Credit Risk Offerings
Freddie Mac created a new asset class with STACR that has brought private capital into the mortgage market and earned these awards:
Euromoney: Global Structured Deal of the Year
GlobalCapital: RMBS Deal of the Year
The Banker: U.S. Deal of the Year for the Americas
Freddie Mac is leading the market with initiatives to reduce taxpayer exposure and offer private investors new and innovative ways to invest in the post-crisis creditworthiness of the U.S. residential housing market. Currently Freddie Mac offers two distinct single-family risk sharing initiatives that appeal to a wide variety of investors such as hedge funds, mutual funds, REITS, banks, credit unions, and insurance and reinsurance companies.
Freddie Mac Structured Agency Credit Risk (STACR®)
Freddie Mac has a new type of credit security called Structured Agency Credit Risk (STACR) securities. With STACR securities, Freddie Mac intends to reduce its exposure to single-family mortgage credit risk for recently-purchased loans and open the doors for risk transfer to private investors. Through STACR, Freddie Mac is working to minimize potential credit losses and add a layer of protection against taxpayers’ exposure. More
Freddie Mac Agency Credit Insurance Structure (ACIS®)
Freddie Mac will periodically purchase insurance against some of the credit risk associated with its new Single-Family book of business. This type of insurance coverage is intended to attract new sources of private capital from non-mortgage guaranty insurers and reinsurers interested in assuming a portion of the credit risk on specified portions of Freddie Mac’s high-quality Single-Family mortgage loan portfolio. More
Benefits of Risk Sharing Credit Products & Innovations
- Provide multiple avenues for sharing mortgage credit risk with a diverse spectrum of private investors.
- Reduces taxpayer's credit risk exposure to the mortgage industry.
- Furthers Freddie Mac's strategic goal to develop multiple forms of risk-sharing structures.
- Aligns with the FHFA 2014 conservatorship goals.