In the current environment, Freddie Mac is focused on its role in providing liquidity to the multifamily industry, even when other market participants pull back.

According to the government-sponsored enterprise (GSE), as capital starts to come off the sidelines and adjust to the market environment and “higher-for-longer” rates, opportunities will increase for it to advance its mission of increasing liquidity, stability, and affordability.

In the first quarter, a majority of deals were five-year fixed-rate structures, reflecting Freddie Mac’s ability to meet the needs of the market. Products and features receiving strong interest so far this year include lease-up, workforce housing preservation, 35-year amortizations, rate buydowns, and long-term facilities.

“We’ll continue to respond to market conditions in a level and balanced way,” notes the GSE.

Looking to the rest of the year, Freddie Mac executives say they will continue to work with their Optigo lenders to develop creative and customized solutions that meet credit standards and help advance the GSE’s mission.

“Our partnership with our Optigo lenders will move the needle to provide stability and liquidity across the multifamily market,” says Meg McElgunn, vice president of conventional production and sales. “We look forward to working with our lenders, borrowers, and investors throughout 2024 to get deals done—both affordable and market-rate—and to achieve our goals as we drive our business forward.”

Another priority for Freddie Mac Multifamily this year is workforce housing, specifically providing offerings that can help make deals pencil with favorable pricing and credit terms for borrowers that agree to keep a portion of the units affordable to working families.

According to the GSE, its workforce housing products create certainty of execution at lower costs and can take interest rate risk off the table before the construction of the projects is completed, which helps both preserve and support the creation of affordable housing.

In 2023, Freddie Mac surpassed a 3,000-unit goal under its Workforce Housing Preservation offering. This year, it is on its way to helping preserve more than 5,000 units through the same offering.

“It’s a win all around: Renters maintain affordable rents for longer, borrowers can receive better loan terms, and Freddie Mac is achieving our goals to help address the affordability crisis,” says McElgunn.

Freddie Mac Multifamily also announced enhancements related to risk management in April. The policy and process enhancements further strengthen underwriting due diligence, bolster fraud detection and deterrence, and mitigate other risks. According to the GSE, the changes include enhanced property inspection requirements and additional due diligence.