Freddie Mac expanded its Multifamily credit risk transfer offerings with the creation of a Multifamily Credit Insurance Pool (MCIP) offering and the closing of the first transaction under that offering. In MCIP transactions, Freddie Mac enters into long-term credit insurance contracts covering credit losses from existing multifamily loans in the company’s portfolio or bonds that Freddie Mac fully guarantees. The structure transfers a percentage of credit risk to reinsurers, helping reduce Freddie Mac’s need to hold capital for the underlying loans in the pool. Freddie Mac also announced its first transaction through the offering, MCIP 2018-1. Partnering with reinsurance broker Aon, Freddie Mac has purchased credit risk insurance for the first 5% of credit losses on a reference pool of $915 million, which consists of 55 loans in Freddie Mac’s Bond Credit Enhancement and Multifamily Participation Certificate program portfolios. The average loan balance in the pool is $16.6 million, and most of the 55 properties in the pool include rent-restricted units that are affordable to low- and very low-income families, helping to fulfill Freddie Mac’s affordability mission. There is a total of five reinsurers participating in this transaction.