The Freddie Mac Student Housing Mortgage is designed to provide financing to purchase or refinance multifamily properties (in other words it will finance commercial properties like apartment buildings). The properties must be occupied by at least 50% of students currently enrolled in school.



The terms are great and can offer flexible rates, full or partial interest only and up to 80% loan to value financing. The goal is to develop more housing units for college and university students. Hopefully the savings that property owners receive will be felt by the students renting the units.

Part of the requirements is that the property must be located two miles or closer to a college or university or be on the route of public transportation. The school enrollment must be 8,000 or more, but multiple schools within the proximity can be added together. And the leases must be for nine to twelve months.

While the concept behind the program is a good one, it is a concern that the program includes interest only options. That is one of the options that has been causing so many problems for homeowners and lenders in the industry and partially responsible for the rise in foreclosures.

The real question is the actual need for the program. Most colleges and universities have housing on campus that they offer students at reasonable rates. College communities are dotted about with off campus houses and apartment complexes. The addition of the program through Freddie Mac could provide needed housing as well, but it could also provide unfair competition to other property holders in the community.