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SR Certificates

Multifamily SR Certificates are backed by mortgages secured primarily by Single-Family Rental housing properties (SFR Loans).  Generally, SFR Loans range from $10 million—$250 million and are underwritten by Freddie Mac at the time of origination for sale to Freddie Mac by a specialty network of Seller/Servicers or SFR lenders.

In SR Certificate issuances, Freddie Mac guarantees senior classes of securities issued by a third-party trust but does not issue Freddie Mac structured pass-through securities. The third-party trust also issues unguaranteed subordinate securities.  From time to time, Freddie Mac may also purchase for securitization seasoned SFR Loan pools in whole loan sales.  For SFR Loans that were not underwritten by Freddie Mac at origination, the loans may not have been purchased by Freddie Mac prior to securitization and Freddie Mac will issue structured pass-through securities.


SR Certificates are generally structured as follows:

  • Freddie Mac purchases and aggregates SFR Loans, by a Seller or groups of Sellers, for securitization.
  • Freddie Mac sells the SFR Loans to a third-party depositor who deposits the loans into a third-party trust.
  • The third-party trust issues private-label securities backed by the SFR Loans.
  • Freddie Mac guarantees the senior securities issued by the third-party trust, which are then publicly offered. In some cases, a third party may act as loan seller and Freddie Mac may issue structured pass-through securities.
  • The unguaranteed securities issued by the third-party trust are privately offered to third-party Investors.
  • The private-label securities are not expected to be rated.

Single-family Rental Structural Diagram

  • Strong credit provided by the Freddie Mac guarantee plus the additional credit support of an underlying SFR loan pool underwritten to Freddie Mac's standards
  • Diversification through pooled risk of many assets versus single asset risk
  • Transparency on collateral and deal information through the offering documents
  • Guarantee of timely payment of interest and ultimate payment of principal on the private-label securities guaranteed by Freddie Mac
  • Strength of a Freddie Mac credit review based on strong credit management and relevant underwriting experience

Additional Resources

Disclosure

  • SR Certificates Security Lookup – Provides disclosure documents and structuring information. You will need to enter the SR-Series Number (e.g. SR001), select the desired information option and click on Submit.
  • Offering Circulars – You will need to enter the SR-Series Number (e.g., SR001), select the Offering Circular Supplement and click on Submit.

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