Freddie Mac Multifamily has announced that it will enter the market with the issuance of $ 230 million social bonds supporting 1,267 rental housing units in 39 states and the District of Columbia for people with intellectual and developmental disabilities.
The proceeds of these social bonds help fund community homes essential to the “deinstitutionalization” of care for people with disabilities, according to the GSE. The properties offer 4,462 beds, of which about 90% are affordable for people earning 50% of the median income in the area.
“Freddie Mac Multifamily is incredibly proud to bring our first social bond transaction to market providing housing for people with intellectual and developmental disabilities,” said Robert Koontz, senior vice president of capital markets for Freddie Mac Multifamily , in a prepared statement. “This transaction represents our commitment to ensuring safe and affordable housing that meets the needs of the community it serves. Our Impact Bonds, and in particular the Social Bonds framework, encourage innovation to deliver solutions that meet the unique needs of underserved communities.
The proceeds of Freddie Mac’s social bonds are used either to provide liquidity to social impact financial institutions for the financing of affordable housing or to finance multi-family properties created by the Freddie Mac Multifamily Optigo network that are affordable to a poor population. served.
If an institution receives liquidity and owns properties financed by social bonds, it should foster various socio-economic opportunities for residents and their communities. In addition, they should provide affordable housing for low and moderate income families.
Freddie Mac Multifamily has successfully introduced similar programs. For example, in April he announced that it issued more than $ 5 billion in green, social and sustainable bonds in 2020 via its Impact Bond series for the asset class.
Of this, $ 3.3 billion was allocated to green bonds in 2020, of which $ 874 million was in social bonds and $ 971 million in sustainable bonds issued until the end of the year.
Green bonds are focused on improving housing labor efficiency, with tenants expected to save an average of $ 261 per unit per year through lower utility costs. Associated water improvements are expected to save over 370 million gallons of water per year, equivalent to the amount used by 4,000 households, while energy reductions are expected to save 260 million kBtu per year, enough energy to power 7,200 homes.