Fitch Ratings has affirmed six classes of FREMF 2013-K26 multifamily mortgage pass-through certificates series and three classes of Freddie Mac structured pass-through certificates series K026. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations of Freddie Mac 2013-K26 are based on the stable performance of the underlying collateral. As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced by 1.60% to $1.442 billion from $1.466 billion at issuance. Four loans (2.3%) are on the servicer's watch list, two of which (1%) have been designated as Fitch Loans of Concern. The other two loans are on the watchlist due to minor deferred maintenance issues and are not considered Loans of Concern. No loans are in special servicing or are defeased. Approximately 78% of the pool has partial-term interest-only periods, with 5% having full-term interest-only periods.

The affirmations of the Freddie Mac K026 certificates are the result of the pass-through nature of the certificates, as they are dependent on the underlying ratings of corresponding classes of FREMF 2013-K26.

The largest Loan of Concern (0.6% of the pool) is secured by a 374-unit garden style apartment complex located in Durham, North Carolina. The subject is located 3.1 miles west of the University of North Carolina and has a student concentration of 18.2%. The loan has been added to the watch list due to low debt service coverage ratio (DSCR) and low occupancy. As of year to date (YTD) September 2015, DSCR reported at 0.53x with occupancy at 81%, a decline from 1.45x DSCR and 90% occupancy at issuance. The loan remains current as of the December 2015 payment date.

The second largest Loan of Concern is secured by a 200 unit multifamily property located in Tallahassee, FL (0.4%). Property performance has declined since issuance due to competition from new supply in the market. As of YTD June 2015, DSCR reported at 1.14x with occupancy at 86%, a decline from 1.37x DSCR and 96.5% occupancy at issuance. According to the servicer, the borrower has had to lower rates and offer leasing incentives to attract new tenants and keep existing ones. The loan remains current as of the December 2015 payment date.

The largest loan of the pool (8.5%) is secured by East Coast 4, a leasehold interest in a 367-unit high-rise apartment complex located in Long Island City, NY. The property is part of a larger site that represents the second phase of a master-planned project located along the East River in Hunters Point. As of September 2015, occupancy declined to 96% from 100% at issuance. However, DSCR improved to 2.48x for YTD September 2015, compared to 2.32x at year end December 2013 and 2.24x at issuance.

The second largest loan (3.6%), Oakwood Falls Church, is secured by a 567-unit mid-rise apartment complex located in Falls Church, VA, that is primarily used for corporate housing. The complex includes four residential buildings, a leasing office, conference rooms, business center and club room, a convenience store, a dry cleaner, a pro tennis shop, tennis and basketball courts, and a beach volleyball court. As per the servicer reporting the property's occupancy has declined to 80% as of September 2015, compared to 88% as of December 2014. The DSCR has steadily declined since issuance reporting at 1.75x as of December 2015, compared to YE 2013 at 2.50x and issuance at 2.61x.

RATING SENSITIVITIES

The Rating Outlook for all classes remains Stable. 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 portfolio-level metrics. Additional information on rating sensitivity is available in the report 'FREMF 2013-K26 Multifamily Mortgage Pass-Through Certificates and Freddie Mac Structured Pass-Through Certificates, Series 2013-K26' (April 16, 2013), available at www.fitchratings.com.

DUE DILIGENCE USAGE

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

Fitch affirms the following classes:

FREMF 2013-K26 Multifamily Mortgage Pass-Through Certificates

--$166.2 million class A-1 at 'AAAsf'; Outlook Stable;

--$1.1 billion class A-2 at 'AAAsf'; Outlook Stable;

--$73.3 million class B at 'Asf'; Outlook Stable;

--$36.7 million class C at 'BBB+sf'; Outlook Stable;

--$1,223* billion class X1 at 'AAAsf'; Outlook Stable;

--$1,223* billion class X2-A at 'AAAsf'; Outlook Stable.

Fitch does not rate the class D, X2-B and X3 certificates.

Freddie Mac Structured Pass-Through Certificates Series K026

--$166.2 million class A-1 at 'AAAsf'; Outlook Stable;

--$1.1 billion class A-2 at 'AAAsf'; Outlook Stable;

--$1,223* billion class X1 at 'AAAsf'; Outlook Stable.

Fitch does not rate the class X3 certificate.

*Notional amount and interest-only.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Related Research

FREMF 2013-K26 Multifamily Mortgage Pass-Through Certificates, Series 2013-K26 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=745917

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998190

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998190

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.