Freddie Mac Adds Multifamily ARM’s

for rent signAdjustable rate mortgages are now eligible for securitization into K Certificates, Freddie Mac multifamily mortgage-backed securities.

The Freddie Mac multifamily mortgage-backed securities — K Certificates, are backed by selected loans purchased through CME.  CME is the multifamily mortgage loan execution path.

Through CME, Freddie Mac buys mortgages secured by multifamily properties from its lender network. Freddie Mac typically will pool the loans, securitize them through a broker/dealer and offer securities to the market.

CME offers greater certainty of execution and lower risk-based pricing compared to loans the company holds in its portfolio. Freddie Mac has a growing pipeline of CME loans, which comprised more than 70 percent of its multifamily funding volume in the last 15 months.

According to David Brickman, senior vice president of Multifamily for Freddie Mac, “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.”

Brickman notes that since Freddie Mac began offering K Certificates backed by CME loans, it has opened up the capital markets to commercial mortgage backed securities issuances through 13 offerings totaling more than $14 billion.”

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.

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