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Adjustable-Rate Mortgages Eligible for Securitization

June 29, 2011

Building on the success of our Capital Markets ExecutionSM (CME), Freddie Mac recently began offering our adjustable-rate mortgage (ARM) for securitization. In the last two years, we've made student housing loans, seniors housing loans, conventional structured finance pools, and Targeted Affordable Housing (TAH) loans eligible for CME. Today, more than 70 percent of our multifamily funding volume has been through CME loans.

"CME continues to expand liquidity in the multifamily capital marketplace by creating a reliable, competitively priced source of financing through our deep pool of capital providers," said David Brickman, senior vice president of Freddie Mac Multifamily. "With our growing pipeline of CME loans, we've become a reliable and consistent issuer of K Certificates, multifamily mortgage-backed securities."

To ensure you have the most up-to-date CME information to share with your borrowers, the following resources are available:

  • Freddie Mac Fixed-Rate Product for CME Term Sheet – Provides a summary of the product terms, key benefits and a quick overview of how the product works.
  • Freddie Mac Adjustable-Rate Product for CME Term Sheet – Explains the index choices, spread lock, lockout and prepayment provisions, as well as a brief description of how our ARM works.
  • Updated CME Toolkit – In addition to the existing materials, we recently added a comparison of a Fixed Rate Note to Adjustable Rate Note. This is a side-by-side comparison of the legal differences between a CME Fixed Rate Note and a CME Adjustable Rate Note.

If you have any questions about CME, please contact your Freddie Mac regional representative.

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