OREANDA-NEWS. Fitch Ratings has affirmed four classes of Freddie Mac 2011-K15 multifamily mortgage pass-through certificates along with three classes of Freddie Mac structured pass-through certificates, K-015. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations of the Freddie Mac 2011-K15 are based on the stable performance of the underlying collateral pool since issuance. As of the June 2016 remittance, the pool has no delinquent or specially serviced loans. Five loans (1.8%) are fully defeased. The loans' final maturity dates are in 2020 (4%), and 2021 (96%). At issuance, the pool's composition consisted of one interest-only loan (2.4%), and 28 loans (53.2%) structured with an interest-only period that have subsequently ended. The pool is comprised of 92.9% traditional multifamily properties, 4% senior living properties and 2.8% student housing properties.

The pool's aggregate principal balance has been paid down by 7.1% to $1.08 billion from $1.165 billion at issuance. 50 of the 90 loans in the transaction (55.6% of the pool) reported full or partial year 2015 financials. Based on the servicer provided financial statements, the pool's overall net operating income (NOI) improved 4.8% since the previous year and 23.1% since issuance. There are four loans (3.8%) on the master servicer's watchlist due to deferred maintenance or other property events; however, Fitch has not designated any Fitch Loans of Concern as the issues are not expected to significantly affect performance.

The affirmations of the Freddie Mac K-015 certificates are the result of the pass-through nature of the certificates, as they are dependent on the underlying ratings of corresponding classes for FREMF 2011-K15.

The largest watchlist and twelfth largest loan of the pool (2.1%) is secured by Villages of Bogey Hills, a 486-unit garden style apartment complex located in St. Charles, MO. The community has a number of amenities which include 24-hour fitness center, business center, dog park, two swimming pools, barbeque pit area, sand volleyball court, and children's playground. The apartments feature carpeted bedrooms and living areas, outside patios, personal storage areas, and no pet restrictions. The building is situated 25 miles northwest of St. Louis, MO. The subject currently has 11 units off-line after a maintenance mishap in January 2016 caused a water pipe to burst and flood individual units. As of April 2016, the majority of repair work was completed and the servicer was verifying the completion of work in order to distribute insurance proceeds. The property has experienced a consistent occupancy rate of 95% during the life of the transaction due to the superior amenity package and building renovations.

The second largest watchlist loan (0.6%) is secured by Indian Creek Apartments, a 240-unit garden style apartment complex located in Georgetown, TX. The subject was built in 1985 and renovated in 2007. The community amenities include a clubhouse, two swimming pools, in-unit fireplaces, washer/dryer hook-ups, and a convenient location that is in close proximity to nearby retail centers. As of YE 2015, the reported NOI is 45% higher than issuance. The property is on the servicer watchlist after the community lost one 16-unit building to fire in September 2015. The management company is currently working with an architect in order to start construction on the replacement building. Although Fitch anticipates an increase in vacancy due to the fire damage, the property continues to outperform its competitive set and exhibits superior operating metrics in comparison to the broader market.

The third largest watchlist loan (0.62%) is secured by a 194-unit 10 building apartment community located in Knoxville, TN. The community amenities include a business center, dog park, swimming pool, grill areas, tennis court, community room, and children's playground. The complex has one, two, and three bedroom units that feature carpeted living areas, modern kitchens, brushed nickel fixtures, washer dryer hook-ups, and solid surface countertops. As of year-end 2015, the subject had occupancy of 87% and a debt service coverage ratio of 1.99 times (x). Twenty units were damaged in February 2016 after a building was struck by lightning. The sponsor completed repairs in May and the servicer is awaiting the final lien waiver and proof of payment. Fitch will monitor the loan for any negative operating impacts as the management works to lease-up the offline units.

RATING SENSITIVITIES

The Rating Outlook remains Stable for the rated classes. Future upgrades are possible with significant paydown or defeasance and stable to improved performance. The student and senior housing properties exhibit weaker operating and leverage metrics when compared to broader multifamily composition. Fitch will continue to monitor these concentrations. If performance deteriorates, negative rating actions are possible.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following classes:

FREMF 2011-K15 Multifamily Mortgage Pass-Through Certificates

--$61.4 million class A-1 at 'AAAsf'; Outlook Stable;

--$866.3 million class A-2 at 'AAAsf'; Outlook Stable;

--$927.8 million class X1 at 'AAAsf'; Outlook Stable;

--$67 million class B at 'Asf'; Outlook Stable.

Fitch does not rate classes C, interest-only class X2, and interest-only class X3.

Freddie Mac Structured Pass-Through Certificates, Series K-015

--$61.4 million class A-1 at 'AAAsf'; Outlook Stable;

--$866.3 million class A-2 at 'AAAsf'; Outlook Stable;

--$984.2 million class X1 at 'AAAsf'; Outlook Stable.

Fitch does not rate interest-only class X3.