OVERVIEW Product Summary

ACIS HARP Managed Risk (ARMR) gives (re)insurers the opportunity to gain exposure to legacy credit risk from Freddie Mac. ARMR is a limited-time insurance offering that transfers credit risk on loans refinanced through the Home Affordable Refinance Program (HARP), using the infrastructure of the existing ACIS offering alongside STACR investors. Mortgage loans included in ARMR reference pools have a clean pay history when they are pooled. ARMR incorporates most of the structural characteristics of ACIS including: multi-tranche offering; principal and loss event waterfalls; partial collateralization; and call option.

Characteristics

  • Reference pool is comprised of mortgage loans refinanced through Home Affordable Refinance Program (HARP)
  • (Re)insurers are only required to partially collateralize their limit, driven by external ratings
  • Longer maturity than on-the-run ACIS transactions, typically the life of the loan
  • Reference pool is shared with STACR
  • Mortgage loans have clean pay over last 6 months, no more than one D30 in the prior 12 months
  • Cashflows and structure mimic on-the-run STACR and ACIS transactions
  • Multi-tranche structure allows (re)insurers to determine their risk appetite
  • Co-participation alongside global capital markets investors and Freddie Mac

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Find out how Credit Risk Transfer creates investor opportunities while strengthening the U.S. mortgage market.

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credit_securities@freddiemac.com(866) 903-2767