McLEAN, VA–Freddie Mac has launched its first single-family rental home securitization as part of its push into this space. This inaugural offering is part of a pilot project, for which the GSE has gotten approval from the FHFA to issue slightly more than $1 billion.
For this transaction, Freddie expects to issue approximately $161 million in SR, or single rental, certificates. They are backed by 59 loans issued primarily by CoreVest American Finance Lender.
This program is largely an affordable play for the GSE, David D. Leopold, vice president of targeted affordable sales & investments at Freddie Mac Multifamily, tells GlobeSt.com. Indeed, of the 2,355 properties included in this transaction, 94% are affordable to families earning less than 100% of area median income and 71% are affordable to low-income families earning less than 80% AMI. More than 12% are affordable to families earning 50% of AMI or less.
Freddie Mac is approaching the market with two products, Leopold says. One is a standard retail mortgage for single-family home portfolios in which the GSE purchases mortgages originated by its seller servicer network. The other – which the CoreVest transaction illustrates — is a direct to securitization that is structured off of Freddie Mac's Q shelf. That means an originating lender has made multiple mortgages and aggregated them and Freddie provides liquidity for those mortgages through the securitization. It issues the securities, some of which are wrapped by Freddie Mac, which is consistent with the Q shelf's risk transfer model.
In other words, the mortgages in such a transaction are not Freddie Mac-originated collateral as you would find in one of its K Deals.
Leopold said because this is a new product launch it will require some time to ramp up but it hopes to use all of the $1 billion plus allowed to it under the program next year. “We are looking forward to doing more,” he says.
McLEAN, VA–Freddie Mac has launched its first single-family rental home securitization as part of its push into this space. This inaugural offering is part of a pilot project, for which the GSE has gotten approval from the FHFA to issue slightly more than $1 billion.
For this transaction, Freddie expects to issue approximately $161 million in SR, or single rental, certificates. They are backed by 59 loans issued primarily by CoreVest American Finance Lender.
This program is largely an affordable play for the GSE, David D. Leopold, vice president of targeted affordable sales & investments at
In other words, the mortgages in such a transaction are not Freddie Mac-originated collateral as you would find in one of its K Deals.
Leopold said because this is a new product launch it will require some time to ramp up but it hopes to use all of the $1 billion plus allowed to it under the program next year. “We are looking forward to doing more,” he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
