USDA AND FREDDIE MAC JOIN FORCES TO REHABILITATE AND PRESERVE AFFORDABLE RURAL RENTAL HOUSING

Freddie Mac Pledges $10 Million To Rehabilitate Rural Apartment Properties In 2004

Washington, DC – The United States Department of Agriculture and Freddie Mac today announced a partnership effort to help property owners substantially rehabilitate and preserve affordable rental apartments located in underserved rural areas. The initiative is designed to improve the quality of life for the people living in aging apartments and to preserve affordable rental housing for the future.

Freddie Mac plans to begin the program by purchasing $10 million in new loans that are secured by rural properties with existing USDA Rural Development Section 515 rental housing mortgages in place. At first, only mortgages secured by USDA properties located in Indiana and Ohio will be eligible for purchase by Freddie Mac. Eventually, it is anticipated that the Freddie Mac program will be available nationwide. Freddie Mac's multifamily seller/servicer network will originate the loans, which will be designated specifically for the rehabilitation of the properties.

Over the years, the Rural Development's Section 515 rental housing program has successfully enabled the construction of approximately 17,000 properties in underserved rural communities across the United States. However, the majority of these rental properties were built between 1970 and 1980 and are in need of modernization and repair. The partnership effort between Freddie Mac and USDA will help renovate a portion of the portfolio.

"I have encouraged Freddie Mac to focus more on rural housing and this represents a good start. I look forward to working with them to expand this program nationwide," said US Representative Barney Frank, Ranking Democrat on the House Financial Services Committee.

"We are pleased with Freddie Mac's commitment to provide financial support to preserve much-needed rural rental housing," said Agriculture Acting Under Secretary for Rural Development Gilbert Gonzalez. "This partnership will help ensure continued access by rural residents to safe, decent and affordable housing."

"We are excited about the opportunity to work with the RHS to preserve affordable rental housing in rural areas and farming communities not traditionally served by the mortgage industry," said Adrian Corbiere, Freddie Mac senior vice president. "Working with the RHS and our correspondent lender network, we will significantly increase the lifespan of this housing stock and enable more people to live comfortably and within their means."

USDA Rural Development's mission is to deliver programs in a way that will support increasing economic opportunity and improve the quality of life of rural residents. As a venture capital entity, Rural Development provides equity and technical assistance to finance and foster growth in homeownership, business development, and critical community and technology infrastructure. Further information on rural programs is available at a local USDA Rural Development office or by visiting USDA's web site at http://www.rurdev.usda.gov.

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Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to create a continuous flow of funds to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases mortgages from lenders and packages them into securities that are sold to investors. Over the years, Freddie Mac has made home possible for one in six homebuyers in America.

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