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Press Release

Fannie Mae Completes Final Credit Risk Sharing Transaction of 2015

December 17, 2015

For the First Time, Fannie Mae's CIRT Transaction Uses Adjustable Rate Mortgages in Loan Pool

Andrew Wilson


WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced today that it has completed its final Credit Insurance Risk Transfer (CIRT) transaction of 2015, increasing the role of private capital in the mortgage market and reducing taxpayer risk. This transaction, CIRT 2015-6, shifts credit risk on a pool of single-family loans to a panel of reinsurers. The company continues to innovate in the credit risk transfer space, and for the first time since the CIRT program’s inception, the covered loan pool consists of 5/1, 7/1 and 10/1 fixed period adjustable rate mortgages (ARMs), which allowed the company to offer a  new investment opportunity for reinsurers. Through this latest deal, Fannie Mae has this year acquired more than $1 billion of CIRT insurance coverage on over $40 billion of loans with six CIRT transactions, and over $1.2 billion of coverage on over $46 billion of loans since the program's inception in 2014.

“Fannie Mae remains focused on advancing and driving strong interest and results for our credit risk transfer programs that help shift risk away from the company and to holders of private capital, reduce taxpayer risk and help create a safer, stronger housing finance system,” said Rob Schaefer, vice president for credit enhancement strategy & management. “With our final CIRT deal of 2015, we continued to find ways to interest reinsurers with access to varied loan collateral by introducing ARM loans to our transactions. Insurers and reinsurers tell us that they value our commitment to engage their industry through our CIRT program, and the unique, customized risk opportunities that CIRT can offer, helping insurers and reinsurers to expand their risk portfolio.”

In CIRT-2015-6 which became effective November 1, 2015, Fannie Mae retains risk for the first 50 basis points of loss on an $8.2 billion pool of loans. If this $41 million retention layer were exhausted, reinsurers would cover the next 250 basis points of loss on the pool, up to a maximum coverage of approximately $206 million. Coverage is provided based upon actual losses for a term of 10 years. Depending upon the pay down of the insured pool and the amount of insured loans that become seriously delinquent, the aggregate coverage amount may be reduced at the 3-year anniversary and each anniversary of the effective date thereafter.  The coverage may be canceled by Fannie Mae at any time on or after the 5-year anniversary of the effective date by paying a cancellation fee. 

In 2016, Fannie Mae expects to continue coming to market with CIRT and CAS deals that allow private capital to gain exposure to the U.S. housing market.

More information on Fannie Mae’s credit risk transfer activities is available at

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