Freddie Mac played a critical role for multifamily borrowers in 2020 during the COVID-19 pandemic and the subsequent economic downturn, financing roughly 803,000 rental units, with more than 95% of those units being affordable to households earning 120% or below the area median income. Freddie Mac Multifamily also set a record $82.5 billion in loan purchase and guarantee volume last year, surpassing the prior record of $78.4 billion in 2019.
“In a volatile year, Freddie Mac was a stabilizing force in the multifamily market,” said Debby Jenkins, executive vice president of Freddie Mac Multifamily. “The fact that we hit a record in the midst of a pandemic shows our commitment to be a consistent force of debt financing for multifamily operators in both good times and bad. Our network of Optigo lenders did not skip a beat, and the Freddie Mac team kept up with a demanding pace to ensure we fulfilled our mission. At the same time, we exceeded our mission-driven benchmarks, the vast majority of units we financed are affordable to low- and moderate-income households.”
The $82.5 billion in production last year combined with the $17.5 billion in volume for the fourth quarter of 2019 put the government-sponsored enterprise (GSE) right at the $100 billion cap mandated by the Federal Housing Finance Agency. Freddie Mac also surpassed its mission-driven requirement of 37.5%, with approximately 40% of volume meeting the definition. These mission-driven transactions benefited affordable housing, smaller multifamily properties, seniors housing, manufactured housing, and rural housing. A new $70 billion cap has been established for 2021 with a 50% mission-driven requirement with new and different criteria.
Freddie Mac served all corners of the multifamily market in 2020 through its offerings, including nearly $5.3 billion small-balance loans, a record $12 billion in Targeted Affordable Housing loans, and $3.7 billion in seniors housing loans, including senior-living apartments. The GSE also securitized a record $78 billion through its securitization offerings, such as K- and SB-Deals, transferring a majority of expected and stress credit risk to third-party investors. Freddie Mac also provided $500 million in low-income housing tax credit equity investments to support underserved communities.
“We are proud that our achievements in 2020 reflect the critical role we play in the multifamily market,” said Richard Martinez, senior vice president of production and sales at Freddie Mac Multifamily. “During a global pandemic, Freddie Mac continued to provide critical liquidity to the market and continued working to address the persistent affordability challenges facing countless renters. We quickly adapted to the environment around us, rolling out a forbearance plan for borrowers and protections for renters to help address the challenges presented by COVID-19.”