Making Good on Our Duty to Serve
Freddie Mac’s Duty to Serve Plan is our road map for identifying housing challenges in underserved markets and finding opportunities to Make Home Possible for low- to middle-income homebuyers and renters. This work centers on three traditionally underserved markets: rural housing, manufactured housing and affordable housing preservation.
Since the plan’s first release in 2018, our Single-Family and Multifamily divisions have worked to serve those communities across the country.
We are helping to increase the availability of housing financing options and improve access to quality, affordable housing in some of the hardest-to-serve rural markets in the country.
Since 2018, Freddie Mac has provided more than $7.6 billion to finance more than 52,000 single-family homes in predominantly high-needs rural areas.
We have a number of product offerings designed to help make homeownership more affordable in those areas. For example, our low-down payment Home Possible® product suite offers a range of affordable options to borrowers in rural areas. Our CHOICERenovation® offering can finance repairs and renovations to update older homes and improve resilience to natural disasters.
Recently, we announced the launch of HeritageOneSM, a loan product that expands conventional mortgage financing to Native American tribe members living on tribal lands. It also can be combined with other Freddie Mac products.
To support these efforts and encourage industry collaboration in rural communities, Freddie Mac will host its 5th Annual Rural Research Symposium on November 2.
We’ve also worked hard to expand opportunities for renters in rural areas. In 2022, our Multifamily business financed nearly 1,000 affordable rental units with 20 separate investments in rural areas through our Low-Income Housing Tax Credit (LIHTC) equity investments. A great example of how these investments can work in action is St. Catherine de Vigri Villas, the first new affordable housing project in Tieton, Washington, in more than 30 years. We also developed new language for LIHTC partnership agreements that helps support the continuation of non-profit ownership of these properties and the preservation of their affordability.
Manufactured housing represents a critical source of affordable housing. According to the Manufactured Housing Institute, more than 21 million people live in approximately 8.2 million manufactured homes across the country.
Costing about 50% less per square foot than traditional site-built homes, manufactured homes provide a more affordable option for many families. As part of Duty to Serve, we introduced our CHOICEHome® product, which offers conventional financing for manufactured homes. We’ve already provided more than $5.4 billion to finance 40,000 manufactured homes. These homes have many of the features and aesthetics of site-built homes and their appeal is inspiring municipalities to embrace manufactured housing as an affordable solution to growing demand.
For example, in Hagerstown, Maryland, Kilpatrick Woods is a new development of homes eligible for Freddie Mac financing that offers many of the same amenities as stick-built homes and is integrated into the surrounding neighborhoods. It can serve as a model for the future.
Many residents of manufactured homes own their home but rent the land on which it sits. More than 43% of these homes are in manufactured housing communities (MHCs), so providing liquidity to these communities is an important way to support manufactured housing.
In 2022, Freddie Mac Multifamily used its MHC loan agreements to extend tenant protections to approximately 20,000 residents of these communities. Freddie Mac also continues to offer financing to MHCs where the residents themselves own the community, supporting this unique tenant-led management structure.
Affordable Housing Preservation
We continue to explore innovative solutions that preserve and maintain affordable properties for future generations of buyers and renters.
Freddie Mac is exploring shared equity homeownership, which helps create and preserve long-term housing affordability, especially in high-cost areas. Under this approach, low-income homebuyers can buy a home and rent the land under it at below-market rates from entities such as non-profits or government agencies. In return for the reduced price, the homebuyer agrees to sell the home to another income-eligible buyer in the future.
To support shared equity homeownership, Freddie Mac offers conventional financing for homes with income-based resale restrictions. We also are working to promote standardization to help this market grow. Our efforts include a certification program and a standard set of legal documents.
Last year, our Multifamily business worked to meet the challenge of affordable housing preservation, providing more than $12 billion in liquidity supporting approximately 72,000 affordable rental units. Through this work, we provided extensive support for LIHTC and Section 8 properties, as well as those that benefit from state and local affordable housing programs. Our combined efforts are delivering on our commitment to support the most affordable parts of the market for communities most in need.
The Work Goes On
We know there is much more work to be done in underserved areas and we are committed to doing it. That commitment is more than just words on the page — it’s a central part of our mission to Make Home Possible for buyers and renters in all communities in any economic climate. In close partnership with our industry partners, we are building on our progress to find new products and strategies to do so — even in today’s challenging market environment.
©2023 by Freddie Mac.