Comunidad Partners has secured a $300 million financing commitment that will support affordable workforce housing through Bellwether Enterprise and Freddie Mac. The initiative is backed by Freddie Mac’s Tenant Advancement Commitment, which offers competitive financing to borrowers who agree to maintain or enhance affordability for the duration of a loan purchased by the government-sponsored enterprise at properties without regulatory rent restrictions.
As part of the arrangement, Comunidad will provide social services, including health and wellness, youth and adult education, and economic advancement programming, at each of the properties financed.
“The need to create and preserve affordability in housing while simultaneously integrating environmental, social, and governance (ESG) principles into our communities at scale was the thrust behind crafting this innovative capital markets product in partnership with Freddie Mac,” said Antonio Marquez, managing partner at Comunidad, a women- and minority-owned real estate investment firm specializing in affordable and workforce housing. “We anticipate this new social impact financing commitment will pave the way for thousands of workforce/affordable units to remain affordable with the added benefit of improved social impact outcomes for our residents in the years ahead.”
So far, Freddie Mac has purchased $86 million in loans originated by Bellwether Enterprise on behalf of Comunidad through its lending facility. Loans purchased must meet one of three requirements throughout the life of the loan: At least 20% of the units are affordable to residents earning no more than 60% of the area median income (AMI), at least 51% of units are affordable at 80% of the AMI and at least 10% are at 60% of the AMI, or 75% of units are affordable to residents earning no more than 80% of the AMI.
Bellwether Enterprise funded and Freddie Mac purchased the first two loans under the Tenant Advancement Commitment earlier this year for the 304-unit Oaks at Holcomb Bridge and the 206-unit Metro 7000.
“Preserving naturally occurring affordable housing for the missing middle class of America and facilitating social impact services for tenants has always been a goal of mine,” said Anthony Tarter, executive vice president and director of workforce housing and social impact for Bellwether Enterprise, who structured the arrangement. “Antonio Marquez of Comunidad and Freddie Mac are committed to this mission, and together our efforts will result in the preservation of thousands of multifamily units across numerous states.”
Oaks at Holcomb Bridge is a garden-style community in the Atlanta suburb of Roswell, Georgia, an area where rents have increased 13% in the past five years. Comunidad has agreed to restrict rents at a minimum of 75% of the units for households earning at or under 80% at the AMI and rents not exceeding 30% of their
. It also will invest $1.35 million in capital improvements.
Metro 7000 is a garden-style community in Fort Worth, Texas, which has seen rents increase 5% over the past three years. Comunidad has self-imposed affordability restrictions and will invest $1.1 million in capital improvements.
Comunidad will offer social services for residents at both properties. These include telehealth, concierge resource referral, resident council meetings, youth education services, health and wellness education, and economic advancement education. Veritas Impact Partners will partner with Comunidad to implement the social impact and resident services that will be provided at the properties under the Tenant Advancement Commitment.
Community assessments and resident feedback will help Comunidad and Freddie Mac evaluate the ongoing impact of the social services provided. The investment firm also is leveraging its proprietary ESG data analytics platform to measure its social impact initiative against key performance metrics. The resulting data will allow for reporting that aligns with the U.N.’s Sustainable Development Goals and Freddie Mac’s Sustainability Bonds Framework.
“Freddie Mac’s Tenant Advancement Commitment is preserving affordable rents and providing essential social services that benefit entire communities,” said Debby Jenkins, executive vice president and head of multifamily for Freddie Mac. “Comunidad and Bellwether are pioneers in this effort, and we are so proud to have found an innovative financing structure that will accelerate their efforts in alignment with our new Multifamily Equity initiative to advance tenant interest.”