Freddie Mac has priced its sixth guaranteed multifamily small balance loan securitization of 2016.
In the securitization, Freddie Mac expects to guarantee roughly $315 million in Multifamily SB Certificates. The securitization is backed by small-balance loans underwritten by Freddie Mac and issued by a third-party trust.
Freddie Mac will guarantee six senior principal and interest classes and an interest-only class of securities issued by the FRESB 2016-SB16 Mortgage Trust. The company is also serving as a mortgage loan seller and master servicer to the trust. The trust itself will issue additional certificates that will not be guaranteed by Freddie Mac to sell to private investors.
Four classes of the securities will carry coupons ranging from 1.83% to 2.43% and yields ranging from 1.6786% to 2.3459%.
JPMorgan Securities is the sole lead manager and book runner. D.A. Davidson & Co., Duncan-Williams Inc., Stifel, Nicolaus & Co. and Wells Fargo Securities are co-managers. The 154 mortgages involved were originated by CBRE Capital Markets, The Community Preservation Corp., Greystone Servicing Corp. and RED Mortgage Capital.
The Small Balance Loan origination initiative dates back to October 2014. It was designed to serve less populated markets and provide liquidity to smaller apartment properties. The loans involved typically range from $1 million to $5 million with the backing of five or more units.