JP Morgan Extends Affordable Housing Lending Reach With Freddie Mac License

At a time when the creation and preservation of affordable housing is more critical than ever, one lending powerhouse has beefed up its tool kit. 

J.P. Morgan’s commercial real estate agency and institutional capital team just landed its Freddie Mac Targeted Affordable Housing Optigo lender license, Commercial Observer can first report. 

The license expands the repertoire of agency financing options available to J.P. Morgan’s borrowers — with a Fannie Mae Delegated Underwriting and Servicing license already in play — and further underscores the bank’s commitment to the affordable housing sector, John Hofmann, head of agency and institutional capital at J.P. Morgan, told CO. 

“We’re the largest multifamily lender in the country, so this is really vital to our real estate franchise,” Hofmann said. “We’ve had a great relationship with Freddie Mac, as well as Fannie Mae, for a long period of time. Given the firm’s commitment to affordable housing, the addition of the Freddie Mac affordable license was a natural progression for us, and something that helps us continue to fulfill our mission, which is helping to increase the supply of affordable housing in this country.”

J.P. Morgan has held a Freddie Mac conventional license — utilized for standard mortgage loans — since 2022, and the bank’s agency lending business has more than doubled since then. The Freddie Mac affordable housing license is given to lenders with significant experience in the lending sector, with the goal of increasing and preserving subsidized housing for low-income renters, often in underserved communities. 

The addition of the new license expands J.P. Morgan’s suite of long-term financing options for its borrowers, and also allows it to pair its balance sheet capital with agency loans to tailor financing solutions specifically to clients’ needs. 

“It’s really imperative to increase the supply of affordable housing, and our ability to coordinate capital is our value proposition and key differentiator in the market,” Hofmann said. “We have the ability to look across the capital markets, understand our clients needs, and put them in the right debt solutions that work for us and our balance sheet, but also utilize the capital markets and pull everything together. That’s where we’re hoping to make an outsized impact on the market, and we’re very excited about this expanded partnership with Freddie Mac.” 

With more tools now in its tool kit, one might think portfolio growth is inevitable for J.P. Morgan, but the team is thinking about what “growth” means in a different way. 

“When we think about growth, we actually measure it as impact in the community,” Hofmann said. “Our goal is to provide our clients with an array of capital options, and we’re agnostic to what they choose. We want them to pick the best debt structure for their business plan, and part of that plan may be a Fannie Mae or Freddie Mac loan.

“Our goal is to get our clients from the shovel in the ground to the permanent loan,” he added. “That’s what’s fun about this relationship with Fannie Mae and Freddie Mac — we’re able to accomplish that from the start to finish. Our goal is to support our clients in any environment because environments change, capital flows change, interest rates change, and our hope is to be a steady source of capital for the long term.”

J.P. Morgan’s commitment to affordable housing runs deep, and was discussed by Michelle Herrick, now head of commercial real estate for J.P. Morgan, in a 2017 interview where Herrick described affordable housing as “a huge component of our overall initiatives.” 

Indeed, the firm continues to work closely with the public, private and nonprofit sectors in its goal to further economic inclusion and expand the availability of affordable housing across the country. 

 “Affordable housing is essential to strong communities,” Herrick said in a statement regarding the Freddie Mac affordable housing license. “This license is a reflection of our shared commitment with Freddie to creating and preserving more affordable housing in our local communities, and reinforces the financial strength, underwriting expertise and servicing capabilities that are synonymous with the J.P. Morgan name.”

With fourth-quarter pipelines top of mind for many today, Hofmann’s team is focused on closing the deals it’s working on for the end of the year, and positioning itself for 2026 and beyond. 

“One thing we’re fortunate in is our ability to innovate, and as we look at housing across the country we’re thinking about the different levers that we can pull,” he said. “The innovation piece of all of this, for me, is really exciting.” 

 Cathy Cunningham can be reached at ccunningham@commercialobserver.com.