This article from HousingWire discusses Fannie Mae’s execution of CIRT, or Credit Insurance Risk Transfer, deals on $31 billion of single-family loan securities. CIRT deals are designed to transfer risk from Fannie Mae to private capital investors (referred to here as reinsurers). Doing so helps Fannie Mae manage risk and concentrate on its mission to ensure access to mortgage credit and support the housing market.

The CIRT deals executed by Fannie Mae are related to single-family loans that are already in the company’s portfolio. In a press release, Fannie Mae said these deals “will transfer credit risk on approximately $31 billion UPB of single-family loans with note rates between 4.5 and 5 percent and were issued with the help of multiple reinsurers.”

This type of deal is meant to offer private capital investors a great opportunity to acquire a more diversified portfolio of mortgage credit risk. Fannie Mae says that it has continuously been working with reinsurers over the past six months to develop more innovative and efficient risk transfer structures. The company has now issued approximately $115 billion of CIRT deals since 2013.

By executing CIRT deals and transferring risk to private capital investors, Fannie Mae is equipped to continue its mission of providing access to safe and affordable mortgage credit and supporting the housing market while minimizing losses to taxpayers. This is the fourth CIRT transaction issued by Fannie Mae this year, and speaks highly to the progress the company is able to make in managing their risk.

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