Dealflow | May 15, 2019

Impact Community Capital recycles affordable housing financing with Freddie Mac swaps

David Bank
ImpactAlpha Editor

David Bank

ImpactAlpha, May 15 — The San Francisco-based low-income housing lender is piloting a new structure to free capital to finance additional affordable units.

Impact Community Capital swapped 77 loans, totaling more than $140 million, for “participation certificates,” or PCs, guaranteed by Freddie Mac, a U.S. government-owned corporation that packages mortgages into securities. Impact plans to sell the “multi PCs” to impact and other investors.

We think this is the product that can be the entry point for new institutions that have heard about impact investing, but have had trouble getting in” and want higher credit quality, Impact Community Capital’s Michael Lohmeier told ImpactAlpha.