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Freddie Mac Steps Up Use of Forward Commitments to Finance Affordable Units
Freddie Mac Multifamily said it’s ramping up financing that supports newly constructed or substantially rehabilitated multifamily housing. The company will leverage new flexibilities granted by the Federal Housing Finance Agency that allow for more use of forward commitments, which are agreements to purchase loans at a later date with certain financing terms locked in today, providing greater certainty to construction lenders and housing developers.
“One of the most complicated factors in determining how, where and when to build or rehabilitate a multifamily property is market uncertainty, and that’s particularly true right now,” said Steve Johnson, VP of production & sales at Freddie Mac Multifamily. “Our forward commitment program can take some of those concerns off the table.”
FHFA previously subjected forward commitments to Freddie Mac’s annual production cap ($78 billion for 2022) but will now exempt a certain amount ($3 billion for 2022) of forward commitments from the cap.
- ◦Financing
- ◦Policy/Gov't
