FREDDIE MAC AND REILLY MORTGAGE GROUP JOIN TOGETHER TO FINANCE RIVER VIEW VILLAS IN NEW ORLEANS

336-Units Of Affordable Rental Housing Damaged By Hurricane Katrina

McLean, VA – Working with Reilly Mortgage Group, Freddie Mac recently provided a flexible financing structure through its credit enhancement of $12.6 million in variable-rate, tax-exempt bonds. Proceeds from these bonds helped finance the River View Villas, a 336-unit New Orleans property that sustained hurricane damage when Katrina swept through last year.

"Katrina hit just a few days before the credit enhancement was scheduled to close. All parties agreed to postpone the closing," said Mike McRoberts, Freddie Mac vice president and Southeast Region managing director. "The property sustained an estimated $1.5 million in damages from the storm. Freddie Mac followed through on its commitments relating to this transaction despite these and other tremendous challenges. Its credit enhancement enabled the New Orleans-based borrower to increase its liquidity, while facilitating the exit of its equity partner."

"Freddie Mac expedited a pre-stabilized closing by obtaining various credit enhancements, such as debt service escrow and a letter of credit, to make the closing possible for the borrower," said Phil Morse, vice president of Reilly Mortgage Group. "The transaction closed as a result of the creative structuring by Freddie Mac, which enabled the borrower to avoid any negative financial consequences."

At the time of closing, the property was more than 72 percent occupied, with the remaining units unoccupied because of hurricane damage. Management at River View Villas expects repair work on these units to be completed and the units fully occupied by the end of the year.

Freddie Mac continues to demonstrate its commitment to providing affordable rental housing in New Orleans following Hurricane Katrina by funding or moving towards funding more than $100 million in mortgages on multifamily properties in that area since December.

"Since the hurricane, we have been working daily with our impacted borrowers and their insurance companies to help them rebuild their properties and get much-needed rental housing back on the market," said McRoberts.

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 40,000 multifamily properties totaling more than $100 billion.

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 made home possible for one in six homebuyers and more than four million renters.

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