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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Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.
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