One aspect of Freddie Mac's initiative focuses on addressing gaps in knowledge, relationships and financing to support emerging and diverse developers, borrowers and lenders. "It is all about providing resources so that a broader array of multifamily stakeholders can work with Freddie Mac and our network of lenders," says Steve Johnson, SVP of production at Freddie Mac Multifamily. "We have to make sure that we provide the right information in the right formats so that emerging developers, borrowers and lenders have a clear pathway to engage with us."

As part of this effort, Freddie Mac is expanding its Develop the Developer Academy to include multifamily lending and creating a Correspondent Lender program. Johnson added that by having our lender network engage with emerging and diverse lenders to broker deals, the hope is to see loans reach a broader community, in terms of both the lending institutions and the developers and borrowers.

Developers are critical to the initiative because, as Johnson has said, they get at the heart of the problem: the creation and preservation of affordable housing. "Emerging developers are in a tricky spot—it's hard to get started," he explains. "Once they understand how to get going and are connected with the parties that have experience with financing affordable properties and properties in traditionally underserved communities, these developers can more easily move forward." This initiative helps provide that jumpstart.

The Correspondent Lender program helps extend the reach of Freddie Mac Multifamily financing. The program focuses on connecting small financial institutions (SFIs), Community Development Financial Institutions (CDFIs) and minority depository institutions (MDIs) to Freddie Mac's network of lenders.  These institutions often have existing presence and relationships in underserved communities and can help extend Freddie Mac's liquidity to areas where it is needed most.

Building Relationships

Freddie Mac's program is making key connections and building established networks of stakeholders that can create and operate affordable housing. "We are setting up a framework to make these connections," says Johnson. Hosting events is one strategy to help build those relationships.

In April 2023, Freddie Mac hosted its inaugural Diverse & Emerging Borrower Forum. The event brought together some of the leading developers and operators in the industry, many of whom did not know each other. "It was really exciting," says Johnson. "It drove home the idea that something as simple as a few hours together and making those introductions can really work. Relationships and networking are really powerful."

By establishing these networks for budding developers, Freddie Mac isn't only supporting the existing multifamily development community, but creating new opportunities and new stakeholders that can create, preserve and operate affordable rentals. "We want to be there as facilitators, and we want to stay on the forefront of what is coming next," adds Johnson.

The initiative is still in its infancy, but it is already showing progress. "We want to create a durable concept that moves the needle. We are creating a movement."

For more thought leadership from Freddie Mac, click here.