Effective August 1, 2024, CIRT 2024-H3 lets Fannie Mae retain risk for the first 185 basis points of loss on the $6.4 billion covered loan pool. Furthermore, 25 insurers and reinsurers will take on the next 250 basis points of loss if the $119 million retention layer is exhausted.
Coverage for the transaction is based on actual losses over an 18-year term. The coverage amount can be adjusted annually based on the paydown of the insured pool and the principal amounts of seriously delinquent loans. Fannie Mae can also cancel the coverage any time after the fifth anniversary by paying a cancelation fee.
Since its inception, Fannie Mae has obtained around $27.7 billion of insurance coverage on $928 billion of single-family loans through the CIRT program, measured at issuance for both post-acquisition (bulk) and front-end transactions. As of June 30, 2024, about $1.35 trillion in outstanding UPB of loans in the single-family conventional guaranty book of business were included in a reference pool for a credit risk transfer transaction.
Source: mpamag.com