Freddie Mac on Thursday priced its first transaction to result from its pilot in the single-family rental market.
In the deal, FRESR 2017-SR01, Freddie Mac guaranteed approximately 80% or $161 million of the certificates CoreVest issued in a $202 million securitization called CAFL 2017-2.
“Single-family rentals provide an important alternative for the millions of families looking for options beyond rental apartments who may not have the means to — or choose not to — purchase a home,” said David Leopold, vice president of targeted affordable sales and investments in Freddie Mac’s multifamily division, in a press release.
“We are using our multifamily financing capability to help meet this critical need and ensure that as families grow, their homes can grow with them,” he said.
There are 2,355 properties involved in the deal and 94% of these are affordable to families earning less than 100% of the area median income. Families earning less than 80% of the AMI can afford 71% of the properties. Families earning 50% or less of AMI can afford 12% of the properties.
The transaction’s $20.272 million Class A-1, which has a weighted average life of 3.06 years and 2.357% coupon, priced at a spread of 23 basis points above swaps to yield 2.3151% at a dollar price of $99.9981.
The $93.571 million Class A-2, which has a weighted average life of 4.62 years and a 2.75% coupon, priced at a spread of 33 basis points above swaps to yield 2.4919% and a dollar price of $100.998.
The $47.266 million Class A-3, which has a weighted average life of 9.36 years and a 2.75% coupon, priced at a spread of 64 basis points above swaps to yield 2.9601% at a dollar price of $100.9939.