OREANDA-NEWS. Fitch Ratings has affirmed all six classes of Freddie Mac 2012-K709 multifamily mortgage pass-through certificates and the three classes of Freddie Mac structured pass-through certificates, K-709. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations of the Freddie Mac 2012-K709 are based on the stable performance of the underlying collateral pool. As of the March 2015 remittance, the pool had no delinquent or specially serviced loans and no loans are on the servicer watchlist. The pool's aggregate principal balance has been paid down by 2.3% to \$1.213 billion from \$1.241 billion at issuance. Thirty-four of the 54 loans (63.0% of the pool) reported at least partial year 2014 financials. Although not directly comparable, based on annualized financial statements, the pool's overall net operating income (NOI) improved 21% since issuance. One loan (0.56% of the pool) is on the watch list due to an increase in advertising and marketing expenses impacting the property's net operating income. Three loans (2.38%) are defeased.

The affirmations of the Freddie Mac K709 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 2012-K709.

The largest loan of the pool (11.0%) is secured by Atlantic Point Apartments, a 795-unit townhome-style apartment community located in Bellport, NY. The complex incorporates a number of common area amenities which include a clubhouse, business center, tennis courts, basketball court, and media room. The subject experienced an decrease in vacancy during the first half of 2014 reaching 4% at the end of the second quarter which is 100 bps from the property's low at issuance of 3%. The decrease in vacancy and the increase of rental rates at the property have resulted in a 25% increase to NOI from the issuance reported financials.

The second largest loan (5.51%) is secured by The Bennington, a 348-unit high rise apartment complex located in Alexandria, VA. The subject is located four miles southwest of Washington D.C., and is less than a quarter mile from I-395 which is a direct artery into the capital. The subject underwent significant renovations 2008 through 2010 for the apartment units and the common areas are scheduled for minor renovations in the future. The units feature hardwood floor entries, in unit washer/dryer units, spacious layouts, and large kitchens. The common area amenities feature a complimentary coffee bar, outdoor pool, convenience store, parking garage, and fitness center. The property has an occupancy rate of 97%, above the market average of 95%. NOI for the subject has been stable with minimal volatility since issuance. This trend should continue as new development is restricted in the submarket and economic growth should drive moderate yearly rental rate increases for the next 12 to 24 months.

The watchlist loan, Fulton Place (0.56%), is secured by a 244-unit student housing apartment complex located in Greensboro, NC. The subject was built in 2008 is located in the College Hill district, adjacent to Greensboro College. The community amenities consist of an outdoor swimming pool, spa, business center, clubhouse, fitness center, and in-unit laundry rooms. The subject has performed strongly over the last few years as the submarket experienced muted multifamily development. Performance has dipped as marketing expenses increased during the lease-up period for the fall 2015 school year. Management indicates that the property has reached budgeted 2015 occupancy and an expense reduction plan during the second half of the year will return performance to its historical norm. The complex is considered a high-quality asset which is the primary factor in the subject commanding 12% more on a per unit basis than its competitive set.

RATINGS SENSITIVITIES

All classes maintain Stable Outlooks. Due to the recent issuance of the transaction and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Additional information on rating sensitivity is available in the report 'FREMF 2012-K709 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K709' (June 7, 2012), available at www.fitchratings.com.

Fitch has affirmed the following classes as indicated:

FREMF 2012-K709 Multifamily Mortgage Pass-Through Certificates
--\$76.4 million class A-1 at 'AAAsf'; Outlook Stable;
--\$932.3 million class A-2 at 'AAAsf'; Outlook Stable;
--\$1.008 billion class X1 at 'AAAsf'; Outlook Stable;
--\$1.008 billion class X2-A at 'AAAsf'; Outlook Stable;
--\$80.7 million class B at 'A-sf'; Outlook Stable;
--\$31 million class C at 'BBBsf'; Outlook Stable.

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

Freddie Mac Structured Pass-Through Certificates, Series K-709
--\$76.4 million class A-1 at 'AAAsf'; Outlook Stable;
--\$932.3 million class A-2 at 'AAAsf'; Outlook Stable;
--\$1.008 billion class X1 at 'AAAsf'; Outlook Stable.

Fitch does not rate interest-only class X3.