STACR SPI is a fully collateralized issuance of non-guaranteed certificates. Using participation interests created for recently originated mortgage loans acquired by Freddie Mac through its cash window, Freddie Mac issues participation certificates (PCs) backed by the PC participation interests, and issues SPI securities initially backed by credit participation interests.
Principal and interest is paid monthly to the PCs and SPI securities based on payments made by or advanced on behalf of the borrowers. The SPI program includes a constructive default mechanism whereupon removal of a participation interest from a PC, the SPI trust receives the related PC participation interest. Thereafter, 100% of the related loan's activity is allocated to the SPI trust, including both principal and interest payments and any losses. The offered SPI securities are REMIC regular interests.