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Freddie Mac Multifamily Closes First Social Impact M-Deal Supporting Housing for Homeless Veterans and Those in Need

Freddie Mac Multifamily Closes First Social Impact M-Deal Supporting Housing for Homeless Veterans and Those in Need

MCLEAN, Va., Dec. 08, 2020 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) recently closed its first Social Impact M-Deal backed by 27 mission-focused properties for low-income residents, many of whom are disabled, seniors with disabilities or homeless veterans.

The transaction provided $359 million in liquidity to Arc70 to fund bonds backed by properties that address affordable housing challenges or properties serving underserved groups considered to be among the most vulnerable. This is the first M Certificate offering under the company’s Social Bonds Framework, which is part of the larger Impact Bonds series.  

“We are proud to announce our inaugural Social Impact M-Deal, part of our Impact Series focused on providing critical funding for affordable properties and those serving underserved groups,” said Steve Johnson, Vice President, Targeted Affordable Housing Production at Freddie Mac Multifamily. “Partnerships like the one with Arc70 allow Freddie Mac to continue to deliver on our mission of preserving and revitalizing affordable housing across the country.”

“This Social Impact M-Deal provides financing necessary for critically needed and safe affordable housing, which is the core focus of Arc70,” said Denny Hou, co-founder of Arc70. 

Adrian Garcia, co-founder of Arc70, added, “This transaction demonstrates how our strong long-term partnership with Freddie Mac can work with the capital markets to meet diverse housing needs in underserved communities at scale.”

The proceeds from the underlying bonds are used to back 27 rental properties for low-income, veteran and disabled senior residents. These properties include:

  • The Abigail Apartments in Portland, Oregon, a newly constructed mixed-use multifamily property where the majority of units are reserved for tenants who meet extremely low- and very low-income criteria.
  • Step-Up on Second in Santa Monica, California, a newly renovated apartment complex focused on providing psychosocial rehabilitation and support to homeless and those affected by serious mental issues.
  • The Grove at Parkside, a recently constructed property in Washington, D.C., providing affordable housing to tenants making at or below 60% of the area median income.

Freddie Mac Multifamily is the nation’s multifamily housing finance leader. Historically, more than 90% of the eligible rental units we fund are affordable to families with low-to-moderate incomes earning up to 120% of area median income.

More than 90% of the mortgages purchased support rental units for households earning 120% of area median income or below. Freddie Mac securitizes about 90% of the multifamily loans it purchases, thus transferring the majority of the expected credit risk from taxpayers to private investors.

About Freddie Mac

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers.

Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Media Contact

Mike Morosi
(703) 918-5851
Michael_Morosi@FreddieMac.com

About Arc70 Capital

Arc70 Capital is a structured credit investor that takes a long-term approach to investing and working with stakeholders to finance the development and preservation of affordable housing. Arc70 has made more than $4.8 billion of affordable housing related investments, which have built or preserved over 44,000 units of affordable housing across the country. 

Media Contact

Steffan Dye
ir@arc70.com

Robert Lucas

VP, Transaction Management

Robert Lucas manages and optimizes the warehouse portfolio at Arc70. Prior to joining, he spent 17 years at Deutsche Bank primarily as a trader across multiple asset classes. He brings over a decade of experience in Capital Markets in both Securitized Products and Munis. He holds a B.A. in both Business Administration and History as well as an M.A. in International Business from the University of Florida.

 

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Michael Patterson

Senior Advisor, Asset Protection

Michael Patterson is a senior advisor to Arc70’s servicing, origination, and underwriting functions, where his expertise adds to the firm’s lending and asset management infrastructure. He brings 40+ years of experience in real estate finance, most recently serving with Freddie Mac Multifamily as vice president for underwriting, credit, and execution for affordable and senior housing, structured transactions, small balance loans, and tax credit equity investments. He also developed and launched the K-deal securitization platform. Prior to Freddie, he was a construction lender and special servicer on affordable mortgages at a forerunner of Bank of America. He holds a B.A. from The George Washington University in Washington DC and has passed CFA Levels I & II.

 

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Joshua Cabrera

Chief Compliance Officer

Joshua Cabrera serves as Chief Compliance Officer at Arc70 where he drives the institutionalization of the firm’s limited partner base through investor research and marketing execution. Previously, he was a senior researcher of real assets at Marquette Associates and Associate Portfolio Manager at the Exelon Investment Office. He holds a B.S in Finance from the University of Notre Dame and M.B.A from Northwestern University. He is also a Chartered Financial Analyst and Level II Chartered Alternative Investment Analyst Candidate.

 

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Jennifer Wu

Chief Financial Officer

Jennifer Wu leads financial management, reporting, and operational strategy at Arc70. With 20 years of experience in corporate finance and accounting, she brings institutional rigor across treasury, audit, controls, and financial systems. Her background includes senior leadership roles in investment and real estate finance, with a focus on scalable infrastructure and investor transparency. She is a CPA and holds a B.A. in Economics and Business Administration from University of California at Berkeley and an M.B.A. from University of California at Los Angeles.

 

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TJ Park

Director, Head of Portfolio Management

TJ Park serves as head of portfolio management at Arc70 where he manages the funds’ capital allocation, liquidity, and assets. He is also involved with the firm’s business development and capital raising efforts. He started as a deal lead where he evaluated equity and debt opportunities, and sits on the firm’s investment and risk management committees. Previously, he was a senior investment analyst and asset manager at Reliant Group Management, a real estate private equity firm, and a fund analyst at WNC & Associates, a national tax credit syndicator.

 

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Matthew Cicchetti

Director, Warehouse and Legal

Matthew Cicchetti is a distinguished legal professional with a robust background in financial markets. He ensures that Arc70 operates within legal boundaries, mitigates risks, and upholds regulatory compliance. His significant experience in warehouse finance allows him to bring strategic insights into Arc70’s warehouse transactions and to optimize financial structures that enhance fund performance. Prior to joining Arc70, he spent over 9 years at Deutsche Bank, first in its legal department and then as vice president in its Municipal Capital Markets Group where he worked on billions of dollars of direct lending and derivative affordable housing transactions. Before Deutsche Bank, he was a Florida bar fellow with the ACLU of Florida and a member of a defense team practicing before the United Nations International Criminal Court for the former Yugoslavia. he holds a B.A. in History from Florida State University and a J.D. from Florida Coastal School of Law.

 

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Matthew Engler

Managing Director, Capital Markets

Matthew Engler brings 20+ years of experience in affordable housing finance across a variety of roles in investment banking, LIHTC equity investing, and debt and equity capital raising and structuring. Over the course of his career, he has worked on $20B+ of affordable housing financings, ranging from closing debt and equity at the property and fund level to structuring and executing a wide variety of hedges and swaps to large-scale pooled securitizations and risk-transfer transactions. At Arc70, he manages all aspects of the firm’s securitization programs and onboards and oversees relationships with origination and bank warehouse partners. He is a member of the risk management committee and uses his derivatives expertise to assist in hedging strategy and implementation. Prior to joining Arc70, he worked in public finance investment banking with a number of bulge bracket firms, including Wells Fargo and Barclays. In these roles he drove substantial growth of their respective affordable housing finance practices by leading municipal bond transactions for numerous state housing finance agencies and affordable housing developers and affordable housing securitizations for Freddie Mac and Fannie Mae. Earlier in his career, he invested in LIHTC properties for the insurance company Unum and raised equity from institutional investors in syndicated LIHTC funds at Meridian Investments, where he served as COO. He holds a B.A. in Physics from Bowdoin College, a M.A. in Economics from Tufts University, and an M.B.A. in Finance from the Yale School of Management.

 

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Clayton Davis

Senior Advisor, Securitization

Clayton Davis brings more than 30 years of structured finance experience to his role as Senior Advisor, Securitization at Arc70. He previously served as Director of Structured Affordable Production in Freddie Mac’s Multifamily Division, where he led the negotiation and securitization of complex affordable housing transactions. He is the named inventor of a patented affordable housing structure (U.S. Patent #8,010,439) and is recognized for his innovations in tax-exempt finance.

 

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Victor Pa

Chief Risk Officer

Victor Pa serves as head of risk management at Arc70, overseeing functions such as risk measurement and analytics and provides business strategy recommendations for the evaluation of financial volatility risk, managing portfolio limits, and implementing our capital framework and risk appetite. Prior to joining, he worked with Freddie Mac for over 25 years and has served in numerous company divisions and roles including Multifamily, Single Family, Investments, Capital Markets, Modeling, and Risk Management. He led multifamily’s regulatory capital and internal capital management initiatives as well as market risk management and mitigation activities. He holds a B.S. in Engineering and M.B.A. from Virginia Tech.

 

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Long Nguyen

Director, Head of Underwriting

Long Nguyen is a member of the investment committee at Arc70 and is responsible for the management and oversight of underwriting for multifamily affordable housing. He ensures that underwriting policies, procedures, and best practices are implemented for transactions in the portfolio. Prior to joining Arc70, he served at ARES Commercial Real Estate (ACRE Capital) as a Fannie Mae DUS underwriter. He holds a B.S. in Business Administration from University of California at Berkeley.

 

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Steffan Dye

Managing Director, Head of Investor Relations

Steffan Dye has over 20 years of professional experience in private capital investor relations and fundraising. Steffan is responsible for managing and developing investor and consultant relationships, fundraising, and marketing at Arc70. Prior to joining, he served as managing director at Harbert Management Corp. He also previously worked in Stifel / Eaton Partners’ private placement group and helped lead the investor relations and fundraising team at Ridgewood. He holds a B.A. in Global Change and World Order from the University of California at Berkeley.

 

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Denny Hou

Co-Founder and General Partner

Prior to co-founding Arc70, Denny Hou was a principal in Sierra Point Group, where he founded a multifamily investment and development firm focused on affordable housing. Before Sierra Point, he was a partner at Cypress Management and also gained experience at Kohlberg Kravis Roberts. He received a B.S. in Economics from the Wharton School of the University of Pennsylvania.

 

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Adrian Garcia

Co-Founder and General Partner

Prior to co-founding Arc70, Adrian Garcia was a principal in Google’s Capital Investments group where he led a team that executed strategic investments in real estate, affordable housing and capital market transactions. He also previously gained experience at LCV Capital Management, North Point Advisors, and DLJ Private Equity. He received a B.S. in Business Administration from University of California at Berkeley.

 

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Mark Wright

VP, Portfolio Management

Mark started his career in portfolio management at Freddie Mac Multifamily. He was responsible for hedge analytics, capital and profitability reporting, and earnings forecasts. He helped automate several key processes and provided instrumental analysis that drove impactful business model changes. After four years in Multifamily, he spent several years in Freddie Mac's Single Family division. There, he worked in securitization and provided analytics that helped support the Single Family UMBS market. He also supported the pricing division to help the company achieve target market share while meeting mission critical affordable housing goals. He holds a B.S. in Quantitative Finance and Mathematics from James Madison University and a Masters of Engineering in Computer Science from Virginia Tech.

 

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