MCLEAN, VA-Freddie Mac’s mezz lending program for multifamily is formally beginning operations on Wednesday. A spokeswoman for the GSE tells GlobeSt.com that Berkshire Properties, Carmel Partners, Essex Property Trust and Waterton Capital Solutions will begin providing quotes to customers now that they have completed the training program. 

First announced in April, the mezz program has been put in place to help borrowers refinance properties whose values have dropped. In it, Freddie originates a first mortgage with a fixed rate and the mezz lender provides another 15% at either a fixed or floating rate.

The demographics of its target audience explain why equity lenders have been tapped to participate, David Brickman, vice president of multifamily and CMBS Capital Markets at Freddie Mac, told GlobeSt.com in an earlier interview--meaning the companies are not traditional debt players as one might expect. The spokeswoman adds that Freddie doesn’t have immediate plans to expand the number or type of lenders.

Once the program is ramped up, Brickman said he expected annual volume to run between $2 billion to $3 billion in senior debt with a "few hundred million" in mezz loans. Freddie Mac--as well as Fannie Mae--offered similar programs a few years ago, but they were eventually shelved, as they could not meet terms offered by competing conduits.