Bridge Multifamily Fund Manager and Freddie Mac Multifamily announced the closing of a transaction designed to voluntarily provide rental housing affordable to low-income and working families.
Specifically, Bridge and Wells Fargo closed their first financing under Freddie Mac’s MultiAsset Commitment with a focus on affordability, in which Freddie Mac will purchase and aggregate up to $500 million in loans over a one-year period to allow Bridge to acquire, improve, and preserve workforce and affordable housing nationwide.
The new effort is being done in conjunction with Wells Fargo and KeyBank.
After the one-year term, Freddie Mac will place the aggregated loans in a single securitization, for which Bridge will be required to purchase the subordinate bonds. Wells Fargo will originate $400 million of the commitment and KeyBank will originate the remaining $100 million.
Freddie Mac is using its existing MultiAsset Commitment structure to support social impact financing in an innovative way. This execution incentivizes Bridge, an affiliate of Bridge Investment Group, to keep rents affordable without relying solely on federal, state, or municipal affordable housing programs.
As part of the financing, Bridge has agreed that a majority of units in each property will be rented to those earning below 80% of the area median income (AMI)—and will remain that way for the life of each loan.
The first asset to be acquired within this vehicle, a 352-unit multifamily community in Plant City, Fla., has 82% of its rents affordable to those residents earning less than 80% of the AMI. This asset presents an opportunity for Bridge to preserve and rehabilitate a meaningful amount of affordable housing for the local Tampa workforce, according to officials involved in the deal.