Meeting the Seniors Housing Market Needs
We all know baby boomers are aging and the demand for seniors housing is continuing to rise. In fact, we predict annual production levels will reach more than 90,000 units by 2025 to accommodate the expected explosive growth in the 80-plus-year-old population.
I’m proud to say last year was our best year yet with a record $3.2 billion in volume. Our seniors housing loans are divided between three property types: independent living, assisted living and memory care. The result is a firm and steady supply of funding that will enable the industry and Freddie Mac to better accommodate the rising demand of this very important market.
Managing Rate Volatility
We won much of this business last year due to our ability to hold quoted spreads for 75 days after applications are signed. We also allow borrowers to lock the most volatile part of the coupon, the Treasury Index, at any time during the quote or underwriting process, and more quickly than our Standard Delivery. These features were quite popular with our seniors housing borrowers considering the volatile market last year. Looking ahead, we expect our program’s ability to manage rate volatility to be a very desirable feature again this year.
More than half of our seniors housing funding last year went toward uncapped business to support our mission of providing affordable housing for all Americans. That’s important, because greater affordability means a lower price for senior renters who oftentimes have fixed incomes.
By being more flexible and making decisions on a case-by-case basis, we’ve become faster to respond and more competitive on pricing and structure. It’s all part of Freddie Mac’s mission to make quality, affordable rental housing available—and our commitment to move housing forward.
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