On April 23, Fannie Mae formalized the debut of its previously announced initiative to move forward with Credit Risk-Transfer (CRT) securities specifically aimed at mREIT investors. Under the terms of its 2018 Single-Family Mortgage-Backed Securities (MBS) Prospectus, Fannie will now have the ability to structure its benchmark Connecticut Avenue Securities™ (CAS) offerings as notes issued by trusts that qualify as Real Estate Mortgage Investment Conduits (REMICs). The REMIC CRT structure is designed to accommodate the REIT asset tests set forth in applicable IRS and SEC regulations.
The May 2017 announcements that both Fannie Mae and Freddie Mac would be working with their federal regulator, the Federal Housing Finance Agency (FHFA) to make their respective CRT offerings more attractive to REIT investors reflected broad recognition of the importance of the role of mREITs in the housing sector and an understanding that mREITs are likely to become an even more important source of private mortgage capital in coming years.
Please do not hesitate to contact Tony Edwards, EVP & general counsel (firstname.lastname@example.org; (202) 739-9408) or Penny Rostow, SVP, policy & regulatory affairs (email@example.com; (202) 739-9431) with any related questions.