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Freddie Mac Agency Credit Insurance Structure (ACIS®)

Freddie Mac programmatically enters into insurance/reinsurance transactions to transfer risk associated with a portion of its credit exposure in the residential mortgage market. This insurance-based risk sharing vehicle, Agency Credit Insurance Structure (ACIS®), represents a source of private capital that will shoulder part of the credit risk associated with certain Freddie Mac loans. Since the initial November 2013 ACIS transaction, the program has executed 24 transactions and transferred $6.2 billion in risk. These transactions provide an innovative opportunity for global insurance and reinsurance companies to invest in the credit performance of Freddie Mac's high quality Single-Family loans.

Click here to learn more about ACIS and its features.

Agency Credit Insurance Structure (ACIS®) – Features

Key Structural Considerations

  • Agency Credit Insurance Structure (ACIS®), insurance policies issued by or ceded to global reinsurance companies to cover a portion of the remaining risk (retained vertical slice) on the STACR or standalone reference pools.
  • Freddie Mac transfers risk on mezzanine tranches and a first loss B Tranche; structured similar to an aggregate excess of loss contract.
  • Freddie Mac retains a vertical slice of every tranche to align incentives and manage credit risk efficiently.
  • Actual loss calculation mimics cash flows from underlying collateral.
  • Participants will receive initial premiums at the levels agreed to in the Policy, which are adjusted based on the reference STACR bond rules for the associated reference pool for up to 12.5 years; premium is payable on a monthly basis in arrears.
  • A collateral trust account made up of cash and highly liquid assets will be required.

Program Offerings

  • Multiple offerings based on mortgage product and risk characteristics:
    • 60 to 80% LTV (30 Year Fixed Rate)
    • > 80 LTV (30 Year Fixed Rate)
    • 15 Year Fixed Rate (ACIS Standalone)

ACIS Structure

ACIS Reference Pools

ACIS transactions based on 30 Year Fixed Rate mortgages are linked to the associated STACR Reference Pool.  Standalone deals’ mortgage products vary, but still possess the same qualities.

  • A large and highly-diversified reference pool that helps to provide more stable and predictable performance
  • Freddie Mac's Underwriting Standards
  • Freddie Mac's internal fraud prevention and quality control review process
  • Standardized servicing guidelines that are uniform across Freddie Mac's entire portfolio
  • Freddie Mac's internal quality control sampling strategy will not distinguish between STACR Reference Pool loans and non-STACR Reference Pool loans
  • Historical performance of the STACR Reference Pools can be found here.

ACIS Structure

ACIS Reference Pools

ACIS transactions based on 30 Year Fixed Rate mortgages are linked to the associated STACR Reference Pool. Standalone deals' mortgage products vary, but still possess the same qualities.

  • A large and highly-diversified reference pool that helps to provide more stable and predictable performance
  • Freddie Mac's Underwriting Standards
  • Freddie Mac's internal fraud prevention and quality control review process
  • Standardized servicing guidelines that are uniform across Freddie Mac's entire portfolio
  • Freddie Mac's internal quality control sampling strategy will not distinguish between STACR Reference Pool loans and non-STACR Reference Pool loans
  • Historical performance of the STACR Reference Pools can be found here.

Contact Information

If you have a general question, please contact:

Email: acis@freddiemac.com

Freddie Mac New Transactions:

(866) 903-2767

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