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In SB Certificates℠, Freddie Mac guarantees senior classes of securities issued by third-party trusts and backed by Multifamily Small Balance Loans (SBLs). SBLs generally range from $1 million-$6 million and have five or more units. SBLs are underwritten by Freddie Mac at the time of origination for sale to Freddie Mac by a specialty network of Lenders or SBL Lenders. Freddie Mac may also purchase for securitization seasoned SBL loan pools in whole loan sales. Unlike K Certificates® and other Multifamily securities, Freddie Mac generally does not issue structured passthrough securities in SB-Deals®. The third-party trust issues the senior classes of securities guaranteed by Freddie Mac as well as unguaranteed subordinate securities.

General Structure

SB Certificates are generally structured as follows:

  • Freddie Mac purchases and aggregates SBL loans, by a Seller or groups of Sellers, for securitization.
  • Freddie Mac sells the SBL loans to a third-party depositor who deposits the loans into a third-party trust.
  • The third-party trust issues private-label securities backed by the SBL loans.
  • Freddie Mac guarantees the senior securities issued by the third-party trust, which are then publicly offered. In some cases, a third party may act as loan seller and Freddie Mac may issue structured pass-through securities.
  • The unguaranteed securities issued by the third-party trust are privately offered to third-party investors. 
  • The private-label securities are not expected to be rated.



  • Strong credit provided by the Freddie Mac guarantee plus the additional credit support of an underlying Multifamily SBL loan pool underwritten to Freddie Mac's portfolio standards.
  • Diversification through pooled risk of many assets versus single asset risk.
  • Transparency on collateral and deal information through the offering documents.
  • Guarantee of timely payment of interest and ultimate payment of principal on the private-label securities guaranteed by Freddie Mac.
  • Strength of a Freddie Mac credit review based on decades of strong credit management and underwriting experience.