Freddie Mac has expanded its single-family green bond framework under its single-family green bond program. The program supports Freddie Mac’s commitment to promote environmentally sustainable single-family housing, help reduce climate-related risks, and increase affordability.
The framework received a light green second opinion rating from CICERO Shades of Green, an entity that provides a second opinion on institutions’ frameworks and independent reviews of green bonds.
“Freddie Mac’s sustainability strategy strengthens our commitment to our mission, helps us drive long-term stakeholder value and makes a difference in communities nationwide,” Mark Hanson, Freddie Mac senior vice president of securitization said in a release.
“Through our Single-Family Green MBS [mortgage-backed securities], we’re financing energy-efficient homes and home improvements to help more families achieve and maintain affordable homeownership while reducing the housing sector’s environmental impact.”
A CICERO light green designation means Freddie Mac’s single-family green bond program is climate friendly but does not represent or contribute to the long-term vision. The program is necessary and can potentially significantly reduce greenhouse gas emissions in the short term but must be managed to avoid extending the lifetime of equipment that can lock-in fossil fuel elements. Without the appropriate strategies to protect this program, it may be exposed to the physical and transitional climate risk.
Since issuing its first bond in April 2021, Freddie Mac has issued more than $600 million in single-family green MBS, each backed by the company’s GreenCHOICE mortgages. These help borrowers use refinance proceeds to finance energy efficient home improvements.