Freddie Mac Announces 2009 Multifamily Volumes for Whole Loans and Bond Guarantee Business

For Immediate Release

February 02, 2010
Contact: corprel@freddiemac.com
or (703) 903-3933

McLean, VA – Freddie Mac (NYSE: FRE) announced today that in 2009 it financed its highest percentage of market share, 37 percent of the overall multifamily market, compared to 29 percent in 2008. Due to a contracting market, Freddie Mac had $16.6 billion in volume for its multifamily whole loan and bond guarantee business (multifamily mortgage settlements), compared to $24 billion in 2008. While the annual production volume declined, 2009 volume represents the 3rd largest volume in Freddie Mac’s multifamily history.

This volume includes Freddie Mac’s targeted affordable housing products, which finance apartments that receive some form of government subsidy. Freddie Mac’s multifamily transactions financed more than 250,000 apartment units, the vast majority of which are affordable to families earning low or moderate incomes.

“During the worst economic recession in a decade, we remained focused on providing liquidity to the market when most other sources were still nowhere to be found in 2009,” said Mike May, senior vice president of Multifamily for Freddie Mac. “While the multifamily market has contracted, we continued to finance a good percentage of deals.”

Highlights of Freddie Mac’s multifamily business in 2009 are:

$4.6 billion in Capital Markets Execution^{SM (1)} loan originations;
Settling approximately $15 billion through Freddie Mac’s conventional programs, which included $2.4 billion of conventional structured volume;
81 percent of total 2009 conventional settlements were refinances and 16 percent were acquisitions. The remainder were new construction or rehabilitation financing;
Transacting $1.4 billion in targeted affordable housing products;
$7.2 billion of the transactions used the Freddie Mac Early Rate-Lock option;
Purchases of approximately $900 million in seniors housing mortgages;
Purchases of more than $775 million in student housing mortgages;and
$5.3 billion in ARM financings,⁽²⁾ which includes $4.1 billion in Capped ARMS.

Freddie Mac began purchasing multifamily loans backing apartment housing in 2008 with the intent to securitize and guarantee these loans for sale to third parties.

Capped ARM financings are loans which have adjustable-interest rate terms and contain provisions to limit the maximum interest rate or index rate associated with the loan.

May added, “While 2009 was a stressful year for the entire multifamily industry due to declining property values, and rising vacancy and delinquency rates, I’m proud of what Freddie Mac accomplished and our role in supporting the market.”

Freddie Mac multifamily business accomplishments include:

Settling $2 billion in K Certificates, multifamily mortgage-backed securities;
Facilitating a solution that gave customers access to warehouse lines of credit through Natty Mac;
Refinancing the largest federally-assisted apartment complex in the United States, Starrett City in Brooklyn, thus keeping rents affordable for 12,000 renters of modest financial means;
Finishing the year with a multifamily delinquency rate of 19 basis points (mortgages 60 days or more delinquent) at a time when industry delinquency rates reached triple digits; and
Beginning the green financing pilot initiative with Community Preservation Corp. for loans to retrofit older buildings for energy efficiency.

Click here to read the 2008 business volume press release.

Since the launch of Freddie Mac’s multifamily business in 1993, it has provided more than $228 billion in financing for approximately 57,000 multifamily properties.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

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