look at the contract’s remaining term. See LIHTC with RAD and Section 8.

Ready to price two or three executions on the same rent roll? The Janover Capital desk can run them side by side.