FREDDIE MAC ANNOUNCES NEW FLEXIBLE MULTIFAMILY FINANCING OPTIONS

McLean, VA – Freddie Mac announced today that it now offers a Float-to-Fixed-to-Float Option for newly originated multifamily mortgages. Using this feature, borrowers can take advantage of low short-term floating rates to maximize cash flows early in the life of the mortgage, lock in a fixed rate for the remainder of the term up front in order to eliminate the risk of rising rates in the future, and use up to an additional year of floating-rate debt at the end of the loan to arrange an exit strategy.

Unlike other loans that offer a fixed-to-float option, Freddie Mac's new offering allows for a floating-rate period of one or two years at the beginning of the mortgage term. During this period, the rate is based on the one-month Freddie Mac Reference Bill® index. Once the floating-rate period ends, the rate becomes fixed. The combined term of the initial floating- and fixed-rate periods can be between five and fifteen years. The fixed rate of interest is based on Treasury securities that are similar in maturity to the combined initial floating-rate and fixed-rate periods.

The spread on the initial floating-rate period and the interest rate for the fixed-rate period will be locked at early rate-lock application or commitment. The final floating rate will be set at a fixed spread (currently 250 bps) above the prevailing one-month Reference Bill rate when the loan moves into the final floating-rate period. More product details can be found at www.freddiemac.com/multifamily.

"We expect both fixed-rate and ARM borrowers to find this option appealing," said Robert Tsien, senior vice president for Multifamily Loan Production. "Traditional fixed-rate borrowers can enjoy the additional cash flows created by up to two years of lower interest rates before the loan automatically changes to a preset fixed rate. Borrowers whose strategy would have been to take out a convertible ARM, can choose this option instead and lock in the eventual fixed rate of interest up front."

Additionally, Freddie Mac added new prepayment options to its Capped and Standard Adjustable-Rate Mortgage products. In exchange for a higher prepayment premium and a longer prepayment period for mortgages paid off before they mature or convert to a fixed rate, borrowers can take advantage of two new options that offer them a lower spread over the applicable index. Details of the new prepayment options are available at www.freddiemac.com/multifamily.

"The three prepayment structures for Multifamily ARM products will offer further financial flexibility to the marketplace, as borrowers will now have the ability to adjust the cost of ARM financing with their expected financing horizon," noted Tsien.

Since the introduction of the Freddie Mac Program Plus network of multifamily loan originators and servicers in 1993, Freddie Mac has provided financing for over 30,000 multifamily properties totaling more than $75 billion. That volume represents more than two million rental units across the country, a large portion of which are affordable to people whose income levels are at or below area median income – including newly established households, single-parent households, large family households at lower salaries as well as other renters.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage passthrough securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened the doors for one in six homebuyers.

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