New Affordable Housing Goals, Our Commitment to Renters
August 31, 2015
FHFA recently adopted a final rule establishing 2015-2017 multifamily goals for Freddie Mac and Fannie Mae. Goals are the same for both enterprises. For the first time, FHFA set a goal for rental units affordable to low-income families in small properties (5- to 50-units). The goals are:
- Low-income goal of 300,000 units for each year (up from the proposed 250,000 units, and from our 2014 benchmark of 200,000)
- Very low-income subgoal of 60,000 units for each year (same as the proposed, and up from our 2014 benchmark of 40,000)
- New, small property low-income subgoal of 6,000 units (2015), 8,000 units (2016), and 10,000 units (2017)
The Housing Challenge & Our Commitment
Housing is one of our most basic needs. And today in the U.S., the need for adequate, affordable rental housing is greater than ever. In fact, it hasn’t been this hard for families to find such housing in 50 years (U.S. Census Bureau’s American Community Survey 2000-2011).
The new housing goals are a critical part of our work to create affordability, liquidity and stability in the housing markets. Working with our partners, we’re sharpening our focus on affordable housing so that more low-income families find quality rental homes they can afford.
About 90 percent of the rental housing we fund helps families with incomes at or below the area median income. Workforce housing is essential to our business, our mission — and to most U.S. renters.
Through our Targeted Affordable Housing (TAH), with its team of specialists, we fund subsidized housing for families with incomes significantly below the area median. With the growing gap between supply and demand for affordable homes, tax-exempt financing and our work to serve lower-income renters is critical.
We continue to find new ways to do business with our partners — and provide financing for apartments that serve lower-income renters.
Historically, TAH’s affordable housing preservation and tax-exempt financing was supported through credit enhancement. We’ve expanded our business to provide a new offering: the direct purchase of tax-exempt loans.
Through growing efforts like Small Balance Loans, we finance smaller loans ($1 to $5 million) for smaller properties. Apartment buildings with five to 50 units make up around 30 percent of the multifamily market and provide affordable homes to many of the nation’s moderate- and low-income renters.
We also purchase and securitize manufactured housing community loans to help increase access to affordable housing.
It’s all part of Freddie Mac’s mission to make quality, affordable rental housing available — and our commitment to move housing forward.
Frederick Douglass Apartments
Through our $4 million funding, this low-income property in Baltimore will continue to serve those most in need. The property includes a homeless shelter, supportive housing apartment units, and spaces for nonprofits that serve residents.