In the two years since it reentered the multifamily market, Freddie Mac has made just $2 billion of loans, and a top executive said the agency was taking a cautious approach.

So far, not a single loan has gone delinquent, said Thomas J. Watt, senior vice president of multifamily housing.

That's not surprising, given how new the loans are. Still, at an agency that was driven out of the multifamily business by hefty losses, the lack of delinquencies is something executives like to brag about.

Mr. Watt said Freddie Mac wants to develop objective, quantifiable credit criteria for multifamily loans, similar to those for single-family loans, to ensure that the mortgages it buys are investment grade.

He said so far the agency's multifamily business has been creditworthy and profitable. And the agency has shrunk its pre-1991 portfolio by more than half, to about $5 billion, Mr. Watt said.

Freddie Mac stayed away from multifamily loans for almost three years, beginning in 1991. Under pressure from the Department of Housing and Urban Development, it reentered the market in 1994.

HUD requires Freddie Mac to do at least $375 million of its business in multifamily loans this year. Other goals - that allocate a portion of Freddie Mac's business for low-income and central city mortgages - also have the effect of encouraging the agency to buy and securitize multifamily mortgages.

Almost all of the $900 million in loans that Freddie Mac has purchased or securitized this year were refinancings, often with additional funds for improvement to the properties, Mr. Watt said.

Two-thirds of the total was on properties that house residents who earn 60 to 80% of their metropolitan area's median income.

But, Mr. Watt said, there is a huge demand for financing to house people who make even less. Without a government subsidy, however, he said it was impossible for private investors to do such financing.

One government program - Freddie Mac's risk-sharing arrangement with HUD - that is intended to enable Freddie Mac to finance riskier transactions has so far yielded little fruit.

Mr. Watt said negative market perceptions about HUD had made the program a nonstarter. In fact, he added, the presence of the word "federal" in Freddie Mac's own official name, the Federal Home Loan Mortgage Corp., has been a hurdle in establishing relationships in the multifamily market.

He said Freddie Mac and HUD were trying to nail down their first risk- sharing deal.

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