Miami has a vibe all its own that draws you in. Eclectic and diverse, it’s a stay-up-late city that’s constantly changing — reinventing itself. And turning up the heat.
A century ago, Miami Beach was a sandbar reached only by boat. Today, with its skyscrapers bathed in neon and the lure of South Beach, it’s a vibrant scene that’s easily accessible — and visibly growing. As we witnessed at our customer conference, the official bird of downtown Miami is the crane — the construction crane.
So, for a Multifamily conference on innovation and growth, Miami was the place to be.
Innovation for us means thinking outside the box, investing in better ways to meet market needs. We are “rethinking the game”—a theme we heard throughout our time in Miami from several dynamic speakers (including Moneyball’s Billy Beane).
In our breakout sessions, we highlighted brand new, innovative products like Freddie Mac Multifamily’s Green AdvantageSM — green financing for America’s workforce housing needs. Through efforts like these, we’re working to improve the housing stock across the nation. And we’re making a difference for borrowers, renters and the environment.
Keep in mind that we’re not taking any products away — we’re adding new ones. Furthermore, based on invaluable feedback from all of you, we continue to modify and improve our affordable housing offerings.
A prime example of our affordable housing offerings is our evolving tax-exempt loan (TEL) product line which grew by more than 300% since 2015. Our TEL production, which helps create and preserve affordable housing, is now at $2.5 billion. We’ve committed 167 deals in 27 states, plus Washington, D.C. At the same time we’re expanding TEL offerings, we’re making these complex transactions easier and faster for our customers. And, we’ve broadened our borrower base to ensure we are serving vulnerable families and low-income renters.
So why are products like TEL so important? In Miami and across the nation, you see the demand for all types of housing — yet especially, a growing need for homes that lower-income renters can afford. That’s why we’ve made workforce housing, and affordable housing with rental restrictions, a critical part of Freddie Mac’s mission.
With TEL and all our affordable products, we keep pushing ahead of the curve. We heard from you that your borrowers need more flexibility. The result? We introduced Flex TEL to provide the flexibility of a floating-rate loan during renovation.
Just like Miami, we’re keeping things moving. What’s hot off the press? At the conference we announced we’re now pricing 30-year TELs (the previous term was only up to 18 years) and offering borrowers the choice of a 120-day rate lock (in addition to our 90-day standard).
We’re excited that other new affordable preservation products, like Bridge to Resyndication, are gaining momentum. Our team just converted its first Bridge to Resyndication deal — Parks at Fig Garden in Fresno, CA — to a TEL.
But it’s not just about products. To better serve taxpayers and create new investment opportunities, we’re also innovating and expanding our loan securitization (which includes mortgages for affordable housing). We’re at the forefront: introducing new ways of transferring risk to investors, away from taxpayers.
Overall in Targeted Affordable Housing, we now fund more than twice as many mortgages as we did in 2014. As we grow, with the help of our customers, we’ll continue to make our products better and find new, improved ways of doing business.
It was great to see so many Freddie Mac customers, both old and new, in Miami last week. (Together we were more than 1000!) Working with all of you, we look forward to more growth and positive change in the year ahead. See you this time next year in Phoenix!
Learn about the 2017 Freddie Mac affordable housing outlook in Dave’s recent interview with Affordable Housing Finance.
Have a comment or question? Email us to let us know what's on your mind.