Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 227

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 227
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 value is written off against the allowance for credit losses prior to the reclassification. If the charge-off amount exceeds the existing allowance for credit losses amount, an additional provision for credit losses is recognized. Any remaining allowance for credit losses after the charge-off is reversed through provision for credit losses.We reclassify loans from held-for-sale to held-for-investment when we have both the intent and ability to hold the loan for the foreseeable future. Upon reclassification from held-for-sale to held-for-investment, we reverse the loan’s held-for-sale valuation allowance, if any, and establish an allowance for credit losses as needed. The table below presents the allowance for credit losses or valuation allowance that was reversed or established due to loan reclassifications between held-for-investment and held-for-sale during the periods presented.Table 4.3 - Loan Reclassifications(1)20242023(In millions)UPBAllowance for Credit Losses Reversed or (Established)Valuation Allowance (Established) or ReversedUPBAllowance for Credit Losses Reversed or (Established)Valuation Allowance (Established) or ReversedSingle-Family reclassifications from:Held-for-investment to held-for-sale$2,285 $75 $— $1,968 $37 $— Held-for-sale to held-for-investment(2)233 19 19 191 16 20 Multifamily reclassifications from:Held-for-investment to held-for-sale1,322 12 (61)6,760 4 (58)   Held-for-sale to held-for-investment833 — 10 861 (1)19 (1)Amounts exclude reclassifications related to loans for which we have elected the fair value option.(2)Allowance for credit losses established upon loan reclassifications from held-for-sale to held-for-investment to reflect the net amount we expect to collect on the loan. Loans with prior charge-offs may have a negative allowance for credit losses established upon reclassification. 

Interest IncomeWe recognize interest income on an accrual basis except when we believe the collection of principal and interest in full is not reasonably assured, which generally occurs when a loan is three monthly payments or more past due, at which point we place the loan on non-accrual status unless the loan is well secured and in the process of collection based upon an individual loan assessment. A loan is considered past due if a full payment