Connecticut Avenue Securities (CAS)

Connecticut Avenue Securities (CAS) is the benchmark for U.S. mortgage credit.

$1.2T

of unpaid principal balance is covered through CAS transactions, measured at the time of the transactions, as of Q2 2019.

As the largest manager of residential mortgage credit, Fannie Mae sets the standard for managing credit risk throughout the life cycle of a mortgage – continuously innovating to reduce default risk and credit losses.

Through Connecticut Avenue Securities® (CAS), institutional investors can invest side-by-side with Fannie Mae in our geographically diverse credit book of business. The CAS program provides an opportunity to invest in a portion of the credit risk that Fannie Mae retains when we guarantee single-family mortgage-backed securities (MBS).

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CAS Presentation


A broad and deep market

Since our first CAS issuance in 2013, Fannie Mae has developed the most liquid market for single-family mortgage credit risk. Our offering of industry-leading tools and capabilities have helped to build a broad and diverse investor base. To allow institutional investors to evaluate the program, we provide:


Geographically diverse pool

Underlying reference pools are large and highly diversified, offering broad exposure to the U.S. housing market. Loans are:

  • Conventional 30-year fixed-rate mortgage loans recently securitized into Fannie Mae MBS
  • Originated to meet Fannie Mae's rigorous underwriting and eligibility criteria
  • Managed with our innovative quality control process – we provide ongoing credit risk management oversight throughout the life of each loan

The CAS REMIC

In 2018, Fannie Mae introduced the industry's award-winning innovation in mortgage credit risk transfer, the CAS REMIC, further broadening the investor base. CAS deals from 2018-R07 forward are known as CAS REMICs, and are issued by a bankruptcy remote trust. Transactions prior to CAS 2018-R07, known as the "C" series (e.g., CAS 2018-C06), are unguaranteed and unsecured debt securities of Fannie Mae. The "C" series is unlike standard Fannie Mae debt in that CAS investors may bear losses if loans in the reference pools experience losses.

The CAS REMIC offers the following benefits:

CAS REMIC Alignment CAS REMIC Risk CAS REMIC Access
CAS REMIC Tax CAS REMIC Expansion CAS REMIC Accounting

The CAS REMIC retains key features of the CAS program to support consistency, including:

  • notes are par-priced, uncapped 1-month LIBOR floating rate notes
  • principal and interest on the notes is paid by the trust to note holders on a monthly basis
  • notes have a defined final maturity of 20 years or less
  • payment on the securities is based on performance of a reference pool of loans that were recently securitized into Fannie Mae MBS

The CAS REMIC structure is similar to a typical residential mortgage-backed securitization:

  • utilizes a senior/subordinate structure in which credit protection is provided by the more junior notes to the more senior notes in priority order
  • as principal is repaid on loans in the reference pool, a corresponding amount of principal is repaid to the noteholders
  • if loans in the reference pool default and experience losses, CAS REMIC notes also experience losses – losses are applied first to write down the most junior notes, then allocated to the remaining notes in reverse sequential order

Fannie Mae retains a vertical slice of each CAS REMIC transaction to ensure aligned interest with investors.

CAS REMIC deal structure diagram

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MBS Trust and Prospectus 

Learn more

Are you an institutional investor who wants to learn more about our CAS program? We would love to connect with you. Contact us here.

Fannie Mae wins a Stevie Award Fannie Mae receives the People’s Choice Stevie® Award for Favorite New Product (B2B product) and three Bronze Stevie® Awards for CAS REMIC .

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