Freddie Mac reached a milestone of $1 billion in small multifamily property loans so far this year, Commercial Observer can first report.
The 400 loans that the government agency funded are part of their Small Balance Loan initiative, which started in October 2014. The program is meant to target less populated markets throughout the U.S. and provides loans in the $1 million to $5 million range on properties with five or more units.
“It’s incredible to see what we’ve achieved with our experienced Small Balance Loan Seller/Servicers in such a short period of time,” Stephen Johnson, senior director of multifamily production for Small Balance Loans, said in prepared remarks sent to CO. “In 11 months, we’ve on-boarded and trained 10 Seller/Servicers, inspected nearly 500 properties and underwritten and funded nearly 400 loans with an average balance of $2.5 million.”
Additionally, Freddie Mac’s nearly one-year old initiative is trying to focus on affordable housing. Nearly one-third of renters live in smaller properties with five to 50 units, and many are part of affordable to very-low income households, according to the agency.
“With this country’s growing gap between affordable housing demand and supply, it is critical to provide capital to this market,” Mr. Johnson said. “We want to be the go-to source for small multifamily property financing and our first $1 billion is a step toward that goal.”