Multifamily Credit Insurance Risk Transfer
Building on our long tradition of transferring risk to the private sector, MCIRT is designed to complement – and supplement – Multifamily's Delegated Underwriting and Servicing (DUS®) loss sharing program, where originating lenders share in the credit risk on our loans.
Since 2016, MCIRT has helped mitigate the remaining mortgage credit risk held by Fannie Mae by transferring a portion of the risk to diversified insurers and reinsurers counterparties.
These transactions allow us to bring a deeper, more resilient pool of capital to the Multifamily industry, increasing the liquidity, stability, and sustainability of the market.
$81B of unpaid principal balance was covered through MCIRT transactions, measured at the time of the transaction as of Q3 2020.
$1.9B of coverage was provided by reinsurers through MCIRT transactions as of Q3 2020.
MCIRT's deal structure
Fannie Mae structures its MCIRT deal in the following manner:
MCIRT policy structure
Each MCIRT transaction is structured with a retention layer and an aggregate limit of liability separated into tranches to appeal to various risk appetites. Actual loss is determined after property disposition and lender loss sharing. MCIRT transactions are typically structured as follows:
Elements of a typical MCIRT deal
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