Freddie Mac Announces Landmark – GuruFocus.com
MCLEAN, Va., June 08, 2022 (GLOBE NEWSWIRE) — Freddie Mac (FMCC) today announced the company’s first Fair Housing Funding Plan, designed to promote equity and increase sustainable homeownership and rental opportunities for traditionally underserved Black and Latino communities in across the country. The plan is an important part of Freddie Mac’s extensive mission-driven work to responsibly provide liquidity, stability and affordability in all communities and through all market cycles.
Created in response to a 2021 request from the Federal Housing Finance Agency, the plan includes a series of ambitious actions to advance equity in the single-family and multi-family housing markets. Among the many initiatives is a commitment to fully explore the use of the Special Purpose Credit Program framework to expand access to mortgage financing for traditionally underserved minority communities.
The plan also includes efforts to expand access to capital for diverse multi-family developers, which benefits traditionally underserved owners and operators; measures to preserve and encourage the construction of affordable single-family and multi-family housing; an expansion of existing initiatives to encourage rent reduction and standardize tenant protections; and a series of additional steps to mitigate disparities in credit scoring, underwriting and ratings.
“Freddie Mac’s Fair Housing Finance Plan outlines meaningful actions designed to help make home possible and sustainable for more renters, buyers and homeowners, especially in traditionally underserved communities,” said Michael. DeVito, CEO of Freddie Mac. “Our multi-pronged approach reinforces Freddie Mac’s commitment to working in the housing industry to support opportunities for more Black and Latino families to access the American Dream. We are happy to report that this work is already underway.
Freddie Mac’s plan, covering the period 2022-2024, aims to advance fair and sustainable housing and rental opportunities while ensuring safety and soundness. The plan sets ambitious goals, outlines actions to achieve those goals, and includes annual progress reports.
The company is exploring actions in five key areas:
1. Closing the homeownership gap. Freddie Mac will fully explore the use of the Special Purpose Credit Program (SPCP) framework to purchase loans issued through SPCPs from new or existing lenders. Under federal law, lenders can offer special underwriting or pricing for traditionally disadvantaged groups under a SPCP.
2. Reinforcement of investments in formerly demarcated areas. Freddie Mac’s plan includes efforts to increase support for underserved tenants and multi-family borrowers; increase funding for affordable housing developers; and helping community development financial institutions, minority depository institutions, and small banks improve their access to capital.
3. Fund the creation and preservation of affordable housing. The plan aims to mobilize public and private investment to create and preserve single-family and multi-family housing. The company plans to expand the use of its renovation products to preserve the aging stock of affordable single-family homes, which are especially prevalent in communities of color.
4. Increase opportunities for tenants. As part of the plan, Freddie Mac will expand the company’s multi-family tenant credit creation initiative with new tools aimed at encouraging financial empowerment and wealth creation. The company will also build on its efforts to leverage market-based incentives to preserve affordable rents and promote social services. This can help reduce the social and economic mobility gaps that often impact renters, especially Black and Latino households.
5. Help eliminate disparities between black and Latino communities. The plan introduces several new initiatives aimed at improving access to capital for new, diverse multi-family developers to increase opportunities for wealth creation and improve people’s ability to invest in and grow their communities.
“Our Fair Housing Finance Plan is the result of countless hours of research and analysis within our company,” said Michael Hutchins, President of Freddie Mac. “We plan to partner with lenders, investors and other stakeholders to make meaningful progress towards a fair housing finance system that provides access to wealth, opportunity and a sense of belonging to people and communities. communities across the United States.”
Freddie Mac has already begun implementing its three-year plan. For more information and details, Freddie Mac’s Fair Housing Finance Plan and Fact Sheet are available online. Learn more about Freddie Mac’s diversity, equity and inclusion efforts.