MCLEAN, VA--(Marketwired - Apr 25, 2014) - Freddie Mac (
These are tax-exempt loans issued by a city, county or state housing finance entity for apartments that have affordable rents for lower income individuals. This new execution provides another option for TAH Seller/Servicers and borrowers that is more efficient and costs less than publicly offered credit enhanced bonds.
"Freddie Mac is further reducing its credit risk by securitizing more of its targeted affordable business volume and helping to increase access to credit for affordable rental housing borrowers," said David Brickman, Freddie Mac Multifamily executive vice president. "Through our M-Deals, we will shift taxpayer risk to private investors who will have a first loss position. We are creating an Agency alternative for investing in tax-exempt bonds whose collateral is from multiple borrowers."
Kimball Griffith, Freddie Mac Multifamily vice president of affordable sales and investment, added, "This execution can lower a borrower's issuance costs and ongoing cost of capital significantly, as well as simplify the closing process. It is an alternative financing solution to our bond credit enhancement execution and is particularly attractive for 4 percent Low-Income Housing Tax Credit (LIHTC) developments."
Benefits of using Freddie Mac's Direct Purchase of Tax-Exempt Loans execution:
M-Deal features:
How Freddie Mac's Direct Purchase of Tax-Exempt Loan works:
Direct Purchase of Tax-Exempt Loans is an alternative to the company's existing tax-exempt bond credit enhancement activity.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four 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.