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Weighted Average Coupon (WAC) ARM Guarantor Execution

A competitive securities execution with lucrative options

Freddie Mac's Weighted Average Coupon (WAC) ARM Guarantor execution offers a competitive securities execution for your ARMs that adjust based on the Constant Maturity Treasury (CMT)-index or the London Interbank Offered Rate (LIBOR)-index. Under the WAC ARM Guarantor execution, you receive Freddie Mac WAC ARM Participation Certificates (PCs) in exchange for a variety of nonconvertible CMT- and LIBOR-indexed ARMs. WAC ARM PCs provide investors with assets to match short-term liabilities and liabilities with floating rates. You can also take advantage of an optional delivery period and flexible remittance cycles to meet your individual needs. With only a $500,000 minimum commitment, we'll work with you to take advantage of either a swap and hold or a swap and sell solution that meets your investment needs.

Product Features

FeatureDescription
Eligible Mortgage Products
  • Whole ARM products that adjust using either the 1-Year Weekly Constant Maturity Treasury (CMT) Index or the 6-Month and 1-Year London Interbank Offered Rate (LIBOR) Index
  • Refer to Freddie Mac's Single-Family Seller/Servicer Guide Chapter 30, Chapter J33 and Exhibit 17S for a list of eligible ARM products and Guide Chapter 11 and Chapter A13 for information about their pooling requirements
Special Sales Requirements
  • Each eligible ARM product may only be sold on a whole loan basis
  • All ARMs must have an original term of 30 years (360 months) or less.
  • Minimum pool size is $500,000
  • All ARMs must have the same: Index, Lookback Period, Initial Period, Adjustment Period, Initial Cap (see Guide Section A13.4 (l) for exceptions), and Periodic Cap
  • Adjustable-rate Freddie Mac Relief Refinance MortgagesSM with LTV ratios less than or equal to 105 percent may be pooled with other mortgages without additional pooling requirements
  • Adjustable-rate Relief Refinance Mortgages with LTV ratios greater than 105 percent are not eligible for sale
Minimum Commitment Amount
  • Minimum commitment amount is $500,000
Eligible Remittance Cycles
  • Choose from two remittance options: First Tuesday or our Accelerated Remittance Cycle (ARC)
Eligible Settlement Cycles
  • In the selling system, choose a 3- or 4-day Gold Rush® settlement cycle in exchange for a Gold Rush fee, or choose the 5-day standard cycle
Contract Requirements
  • A WAC ARM Guarantor contract is an optional delivery commitment
  • Minimum servicing spread is 0.25%
  • Maximum servicing spread is 2.00%

Key Benefits

  • Receive a Freddie Mac PC, an attractive investment, that is eligible for Giant PCs
  • Reduce your capital costs by swapping and holding WAC ARM PCs
  • Increase your profitability with 3- and 4-day Gold Rush® settlement cycles in exchange for a Gold Rush fee
  • Choose from two remittance cycles for your P&I remittances to better manage your servicing float value
  • Benefit from a competitive securities execution for your ARM products that adjusts based on the CMT- and LIBOR- index
  • Deliver your mortgages on the same day you take out a WAC ARM Guarantor contract

For More Information

The information found on this page is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.

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