MCLEAN, VA-Freddie Mac is planning to ramp up its K-Certificate program to a monthly schedule. When all is said and done by year’s end Freddie expects to have brought to market $15 billion through this program, David Brickman, vice president of multifamily CMBS capital markets for Freddie Mac, tells GlobeSt.com. 

Freddie Mac launched this program in 2009 with an eye to adding more liquidity to the multifamily sector. Backed by multifamily mortgage loans originated through Freddie Mac’s Capital Markets Execution program--meaning they were purchased from mortgage sellers with the intent to securitize them instead of keeping them on Freddie’s books--the K-Certificates are offered by a network of dealers. Freddie Mac did six deals in 2010 for a total of $6 billion, Brickman says, after its first two in 2009. Total collateral in each deal is approximately $1.2 billion. 

In the 18 months it has been in operation, the program has been well received by the capital markets, Brickman says. “The bonds continue to be sought after and their performance relative to natural benchmarks has been strong. They represent an extremely high-grade, high-credit, quality stable investment and are a good addition to the fixed income space.” 

Freddie Mac expects to price the first K-Certificate for 2011 this week and settle it on or about February 10. They’ll be offered to the market by a network of dealers led by J.P. Morgan Securities and Wells Fargo Securities as co-lead managers and joint book runners. The certificates are backed by 76 recently originated multifamily mortgages by Freddie Mac.

Freddie is also ramping up its mezzanine-funding program that it launched last year. Although it is a separate program from the K-Certificates, both are significant to the investor community, Brickman says. “They are both vehicles to help us deliver liquidity to the mortgage markets.”