Sunday, June 15, 2014
What Freddie Mac is Doing to Increase Affordable Housing for Low-Income Families
Freddie Mac is the nick name for the Federal Home Loan Mortgage Corporation, a public government-sponsored corporation that was created in 1970. The company is an investor who, basically, buys mortgages from banks and then re-sells them as mortgage-backed securities to other investors in the open market. Everyone makes money.
Government sponsored entities like Freddie Mac foster more mortgage lending and construction and increased home ownership. You might be wondering what this has to do with affordable rental housing for low-income families. Builders and purchasers of multi-family housing for low-income and other families have mortgages, too, and Freddie Mac wants to buy them.
How Freddie Mac is helping with affordable housing
Freddie Mac will now be purchasing multifamily, tax-exempt loans. The benefit to the borrower/buyer of multifamily properties is lower closings costs and a simplified closing process, all good incentives for borrowers. This important move by Freddie Mac will help foster more loans on more multi-family housing.
The real benefit
There is a desperate shortage and need for more affordable housing in cities across the U.S. The recent move by Freddie Mac shows much potential for greater lending to those who will ultimately be the builders and providers of more affordable housing that will benefit low-income families.
For more details, visit www.freddiemac.com