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About CRT

Freddie Mac’s Single-Family Credit Risk Transfer (CRT) programs are designed to distribute a portion of Freddie Mac’s mortgage credit risk to third-party participants. The industry-leading and award-winning programs attract capital markets institutional investors and (re)insurance companies worldwide.

Get the CRT Handbook

The Case for CRT

Freddie Mac introduced the first GSE CRT program in 2013 in response to the 2008 financial crisis. CRT has not only evolved into a viable asset class for participants, it has become a part of Freddie Mac’s normal business activities, fulfilling the corporate objective to transfer credit risk exposure on loans that Freddie Mac owns or guarantees away from U.S. taxpayers. CRT has proven to be a successful component of the Freddie Mac risk management toolkit, including during times of economic stress.

Business Process

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Loan Origination

Lenders originate loans to borrowers according to Freddie Mac origination guidelines, and Freddie Mac purchases such loans.

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UMBS Securities

Loans purchased by Freddie Mac are grouped and sold to Uniform Mortgage Backed Securities (UMBS) investors, transferring interest rate risk away from Freddie Mac.

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CRT Eligibility

Loans backing the guaranteed securities (UMBS) are subject to additional CRT eligibility requirements and screened for underwriting defects and performance deficiencies before being included in a reference pool of a CRT transaction.

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Transaction Issuance

Transactions consist of classes of securities representing specific tranches of credit risk exposure. Freddie Mac maintains “skin in the game” by retaining at least 5% of each tranche, thus aligning the interests of Freddie Mac and participants with respect to reference pool performance.

The Three Spokes of CRT

Freddie Mac CRT comprises three distinct spokes of risk sharing.

Securities

Freddie Mac’s primary single-family securities-based credit risk sharing vehicle transfers credit risk to private capital through the issuance of unguaranteed notes using a third-party trust.

(Re)insurance

Freddie Mac’s primary insurance-based credit risk sharing vehicle uses insurance policies with global (re)insurance companies to cover a portion of credit risk on specific reference pools.

Mortgage Insurance

Freddie Mac’s most commonly used form of credit enhancement provides coverage on low-down-payment loans and reduces loss exposure for lenders and investors in the event of mortgage loan defaults.

Freddie Mac CRT Program Evolution

Freddie Mac’s flagship STACR® (Structured Agency Credit Risk) and ACIS® (Agency Credit Insurance Structure®) programs have evolved significantly through their eight-year history. View the milestones.

Credit Risk Management Framework

While CRT is a core component of Freddie Mac credit risk management, CRT participants also benefit from the disciplined framework.

Single-Family Seller/Servicer Guide

Loans eligible for purchase by Freddie Mac must meet the origination and underwriting standards of the Single-Family Seller/Servicer Guide. Underwriting standards set forth, among other things, loan eligibility, documentation requirements and seller representations and warranties.

Loan Product Advisor®

Freddie Mac Loan Advisor® is a set of integrated software applications and services designed to give lenders access to Freddie Mac’s view of risk, loan quality and eligibility during the origination process. As a key component of Loan Advisor, Loan Product Advisor takes advantage of proprietary data models and intelligent automation to help validate that loans meet Freddie Mac underwriting standards.

Seller/Servicer Resources

Loans purchased by Freddie Mac are subject to a strict quality control (QC) process. Robust seller/servicer management, including access to reference guides, tools and technology, is an essential component of QC.

Quality Control Advisor®

Quality Control Advisor, a product in Freddie Mac's Loan Advisor® toolkit, is an end-to-end solution for managing the post-funding quality control and remedy process.

Servicing Solutions

Freddie Mac continuously collaborates with servicers to deliver the best results for borrowers. When borrowers remain responsible, sustainable homeowners, investors benefit.

SHARP

Freddie Mac's Servicer Honors and Rewards Program (SHARP)℠ enables eligible Servicers to receive monetary rewards and public recognition based on their Servicer Success Scorecard. The SHARP awards represent quality servicing, risk management and sustainable homeownership at it its best.

Additional Resources

CRT Handbook

The goal of the CRT handbook is to familiarize the private sector with Freddie Mac’s complementary capital markets and (re)insurance CRT executions, STACR® and ACIS®, as well Freddie Mac’s credit risk management framework.

PMI Handbook

The purpose of the PMI handbook is to illustrate how Freddie Mac’s relationship with approved mortgage insurers enables the purchase of mortgages with loan-to-value (LTV) ratios greater than 80% while reducing loss exposure.

Clarity Data Intelligence®

Freddie Mac is committed to data transparency. Clarity offers numerous ways to organize, analyze and download origination and performance data for Freddie Mac’s CRT offerings, as well as the Single-Family Historical Dataset.

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