KBRA Assigns Ratings to Freddie Mac’s STACR 2025-HQA1
18 Feb 2025 | New York
KBRA assigns ratings to 24 classes from Freddie Mac Structured Agency Credit Risk (STACR®) REMIC 2025-HQA1 Notes, Freddie Mac STACR REMIC Trust 2025-HQA1 (STACR 2025-HQA1), a credit risk sharing transaction with a total note offering of $620,000,000. STACR 2025-HQA1 features loans with loan-to value (LTV) ratios greater than 80%, but less than or equal to 97%. The Offered Notes represent obligations of the STACR 2025-HQA1 Trust in a credit-linked note structure governed by a credit protection agreement between the trust and Freddie Mac, with payments subject to the credit and principal payment risks of the STACR 2025-HQA1 Reference Pool.
The STACR 2025-HQA1 Reference Pool consists of 57,179 residential mortgage loans with an outstanding principal balance of approximately $19.2 billion as of the cut-off date. The Reference Obligations are fully documented, fully amortizing, primarily 30-year fixed-rate mortgages (FRMs) of prime quality. The borrowers in the STACR 2025-HQA1 Reference Pool have a non-zero WA (NZWA) original credit score of 749 and a NZWA debt-to-income (DTI) ratio of 40.2%. The pool’s WA LTV and combined LTV (CLTV) equal 92.7% and 93.0%, respectively.
KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its KBRA RMBS Credit Model, Residential Asset Loss Model (REALM), an examination of the results from third-party loan file due diligence, cash flow modeling analysis of the transaction’s payment structure, reviews of key transaction parties and an assessment of the transaction’s legal structure and documentation. This analysis is further described in our U.S. RMBS Rating Methodology.
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