Freddie Mac Multifamily Leads Industry with $77.8 Billion in Multifamily Loans Securitized
MCLEAN, Va., Jan. 13, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) issued $77.8 billion of multifamily securities in 2020. The record-setting figure demonstrates Freddie Mac’s continued industry leadership in risk transfer and use of innovative securities to move risk from taxpayers to private investors.
Contributing to the $77.8 billion total securitization, the company settled:
- $61.8 billion in K-Deals®
- $4.9 billion in SB-Deals®
- $6.0 billion in Multi PCs
- $5.1 billion M-Deals, ML-Deals, Q-Deals and MF REMICs (P- and RR- series)
“Freddie Mac Multifamily continued its bond issuance throughout a volatile 2020 sending a clear signal about our commitment to the K-Deal platform,” said Debby Jenkins, executive vice president and head of Freddie Mac Multifamily. “We also reinforced our efforts to support affordability, sustainability and environmental stewardship by expanding our impact bond offerings with the creation of sustainability and social bonds. Looking ahead, we will continue working to provide stability and liquidity to the multifamily market with solutions that help lower capital cost for borrowers and make rental housing more affordable while transferring risk to private investors through innovative securities.”
In 2020, Freddie Mac expanded its commitment to affordable, quality rental housing with additions to its Impact Bond series. These offerings help expand access to housing and confront persistent housing challenges through targeted bonds supporting environmental, social and sustainability goals.
Freddie Mac also ramped up its Multi PC issuance with a record $6 billion in executed volume, demonstrating their increasingly important role in Freddie Mac Multifamily offerings. PCs are based on a single-tier pass-through structure, are fully guaranteed and typically securitize a single mortgage. Freddie Mac often leverages its Multifamily Credit Insurance Pool offering, which uses reinsurance contracts, to cover a portion of any credit losses on mortgages securitized through Multi PCs.
“Freddie Mac had another record-setting year and continued to set the pace for the industry when it comes to securitization. Not only did we bring a record volume to market, but we also did so while reaching record-tight spreads throughout much of the year,” said Robert Koontz, senior vice president of Multifamily Capital Markets. “Our credit risk transfer platform remained strong in the face of market volatility brought on by the pandemic and we are proud of our staff and our partnerships with our investor base, who have adapted and elevated Freddie Mac as we together navigated an ever-changing environment.”
In 2020, 450 different investors participated in Freddie Mac’s K- and SB-Deal programs, including 329 in the K-Deal® program and 198 in the SB-Deal® program. An average of nearly 47 investors participated in each K- and SB-Deal. Since the inception of the modern K-Deal in 2009, the company securitized a total of approximately $483 billion across all offerings, including $417.4 billion in K-Deals and $29.9 billion in SB-Deals. Since 2009, 1,059 different investors have participated in Freddie Mac’s K- and SB-Deal programs, including 830 in the K-Deal program and 488 in the SB-Deal program.
Freddie Mac Multifamily is the nation’s multifamily housing finance leader. Historically, more than 90% of the eligible rental units we fund are affordable to families with low-to-moderate incomes earning up to 120% of area median income. Freddie Mac securitizes about 90% of the multifamily loans it purchases, thus transferring the majority of the expected credit risk from taxpayers to private investors.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
MEDIA CONTACT: Mike Morosi