Focusing Our Efforts on Affordable Housing

Homeownership plays a vital role in building communities, supporting families and growing generational wealth. However, given the current challenges facing the housing market, many people are not able to achieve that dream right now. In fact, the dual challenges of high interest rates and limited supply not only pose challenges but have made housing more expensive.

These challenges make Freddie Mac’s affordable housing work all the more important. We are working to address affordability from multiple angles, and we are making progress.

Last year, Freddie Mac financed 806,000 single-family loans, more than half of which supported first-time homebuyers. This is the highest percentage in the three decades we have tracked that statistic. This progress continued into the first quarter of 2024, where 52% of loans supported first-time homebuyers. Moreover, our flagship 3% down payment program, known as Home Possible^®, put more than 96,000 low- to moderate-income borrowers in homes last year alone. Since 2015, more than 850,000 lower income borrowers have leveraged Home Possible to achieve homeownership.  

In addition to our progress bringing ownership to hundreds of thousands of families, we also supported over 423,000 affordable rental units across the country. In total, 92% of all rental units financed in 2023 were affordable at or below 120% of the area median income.

This is our commitment to Making Home Possible in action, which is why we continue to pursue new ways to expand affordability for homeowners and renters.

For example, as part of our recently updated Equitable Housing Finance Plan, we are expanding our down payment assistance tool, DPA One^®. As down payments remain a major barrier to homeownership for many, DPA One gives lenders and other housing professionals a free tool to help borrowers overcome this hurdle by finding and matching them with down payment assistance (DPA) programs nationwide. Already more than 4,000 loan officers are using the platform to leverage more than 700 DPA programs across 49 states and the District of Columbia. We keep adding new DPA programs every month.

In addition to DPA One, Freddie Mac has also started providing $2,500 in the form of down payment and closing cost assistance for homebuyers earning 50% or less of the area median income. Through our Special Purpose Credit Programs (SPCPs), we are also helping thousands of families living in underserved areas achieve homeownership through special underwriting and/or pricing, financial education and down payment assistance. In 2023, Freddie Mac purchased more than 9,300 SPCP loans, the majority of which supported homeownership for families of color, and we’re committed to purchasing another 10,000 loans originated in 2024.

We continue to encourage lenders to design their own proprietary SPCPs that meet our requirements. Freddie Mac supports these programs by waiving the upfront credit fees like we do with our current Duty to Serve offerings in the market.

To help address housing shortages at the community level, we started our Develop the Developer Academy, which supports diverse developers who are building homes in areas lacking new and affordable housing. As of December 2023, this innovative program has trained 119 developers who have created nearly 200 single-family homes and close to 500 multifamily rental units. The program is currently active in Omaha, Nebraska; Tulsa, Oklahoma; and Milwaukee, Wisconsin, with plans to expand to new markets in 2024.

While we are focused on improving affordability for future homeowners, our Single-Family business is increasing its efforts to keep existing homeowners in their homes as well. We are utilizing specialty servicers for delinquent loans who can achieve better borrower outcomes through loan modifications and other efforts. We have also created a Mission Servicing team that has worked to lower delinquency rates for affordable lending loans.

Multifamily also continues to grow its credit building initiative, where on-time rent payments are reported to the credit bureaus. To date, approximately half-a-million renters have enrolled, with more than 300,000 of them increasing their credit score. More than 55,000 participants have established credit scores for the first time. 

While we are proud of Freddie Mac’s progress thus far, we know there is much more work to be done. The housing affordability challenge impacts every corner of our industry and seems unlikely to be solved in the near or medium term. We will continue to seek new ways to address affordability while improving the efficiency and effectiveness of our existing programs to ensure that all families have a place to call home.