OREANDA-NEWS. Fitch Ratings has affirmed all five classes of FREMF 2012-K705 multifamily mortgage pass-through certificates and three classes of Freddie Mac structured pass-through certificates, series K-705. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS
Affirmations are based off the continued stable performance of the underlying pool collateral. As of the November 2015 remittance, the pool has had no delinquent or specially serviced loans since issuance. Fitch has designated one watchlist loan (2%) as a Fitch loan of concern due to a decline in occupancy since issuance.

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 3.8% to $3.16 billion from $3.28 billion at issuance. Per the servicer reporting, 14 loans (12.9% of the pool) are defeased.

The Fitch Loan of Concern (2.12%) is secured by a 384-unit apartment complex, The Gardens at Anthony House, located in Greensboro, NC. The owner invested over $15 million dollars into the apartment complex's second phase (Phase 2) which added an additional 216 units and was finished during late 2013/early 2014. Phase 2 is not collateral for the loan. Occupancy has dropped at the collateral property as the owner has struggled leasing against the increased competition from the newer units in Phase 2. The servicer reported net operating income (NOI) debt service coverage ratio (DSCR) dropped to 0.88x as of year-end (YE) 2014 from 1.18x as of YE 2013. Fitch will continue to monitor occupancy levels at the collateral property, as Phase 2 stabilizes and rental concessions decrease.

The largest loan in the pool (10.2%) is secured by the Enclave, a 1,119-unit, three-building apartment complex located in Silver Spring, MD. The property was 96% occupied as of September 2015. Servicer reported NOI DSCR decreased slightly to 2.55x as of YE 2014 from 2.64x as of YE 2013. The drop is largely attributed to an increase in expenses.

The second largest loan in the pool (4.78%) is secured by Crosswinds at Rolling Road, a 803-unit town-home style apartment complex situated eight miles from Baltimore's CBD. The subject lies within the Woodlawn submarket of Baltimore and benefits from a diversified employment base consisting of defense, life science, financial, and business services companies. As of YE 2014, the property was 94% occupied with a servicer reported NOI DSCR of 2.19x. This NOI DSCR is down from 2.37x as of YE 2013.

RATING SENSITIVITIES
All classes maintain Stable Outlooks. Due to the stable performance of the underlying collateral, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics. Additional information on rating sensitivity is available in the report 'FREMF 2012-K705 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series K-705' (Feb. 29, 2012), available at www.fitchratings.com.

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

Fitch has affirmed the following ratings:

FREMF 2012-K705 Multifamily Mortgage Pass-Through Certificates

--$53 million class A-1 at 'AAAsf'; Outlook Stable;
--$936.3 million class A-2 at 'AAAsf'; Outlook Stable;
--$68.8 million class B at 'Asf'; Outlook Stable;
--$30.6 million class C at 'BBB+sf'; Outlook Stable;
--$989.4 million* Class X-1 at 'AAAsf'; Outlook Stable.

Of FREMF 2012-K705, Fitch does not rate the 1.2 billion interest-only class X2, the $191 million interest-only class X3 or the $91.7 million class D.

Freddie Mac Structured Pass-Through Certificates, Series K-705
--$53 million class A-1 at 'AAAsf'; Outlook Stable;
--$936.3 million class A-2 at 'AAAsf'; Outlook Stable;
--$989.4 million* class X-1 at 'AAAsf'; Outlook Stable.

*Notional amount and interest-only

Of the Freddie Mac Structured Pass-Through Certificates, Series K-705, Fitch does not rate the $191 million interest-only X3.