Freddie Mac announced it is now offering faster and cheaper financing for affordable rentals in all U.S. markets.
Late last year, the company announced its pilot program, where it said it was partnering with CoreVest to enhance liquidity in the single-family rental market. Now, it is expanding that program.
Freddie Mac announced its program, Targeted Affordable Housing Express, a new offering designed to provide faster, simpler and cheaper financing for the preservation of smaller, affordable rental properties.
TAH Express financing is now available in all markets, and is an extension of Freddie Mac Multifamily’s Targeted Affordable Housing platform, which generally finances properties that have units with rent restrictions.
“We’re excited to announce this new offering, which brings more choices, better terms, and a faster, simpler process to cash preservation loans,” said David Leopold, Freddie Mac Multifamily vice president of targeted affordable housing sales and investments.
“TAH Express is helping to make the preservation of affordable housing as simple and inexpensive as possible,” Leopold said. “It’s also an important component of our commitment to expand our reach in underserved markets – known as our Duty to Serve mandate.”
Through TAH Express, borrowers can use a condensed prescreen process, simplified non-negotiable legal documents and a standardized underwriting process, resulting in lower transaction costs. TAH Express also offers a “step-down” prepayment option, which provides more flexibility in the prepayment of these smaller loans.
The program is available for properties with a loan amount of $10 million or less. They must be stabilized and treated as entirely uncapped by the Federal Housing Finance Agency. Properties not subject to the FHFA’s volume cap support specific affordable and underserved needs.
Properties must also have at least one of the following affordable characteristics: tax abatement, Section 8 Vouchers or a housing assistance payments contract, low-income housing tax credit properties in at least year 11 of compliance period or a regulatory agreement that imposes rent or income restrictions.
The GSEs have continued to up their presence in the single-family rental and multifamily markets. In November, Fannie Mae and Freddie Mac announced they were re-entering the low income housing tax credit market, a federal program which encourages investment of equity into affordable rental housing.
In the GSEs 2017 scorecard report, the FHFA explained it placed loan production caps on each of the GSE’s multifamily business to further the goal of maintaining multifamily activities while not impeding on the participation of private capital. The cap set for both companies in 2017 was $36.5 billion.
However, the FHFA designed exclusions from the cap to support affordable and underserved multifamily segments of the multifamily market, saying these segments are not being adequately served by the private sector.