Freddie Mac recently announced that its Credit Risk Transfer (CRT) program expects note issuance volume of at least $25 billion in 2022. The government-sponsored enterprise (GSE) has made its first installment on this projection by issuing two single-family CRT ticket offerings totaling $3.3 billion so far this year, which are backed by benchmark loan pools valued at $78.6 billion.

Both CRT offerings were issued under Freddie’s Structured Agency Credit Risk (STACR) program. The initial deal closed on Jan. 29 and the second offering is expected to close on Feb. 11, according to the Kroll Bond Rating Agency’s pre-sale reviews of STACR securitizations.

STACR 2022-DNA1 involves a $1.4 billion note issued against a benchmark loan pool of 190,774 residential mortgages with an outstanding principal balance of $33.6 billion. In the second offering, STACR 2022-DNA2, Freddie issues a $1.9 billion note against a benchmark pool of 143,889 single-family mortgages valued at around $45 billion.

Through Freddie Mac’s STACR CRT transactions, private investors participate with the agency in sharing some of the mortgage credit risk in the pools of benchmark loans retained by the GSE. Investors receive principal and interest payments on the STACR notes they purchase, but if credit losses exceed a threshold predefined by the issued security, investors are responsible for absorb losses exceeding this mark.

The main originators of the loan pool in the first STACR offering of 2022, according to the KBRA report, were United Wholesale Mortgage (UWM), 7%; Newrez LLCseven%; rocket mortgage6.6%; Pennymac6.3%; JPMorgan Chase, 5.9%; and “others”, 67.2%

UWM was also the main originator of the second STACR deal of 2022, at 9.1% of the loan pool. Rocket Mortgage also performed well at 8.3%, followed by Wells Fargo6.1%; JPMorgan Chase5.9%; newrez, 5%; and others, 65.7%

Freddie Mac’s CRT program was founded with the issuance of the first STACR ratings in July 2013. Freddie’s other single-family CRT program, the Agency Credit Insurance Structure (ACIS) program, shares risk with reinsurance companies. It was introduced in November 2013.

“Freddie Mac’s Single Family credit risk transfer programs transfer credit risk from U.S. taxpayers to global private capital via securities and reinsurance policies, providing stability, liquidity and affordability to the U.S. housing market,” Freddie Mac said in a Press release.

Freddie Mac issued more than $18 billion worth of CRT notes in 10 STACR and 11 ACIS deals in 2021, according to the agency.

Freddie’s counterpart, Fannie Maeplans to issue about $15 billion in notes through Connecticut Avenue Securities’ real estate mortgage investment conduit in 2022, according to Devang Doshi, senior vice president of single-family capital markets at Fannie.