The Federal Housing Finance Agency (FHFA) today issued its semi-annual Credit Risk Transfer Progress Report describing the status and volume of credit risk transfer (CRT) transactions through the second quarter of 2019. The Report provides a comprehensive picture of how Fannie Mae and Freddie Mac (the Enterprises) transfer a substantial portion of credit risk to the private sector through a variety of transactions in both the single-family and multifamily markets.
Through the first half of 2019, Fannie Mae and Freddie Mac transferred 84 percent and 89 percent, respectively, of the allocated credit risk capital on 2018 acquisitions covered by credit risk transfer. Of the total single-family loan acquisitions of the Enterprises in 2018, 73 percent were targeted for credit risk transfer.
Since the start of the CRT programs in 2013 through the end of June 2018, the Enterprises have transferred a portion of credit risk on approximately $3.1 trillion of unpaid principal balance (UPB) with a combined Risk in Force (RIF) of about $102 billion, or 3.3 percent of UPB.
The Progress Report shows that, in the first half of 2019:
- The Enterprises transferred risk on approximately $281 billon of UPB with a total RIF of $10 billion. Securities issuances, like Structured Agency Credit Risk (STACR) and Connecticut Avenue Securities (CAS), accounted for 56 percent of RIF.
- Fannie Mae transferred risk on $154 billion of UPB, with a total RIF of $5.6 billion.
- Freddie Mac transferred risk on $127 billion of UPB with a total RIF of $4.9 billion.
Progress Report (Link to 2019 Q2 report)