Our Securitization Program

Through our securitization program, we offer a wide array of products to meet the acquisition and refinance needs of borrowers including our fixed-rate, adjustable,  and supplemental mortgages, as well as  specialty products for Student Housing, Seniors Housing, and Conventional Structured Products.

During origination and after our purchase of a loan, we strive to provide excellent customer service for Sellers and borrowers, by: 

• Making sure our people, processes and relationships exceed expectations
• Providing specialized knowledge of borrower pre-and post-securitization needs
• Staying continually engaged and attentive to borrower financing needs
• Supporting Seller/Servicers and borrowers with unique regional market experience
• Ensuring that Freddie Mac continues to be the Multifamily investor of choice
• Providing responsive service and keeping servicers and borrowers informed of our decision making process
• Monitoring the performance of the Master and Special Servicers to ensure that borrowers receive the same superior level of service after securitization

Our Multifamily teams are focused on a holistic customer service experience that allows you to do business with us easily and efficiently.

• To provide liquidity in the mortgage market
  • Continued lending ability with reduced capital allocation
  • Attract and leverage private capital for borrowers

• To reduce risk for the Multifamily line of business and address market needs
  • Ability to sell the default risk to private investors
  • Decreases portfolio dependency by 90%

• Individual loans are originated and aggregated into a large pool, usually in sizes of $1 B or greater
• Pooling reduces risk through diversification of:
  • Borrower/Sponsor
  • Geography
  • Property type
  • Loan size and type
• Large pools are attractive to investors, and enable greater customization of risk tranches

• Aggregated loans are sold to the bond issuer/depositor
• Trust issues bonds to be sold to investors
• Bonds have an ownership interest in trust
• Investors buy bonds from the trust and pay the bond issuer

• Servicers assume responsibility for servicing and economic decisions
• Actions and decisions are controlled by securitization documents and applicable loan documents

• Origination requirements are focused on multifamily loans secured by occupied, stabilized, and completed properties
• Single purpose entity (SPE) is required for almost all loans greater than or equal to $5 million

• 5-, 7-, and 10-year loan terms with a maximum amortization of 30 years
• May contain initial interest-only periods per underwriting guidelines
• Mortgages are fixed rate or floating rate
• Shorter or longer loan terms, markets of concern, and specialty product types typically require adjustments
• Most loans require a refinance test (some exceptions for low leverage transactions)

• Maximum loan-to-value (LTV) of 80%, minimum DSCR of 1.25x (acquisition loans or refinanced loans with no cash out to the borrower)
• Maximum LTV of 75%, minimum DSCR of 1.30x (refinanced loans with cash out to the borrower). Exceptions may be granted

• A non-recourse carve-out guarantor is generally required
• Re-underwriting required based on current property performance and financials and Freddie Mac’s credit policy