FREDDIE MAC ANNOUNCES A NEW DELEGATED UNDERWRITING INITIATIVE FOR MULTIFAMILY TARGETED AFFORDABLE LOANS

McLean, VA – Freddie Mac today announced a new multifamily initiative that gives certain qualified correspondent lenders more flexibility when underwriting mortgages on apartments with units affordable to families with low- and very-low incomes. The new delegated underwriting initiative will enable Freddie Mac to provide faster commitments for permanent debt financing or credit enhancement for properties with tax-credit financing. GMAC Commercial Mortgage Corp. (GMACCM), through its Affordable Housing Division, is the first Freddie Mac correspondent lender to participate in the program.

Multifamily borrowers seeking debt financing or credit enhancement for tax-credit properties are typically on a tight schedule because of tax credit allocation timelines specified by state housing allocation agencies. The new delegated underwriting initiative will provide borrowers with a Freddie Mac financing decision earlier in the underwriting process, helping to ensure that allocation deadlines are met.

Through individual agreements with approved seller/servicers, Freddie Mac will increase its reliance on the seller/servicer's underwriting of tax credit debt in return for the seller/servicer assuming a portion of the credit risk.

"This is an exciting time for Freddie Mac. We have a renewed commitment to our housing mission and, as part of that, we are actively seeking new ways to reach those most in need of affordable rental housing," said Adrian Corbiere, senior vice president of multifamily housing. "Our new delegated underwriting initiative for tax credit debt will complement our existing prior-approval program and enable us to support an increase in the stock of affordable apartments."

As the first participant in the delegated underwriting initiative, GMACCM is helping Freddie Mac test the initiative. The current agreement between the two companies creates a modified delegated underwriting arrangement for tax-credit properties that may be expanded into a fully delegated model for such properties in the future. Freddie Mac is working with other seller/servicers interested in participating in the delegated underwriting initiative, which initially will be limited to members of Freddie Mac's Targeted Affordable seller/servicer network.

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 35,000 multifamily properties totaling more than $86 billion. That volume represents more than two million rental units across the country, the vast majority 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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