Back in July, Freddie Mac announced it was gearing up to enter the rental market with a focus on affordable housing.
Then, the company officially launched its single-family rental financing pilot program in December. In order to do so, Freddie Mac announced CoreVest as its partner.
Now, Berkadia, a leader in the commercial real estate industry, announced it closed the first single-family rental financing deal through Freddie Mac Multifamily.
The sale financed about $11.1 million for a 10-year, fixed-rate loan secured by 195 homes and one duplex in nine different metropolitan areas across six states. Over 90% of the homes have rents that are considered affordable for families earning at or below 80% of the area median income. What’s more, 100% of the units are affordable for families earning at or below 100% of the area median income.
“We’ve said from the beginning that the goal of our single-family rental pilot is to increase the availability of affordable rental housing in communities across the country, and this transaction does exactly that,” said David Leopold, Freddie Mac Multifamily vice president of targeted affordable sales and investments. “All of the homes in this transaction will remain affordable for working families, with over 90% affordable for low- and very-low income families.”
“We thank our strong partners at Berkadia for working constructively with us to bring even more affordable housing to those families that need it,” Leopold said. “We look forward to continuing to use our unique position in the market to drive financing towards greater affordability in the single-family rental market.”
Berkadia was the first Freddie Mac seller/servicer to obtain the National Single Family Rental Designation by Freddie Mac Multifamily, permitting the organization to sell and service loans secured by single-family rental properties nationwide to Freddie Mac. This marked the first transaction of this kind for Berkadia and Freddie Mac.
“The single-family rental space has a gap in liquidity and affordability, which Freddie Mac is well-positioned to fill as evidenced by this transaction,” Berkadia Managing Director Anthony Cinquini said.
“We’ve been working closely with our partners at Freddie Mac to devise a lending platform that applies the discipline of our multifamily lending standards to single-family home rentals,” Cinquini said. “This includes detailed and thorough underwriting of the borrowers and homes at origination and throughout the term of the loan, which promotes the long-term sustainability of the rental homes.”