News Release

Contact: Jim Brownlee, (202) 720-2091
jim.brownlee@usda.gov
Tim McNeilly, (202) 690-0498
tmcneill@rdmail.rural.usda.gov

AGREEMENT EXPANDS MARKET FOR CREATING AFFORDABLE RURAL RENTAL HOUSING

     WASHINGTON, August 10, 2001--USDA officials highlighted today the immediate impact a recently signed agreement between the U.S. Department of Agriculture and Freddie Mac is having on creating new rental housing opportunities in rural areas. As a result of a June 21, 2001 agreement, Freddie Mac has already agreed to purchase $3.75 million in USDA Rural Housing Service (RHS) Multi-Family Housing Guarantee Loans (Section 538 program), which is expected to result in the creation of 144 new rental housing units in the state of Indiana.

     "This new agreement provides USDA a unique tool to increase the availability of affordable rural rental housing to families throughout the United States," said James R. Moseley, Deputy Secretary of Agriculture. "The opening of new markets for multi-family housing loan guarantees will bring lenders greater flexibility in developing lending strategies, and stimulates further development of new rental housing in historically underserved areas."

     The Section 538 program is a guaranteed loan program designed to provide loan guarantees to lenders interested in serving tenants with low- and moderate-incomes. The program is an effective way to ensure that USDA Rural Development meets rural housing needs and promote rural economic stability and development. Prior to the agreement with Freddie Mac, RHS had limited success in selling loans originated under the Section 538 program in the secondary market.

     Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage passthrough securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened the doors for one in six homebuyers and more than two million renters across America. Additional information may be found at http://www.freddiemac.com.

     USDA Rural Development serves as the lead federal entity for rural development needs, and administers program assistance through three agencies: Rural Housing Service, Rural Business-Cooperative Service, and Rural Utilities Service. Further information on USDA Rural Development can be obtained by visiting USDA's web site at http://www.rurdev.usda.gov.

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