Freddie Mac has a new program that will offer lower cost financing to investors of apartments who agree to cap rent increases for the life of the loan. The goal is to create rent control by keeping units in private hands and controlling the rate of rent increases.
Recently investors have been buying less expensive buildings in need of renovation and then raising rents, resulting mid-priced apartment rents raising even faster than luxury units. According to RealPage Inc., average rents for midrange Class B properties rose by nearly 20% from 2012 through 2017, while high-end, Class A rents rose by 16.6% on average. This initiative will help Freddie Mac fulfill its mandate from the Federal Housing Finance Agency to lend to underserved communities.
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