Freddie Mac Multifamily is known in the industry for outstanding credit quality. What does it take to deliver on that promise?
It Takes a Sound Credit Philosophy
We strictly adhere to a core set of credit principles when deciding whether to buy mortgages. And, importantly, we follow a prior-approval model. This means that we underwrite each multifamily mortgage loan in-house before agreeing to buy it; we do not delegate our due diligence or credit analysis. Because each transaction is unique, we craft each mortgage loan to fit the borrower, the property, and the market, while managing credit risk appropriately.
Our discipline gives us, our customers, and investors confidence in the quality of the loans we buy.
It Takes a Top-notch In-house Team
Our in-house team has the business and industry expertise, local-market understanding, flexibility, and creativity needed to address the complexities of designing mortgage solutions for multifamily rental properties.
It Takes Trusting Relationships
We buy loans through select national seller/servicers with local presence who have years of multifamily lending expertise and proven track records of success. We collaborate with them and well-qualified borrowers (property owners and developers) to identify and craft funding solutions that achieve positive, meaningful results.
It Takes an Industry-leading Servicing Standard
After we buy a loan, we closely monitor how it’s managed. Based on our years of experience and input from our customers, we set a servicing standard that is consistent across every loan we buy, regardless of whether it’s securitized or held in our portfolio – a unique approach in the industry. This allows us to build a shared credit philosophy and consistent processes across all loans purchased, to create a positive experience for our seller/servicers and borrowers, and to deliver solid business performance.
It Takes an Innovative Risk Transfer Model
More than 90 percent of the loans we buy are securitized in a way that shifts nearly all of our risk to private investors. Investors’ interest in buying our securities, in effect, is the market’s way of grading the strength of our business. Our securities are consistently well-received in the marketplace, and we’ve experienced zero losses on our guarantee on our securities to date.
It Takes Commitment to the Nation’s Renters
Every day, we commit ourselves to making home possible to renters nationwide, while minimizing credit risk to taxpayers. Through our dedication to building quality into every part of our business and to setting and maintaining high standards, we’re building a better multifamily housing finance system.