Freddie Mac announced on Friday that it has obtained a new insurance policy under its Agency Credit Insurance Structure, which will provide a combined maximum limit of up to approximately $294 million of losses on single-family loans made under the Home Affordable Refinance Program.
The Affordable Refinance Program, a federal program launched in 2009, provides homeowners lower mortgage rates and other refinance benefits if they owe more money on their mortgage than the value of their home.
“ACIS ARMR has been an important evolution of the ACIS program, helping Freddie Mac transfer additional risk on seasoned loans while providing reinsurers with a new and innovative opportunity to invest in the U.S. residential housing market,” Vice President of Credit Risk Transfer Gina Healy said.
In 2017, Freddie Mac obtained an ACIS insurance policy that covered a combined maximum limit of approximately $285 million of credit losses, which transferred a “significant portion” of credit risk on a $16 billion pool of 15-year mortgages purchased by the company during the first nine months of 2016.
Since 2013, Freddie Mac has transferred a portion of credit risk on more than $1 trillion of unpaid principal balance on single-family mortgages.
“Credit loss coverage through the ACIS program has now reached $10 billion. Through outreach, education and innovation we’re working to attract even more private capital to ACIS and credit risk transfer.”