Freddie Mac (OTCQB: FMCC) announces the pricing of the SB36 offering, a multifamily mortgage-backed securitization backed by small balance loans underwritten by Freddie Mac and issued by a third-party trust. The company expects to guarantee approximately $315 million in Multifamily SB Certificates (SB36 Certificates), which are anticipated to settle on or about August 23, 2017. Freddie Mac Small Balance Loans generally range from $1 million to $6 million and are backed by properties with five or more units. This is the eleventh SB Certificate transaction in 2017.
- Sole lead manager and bookrunner: J.P. Morgan Securities LLC
- Co-managers: Drexel Hamilton, LLC, PNC Capital Markets LLC, Stifel, Nicolaus & Company, Incorporated, and Wells Fargo Securities, LLC
- 131 mortgages originated by Capital One Multifamily Finance, LLC, CBRE Capital Markets, Inc., Greystone Servicing Corporation, Inc., and RED Mortgage Capital, LLC.
- SB36 Certificates Offering Circular
- Small Balance Securitization Investor Presentation
Freddie Mac is guaranteeing six senior principal and interest classes and an interest only class of securities issued by the FRESB 2017-SB36 Mortgage Trust and is also acting as mortgage loan seller and master servicer to the trust. In addition to the seven classes of securities guaranteed by Freddie Mac, the trust will issue certificates consisting of Class B and R Certificates, which will not be guaranteed by Freddie Mac and will be sold to private investors.
The Small Balance Loan (SBL) origination initiative was first announced in October 2014, and expands the company's continuing effort to better serve less populated markets and provide additional liquidity to smaller apartment properties. Freddie Mac has a specialty network of Seller/Servicers and SBL lenders with extensive experience in this market who source loans across the country.