Freddie Mac

McLEAN, VA—Freddie Mac looked on with an unusual amount of pride as it closed the books on its latest $1.2 billion K-Deal: it has securitized more than $80 billion in multifamily mortgages through this program since its inception in 2009. “This is definitely a milestone for us,” Mitchell Resnick, vice president of Freddie Mac Multifamily Capital Markets, tells

The deal is telling in other regards as well. The offering was backed exclusively by LIBOR-based, floating rate multifamily mortgages with five- and seven-year terms. The GSE, in short, is doing more of these. “Borrowers seem to be more and more interested in taking out floating rate loans,” Resnick says. “I could easily see us doing another floating rate transaction this year.”

The pass-through K-deal was notable in another respect—it is becoming clear that there is less multifamily product to securitize. This is not an issue with Freddie Mac, but rather, Resnick says, a function of the amount of origination happening in the multifamily universe. “It is definitely lower this year,” he says.

The reasons are unclear – possibly it could be due to pent up demand for bonds in some cases – but Resnick and others in the industry feel originations will start to pick up as the year goes on. “Loans made seven years ago will start maturing and the borrowers will be looking for refinancing,” he says.

Another trend important to the GSE is its inclusion in the Barclays index, which is bringing in more buyers or investors than ever before. The universe of Freddie Mac K-deal investors has expanded as a direct result of that, Resnick says.