Credit Insurance Risk Transfer

Credit Insurance Risk Transfer helps reduce credit risk for Fannie Mae while bringing additional private capital to the Single Family housing market.


of unpaid principal balance of single family mortgage loans has been partially covered through CIRT transactions, measured at the time of the transactions, as of Q1 2020.

Credit Insurance Risk Transfer (CIRT) transactions transfer credit risk on a pool of loans to an insurance provider, which may then transfer that risk to one or more reinsurers.

The reinsurance market is a significant and attractive source of private capital because reinsurers generally have diversified books of business that are not heavily concentrated in or highly correlated to U.S. residential mortgage risk.

These transactions complement Fannie Mae's other current risk transfer offerings that leverage the capital markets, mortgage insurance, and lender risk-sharing structures.

Innovative offerings

Fannie Mae offers both post-acquisition and front-end CIRT transactions. Post-acquisition transactions transfer a portion of credit risk on loans Fannie Mae has already acquired, while front-end transactions commit coverage for loans to be acquired over a forward delivery period. Coverage for front-end transactions begins as soon as those loans are acquired by Fannie Mae, eliminating aggregation risk.

CIRT is designed to be flexible and can cover various loan types acquired by Fannie Mae. While most transactions cover collateral pools similar to the 30-year fixed-rate pools covered by Connecticut Avenue Securities® (CAS), pools of adjustable-rate mortgages and 15/20-year fixed-rate mortgages have been covered on a periodic basis.

Deal Structure

Fannie Mae structures its CIRT deal in the following manner:

CIRT Deal Structure

CIRT insurance policy structure example

Each CIRT transaction is structured with a retention layer and an aggregate limit of liability. Actual loss is determined after property disposition.

  • Fannie Mae retains an initial portion of risk.
  • If this retention level is exhausted, insurers and/or reinsurers will cover actual losses up to aggregate limit of liability.
  • Limit may step down on first anniversary and monthly thereafter depending on level of delinquencies and pool paydowns.

CIRT Example

Click the image below to learn more about CIRT:

CIRT Overview

A transparent program

Key deal documents and data are available on our webpages.

Learn more

Are you a reinsurer who wants to learn more about our CIRT program? We would love to meet with you. Contact us here.