Thursday, August 3, 2017

Affordable Housing Solution Proposed by Freddie Mac

For the last few months, Freddie Mac, the Federal Home Loan Mortgage Corporation (FHLMC), has been drafting a plan that would support affordable housing and access to credit for very low-, low- and moderate-income households. This project is called Duty to Serve and its purpose is to bring liquidity, stability and cost-effectiveness to underserved housing markets.

Although the U.S. economy has made leaps and bounds in recovering from the recession, causing financial markets to hit record highs and the unemployment rate to drop to its lowest in a decade, the affordable-housing crisis is one that remains growing exponentially. A 2015 study conducted at the Joint Center for Housing Studies at Harvard University found that 27% of renters spent more than 50% of their income on rent. That’s 7% up from 15 years before in 2000 at 20%, and then compared to 1960’s 12% – you can see how that rate is rising somewhat quickly.

Now, there are only 7.3 million affordable rental units in the nation and there are 11.2 million low-income households. The 3.9 million deficit is Freddie Mac’s focus. Of the many multifamily loans financed by the mortgage corporation, roughly 90% support workforce housing. In late 2014, Freddie Mac Multifamily purchased its first manufactured-housing community loan and has since provided $2.1 billion in financing for manufactured homes, allowing housing availability for more than 53,000 families in over 265 communities across 31 states. According to Prosperity Now, more than 17 million Americans live in manufactured housing communities, making up approximately 12% of the low-income household population.



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