The Federal Reserve has chosen a collateral monitor for new and existing commercial mortgage bonds in a program through which it offers investors cheap loans to buy such bonds.

Trepp LLC will "assist the New York Fed by providing valuation, modeling, analytics and reporting" on these commercial mortgage-backed securities, the central bank said Tuesday, the loan application deadline for newly created commercial mortgage bond portion of its Term Asset-Backed Securities Loan facility, or TALF.

Trepp "will not establish policies or make decisions for the New York Fed, including decisions whether to reject a CMBS as collateral for a TALF loan."

Further, the Fed may use the services of other collateral monitors in connection with TALF, the bank said.

The bank is likely to offer loans for existing CMBS beginning in July.

-By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371; anusha.shrivastava@dowjones.com