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Multifamily Loans
 12 Months Ended
Dec. 31, 2018
Multifamily loans  
Accounts, Notes, Loans and Financing Receivable [Line Items]  
Multifamily Loans
Multifamily Loans
During the third and fourth quarters of 2018, we invested in multifamily subordinate securities issued by three Freddie Mac K-Series securitization trusts and were required to consolidate the underlying multifamily loans owned at these entities for financial reporting purposes in accordance with GAAP. At December 31, 2018, we consolidated 162 held-for-investment multifamily loans, with an aggregate unpaid balance of $2.13 billion and a fair value of $2.14 billion. We did not own or consolidate any multifamily loans at December 31, 2017. The outstanding multifamily loans held-for-investment at the Freddie Mac K-Series entities at December 31, 2018 were first-lien, fixed-rate loans that were originated in 2015 and 2016 and had original loan terms of seven to ten years and an original weighted average LTV ratio of 69%. At December 31, 2018, the weighted average coupon of these multifamily loans was 4.16% and the weighted average remaining loan term was seven years. At December 31, 2018, none of these loans were greater than 90 days delinquent or in foreclosure.
During the year ended December 31, 2018, we recorded a net market valuation gain of $47 million on these loans through Investment fair value changes, net on our consolidated statements of income. Pursuant to the collateralized financing entity guidelines, the market valuation changes of these loans are based on the estimated fair value of the ABS issued associated with the securitizations. The net impact to our income statement associated with our economic investment in the securities of the Freddie Mac K-Series securitization entities is presented in Note 5.
Multifamily Loan Characteristics
The following table presents the geographic concentration of multifamily loans recorded on our consolidated balance sheets at December 31, 2018.
Table 8.1 – Geographic Concentration of Multifamily Loans
Geographic Concentration
(by Principal)
 
December 31, 2018
California
 
11
%
Texas
 
9
%
Arizona
 
8
%
Georgia
 
6
%
Other states (none greater than 5%)
 
66
%
Total
 
100
%

The following table displays the loan product type and accompanying loan characteristics of multifamily loans recorded on our consolidated balance sheets at December 31, 2018.
Table 8.2 – Product Types and Characteristics of Multifamily Loans
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan Balance
 
 
Number of
Loans
 
Interest
 Rate
 
Maturity
Date
 
Total
Principal
 
30-89
Days
DQ
 
90+
Days
DQ
Fixed loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,000

to
$10,000
 
 
70

 
3.29
%
to
4.73%
 
2023-02
-
2027-01
 
$
394,373

 
$
—

 
$
—

 
$
10,001

to
$20,000
 
 
66

 
3.54
%
to
4.61%
 
2023-09
-
2027-01
 
960,992

 
—

 
—

 
$
20,001

to
$30,000
 
 
16

 
3.65
%
to
4.72%
 
2024-01
-
2026-12
 
373,036

 
—

 
—

 
$
30,001

to
$40,000
 
 
7

 
3.62
%
to
4.71%
 
2025-11
-
2026-06
 
244,074

 
—

 
—

 
 
over
$40,000
 
 
3

 
3.74
%
to
4.18%
 
2024-10
-
2026-06
 
154,223

 
—

 
—

Total:
 
162

 
 
 
 
 
 
 
 
 
$
2,126,698

 
$
—

 
$
—