New offering aims to make workforce rental housing accessible and affordable
Fannie Mae has unveiled Sponsor-Dedicated Workforce (SDW), a new product designed to bolster the supply of rental housing that is both affordable and accessible to the workforce.
This offering is made more attractive with pricing incentives and underwriting flexibilities, encouraging Fannie Mae multifamily borrowers to commit to rent restrictions for eligible properties throughout the loan’s lifespan.
According to its news release, the SDW product is tailored for borrowers committed to preserving or creating at least 20% of units in a multifamily property affordable to residents earning between 80% of area median income (AMI). In specially designated metro areas where the cost-of-living is high, the threshold extends to those earning from 100-120% AMI.
Compliance with these rent restrictions, embedded in the loan agreements, will be verified annually by Fannie Mae’s network of Delegated Underwriting and Servicing (DUS) lenders.
Rob Levin, senior vice president and chief customer officer of Fannie Mae Multifamily, expressed enthusiasm about the potential impact of the SDW product.
“Fannie Mae’s new Sponsor-Dedicated Workforce product will help solve rental affordability, accessibility, and sustainability challenges that missing-middle renters currently face,” Levin said. “With this creative new financing solution, Fannie Mae and our partners can increase the supply of workforce rental units across the country and support long-term housing stability for renters. We look forward to providing our lenders and borrowers with competitive pricing, certainty of execution, and efficiency under our delegated underwriting model so they can readily use this product.”
“Affordability continues to be a significant challenge for multifamily renters as rent increases have outpaced income growth,” said Michele Evans, head of Fannie Mae Multifamily. “Fannie Mae is addressing the need for workforce housing by providing innovative, attractive programs that create and preserve affordable multifamily units while enabling socially responsible investment opportunities for investors. The Sponsor-Dedicated Workforce product is our latest solution that supports a more equitable housing market and enables our partners to do well by doing good.”
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