MReport November 2021

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M REPORT | 63 SECONDARY MARKET THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T GSE Enacts Bond Program to Support Affordable Housing Through a new $3 billion bond initiative, Freddie Mac seeks to create more opportunities for families to access quality housing. F reddie Mac plans to offer at least $3 billion in single- family affordable housing bonds, a new program designed to support afford- able homeownership and serve historically underserved markets. To underscore this effort, the company will offer approximately $285 million in Uniform Mortgage- Backed Securities (UMBS) backed by loans purchased through its Home Possible program. "Freddie Mac is committed to creating additional opportunities for families to access quality hous- ing—and today we are announc- ing a major action in support of that goal," said Michael DeVito, CEO of Freddie Mac. "Through this new, multi-billion-dollar affordable housing bond pro- gram, we are providing focused liquidity, stability, and affordabil- ity designed to bring sustainable homeownership opportunities to lower-income borrowers across the country. This is also intended to give investors a vehicle to in- vest in underserved communities." Freddie Mac's Home Possible mortgage offers a 3% down payment solution, which helps very low- to low-income poten- tial homebuyers overcome the leading barrier to homeowner- ship: affording a down payment. Home Possible mortgages are only available to families with income at or below 80% of area median income. In addition to a down pay- ment requirement of as little as 3%, Home Possible offers very low- to low-income borrowers significant additional benefits, including: Lower mortgage insurance cov- erage requirements, which enable a lower monthly payment, and support affordable and sustain- able homeownership. Mortgage insurance is cancelable upon reaching 20% equity, potentially saving thousands over the life of the loan. Reduced credit fees, which enable a lower borrower monthly payment. Flexible sources of down pay- ments, such as down payment assistance, gifts, and sweat equity, which can be used for down pay- ment and closing costs. Responsible homeownership through required education and counseling for first time home- buyers, which can be fulfilled by products such as CreditSmart Homebuyer U. "This bond offering is another way Freddie Mac is bringing additional support to the hous- ing market—and are part of our comprehensive effort intended to address longstanding issues of inequality in housing," said Pam Perry, VP of Single-Family Equitable Housing. "In the future, look for us to expand this offering and strengthen our commitment to this important work." Freddie Mac purchased more than 80,000 Home Possible mort- gages through the first half of 2021, making homeownership possible for more than 623,000 families through $121 billion in Home Possible mortgages since 2015. Their latest offering of securities entirely backed by Home Possible loans builds on existing Impact Bonds issuances by Freddie Mac Multifamily, which include Green Bonds, Sustainability Bonds, and Social Bonds. Multifamily created Impact Bonds to support the divi- sion's mission-driven work and has issued more than $8.5 billion through these vehicles to date.

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