Freddie, DLJ Launch Multifamily Deal


Freddie Mac announced last week that it closed a $160 million Multifamily Gold PC swap with Column Financial, Inc., a subsidiary of Donaldson, Lufkin & Jenrette, Inc.

According to a spokesman at the government-sponsored enterprise, the $160 million security is backed by 17 multifamily properties owned by Southern Management, one of the largest owner-managers of apartment properties in the U.S.

DLJ repackaged the $160 million Gold PC into a Freddie Mac REMIC security with two classes, tailoring the mortgages' cash flows to meet investor demand. The real estate mortgage investment conduit is identified as Series 2171.

"This transaction shows the flexibility of the Multifamily Gold PC and REMIC programs in meeting the needs of a wide range of investors," said H.L. Varick, vice president of negotiated transactions in Freddie Mac's multifamily division. "Whether looking for a simple mortgage security swap to provide balance sheet flexibility, or a reconfiguration of cash flows, Freddie Mac's Negotiated Transactions group has a product that works, and works fast."

Since the introduction of the Freddie Mac Program Plus network of multifamily loan originators and servicers in 1993, the GSE has provided financing for nearly 5,000 multifamily properties totaling more than $17 billion. That volume represents over 627,000 rental units across the country, more than 95% of which are affordable to people whose income levels are at or below area median income - including newly established households, single-parent households, large family households at lower salaries and older Americans.

"We had a small window of time in which we were required to complete this transaction. Freddie Mac was able to meet our tight time schedule and complete this transaction inside of 60 days," said Anand Gajjar, senior vice president at DLJ. - AT