Source: Freddie Mac / #Multifamily #Finance
MCLEAN, VA - Freddie Mac announced that it will guarantee its second series of SB Certificates, which are backed by multifamily small balance loans underwritten by Freddie Mac and issued by a third-party trust. The company expects to guarantee approximately $109 million in SB Certificates (SB2 Certificates), which are anticipated to price the week of August 24, 2015, and settle on or about August 28, 2015.
For the SB2 Certificates, Wells Fargo Securities, LLC will operate as sole lead manager and bookrunner. Arbor Commercial Mortgage, LLC, originated the 42 small balance multifamily mortgages that are underwritten by Freddie Mac and that back the SB2 Certificates.
Freddie Mac is guaranteeing four classes of senior securities issued by a third party trust, the FRESB 2015-SB2 Mortgage Trust, and is acting as mortgage loan seller and master servicer. In addition to the three senior principal and interest classes and the senior interest only class guaranteed by Freddie Mac, the trust will also issue certificates consisting of the Class B, X2 and R Certificates, which will not be guaranteed by Freddie Mac and will be sold to private investors. The SB2 preliminary offering circular is available here.
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. Loans in the program generally range from $1 million to $5 million and have five or more units. Freddie Mac has a specialty network of Seller/Servicers and SBL lenders with extensive experience in this market who source loans across the country. Freddie Mac purchases and aggregates loans by seller and will then securitize each seller's deals when pool sizes are approximately $100 million to $125 million.