Freddie Mac to securitize multifamily adjustable-rate mortgages
Adjustable-rate mortgages on multifamily properties can now be sold to Freddie Mac's multifamily Capital Markets Execution program for securitization, the government-sponsored enterprise said Friday. Freddie Mac's CME program provides liquidity to the multifamily segment by buying up mortgages in the space and pooling those loans into securitization packages that are marketed to investors in the form of K-certificates backed by multifamily loans. "Since we began offering K-Certificates backed by CME loans, we've opened up the capital markets to commercial mortgage backed securities issuances through 13 offerings totaling more than $14 billion," said David Brickman, senior vice president of multifamily for Freddie Mac. Multifamily residences are classified as commercial assets. The inclusion of multifamily ARMs has the potential to increase Freddie's growing pipeline of CME loans, which represented 70% of its multifamily funding volume over the course of the past 15 months. CME continues to diversify the products allowed into the pipeline. Since 2009, Freddie Mac has added student housing loans, senior housing loans and conventional structured finance pools to its CME program. "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," Brickman said. "With our growing pipeline of CME loans, we've become a reliable and consistent issuer of K Certificates, multifamily mortgage-backed securities." Write to Kerri Panchuk.