David Brickman, senior vice president of the Freddie Mac’s multifamily business, recently provided a mid-year progress report detailing just how the company provides value for American taxpayers. The following are some of the highlights from the report, which came out in early September:

  • Multifamily earnings increased in the first half of 2012 to $942 million, almost as much as all of 2010.

  • Freddie financed rental housing for 193,000 families, most of which were affordable for families below local area median income.

  • Multifamily loan purchases for the first half of 2012 were at $12.4 billion, allowing borrowers to refinance at lower rates and fund new apartment construction.

But perhaps the most noteworthy takeaway in the report card is the increase in multifamily K-certificates being issued by the company. For the first half of 2012, Freddie Mac has settled $10 billion in mortgage-backed securities, an execution that transfers the risk to private investors, thereby protecting taxpayers. Since 2010, the company has settled K deals worth $30 billion. 
And the company is getting creative: Freddie Mac recently announced its first offering of K Certificates backed exclusively by floating rate multifamily mortgages.

The company also recently announced the launch of another new type of K Certificate: the K-P-certificate.

This new type of Structured Pass-Through Certificate is made up of loans already existing within its multifamily portfolio, as wrapped funds. The first of these K-P deals, backed by 28 seasoned mortgages, is a $450 million transaction set for October. And the firm will act as special servicer for the first time in the K series of offerings. These loans don’t rely on newly originated collateral, and provide Freddie with a credit risk it is quite comfortable with.

According to Mitch Resnick, vice president for Freddie Mac Multifamily, this new offering is just a supplemental transaction that the company is trying out and it is not anticipating doing high volumes of the certificate in the future.