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Multifamily REMICs

Multifamily Real Estate Mortgage Investment Conduits (REMICs) are flexible tools that support the liquidity of our structured pass-through certificates and participation certificates while offering dealers and investors an advantageous REMIC structuring option with a Freddie Mac guarantee. Through this program, we re-securitize eligible classes of existing guaranteed multifamily certificates (Re-REMIC collateral) and Multifamily PCs (PC REMIC collateral) and use flexible structuring features to issue new REMIC securities backed by these mortgage assets.

General Structure

Freddie Mac re-securitizes guaranteed multifamily certificates through the following steps:

  • First, an approved dealer notifies Freddie Mac of their intent to proceed and reserves a shelf number.
  • Then, the REMIC structure is finalized, including MACR classes, by the mid-month Structure Final Date.
  • Two to four business days prior to settlement, the REMIC offering documents are printed.
  • Two business days prior to settlement, the dealer delivers the certificates serving as REMIC collateral to Freddie Mac.
  • Finally, the REMIC bonds are settled between the payment date on the REMIC collateral and their month-end Record Date, and Freddie Mac delivers the new REMIC certificates to the dealer.

Structuring Features

  • Groups: By employing grouping and group-directed classes, the collateral can be segregated into groups, and multiple groups’ cash flows can be restructured within the same transaction.
  • Coupon Stripping: Allows existing mortgage assets that are trading at a premium to be separated into one or more par principal and interest class and one or more interest-only classes.
  • Time Tranching: Allows existing mortgage assets to be combined and their aggregated cash flows restructured for optimal execution.
  • MACR Classes: In a Series with Modifiable and Combinable REMIC Certificates (MACR Classes), the holders of specified REMIC classes can exchange all or part of those classes for proportionate interests in related MACR Classes and vice versa. The MACR Classes receive payments from their related REMIC classes.

remics-Chart

Series

Multifamily REMIC Certificates feature guaranteed mortgage assets as collateral:

  • RR-000 Series for K-Deal® and Q-Deal collateral
  • P-000 Series for Multi PC collateral

Benefits

  • Advantageous REMIC structuring options
  • Freddie Mac guaranteed REMIC bond issuance
  • REMIC/MACR Certificates are eligible mortgage assets for future Re-REMICs
  • Efficient deal process and pricing
  • Supports liquidity of underlying mortgage assets
  • Transparency on collateral and deal information through the offering documents and those related to the REMIC collateral