Dealmaker: Merchants Capital Completes $214M Freddie Mac Transaction

Merchants Capital and Merchants Bank of Indiana, Carmel, Ind., completed a $214 million securitization of 14 multifamily mortgage loans secured by 24 mortgaged properties through a Freddie Mac-sponsored Q-Series transaction.

The commercial mortgage-backed securities deal represented Merchants Capital’s second such transaction. Last year, it secured a $262 million Q-Series transaction. Unlike the 2021 transaction, 100 percent of the securities were guaranteed by Freddie Mac and sold to the market. Merchants Capital will sub-service the loans in the pool.

The $214 million in loans consisted of 14 multifamily properties in Georgia, Indiana, Michigan, New York and Ohio ranging in size from 60 to 352 units. Several properties were supported by low-income housing tax credits. The collateral pool is all seven-year capped adjustable-rate mortgages, a new product for the platform.

The certificates were designated social bonds within the Freddie Mac Social Bond Framework. Proceeds from social bonds provide liquidity to social impact financial institutions including community development financial institutions, housing finance agencies and other financial institutions such as Merchants Bank of Indiana. These social impact financial institutions finance affordable housing to low-income communities and underserved populations consistent with the Social Bonds Framework.