How Freddie Mac Increases the Availability of Multifamily Debt
Freddie Mac is a government-sponsored enterprise (GSE) tasked with increasing the amount of money available for mortgage lending in the United States, and thereby increasing the ease at which ordinary Americans can find housing. To do so, Freddie Mac purchases mortgages from lenders, pools them into mortgage-backed securities (MBS) and sells them to investors on the secondary market. This allows lenders to make more loans, stimulating the economy and promoting home ownership.
While Freddie Mac’s initial focus was single-family loans, the agency also purchases mortgages for multifamily properties, helping to increase the rental housing supply across the country. In particular, Freddie Mac focuses much of its attention on guaranteeing loans for affordable properties, though it also finances senior living and student housing properties, as well as manufactured housing communities.
In 2018, Freddie Mac purchased and guaranteed a record-setting $78 billion in multifamily loans, making it the largest multifamily lender in the United States (as it has been for several years in a row). In 2018, Freddie Mac financed approximately 860,000 rental units, over 90% of which are considered affordable for low and medium income residents. In contrast, Fannie Mae, the nation’s second-largest multifamily lender, purchased and guaranteed just over $65 billion in loans.