Freddie Mac will offer low-cost loans to owners of multifamily properties who keep the majority of their units affordable to tenants who earn 80 percent or less of the local median income for the duration of the loan.
Freddie Mac will offer low-cost loans to owners of multifamily properties who keep their buildings affordable to households earning 80 percent or less of an area’s median income for the duration of the loan. “Freddie Mac is the country’s largest backer of apartment loans,” observed Wall Street Journal writer Laura Kusisto. “The move could open up a new approach to creating and preserving middle-class housing,” she added.
The program will begin with $500 million in loans to Bridge Investment Group, which has a portfolio of about 30,000 apartments around the country. The investment group reported it has identified 38 potential metro areas around the country in which to invest the money.
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The new program is part of Freddie Mac’s formal commitment to provide “affordable, adequate housing…in all economic conditions and in markets that might otherwise be neglected.” According to Freddie Mac, the entity provided $8.6 billion to help finance apartment units “for renters with the greatest need” and also funded more than 2,600 “small properties” between five and 50 units, which are generally considered to be the most likely apartments to be affordable in an area.
“The supply of workforce housing is rapidly declining. There is an urgent need to preserve what is there and find ways [to] effectively create more,” said head of Freddie Mac’s multifamily division, David Brickman. Freddie Mac purchased about $48 billion in multifamily loans made on affordable apartments in 2017. In 2013, however, 75 percent of its purchases were allocated to affordable housing.