Freddie Mac Multifamily to issue sustainability bonds backing low income housing

by Candyd Mendoza01 Oct 2020

Freddie Mac Multifamily announced Tuesday a new addition to its impact bonds series that supports sustainable communities through financing affordable and workforce housing.

The GSE's multifamily division has announced that it will soon go to market with a new sustainability bonds offering, labelled K-SG. Freddie's sustainability bonds aim to raise capital to support economic mobility for residents as well as economic growth for communities.

"The new sustainability bonds offering rounds out our impact bonds lineup, joining the social bonds series that launched earlier this month and the K-G series that launched in 2019," said Robert Koontz, the head of capital markets for Freddie Mac Multifamily.

Freddie Mac Multifamily said it will use the proceeds of the sustainability bonds program to fund multifamily properties that:

  • finance affordable housing to low- to moderate-income families
  • may have features, or are located in areas, that further economic opportunity for residents
  • may include certain environmental impact features

The first FREMF K-SG01 transaction will be backed by eligible 10-year, fixed-rate loans selected in accordance with Freddie Mac Sustainability Bonds Framework. Profits from the underlying loans are used to finance rental properties that serve low- to moderate-income families. Certain properties have environmental features such as existing energy or water efficiency improvements, building standards for energy efficiency or transit-oriented, and located in areas, that further economic opportunity or residential economic diversity.

"We've long had a focus on affordable and workforce properties and a consistent track record of over 85% of the units we finance being affordable to residents making 100% or less of the area median income," Koontz said. "These offerings further demonstrate our strong commitment to promoting sustainable communities through affordable housing."