400 Loans Funded, Many for Affordable Rental Properties
MCLEAN, VA--(Marketwired - Sep 10, 2015) - Freddie Mac (OTCQB: FMCC) this week reached a milestone of funding more than $1 billion in small multifamily property loans. Close to one-third of renters live in smaller properties with five to 50 units, many of which are affordable to low- and very low-income households.
"With this country's growing gap between affordable housing demand and supply, it is critical to provide capital to this market," said Stephen Johnson, Freddie Mac senior director of Multifamily Production for Small Balance Loans. "We want to be the go-to source for small multifamily property financing and our first $1 billion is a step toward that goal."
"It's incredible to see what we've achieved with our experienced Small Balance Loan Seller/Servicers in such a short period of time," Johnson added. "In 11 months, we've on-boarded and trained 10 Seller/Servicers, inspected nearly 500 properties and underwritten and funded nearly 400 loans with an average balance of $2.5 million."
The Small Balance Loan (SBL) initiative was announced in October 2014 and expanded the company's continuing effort to better serve less populated markets and provide additional liquidity to smaller apartment properties. Loans in the program generally range from $1 million to $5 million and have five or more units. Freddie Mac has a specialty network of SBL lenders with extensive experience who source loans across the country.
Freddie Mac purchases and aggregates loans by seller and will then securitize each seller's deals when pool sizes are approximately $100-$125 million. By structuring these loans into securities where private parties hold the first-loss position, the vast majority of the credit risk is shifted away from Freddie Mac and U.S. taxpayers. Freddie Mac has announced three small balance loan securitizations this year for a total of $410 million.
About Freddie Mac
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports homeowners and renters nationwide by providing mortgage capital to lenders. Today Freddie Mac is making home possible for approximately one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.
The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac's future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future results are discussed more fully in our reports filed with the SEC.