LEGAL NOTICE

The information on this webpage is intended to support prospective investors in Multifamily Structured Credit Risk (MSCR®) securities who are (1) regulated in the European Union and are “institutional investors” (“EU institutional investors”) under Regulation (EU) 2017/2402 (as amended, the “EU Securitisation Regulation”) or (2) regulated in the UK and are “institutional investors” (“UK institutional investors,” and together with EU institutional investors, “institutional investors”) under the securitisation sourcebook of the handbook published by the UK’s Financial Conduct Authority, the securitisation part of the rulebook published by the Prudential Regulation Authority of the Bank of England or Securitisation Regulations 2024 (SI 2024/102) (together, the “UK Securitisation Framework,” and together with the EU Securitisation Regulation, the “Securitisation Regulations”).

An institutional investor is required to independently assess and determine whether the information provided by Freddie Mac is sufficient to satisfy the due diligence obligations under the Securitisation Regulations (“Due Diligence Obligations”) or any other legal, regulatory or other requirements. An institutional investor should consult with its own legal and regulatory advisors for assistance in making such assessment and determination. Freddie Mac makes no representation or warranty concerning the accuracy or completeness of the information set forth or referenced herein or that such information and/or any information provided in respect of such MSCR securities is sufficient to permit an institutional investor to comply with the Due Diligence Obligations.

Furthermore, the Securitisation Regulations or the interpretation or application thereof may change in the future, and such change may affect the regulatory position of institutional investors in relation to MSCR securities. Institutional investors should continue to evaluate any such changes, if applicable, and determine any future course of action, if necessary.

Verification regarding Credit Granting

Freddie Mac does not originate or make mortgage loans directly to borrowers. It purchases loans in the secondary market and securitizes those loans into mortgage-backed securities. Freddie Mac determines and applies various requirements and limitations in respect of the loans which it purchases.

Freddie Mac publishes comprehensive guidelines and resources for its sellers and servicers of loans which it purchases on topics such as loan products and quality management. Information regarding Freddie Mac’s underwriting and servicing requirements can be accessed through the Freddie Mac Multifamily Seller/Servicer Guide.

The reference obligations for an MSCR transaction are required to satisfy certain eligibility criteria. Information regarding Freddie Mac’s credit granting criteria, quality assurance processes and loan servicing standards for any specific MSCR transaction is set forth in the “General Mortgage Loan Purchase and Servicing” section in an appendix to the relevant Private Placement Memorandum or in the “Reference Obligations” section of the relevant Private Placement Memorandum. Such Private Placement Memorandum is available here.

An overview of the MSCR program and information regarding Freddie Mac’s credit risk management framework can be found in the MSCR Investor Presentation.

Verification of Risk Retention

For an MSCR transaction, Freddie Mac commits, in a securitization regulation agreement entered into for such transaction, to retain, on an ongoing basis for so long as the securities of such MSCR transaction are outstanding, a material net economic interest in the form of 5% of every tranche of an MSCR transaction. At the closing of an MSCR transaction, Freddie Mac executes a securitization regulation agreement stating that it will hold on an on going basis at least 5% of every MSCR tranche. Please see the securitization regulation agreement available for the MSCR transaction here.

Verification of Information Disclosure

On October 10, 2022, the European Commission published a report on the functioning of the EU Securitisation Regulation (the “Commission Report”) in which, among other things, its assessment was that differentiating the scope of the information which is required for an EU institutional investor to satisfy Article 5(1)(e) depending on whether the securitization is issued by an entity established in the EU or an entity in a third country is not in line with the legislative intent of the EU Securitisation Regulation.

The information requirements under Article 7 of the EU Securitisation Regulation that apply in respect of an MSCR transaction were it issued by an entity established in the EU are set out at (1) to (5) below together with a summary of what is made available to prospective investors and investors in an MSCR transaction that goes towards satisfying such requirements. Certain of those information requirements are not applicable in respect of the MSCR transaction because no MSCR securities are listed on a regulated stock exchange or multilateral trading facility and because the MSCR transaction is not an STS securitisation (see further below).

The equivalent information requirements under the UK Securitisation Framework require that sufficient information is made available to enable the institutional investor independently to assess the risks of holding the securitisation position, and that there is a commitment to make such information available on an ongoing basis. Where none of the originator, sponsor and issuer are established in the UK, the UK Securitisation Framework provides that adequacy of information is based on sufficiency to enable independent assessment rather than prescribed templates.

(1) Information on the underlying exposures on a quarterly basis in accordance with technical standards specifying the information to be provided and the format thereof. Such technical standards set out forms of reporting templates to be used for providing such information, including a reporting template for commercial real estate exposures.

To support investors with this requirement, starting in May 2026 (reflecting information for the first reporting period), Freddie Mac will begin providing loan level data on the reference pool at the time of issuance as well as monthly for the MSCR 2026-MN13 transaction and future transactions in the form of the template set out in Annex III (Underlying Exposures Information – Commercial Real Estate) to Commission Delegated Regulation (EU) 2020/1224 for reporting asset-level information for loans for the purposes of acquiring commercial real estate or secured by commercial real estate. Please refer to the download instructions and field mapping and explanations to the reference pool disclosures available here: Excel or PDF.

Institutional investors should obtain their own legal and regulatory advice to ensure the information Freddie Mac and the Indenture Trustee provide is sufficient.

(2) All underlying documentation that is essential for the understanding of the transaction

For an MSCR transaction, the Preliminary Private Placement Memorandum is made available to prospective investors by the dealer syndicate prior to pricing.

In addition, with the intention of assisting institutional investors to comply with this requirement, there is set forth under “MSCR Legal Documentation”, historical MSCR transaction documents. Although Freddie Mac expects that terms will be similar in future MSCR deals, terms may vary in each transaction. Investors should review the relevant Preliminary Private Placement Memorandum, Final Private Placement Memorandum, and transaction-specific agreements for a specific MSCR transaction, in particular, because certain terms which are redacted in the transaction documents shall, for a specific MSCR transaction, have the meanings given to them in the Preliminary Private Placement Memorandum, Final Private Placement Memorandum, and transaction documents for such transaction. 

Following closing, the Final Private Placement Memorandum, securitization regulation agreement, term sheet, trust agreement, capital contribution agreement, collateral administration agreement, as applicable, are available here.

(3) A transaction summary or overview of the main features of the securitization, including certain specified details.

For an MSCR transaction, the Preliminary Private Placement Memorandum made available to prospective investors by the dealer syndicate prior to pricing, is intended to provide all information needed to fully understand the transaction and make a fully informed investment decision. This includes deal structure diagrams, information related to risks of the investment, roles performed by the transaction parties, credit enhancement, cash flows, loss waterfall, deal triggers, deal termination events, investor voting rights and descriptions of the underlying collateral. In addition, during marketing and prior to pricing, a Term Sheet is available for viewing through the respective transaction’s data site. Please contact your dealer for relevant access credentials.

General information about the program and deal structures can be found in our MSCR Investor Presentation.

(4) Quarterly investor reports containing: (i) all materially relevant data on the credit quality and performance of underlying exposures; (ii) information on events which trigger changes in the priority of payments or the replacement of any counterparties, and data on the cash flows generated by the underlying exposures and by the liabilities of the securitisation; and (iii) information about the risk retained.

To support investors with this requirement, starting in May 2026 (reflecting information for the first reporting period), Freddie Mac will begin providing the reporting for the MSCR 2026-MN13 transaction and future transactions in the form of the template set out in Annex XII (Investor Report Information — Non-Asset Backed Commercial Paper Securitisation) to Commission Delegated Regulation (EU) 2020/1224. Please refer to the download instructions and field mapping and explanations to the reference pool disclosures here: Excel or PDF. For additional information, please refer to the relevant monthly payment date statement on the Indenture Trustee’s website.

Institutional investors should obtain their own legal and regulatory advice to ensure the information Freddie Mac and the Indenture Trustee provide is sufficient.

(5) Any significant event such as: (i) a material breach of the obligations provided for in the transaction documents, including any remedy, waiver or consent subsequently provided in relation to such a breach; (ii) a change in the structural features that can materially impact the performance of the securitisation; (iii) a change in the risk characteristics of the securitisation or of the underlying exposures that can materially impact the performance of the securitisation; (iv) any material amendment to transaction documents.

As stated in the relevant Private Placement Memorandum, available here, Freddie Mac will provide notice about specific events such as material breaches and certain amendments to transaction documents, and events potentially impacting the performance of the securities will be communicated to investors. Freddie Mac provides such information in the relevant payment date statement and/or on the Trustee’s website.

Due Diligence Assessment

The risk factors associated with MSCR securities are disclosed in the “Risk Factors” section of the relevant Private Placement Memorandum for such MSCR securities, which is available here.

Information exhibiting the sensitivity of yields and other variables to different pre-payment simulations, credit events, or write-down amounts are disclosed in the “Prepayment and Yield Considerations” section of the Private Placement Memorandum for the relevant MSCR securities, which is available here.

The ongoing performance of MSCR reference pools can be accessed by downloading the loan level disclosures or via MSIA Data Download Site. Risk characteristics and stratifications of the underlying reference pools are available in advance of an MSCR issuance through transaction-specific presentations distributed to potential investors.

The detailed structure of an MSCR issuance, including deal characteristics such as payment priority, credit support and delinquency triggers, definition of loss, credit events and issuer support obligations is set forth in the “Description of the Notes” section of the relevant Private Placement Memorandum, available here.

Monitoring and Stress Testing

Freddie Mac provides loan level data on the reference pool at the time of issuance as well as monthly performance data which is available for download via MSIA. Relevant information includes, but is not limited to, credit characteristics (i.e., loan-to-value ratio, credit score, debt-to-income ratio, etc.) and performance data (current balances, delinquency status, modification status, credit event, etc.). Investors can also analyze this data through various dashboards in MSIA.

Freddie Mac does not provide analytical tools to directly perform stress testing on cash flows and collateral values; however, it makes transaction- and loan-level data publicly available so that vendors and other third-parties can provide analytics on the transactions. Certain information concerning the reference obligations may be available through the following services: BlackRock Financial Management, Inc., Bloomberg, L.P., Moody’s Analytics, Trepp, LLC, Intex Solutions, Inc., CMBS.com, CRED iQ, LSEG, DealX, KBRA Analytics, LLC and Yield Book, an LSEG business.** A number of brokers/dealers are able to assist investors with any analytical and modeling requirements. Many such broker/dealers also release periodic research on the performance of MSCR securities.

Information exhibiting the sensitivity of yields and other variables to different pre-payment simulations, credit events, or write-down amounts are presented in the “Prepayment and Yield Considerations” section of the Private Placement Memorandum for the relevant MSCR securities and can be found here.

Simple-Transparent-Standardized (STS)

A securitization is eligible for designation as an STS securitisation under the EU Securitisation Regulation only if each of the originator, sponsor and SSPE of such securitization is established in the European Union. A securitization is eligible for designation as an STS securitisation under the UK Securitisation Framework only if the originator and sponsor of such securitization is established in the United Kingdom. Freddie Mac and the SSPE for an MSCR transaction are established in the United States. Therefore, an MSCR securitization is not eligible for designation as an STS securitisation under the Securitisation Regulations.

Not Resecuritization

The underlying reference pool for an MSCR transaction does not include any reference obligations that are themselves securitization positions. Therefore, an MSCR transaction is not a resecuritization.

**PLEASE NOTE: References to third-parties, including vendors, are provided for information only; Freddie Mac does not specifically endorse any third-parties or their products/services. Freddie Mac is not responsible for the content or accuracy of external third-party websites.

i Under United States federal securities law and practice, the Preliminary Private Placement Memorandum, made available to prospective investors by the underwriting syndicate prior to pricing, is intended to provide all information needed to fully understand an MSCR transaction and assist investors in making a fully informed investment decision. This includes deal structure diagrams; information related to risks of the investment, roles performed by the transaction parties, credit enhancement, cash flows, loss waterfall, deal triggers, deal termination events, and investor voting rights; and descriptions of the underlying collateral. The Final Private Placement Memorandum, and the transaction-specific agreements, are made available shortly after a transaction prices. These documents are available through the Deal Documents page.

For UK Institutional Investors of MSCR transactions before 2026-MN13, please see additional resources here.