HGI Leads $200M Freddie Mac Q Series Deal

Harbor Group International (HGI) has closed the first ever multi-sponsor deal of multifamily loans through Freddie Mac (FMCC)’s Q Series securitization program, Commercial Observer has learned

The real estate investment and management firm executed the roughly $200 million transaction as a co-sponsor, with Bridge Investment Group contributing seven of the 10 loans in the securitization. Freddie Mac selected HGI to partner for the first multi-contributor deal in the government sponsored enterprise’ Q-Series nearly two years after of this type nearly two years after competing its own  Q Series transaction involving a $153 million securitization of eight multifamily loans in November 2022.

Norfolk, Va.-based HGI began to focus on Freddie Mac Q Series deals after launching its HGI Multifamily Credit Fund in September 2021. 

 “This securitization further emphasizes HGI’s ability to find creative ways to support the affordable multifamily market, while making attractive credit investments on behalf of our investors amid volatile market conditions,” Matt Jones, HGI’s chief investment officer of credit investments, said in a statement. “We look forward to continuing to work with Freddie Mac in providing liquidity to the multifamily industry and appreciate their commitment to building on our strong, multi-decade relationship.”

Freddie Mac Q Series deals are part of a third-party loan securitization program that converts illiquid loans into marketable securities guaranteed by Freddie Mac, according to the government sponsored enterprise. The program’s goal is aimed at supplying liquidity to small financial institutions to enable recycling capital and support Freddie Mac’s affordable housing goals. .

The securitization adds to HGI’s debt portfolio, which expanded in summer 2020 when the firm began providing senior mortgage bridge loans on multifamily properties. A year later it formed the HGI Multifamily Credit Fund, which invests in senior mortgage loans, Freddie Mac K Series bonds, preferred equity, mezzanine loans and securitized multifamily mortgages.

HGI has been active with Freddie Mac as both a borrower and lender going back to 2015 when it first became a Freddie Mac K Series B-piece buyer.

“Freddie Mac Multifamily continues to innovate to meet the needs of the market and our mission,” Robert Koontz, senior vice president of multifamily capital markets at Freddie Mac, said in a statement. “In securitizing our first ever multi-sponsor Q-Deal, we are proud to work with sponsors like Harbor Group International to transfer risk and unlock capital for affordable multifamily housing.”

Andrew Coen can be reached at acoen@commercialobserver.com