Freddie Mac, the country’s largest backer of apartment loans, is rolling out a new program that will offer lower-cost financing to owners who agree to cap rent increases for the life of their loans. Unlike government-mandated rent control, the new Freddie Mac program is voluntary.
According to Realtor.com, operators who receive the low-cost loans must have at least 50% of the units affordable to households making the local median income or below. Borrowers must then agree to limit rent growth on 80% of units.
The average loan size will likely range from $2 million to $3 million.
“This program allows the property owner to achieve the same returns via the workforce housing mezz loan as they would through a standard rent increase,” explained Amanda Nunnink, senior director of Production and Sales at Freddie Mac Multifamily.