Freddie Mac MSCR notes affirmation reflects stable multifamily credit performance

Traders Union
All News
Financial Institutions
Freddie Mac MSCR affirmation

Highlights

Fitch Ratings affirmed two classes of Freddie Mac MSCR 2025-MN12 notes with Stable Outlooks, citing no material transaction changes since issuance.
At issuance, the MSCR 2025-MN12 reference pool comprised 890 obligations totaling $20.9 billion from various Freddie Mac multifamily loan programs.
As of August 2025, the delinquency rate for the MSCR series stood at 0.1%, reflecting highly diversified loan concentration and low historical GSE multifamily losses.

Transaction structure and rating rationale

As reported by Fitch Ratings, the agency has affirmed two classes of Freddie Mac Multifamily Structured Credit Risk, or MSCR, notes from series 2025-MN12, with a Stable Rating Outlook on both classes.

MSCR 2025-MN12 functions as a credit risk transfer mechanism that shifts the credit risk of a reference pool of loans held and/or guaranteed by Freddie Mac to note investors. At issuance, the reference pool included 890 obligations totaling $20.9 billion, with loans originated through Freddie Mac's Multi PC, K Series, Targeted Affordable Housing Bond Credit Enhancement, and small balance loan programs.

The notes' proceeds are used by the trust to buy eligible investments under the transaction documents. On each payment date, earnings from those investments are used to pay interest due, while Freddie Mac provides additional funds if those earnings are not sufficient to cover required amounts.

Portfolio performance and market implications

The transaction is designed to mirror traditional CMBS cash flows for investors, with noteholders receiving interest based on each note's rate and outstanding notional balance. That balance can be reduced by losses to the trust from liquidations or modifications, while principal paydowns are linked to corresponding principal payments from the reference pool.

Fitch said the affirmations and Stable Outlooks reflect performance that remains in line with issuance expectations and no material transaction changes since issuance. The agency said its net cash flow at issuance was $1.7 billion, while full-year financials have not yet been reported because the transaction closed in November 2025.

Fitch also noted that historical losses under GSE multifamily programs are much lower than losses seen in conduit transactions. The agency said this was the 12th issuance in Freddie Mac's MSCR series, and that as of August 2025 the delinquency rate for the series was 0.1%, with loan concentration across the pool remaining highly diversified relative to the average Fitch-rated 10-year Freddie Mac transaction.

Earlier, we reported that Hainan Rubber planned refinancing via proposed subordinated perpetual sustainable securities issued by Halcyon Agri with coupon deferral.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.