An expanding federal initiative to create more affordable rental housing has already had some success in Tulsa, officials said Monday.
To address the nationwide rental housing shortage and widening affordability gap, the Federal Mortgage Mortgage Corporation, commonly known as Freddie Mac, has stepped up financing to support new or significantly renovated multifamily homes. announced plans to This change will give Freddie Mac more flexibility in “forward financing” to affordable labor housing lenders and developers.
In the release, Freddie Mac cited the development of Tulsa’s River West neighborhood as an example of a successful forward financing arrangement. This is essentially an agreement to purchase a loan after certain funding terms have been fixed. It limits lenders and home developers by limiting the risks they face in executing complex multifamily transactions in volatile markets.
Steve Johnson, vice president of production and sales for the Freddie Mac Multifamily, said: “Our Forward Commitment Program can take some of these concerns off the table and is working to help construction financiers, developers, nonprofits, municipalities and affordable housing. Help other people in the world do the math right and move forward.”
In 2017, Freddie Mac pledged to move forward with construction of River West. The West Tulsa neighborhood currently includes 222 residential units across walk-up building and townhouse communities. More than three-quarters of his units have regional median income capped at 50-60% of his. Ultimately, a project will involve multiple development phases. Freddie Mac invested her $40 million Low Income Housing Tax Credit (LIHTC) stake in her first four phases through her syndicator, RBC Community Investments.
Johnson said the expanded initiative will allow for more development across the country.
The Federal Housing Finance Agency (FHFA) previously capped Freddie Mac’s forward commitments with a 2022 production cap of $78 billion. Now it exempts a certain amount from the cap. Separately, the FHFA lifted a $500 million cap on forward commitments for real estate not benefiting from LIHTC.
“This move will help us add or maintain thousands of affordable multifamily units each year,” Johnson said.
The plan, drawn up in 2021, also includes measures to maintain and promote the construction of single-family homes. Expanding on existing initiatives to encourage rent reductions and standardize tenant protections. and a series of additional measures to reduce disparities in credit scoring, underwriting and underwriting.
Freddie Mac CEO Michael DeVito said, “Freddie Mac’s equitable housing finance plan will make housing possible and sustainable for more renters, buyers and homeowners. We are planning meaningful actions aimed at improving health, especially in traditionally underserved communities.