08-15E

We perform a full atomic relaxation of the bulk ferrite with 12.5\%-concentration of monoatomic interstitial Cr which is periodically located on the edges of cubic cell of Fe$_\alpha $. We show that structural relaxation leads to significant atomic displacements and results in the formation of parallel chains of alternatively tilted Fe$_6$-octahedra. The atomic distortions result in the formation of a new metallic state which can be characterized as multiferroic with the electronic properties close to half-metallic. The static electric polarization appears due to inhomogeneous spatial distribution of magnetic moments caused by their frustration by Cr impurities. The properties of generated interstitial alloys can have important consequences for the applications in spintronic and multifunctional devices.