Freddie Mac is a government sponsored enterprise created in 1970 at provide liquidity, stability, and affordability to the single family housing market. Like its rival, Fannie Mae, Freddie Mac issues insurance for multifamily mortgages underwritten to its guidelines and thereby causing them to be able to sold into the capital markets. While Freddie Mac is not a part of the federal government, its credit is considered to be virtually “Full Faith and Credit” of the United States thereby creating interest rates below those of other non-governmental institutions.
Freddie Mac was put into conservatorship on September 6, 2008 and now really is part of the federal government for all practical purposes. Freddie Mac continues to purchase and securitize mortgages for multifamily properties.
Freddie Mac licenses the Program Plus multifamily loan platform that is similar to the Fannie Mae DUS program. Freddie Mac has a series of loan programs; fixed rate, affordable, seniors, supplemental, etc. that mirror almost exactly those terms of Fannie Mae. The major differences between the two institutions are that Freddie Mac requires a pre-review meeting with its mortgage bankers on each deal, does make its own underwriting review of the processing loan package, and commits in its name.
A Freddie Mac is an excellent choice for larger, well-located new properties (“brochure quality”). They can deliver a good interest rate and terms; and are known for very fast turnaround time when they want to make a loan.
