NEWS RELEASE WASHINGTON, D.C.

Tim McNeilly (202) 690-0498

USDA AND FREDDIE MAC JOIN FORCES TO REHABILITATE AND PRESERVE AFFORDABLE RURAL RENTAL HOUSING
Freddie Mac Pledges $10 Million to Rehabilitate Rural Rental Housing Properties in 2004

     WASHINGTON, August 27, 2004--The United States Department of Agriculture and Freddie Mac today announced a partnership effort to begin a $10 million pilot program to substantially rehabilitate and preserve affordable rental properties located in underserved rural areas. The $10 million pilot program is meant to improve the quality of life for the people living in the aging apartments and to preserve the affordable rental housing for the future.

     Through the joining of efforts, Freddie Mac will purchase $10 million new loans that are secured by rural properties with existing USDA Rural Development rural rental housing mortgages in place. At the beginning of the pilot, only mortgages secured by USDA properties located in Indiana and Ohio will be eligible for purchase by Freddie Mac. Eventually, it is anticipated that the pilot program will be available nationwide. Freddie Mac's multifamily seller/servicer network will originate the loans, which will be designated specifically for the rehabilitation of the properties.

     Over the years, the Rural Development rural rental housing program has successfully enabled the construction of approximately 17,000 properties in underserved rural communities across the United States. However, the majority of these rental properties were built between 1970 and 1980 and are in need of modernization and repair. The partnership effort between Freddie Mac and USDA will help renovate a portion of the portfolio.

     "We are pleased with Freddie Mac's commitment to provide financial support to preserve much needed rural rental housing," said Agriculture Acting Under Secretary for Rural Development Gilbert Gonzalez. "This partnership will help ensure continued access by rural residents to safe, decent and affordable housing."

     USDA Rural Development's mission is to deliver programs in a way that will support increasing economic opportunity and improve the quality of life of rural residents. As a venture capital entity, Rural Development provides equity and technical assistance to finance and foster growth in homeownership, business development, and critical community and technology infrastructure. Further information on rural programs is available at a local USDA Rural Development office or by visiting USDA's web site at http://www.rurdev.usda.gov.

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