Woodland Park, a community in East Palo Alto, California, is located right in the middle of Silicon Valley, one of the most expensive areas in the country to live. It’s home to Facebook, Google, NASA’s Ames Research Center and other giant enterprises.
The community is made up of 189 buildings on about 51 acres, including a 200-plus unit apartment building, single-family rentals, two-to-four unit buildings, as well as commercial space. Many of the properties are older housing stock.
East Palo Alto’s 2.5 square miles create a pocket of hope for low- and very low-income households, providing them with affordable housing in the midst of this high-cost region. Just outside its city limits, apartment rent averages about $2,600 per unit, and the median home price is around $1 million.
When the Seller/Servicer approached us for funding to manage and maintain the Woodland Park properties, we made affordability our No. 1 concern in pursuing this deal. The borrower wanted to improve the quality of housing while maintaining the same number of affordable units.
Our Revolving Credit Facility is a 5-year, interest-only loan that gives the borrower more flexibility than a typical transaction—it enables us to take in many different types of collateral within the facility. Also, following initial funding, it allows the borrower to “borrow-up” by drawing additional financing at first mortgage rate pricing.
Woodland Park’s tenants work maintenance and other service jobs at some of the world’s largest tech companies. A number of residents hold two or three jobs, so living close to work is key. With the rapid development of Silicon Valley, the Woodland Park residents feared they would be displaced. However, we were able to preserve some of the only affordable housing units remaining in this very expensive region. In fact, the borrower assured us—and the local municipality required—that every workforce housing unit that is taken down or redeveloped will be replaced with another workforce housing unit, helping to keep the neighborhood affordable.
This deal is another example of how Freddie Mac is committed to providing our customers with flexible financing solutions, such as the Revolving Credit Facility. It also furthers our mission to preserve affordable rental housing. We were extremely excited to join forces with the professionals at CBRE and Greystone on this important project that provides hope to these 1,808 households.
Freddie Mac provided a $330 million Revolving Credit Facility through Greystone Servicing Corporation Inc. and CBRE for the borrower to renovate 1,808 units and redevelop the affordable community.
* Located in East Palo Alto within Silicon Valley
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