OVERVIEW Freddie Mac Securities

Freddie Mac introduced credit risk transfer by establishing innovative offerings for capital markets investors, providing them investment opportunities to gain exposure to the U.S. residential housing market. Freddie Mac structures credit risk into securities that are sold to investors such as money managers, hedge funds, REITs and insurance companies.

STACR® STACR® TRUST * STACR SPI℠
ISSUANCE TYPE Debt Notes Trust Notes Cash Securitization/REMIC
PRIMARY INVESTOR BASE Money Managers, Hedge Funds, REITs, Sovereign Funds & Insurance Companies
OFFERINGS (Multi Class), Investment Grade, Non-Investment Grade, Not Rated
STACR®
Issuance Type
Primary Investor Base
Offerings

*STACR SPI is issued as a replacement to Whole Loan Securities (WLS).

OFFERINGS All Freddie Mac Securities

STACR® (Structured Agency Credit Risk)

STACR debt notes are unsecured and non-guaranteed bonds issued by Freddie Mac.  Principal payments are determined by the delinquency and principal payment performance on the associated STACR reference pool consisting of recently acquired single-family mortgages from a specified period. Freddie Mac transfers credit risk from the mortgages in the reference pool to credit investors who invest in the STACR debt notes.

Freddie Mac makes periodic payments of principal and interest on the notes, and Freddie Mac benefits from the credit risk transfer through a reduction in note balances for defined credit events on the reference pool. Depending on the type of STACR issuance, reductions of the note balances may be based on a fixed severity (DN or HQ STACR offerings) or an actual loss (DNA or HQA STACR offerings) approach.

STACR® Trust

STACR Trust offers unsecured and non-guaranteed bonds issued by a third-party trust whose principal payments are determined by the delinquency and principal payment performance on the associated STACR reference pool consisting of recently acquired single-family mortgages from a specified period. Freddie Mac transfers credit risk from the mortgages in the reference pool to credit investors who invest in the STACR trust issued notes.

The trust makes periodic payments of principal and interest on the notes to investors, and Freddie Mac benefits from the credit risk transfer through a reduction in note balances for defined credit events on the reference pool. STACR Trust reductions of the note are based on an actual loss calculation.

STACR SPISM (Securitized Participation Interests)

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 PCs backed by the PC Participation Interests, and issues SPI securities initially backed by Credit Participation Interests. 

Prinicipal 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 where upon 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.

WLS (Whole Loan Securities)

WLS securitizations comprise features of both traditional private label securities and Freddie Mac guaranteed securities. WLS issues guaranteed senior and non-guaranteed subordinated certificates. Note: STACR SPI is the current fully-collateralized cash CRT securitization issued. The last WLS deal was completed in July 2017.

OVERVIEW Freddie Mac (Re)insurance Contracts

Freddie Mac programmatically issues insurance/reinsurance transactions to transfer credit risk associated with a portion of its credit exposure to the residential mortgage market. These insurance-based risk sharing vehicles represent a source of private capital that will shoulder part of the credit risk associated with certain Freddie Mac loans.

Freddie Mac has variety of insurance-based Credit Risk Transfer offerings including ACIS, ARMR, IMAGIN and AFRM.

ACIS® ARMRSM AFRMSM IMAGINSM
ISSUANCE TYPE (Re)insurance Policy
PRIMARY INVESTOR BASE (Re)insurance
OFFERINGS (Multi Class)
(Re)Insurance Policy
(Multi Class)
Forward
(Re)insurance Policy
Forward Loan-Level MI Coverage
ACIS®
Issuance Type
Primary Investor Base
Offerings

OFFERINGS All (Re)insurance Contracts

ACIS® (Agency Credit Insurance Structure)

Agency Credit Insurance Structure (ACIS®) is Freddie Mac’s insurance-based credit risk sharing vehicle. ACIS transactions are insurance policies issued by or ceded to global (re)insurance companies to cover a portion of credit risk on the STACR or standalone reference pools. These transactions provide an innovative opportunity for global (re)insurance companies to invest in the credit performance of Freddie Mac’s quality single-family mortgage loans. Unlike other (re)insurance policies, ACIS offer a multi-tranche structure that accommodates (re)insurers with different risk appetites. Freddie Mac pays monthly premiums to (re)insurers, based on their tranche participation, in exchange for claim coverage on their portion of the reference pool.

AFRM (ACIS Forward Risk Mitigation)

AFRM is the latest evolution of the ACIS suite of products. AFRM gives global (re)insurance companies the opportunity to take on credit risk associated with a reference pool of single-family mortgage loans on a forward basis.

ARMR (ACIS HARP Managed Risk)

ARMR is a limited-time offering to global (re)insurance companies that transfers credit risk on loans that were refinanced through Freddie Mac's Relief Refinance Program and Home Affordable Refinance Program (HARP) and is offered alongside STACR investors. 

IMAGIN (Integrated Mortgage Insurance)

Freddie Mac supports low-down payment lending through its exclusive negotiated offering, IMAGIN. IMAGIN is an alternative form of front-end mortgage insurance in which Freddie Mac obtains the mortgage insurance coverage simultaneously with loan delivery. IMAGIN is an additional option beyond traditional Borrower-Paid MI (BPMI) and Lender-Paid MI (LPMI).

Deep MI (Mortgage Insurance)

Deep MI CRT provides an opportunity for mortgage insurers and their affiliates to participate in credit risk transfer with Freddie Mac. This insurance offering allows mortgage insurers to cover additional risk on single-family mortgage loans beyond traditional mortgage insurance.

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credit_securities@freddiemac.com(866) 903-2767