Freddie Launches Multifamily MBS

Freddie Mac (FRE) says it’s responding to difficult conditions in the multifamily housing market by finding ways to link affordable rental housing to capital markets. The agency’s latest tactic, launched today, involves its offering of Series K-003 Structured Pass-Through Certificates (K Certificates). These multifamily mortgage-backed securities aim to provide a new vehicle for Freddie Mac to provide liquidity, stability and affordability in the multifamily market, the agency said. The certificates — which are backed by about $1bn in multifamily mortgage loans, originated through Freddie Mac’s Capital Markets Execution program — will be offered to the market by a network of dealers led by Deutsche Bank Securities. “K Certificates offer a simple and transparent structure for investors,” says David Brickman, vice president of Multifamily and CMBS Capital Markets. The securities offer investors credit protection in the form of both Freddie Mac’s guarantee and principal subordination, and they are structured to provide stable, reliable cash flows due to the large, diversified pool of call-protected multifamily mortgages underlying the certificates, according to a press statement. Write to Kelly Curran.