Freddie Mac Multifamily Prices Social Bonds Deal Providing Liquidity to Social Impact Financial Institution

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has priced $102.9 million in Social Bonds aimed at financing affordable housing across 18 states. Approximately 3,100 rental units will benefit, with about 1,100 units serving renters earning 50% or less of the area median income. This transaction marks Freddie Mac's second collaboration with IMPACT Community Capital and aims to enhance socioeconomic opportunities for low- to moderate-income families. Freddie Mac has facilitated funding for around 4,000 affordable units through these initiatives, showcasing its commitment to improving housing accessibility.

Positive

• Issuance of $102.9 million in Social Bonds enhances funding for affordable housing.
• Approximately 3,100 rental units are positively impacted, catering to low-income residents.
• The collaboration with IMPACT Community Capital will foster socioeconomic opportunities.

Negative

• None.

MCLEAN, Va., Sept. 30, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today announced it has priced a new issuance of $102.9 million in Social Bonds. The transaction is Freddie Mac’s second Social Bonds deal with IMPACT Community Capital LLC (IMPACT) and provides the firm with additional capital for affordable housing investments throughout the country. Proceeds from the underlying loans are used to finance rental properties in 18 states that serve low- to very low-income residents. Of approximately 3,100 rental units at the properties, about 1,100 are home to renters with very low incomes who make 50% or less of area median income. In addition to providing affordable housing to low- to moderate-income families, institutions receiving liquidity and properties financed from Social Bonds proceeds work to foster various socioeconomic opportunities for residents and their communities.

“The Social Bonds offering is part of our ongoing focus on affordable and workforce properties,” said Robert Koontz, the head of Capital Markets for Freddie Mac Multifamily. “Freddie Mac has helped IMPACT finance roughly 4,000 affordable housing units across two Social Bonds transactions, reflecting the company’s enduring commitment to working with our partners to innovate solutions in the affordable housing space.”

The transaction is a REMIC – FHMR 2020-P011 issuance backed by a pool of Multifamily PCs contributed by an affiliate of IMPACT. The flexibility afforded by the Multifamily REMIC structure allowed IMPACT to create an efficient, diversified structured transaction with advantageous cash flow features, which are expected to maximize transaction proceeds to enable IMPACT to enhance its work in the affordable housing arena.

Michael Lohmeier, chief investment officer at IMPACT, notes, “As an investment manager focused on social impact, partnering with Freddie Mac enhances our ability to provide capital to underinvested communities and provide our investors investment options to meet their strict guidelines. Freddie Mac’s ability to bring market-oriented solutions and flexible executions is invaluable to IMPACT and provides both a unique and targeted investment solution.”

According to the company’s Social Bonds Framework, the proceeds of Freddie Mac’s Social Bonds are used either to provide liquidity to social impact financial institutions for financing of affordable housing or to finance multifamily properties originated by the Freddie Mac Multifamily Optigo® network that are affordable to an underserved population.  

Freddie Mac Multifamily is the nation's multifamily housing finance leader. Historically, more than 90% of the eligible rental units we fund are affordable to families with low-to-moderate incomes earning up to 120% of area median income. Freddie Mac securitizes about 90% of the multifamily loans it purchases, thus transferring the majority of the expected credit risk from taxpayers to private investors.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.

MEDIA CONTACT: Mike Morosi
(703) 918-5851
Michael_Morosi@FreddieMac.com 
Erin Mancini
(703) 903-1530
Erin_Mancini@FreddieMac.com 

FAQ

What is the purpose of Freddie Mac's new Social Bonds issuance?

The Social Bonds issuance aims to finance affordable housing across the United States, providing capital for rental properties serving low- to very low-income residents.

How many rental units will benefit from Freddie Mac's Social Bonds?

Approximately 3,100 rental units will benefit from the proceeds of the Social Bonds.

What is Freddie Mac's stock symbol?

Freddie Mac's stock symbol is FMCC.

When was the Social Bonds issuance by Freddie Mac announced?

The Social Bonds issuance was announced on September 30, 2021.

Who is involved in the partnership for the Social Bonds?

Freddie Mac is partnering with IMPACT Community Capital for the Social Bonds issuance.