Fannie Mae Executes CIRT Transaction on $12.1 Billion of Single-Family Loans

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Fannie Mae transferred $284.8 million of mortgage credit risk to private insurers and reinsurers in a recent Credit Insurance Risk Transfer (CIRT) transaction, its fourth of the year.

”We appreciate the support of the 25 insurers and reinsurers that committed to write coverage on this deal,” says Rob Schaefer, vice president, capital markets, for Fannie Mae in a release.

The covered loan pool for the deal consists of approximately 34,000 single-family mortgage loans with an outstanding unpaid principal balance (UPB) of approximately $12.1 billion. 

Additionally, the covered pool collateral has loan-to-value (LTV) ratios of 80.01% to 97.00% and was acquired between May 2023 and September 2023.

The loans included in the transaction are fixed-rate, generally 30-year term, fully amortizing mortgages and were underwritten using rigorous credit standards and enhanced risk controls.

As per the deal, which became effective April 1, Fannie Mae will retain risk for the first 185 basis points of loss on the $12.1 billion covered loan pool. If the $224.2 million retention layer is exhausted, 25 insurers and reinsurers will cover the next 235 basis points of loss on the pool, up to a maximum coverage of $284.8 million.

Photo: Mathew Schwartz

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