Owners who cap rent rises will see lower finance costs under new Freddie Mac plan

Initiative is similar to rent control but will be voluntary

National /
Aug.August 07, 2018 10:00 AM

(Credit: iStock)

Freddie Mac is launching a new program to help keep rents down.

The initiative will offer owners who cap rent increases for the duration of their loans lower-cost financing, according to the Wall Street Journal. It works similar to rent control but is a voluntary program.

Freddie Mac plans to announce the program on Tuesday and launch it immediately. The firm will provide mezzanine debt to owners at below market cost, which could be appealing to real estate investors facing a rental market that has been slowing down.

Owners who get the loans are required to make at least 50 percent of their units affordable for houses making the local median income or less, and they have to limit rent increases on 80 percent of the units.

The company started offering low-cost loans for owners who agree to cap rent increases this spring, but the new program will apply more broadly because it applies to investors that do not have an explicit focus on affordable housing, according to Freddie Mac executive vice president David Brickman.

“You’re taking some of the opportunity to hit a home run off the table,” he told the Journal, “but arguably making it more likely you can hit a single or a double.” [WSJ] – Eddie Small


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
RXR's Scott Rechler
Rechler responds: RXR boss on health of his office portfolio
Rechler responds: RXR boss on health of his office portfolio
A photo illustration of Gainesville Mayor Harvey Ward and Gainesville, Florida (Getty, Harvey Ward)
NIMBYs triumph in Florida upzoning battle
NIMBYs triumph in Florida upzoning battle
25 Cactus, Irvine, CA and Albert Pujols
Albert Pujols lists Irvine mansion for $10M
Albert Pujols lists Irvine mansion for $10M
Fromk left: Mauricio Umansky, Christian Ulbrich, and Scott Rechler
They said what now? Real estate quotes of the week
They said what now? Real estate quotes of the week
RXR's Scott Rechler, Tamir Shemesh, Richard Meruelo, and Maria Meruelo (Getty, Serhant, Coldwell Banker)
Breakups, layoffs and walkaways: No love in real estate last week
Breakups, layoffs and walkaways: No love in real estate last week
Connecticut proposal would convert empty box stores into housing
Connecticut proposal would convert empty box stores into housing
Connecticut proposal would convert empty box stores into housing
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...