McLEAN, VA—Freddie Mac has launched a tax-exempt loan program for affordable housing development that is a variation on the 4% Low-Income Housing Tax Credit execution.

Essentially this is how it will work: a Freddie Mac Targeted Affordable Housing seller or servicer, typically a lender, will make a direct loan to a government entity such as a city, county or state housing authority in exchange for a tax-exempt note.

Freddie Mac will then purchase the tax-exempt loan from the seller. The city, county or state housing authority that issued the note then lends the loan proceeds to a borrower to finance a multifamily housing community that has affordable rents.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.