Dive Brief:
- Kevin Palmer will be the new head of Freddie Mac Multifamily effective May 9, according to an announcement on the agency’s website.
- Palmer, who most recently served as vice president for single-family portfolio management, has served in a variety of positions at Freddie Mac since 2001. He previously had broad responsibility for the agency’s single-family portfolio, overseeing pricing, servicing, credit risk transfer and various other capital markets and risk management activities.
- While both Freddie Mac and Fannie Mae saw their share of multifamily loan volume decline in 2021, they still financed 41% of all new apartment loans in 2021, according to data provided to Multifamily Dive by New York City-based commercial real estate data firm Real Capital Analytics. During the five years before the pandemic, they accounted for 54% of loans on average.
Dive Insight:
In remarks announcing Palmer's promotion, Michael DeVito, CEO of Freddie Mac, pointed out that Freddie Mac Multifamily has a long and successful track record of supporting affordable rental housing. He said he believes Palmer will continue that work.
“Over the course of his more than two decades at Freddie Mac, Kevin Palmer has demonstrated broad knowledge of the mortgage industry, a deep understanding of our company and an unyielding commitment to our mission,” DeVito said in prepared remarks. “These qualities make him the right leader to take our multifamily business forward.”
Palmer takes over Freddie’s multifamily operation after net income fell in the first quarter. The apartment segment saw net income of $387 million, down $642 million year over year.
“This decline was primarily driven by lower investment gains due to spread widening, lower initial pricing margins on new loan purchases and lower guarantee fee income, which was impacted by rising interest rates and spread widening on the fair values of the guarantee assets,” said Christian M. Lown, executive vice president and chief financial officer of Freddie Mac in a statement released in April.
Freddie reported new business activity of $15 billion in the first quarter of 2022, and its mortgage portfolio increased by 5% year over year to $415 billion. The delinquency rate, which doesn’t include loans in forbearance, was at 8% on March 31 — the same as the fourth quarter of last year.
Freddie Mac Multifamily’s mission goes beyond the financials. In 2022, the agency also made it a priority to help renters build strong credit scores by reporting on-time rental payments to credit reporting agencies.
It has enrolled 43,000 households across more than 450 multifamily properties in the program. In the process, more than 13,000 new credit scores have been established. Seventy-one percent of renters with an existing credit score saw their scores increase.
“Additionally, for renters, we’re building on the tenant protections we announced last year by extending protections to those who rent a home within a manufactured housing community,” DeVito said. “These include prior notice of rent increases and notice of a planned sale or closure of the community.”
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