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  • Comment Detail

  • Date: 07/19/22
    First Name: Mitchell
    Last Name: Monroe
    Email: mitchell@parkavenueam.com
    Organization Type: N/A
    Organization: Park Avenue Asset Management

  • Comment

    We are reaching out to inquire about the possibility of eliminating the required terrorism insurance for all Freddie Mac loans.

    At present, Freddie Mac lends to four of our multifamily properties. Terrorism insurance for the four properties cost $1,835, which equates to $12 per unit. Although the dollar amount is not overwhelming, the year over year increase for liability and property insurance has been 28%. That increase coupled with the required terrorism insurance and the pressures of inflation make insuring these assets extremely unaffordable and unfortunately must be passed off to tenants via rental increases.

    We acknowledge that terrorist attacks occur in the United States, but extremely seldomly and usually targeting city centers in commercial zones, not residential areas.

    Nationwide rental rates have increased an absorbent amount over the past year and if the goal of Fannie Mae and Freddie Mac is to keep housing affordable, we ask for the reconsideration of the terrorism insurance requirement. If not an entire elimination of the requirement, than those assets located in non-urban areas.

    Our point is not only financial, but principal. Thank you and feel free to reach out at any time,

    Mitchell