Adjustable rate mortgages for senior housing loans are now eligible for sale through Freddie Mac’s multifamily Capital Markets Execution (CME) securitization program.
Over the last two years, Freddie Mac has made student housing loans, seniors housing loans, conventional structured finance pools and Targeted Affordable Housing loans eligible for CME. The loans have become a growing part of the government sponsored entity’s (GSE) business, compromising more than 70% of its multifamily funding volume in the last 15 months.
Prior to the announcement, only fixed rate seniors housing product was eligible for the program.
“CME continues to expand liquidity in the multifamily capital marketplace by creating a reliable, competitively priced source of financing through our deep pool of capital providers. With our growing pipeline of CME loans, we’ve become a reliable and consistent issuer of K Certificates, multifamily mortgage-backed securities,” said David Brickman, senior vice president of Multifamily for Freddie Mac.
Freddie Mac senior housing product designed for the purchase or refinance of seniors housing, which includes senior apartments, independent living properties, assisted living properties, and properties with a limited amount of skilled nursing or dementia care.
The CME program was introduced in April 2008 for conventional mortgages, with the June 2009 settlement of the first securitization of K Certificates, multifamily mortgage-backed securities. In the first five months of 2011, Freddie Mac brought to market six K Certificate transactions with an issuance size of about $1 billion each.
“Since we began offering K Certificates backed by CME loans, we’ve opened up the capital markets to commercial mortgage backed securities issuances through 13 offerings totaling more than $14 billion,” said Brickman.
Since the launch of Freddie Mac’s multifamily business in 1993, it has provided more than $243 billion in financing for approximately 57,000 multifamily properties.