FEDERAL HOME LOAN MORTGAGE CORP filed this 8-K on 05/08/2014
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8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2014

Federal Home Loan Mortgage Corporation

 

(Exact name of registrant as specified in its charter)

Freddie Mac

 

Federally chartered

corporation

  001-34139   52-0904874

(State or other jurisdiction of

incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

8200 Jones Branch Drive

McLean, Virginia

  22102-3110
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (703) 903-2000

Not applicable

 

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02. Results of Operations and Financial Condition.

On May 8, 2014, Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation) announced its results of operations for the quarter ended March 31, 2014. A copy of the related press release for the quarter ended March 31, 2014 is being filed as Exhibit 99.1 to this report and is incorporated herein by reference. In addition, a copy of the First Quarter 2014 Financial Results Supplement is being furnished as Exhibit 99.2 to this report and is incorporated herein by reference.

Exhibit 99.1 submitted herewith shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

Exhibit 99.2 submitted herewith shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of Section 18, nor shall it be deemed to be incorporated by reference into any disclosure document relating to Freddie Mac, except to the extent, if any, expressly set forth by specific reference in such document.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are being filed or furnished as part of this Report on Form 8-K:

 

Exhibit Number

  

Description of Exhibit

      

99.1

   Press release, dated May 8, 2014, issued by Freddie Mac

99.2

   First Quarter 2014 Financial Results Supplement


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

FEDERAL HOME LOAN MORTGAGE CORPORATION  
By:  

/s/ James G. Mackey

 
  James G. Mackey  
  Executive Vice President — Chief Financial Officer  

Date: May 8, 2014


EXHIBIT INDEX

 

Exhibit Number

  

Description of Exhibit

      

99.1

   Press release, dated May 8, 2014, issued by Freddie Mac

99.2

   First Quarter 2014 Financial Results Supplement
Exhibit 99.1

Exhibit 99.1

 

LOGO      News Release

FOR IMMEDIATE RELEASE

May 8, 2014

MEDIA CONTACT: Lisa Gagnon

703-903-3385

INVESTOR CONTACT: Robin Phillips

571-382-4732

FREDDIE MAC REPORTS NET INCOME OF $4.0 BILLION;

COMPREHENSIVE INCOME OF $4.5 BILLION FOR FIRST QUARTER 2014

Company to Return Additional $4.5 Billion to Taxpayers in Second Quarter

 

First Quarter 2014 Financial Results

   

First quarter 2014 net income was $4.0 billion – the company’s tenth consecutive quarter of positive earnings, compared to $8.6 billion in the fourth quarter of 2013

   

First quarter 2014 comprehensive income was $4.5 billion, compared to $9.8 billion in the fourth quarter of 2013

   

First quarter financial results were affected by the following significant items:

¡     Legal settlement benefits of $4.9 billion ($3.4 billion after-tax), mostly related to private-label securities litigation

¡     Derivative losses of $2.4 billion ($1.6 billion after-tax), driven by lower long-term interest rates

   

Recent level of earnings is not sustainable over the long term, and earnings may be volatile from period to period

Treasury Draws and Dividend Payments at March 31, 2014

 

   

Based on March 31, 2014 net worth of $6.9 billion, the company’s June 2014 dividend obligation will be $4.5 billion, bringing total cash dividends paid to Treasury to $86.3 billion

   

Senior preferred stock held by Treasury remains $72.3 billion, as dividend payments do not reduce prior Treasury draws

Housing Market Support Since January 1, 2009

 

   

Provided $2.3 trillion of liquidity, including $52 billion in the first quarter of 2014, to the mortgage market, that funded:

¡     7.8 million refinancings, including over 140,000 in the first quarter

¡     2.1 million home purchases, including over 104,000 in the first quarter

¡     1.7 million units of multifamily rental housing, including over 51,000 in the first quarter

   

Helped over 987,000 borrowers to avoid foreclosure, including over 34,000 in the first quarter

Credit Quality at March 31, 2014

 

   

Post-2008 book of business grew to 55 percent of single-family credit guarantee portfolio during the first quarter, excluding HARP and other relief refinance loans which were 21 percent

   

Delinquency rates remained below industry benchmarks:

¡     Single-family serious delinquency rate declined to 2.20 percent

¡     Multifamily delinquency rate was 0.04 percent

 


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 2

McLean, VA — Freddie Mac (OTCQB: FMCC) today reported net income of $4.0 billion for the first quarter of 2014, compared to $8.6 billion for the fourth quarter of 2013. The company also reported comprehensive income of $4.5 billion for the first quarter of 2014, compared to $9.8 billion for the fourth quarter of 2013.

Summary Financial Results (1)

 

            Three Months Ended  
($ Billions)    12/31/13     3/31/14     Change  

1

   Net interest income    $ 3.8      $ 3.5      $ (0.3

2

   (Provision) benefit for credit losses      0.2        (0.1     (0.3

3

   Derivative gains (losses)      1.0        (2.4     (3.3

4

   Net impairment      (1.3     (0.4     0.9   

5

   Other non-interest income      6.1        5.8        (0.3

6

   Non-interest expense      (0.4     (0.8     (0.4
     

 

 

   

 

 

   

 

 

 

7

   Pre-tax income    $ 9.3      $ 5.8      $ (3.6

8

   Income tax expense      (0.7     (1.7     (1.0
     

 

 

   

 

 

   

 

 

 

9

   Net income    $ 8.6      $ 4.0      $ (4.6

10

   Total other comprehensive income      1.2        0.5        (0.7
     

 

 

   

 

 

   

 

 

 

11

   Comprehensive income    $ 9.8      $ 4.5      $ (5.3
     

 

 

   

 

 

   

 

 

 
         

 

 

   

 

 

   

 

 

 

 

(1) Columns and rows may not add due to rounding. See “Appendix - Financial Results Discussion” section for additional information about the company’s financial results for the first quarter of 2014.

Net Income – Freddie Mac’s net income was $4.0 billion for the first quarter of 2014, down $4.6 billion from the fourth quarter of 2013. The decrease primarily reflects a shift to derivative losses in the first quarter of 2014 from derivative gains in the fourth quarter of 2013 as long-term interest rates declined. In addition, the decline in net income was affected by lower legal settlement proceeds and higher income tax expense, partially offset by lower net impairment expense on mortgage-related securities. Absent legal settlements, first quarter 2014 net income would have been significantly lower.

Freddie Mac’s earnings may be volatile due to changes in the fair value of the company’s derivative portfolio, which is used to reduce Freddie Mac’s exposure to interest-rate risk. Fair value changes on derivatives are included in earnings, while fair value changes associated with several of the types of assets and liabilities being hedged are not. Therefore, there can be timing mismatches affecting current period earnings, which may not be reflective of the economics of the company’s business.

Comprehensive Income – Freddie Mac’s comprehensive income was $4.5 billion for the first quarter of 2014, down $5.3 billion from the fourth quarter of 2013. The decrease was primarily driven by lower quarterly net income.

Legal Settlements – Freddie Mac and the Federal Housing Finance Agency (FHFA) continued to reach agreements with a number of institutions to settle litigation related to Freddie Mac’s investment in certain private-label securities (PLS). These settlements contributed $4.5 billion to Freddie Mac’s pre-tax income in the first quarter of 2014, compared to $4.8 billion in the fourth quarter of 2013. Additionally, Freddie Mac entered into agreements with a number of its sellers to resolve certain representation and warranty claims (substantially all of


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 3

which related to pre-conservatorship loan origination activity) in exchange for one-time cash payments. These payments contributed $0.3 billion to the company’s pre-tax income in the first quarter of 2014, compared to $0.8 billion in the fourth quarter of 2013.

Sustainability of Earnings – The level of earnings Freddie Mac has experienced in recent periods is not sustainable over the long term. Freddie Mac’s recent financial results, particularly the level of loan loss provisioning, have benefited significantly from strong home price appreciation, which is beginning to moderate. Freddie Mac’s 2013 financial results also included a significant benefit related to the release of the deferred tax asset valuation allowance. Additionally, the company’s 2013 and 2014 financial results included legal settlements of both PLS litigation and representation and warranty claims. Freddie Mac’s settlements of representation and warranty claims related to pre-conservatorship loan originations are largely complete while PLS litigation is ongoing and additional settlements are expected in the remainder of 2014. In addition, declines in the size of the company’s mortgage-related investments portfolio, as required by FHFA and the Purchase Agreement with Treasury, will reduce earnings over time. The company’s financial results will also continue to be affected by changes in interest rates, the yield curve, and mortgage spreads, which can cause significant earnings and net worth variability from period to period.

About Freddie Mac’s Conservatorship

Purchase Agreement with Treasury – Freddie Mac has been operating under conservatorship, with FHFA as Conservator, since September 6, 2008. The support provided by Treasury pursuant to the Purchase Agreement enables the company to maintain access to the debt markets and have adequate liquidity to conduct its normal business operations. Based on Freddie Mac’s net worth of $6.9 billion at March 31, 2014, less the 2014 capital reserve amount of $2.4 billion, the company’s dividend obligation to Treasury in June 2014 will be $4.5 billion. Including the June 2014 dividend obligation, Freddie Mac’s aggregate cash dividends paid to Treasury will total $86.3 billion, $14.9 billion more than cumulative cash draws of $71.3 billion received from Treasury through March 31, 2014. Under the Purchase Agreement, the payment of dividends does not reduce the outstanding liquidation preference. Accordingly, Treasury still maintains a liquidation preference of $72.3 billion on the company’s senior preferred stock as of March 31, 2014.

Treasury Draws and Dividend Payments

 

LOGO

 

(1) The initial $1 billion liquidation preference of senior preferred stock was issued to Treasury in September 2008 as consideration for Treasury’s funding commitment. The company received no cash proceeds as a result of issuing this initial $1 billion liquidation preference of senior preferred stock.
(2) Amount does not include the June 2014 dividend obligation of $4.5 billion.


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 4

In August 2012, the terms governing the company’s dividend obligations on the senior preferred stock were amended. The amended Purchase Agreement does not allow the company to build capital over the long term. Beginning in 2013, the required senior preferred stock dividends each quarter equal the amount, if any, by which the company’s net worth as of the end of the preceding quarter exceeds an applicable capital amount. The applicable capital amount is $2.4 billion for 2014, and will be reduced by $600 million each year thereafter until it reaches zero on January 1, 2018.

The amount of remaining funding available to Freddie Mac under the Purchase Agreement with Treasury is currently $140.5 billion, and will be reduced by any future draws.

Freddie Mac is not permitted to redeem the senior preferred stock prior to the termination of Treasury’s funding commitment under the Purchase Agreement. The limited circumstances under which Treasury’s funding commitment will terminate are described in “BUSINESS — Conservatorship and Related Matters — Treasury Agreements” in the company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Remittance of Guarantee Fees to Treasury – In September 2012, Freddie Mac began remitting proceeds to Treasury from the 10 basis point guarantee fee increase required by the Temporary Payroll Tax Cut Continuation Act of 2011. The cumulative expense related to this increase totals $818 million, including $178 million in the first quarter of 2014.

Dodd-Frank Act Stress Test Results – In April 2014, pursuant to a September 2013 FHFA rule implementing the Dodd-Frank Act stress testing requirements, Freddie Mac publicly released its stress test results under a severely adverse scenario which are available at www.Freddiemac.com/investors.

Housing Market Support

Freddie Mac supports the U.S. housing market by ensuring credit availability for new and refinanced mortgages as well as rental housing. The company also helps struggling homeowners avoid foreclosure and stabilizes communities nationwide. Since the beginning of 2009, Freddie Mac has helped 11.6 million American families own or rent a home and another 987,000 families avoid foreclosure. At the same time, the company is working with FHFA, its customers and the industry to build a stronger housing finance system for the nation.


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 5

Number of Families Helped

 

(Thousands)    2009      2010      2011      2012      2013      YTD
3/31/14
     Cumulative
Total
 

1

   Number of families helped to own or rent a home      2,480         2,089         1,830         2,472         2,458         295         11,624   

2

       Relief refinance borrowers (includes HARP)(1)      169         533         453         687         611         59         2,512   

3

       Other refinance borrowers(1)      1,595         947         740         996         944         81         5,303   

4

       Purchase borrowers(1)      460         378         326         353         515         104         2,136   

5

       Multifamily rental units      256         231         311         436         388         51         1,673   

6

   Number of single families helped to avoid foreclosure(2)      133         275         208         169         168         34         987   

7

       Loan modifications      65         170         109         70         83         19         516   

8

       Repayment plans      34         31         33         33         29         8         168   

9

       Forbearance agreements      15         35         20         13         12         2         97   

10

       Short sales & deed-in-lieu of foreclosure transactions      19         39         46         53         44         5         206   

11

   Total (lines 1+6)      2,613         2,364         2,038         2,641         2,626         329         12,611   

 

(1) For the periods presented, a borrower may be counted more than once if the company purchased more than one loan (purchase or refinance mortgage) relating to the same borrower.
(2) These categories are not mutually exclusive and a borrower in one category may also be included within another category in the same period. For the periods presented, a borrower may subsequently go into foreclosure.

Providing Liquidity – Freddie Mac provides access to financing for new and refinanced mortgages and rental housing. Since the beginning of 2009, the company has provided $2.3 trillion in liquidity to the market through its purchases of loans and issuances of mortgage-related securities, including $52 billion during the first quarter of 2014.

Market Liquidity Provided (1)

 

($ Billions)    2009      2010      2011      2012      2013      YTD
3/31/14
     Cumulative
Total
 

1

   Single-family purchases or issuances(1)    $ 483       $ 390       $ 321       $ 427       $ 423       $ 49       $ 2,093   

2

       Relief refinance mortgages (includes HARP)      35         106         82         123         99         9         454   

3

       Other refinance mortgages      345         200         168         228         210         17         1,168   

4

       Purchase mortgages      94         78         71         76         114         23         456   

5

        Other(2)      9         6         -         -         -         -         15   

6

   Multifamily loan purchases or guarantees(1)(3)    $ 17       $ 16       $ 20       $ 29       $ 26       $ 3       $ 111   

7

   Other(4)    $ 46       $ -       $ 8       $ -       $ 4       $ -       $ 58   

8

   Total (lines 1+6+7)    $ 546       $ 406       $ 349       $ 456       $ 453       $ 52       $ 2,262   

 

(1) Based on unpaid principal balance (UPB) and includes other guarantee commitments.
(2) Includes Ginnie Mae Certificates, HFA initiative-related guarantees, and Other Guarantee Transactions.
(3) Excludes Multifamily issuances of K-deals.
(4) Consists of non-Freddie Mac mortgage-related securities purchased for the company’s mortgage-related investments portfolio.

Enabling Refinance Activity – Freddie Mac helps borrowers lower their payments and/or improve their mortgage terms by purchasing refinance mortgages. Refinance purchases of $26 billion accounted for 53 percent of the company’s single-family mortgage purchase volume during the first quarter of 2014. The company


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 6

estimates that the homeowners who refinanced during the first quarter will reduce their mortgage interest payments by an average of about $2,600 during the first 12 months. Since the beginning of 2009, the company has helped over 7.8 million homeowners refinance their homes.

Through Freddie Mac’s relief refinance initiative, which includes the Home Affordable Refinance Program (HARP) for loans above 80 percent LTV, the company provided streamlined refinances to nearly 59,000 borrowers during the first quarter of 2014. This included approximately 30,000 HARP borrowers that will reduce their mortgage interest payments by an average of nearly $2,800 during the first 12 months.

Preventing Foreclosures – Freddie Mac helps struggling borrowers retain their homes or otherwise avoid foreclosure. During the first quarter of 2014, the company completed over 34,000 single-family loan workouts, including nearly 19,000 loan modifications. This brings the total number of homeowners the company has helped to avoid foreclosure to over 987,000 since the beginning of 2009.

In addition, when foreclosure is unavoidable, Freddie Mac has further helped to stabilize communities by focusing its real estate owned (REO) home sales on owner-occupants, who have made up two–thirds of its purchasers since the beginning of 2009, and by promoting industry-leading standards for property preservation.

Building a Stronger Mortgage Market –Working with FHFA and the industry, Freddie Mac continues to innovate to help develop a stronger, more efficient mortgage market that benefits the nation’s homebuyers and taxpayers. These efforts include shifting risk to the private market through innovative capital market transactions like Structured Agency Credit Risk (STACR) debt notes and multifamily K-deal securities, strengthening the mortgage market’s infrastructure through the Uniform Mortgage Data Program and the Common Securitization Platform and building a more efficient, customer-focused company.

Credit Quality

New Single-Family Book – At March 31, 2014, the company’s new single-family book (loans acquired after 2008, excluding HARP and other relief refinance mortgages) accounted for 55 percent of the UPB of Freddie Mac’s single-family credit guarantee portfolio. Since 2008, Freddie Mac has enhanced its credit and underwriting policies, mortgage lenders have delivered fewer loans with higher-risk characteristics, and overall the company has seen positive changes in the underwriting practices of lenders and mortgage insurers. These factors have contributed to the improved credit quality of the company’s new single-family book, including low delinquency rates and credit losses.


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 7

Single-Family Credit Guarantee Portfolio – Concentration of Credit Risk

 

      As of 3/31/14   YTD
3/31/14
      % of Portfolio   Serious Delinquency
Rate
  % of Credit Losses

New single-family book (1)

   55%   0.24%   3%

HARP and other relief refinance loans

   21   0.65%   8

2005-2008 legacy single-family book

   15   8.25%   77

Pre-2005 legacy single-family book

   9   3.16%   12

Total

   100%   2.20%   100%

 

(1) Loans acquired after 2008. Excludes HARP and other relief refinance loans.

HARP and Other Relief Refinance Loans – HARP and other relief refinance loans represented 21 percent of the UPB of Freddie Mac’s single-family credit guarantee portfolio at March 31, 2014. HARP loans generally reflect many of the credit risk attributes of the original loans, particularly LTV ratios, and thus generally present higher risk to the company than other refinance loans the company has purchased since 2009. However, in many cases, the borrowers’ payments are reduced through HARP refinancing, thereby strengthening the borrowers’ potential to make their mortgage payments.

2005-2008 Legacy Single-Family Book – Freddie Mac’s 2005-2008 legacy single-family book continues to represent a declining portion of the company’s single-family credit guarantee portfolio. At March 31, 2014, the 2005-2008 legacy single-family book represented 15 percent of the UPB of the company’s single-family credit guarantee portfolio, but accounted for 77 percent of the company’s single-family credit losses during the first quarter of 2014. The gradual reduction of Freddie Mac’s 2005-2008 legacy single-family book has positively impacted the payment performance of its overall single-family credit guarantee portfolio.

Single-Family Credit Guarantee Portfolio Purchases – LTV Ratios and Credit Scores

 

      2009   2010   2011   2012   2013   YTD
3/31/14

Weighted Average Original LTV Ratio:

            

Relief refinance (includes HARP)

   80%   77%   77%   97%   91%   86%

All other

   66%   67%   67%   68%   71%   75%

Total purchases

   67%   70%   70%   76%   75%   77%

Weighted Average Credit Score:

                        

Relief refinance (includes HARP)

   738   747   744   740   727   711

All other

   757   758   759   762   756   747

Total purchases

   756   755   755   756   749   740

Total single-family loans (including relief refinance loans) purchased by Freddie Mac in the first quarter of 2014 had a weighted average original LTV ratio of 77 percent and a weighted average FICO score of 740. Recent


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 8

trends in LTV ratios and credit scores reflect, in part, a higher proportion of home purchase loans in the company’s loan acquisition volume and continued purchases of HARP loans.

Single-family serious delinquency rate was 2.20 percent at March 31, 2014, compared to 2.39 percent at December 31, 2013. The company’s single-family serious delinquency rate is substantially below the rate for the entire U.S. mortgage market. According to the Mortgage Bankers Association’s National Delinquency Survey, the serious delinquency rate on first-lien single-family loans in the U.S. mortgage market was 5.41 percent at December 31, 2013, which is the most recent date for which data is available. Freddie Mac’s delinquency rates continue to be affected by delays, including those due to increases in foreclosure process timeframes, general constraints on servicer capacity and court backlogs (in states that require judicial foreclosure process).

Multifamily delinquency rate (based on loans 60 days or more past due or in the process of foreclosure) was 0.04 percent at March 31, 2014, compared to 0.09 percent at December 31, 2013, reflecting continued strong multifamily portfolio performance.

Additional Information

For more information, including that related to Freddie Mac’s financial results, conservatorship and related matters, see the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, and the company’s

Consolidated Financial Statements and Financial Results Supplement. These documents are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors.

Additional information about Freddie Mac and its business is also set forth in the company’s filings with the SEC, which are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov. Freddie Mac encourages all investors and interested members of the public to review these materials for a more complete understanding of the company’s financial results and related disclosures.

* * * *

This press release contains forward-looking statements, which may include statements pertaining to the conservatorship, the company’s current expectations and objectives for its single-family, multifamily and investment businesses, its loan workout initiatives and other efforts, and other programs to assist the U.S. residential mortgage market, liquidity, capital management, economic and market conditions and trends, market share, the effect of legislative and regulatory developments, and new accounting guidance, credit quality of loans the company owns or guarantees, and results of operations and financial condition on a GAAP, Segment Earnings and fair value basis. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company’s control. Management’s expectations for the company’s future necessarily involve a number of assumptions, judgments and estimates, and various factors, including changes in market conditions, liquidity, mortgage spreads, credit outlook, actions by the U.S. government (including FHFA, Treasury and Congress), and the impacts of legislation or regulations and new or amended accounting guidance, could cause actual results to differ materially from these expectations. These assumptions, judgments, estimates and factors are discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2013, Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and Current Reports on Form 8-K, which are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and the SEC’s Web site at


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 9

www.sec.gov. The company undertakes no obligation to update forward-looking statements it makes to reflect events or circumstances after the date of this press release.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

# # #


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 10

Appendix - Financial Results Discussion

Summary Consolidated Statements of Comprehensive Income (1)

 

            Three Months Ended  
($ Billions)    12/31/13     3/31/14     Change  

1

   Net interest income    $ 3.8      $ 3.5      $ (0.3

2

   (Provision) benefit for credit losses      0.2        (0.1     (0.3

3

       Derivative gains (losses)      1.0        (2.4     (3.3

4

       Net impairments of AFS securities recognized in earnings      (1.3     (0.4     0.9   

5

       Other non-interest income      6.1        5.8        (0.3
     

 

 

   

 

 

   

 

 

 

6

   Non-interest income (loss)      5.8        3.1        (2.6

7

       Administrative expenses      (0.5     (0.5     0.0   

8

       REO operations expense      (0.0     (0.1     (0.0

9

       Temporary Payroll Tax Cut Continuation Act of 2011 expense      (0.2     (0.2     (0.0

10

       Other non-interest income (expense)      0.3        (0.1     (0.4
     

 

 

   

 

 

   

 

 

 

11

   Non-interest expense      (0.4     (0.8     (0.4

12

   Pre-tax income      9.3        5.8        (3.6

13

   Income tax expense      (0.7     (1.7     (1.0
     

 

 

   

 

 

   

 

 

 

14

   Net income    $ 8.6      $ 4.0      $ (4.6

15

   Total other comprehensive income      1.2        0.5        (0.7
     

 

 

   

 

 

   

 

 

 

16

   Comprehensive income    $ 9.8      $ 4.5      $ (5.3
     

 

 

   

 

 

   

 

 

 
         

 

 

   

 

 

   

 

 

 

 

(1) Columns and rows may not add due to rounding.

Net interest income was $3.5 billion for the first quarter of 2014, compared to $3.8 billion for the fourth quarter of 2013. Net interest yield was 72 basis points for the first quarter of 2014, compared to 76 basis points for the fourth quarter of 2013. The decreases in both net interest income and net interest yield primarily reflect a decline in the balance of higher-yielding mortgage-related assets due to continued liquidations.

 

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Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 11

(Provision) benefit for credit losses was provision expense of $85 million for the first quarter of 2014, compared to a benefit of $201 million for the fourth quarter of 2013. The shift was mostly due to a $0.5 billion decrease in recoveries from settlements of representation and warranty claims.

 

LOGO

The company’s loan loss reserve balance is increased by a provision for credit losses (and decreased by a benefit for credit losses) and reduced by charge-offs. Freddie Mac’s loan loss reserves were $24.1 billion at March 31, 2014, compared to $24.7 billion at December 31, 2013.

Derivative gains (losses) was a loss of $2.4 billion for the first quarter of 2014, compared to a gain of $1.0 billion for the fourth quarter of 2013. The shift to a loss in the first quarter of 2014 was primarily driven by losses on the net pay-fixed swap portfolio as long-term interest rates decreased.

 

LOGO

Net impairment of AFS securities recognized in earnings was $364 million for the first quarter of 2014, compared to $1.3 billion for the fourth quarter of 2013. Fourth quarter net impairment expense included the impact of implementing enhanced model assumptions to project cash flows on certain modified loans collateralizing non-agency mortgage-related securities.


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 12

 

LOGO

Other non-interest income was $5.8 billion for the first quarter of 2014, compared to $6.1 billion for the fourth quarter of 2013. The decrease was mostly driven by a $0.3 billion decrease in settlement proceeds related to PLS litigation in the first quarter of 2014.

 

LOGO

Non-interest expense was $771 million for the first quarter of 2014, compared to $390 million for the fourth quarter of 2013. Fourth quarter non-interest expense included a benefit of $350 million related to the Lehman bankruptcy settlement.

 

LOGO

Income tax expense was $1.7 billion for the first quarter of 2014, compared to $731 million for the fourth quarter of 2013. The increase was primarily driven by a higher effective tax rate in the first quarter of 2014. The company’s income tax results for 2013 were impacted by the release of the deferred tax asset valuation allowance. In 2014, the company expects its effective tax rate to be marginally below the statutory rate of 35 percent.


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 13

Total other comprehensive income was $479 million for the first quarter of 2014, compared to $1.2 billion for the fourth quarter of 2013. The decrease reflects lower reclassifications to earnings of other-than-temporary impairments on non-agency securities in the first quarter. The decrease also reflects lower fair value gains on non-agency securities as spreads tightened less in the first quarter compared to the fourth quarter, largely offset by fair value gains on available-for-sale (AFS) securities due to declines in interest rates.

 

LOGO

Segment Financial Results – Freddie Mac’s operations consist of three reportable segments, which are based on the type of business activities each performs — Single-family Guarantee, Investments and Multifamily. Certain activities that are not part of a reportable segment are included in the All Other category.

Summary of Segment Earnings (Loss) and Comprehensive Income (Loss) (1)

 

            Three Months Ended  
($ Billions)    12/31/13 (2)     3/31/14     Change  
   Segment Earnings (loss), net of taxes       

1

       Single-family Guarantee    $ 1.3      $ 0.3      $ (0.9

2

       Investments      6.9        3.3        (3.6

3

       Multifamily      0.5        0.4        (0.1

4

       All Other      (0.0     (0.0     (0.0
     

 

 

   

 

 

   

 

 

 

5

   Total Segment Earnings (loss), net of taxes    $ 8.6      $ 4.0      $ (4.6
     

 

 

   

 

 

   

 

 

 
   Comprehensive income (loss) of segments       

6

       Single-family Guarantee    $ 1.3      $ 0.3      $ (1.0

7

       Investments      8.3        3.8        (4.5

8

       Multifamily      0.2        0.4        0.3   

9

       All Other      0.1        (0.0     (0.1
     

 

 

   

 

 

   

 

 

 

10

   Comprehensive income (loss) of segments    $ 9.8      $ 4.5      $ (5.3
     

 

 

   

 

 

   

 

 

 
         

 

 

   

 

 

   

 

 

 

 

(1) Columns and rows may not add due to rounding.
(2) In the first quarter of 2014, Freddie Mac revised its inter-segment allocations for the change in fair value of the Multifamily segment’s investment securities and held-for-sale loans. Prior period results presented above have been revised. See “NOTE 13: SEGMENT REPORTING” in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 for additional information.


Freddie Mac First Quarter 2014 Financial Results

May 8, 2014

Page 14

Single-family Guarantee segment earnings were $313 million for the first quarter of 2014, compared to $1.3 billion for the fourth quarter of 2013. The decrease primarily reflects higher income tax expense, lower non-interest income and higher provision for credit losses. Comprehensive income for the Single-family Guarantee segment approximated segment earnings for both the first quarter of 2014 and fourth quarter of 2013.

Investments segment earnings were $3.3 billion for the first quarter of 2014, compared to $6.9 billion for the fourth quarter of 2013. The decrease was mostly driven by a shift to derivative losses in the first quarter of 2014 from derivative gains in the fourth quarter of 2013. Comprehensive income for the Investments segment was $3.8 billion for the first quarter of 2014, compared to $8.3 billion for the fourth quarter of 2013. The decrease reflects lower segment earnings, coupled with lower fair value gains on non-agency AFS securities as spreads tightened less in the first quarter of 2014 compared to the fourth quarter of 2013.

Multifamily segment earnings were $418 million for the first quarter of 2014, down slightly from $491 million for the fourth quarter of 2013. Comprehensive income for the Multifamily segment was $418 million for the first quarter of 2014, compared to $164 million for the fourth quarter of 2013. The improvement primarily reflected an increase in the fair value of AFS securities driven by favorable market movements.

Exhibit 99.2
First Quarter 2014
Financial Results
Supplement
May 8, 2014
Exhibit 99.2


2
Table of contents
Business Results
Credit Supplement
3 -
Quarterly Financial Results
20 -
National Home Prices
4 -
Comprehensive Income
21 -
State-by-State Home Prices:  June 2006 to March 2014
5 -
Senior Preferred Stock Purchase Agreement with Treasury
22 -
State-by-State Home Prices:  March 2013 to March 2014
6 -
Treasury Draw Requests and Dividend Payments
23 -
Mortgage Market and Freddie Mac Serious Delinquency Rates
7 -
Total Equity and Senior Preferred Stock Activity
24 -
8 -
Single-Family Guarantee Fees Charged on New Acquisitions
25 -
9 -
Structured
Agency
Credit
Risk
(STACR
®
)
Debt
Note
Issuances
26 -
10 -
Loan Loss Reserves
27 -
11 -
28 -
12 -
29 -
13 -
30 -
14 -
31 -
15 -
32 -
Multifamily Portfolio Composition
16 -
33 -
Multifamily Securitization Volume
17 -
34 -
Multifamily New Business Volume by State
18 -
35 -
Multifamily Mortgage Portfolio UPB Concentration by State
36 -
Multifamily Mortgage Portfolio by Attribute
37 -
Multifamily Mortgage Portfolio by Attribute, Continued
38 -
Multifamily Market and Freddie Mac Delinquency Rates
Loan Purpose of Single-Family Credit Guarantee Portfolio
Purchases
Credit Quality of Single-Family Credit Guarantee Portfolio Purchases
Single-Family Credit Guarantee Portfolio Characteristics
Single-Family 1Q 2014 Credit Losses and REO by Region and State
Single-Family Credit Profile by Book Year and Product Feature
Single-Family Serious Delinquency Rates by State and Region
Aging of Single-Family Seriously Delinquent Loans by Judicial and
Non-Judicial States
Real Estate Owned
Single-Family Cumulative Foreclosure Transfer and Short Sale
Rates by Book Year
Market Liquidity Provided
Single-Family Refinance Activity
Performance of Single-Family Modified Loans
Single-Family Loan Modifications
Single-Family Loan Workouts
Administrative Expenses
Purchase Agreement Portfolio Limits


3
Quarterly financial results
Line 3:
A shift from derivative gains in 4Q13 to
derivative losses in 1Q14 primarily driven by
losses on the net pay-fixed swap portfolio as long-
term interest rates decreased.
Line 13:
Higher income tax expense primarily
driven by a higher effective tax rate in 1Q14.  In
2014, the company expects its effective tax rate to
be marginally below the statutory rate of 35
percent.
Note: Columns and rows may not add due to rounding.
($ Billions)
1Q 2014
vs
4Q 2013
1Q 2014
4Q 2013
1
Net interest income
$3.8
$3.5
($0.3)
2
(Provision) benefit for credit losses
0.2
(0.1)
(0.3)
3
Derivative gains (losses)
1.0
(2.4)
(3.3)
4
Net impairment of available-for-sale
securities recognized in earnings
(1.3)
(0.4)
0.9
5
Other non-interest income
6.1
5.8
(0.3)
6
Non-interest income
5.8
3.1
(2.6)
7
Total administrative expenses
(0.5)
(0.5)
0.0
8
Real estate owned operations expense
(0.0)
(0.1)
(0.0)
9
Temporary Payroll Tax Cut Continuation
Act of 2011 expense
(0.2)
(0.2)
(0.0)
10
Other non-interest income (expense)
0.3
(0.1)
(0.4)
11
Non-interest expense
(0.4)
(0.8)
(0.4)
12
Pre-tax income
9.3
5.8
(3.6)
13
Income tax expense
(0.7)
(1.7)
(1.0)
14
Net income
8.6
4.0
(4.6)
15
Total other comprehensive income,
net of taxes
1.2
0.5
(0.7)
16
Comprehensive income
$9.8
$4.5
($5.3)


4
Comprehensive income
A
B
C = A + B
$ Billions
$1.8
$2.9
$5.6
$5.7
$7.0
$4.4
$30.4
$9.8
$4.5
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013
2Q
2013
3Q
2013
¹
4Q
2013
1Q
2014
Net income
Comprehensive income
1
2
Total
other
comprehensive
income
(loss),
net
of
taxes
²
Net income and Comprehensive income include $23.9 billion non-cash benefit from releasing the valuation allowance on deferred tax assets.
Consists of the after-tax changes in: (a) the unrealized gains and losses on available-for-sale securities; (b) the effective portion of derivatives previously designated as cash flow
hedges; and (c) defined benefit plans.


Senior Preferred Stock Purchase Agreement with
Treasury
Senior
preferred
stock
outstanding
and
held
by
Treasury
remained
$72.3
billion at
March 31, 2014.
1
»
Dividend payments do not reduce prior Treasury draws.
»
Any future draws will increase the balance of senior preferred stock outstanding.
Since entering conservatorship in September 2008, Freddie Mac has:
»
Received cumulative draws of $71.3 billion from Treasury.  No draws have been requested for
the past eight quarters; last draw request was $19 million for first quarter 2012.
Freddie Mac’s net worth was $6.9 billion at March 31, 2014.
»
Capital
reserve
amount
is
$2.4
billion
for
quarterly
payments
in
2014,
and
will
be
reduced
by
$600 million each year thereafter until it reaches zero on January 1, 2018.
»
Dividend obligation to Treasury will be $4.5 billion in June 2014. 
»
Aggregate cash dividends paid to Treasury will total $86.3 billion including the June dividend
obligation, versus cumulative cash draws of $71.3 billion received from Treasury through
March 31, 2014.
The amount of remaining Treasury funding currently available to Freddie Mac under
the
Purchase
Agreement
is
$140.5
billion.
Any
future
draws
will
reduce
this
amount.
1
5
Senior preferred stock outstanding of $72.3 billion at March 31, 2014 includes cumulative draws of $71.3 billion plus the initial liquidation preference of $1 billion.


Dividend Payments to Treasury
Draw Requests from Treasury
6
Treasury draw requests and dividend payments
$ Billions
5
4
Draws From Treasury
Dividend Payments to Treasury
3
($ Billions)
Cumulative
Total
Total
Senior
Preferred
Stock
Outstanding
$72.3
Less:
Initial
Liquidation
Preference
1
$1.0
Treasury Draws
$71.3
($ Billions)
Cumulative
Total
Dividend Payments as of 03/31/14
$81.8
2Q 2014 Dividend Obligation
$4.5
Total
Dividend
Payments
2
$86.3
$44.6
$6.1
$13.0
$7.6
$0.02
$0.0
$0.0
2008
2009
2010
2011
2012
2013
YTD
2014
$0.2
$4.1
$5.7
$6.5
$7.2
$47.6
$10.4
2008
2009
2010
2011
2012
2013
YTD
2014
The initial $1 billion liquidation preference of senior preferred stock was issued to Treasury in September 2008 as consideration for Treasury’s funding commitment.  The company
received no cash proceeds as a result of issuing this initial $1 billion liquidation preference of senior preferred stock.
Amounts may not add due to rounding.
Amount does not include the June 2014 dividend obligation of $4.5 billion.
Annual amounts represent the total draws requested based on Freddie Mac’s quarterly net deficits for the periods presented.  Draw requests are funded in the subsequent quarter
(e.g., $19 million draw request for 1Q 2012 was funded in 2Q 2012). 
Represents quarterly cash dividends paid by Freddie Mac to Treasury during the periods presented. Through December 31, 2012, Treasury was entitled to receive cumulative
quarterly cash dividends at the annual rate of 10% per year on the liquidation preference of the senior preferred stock.  However, the fixed dividend rate was replaced with a net
worth sweep dividend payment beginning in the first quarter of 2013.  See the company’s Annual Report on Form 10-K for the year ended December 31, 2013 for more information.
1
2
3
4
5


7
Total equity and Senior Preferred Stock activity
See the company’s 10-Q for the quarter ended March 31, 2014 for a description of the company’s dividend obligation to Treasury.
2
Includes the initial liquidation preference of Freddie Mac’s senior preferred stock of $1.0 billion.
Note: Columns may not add due to rounding.
($ Billions)
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
1
Beginning
balance
-
Total
equity
/
GAAP
net
worth
$8.8
$10.0
$7.4
$33.4
$12.8
2
Capital draw funded by Treasury
-
-
-
-
-
3
Net income
4.6
5.0
30.5
8.6
4.0
4
Total other comprehensive income (loss), net of taxes
2.4
(0.6)
(0.0)
1.2
0.5
5
Comprehensive income
7.0
4.4
30.4
9.8
4.5
6
Dividends paid to Treasury
(5.8)
(7.0)
(4.4)
(30.4)
(10.4)
7
Other
-
-
-
-
-
8
Ending
balance
-
Total
equity
/
GAAP
net
worth
¹
$10.0
$7.4
$33.4
$12.8
$6.9
9
Aggregate
liquidation
preference
of
the
senior
preferred
stock
²
$72.3
$72.3
$72.3
$72.3
$72.3
10
Remaining senior preferred stock funding available
$140.5
$140.5
$140.5
$140.5
$140.5


8
Single-family guarantee fees charged on new
acquisitions
Quarterly
In Basis Points, Annualized
Annual
In Basis Points
Legislated
10
Basis
Point
Guarantee
Fee
Remitted
to
Treasury
¹
Single-Family
Guarantee
Fee
Charged
on
New
Acquisitions
(excluding
amounts
remitted
to
Treasury)
²
Effective April 1, 2012, guarantee fees charged on single-family loans sold to Freddie Mac were increased by 10 basis points.  Under the Temporary Payroll Tax Cut Continuation
Act of 2011, Freddie Mac is required to remit the proceeds from this increase to Treasury.  Given the April 1, 2012 effective date, the impact of the increase on average guarantee
fees for full-year 2012 was 7.5 basis points.
Represents the estimated rate of management and guarantee fees for new acquisitions during the period assuming amortization of delivery fees using the estimated life of the
related loans rather than the original contractual maturity date of the related loans.  Also includes the effect of pricing adjustments that are based on the relative performance of our
PCs compared to comparable Fannie Mae securities. 
1
2


$0.5
$0.6
$1.0
3Q13
4Q13
1Q14
Structured
Agency
Credit
Risk
(STACR
®
)
debt
note
issuances
9
$ Billions
1
The reference pool for the April 2014 STACR debt note issuance represented an unpaid principal balance of $28.1 billion.
2
Includes the first loss risk held by Freddie Mac.
$22.6
$35.3
$32.4
STACR Reference Pool
²
($ Billions)
($ Billions)
Cumulative
Total
STACR Debt Note Issuance as of 03/31/14
$2.1
April 2014 Issuance¹
$1.0
Total Issuance
$3.1


10
Loan loss reserves
1
1
Includes amounts related to certain loans purchased under financial guarantees and reflected within other expenses on the company’s consolidated statements of comprehensive
income.
2
Consists of the allowance for loan losses and the reserve for guarantee losses.
2
$ Billions
($3.3)
($2.9)
($3.0)
($2.5)
($2.1)
($1.9)
($0.6)
($0.4)
($0.9)
$1.8
$0.2
$0.6
($0.7)
($0.5)
($0.6)
($1.1)
($0.2)
$0.1
$38.3
$35.8
$33.8
$30.9
$28.6
$26.4
$25.0
$24.7
$24.1
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
Net Charge-offs
Provision (Benefit)
Loan Loss Reserves (Period End Balances)


11
Real estate owned¹
Property Inventory
1Q 2014 Activity
Geographic Distribution
2
Based on Number of Properties in Inventory
Historical Trend
Ending Property Inventory
((Number of Properties)
In 1Q14, REO inventory declined primarily due to lower single-family foreclosure activity as a
result of Freddie Mac’s loss mitigation efforts and a declining amount of delinquent loans.
The
Southeast
region
comprised
31
percent
of
the
company’s
REO
property
inventory
at
March
31,
2014.
In
this
region,
Florida
comprised
20
percent
of
the
company’s
single-
family
inventory
at
March
31,
2014
and
has
been
one
of
the
states
with
high
REO
severity
rates
in
the
last
several
years.
The
North
Central
region
comprised
30
percent
of
Freddie
Mac’s
REO
property
inventory
as
of
March
31,
2014.
This
region
generally
has
experienced
more
challenging
economic
conditions,
and
includes
a
number
of
states
with
longer
foreclosure
timelines
due
to
the
local
laws
and
foreclosure
process
for
single-family
mortgage
loans.
Seven
of
the
nine
states
in
the
North
Central
region
require
a
judicial
foreclosure
process.
The
North
Central
region
experienced
a
decline
in
REO
acquisition
activity
during
1Q14
compared
to
4Q13
primarily
due
to
a
decline
in
the
number
of
loans
that
transitioned
to
serious
delinquency
in
recent
periods.
((Number of Properties)
((Number of Properties)
47,308
43,567
14,385
(18,126)
12/31/13
Inventory
Acquisitions
Dispositions
03/31/14
Inventory
59k
47k
53k
51k
49k
48k
45k
47k
44k
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013
2Q
2013
3Q
2013
4Q
2013
1Q
2014
8k
14k
16k
4k
5k
8k
14k
13k
4k
5k
Northeast
Southeast
North Central
Southwest
West
12/31/13
03/31/14
Includes single-family and multifamily REO.  Multifamily ending property inventory was 1 property as of December 31, 2013 and 2 properties as of March 31, 2014.
Region designation: West (AK, AZ, CA, GU, HI, ID, MT, NV, OR, UT, WA); Northeast (CT, DE, DC, MA, ME, MD, NH, NJ, NY, PA, RI, VT, VA, WV); Southeast (AL, FL, GA, KY, MS,
NC, PR, SC, TN, VI); North Central (IL, IN, IA, MI, MN, ND, OH, SD, WI); and Southwest (AR, CO, KS, LA, MO, NE, NM, OK, TX, WY).
1
2


12
Market liquidity provided
Number of Families Freddie Mac Helped
to Own or Rent a Home¹
In Thousands
Purchase and Issuance Volume²
(Single-Family and Multifamily)
$ Billions
1
For the periods presented, a borrower may be counted more than once if the company purchased more than one loan (purchase or refinance mortgage) relating to the same 
borrower.
2
Includes cash purchases of single-family and multifamily mortgage loans, issuances of Freddie Mac mortgage-related securities through the company’s guarantor swap program,
issuances
of
other
guarantee
commitments,
issuances of other structured securities and purchases of non-Freddie Mac mortgage-related securities.
Number
of
Families
Freddie
Mac
Helped
to
Own
or
Rent
a
Home
¹
(In Thousands)
Refinance borrowers (includes HARP)
Purchase borrowers
Multifamily rental units
Freddie
Mac
Purchase
and
Issuance
Volume
²
Cumulative Totals
Since 2009
11,624
$2.3 Trillion
7,815
2,136
1,673


13
Single-family refinance activity¹
2009
2010
2011
2012
2013
1Q
2014
Cumulative
Total
Number
of
Borrowers
²
(In Thousands)
Other Refinance
1,595
947
740
996
944
81
5,303
Relief
Refinance
-
LTV
80%
83
324
268
253
270
29
1,227
Relief
Refinance
-
LTV
>
80%
to
100%
(HARP)³
72
166
126
191
168
17
740
Relief
Refinance
-
LTV
>
100%
to
125%
(HARP)³
14
43
59
144
110
9
379
Relief
Refinance
-
LTV
>
125%
(HARP)³
0
0
0
99
63
4
166
Total Number of Borrowers
1,764
1,480
1,193
1,683
1,555
140
7,815
$ Volume
(In Billions)
Other Refinance
$345
$200
$168
$228
$210
$17
$1,168
Relief
Refinance
-
LTV
80%
$15
$58
$42
$36
$37
$4
$192
Relief
Refinance
-
LTV
>
80%
to
100%
(HARP)³
$17
$38
$27
$37
$30
$2
$151
Relief
Refinance
-
LTV
>
100%
to
125%
(HARP)³
$3
$10
$13
$30
$21
$2
$79
Relief
Refinance
-
LTV
>
125%
(HARP)³
$0
$0
$0
$20
$11
$1
$32
Total $ Volume
$380
$306
$250
$351
$309
$26
$1,622
Consists of all single-family refinance mortgage loans that the company either purchased or guaranteed during the period, including those associated with other guarantee
commitments and Other Guarantee Transactions. 
Some loans have multiple borrowers, but the company has counted them as one borrower for this purpose.  For the periods presented, a borrower may be counted more than
once if the company purchased more than one refinance loan relating to the same borrower.
The relief refinance mortgage initiative is Freddie Mac’s implementation of the Home Affordable Refinance Program (HARP).  Under the program, the company allows eligible
borrowers who have mortgages with high current LTV ratios to refinance their mortgages without obtaining new mortgage insurance in excess of what was already in place. 
HARP is targeted at borrowers with current LTV ratios above 80%; however, Freddie Mac’s program also allows borrowers with LTV ratios at or below 80% to participate.
1
2
3


Repayment plans
14
Loan modifications
Forbearance agreements
Short sales and deed-in-lieu of foreclosure transactions
Single-family
loan
workouts
1
Home
Retention
Actions
2
Foreclosure
Alternatives
2
133
275
46
208
41
41
Consists of both home retention actions and foreclosure alternatives.
2
These categories are not mutually exclusive and a borrower in one category may also be included within another category in the same or another period.  For example, a borrower
helped
through
a
home
retention
action
in
one
period
may
subsequently
lose
his
or
her
home
through
a
foreclosure
or
a
short
sale
or
deed-in-lieu
transaction
in
a
later
period.
40
169
168
34
0
30
60
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
Number of Loans
(000)
0
50
100
150
200
250
300
2009
2010
2011
2012
2013
Number of Loans
(000)
Number
of
Families
Avoiding
Foreclosure
1
(In Thousands)
Families Retaining Homes
Cumulative Totals Since
2009
987
8 out of every 10


No change in terms
Term extension
Change in interest rate, and in certain cases, term extension
Change in interest rate, term extension and
principal forbearance  
15
Single-family loan modifications
Single-family Loan Modifications
(HAMP and non-HAMP)
1
2
65
170
109
21
19
21
70
23
83
19
0
10
20
30
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
Number of
Loans
(000)
0
40
80
120
160
200
2009
2010
2011
2012
2013
Number of
Loans
(000)
  Includes completed loan modifications under HAMP and under the company’s other modification programs.  Excludes those loan modification activities for which the borrower has
started the required process, but the modification has not been made permanent or effective, such as loans in a modification trial period.
Principal forbearance is a change to a loan’s terms to designate a portion of the principal as non-interest bearing and non-amortizing.
Note: Totals may not recalculate due to rounding.
1
2


16
Quarterly Percentages of Modified Single-Family Loans
(HAMP and non-HAMP) ¹
Performance of single-family modified loans
Time Since Modification
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
4Q 2013
3 to 5 months
85%
87%
84%
85%
86%
85%
84%
83%
6 to 8 months
80%
83%
82%
81%
81%
79%
82%
N/A
9 to 11 months
77%
81%
78%
78%
78%
80%
N/A
N/A
12 to 14 months
76%
78%
76%
75%
78%
N/A
N/A
N/A
15 to 17 months
74%
77%
73%
76%
N/A
N/A
N/A
N/A
18 to 20 months
73%
75%
74%
N/A
N/A
N/A
N/A
N/A
21 to 23 months
71%
76%
N/A
N/A
N/A
N/A
N/A
N/A
24 to 26 months
73%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
% Current and Performing
Quarter of Loan Modification Completion²
1
2
Represents the percentage of loans that are current and performing (no payment is 30 days or more past due) or have been paid in full.  Excludes loans in modification trial periods.
Loan modifications are recognized as completed in the quarterly period in which the servicer has reported the modification as effective and the agreement has been accepted by the
company. For loans that have been remodified (e.g., where a borrower has received a new modification after defaulting on the prior modification) the rates reflect the status of each
modification separately. For example, in the case of a remodified loan where the borrower is performing, the previous modification would be presented as being in default in the
applicable period.


17
Administrative expenses
Annual
Quarterly


Mortgage-related investments portfolio ending balance
Mortgage-related investments portfolio limit
18
Purchase Agreement portfolio limits
Indebtedness
1, 3
($ Billions)
Mortgage Assets
1, 2
($ Billions)
Indebtedness limit
Total debt outstanding
1
2
3
The company’s Purchase Agreement with Treasury limits the amount of mortgage assets the company can own and indebtedness it can incur.  Under the Purchase Agreement,
mortgage assets and indebtedness are calculated without giving effect to the January 1, 2010 change in the accounting guidance related to the transfer of financial assets and
consolidation of variable interest entities (VIEs).  See the company’s Annual Report on Form 10-K for the year ended December 31, 2013 for more information.
Represents the unpaid principal balance (UPB) of the company’s mortgage-related investments portfolio.  The company discloses its mortgage assets on this basis monthly in its 
Monthly Volume Summary reports, which are available on its Web site and in Current Reports on Form 8-K filed with the Securities and Exchange Commission (SEC).
Represents the par value of the company’s unsecured short-term and long-term debt securities issued to third parties to fund its business activities.  The company discloses its 
indebtedness on this basis monthly in its Monthly Volume Summary reports, which are available on its Web site and in Current Reports on Form 8-K filed with the SEC.


19
Credit
Supplement


20
National home prices have experienced a cumulative
decline of 15% since June 2006
3.0
4.8
2.7
0.4
1.3
2.1
(0.8)
(1.6)
0.8
0.8
(2.2)
(4.4)
(3.2)
(0.9)
(2.9)
(5.4)
(2.7)
1.2
0.0
(1.6)
(0.3)
0.7
(2.5)
(2.8)
(1.2)
1.1
(1.1)
(2.0)
0.5
4.1
1.2
0.2
2.8
5.4
1.6
(0.7)
1.2
(6)
(4)
(2)
0
2
4
6
1Q
2005
4Q
2005
3Q
2006
2Q
2007
1Q
2008
4Q
2008
3Q
2009
2Q
2010
1Q
2011
4Q
2011
3Q
2012
2Q
2013
1Q
2014
Percent
(%)
National home prices use the Freddie Mac House Price Index for the U.S., which is a value-weighted average of the state indexes where the value weights are based on Freddie Mac’s single-
family credit guarantee portfolio.  Other indices of home prices may have different results, as they are determined using different pools of mortgage loans and calculated under different
conventions than Freddie Mac’s.  The Freddie Mac House Price Index for the U.S. is a non-seasonally adjusted monthly series; quarterly growth rates are calculated as a 3-month change based
on the final month of each quarter.  Seasonal factors typically result in stronger house-price appreciation during the second and third quarters. Historical quarterly growth rates change as new
data becomes available.  Values for the most recent periods typically see the largest changes.  Cumulative decline calculated as the percent change from June 2006 to March 2014.
Source: Freddie Mac.
1
1


4%
AK
0%
-13 to -1%
-22%
-21 to -14%
CT -23%
DC 26%
DE -16%
0%
HI
RI -29%
MA
MD
NJ -23%
Home price performance by state
June
2006
to
March
2014
United States -
15%
1
The Freddie Mac House Price Index for the U.S. is a value-weighted average of the state indexes where the value weights are based on Freddie Mac’s single-family credit
guarantee portfolio.  Other indices of home prices may have different results, as they are determined using different pools of mortgage loans and calculated under different
conventions.
The
Freddie
Mac
House
Price
Index
for
the
U.S.
is
a
non-seasonally
adjusted
monthly
series.
Source: Freddie Mac
21
-6%
AL
-4%
AR
-28%
AZ
-20%
CA
7%
CO
-35%
FL
-16%
GA
1%
IA
-16%
ID
-24%
IL
-5%
IN
-1%
KS
KY -4%
2%
LA
-21%
-15%
ME
-21%
MI
-17%
MN
-13%
MO
-7%
MS
4%
MT
NC -7%
38%
ND
2%
NE
-12%
NM
-41%
NV
-11%
NY
-15%
OH
7%
OK
-11%
OR
-9%
PA
-9%
SC
9%
SD
TN -1%
17%
TX
0%
UT
-14%
VA
-6%
VT
-14%
WA
-16%
WI
1%
WV
6%
WY
-20%
NH
-11%
1


6%
AL
1%
AK
9%
4 to 8%
-3 to 0%
1 to 3%
-1%
AR
12%
AZ
16%
CA
8%
CO
CT 0%
DC 10%
DE 5%
9%
FL
9%
GA
8%
HI
3%
IA
6%
ID
6%
IL
3%
IN
3%
KS
KY 1%
2%
LA
4%
-3%
ME
11%
MI
6%
MN
4%
MO
1%
MS
7%
MT
NC 3%
6%
ND
4%
NE
NJ 2%
2%
NM
18%
NV
2%
NY
4%
OH
2%
OK
11%
OR
0%
PA
RI 2%
4%
SC
2%
SD
TN 5%
8%
TX
7%
UT
3%
VA
7%
WA
3%
WI
1%
WV
4%
WY
3%
6%
MD
MA
NH
Home price performance by state
March
2013
to
March
2014
1
United States 8%
1
The Freddie Mac House Price Index for the U.S. is a value-weighted average of the state indexes where the value weights are based on Freddie Mac’s single-family credit
guarantee portfolio. Other indices of home prices may have different results, as they are determined using different pools of mortgage loans and calculated under different
conventions.
The
Freddie
Mac
House
Price
Index
for
the
U.S.
is
a
non-seasonally
adjusted
monthly
series.
Source: Freddie Mac
22
0%
VT


23
19.92%
5.41%
3.08%
2.39%
Single-family Serious Delinquency Rates
Mortgage market and Freddie Mac serious delinquency
rates
0
4
8
12
16
20
24
28
32
Mar-
09
Jun-
09
Sep-
09
Dec-
09
Mar-
10
Jun-
10
Sep-
10
Dec-
10
Mar-
11
Jun-
11
Sep-
11
Dec-
11
Mar-
12
Jun-
12
Sep-
12
Dec-
12
Mar-
13
Jun-
13
Sep-
13
Dec-
13
Total Mortgage Market
Prime
¹
Subprime
¹
Freddie Mac
¹
²
1
2
  
Source: National Delinquency Survey from the Mortgage Bankers Association.  Categories represent first lien single-family loans.  Data is not yet available for the first quarter of
2014.
   See “MD&A – RISK MANAGEMENT – Credit Risk – Mortgage Credit Risk Single-Family Mortgage Credit Risk Credit Performance – Delinquencies” in Freddie Mac’s Form 10-K
for the year ended December 31, 2013, for information about the company’s reported delinquency rates.  The single-family serious delinquency rate at March 31, 2014 was 2.20%.


24
Total
Refinance
Loans:
53%
Loan purpose of single-family credit guarantee
portfolio purchases
The relief refinance mortgage initiative is Freddie Mac’s implementation of the Home Affordable Refinance Program (HARP).  Under the program, the company allows eligible
borrowers who have mortgages with high current LTV ratios to refinance their mortgages without obtaining new mortgage insurance in excess of what was already in place.  HARP is
targeted at borrowers with current LTV ratios above 80%; however, Freddie Mac’s relief refinance initiative also allows borrowers with LTV ratios at or below 80% to participate.
Percent (%)
3
2005
2006
2007
2008
2009
2010
2011
2012
2013
1Q
2014
Purchase
Other Refinance
HARP
¹
Relief
Refinance
(Non-HARP)
¹


25
Credit quality of single-family credit guarantee portfolio
purchases
2009
2010
2011
2012
2013
1Q
2014
Weighted
Average
Original
LTV
Ratio
¹
Relief refinance (includes HARP)
80%
77%
77%
97%
91%
86%
All other
66%
67%
67%
68%
71%
75%
Total purchases
67%
70%
70%
76%
75%
77%
Weighted
Average
Credit
Score
²
Relief refinance (includes HARP)
738
747
744
740
727
711
All other
757
758
759
762
756
747
Total purchases
756
755
755
756
749
740
2009
2010
2011
2012
2013
1Q
2014
Purchase
of
Relief
Refinance
Mortgages
>
80%
LTV
(HARP
loans)
³
$ Billions
$19.6
$47.9
$39.7
$86.9
$62.5
$5.2
% of single-family credit guarantee portfolio purchases
4%
12%
12%
20%
15%
10%
   Original LTV ratios are calculated as the unpaid principal balance (UPB) of the mortgage Freddie Mac guarantees including the credit-enhanced portion, divided by the lesser of the
appraised value of the property at the time of mortgage origination or the mortgage borrower’s purchase price.  Second liens not owned or guaranteed by Freddie Mac are excluded
from the LTV ratio calculation.  The existence of a second lien mortgage reduces the borrower’s equity in the home and, therefore, can increase the risk of default.
   Credit score data is based on FICO scores at the time of origination and may not be indicative of the borrowers’ current creditworthiness.  FICO scores can range between
approximately 300 to 850 points.
   HARP is the portion of the company’s relief refinance initiative targeted at borrowers with current LTV ratios above 80%. 
1
2
3


26
Single-family 1Q 2014 credit losses and REO
by region and state
($ Billions)
% of Total
UPB
2
($ Millions)
% of Total
Serious
Delinquency
Rate
3
(%)
1Q 2014
Acquisitions
($ Millions)
REO
Inventory
($ Millions)
% of Total
Inventory
($ Millions)
% of Total
Region
6
1
West
$465
28%
$7,896
20%
1.55%
$423
$1,080
15%
$79
8%
2
Northeast
430
26
15,014
38
3.10%
411
1,517
22
258
27
3
North Central
289
18
5,118
13
1.67%
422
1,778
26
228
23
4
Southeast
272
16
9,378
23
3.07%
810
2,125
30
356
37
5
Southwest
195
12
2,242
6
1.25%
151
461
7
46
5
6
Total
$1,651
100%
$39,648
100%
2.20%
$2,217
$6,961
100%
$967
100%
State
7
Arizona,
California,
Florida
&
Nevada
7
$423
26%
$11,204
28%
2.63%
$861
$2,130
31%
$310
32%
8
Illinois,
Michigan
&
Ohio
8
174
10
3,732
10
1.95%
291
1,326
19
168
17
9
New
York
&
New
Jersey
9
145
9
8,759
22
4.98%
91
274
4
103
11
10
All other
909
55
15,953
40
1.72%
974
3,231
46
386
40
11
Total 
$1,651
100%
$39,648
100%
2.20%
$2,217
$6,961
100%
$967
100%
Total Portfolio UPB
1
Seriously Delinquent Loans
REO Acquisitions & Balance
4
Credit
Losses
5
Based on the unpaid principal balance (UPB) of the single-family credit guarantee portfolio at March 31, 2014.
UPB amounts exclude $394 million of Other Guarantee Transactions since these securities are backed by non-Freddie Mac issued securities for which loan characteristic data was not
available.
Based on the number of loans that are three monthly payments or more past due or in the process of foreclosure.
Based on the UPB of loans at the time of REO acquisition.
Consist of the aggregate amount of charge-offs, net of recoveries, and REO operations (income) expense for 1Q 2014.
Region designation: West (AK, AZ, CA, GU, HI, ID, MT, NV, OR, UT, WA); Northeast (CT, DE, DC, MA, ME, MD, NH, NJ, NY, PA, RI, VT, VA, WV); Southeast (AL, FL, GA, KY, MS, NC, PR,
SC, TN, VI); North Central (IL, IN, IA, MI, MN, ND, OH, SD, WI); and Southwest (AR, CO, KS, LA, MO, NE, NM, OK, TX, WY).
Represents the four states that had the largest cumulative declines in home prices during the housing crisis that began in 2006, as measured using Freddie Mac’s home price index.
Represents selected states in the North Central region that have experienced adverse economic conditions since 2006.
Represents two states with a judicial foreclosure process in which there are a significant number of seriously delinquent loans within Freddie Mac’s single-family credit guarantee portfolio.
1
2
3
4
5
6
7
8
9


1.2%
Single-family serious delinquency rates by state and
region
27
Single-family Serious Delinquency Rates
By State
1,2
Single-family Serious Delinquency Rates
By Region
1,3
1
Based
on
the
number
of
loans
that
are
three
monthly
payments
or
more
past
due
or
in
the
process
of
foreclosure.
See
“MD&A
RISK
MANAGEMENT
Credit
Risk
Mortgage
Credit
Risk
Single-Family
Mortgage
Credit
Risk
Credit
Performance
Delinquencies”
in
Freddie
Mac’s
Form
10-K
for
the
year
ended
December
31,
2013,
for
information
about
the company’s reported delinquency rates. 
2
States presented are those with the highest number of seriously delinquent loans within Freddie Mac’s single-family credit guarantee portfolio as of March 31, 2014.   
3
Region designation: West (AK, AZ, CA, GU, HI, ID, MT, NV, OR, UT, WA); Northeast (CT, DE, DC, MA, ME, MD, NH, NJ, NY, PA, RI, VT, VA, WV); Southeast (AL, FL, GA, KY, MS, NC,
PR, SC, TN, VI); North Central (IL, IN, IA, MI, MN, ND, OH, SD, WI); and Southwest (AR, CO, KS, LA, MO, NE, NM, OK, TX, WY).
1.7%
2.2%
3.1%
3.1%
5.6%
6.0%
2.2%
2.5%
4.3%
1.3%
1.6%
0
2
4
6
8
10
12
14
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013
2Q
2013
3Q
2013
4Q
2013
1Q
2014
Percent
California
Florida
Illinois
New Jersey
New York
Total
0
1
2
3
4
5
6
1Q
2011
2Q
2011
3Q
2011
4Q
2011
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013
2Q
2013
3Q
2013
4Q
2013
1Q
2014
Percent
West
Northeast
North Central
Southeast
Southwest
Total


Aging of single-family seriously delinquent loans by
judicial and non-judicial states
28
1
Excludes loans underlying certain single-family Other Guarantee Transactions since the geographic information is not available to us for these loans.  As of March 31, 2014, the
states and territories classified as having a judicial foreclosure process consist of:  CT, DE, FL, HI, IA, IL, IN, KS, KY, LA, ME, ND, NE, NJ, NM, NY, OH, OK, OR, PA, PR, SC, SD, VI,
VT and WI.  All other states are classified as having a non-judicial foreclosure process. Judicial foreclosures are those conducted under the supervision of a court.
# of Seriously
Delinquent
Loans
Percent
# of Seriously
Delinquent
Loans
Percent
# of Seriously
Delinquent
Loans
Percent
Judicial
Review
States
¹
Less than or equal to 1 year
73,887
23%
59,129
23%
54,249
23%
More than 1 year and less than or equal to 2 years
45,464
14%
30,604
12%
27,853
12%
More than 2 years
76,125
24%
65,154
26%
61,022
26%
Non-Judicial
States
¹
Less than or equal to 1 year
78,209
24%
60,175
24%
54,636
24%
More than 1 year and less than or equal to 2 years
26,764
8%
17,968
7%
16,263
7%
More than 2 years
23,062
7%
19,731
8%
18,427
8%
Combined
¹
Less than or equal to 1 year
152,096
47%
119,304
47%
108,885
47%
More than 1 year and less than or equal to 2 years
72,228
22%
48,572
19%
44,116
19%
More than 2 years
99,187
31%
84,885
34%
79,449
34%
Total
323,511
100%
252,761
100%
232,450
100%
As of 03/31/13
As of 12/31/13
As of 03/31/14


29
Single-family
credit
guarantee
portfolio
characteristics
1
Option
FICO
FICO
Original
LTV
FICO < 620 &
Original
Attribute
Alt-A
2
Interest-only
3
ARM
< 620
4
620
659
4
> 90%
LTV
>
90%
4
1
UPB $ Billions
$1,651
$55
$33
$6
$47
$95
$261
$13
2
Percent of Total Portfolio
100%
3%
2%
0%
3%
6%
16%
1%
3
Average UPB per loan
$154,848
$154,270
$223,688
$197,819
$126,234
$132,838
$169,771
$137,156
4
Fixed Rate (% of total portfolio)
94%
63%
17%
0%
95%
94%
98%
98%
5
Owner Occupied
90%
82%
80%
76%
95%
93%
91%
95%
6
Original Loan-to-Value (OLTV)
75%
73%
74%
71%
81%
80%
107%
107%
7
OLTV > 90%
16%
4%
3%
2%
27%
23%
100%
100%
8
Current Loan-to-Value (CLTV)
69%
86%
91%
84%
82%
79%
97%
102%
9
CLTV > 90%
16%
44%
50%
39%
36%
32%
59%
67%
10
CLTV > 100%
9%
31%
34%
26%
25%
21%
33%
48%
11
CLTV > 110%
5%
21%
21%
17%
16%
13%
20%
31%
12
Average
FICO
Score
4
739
710
718
707
584
643
725
582
13
FICO
<
620
4
3%
5%
3%
4%
100%
0%
5%
100%
Book
Year
5
14
2014
1%
0%
0%
0%
0%
1%
1%
0%
15
2013
17%
0%
0%
0%
1%
6%
11%
1%
16
2012
16%
0%
0%
0%
1%
3%
7%
0%
17
2011
7%
0%
0%
0%
1%
2%
2%
0%
18
2010
7%
0%
1%
0%
1%
3%
2%
0%
19
2009
7%
0%
1%
0%
2%
3%
1%
1%
20
New single-family book (2009 to 2014)
55%
0%
2%
0%
6%
18%
24%
2%
21
HARP
and
other
relief
refinance
loans
6
21%
0%
0%
0%
30%
23%
60%
56%
22
2005 to 2008 Legacy single-family book
15%
84%
94%
71%
43%
39%
10%
26%
23
Pre-2005 Legacy single-family book
9%
16%
4%
29%
21%
20%
6%
16%
24
%
of
Loans
with
Credit
Enhancement
7
13%
11%
9%
15%
22%
19%
49%
52%
25
%
Seriously
Delinquent
8
2.20%
9.66%
11.55%
11.67%
9.29%
6.65%
2.93%
8.87%
Total Portfolio
as of
March 31, 2014
Portfolio characteristics are based on the unpaid principal balance (UPB) of the single-family credit guarantee portfolio.  Approximately $1 billion in UPB for Other Guarantee Transactions
is included in total UPB and percentage seriously delinquent but not included in the calculation of other statistics since these securities are backed by non-Freddie Mac issued securities
for which loan characteristic data was not available.
For a description of Alt-A, see the “Glossary” in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014. 
Beginning September 1, 2010, the company fully discontinued purchases of interest-only loans.
Represents the FICO score of the borrower at loan origination.  The company estimates that less than 1% of loans within the portfolio are missing origination FICO scores and as such
are excluded.
Indicates year of loan origination (except for HARP and other relief refinance loans). Calculated based on the loans remaining in the portfolio as of March 31, 2014, rather than all loans
originally guaranteed by the company and originated in the respective year.  Each Book Year category represents the percentage of loans referenced in line 1 of the same vertical
column. Individual book years exclude HARP and other relief refinance loans originated in that year. See endnote (6).  
HARP and other relief refinance loans are presented separately rather than in the year in which the refinancing occurred (from 2009 to 2014).  All other refinance loans are presented
within the year that the refinancing occurred.
Excludes credit enhancement coverage occurring subsequent to the company’s purchase or guarantee, such as STACR debt notes or other risk transfer transactions 
(i.e., K certificate transactions).  Including subsequently obtained coverage, the percentage for the total portfolio with credit enhancement was 19% as of March 31, 2014.
Based on the number of loans that are three monthly payments or more past due or in the process of foreclosure.
Note: Individual categories are not mutually exclusive, and therefore are not additive across columns.
1
2
3
4
5
6
7
8


30
Single-family credit profile by book year and product
feature
1
Attribute
2014
2013
2012
2011
2010
2009
New single-
family book
(2009 to 2014)
HARP and
other relief
refinance
loans
³
2005 to 2008
Legacy single-
family book
Pre-2005
Legacy single-
family book
1
UPB $ Billions
$1,651
$20
$285
$260
$116
$110
$116
$907
$343
$255
$146
2
Original Loan-to-Value (OLTV)
75%
75%
71%
69%
69%
69%
69%
70%
89%
75%
73%
3
OLTV > 90%
16%
14%
10%
7%
5%
4%
3%
7%
45%
11%
11%
4
Current Loan-to-Value (CLTV)
69%
75%
68%
60%
58%
59%
62%
63%
80%
86%
49%
5
CLTV > 100%
9%
0%
0%
0%
0%
0%
1%
0%
20%
28%
2%
6
CLTV > 110%
5%
0%
0%
0%
0%
0%
0%
0%
12%
18%
1%
7
Average
FICO
Score
4
739
747
754
761
756
754
751
756
735
703
710
8
FICO
<
620
4
3%
0%
0%
0%
0%
0%
1%
0%
4%
8%
7%
9
Adjustable-rate
6%
6%
5%
5%
8%
4%
1%
5%
1%
15%
12%
10
Interest-only
5
2%
0%
0%
0%
0%
0%
0%
0%
0%
12%
1%
11
Investor
6%
7%
6%
4%
5%
5%
3%
5%
9%
6%
5%
12
Condo
7%
8%
7%
5%
5%
6%
7%
6%
9%
11%
8%
Geography
13
Arizona,
California,
Florida
&
Nevada
6
26%
32%
27%
26%
21%
18%
17%
24%
28%
31%
22%
14
Illinois,
Michigan
&
Ohio
7
10%
8%
10%
10%
9%
10%
9%
10%
13%
9%
14%
15
New
York
&
New
Jersey
8
9%
7%
8%
7%
10%
9%
10%
8%
8%
10%
11%
16
All other states
55%
53%
55%
57%
60%
63%
64%
58%
51%
50%
53%
17
% of
Loans
with
Credit
Enhancement
9
13%
24%
18%
13%
10%
8%
8%
13%
12%
18%
10%
18
% Seriously
Delinquent
10
2.20%
0.00%
0.01%
0.05%
0.20%
0.40%
0.87%
0.24%
0.65%
8.25%
3.16%
Total Portfolio
as of
March 31, 2014
Book Year
²
 
Portfolio characteristics are based on the unpaid principal balance (UPB) of the single-family credit guarantee portfolio.  Approximately $1 billion in UPB for Other Guarantee Transactions is
included in total UPB and percentage seriously delinquent but not included in the calculation of other statistics since these securities are backed by non-Freddie Mac issued securities for which
loan characteristic data was not available.
Indicates year of loan origination (except for HARP and other relief refinance loans). Calculated based on the loans remaining in the portfolio as of March 31, 2014, rather than all loans originally
guaranteed by the company and originated in the respective year.  Individual book years exclude HARP and other relief refinance loans originated in that year.  See endnote (3). 
HARP and other relief refinance loans are presented separately rather than in the year in which the refinancing occurred (from 2009 to 2014).  All other refinance loans are presented within the
year that the refinancing occurred.
Represents the average of the borrowers’ FICO scores at origination.  The company estimates that less than 1% of loans within the portfolio are missing FICO scores and as such are excluded.
Beginning September 1, 2010, the company fully discontinued purchases of interest-only loans.
Represents the four states that had the largest cumulative declines in home prices during the housing crisis that began in 2006, as measured using Freddie Mac’s home price index.
Represents selected states in the North Central region that have experienced adverse economic conditions since 2006.
Represents two states with a judicial foreclosure process in which there are a significant number of seriously delinquent loans within Freddie Mac’s single-family credit guarantee portfolio.
Excludes credit enhancement coverage occurring subsequent to the company’s purchase or guarantee, such as STACR debt notes or other risk transfer transactions (i.e., K certificate
transactions).  Including subsequently obtained coverage, the percentage for the total portfolio with credit enhancement was 19% as of March 31, 2014.
Based on the number of loans that are three monthly payments or more past due or in the process of foreclosure.
1
2
3
4
5
6
7
8
9
10


31
Single-family cumulative foreclosure transfer and
short
sale
rates
1
by
book
year
2007
2006
2005
2004
2014
2008
2009
2010
2011
2013
2012
1  
Rates are calculated for each year of origination as the number of loans that have proceeded to foreclosure transfer or short sale and resulted in a credit loss, excluding
any subsequent recoveries, divided by the number of loans originated in that year that were acquired in the company’s single-family credit guarantee portfolio. Includes
Other Guarantee Transactions where loan characteristic data is available.
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
12.00%
Yr1
Q1
Yr1
Q3
Yr2
Q1
Yr2
Q3
Yr3
Q1
Yr3
Q3
Yr4
Q1
Yr4
Q3
Yr5
Q1
Yr5
Q3
Yr6
Q1
Yr6
Q3
Yr7
Q1
Yr7
Q3
Yr8
Q1
Yr8
Q3
Yr9
Q1
Yr9
Q3
Yr10
Q1
Yr10
Q3
Yr11
Q1
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Quarter Post Origination


32
Total Multifamily (MF) Portfolio
UPB $ Billions
Multifamily portfolio composition
$167
$165
$135
$154
$164
$169
$177
$180
12/31/07
12/31/08
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
03/31/14
MF loan portfolio
MF investment securities portfolio
MF guarantee portfolio


33
K-Deal
Securitization
Volume
¹
UPB $ Billions
Multifamily securitization volume
1
Total UPB represents the total collateral UPB of multifamily loans sold via Freddie Mac’s K Certificate transactions.
2
Data as of March 31, 2014.
$2.1
$6.4
$13.7
$21.2
$28.0
$3.9
2009
2010
2011
2012
2013
YTD
2014
²


AL
1.0%
AK
0.0%
> 5%
> 3% -
5%
1%
> 1% -
3%
AR
0.1%
AZ
2.0%
CA
7.0%
CO
3.7%
CT
0.3%
DC
1.2%
DE
0.0%
FL
5.5%
GA
6.2%
HI
0.0%
IA
0.9%
ID
<0.1%
IL
1.9%
IN
0.8%
KS
0.1%
KY
0.7%
LA
0.0%
MD
2.4%
ME
0.0%
MI
0.9%
MN
1.4%
MO
0.6%
MS
0.0%
MT
0.0%
NC
2.6%
ND
0.0%
NE
1.1%
NJ
1.2%
NM
0.0%
NV
1.7%
NY
14.1%
OH
5.0%
OK
0.4%
OR
0.9%
PA
1.2%
RI
<0.1%
SC
<0.1%
SD
0.5%
TN
1.7%
TX
23.5%
UT
1.0%
VA
2.4%
VT
0.0%
WA
2.0%
WI
0.8%
WV
0.0%
WY
0.1%
NH
0.0%
34
MA 3.0%
MF New Business Volume $3.0B
For the Three Months Ended March 31, 2014
1
Based on the unpaid principal balance (UPB) of the multifamily loan purchases and issuance of other guarantee commitments and other structured securities. 
Percentages shown above are rounded to the nearest tenth of a percent although classifications are based on unrounded figures.
Multifamily
new
business
volume
by
state
(%)
1


Multifamily mortgage portfolio UPB concentration by
state
1
AL
0.9%
AK
0.0%
AR
0.3%
AZ
2.4%
CA
16.6%
CO
3.0%
CT
0.9%
DC
0.7%
DE
0.2%
FL
7.0%
GA
4.3%
HI
0.2%
IA
0.2%
ID
<0.1%
IL
2.5%
IN
0.7%
KS
0.8%
KY
0.5%
LA
0.7%
MA 1.9%
MD
4.9%
ME
<0.1%
MI
1.0%
MN
1.2%
MO
1.1%
MS
0.3%
MT
<0.1%
NC
2.8%
ND
0.1%
NE
0.5%
NJ
2.7%
NM
0.3%
NV
1.1%
NY
8.5%
OH
2.0%
OK
0.5%
OR
0.9%
PA
2.5%
RI
0.2%
SC
0.9%
SD
<0.1%
TN
1.4%
TX
12.9%
UT
0.6%
VA
5.3%
VT
0.0%
WA
3.4%
WI
0.7%
WV
<0.1%
WY
<0.1%
NH
0.1%
35
5%
2% -
5%
1%
1% -
2%
MF Mortgage Portfolio $132.6B
2
As of March 31, 2014
1
2
Based on the unpaid principal balance (UPB) of unsecuritized mortgage loans, other guarantee commitments, and collateral underlying other structured securities and K  Certificate
transactions.  Percentages shown above are rounded to the nearest tenth of a percent although classifications are based on unrounded figures.
Consists of the UPB of unsecuritized multifamily loans, other guarantee commitments, and guaranteed Freddie Mac mortgage-related securities.  Excludes the UPB associated with
unguaranteed subordinated tranches in K Certificate transactions and other structured securities.


36
Multifamily
mortgage
portfolio
by
attribute
¹
Year
of
Acquisition
or
Guarantee
³
1
2007 and prior
$40.6
0.43%
$34.2
0.24%
$33.0
0.15%
2
2008
16.0
0.22
13.2
0.18
12.6
-
3
2009
12.1
-
11.2
-
11.0
-
4
2010
11.8
-
10.9
0.13
10.7
0.07
5
2011
16.9
-
15.9
-
15.7
-
6
2012
25.6
-
23.7
-
23.5
-
7
2013
6.0
-
23.7
-
23.2
-
8
2014
N/A
N/A
N/A
N/A
2.9
-
Total
$129.0
0.16%
$132.8
0.09%
$132.6
0.04%
Maturity Dates
9
2014
$7.1
0.28%
$2.1
0.12%
$1.4
0.20%
10
2015
9.2
0.15
6.9
0.05
6.5
-
11
2016
12.6
0.05
11.2
-
10.7
-
12
2017
10.6
0.19
10.0
0.43
9.8
0.27
13
2018
17.3
-
17.0
-
16.9
-
14
2019
18.2
-
17.5
0.07
17.6
0.05
15
Beyond 2019
54.0
0.27
68.1
0.09
69.7
0.03
Total
$129.0
0.16%
$132.8
0.09%
$132.6
0.04%
Geography
4
16
California
$21.2
0.10%
$22.4
0.03%
$22.3
-
%
17
Texas
16.0
0.13
16.7
0.02
16.9
-
18
New York
10.8
0.09
11.4
0.12
11.5
0.08
19
Florida
9.0
0.04
9.3
0.28
9.2
-
20
Virginia
7.0
-
7.0
0.37
6.9
0.38
21
Maryland
6.6
-
6.7
-
6.5
-
22
All other states
58.4
0.26
59.3
0.08
59.3
0.04
Total
$129.0
0.16%
$132.8
0.09%
$132.6
0.04%
UPB
($ Billions)
March 31, 2014
UPB
($ Billions)
Delinquency
Rate
²
(%)
December 31, 2013
Delinquency
Rate
²
(%)
March 31, 2013
Delinquency
Rate
²
(%)
UPB
($ Billions)
Based on the unpaid principal balance (UPB) of the multifamily mortgage portfolio.
Based on the UPB of mortgages two monthly payments or more past due or in the process of foreclosure. 
Based on either: (a) the year of acquisition, for loans recorded on the company’s consolidated balance sheets; or (b) the year that the company issued its guarantee, for the
remaining loans in its multifamily mortgage portfolio.
Presents the six states with the highest UPB at March 31, 2014.
1
2
3
4


37
Multifamily
mortgage
portfolio
by
attribute,
continued
Current Loan Size
1
> $25M
$49.1
-
%
$50.6
0.05%
$50.1
0.05%
2
> $5M & <= $25M
71.0
0.26
73.2
0.11
73.4
0.03
3
> $3M & <= $5M
5.7
0.17
6.0
0.11
6.0
0.06
4
> $750K & <= $3M
3.0
0.56
2.8
0.17
2.9
0.17
5
<= $750K
0.2
0.37
0.2
0.46
0.2
0.26
6
Total
$129.0
0.16%
$132.8
0.09%
$132.6
0.04%
Legal Structure
7
Unsecuritized Loans
$73.7
0.06%
$59.2
0.08%
$55.9
0.02%
8
K Certificates
41.8
0.06
59.8
0.07
62.8
0.05
9
Other Freddie Mac mortgage-related securities
4.2
3.07
4.8
0.59
4.8
0.28
10
Other guarantee commitments
9.3
-
9.0
-
9.1
-
11
Total
$129.0
0.16%
$132.8
0.09%
$132.6
0.04%
Credit Enhancement
12
Credit Enhanced
$52.2
0.34%
$70.2
0.11%
$73.3
0.07%
13
Non-Credit Enhanced
76.8
0.04
62.6
0.07
59.3
0.02
14
Total
$129.0
0.16%
$132.8
0.09%
$132.6
0.04%
Other
15
Original LTV > 80%
$5.6
2.34%
$5.6
0.19%
$5.6
0.19%
16
Original
DSCR
below
1.10
³
$2.2
3.76%
$2.2
-
%
$2.2
-
%
March 31, 2014
UPB
($ Billions)
Delinquency
Rate
²
(%)
December 31, 2013
Delinquency
Rate
²
(%)
March 31, 2013
Delinquency
Rate
²
(%)
UPB
($ Billions)
UPB
($ Billions)
3
2
1
Based on the unpaid principal balance (UPB) of the multifamily mortgage portfolio.
Based on the UPB of mortgages two monthly payments or more past due or in the process of foreclosure.
DSCR – Debt Service Coverage Ratio – is an indicator of future credit performance for multifamily loans. DSCR estimates a multifamily borrower’s ability to service its mortgage obligation using the secured
property’s cash flow, after deducting non-mortgage expenses from income. The higher the DSCR, the more likely a multifamily borrower will be able to continue servicing its mortgage obligation.
¹


0.00%
Multifamily market and Freddie Mac delinquency rates
Percent
1
38
6.24%
0.83%
0.09%
1
0
2
4
6
8
10
12
14
4Q 2009
2Q 2010
4Q 2010
2Q 2011
4Q 2011
2Q 2012
4Q 2012
2Q 2013
4Q 2013
Freddie Mac (60+ day)
FDIC Insured Institutions (90+ day)
MF CMBS Market (60+ day)
ACLI Investment Bulletin (60+ day)
See “MD&A – RISK MANAGEMENT – Credit Risk – Mortgage Credit Risk Multifamily Mortgage Credit Risk ” in Freddie Mac’s Form 10-K for the year ended December 31,
2013, for information about the company’s reported multifamily delinquency rate.  The multifamily delinquency rate at March 31, 2014 was 0.04%. 
Source: Freddie Mac, FDIC Quarterly Banking Profile, TREPP (CMBS multifamily 60+ delinquency rate, excluding REOs), American Council of Life Insurers (ACLI).  Non-Freddie
Mac data is not yet available for the first quarter of 2014.


39
Safe Harbor Statements
Freddie Mac obligations
Freddie Mac’s securities are obligations of Freddie Mac only. The securities, including any interest or return of discount on the securities,
are not guaranteed by and are not debts or obligations of the United States or any federal agency or instrumentality other than Freddie
Mac.
No offer or solicitation of securities
This
presentation
includes
information
related
to,
or
referenced
in
the
offering
documentation
for,
certain
Freddie
Mac
securities,
including offering circulars and related supplements and agreements. Freddie Mac securities may not be eligible for offer or sale in
certain
jurisdictions
or
to
certain
persons.
This
information
is
provided
for
your
general
information
only,
is
current
only
as
of
its
specified
date and does not constitute an offer to sell or a solicitation of an offer to buy securities. The information does not constitute a sufficient
basis
for
making
a
decision
with
respect
to
the
purchase
or
sale
of
any
security.
All
information
regarding
or
relating
to
Freddie
Mac
securities
is
qualified
in
its
entirety
by
the
relevant
offering
circular
and
any
related
supplements.
Investors
should
review
the
relevant
offering circular and any related supplements before making a decision with respect to the purchase or sale of any security. In addition,
before purchasing any security, please consult your legal and financial advisors for information about and analysis of the security, its
risks and its suitability as an investment in your particular circumstances.
Forward-looking statements
Freddie Mac's presentations may contain forward-looking statements, which may include statements pertaining to the conservatorship,
the company’s current expectations and objectives for its single-family, multifamily and investment businesses, its loan workout
initiatives and other efforts and other programs to assist the U.S. residential mortgage market, liquidity, capital management, economic
and market conditions and trends, market share, the effect of legislative and regulatory developments, and new accounting guidance,
credit quality of loans we guarantee, and results of operations and financial condition on a GAAP, Segment Earnings and fair value
basis. Forward-looking statements involve known and unknown risks and uncertainties, some of which are beyond the company’s
control. Management’s expectations for the company’s future necessarily involve a number of assumptions, judgments and estimates,
and various factors, including changes in market conditions, liquidity, mortgage spreads, credit outlook, actions by the U.S. government
(including FHFA, Treasury and Congress), and the impacts of legislation or regulations and new or amended accounting guidance, could
cause actual results to differ materially from these expectations. These assumptions, judgments, estimates and factors are discussed in
the
company’s
Annual
Report
on
Form
10-K
for
the
year
ended
December
31,
2013,
Quarterly
Report
on
Form
10-Q
for
the
quarter
ended March 31, 2014 and Current Reports on Form 8-K, which are available on the Investor Relations page of the company’s Web site
at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov. The company undertakes no obligation to update forward-
looking statements it makes to reflect events or circumstances after the date of this presentation.