Freddie Mac (FRE) is expected to sell nearly $1 billion of commercial mortgage bonds backed by multifamily loans Tuesday in an attempt to bolster the battered apartment sector, according to a person familiar with the deal.

This would be the first time that a commercial mortgage bond is sold with the backing of a government-sponsored enterprise. It also would be the first large commercial mortgage bond deal in nearly a year.

This transaction is expected to open up a new way for Freddie to raise liquidity and support the troubled multifamily market. Apartment and condominium complexes have been the most troubled in the real-estate sector.

Speculative developers built huge condominium towers and apartment complexes at the peak of the housing bubble, especially in states like Florida, Arizona, Nevada and California. When the housing market collapsed, these loans gradually started turning south. They are the worst performing type of property among commercial mortgages.

Delinquency rates in loans with apartments and condos as collateral have skyrocketed to 5.12% in April, according to RBS research. The loss severity on this property type is more than 25%, as more than 754 loans have been liquidated.

Data released earlier this week show that new home construction in the U.S. fell to a fresh low in April, as a result of a sharp drop in ground breakings for high-rise towers and multifamily dwellings.

So far, both Freddie and Fannie Mae (FNM), have held multifamily loans that they purchase on their books without securitizing them. This move is expected to free up Freddie's capital, so that it can invest more in multifamily loans.

This comes at a time when Fannie also has started packaging residential loans it holds in its portfolio into securities. Fannie, however, hasn't sold them to investors yet.

Freddie, on the other hand, has sold these multifamily loans that were held in its investment portfolio to a Deutsche Bank Trust, which will package and sell these bonds. The deal will be led by Deutsche Bank, according to the person familiar with the matter.

Market participants say this is a positive sign for the market and raises the prospect of more such deals from the GSEs.

Also, the implicit backing of the government is expected to make these otherwise risky investments more appealing to investors.

-By Prabha Natarajan, Dow Jones Newswires; 201-938-5071; prabha.natarajan@dowjones.com