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Freddie Mac's New Policies for Multifamily Sales

Freddie Mac, formally known as the Federal Home Loan Mortgage Corporation, is a government-sponsored enterprise (GSE) founded in 1970 to expand the secondary mortgage market by securitizing mortgages, thereby increasing the availability of capital for mortgage lending.

As the nation’s leader in multifamily housing finance, Freddie Mac plays a pivotal role in maintaining liquidity, stability, affordability, and equity in the housing market. Over 90% of the rental units Freddie Mac funds are affordable to families with low-to-moderate incomes, reflecting its mission to make home ownership and renting achievable across economic cycles.

Enhanced Property Inspection Requirements

One of the standout changes is the intensified scrutiny of property inspections. Starting April 18, Freddie Mac will require a higher number of unit inspections and larger lease audit sample sizes. For real estate agents, this means a more rigorous inspection process when listing or managing multifamily properties. It’s vital to prepare sellers for these changes, ensuring that all units are in optimal condition to pass these more stringent inspections.

Increased Due Diligence on Lease Audits

Freddie Mac now demands additional documentation during lease audits, specifically to verify actual tenant rental payments. This adjustment aims to curb potential misrepresentations of rental income, thereby ensuring that financial disclosures are accurate. Agents should advise their clients to maintain meticulous records of rental payments to avoid discrepancies during lease audits.

Stronger 'Know Your Customer' Protocols

The new policies include enhanced due diligence for first-time borrowers and those with limited experience in multifamily properties. This involves additional liquidity verification and checks on real estate owned by the borrower. Real estate agents should be prepared to assist clients in navigating these requirements by ensuring they have the necessary documentation and understanding of the process.

Revised Associations with Title Companies

Freddie Mac is also updating its processes to restrict business with certain title companies. This measure suggests that real estate agents should verify that the title companies they recommend are in good standing with Freddie Mac’s updated policies. Ensuring compliance will help in smoothing the closing process for multifamily transactions.

Appraisal Review and Appraiser Independence

Lastly, Freddie Mac has introduced stricter appraisal review processes and reinforced requirements for appraiser independence. These steps are designed to safeguard the objectivity and impartiality of appraisals. Real estate agents must ensure that appraisals are conducted independently and in accordance with these new standards to prevent any conflicts of interest or bias.

Implications for Real Estate Agents

These policy updates are part of Freddie Mac’s ongoing efforts to enhance its risk management and fraud detection capabilities. For real estate agents, these changes underscore the need for increased diligence and preparation in handling multifamily properties. Staying informed and compliant with these new requirements will not only facilitate smoother transactions but also help agents uphold their reputation for integrity and reliability in the real estate market.

Freddie Mac continues to play a crucial role in the multifamily housing sector, providing necessary funding while ensuring that the process remains transparent and secure for all parties involved. As real estate professionals, adapting to these enhancements will be key to navigating the evolving landscape of multifamily housing finance.

How do you help your seller clients prepare to sell multifamily properties? Comment below or share with a colleague in an upcoming CE Class!


Freddie Mac. (2024, April 15). Freddie Mac Multifamily enhances policies to strengthen due diligence, deter fraud and reduce risks [Press release].

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