WAYS TO INVEST WITH CRTCRT Offerings

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 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 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 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.