McLEAN, VA–Freddie Mac has developed a new execution for affordable housing — namely unsubsidized affordable housing, also known as naturally occurring affordable housing or NOAH. This type of product is seen as being at risk of being acquired by a developer and turned into market-rate housing.
Specifically, what the GSE has done is create a legal and financial infrastructure to enable better efficiency for subordinate financing for NOAH housing. It provides a set of parameters for a gap loan that would go between the senior debt that Freddie Mac routinely provides and what the sponsor is able to provide in equity.
Called an impact gap execution, it is a way for investors to direct their funds to NOAH properties and to borrowers that will preserve the property over the long term, Corey Aber, manager, Community Mission & Impact Finance at Freddie Mac Multifamily, tells GlobeSt.com
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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.
