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Loans tied to commercial real estate are performing quite well with originations in the commercial/multifamily segment up 25% in the second quarter from last year, the Mortgage Bankers Association said Thursday.
Originations also grew 39% from the first quarter.
The segment is doing well enough for Freddie Mac to offer its first structured pass-through certificates backed by LIBOR-based, floating rate multifamily loans with five- and seven-year terms.
Freddie is offering about $1.1 billion in K certificates, which will price on the week of Oct. 1.
Meanwhile, outstanding debt in the segment fell by $10.4 billion, or 0.4%, in the second quarter as more balances on CMBS loans, CDOs and ABS transactions declined, the MBA said.
The delinquency rates on commercial and multifamily debts tied to life insurance companies, Fannie Mae and Freddie Mac remained low while late payments on bank-held commercial loans declined outright.
Loans tied to CMBS structured transactions have higher delinquency rates driven by REOs and foreclosures in the loan pools.
"This deal is the next step toward our goal of offering the broadest array of financing options to our borrowers and the investor community," said Mitch Resnick, vice president of multifamily capital markets for Freddie Mac. "Earlier this month we announced our first fully-wrapped K-series transaction and today our first floating rate security is being marketed. We've settled 31 deals totaling more than $36 billion in collateral since the program's inception in 2009."
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