FHFA FY 2023

PERFORMANCE AND

ACCOUNTABILITY REPORT

X TABLE OF CONTENTS

MESSAGE FROM THE DIRECTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

FHFA’s MISSION, VISION, AND VALUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

MANAGEMENT’S DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

About the Federal Housing Finance Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Background on FHFA’s Statutory Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Regulator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Conservator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Background on the Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Federal Home Loan Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

FHFA Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Strategic Goals and Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Summary of Performance Measures and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Looking Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Analysis of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

FY 2023 COVID-19 – Financial Impact on FHFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

What Is FHFA’s Net Position and Net Costs? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

How Does FHFA Generate Revenue? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

How Does FHFA Align Costs to Strategic Goals? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

How Does FHFA Assess Internal Controls? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

FHFA Statements of Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

PERFORMANCE SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

FHFA’s Performance Planning and Review Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Validation and Verification of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Strategic Goal 1: Secure the Regulated Entities’ Safety and Soundness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Strategic Goal 2: Foster Housing Finance Markets that Promote Equitable Access 

to Affordable and Sustainable Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Strategic Goal 3: Responsibly Steward FHFA’s Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Added, Changed, and Discontinued Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Appendix I: FHFA’s Response to Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Audits and Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Management Report on Final Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Office of Inspector General Management and Performance Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Summary of Financial Statements Audit and Management Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Payment Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Civil Monetary Penalty Adjustment for Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Performance Measure Validation and Verification Template . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

List of Figures and Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Connect with FHFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

FHFA Key Management Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Office of the Inspector General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Federal Housing Finance Oversight Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
X MESSAGE FROM THE DIRECTOR 

This Fiscal Year (FY) 2023 Performance and Accountability Report provides the financial 

statements and analysis for the Federal Housing Finance Agency (FHFA), and it assesses the 

performance of FHFA as regulator and conservator of the Federal National Mortgage Association 

(Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) – together, the 

Enterprises – and as regulator of the Federal Home Loan Bank (FHLBank) System. This report is 

intended to meet the requirements of the Government Performance and Results Modernization Act 

of 2010. The report’s financial and performance data are reliable and complete in accordance with 

Office of Management and Budget Circulars A-123 and A-136. 

The strategic goals against which this report evaluates the Agency’s performance were established in April 2022 in FHFA’s 

FY 2022 – 2026 Strategic Plan. These strategic goals reflect FHFA’s focus to fulfill its mission and carry out its statutory 

responsibilities, as well as its commitment to a strong and equitable housing finance system:

1)Secure the safety and soundness of the regulated entities; 

2)Foster housing finance markets that promote equitable access to affordable and sustainable housing; and 

3)Responsibly steward FHFA’s infrastructure.

FHFA continues to strengthen the safety and soundness of its regulated entities. In March 2023, FHFA published a notice of 

proposed rulemaking to further enhance the Enterprise Regulatory Capital Framework (ERCF) that would implement the 

lessons learned through the continued application of the ERCF, adopted in FY 2021, and better reflect the risks inherent in the 

Enterprises’ business models. FHFA also issued guidance, such as Advisory Bulletin 2023-03 on model risk management, to 

address and set expectations for the regulated entities’ business practices.

FHFA is also ensuring that its regulated entities identify and manage emerging climate-related risks. The Agency continues 

to work closely with the Enterprises to enhance the transparency, accountability, and alignment of their publicly reported 

Environmental, Social, and Governance metrics, and has begun monitoring their greenhouse gas emissions data and reporting 

readiness. In its supervisory role, FHFA has continued to review how the regulated entities consider the risks associated with 

climate change and natural disasters in their decision making and governance.

In order to meet its statutory obligation to foster liquid, efficient, competitive, and resilient national housing finance markets, 

FHFA continues to strengthen its core mission activities. Integral to this effort are updates to the Enterprises’ credit score 

requirements. In October 2022, the Agency announced the validation and approval of the FICO 10T and VantageScore 4.0 

credit score models for use by the Enterprises, as well as the requirement that loans delivered to the Enterprises include a 

minimum of two, rather than three, credit reports for each borrower from the national consumer reporting agencies. As the 

implementation of these updated requirements continues, FHFA and the Enterprises have undertaken extensive stakeholder 

engagement, and FHFA has announced a series of stakeholder forums to allow discussion of a wide variety of issues, 

opportunities, and challenges related to this implementation process.

Over the course of the fiscal year, FHFA announced multiple updates to the Enterprises’ single-family pricing framework to 

enhance mission attainment while also bolstering safety and soundness. In October 2022, FHFA announced targeted increases 

to the upfront guarantee fees for most cash-out refinance loans. Simultaneously, FHFA announced the elimination of upfront 

guarantee fees for mortgage loans for many creditworthy low- and moderate-income first-time homebuyers, as well as certain 

borrowers purchasing homes in rural communities or purchasing manufactured housing. In January 2023, FHFA announced 

a recalibration of the upfront fees for most purchase and rate-term refinance loans to align the fee structure more closely with 

the risk factors utilized in the Enterprise Regulatory Capital Framework. Following extensive engagement with a variety of 

stakeholders, in May 2023, FHFA rescinded an upfront fee that was based on borrowers’ debt-to-income ratios scheduled to 

take effect later in the year. In May 2023, FHFA also published a request for input (RFI) on the Enterprises’ single-family 

pricing framework to gather further feedback regarding the goals and policy priorities FHFA should pursue in its oversight of 

this framework. Together, these steps will strengthen safety and soundness, better ensure the Enterprises fulfill their statutory 

missions, and more accurately align pricing with the expected financial performance and risks of the underlying loans.

1| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
FHFA has also committed to conducting a public process to identify concrete solutions to address the challenges faced by renters 

nationwide, focusing on properties with mortgage loans backed by the Enterprises. The Agency has led a stakeholder engagement 

process to explore the Enterprises’ role in protecting the nation’s tenants, and in May 2023, issued an RFI on multifamily tenant 

protections to solicit feedback from a diverse set of viewpoints. Representative of the Agency’s commitment to supporting safe 

and sustainable housing opportunities for renters, FHFA also announced enhancements to the Enterprises, multifamily radon 

standards in January 2023. The enhanced radon standards were the result of extensive research and stakeholder outreach.

In 2022, the Enterprises released their inaugural Equitable Housing Finance Plans to identify and address barriers to 

sustainable housing opportunities, including goals and actions to advance equity in housing finance in 2022-2026. In April 

2023, FHFA announced updates to build upon the inaugural plans and make adjustments based on initial research and 

findings. Also in April 2023, FHFA announced a notice of proposed rulemaking to formalize many of the Agency’s existing 

practices and programs regarding fair housing and fair lending oversight of its regulated entities, including the requirement 

for the Enterprises to maintain Equitable Housing Finance Plans. FHFA expects this rulemaking to provide increased public 

transparency and greater oversight and accountability of the regulated entities’ fair housing and fair lending compliance.

As part of FHFA’s ongoing efforts to understand technology-driven developments in housing finance and the associated 

opportunities and risks, the Agency hosted its inaugural TechSprint, a team-based problem-solving event. The TechSprint brought 

together experts and practitioners from the technology and mortgage finance sectors to propose solutions that could reduce 

mortgage costs and delivery times while creating a more inclusive and transparent process. Over a three-day period in July 

2023, the event consisted of intensive, in-person collaboration, along with several publicly available live-streamed panels and 

presentations. Teams worked to address problem statements centered around the question: How might data digitization drive 

transparency and increase access, fairness, affordability, and sustainability in mortgage lending?

In October 2022, using millions of Enterprise appraisal records, FHFA began publishing quarterly Uniform Appraisal Dataset 

(UAD) Aggregate Statistics Data Files and launched UAD Aggregate Statistics Dashboards on its website. Using this data in 

a manner that protects borrower privacy, the UAD aggregate statistics and dashboards give stakeholders and the public new 

access to a broad set of data points and trends found in appraisal reports. The new data and quarterly releases exemplify the 

Agency’s dedication to transparency, providing access to information that can help deter appraisal bias, and, ultimately, lead 

to a more efficient and equitable valuation system.

As the FHLBank System nears its 100th year, FHFA launched a comprehensive review of the System to ensure it remains 

positioned to meet the needs of the future. FHFA solicited written input from the public and hosted public listening sessions 

and regional roundtable discussions across the country, covering a variety of topics. Topics included issues of local 

importance as well as more foundational questions about the FHLBanks’ mission, purpose, and organization. FHFA drew on the 

feedback received through this public engagement along with its own extensive analysis when preparing a report, published 

in November 2023, which includes recommendations for how the FHLBank System could effectively fulfill its mission. 

Success in meeting FHFA’s mission and goals requires empowered and supported staff and prudent business practices that 

responsibly steward the Agency’s infrastructure. FHFA’s high-performance culture leads us to continuously review our work to 

identify opportunities for improvements. Our work reflects the Agency’s values of fairness, accountability, integrity, and respect. 

Transparency and dialogue with stakeholders and the public are vital to the policymaking process. The publication of this 

report is one way FHFA informs the public of our planned actions and decision-making to facilitate this dialogue. 

This report demonstrates that FHFA performed well against its strategic goals and finds that the Agency has no material 

internal control weaknesses. Since its inception in July 2008, FHFA has received an unmodified audit opinion on its financial 

statements from the U.S. Government Accountability Office every year. This strong performance is a testament to the 

dedicated, hardworking, and professional staff of FHFA.

Sincerely,

SANDRA L . THOMPSON

Director, Federal Housing Finance Agency

November 8, 2023

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 3
FHFA’s MISSION, VISION, AND VALUES1

MISSION

Ensure the regulated entities fulfill their mission by operating in a safe and sound manner to serve as a reliable source of 

liquidity for equitable and sustainable housing finance and community investment throughout the economic cycle.

VISION

For FHFA’s supervisory, regulatory, and mission-related activities to support a reliable, stable, equitable, and liquid 

U.S. housing finance system.

VALUES

FHFA’s culture is built on a foundation of competence, diversity, equity, and inclusion. Accordingly, FHFA employees 

emulate the following values:

FAIRNESS We value varied perspectives and thoughts and treat others with impartiality.

ACCOUNTABILITY We are responsible for carrying out our work with transparency and professional excellence.

INTEGRITY We are committed to the highest ethical and professional standards to inspire trust and confidence 

 in our work and in one another.

RESPECT We treat others with dignity, share information and resources, and collaborate.

1 https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA_StrategicPlan_2022-2026_Final.pdf. 

3| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X LIST OF 

ABBREVIATIONS

Abbreviation Description

AB Advisory Bulletin

AHP Affordable Housing Program

AI Artificial Intelligence 

AMA Acquired Member Assets

APP Annual Performance Plan

ARCC Audit, Risk, and Control Committee

Bank Act Federal Home Loan Bank Act of 1932

Bureau of the 

Fiscal Service 

Fiscal Service

CAMELSO Capital, Asset Quality, Management, 

Earnings, Liquidity, Sensitivity to Market Risk, 

and Operational Risk

CFPB Consumer Financial Protection Bureau

CRT Credit Risk Transfer

CSP Common Securitization Platform

CSS Common Securitization Solutions, LLC

CY Calendar Year

D&I Diversity and Inclusion

DAFS Division of Accounting and Financial Standards

DBR Division of Federal Home Loan Bank Regulation

DCOR Division of Conservatorship Oversight 

and Readiness

DEIA Diversity, Equity, Inclusion, and Accessibility

DER Division of Enterprise Regulation

DGC Data Governance Committee

DHMG Division of Housing Mission and Goals

DRS Division of Research and Statistics

DTS Duty to Serve

EEO Equal Employment Opportunity

ERCF Enterprise Regulatory Capital Framework

ESG Environmental, Social, and Governance 

FAIR Fairness, Accountability, Integrity, and Respect

Fannie Mae Federal National Mortgage Association 

FASAB Federal Accounting Standards Advisory Board

FEVS Office of Personnel Management’s 

Federal Employee Viewpoint Survey

FHFA Federal Housing Finance Agency

FHFA HPI® FHFA House Price Index®

FHLBank Federal Home Loan Bank

Fintech Office Office of Financial Technology

FISMA Federal Information Security 

Modernization Act of 2014

FMFIA Federal Managers’ Financial Integrity Act

FMS Financial Management System

Freddie Mac Federal Home Loan Mortgage Corporation

FY Fiscal Year 

Abbreviation Description

GAO U.S. Government Accountability Office 

GHG Greenhouse Gas

HERA Housing and Economic Recovery Act of 2008

ICAM Identify, Credential, and Access Management 

MBS Mortgage-Backed Security

MI Mortgage Insurer

MRA Matter Requiring Attention

MSR Mortgage Servicing Rights

MVE Market Value of Equity

MWOB Minority- and Women-Owned Businesses

NMDB® National Mortgage Database®

NSMO National Survey of Mortgage Originations 

OCAC Office of Congressional Affairs 

and Communications

OCOO Office of the Chief Operating Officer

OD Office of the Director

OEOF Office of Equal Opportunity and Fairness

OF Office of Finance 

(of the Federal Home Loan Bank System)

OGC Office of General Counsel

OIG Office of Inspector General

OMB Office of Management and Budget

OMWI Office of Minority and Women Inclusion

PAR Performance and Accountability Report

PAVE Property Appraisal and Valuation Equity Taskforce

PIIA Payment Integrity Information Act of 2019

PO Purchase-Only

PSPA Preferred Stock Purchase Agreement

PUDB Public Use Database

PVCS Par Value of Capital Stock

RFI Request For Input or Request For Information

ROE Report of Examination

Safety and 

Soundness Act

Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992

SEC U.S. Securities and Exchange Commission

SF Single-Family

SDQ Seriously Delinquent

Treasury U.S. Department of the Treasury

UAD Uniform Appraisal Dataset

UMBS Uniform Mortgage-Backed Security

U .S .C . United States Code

U .S . GAAP U.S. Generally Accepted Accounting Principles

USPAP Uniform Standards of Professional Appraisal Practice

VBCI Values-Based Culture Initiative

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 4
XMANAGEMENT’S DISCUSSION AND ANALYSIS

06 ABOUT THE FEDERAL HOUSING FINANCE AGENCY

10 FHFA ORGANIZATION

14 PERFORMANCE SUMMARY

18 LOOKING FORWARD

21 FINANCIAL SUMMARY

27 FHFA STATEMENTS OF ASSURANCE

Management’s Discussion and Analysis

5| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X ABOUT THE FEDERAL HOUSING FINANCE AGENCY

2

 The OF and CSS are not separate “regulated entities” as the term is defined by statute (see 12 U.S.C. § 4502(20)). Rather, OF is part of the FHLBank 

System, and CSS is an affiliate of the Enterprises. However, for convenience, references to the “regulated entities” in this report should be read to also 

apply to the OF and CSS, unless otherwise noted.

3

 12 U.S.C. § 4513.

4

 12 U.S.C. § 4513(a)(1).

BACKGROUND ON FHFA’S 

STATUTORY OBLIGATIONS

The Federal Housing Finance Agency (FHFA) was 

established by the Housing and Economic Recovery 

Act of 2008 (HERA), amending the Federal Housing 

Enterprises Financial Safety and Soundness Act of 1992 

(Safety and Soundness Act). The Agency is responsible 

for the effective supervision, regulation, and housing 

mission oversight of Fannie Mae and Freddie Mac (the 

Enterprises), Common Securitization Solutions, LLC 

(CSS), and the Federal Home Loan Bank (FHLBank) 

System, which includes the 11 FHLBanks and Office of 

Finance (OF), a joint office of the FHLBanks. FHFA’s 

mission is to ensure that Fannie Mae, Freddie Mac, and 

the FHLBanks (together, the regulated entities2

) operate 

in a safe and sound manner so that they serve as a reliable 

source of liquidity and funding for housing finance and 

community investment through the economic cycle. Since 

September 6, 2008, FHFA has also served as conservator 

of the Enterprises.

Regulator

The Safety and Soundness Act, as amended by HERA, 

assigns to FHFA regulatory oversight of the Enterprises 

and the FHLBank System.3 The statute vests FHFA 

with the authorities, similar to those of other prudential 

financial regulators, to maintain the financial health of the 

regulated entities. FHFA is responsible for supervising the 

business and operations of the regulated entities to ensure 

that they are safe and sound and aligned with the missions 

set forth in their authorizing statutes. FHFA exercises 

these regulatory and supervisory authorities by issuing 

rules, policy guidance documents, and regulatory orders.

The Safety and Soundness Act requires FHFA to fulfill the 

following duties:

(A) to oversee the prudential operations of each 

regulated entity; and

(B) to ensure that—

i. each regulated entity operates in a safe and 

sound manner, including maintenance of 

adequate capital and internal controls;

ii. the operations and activities of each regulated 

entity foster liquid, efficient, competitive, and 

resilient national housing finance markets, 

including activities relating to mortgages 

on housing for low- and moderate-income 

families involving a reasonable economic 

return that may be less than the return earned 

on other activities;

iii. each regulated entity complies with the Safety 

and Soundness Act and the rules, regulations, 

guidelines, and orders issued under this 

chapter and the authorizing statutes;

iv. each regulated entity carries out its statutory 

mission only through activities that are 

authorized under and consistent with the 

Safety and Soundness Act and the authorizing 

statutes; and

v. the activities of each regulated entity and 

the manner in which such regulated entity is 

operated are consistent with the public interest.4

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 6
Conservator

FHFA’s authority as both conservator and regulator of 

the Enterprises is based upon statutory mandates, which 

include the following conservatorship authorities granted 

by HERA:

(D) ... take such action as may be—

i. necessary to put the regulated entity in a 

sound and solvent condition; and

ii. appropriate to carry on the business of the 

regulated entity and preserve and conserve the 

assets and property of the regulated entity.5

5

 12 U.S.C. § 4617(b)(2)(D).

6

 12 U.S.C. § 5220(b)(1).

Continuing the business of the Enterprises in conservatorships 

also incorporates the above-referenced responsibilities that 

are enumerated in 12 U.S. Code (U.S.C.) § 4513(a)(1).

Additionally, under the Emergency Economic 

Stabilization Act of 2008, FHFA has a statutory 

responsibility in its capacity as conservator to “implement 

a plan that seeks to maximize assistance for homeowners 

and use its authority to encourage the servicers of the 

underlying mortgages, and considering net present value to 

the taxpayer, to take advantage of ... available programs to 

minimize foreclosures.”6

Management’s Discussion and Analysis

7| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
BACKGROUND ON 

THE REGULATED ENTITIES

The Enterprises

Fannie Mae and Freddie Mac were created by Congress 

in 1938 and 1970, respectively, to provide stability 

and liquidity in the secondary market for residential 

mortgages. The Enterprises acquire mortgages that 

lenders have already made to borrowers. The Enterprises 

guarantee the payment of principal and interest on the 

underlying mortgages and charge lenders a guarantee fee 

for assuming the credit risk associated with the acquired 

mortgages. Since September 6, 2008, the Enterprises have 

operated in conservatorships.

To reduce their credit risk exposure on guaranteed 

mortgages, the Enterprises routinely sell a portion of 

the credit risk on newly acquired single-family (SF) 

mortgages in targeted categories to the private sector. 

The Enterprises also purchase multifamily mortgages, 

with each Enterprise using a different model of credit risk 

sharing for these purchases. Fannie Mae primarily uses 

loss-sharing transactions through a delegated underwriting 

system. Freddie Mac primarily uses a capital markets 

execution that transfers the bulk of its credit risk. 

CSS, jointly and equally owned by the Enterprises, uses 

the Common Securitization Platform (CSP) to administer 

the Enterprises’ portfolios of Mortgage-Backed Securities 

(MBS) and for the issuance of the Uniform MortgageBacked Security (UMBS). Operating the CSP involves 

storing, processing, and transmitting large volumes of data, 

as CSS acts as an agent for the Enterprises to facilitate 

issuance of SF MBS and related disclosures, as well as to 

administer the securities post-issuance. Specifically, CSS 

records securities with registrars (e.g., Federal Reserve 

Bank of New York), supports and facilitates security 

settlement activities, validates settlements, and provides 

confirmation back to the requestor.

As shown in Figure 1, most SF mortgages are pooled into 

MBS, which are guaranteed by the Enterprises and then 

sold to investors.

PRIMARY

MORTGAGE

MARKET

Market in which 

financial ins tu ons 

provide mortgage 

loans to home buyers

Lenders sell loans that

meet underwri ng and 

products standards

Lenders sell 

MBS received 

from Fannie 

Mae or 

Freddie Mac

Lenders

receive

cash

Lenders receive

cash or MBS SECONDARY 

MORTGAGE

MARKET

Market in which 

exis ng mortgages 

and MBS are traded

FANNIE MAE 

FREDDIE MAC

WALL STREET

LENDER

Credit Guarantee

Business Por olio Ac vi es

Borrower applies 

for mortgage

Borrower 

receives loan

BORROWER

INVESTORS

Conservator

Safety and 

soundness 

regulator

Figure 1: FHFA’s Oversight Role – Fannie Mae and Freddie Mac

Buys

MBS

Issues 

MBS

Buys

debt

Issues 

debt

Buys MBS, debt, 

and credit risk

Sells MBS, debt, 

and credit risk

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 8
The Federal Home Loan Banks

7

 Consolidated obligations are debt obligations on which the 11 FHLBanks are jointly and severally liable, see 12 U.S.C. §1431, and which are sold to 

the public through OF. By statute, FHLBank consolidated obligations must plainly state that they are not obligations of the United States and are not 

guaranteed by the United States. See 12 U.S.C. § 1435.

8

 Housing associates are not FHLBank members, but they have limited access to products and services offered by the FHLBanks. See 12 U.S.C. § 1430b; 

12 CFR part 1264. Most housing associates are state or local housing finance agencies.

Congress passed the Federal Home Loan Bank Act 

(Bank Act) in 1932 to establish the FHLBank System and 

reinvigorate a housing market devastated by the Great 

Depression. The FHLBank System includes 11 district 

FHLBanks, each serving a designated geographic area of 

the United States, and the OF, which issues consolidated 

obligations7 to fund the FHLBanks’ operations. The 

FHLBanks are member-owned cooperatives that provide a 

reliable source of liquidity to member financial institutions 

by making secured loans, known as advances, to member 

institutions and housing associates8 (see Figure 2). These 

advances increase the available funding for residential 

mortgages. The FHLBank advances must be secured 

with eligible collateral, consisting primarily of singlefamily mortgages, multifamily mortgages, government 

and agency securities, and commercial real estate loans. 

Some FHLBanks also purchase mortgage loans directly 

from their members through on-balance sheet Acquired 

Member Assets (AMA) programs.

As of September 30, 2023, there were 6,490 active FHLBank members, consisting of commercial banks, credit unions, 

thrifts, insurance companies, and community development financial institutions.

• INDIVIDUAL

• INSTITUTIONAL 

• FOREIGN

OF issues debt to

approved dealers Investors purchase 

debt

Dealers receive

cash from sale

Lender receives cash

• Borrowing (advance)

• Proceeds from sale of

mortgage loan

FHLBanks receive cash 

from debt issuance

Receive cash from dealers

Borrower applies 

for mortgage

Borrower 

receives loan

BORROWER

LENDER (MEMBER)

WALL STREET

FHLBANK

OFFICE OF FINANCE

Ensures 

safety and 

soundness

INVESTORS

SECONDARY

MARKET

OF issues debt 

on behalf of 

all FHLBanks

En es such as 

Fannie Mae/Freddie Mac

Some of the FHLBanks’ mortgage

programs also provide a conduit to

other secondary market en es

Figure 2: FHFA’s Oversight Role – Federal Home Loan Banks and Office of Finance

Lender provides

collateral or sells

mortgage to an 

FHLBank and may 

buy FHLBank stock

Management’s Discussion and Analysis

9| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X FHFA ORGANIZATION

FHFA’s workforce includes highly skilled examiners, economists, financial analysts, policy analysts, attorneys, accountants, 

and subject matter experts in banking, housing, insurance, technology, and legal matters. The Director sets the course for the 

Agency to achieve its mission, and the Agency’s divisions and offices work together to meet the Agency’s strategic goals. 

FHFA’s principal organizational units are shown in Figure 3.

OFFICE OF CONGRESSIONAL 

AFFAIRS AND 

COMMUNCATIONS

OFFICE OF EQUAL 

OPPORTUNITY AND FAIRNESS

OFFICE OF MINORITY AND 

WOMEN INCLUSION

OFFICE OF GENERAL COUNSEL

OFFICE OF THE 

DIRECTOR

OFFICE OF

INSPECTOR GENERAL

Figure 3: FHFA Principal Organiza on Structure

OFFICE OF

THE CHIEF 

OPERATING 

OFFICER

DIVISION OF

ACCOUNTING 

AND FINANCIAL 

STANDARDS

DIVISION OF

ENTERPRISE 

REGULATION

DIVISION OF

CONSERVATORSHIP

OVERSIGHT AND

READINESS

DIVISION OF

HOUSING 

MISSION AND

GOALS

DIVISION OF

RESEARCH AND 

STATISTICS

DIVISION OF

FHLBANK 

REGULATION

The Agency operated with an approved operating budget of $309.3 million in Fiscal Year (FY) 2023 and ended the year with 

728 employees on board. For FY 2024, the Agency’s budget increased to $318.8 million and supports 805 positions. FHFA’s 

Office of Inspector General (OIG) operated with a FY 2023 budget of $55 million and ended the year with 118 employees 

on board. The OIG’s FY 2024 budget increased to $57 million, which will support 155 positions. See Table 1 for staff 

distribution by major FHFA divisions and offices.

Table 1: FHFA Staffing Summary

FY 2023 (Actuala) % by Functional Area FY 2024 (Budget) % by Functional Area

Mission Division/Officesb 512 70% 563 70%

Mission Support Division/Officesc 216 30% 242 30%

Number of FHFA Employees 728 100% 805 100%

Number of OIG Employees 118 100% 155 100%

a

 Actual Employees onboard as of September 30, 2023.

b

 Mission Divisions and Offices include: Division of Accounting and Financial Standards, Division of FHLBank Regulation, Division of Conservatorship 

Oversight & Readiness, Division of Enterprise Regulation, Division of Housing Mission and Goals, Division of Research and Statistics, 

and Office of Minority and Women Inclusion.

c

 Mission Support Divisions and Offices include: Director’s Office, Office of the Chief Operating Officer, Office of Congressional Affairs and 

Communications, Office of Equal Opportunity and Fairness, and Office of General Counsel.

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 10
The Office of the Director (OD) provides overall 

leadership and strategic direction for the Agency.

The Office of the Chief Operating Officer (OCOO) 

ensures the Agency has the necessary assets (people, 

technology, information, and facilities) and governance 

(policy, procedures, and processes) to achieve its 

regulatory mission. It oversees the Agency’s day-to-day 

operations, including facilities management, continuity 

of operations, financial planning and budgeting, 

contracting, human resource management, information 

technology, quality assurance, program management, 

and audit follow-up functions. The office also leads 

Agency strategic planning, performance management and 

reporting efforts, and enterprise risk management. As the 

asset manager of FHFA, the office ensures the Agency 

uses systematic, structured, and coordinated approaches to 

optimally manage its resources.

The Division of Enterprise Regulation (DER) 

supervises the Enterprises and CSS and evaluates the 

safety and soundness of their financial condition and 

operations. DER contributes to the achievement of 

FHFA’s strategic goals and strategic objectives through 

planning and executing risk-based examinations of the 

Enterprises and CSS, developing and preparing the annual 

reports of examination (ROEs), issuing supervision policy 

and examiner guidance, and providing risk analysis. The 

annual ROEs assign composite and component ratings in 

accordance with FHFA’s supervisory rating system and 

communicate the principal examination conclusions and 

findings for the supervisory cycle.

The Division of Federal Home Loan Bank Regulation 

(DBR) supervises the FHLBanks and OF to ensure their 

safe and sound condition and operation. The division 

oversees and directs all FHLBank examination activities, 

develops examination findings, and prepares ROEs. 

DBR monitors and assesses the financial condition 

and performance of the FHLBanks and OF and tests 

their compliance with laws and regulations through 

annual examinations, periodic visits, monitoring, and 

analysis. The division establishes supervisory policy and 

Management’s Discussion and Analysis

11| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
regulation for the FHLBanks and conducts FHLBankfocused research. DBR also conducts Affordable Housing 

Program (AHP) examinations of each FHLBank annually 

to promote compliance with program regulations and to 

evaluate the effectiveness of each FHLBank’s AHP. 

The Division of Housing Mission and Goals (DHMG) is 

responsible for oversight of the Enterprises’ single-family 

and multifamily housing policies and programs, the 

Enterprises’ and FHLBanks’ affordable housing programs 

and fair lending compliance, and the Enterprises’ 

regulatory capital policy. DHMG oversees the affordable 

housing goals and Duty to Serve requirements for the 

Enterprises, as well as the affordable housing goals of 

the FHLBanks, and provides oversight of FHLBank 

community and economic development programs. 

DHMG monitors the Enterprises and the FHLBanks 

for fair lending risk and conducts targeted fair lending 

risk assessments on their policies, programs, and 

activities. DHMG’s capital policy responsibilities include 

developing regulatory capital policy for the Enterprises 

and providing oversight of their Dodd-Frank Act Stress 

Tests, credit risk transfer programs, and counterparty 

financial eligibility standards. DHMG oversees and 

coordinates FHFA activities affecting housing finance 

and financial markets in support of FHFA’s mission and 

the Director’s responsibilities as a member of the Federal 

Housing Finance Oversight Board, the Financial Stability 

Oversight Board, the Financial Stability Oversight 

Council, and the Appraisal Subcommittee of the Federal 

Financial Institutions Examination Council.

The Division of Conservatorship Oversight and 

Readiness (DCOR) assists the FHFA Director, as 

conservator, in carrying out conservatorship obligations. 

DCOR monitors Enterprise business and board 

activities and facilitates communications between the 

Enterprises and FHFA as conservator to ensure the 

prompt identification of emerging issues and their timely 

resolution. DCOR also works with the Enterprises’ 

boards and senior management to establish priorities 

and milestones for accomplishing the goals of the 

conservatorships. DCOR is also responsible for ensuring 

that FHFA can address troubled entities in a safe, efficient, 

and stabilizing manner, particularly if an economic 

downturn emerges, including contingency plans for 

resolving FHFA-regulated entities in the event of distress 

and failure.

The Office of General Counsel (OGC) advises and 

supports the Director and FHFA staff on legal matters 

related to the functions, activities, and operations of 

FHFA and the regulated entities. It supports supervision 

functions, rule writing, housing mission policy initiatives, 

enforcement actions, agency internal operations, and 

agency-related litigation, among other items. The Senior 

Agency Official for Privacy manages the Freedom 

of Information Act and Privacy Act programs. The 

Designated Agency Ethics Official manages the Agency’s 

ethics program; advises, counsels, and trains FHFA 

employees on ethical standards and conflicts of interest; 

and manages the Agency’s financial disclosure program.

The Division of Accounting and Financial Standards 

(DAFS) promotes the safety and soundness of the 

regulated entities. The Office of the Chief Accountant 

performs oversight of the regulated entities’ accounting 

policies, internal controls over financial reporting, 

financial and sustainability disclosures, internal 

and external audit functions, and financial crimes 

compliance and risk management. DAFS provides 

supervisory guidance in these areas; monitors and 

analyzes developments in accounting, auditing, financial 

crime and cybersecurity risk management; and engages 

with standard-setters and external stakeholders on 

emerging issues. DAFS supports the transparency and 

accountability of FHFA’s supervision and regulation 

through the Office of the Ombudsman, which provides 

independent, neutral consideration of complaints and 

appeals on matters relating to FHFA’s regulation and 

supervision of the regulated entities.

The Division of Research and Statistics (DRS) 

leads the Agency’s efforts to produce and disseminate 

high quality data, research, statistics, and analysis to 

internal and external stakeholders. For example, the 

division is responsible for publishing FHFA’s House 

Price Index, National Mortgage Database (NMDB®), 

the NMDB Aggregate Statistics, the National Survey 

of Mortgage Originations data, the Uniform Appraisal 

Dataset Aggregate Statistics, and the Enterprise Public 

Use Database. The division also leads the Agency’s 

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 12
efforts to manage and leverage data as a strategic asset 

by improving the Agency’s data governance, lifecycle 

data management, analytics capabilities, and public data 

dissemination. The division provides the leadership and 

coordination needed to achieve the Agency’s Climate 

Change and Environmental, Social, and Governance 

objectives. DRS staff also work with other government 

researchers and data experts, engage in academic and 

industry conferences and meetings, and disseminate 

statistical products and research to the public.

The Office of Minority and Women Inclusion (OMWI) 

leads the Agency’s efforts to advance diversity, equity, 

inclusion, and accessibility among its workforce and 

senior-level management. OMWI is responsible for 

developing standards for increased participation of 

minority- and women-owned businesses in Agency 

programs and contracts, including standards for 

coordinating technical assistance to such businesses and 

evaluating the good faith efforts of Agency contractors 

and subcontractors. OMWI also oversees and directs all 

diversity and inclusion (D&I) examination activities, 

develops examination findings, and prepares annual D&I 

ROEs for the Enterprises, the FHLBanks, OF, and CSS.

The Office of Equal Opportunity and Fairness 

(OEOF) houses FHFA’s Equal Employment Opportunity 

(EEO), antiharassment, and alternative dispute resolution 

functions and has the responsibility for maintaining 

effective affirmative employment programs. The office 

partners with FHFA leadership and the workforce to 

ensure an equitable and civil workplace, grounded 

in the dignity and respect of all employees. The 

office interprets the Equal Employment Opportunity 

Commission’s regulations, Management Directives, 

and guidance documents, while remaining proactively 

neutral and impartial in the administration of the federal 

EEO Complaint Process and the Harassment Prevention 

Program. The office educates the workforce on their rights 

and responsibilities under civil rights laws. OEOF ensures 

that FHFA is compliant with EEO laws and regulations. 

In addition, the office develops tools, methodologies, and 

learning and education options to inform the workforce 

about how to address workplace conflict through 

alternative dispute resolution.

The Office of Congressional Affairs and 

Communications (OCAC) is responsible for the public 

affairs and congressional relations functions at FHFA 

and is the primary point of contact for the external and 

internal communications of the Agency. OCAC prepares 

and disseminates pertinent public information and 

responds to inquiries from Congress, the media, industry, 

and the public at large.

The Office of Inspector General (OIG) conducts 

independent audits, evaluations, compliance reviews, and 

investigations to help FHFA achieve its mission and goals 

and guard against waste, fraud, and abuse. OIG informs 

the Director, Congress, and the public of any issues or 

deficiencies relating to programs and operations. OIG 

activities assist FHFA staff and program participants by 

ensuring the effectiveness, efficiency, and integrity of 

FHFA’s programs and operations.

Management’s Discussion and Analysis

13| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X PERFORMANCE SUMMARY

STRATEGIC GOALS 

AND OBJECTIVES

FHFA’s Strategic Plan provides the foundation for 

Agency planning, budgeting, operations, and reporting. 

It establishes long-term goals and objectives to achieve 

FHFA’s mission.

The Strategic Plan also identifies planned means and 

strategies to achieve the strategic objectives. Key 

elements from FHFA’s FY 2023 Annual Performance 

Plan, which reports progress on the Agency’s Strategic 

Plan, are presented in Figure 4, including the three 

strategic goals and their corresponding strategic objectives 

that were in effect during FY 2023, the period covered by 

this report. The performance measures associated with 

the strategic objectives are presented in the Performance 

Section. Validation and verification activities, conducted 

to confirm that performance results are reported 

accurately, are described on page 32, and a template that 

FHFA uses to validate and verify its measures and data 

can be found in the Appendices on pages 129.

Figure 4: FHFA’S FY 2022-2026 Strategic Plan: Goals and Objec ves

Strategic Goal 1:

Secure the regulated en es’ 

safety and soundness

1.1. Iden fy risks to the 

regulated en es and assess 

the safety and soundness of 

regulated en ty opera ons

2.1. Promote sustainable access 

to mortgage credit

2.2. Advance equity in housing 

finance, including through 

compliance with fair lending 

laws and regula ons 

3.1. Cul vate a high-performing,

diverse, accountable, and 

engaged workforce

3.2. Ensure efficient and effec ve

stewardship of Agency resources 1.2. Require mely 

remedia on of Ma ers

Requiring A en on

1.3. Preserve and conserve 

Enterprise assets while 

managing the conservatorships

1.4. Iden fy op ons for 

incorpora ng climate 

change into regulated 

en ty governance

Strategic Goal 2:

Foster housing finance markets 

that promote equitable access to

affordable and sustainable housing

2.3. Serve as a reliable source 

of informa on and analysis on 

the state of housing finance 

markets and related issues

2.4. Facilitate greater 

availability of affordable 

housing supply, including 

affordable rental housing 

2.5. Support leveraging of 

technology and data to further 

promote efficiency and cost

savings in mortgage processes

Strategic Goal 3:

Responsibly steward 

FHFA’s infrastructure

3.3. Deliver high-quality support 

services that promote the Agency’s

mission effec veness and safeguard 

the Agency’s infrastructure

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 14
SUMMARY OF PERFORMANCE 

MEASURES AND RESULTS

For FY 2023, FHFA identified a total of 35 performance 

measures and associated targets to monitor progress 

toward achieving the Agency’s strategic goals and 

strategic objectives. FHFA met the targets for 31 of 

these measures at an 89 percent success rate. The overall 

results indicate progress toward achieving FHFA’s goals 

and mission.

Table 2 presents a summary of FY 2023 performance 

measures and results. More information on FHFA’s 

performance organized by strategic goal can be found in 

the Performance Section, starting on page 33.

Table 2: Summary of Performance Measures and Results

Performance Measure FY 2023 Target FY 2023 Result

STRATEGIC GOAL 1: SECURE THE REGULATED ENTITIES’ SAFETY AND SOUNDNESS 

Strategic Objective 1 .1: Identify risks to the regulated entities and assess the safety and soundness of regulated entity operations

1 .1 .1a: Conduct risk-focused supervision and examinations of the Enterprises and 

Common Securitization Solutions by having written risk-based examination plans 

approved by January 31

100 percent of the time MET

1 .1 .1b: Conduct risk-focused supervision and examinations of the FHLBanks by 

having written risk-based examination plans in place prior to the commencement 

of examinations for each of the FHLBanks

100 percent of the time MET

1 .1 .2a: Approve reports of examination by April 159

 for the Enterprises and 

Common Securitization Solutions 100 percent of the time MET

1 .1 .2b: Approve reports of examination within 90 days after completing 

examination work for each of the FHLBanks 100 percent of the time NOT MET

1 .1 .3: Ensure a quarterly Market Value of Equity to par value of capital stock ratio 

greater than or equal to one for each FHLBank 100 percent of the time MET

1 .1 .4: Ensure each FHLBank is adequately capitalized on a quarterly basis 100 percent of the time MET

1 .1 .5: Conduct quarterly reviews of regulated entity public filings 100 percent of the time MET

1 .1 .6a: Approve Diversity and Inclusion reports of examination by 

April 15 for the Enterprises and Common Securitization Solutions 100 percent of the time MET

1 .1 .6b: Approve Diversity and Inclusion reports of examination for at least four of 

the FHLBank System regulated entities 100 percent of the time MET

Strategic Objective 1 .2: Require timely remediation of Matters Requiring Attention

1 .2 .1a: Determine that the Enterprises have satisfactorily addressed safety 

and soundness Matters Requiring Attention in accordance with agreed upon 

remediation plans and timeframes

90 percent of the time MET

1 .2 .1b: Determine that the FHLBanks and Office of Finance have satisfactorily 

addressed safety and soundness Matters Requiring Attention in accordance with 

agreed upon remediation plans and timeframes

90 percent of the time MET

1 .2 .2: Determine regulated entities have satisfactorily addressed Matters 

Requiring Attention relating to their Diversity and Inclusion programs, in 

accordance with agreed upon timeframes

90 percent of the time MET

9

 Or the first business day after if the date falls on a weekend.

Management’s Discussion and Analysis

15| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
Table 2: Summary of Performance Measures and Results

Strategic Objective 1 .3: Preserve and conserve Enterprise assets while managing the conservatorships

1 .3 .1: Provide decision to Enterprises regarding completeness of resolution plan 

submissions in conjunction with readiness activities July 31, 2023 NOT MET

1 .3 .2: Monitor and rate the Enterprises’ performance against current 

Scorecard objectives

Complete quarterly 

assessment within 

30 days of quarter end 

(within 60 days for 

year-end assessment)

MET

Strategic Objective 1 .4: Identify options for incorporating climate change into regulated entity governance

1 .4 .1: Continue to develop the Enterprises’ and FHFA’s climate research agendas Q4 FY 2023 MET

STRATEGIC GOAL 2: FOSTER HOUSING FINANCE MARKETS THAT PROMOTE EQUITABLE ACCESS TO AFFORDABLE AND 

SUSTAINABLE HOUSING

Strategic Objective 2 .1: Promote sustainable access to mortgage credit

2 .1 .1: Issue annual ratings for each Enterprise’s Duty to Serve performance in 2021 Q1 FY 2023 MET

2 .1 .2: Publish final Enterprise multifamily housing goals rule for 2023-24 Q1 FY 2023 MET

Strategic Objective 2 .2: Advance equity in housing finance, including through compliance with fair lending laws and regulations

2 .2 .1: Issue an FHFA Fair Lending Rating System Q4 FY 2023 MET

2 .2 .2: Ensure Enterprises’ updated Equitable Housing Finance Plans are published Q3 FY 2023 MET

Strategic Objective 2 .3: Serve as a reliable source of information and analysis on the state of housing finance markets and related issues

2 .3 .1: Publish FHFA House Price Indexes 12 monthly and 

4 quarterly MET

2 .3 .2: Publish annual Public Use Database September 2023 MET

2 .3 .3: Publish quarterly aggregate statistics on mortgage profiles 

and delinquencies from National Mortgage Database One per quarter MET

2 .3 .4: Publish annual Guarantee Fee Report December 2022 MET

Strategic Objective 2 .4: Facilitate greater availability of affordable housing supply, including affordable rental housing

2 .4 .1 Determine that the Enterprises have met the mission-driven 

requirements in Appendix A of the Conservatorship Scorecard10

By the end of the 

calendar year 2022, 

(1) Each Enterprise’s 

mission-driven business 

meets or exceeds 

50 percent of total 

multifamily business, and 

(2) At least 25 percent of 

each Enterprise’s total 

business is affordable at 

or below 60 percent of 

area median income

MET

10 The 2022 Conservatorship Scorecard expands the definition of naturally occurring affordable housing to include affordability adjustments in certain 

markets FHFA designates as cost-burdened to renters and classifies as mission-driven, financing that facilitates energy and water conservation measures for 

low-income tenants. Other mission-driven business includes loans on manufactured housing; community blanket loans; loans that finance properties in rural 

markets; loans that finance small multifamily (5-50 unit) properties; loans that finance seniors housing assisted living properties; and loans on properties 

encumbered by a regulatory agreement or recorded use restriction that restricts the unit rents and the incomes of the tenants occupying the units. The 2022 

Conservatorship Scorecard can be found here: https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/2022-Appendix-A-10132021.pdf. 

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 16
Table 2: Summary of Performance Measures and Results

2 .4 .2: Determine that Real Estate Owned properties held by the Enterprises 

are marketed providing an exclusive opportunity for owner-occupants and 

community-oriented organizations to purchase the property prior to investors

More that 90 percent 

of vacant properties 

marketed

MET

Strategic Objective 2 .5: Support leveraging of technology and data to further promote efficiency and cost savings in mortgage processes

2 .5 .1: Complete analysis of input received from the Request for Input 

on Fintech in Housing Finance issued in FY 2022, capturing an overview 

of responses received

March 31, 2023 MET

STRATEGIC GOAL 3: RESPONSIBLY STEWARD FHFA’S INFRASTRUCTURE 

Strategic Objective 3 .1: Cultivate a high-performing, diverse, accountable, and engaged workforce

3 .1 .1: Federal Employee Viewpoint Survey Performance Confidence Index 70 percent positive MET

3 .1 .2: Federal Employee Viewpoint Survey Employee Engagement Index 70 percent positive MET

3 .1 .3: Improve Time-to-Hire 80 calendar days NOT MET

3 .1 .4: Develop FHFA Culture Plan Q1 FY 2023 MET

Strategic Objective 3 .2: Ensure efficient and effective stewardship of Agency resources

3 .2 .1: Ensure FHFA’s financial statements audit receives an unmodified opinion 

with no material weaknesses 100 percent of the time MET

3 .2 .2: Increase the dollar amount of FHFA contracts awarded to minority- and 

women-owned businesses consistent with legal standards

Total dollar amount of 

contracts greater than the 

five-year average

MET

3 .2 .3: Management completes corrective actions to address FHFA Office of 

Inspector General recommendations in a timely manner

90 percent of the 

corrective actions 

to address Office of 

Inspector General 

recommendations 

are completed within 

one year of the 

resolution date or the 

approved timeframe

MET

Strategic Objective 3 .3: Deliver high-quality support services that promote the Agency’s mission effectiveness and 

safeguard the Agency’s infrastructure 

3 .3 .1: Ensure FHFA’s Federal Information Security Modernization Act audit 

identifies no significant deficiencies 100 percent of the time MET

3 .3 .2: Develop FHFA Information Technology Strategic Plan Q4 FY 2023 NOT MET

Management’s Discussion and Analysis

17| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X LOOKING FORWARD

FHFA has identified the following key management challenges and priorities the Agency is likely to face going forward as 

efforts to accomplish its mission continue.

Formalize Fair Lending and 

Fair Housing Oversight Activities

FHFA continues to strengthen its fair lending and fair 

housing oversight programs. In FY 2024, the Agency 

plans to implement a first-of-its-kind Enterprise Fair 

Lending Rating System to annually assess each Enterprise’s 

compliance with fair lending and fair housing standards, 

as well as equity and public interest goals, including 

Equitable Housing Finance Plan performance. FHFA 

will use this risk-focused rating system to assign a 

rating based on an evaluation of each Enterprise’s fair 

lending compliance management system and program 

effectiveness. FHFA will issue formal ratings in 2024 

based on the Agency’s fair lending, fair housing, and 

equity engagements with the Enterprises during calendar 

year 2023, and these ratings will be considered in the 

Reports of Examination going forward. 

Facilitate Greater Affordable 

Housing Supply

The 2023 Conservatorship Scorecard requires the 

Enterprises to identify strategies and activities to facilitate 

a greater multifamily affordable housing supply within 

the limits of their charter authorities. The Conservatorship 

Scorecard includes several actions to ensure that all 

borrowers and renters have equitable access to longterm affordable housing opportunities. Those strategies 

identified in 2023 will continue to be implemented by 

the Enterprises in FY 2024. Some of the strategies and 

activities in which the Enterprises are already engaged 

include equity investments in Low-Income Housing Tax 

Credits and multifamily forward commitment programs, 

as well as programs with or without public subsidies that 

preserve affordable housing. 

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 18
Financial Technology (FinTech)

In FY 2024, FHFA will publish a summary of the 

inaugural Velocity TechSprint, highlighting how data 

digitization might drive transparency and increase access, 

fairness, affordability, and sustainability in mortgage 

lending. In addition, the summary will capture key themes 

from speakers and panel discussions that FHFA hosted 

during the Velocity TechSprint. FHFA will continue to 

conduct industry outreach and will work with the Enterprises 

to identify and address specific impediments to reducing cost 

and complexity in the mortgage process. The Agency expects 

to host at least one TechSprint in FY 2024 to bring together 

mortgage industry leaders and fintech entrepreneurs for an 

in-person collaboration to address issues related to mortgage 

market efficiency, equity, and inclusion.

Work Towards Implementing 

New Credit Score Requirements

FHFA and the Enterprises have undertaken significant 

efforts to begin the process of implementing new credit 

score requirements for single-family loans delivered to the 

Enterprises. These new requirements include the use of 

scores from two models, FICO 10T and VantageScore 4.0, 

as well as the use of credit reports from a minimum of two, 

rather than three, nationwide consumer reporting agencies. 

Since the Agency began considering modernization of the 

Enterprises’ credit score requirements in 2014, stakeholder 

engagement has been a critical element of this work, 

and continued engagement will be key to a successful 

implementation process. FHFA recognizes that credit scores 

touch almost every aspect of the mortgage finance system. 

The implementation timeline and target dates for updating 

the Enterprises’ requirements need to be both ambitious and 

flexible to accommodate the multiyear process. 

Management’s Discussion and Analysis

19| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
In September 2023, FHFA launched the next phase 

of public engagement to support adoption of the new 

requirements. This phase includes stakeholder forums 

and listening sessions that will allow for identification 

of a wide variety of issues, opportunities, and challenges 

related to successful implementation of the new 

requirements, including potential refinements to the 

timeline for adoption. FHFA believes this enhanced 

stakeholder engagement will identify and troubleshoot 

potential concerns and better ensure that all members 

of the mortgage finance system are prepared for 

implementation of the new requirements.

Climate Risk Management

Throughout FY 2023, FHFA made substantial progress 

in helping to identify and manage climate-related risks at 

its regulated entities. In FY 2024, FHFA and its regulated 

entities will continue to conduct research on how climate 

change affects the housing market. In addition, the 

Agency currently plans for the Fall 2024 Econ Summit 

to be dedicated to climate risk. FHFA and the regulated 

entities also will continue work on incorporating climate 

risk into corporate governance, assessing climate 

exposure via scenario analyses and other methods, 

enhancing climate-related reporting and disclosures, and 

protecting vulnerable consumers. The Agency and its 

regulated entities will also continue to collaborate with 

interagency partners and industry stakeholders to address 

climate risk.

FHFA plans to issue an Advisory Bulletin (AB) in FY 2024 

to provide the Enterprises guidance on managing climate 

risk to support a safe and sound operating environment. 

Although climate risk affects the U.S. housing system 

and Enterprises in various ways, this AB will address key 

climate risks that could affect the Enterprises’ financial 

condition through their business and operations. FHFA’s 

supervisory expectations for managing climate risk will 

take into consideration known best practices, standards, 

and regulatory developments.

Update Loss Mitigation Framework

In FY 2024, FHFA will continue to evaluate the 

Enterprises’ loss mitigation solutions designed to help 

struggling homeowners who need mortgage payment 

assistance. The Enterprises continue to examine lessons 

learned from the COVID-19 pandemic that might inform 

enhancements to the standard loss mitigation solutions, 

with the goal of improving the ability of mortgage 

servicers to assist struggling homeowners with retaining 

their homes, while minimizing losses to the Enterprises 

and, ultimately, to taxpayers. For example, based on 

the success of the COVID-19 payment deferral, FHFA 

announced in March 2023 that the Enterprises would enhance 

their payment deferral policies to allow borrowers facing 

financial hardship to defer up to six months of mortgage 

payments as part of the standard loss mitigation toolkit.

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 20
X FINANCIAL SUMMARY

ANALYSIS OF FINANCIAL 

STATEMENTS

Overview

FHFA prepares annual financial statements for the Agency 

in accordance with U.S. Generally Accepted Accounting 

Principles (U.S. GAAP) as specified by the Federal 

Accounting Standards Advisory Board (FASAB) for 

federal government entities. The FHFA OIG, which is 

consolidated and combined in FHFA’s financial statements, 

has maintained its own financial records since April 2011. 

In accordance with HERA, the Government Accountability 

Office (GAO) performs an independent audit of the 

consolidated and combined financial statements.

How Is FHFA Financed?

HERA authorizes FHFA to collect annual assessments 

from the Enterprises and the FHLBanks to cover the costs 

of performing the Agency’s statutory responsibilities 

related to supervision of the regulated entities, its 

conservatorships, and other responsibilities, and to 

maintain a working capital fund. FHFA is financed 

through revenue from assessments and is considered a 

non-appropriated entity. (FHFA does not receive any 

appropriated funds from Congress.) In addition to the 

collection of assessments, HERA authorizes FHFA to invest 

the idle portions of the assessments through the Treasury 

Federal Investment Program, which is available exclusively 

to federal government organizations. (See Financial 

Statement Note 1.G for further explanation of investments.)

Annually, FHFA determines the total expected costs 

associated with regulating the Enterprises and the 

FHLBanks. The expected costs are shared proportionally 

among the Enterprises and the FHLBanks in accordance 

with FHFA’s assessment regulation, 12 CFR § 1206.6. 

FHFA issues assessment notices to the regulated entities 

semi-annually, with the collections occurring October 1 and 

April 1. In FY 2023, FHFA assessed the entities a total of 

$386.1 million, including $55.0 million to support OIG.

Under HERA, FHFA is authorized to retain a working 

capital fund for unforeseen or emergent requirements, 

which can be funded through a special assessment to the 

entities or through retention of unobligated balances at the 

end of the fiscal year. At the end of FY 2023, the FHFA 

working capital fund had a balance of $54.7 million.

What Is an Unmodified Opinion?

FHFA received an unmodified opinion from GAO on its 

annual financial statements. This means the auditor, GAO, 

expressed an opinion that FHFA’s financial statements 

are fairly presented in all material aspects in accordance 

with U.S. GAAP. FHFA also received an opinion that 

it maintained, in all material respects, effective internal 

control over financial reporting. GAO found no instances 

of reportable noncompliance with provisions of applicable 

laws, regulations, contracts, and grant agreements it tested.

FHFA’s Financial Statements

The principal financial statements present FHFA’s 

financial position (Balance Sheets), Statements of 

Net Cost, Statements of Changes in Net Position, and 

Statements of Budgetary Resources for FY 2023 and 

FY 2022. GAO’s audit report, along with complete 

financial statements and notes for FY 2023 and FY 2022, 

appear on pages 73-104.

Limitations of the Financial Statements

The principal financial statements have been prepared 

to report the financial position, financial condition, 

and results of operations of FHFA, pursuant to the 

requirements of 31 U.S.C. § 3515(b). The statements have 

been prepared from the records of FHFA in accordance 

with U.S. GAAP and the formats prescribed by the Office 

of Management and Budget (OMB). Financial reports 

used to monitor and control budgetary resources are 

prepared from the same records. The statements should be 

read with the understanding that they are for a component 

of the U.S. Government, a sovereign entity.

Management’s Discussion and Analysis

21| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
FY 2023 COVID-19 – FINANCIAL 

IMPACT ON FHFA

The end of the federal COVID-19 Public Health Emergency 

(PHE) was declared on May 11, 2023. As a non-appropriated 

entity, FHFA used its existing resources to support necessary 

activities to ensure safety of its employees and facilities and 

implement Agency activities and policy changes to support 

the regulated entities. FHFA did not receive additional 

funding to support these activities. All costs are included 

in appropriate financial statements discussed below.

WHAT IS FHFA’S NET POSITION 

AND NET COSTS?

Balance Sheet (Assets - Liabilities = Net Position)

The Consolidated Balance Sheet presents, as of 

September 30, 2023, the recorded value of assets 

(funding, property, and amounts owed to FHFA), and 

liabilities (amounts FHFA owes, retained or managed by 

FHFA). The difference between the assets and liabilities 

represents FHFA’s net position.

Assets

At year-end FY 2023, FHFA had $171.6 million in 

assets. The largest asset groups include: Investments 

(78 percent), Fund Balance with Treasury (12 percent), 

General Property, Plant, and Equipment, Net (6 percent), 

and Other Assets (including Advances and Prepayments 

and Accounts Receivable) (4 percent), as displayed in 

Figure 5. FHFA’s investment portfolio included semi-annual 

assessment payments from its regulated entities and the 

working capital fund. FHFA invests solely in market-based 

Government Account Series one-day certificates issued by 

Treasury to efficiently use idle funds with minimum risk 

in accordance with statutory authorities.

Figure 5: Distribu on of Total Assets for FY 2023

Investments

General Property, 

Plant, and 

Equipment, Net

Fund Balance 

with Treasury

Other Assets

Investments

General Property, 

Plant, and 

Equipment, Net

Fund Balance 

with Treasury

Other Assets

78%

6%

12%

4%

Liabilities

At year-end FY 2023, FHFA had $55.5 million in 

liabilities. FHFA’s major liabilities (amounts owed 

by FHFA to other entities) include Federal Employee 

Benefits Payable (40 percent), Deferred Lease Liability 

(23 percent), Accounts Payable (22 percent), Other 

Liabilities (10 percent), and Advances from Others 

(4 percent), as displayed in Figure 6. The largest 

component in the Federal Employee Benefits Payable 

category is Unfunded Accrued Annual Leave, consisting 

of amounts resulting from accumulated, unused 

employee leave.

Figure 6: Distribu on of Total Liabili es for FY 2023

23%

10%

22%

4%

40%

Deferred Lease Liability

Federal Employee 

Benefits Payable

Accounts Payable 

Advances from Others 

and Deferred Revenue

The second largest category is Deferred Lease Liability 

(rent), which is the difference between the straight-line 

monthly rent calculation based on the lease term and the 

amount of cash disbursements paid to date for rent at the 

end of the fiscal year. Determination and recording of 

deferred rent is applicable to the non-federal lease 

agreement on the property at 400 7th Street SW, 

Constitution Center, Washington, D.C. The Constitution 

Center tenant allowance is the unamortized portion of the 

tenant allowance granted to FHFA at the inception of the 

lease. The third largest liability is Accounts Payable. These 

are amounts owed to commercial vendors supporting FHFA 

legal services and mission support activities.

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 22
Net Position

FHFA’s net position (assets-liabilities) increased by 

27 percent, or $24.6 million, in FY 2023, primarily due to 

the increase in investments and the working capital fund. 

The Total Assets increase is largely due to major factors: 

(1) financing required for multi-year capital projects 

including the continued modernization of FHFA’s public 

reporting platforms, oversight support programs, and 

technology infrastructure; and (2) the increase in Special 

Assessments collections for FY 2023. In accordance 

with the FHFA regulation, Special Assessments can be 

used to support conservatorship-related legal services 

and supporting activities. The 1 percent change in Total 

Liabilities is a combination of decreases in Deferred 

Lease Liability ($2.9 million) and Accounts Payable 

($0.2 million); and increases in Federal Employee 

Benefits Payable ($1.2 million), Advances from Others 

($0.6 million), and Other Liabilities ($0.4 million). A 

comparison of the condensed FY 2023 and FY 2022 

Balance Sheets is displayed in Table 3. The complete 

Balance Sheets can be found on page 82.

Table 3: FHFA Condensed Balance Sheets

(dollars in thousands*)

FY 2023 FY 2022 Percent change

Total Assets $171,617 $147,716 16%

Total Liabilities 55,536 56,255 (1%)

Total Net Position $116,081 $91,461 27%

*Amounts are rounded for presentation purposes.

Net Costs

The Statements of Net Cost reflects gross cost of operating 

the Agency, by strategic goal, less related revenues. The 

Statements of Net Costs represents the full cost of operating 

FHFA, consolidated with the costs of operating the FHFA 

OIG. Gross program costs for FY 2023 are $386.0 million, 

which is an increase of $47.6 million above the FY 2022 

gross program costs of $338.4 million.

HOW DOES FHFA 

GENERATE REVENUE?

In accordance with HERA, FHFA collected through 

the semi-annual assessment process $386.1 million 

during FY 2023, which included a $55 million assessment 

for costs related to the operations of the FHFA OIG. 

Regulated entity assessments account for approximately 

97.1 percent of Agency revenues.

The other 2.9 percent of the revenue is generated from 

sources such as reimbursable agreements with other 

federal agencies, interest earned on overnight investments, 

and employee reimbursements. Revenue for FY 2023 was 

24 percent more than FY 2022 due to higher total assessments 

for total costs to support the Agency including staff for 

mission support programs, legal and financial services. 

As a component of revenue, FHFA is allowed to retain 

earned interest on unobligated balances during the year. 

As interest rates continued to increase during FY 2023, 

FHFA’s revenue from earned interest increased 694 percent, 

or by $8.7 million above interest earned in FY 2022. 

FHFA’s summary costs and revenue are reflected in the 

Statements of Net Cost for FY 2023 and FY 2022 as 

presented in Table 4.

Table 4: Summarized Costs and Revenue

(dollars in thousands*)

FY 2023 FY 2022

Costs $386,002 $338,354

Revenue (397,513) (320,327)

Net Cost from Operations ($11,511) $18,027

*Amounts are rounded for presentation purposes.

HOW DOES FHFA ALIGN 

COSTS TO STRATEGIC GOALS?

For FY 2023, FHFA assigned costs to the three strategic 

goals established by FHFA’s 2022-2026 Strategic Plan. 

These Strategic Goals are: (1) Secure the regulated 

entities’ safety and soundness, (2) Foster housing finance 

markets that promote equitable access to affordable and 

sustainable housing, and (3) Responsibly steward FHFA’s 

Management’s Discussion and Analysis

23| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
infrastructure. In mid-FY 2022, FHFA issued a new Strategic 

Plan which renamed Strategic Goal 2 to emphasize the focus 

on promoting equitable access to affordable housing, 

while Strategic Goals 1 and 3 remained relativity static in 

both name and anticipated outcomes. The strategic goals 

comparison provided in Figure 7 on this page and in the 

Statements of Net Cost is an accurate representation of 

FHFA’s programs between the two years.

Effective and efficient agency-wide services and 

management and administrative systems are essential to 

achieve FHFA’s mission and strategic goals. Indirect costs 

are distributed proportionately to the three strategic goals 

based on the percentage of direct program costs allocated 

to each goal to the total direct program costs for the Agency 

(individual program costs/total direct program costs). 

FHFA OIG costs are allocated as part of FHFA’s indirect 

costs. The distribution of FHFA’s gross costs by strategic goal 

for FY 2023 and FY 2022 are presented in Figure 7.

50%

40%

30%

10%

20%

0%

80%

70%

100%

90%

60%

Goal 1

Goal 2

Goal 3

Figure 7: Gross Costs by Strategic Goal

33%

51%

16%

29%

18%

53%

2023 2022

In FY 2023, Goal 1 was FHFA’s largest program area at 

$196.5 million, or 51 percent of total gross costs. The 

next largest program area was Goal 3 at $126.2 million, 

or 33 percent. Goal 2 was the smallest of the three 

program areas at $63.3 million, or 16 percent. Overall, 

gross costs increased from FY 2022 to FY 2023 due to 

critical investment in technology modernization efforts 

supporting mission, climate risk, and the continued focus 

on expanding the Agency’s research capacity.

HOW DOES FHFA ASSESS 

INTERNAL CONTROLS?

FHFA uses systems, controls, and legal compliance 

to determine Management Assurances. It is through 

the following activities that FHFA can state its 

Management Assurances.

Federal Managers’ Financial 

Integrity Act (FMFIA)

Internal controls are essential to effective agency 

management and provide reasonable assurance that 

the following objectives will be achieved: reliability of 

reporting, compliance with laws and regulations, and 

the effectiveness and efficiency of operations. FMFIA 

establishes management’s responsibility to assess and 

report on internal accounting and administrative controls. 

The assessment includes the mission, operational, and 

administrative areas, including accounting and financial 

management. FMFIA requires federal agencies to 

establish controls that reasonably ensure that obligations 

and costs are in compliance with applicable law; funds, 

property, and other assets are safeguarded against waste, 

loss, unauthorized use, or misappropriation; and revenues 

and expenditures are properly recorded and accounted 

for to permit the preparation of reliable reports and to 

maintain accountability over the assets.

During FY 2023, FHFA adhered to the internal control 

requirements of FMFIA and the guidance provided by 

OMB Circular A-123: Management’s Responsibility 

for Enterprise Risk Management and Internal Control. 

FHFA’s Audit, Risk, and Control Committee (ARCC).

During FY 2023, FHFA monitored and assessed the 

following areas:

FHFA OIG

To ensure compliance with the internal control 

requirements of FMFIA, and in accordance with A-123, 

the FHFA OIG has maintained an Executive Committee 

on Internal Controls (ECIC), which is chaired by the 

Assistant Inspector General for Compliance. The 

ECIC is tasked with assessing internal controls at OIG. 

Membership on the ECIC includes the deputy inspector 

general, the chief counsel, the chief information officer, 

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 24
the chief information security officer, and the budget and 

finance director.

Based on the risk profiles and internal control assessments 

completed by each FHFA OIG office, which identified 

no significant issues, the FHFA OIG ECIC recommended 

that the Inspector General sign an assurance statement 

to the FHFA Director recommending an unmodified 

statement of assurance relative to the three areas assessed 

by the FHFA OIG: internal control over financial 

reporting, effectiveness and efficiency of operations, 

and compliance.

Reliability Over Financial Reporting

FHFA conducted an independent assessment of the 

Agency’s controls over financial reporting using 

a risk-based approach. The Agency completed the 

assessment and reported the results to the Agency’s Senior 

Assessment Team (SAT) and the ARCC. The assessment 

determined that there were no material weaknesses that 

adversely affect internal controls over financial reporting.

Reliability Over Non-Financial Reporting

Assessment teams from FHFA divisions and offices 

reviewed controls over a sample of non-financial reports 

using guidance from the GAO Standards for Internal 

Control in the Federal Government, GAO 14-704G, 

(GAO Green Book).11 Division management officials 

and staff reviewed the completed assessments. FHFA 

reviewed the completed assessments and results from 

across the Agency and reported the results to the SAT and 

the ARCC. The assessment determined that there were 

no material weaknesses that adversely affect the controls 

over non-financial reporting.

Compliance with Laws and Regulations

Assessment teams from FHFA divisions and offices 

identified the significant laws and regulations that relate 

to the operations for their respective offices. Assessment 

teams documented the actions that demonstrated 

compliance, the Agency’s Office of General Counsel 

reviewed the submissions, and FHFA reported the results 

to the SAT and the ARCC. The assessment determined 

11 https://www.gao.gov/products/GAO-14-704G.

that there were no material weaknesses that adversely 

affect the compliance with laws and regulations.

Effectiveness and Efficiency 

of Operations

Assessment teams from FHFA divisions and offices 

assessed controls over their operations using guidance 

from the GAO Green Book. Assessment teams also 

assessed the controls for a sample of administrative 

processes and service providers. Division management 

officials and staff reviewed the completed assessments. 

FHFA reviewed the completed assessments and results 

from across the Agency and reported the results to the 

SAT and the ARCC. The assessment determined that there 

were no material weaknesses that adversely affect the 

effectiveness and efficiency of operations.

Assessment Reporting

The ARCC reviewed the assessment and recommended 

an unmodified statement of assurance. In compliance with 

FMFIA and HERA, 12 U.S.C. § 4516(g) requirements, 

the FHFA Director, on the basis of a recommendation 

from ARCC, provided reasonable assurance that 

internal controls over the effectiveness and efficiency 

of operations, compliance with applicable laws and 

regulations, and non-financial and financial reporting as 

of September 30, 2023, were operating effectively and 

that no material weaknesses were found in the design or 

operation of the internal controls.

Federal Management Information 

Systems Strategy

Section 1316(g)(3) of the Safety and Soundness Act 

requires FHFA to implement and maintain financial 

management systems that comply substantially with 

federal financial management systems requirements, 

such as the Federal Financial Management Improvement 

Act of 1996, applicable federal accounting standards, 

and the U.S. Standard General Ledger at the transaction 

level. FHFA, including the FHFA OIG, uses the Bureau 

of the Fiscal Service (Fiscal Service) for its accounting 

services and its financial management system (FMS), 

Management’s Discussion and Analysis

25| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
which includes: 1) a core accounting system—Oracle 

Federal Financials; 2) four feeder systems—Procurement 

Request Information System Management, Concur 

(travel), Invoice Processing Platform (payments), and 

CitiDirect (charge card); 3) a reporting system—Oracle 

Business Intelligence; and 4) an inventory tracking 

system. In FY 2023, FHFA began using the new 

G-Invoicing platform for interagency agreements as 

mandated by Department of Treasury for all federal 

agencies. FHFA is responsible for overseeing Fiscal 

Service performance of accounting services for the 

Agency based on the terms and assignment of activities 

outlined in the Interagency Agreement.

FHFA’s oversight of Fiscal Service is documented in the 

Agency’s Accounting Manual and procedures. A financial 

oversight document outlines the assignment of activities 

between FHFA and Fiscal Service. FMS includes 

manual and automated procedures and processes from 

the initiation of a transaction to the issuance of financial 

reports. FMS meets the requirements of the Safety and 

Soundness Act Section 1316 (g)(3). FHFA and the FHFA 

OIG also use the Interior Business Center (a service 

provider within the U.S. Department of Interior) and 

the National Finance Center (a service provider within 

the U.S. Department of Agriculture) for payroll and 

personnel processing. FHFA has streamlined accounting 

processes by electronically interfacing data from charge 

cards, investment activities, the Concur travel system, 

the procurement system, interagency agreements, the 

Invoice Processing Platform payments system, the Interior 

Business Center payroll system, and the National Finance 

Center payroll system to FMS.

Federal Information Security 

Modernization Act (FISMA)

FISMA requires all federal agencies to develop and 

implement an Agency-wide Information Security Program 

to protect information and systems, including those 

provided or managed by another agency, contractor, or 

other source. In addition, FISMA mandates that agencies 

undergo an annual independent evaluation of their 

Information Security Program and practices, as well as an 

assessment of compliance with FISMA requirements.

12 https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-53r4.pdf

The FHFA OIG contracted with an independent external 

audit firm to conduct performance audits of FHFA 

and FHFA OIG’s Information Security Programs and 

practices as per U.S. Generally Accepted Government 

Auditing Standards. The objectives of the audit were to 

evaluate the effectiveness of FHFA’s and FHFA OIG’s 

Information Security Program and practices and respond 

to the Department of Homeland Security’s FY 2023 

Inspector General FISMA Reporting Metrics. The audit 

methodology included testing a subset of FHFA’s systems 

for compliance with selected controls from National 

Institute of Standards and Technology Special Publication 

800-53, Revision 5, Security and Privacy Controls for 

Federal Information Systems and Organizations.12

The audit concluded that both FHFA and FHFA OIG’s 

Information Security Programs operated effective 

information security programs that complied with FISMA 

and related information security policies and procedures, 

standards, and guidelines. The auditor reviewed and 

verified corrective actions taken by FHFA and FHFA 

OIG during the FY 2023 FISMA audit. The independent 

external auditor concluded that there were no significant 

deficiencies for the FHFA and FHFA OIG information 

security programs.

Prompt Pay

The Prompt Payment Act requires federal agencies to 

make timely payments to vendors and improve the cash 

management practices of the government by encouraging 

the use of discounts when they are justified. This also 

means that FHFA must pay its bills within a narrow 

window of time. In FY 2023, the dollar amount subject 

to prompt payment was $125.2 million. The amount of 

interest penalty paid in FY 2023 was $480.00.

Digital Accountability and 

Transparency Act of 2014

FHFA consulted with OMB and Treasury and determined 

that the Digital Accountability and Transparency Act of 

2014 does not apply to FHFA.

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 26
X FHFA STATEMENTS OF ASSURANCE

Federal Housing Finance Agency Constitution Center

400 7th Street, S.W.

Washington, D.C. 20219

Telephone: (202) 649-3800

Facsimile: (202) 649-1071

www.fhfa.gov

November 8, 2023

Federal Managers’ Financial Integrity Act

Statements of Assurance

Fiscal Year 2023

Federal Housing Finance Agency (FHFA) management is responsible for establishing and 

maintaining effective internal control and financial management systems to meet the objectives 

of Sections 2 and 4 of the Federal Managers’ Financial Integrity Act (FMFIA) of 1982, which 

include the following:

• Reliability of (financial and non-financial) reporting;

• Compliance with laws and regulations; and

• Effectiveness and efficiency of operations.

FHFA conducted its assessment of risk and internal controls in accordance with the Office 

of Management and Budget (OMB) Circular No. A-123, Management’s Responsibility for 

Enterprise Risk Management and Internal Control. Based on the results of this evaluation, FHFA 

can provide reasonable assurance that its internal controls over reporting, compliance with laws 

and regulations, and the effectiveness and efficiency of operations, as of September 30, 2023, 

were operating effectively and no material weaknesses were found in the design or operation of 

the internal controls.

FHFA’s internal control over financial reporting is a process effected by those charged with FHFA’s 

governance and management, and by other personnel. The objectives of this process are to provide 

reasonable assurance that (1) transactions are properly recorded, processed, and summarized 

to permit the preparation of financial statements in accordance with U.S. generally accepted 

accounting principles; (2) assets are safeguarded against loss from unauthorized acquisition, 

use, or disposition; and (3) transactions are executed in accordance with provisions of applicable 

laws, including those governing the use of budget authority, regulations, contracts, and grant 

agreements, noncompliance with which could have a material effect on the financial statements. 

FHFA management is responsible for maintaining effective internal control over financial reporting, 

including the design, implementation, and maintenance of internal controls relevant to the 

preparation and fair presentation of financial statements that are free from material misstatement, 

whether due to fraud or error. FHFA conducted its assessment of the effectiveness of internal 

controls over financial reporting, including complementary user entity controls and entity level 

Management’s Discussion and Analysis

27| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
controls, in accordance with OMB Circular A-123. Based on the results of this evaluation, 

FHFA can provide reasonable assurance that its internal controls over financial reporting, as of 

September 30, 2023, were operating effectively and no material weaknesses were found in the 

design or operation of internal controls over financial reporting.

The Housing and Economic Recovery Act of 2008 (HERA), 12 U.S.C. § 4516.g requires FHFA 

to implement and maintain financial management systems that comply substantially with 

Federal financial management systems requirements. FHFA conducted a review of its financial 

management system in accordance with OMB Circular A-123, Appendix D. Based on the results 

of this review, FHFA can provide reasonable assurance that its financial management systems 

substantially complied with the requirements for federal financial management systems as of 

September 30, 2023.

Sincerely,

Sandra L. Thompson

Director

Mark Kinsey

Chief Financial Officer

Management’s Discussion and Analysis

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 28
XPerformance Section

30 FHFA’S PERFORMANCE PLANNING AND REVIEW PROCESS

32 VALIDATION AND VERIFICATION OF PERFORMANCE DATA

33 STRATEGIC GOAL 1

49 STRATEGIC GOAL 2

60 STRATEGIC GOAL 3

68 ADDED, CHANGED, AND DISCONTINUED MEASURES

Performance Section

29| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X FHFA’S PERFORMANCE PLANNING 

AND REVIEW PROCESS

This section provides an overview of the Federal Housing Finance Agency’s (FHFA) performance planning and review 

framework and processes. FHFA’s performance management process involves a recurring cycle of planning; program 

management and execution; measurement, monitoring and evaluation; verification, validation of data, and reporting; and 

analysis of results that then influences management decisions and future planning. Figure 8 illustrates key elements of 

FHFA’s approach to performance management.

Figure 8: FHFA's Performance Management Cycle

FHFA

Performance 

Planning and 

Review Cycle

ANALYSIS OF RESULTS, MANAGEMENT

DECISIONS, AND FUTURE PLANNING

MONITORING, VALIDATING, 

AND REPORTING

PERFORMANCE PLANNING 

AND BUDGETING

PROGRAM MANAGEMENT

AND EXECUTION

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 30

Performance Section
The first step in FHFA’s performance management 

process is to develop the Agency’s Strategic Plan, which 

identifies FHFA’s strategic goals (longer-term outcome 

level results), strategic objectives (intermediate results 

that need to be achieved to accomplish the strategic 

goals), and means and strategies for achieving the 

strategic objectives. The Strategic Plan as outlined in 

FHFA’s FY 2023 Annual Performance Plan (APP) forms 

the basis of this FY 2023 Performance and Accountability 

Report (PAR). The APP provides operational detail on 

how progress will be made toward the strategic goals 

and strategic objectives, and it identifies performance 

measures that include annual targets to track progress 

toward the strategic objectives. FHFA conducts quarterly 

performance reviews of progress toward annual 

performance measure targets. Goal leaders submit 

quarterly data for the performance measures and targets 

for which they are responsible. Performance data on 

results are validated and verified, then reported in the 

annual PAR. FHFA’s senior leadership reviews the 

quarterly reports to monitor progress toward achieving 

planned performance and the strategic goals. Performance 

data are reviewed and analyzed throughout the year to 

monitor the Agency’s progress in achieving planned 

performance levels and are used to influence management 

and planning decisions, which feed into the next annual 

performance planning process. Figure 9 illustrates FHFA’s 

performance planning and review process.

Figure 9: FHFA's Performance Planning and Review Process

FHFA’S ANNUAL PERFORMANCE 

AND ACCOUNTABILITY REPORT

STRATEGIC PLANNING

• Mission

• Strategic goals

• Strategic objec ves

FHFA’S STRATEGIC PLAN

PERFORMANCE BUDGET DEVELOPMENT

• Resource levels

• System requirements and investment decisions

• Adjustments to targets based on investment decisions

FHFA’S ANNUAL PERFORMANCE BUDGET

PERFORMANCE PLANNING

• Agency goals are confirmed

• Key means and strategies are described

• Annual performance measures and targets are set

• New ini a ves are proposed

FHFA’S ANNUAL PERFORMANCE PLAN

MANAGEMENT, MONITORING, AND ACCOUNTABILITY

• Oversight and coordina on of key means and strategies

• Quarterly execu on review of progress toward

goals and strategies

• Accountability for results

• Strategic plans for systems

• Employee performance evalua on management systems

31| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
X VALIDATION AND VERIFICATION 

OF PERFORMANCE DATA

To ensure that the information reported in FHFA’s 

FY 2023 PAR is complete and reliable, FHFA identifies, 

verifies, and validates the data for each performance 

measure. FHFA has included a template of its 

Performance Measure Validation and Verification form on 

page 129.

Furthermore, every quarter, each office or division 

collects performance data for its measures and reports 

the results in the Agency’s performance tracking system. 

FHFA staff follows documented performance tracking 

and verification procedures to verify and validate the 

data provided to ensure that the information is accurate 

and complete. Agency staff review the information 

provided by offices on their performance measures on a 

quarterly basis, verifying and validating supporting data 

and documents for completeness, clarity, relevance, and 

accuracy. A quarterly report summarizing this information 

is sent to senior management officials.

During the performance tracking cycle, offices provide 

the following information for each performance measure:

• Definition of the performance measure;

• Relevance of the measure;

• Data source;

• Process for calculating or tabulating the 

performance data;

• Process for validating and verifying the data;

• Responsible office/division and manager;

• Location of documentation; and

• Data constraints.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 32

Performance Section
X STRATEGIC GOAL 1: SECURE THE REGULATED ENTITIES’ 

SAFETY AND SOUNDNESS

FHFA promotes safe and sound operations at the regulated 

entities through the Agency’s supervisory program. 

FHFA conducts supervision using a risk-based approach 

to identify existing and emerging risks to the regulated 

entities, evaluate the overall effectiveness of each 

regulated entity’s risk management systems and controls, 

assess compliance with laws and regulations applicable 

to the regulated entity, and ensure the timely resolution of 

matters requiring attention.

STRATEGIC GOAL 1 – SELECTED 

ACCOMPLISHMENTS

FHFA achieved several accomplishments in Fiscal Year 

(FY) 2023 that contributed to progress toward the strategic 

goal. Selected FY 2023 accomplishments include:

Advisory Bulletin on Valuation of 

Mortgage Servicing Rights

On January 12, 2023, FHFA issued Advisory Bulletin 

(AB) 2023-01: Valuation of Mortgage Servicing Rights 

for Managing Counterparty Credit Risk. The AB 

communicates FHFA’s supervisory expectations for the 

Enterprises to establish and implement risk management 

policies and procedures for monitoring and valuing seller/

servicers’ mortgage servicing rights (MSRs). MSRs are 

an important component in the Enterprises’ evaluation 

of a seller/servicer’s financial capacity, which affects 

counterparty risk management practices, such as assigning 

risk ratings and setting risk limits. FHFA determined that 

the Enterprises should have an overall risk management 

framework that ensures MSR values are reasonable, 

objective, and transparent through their own independent 

evaluation of seller/servicer MSRs.

Supplemental Model Risk 

Advisory Bulletin

On December 21, 2022, FHFA issued AB 2022-03: 

Supplemental Guidance to Advisory Bulletin 2013-07: 

Model Risk Management Guidance. This AB is applicable 

to the Enterprises, the Federal Home Loan Banks 

(FHLBanks), and the Office of Finance (OF). It clarifies 

and expounds on various topics covered in FHFA’s existing 

guidance. The intent of this supplemental guidance, 

formatted as Frequently Asked Questions, is to provide 

guidelines that address gaps in AB 2013-07. This was 

prompted by changes in model-related technologies and 

questions that were generated from the expanded use of 

complex models by the FHLBanks. The supplemental 

guidance also addresses model documentation, the 

communication of model limitations, model performance 

tracking, on-top adjustments, challenger models, model 

consistency, and internal stress testing. FHFA developed 

the AB to address issues encountered in supervising and 

examining the regulated entities. The guidance also reflects 

input gathered from consultations with other financial 

regulators and comments from the regulated entities. 

ADVISORY BULLETINS

FHFA issues ABs, which are public documents that 

communicate the Agency’s supervisory expectations 

in particular areas. ABs support FHFA examinations 

of the regulated entities with respect to specific 

supervisory matters and topics.

33| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
New Review Cycle for Diversity 

and Inclusion Exams

After reviewing the examinations of the regulated entities’ 

Diversity and Inclusion (D&I) programs from five previous 

examination cycles, FHFA concluded that it could examine 

the D&I programs of the FHLBanks on an extended 

interval. In the second quarter of 2022, FHFA commenced 

examining the D&I program of one FHLBank or OF each 

quarter. Generally, an FHLBank and OF will undergo a 

D&I examination every three years.

Enhancements to the Enterprise 

Regulatory Capital Framework

In March 2023, FHFA published a notice of proposed 

rulemaking seeking comments on amendments to the 

Enterprise Regulatory Capital Framework (ERCF) that 

would modify various components of the Enterprises’ 

regulatory capital requirements. Key refinements in 

the proposed rule relate to determining risk-weighted 

assets and adjusted total assets for cross guarantees on 

commingled securities (when there is a resecuritization 

where the underlying collateral includes securities that are 

issued and guaranteed by both Fannie Mae and Freddie 

Mac), to implementing a risk multiplier for multifamily 

mortgage exposures secured by properties with certain 

government subsidies, and to computing exposure amounts 

for derivatives and cleared transactions. The proposed 

rule would also modify provisions related to credit scores, 

guarantee assets, mortgage servicing assets, time-based calls 

for credit risk transfer exposures, interest-only mortgagebacked securities, the single-family countercyclical 

adjustment, the stability capital buffer, and the compliance 

date for the advanced approaches.

The public comment period for the proposed rule closed 

in May 2023. FHFA is currently reviewing the feedback.

ENTERPRISE REGULATORY 

CAPITAL FRAMEWORK

The Enterprise Regulatory Capital Framework is 

a going-concern regulatory capital standard which 

ensures that each of Fannie Mae and Freddie Mac 

operates in a safe and sound manner and is 

positioned to fulfill its statutory mission to provide 

stability and ongoing assistance to the secondary 

mortgage market throughout the economic 

cycle. To enhance the safety and soundness of 

the Enterprises, FHFA amended the Enterprise 

Regulatory Capital Framework three times in 2022. 

First, FHFA modified the leverage buffer and the 

risk-weight floor for retained credit risk transfer 

transactions to lessen potential disincentives to risk 

transfer. Second, FHFA enhanced the framework’s 

public disclosure requirements to improve market 

discipline and encourage sound risk management 

practices at the Enterprises. Finally, FHFA 

implemented requirements that each Enterprise 

submit annual capital plans to FHFA and provide 

prior notice for certain capital actions. The capital 

planning requirements allow the Enterprises to 

identify the amount of capital they need to raise to 

meet the requirements in the Enterprise Regulatory 

Capital Framework and to consider the timing of 

when to raise capital and what types of capital 

to raise. The amendments help provide a stable 

regulatory capital framework for the Enterprises as 

they continue to build capital, as well as after they 

achieve adequate capitalization under the Enterprise 

Regulatory Capital Framework.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 34

Performance Section
Enhancements to Private Mortgage 

Insurer Eligibility Requirements 

The Enterprises’ Private Mortgage Insurer Eligibility 

Requirements include standards for assets held by private 

mortgage insurers (MI) to pay claims (Available Assets) to 

ensure that these assets are liquid and readily available to pay 

claims. FHFA and the Enterprises are currently reviewing 

these standards to ensure that Available Assets are high 

quality, highly liquid assets. Importantly, this exercise does 

not limit or prescribe individual MI investment or portfolio 

management choices, but rather refines which of those 

investments the Enterprises would consider sufficiently 

liquid to be considered Available Assets. 

Considerations for refining the standards for Available 

Assets include differentiating between bonds of higher 

or lesser credit quality and higher or lesser liquidity, as 

well as addressing appropriate limits for assets backed 

by residential credit or commercial real estate to mitigate 

wrong-way risk (i.e., the likelihood that such assets would 

lose value during periods of housing stress when the MIs 

may need to sell these assets to pay claims). The updated 

standards will help mitigate the Enterprises’ exposure to 

counterparty risk and better prepare them to withstand a 

stress scenario.

13 https://www.fhlb.com/getmedia/9cd26f43-96eb-4ac0-9dad-e109fd4abdb5/FHLBank-ESG-Report.pdf.

14 https://fhlbanks.com/wp-content/uploads/2023/06/FHLB_CSR_Report.pdf.

Climate Risk Management at 

the FHLBanks 

On March 6, 2023, FHFA conducted the FHLBank System 

at 100: Focusing on the Future Roundtable Discussion 

on Climate Resiliency. The roundtable included topics 

such as resilient building, disaster recovery efforts, 

risk management and tradeoffs, consumer awareness, 

consumer protections, and transition risk. On Apri1 

28, 2023, the FHLBank of Dallas published its 2022 

Environmental, Social, and Governance (ESG) Report,13

a first for the FHLBank System. On June 30, 2023, the 

FHLBanks published their inaugural Corporate Social 

Responsibility Report.14 The Report focuses on how the 

System addresses housing needs, serves renters, borrowers, 

and homeowners, strengthens local economies, and supports 

communities facing environmental and social challenges. 

The Report also includes corporate sustainability 

highlights from each FHLBank.

Throughout FY 2023, in its supervisory role, FHFA continued 

to review how the FHLBanks and OF are considering the 

risks associated with climate change and natural disasters. 

For example, FHFA staff completed an assessment of the 

responses from these entities to its Climate Change, ESG, 

and Natural Disaster Horizontal Review, which collected 

information on the FHLBanks’ consideration of climate 

change risk, plans for reporting and disclosures, and 

actions and strategies for responding to natural disasters.

35| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
Enterprise ESG Reporting and 

Greenhouse Gas Metrics

FHFA has engaged in various initiatives to better 

understand the potential impacts of climate and ESG 

developments on the regulated entities and mortgage 

markets. Development and reporting of consistent, useful 

ESG metrics are important components of fostering 

resiliency in the secondary mortgage market.

In FY 2023, FHFA oversaw the Enterprises’ work in 

enhancing the transparency, accountability, and alignment 

of their publicly reported ESG metrics. The Agency also 

oversaw development of quantitative climate metrics, 

including greenhouse gas (GHG) emissions, and began 

monitoring Enterprise GHG emissions data and reporting 

readiness to align with industry practices for enhancement 

and standardization of climate-related disclosures.

CLIMATE CHANGE AND ESG 

STEERING COMMITTEE

Established in FY 2022, FHFA’s Climate Change and 

ESG Steering Committee informs decision-making 

on climate-related objectives throughout the Agency. 

It serves as a forum for the discussion of the means 

and strategies for achieving Agency goals related to 

Climate Change and ESG. It also serves as a forum 

for updates and discussion among Agency leadership 

of developments related to Climate and ESG topics 

and progress made by FHFA’s regulated entities.

FHFA’s eight Climate Change and ESG working 

groups directly report to the Steering Committee, to 

whom they submit project plans at the beginning of 

each calendar year. Since FY 2022, they have also 

met with the Steering Committee on a quarterly basis 

to discuss progress made on designated goals.

Social Bonds

In February 2023, FHFA issued a Request for Input (RFI) 

on the development and issuance of single-family social 

bonds, which have the potential to support and enhance 

the Enterprises’ shared mission to increase fair and 

sustainable access to credit in underserved markets. The 

RFI builds on the Enterprises’ current practice of issuing 

multifamily social bonds and single-family affordable 

bonds, and it responds to industry and investor demand 

for the development of a robust approach to single-family 

social bonds. The RFI sought feedback on defining 

eligibility criteria, borrower benefits, and impact reporting.

FHFA received responses from a range of stakeholders, 

including trade associations, investors, lenders, think 

tanks, consumer advocates, and consumers. The vast 

majority of stakeholders expressed overall positive 

sentiment in favor of developing a social bond program. 

In general, the respondents viewed social bonds as 

a potentially positive tool to increase liquidity in 

underserved markets. Some respondents urged the 

Enterprises to increase transparency in impact reporting 

and eligibility and be flexible and responsive to changing 

market conditions. FHFA and the Enterprises reviewed 

the feedback and are considering the concerns and 

risks raised by respondents as part of the development 

of a single-family social bond program to support the 

Enterprises’ statutory mission and charter.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 36

Performance Section
STRATEGIC OBJECTIVE 1 .1: IDENTIFY RISKS TO THE REGULATED 

ENTITIES AND ASSESS THE SAFETY AND SOUNDESS OF REGULATED 

ENTITY OPERATIONS

FHFA assesses the safety and soundness of the regulated entities’ operations through annual examinations, targeted 

examinations, ongoing monitoring, and reviews. FHFA uses a uniform examination rating system to assign ratings to the 

Enterprises, the FHLBanks, and OF. FHFA annually assigns each regulated entity a composite rating for the overall condition 

of the entity. In FY 2023, FHFA monitored nine measures for Strategic Objective 1.1 and met the targets for eight of the 

measures. The table below reports progress on these measures.

Table 5: Strategic Objective 1 .1 – Summary of Performance Measures and Results

Strategic Objective 1 .1: Identify risks to the regulated entities and assess the safety and soundness of regulated entity operations

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 

Target

FY 2023 

Result

1 .1 .1a: Conduct risk-focused 

supervision and examinations 

of the Enterprises and Common 

Securitization Solutions by having 

written risk-based examination plans 

approved by January 31

MET MET MET MET MET 100 percent 

of the time MET

1 .1 .1b: Conduct risk-focused 

supervision and examinations of 

the FHLBanks by having written 

risk-based examination plans in 

place prior to the commencement 

of examinations for each of 

the FHLBanks

MET MET MET MET MET 100 percent 

of the time MET

1 .1 .2a: Approve reports of 

examination by April 1515 for 

the Enterprises and Common 

Securitization Solutions

NOT MET MET MET MET MET 100 percent 

of the time MET

1 .1 .2b: Approve reports of 

examination within 90 days after 

completing examination work for 

each of the FHLBanks

MET MET MET MET MET 100 percent 

of the time NOT MET

1 .1 .3: Ensure a quarterly Market 

Value of Equity to par value of capital 

stock ratio greater than or equal to 

one for each FHLBank

MET MET MET MET MET 100 percent 

of the time MET

1 .1 .4: Ensure each FHLBank 

is adequately capitalized on 

a quarterly basis

MET MET MET MET MET 100 percent 

of the time MET

15 Or the first business day after if the date falls on a weekend.

37| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
Table 5: Strategic Objective 1 .1 – Summary of Performance Measures and Results

1 .1 .5: Conduct quarterly reviews 

of review of regulated entity 

public filings

N/A16 N/A N/A MET MET 100 percent 

of the time MET

1 .1 .6a: Approve Diversity and 

Inclusion reports of examination by 

April 1517 for the Enterprises and 

Common Securitization Solutions

N/A N/A N/A N/A NOT MET 100 percent 

of the time MET

1 .1 .6b: Approve Diversity and 

Inclusion reports of examination for 

at least four of the FHLBank System 

regulated entities

N/A N/A N/A N/A MET 100 percent 

of the time MET

16 “N/A” or “not available” means that FHFA did not report data in prior PARs for the marked measures.

17 Or the first business day after if the date falls on a weekend.

PERFORMANCE MEASURE 1 .1 .1A:

Conduct risk-focused supervision and 

examinations of the Enterprises and 

Common Securitization Solutions by 

having written risk-based examination 

plans approved by January 31

PERFORMANCE MEASURE 1 .1 .1B:

Conduct risk-focused supervision and 

examinations of the FHLBanks by having 

written risk-based examination plans in 

place prior to the commencement of 

examinations for each of the FHLBanks

Risk-based examinations focus FHFA resources on areas 

of greatest risk. Risk-based scope documents communicate 

important areas of focus to staff and aid in the overall 

examination planning process. FHFA met this measure for 

FY 2023 as explained in the following paragraph.

• The Enterprises: FHFA examiners examine each 

Enterprise on a continuous basis and annually for 

Common Securitization Solutions (CSS). FHFA 

maintains a written risk-based examination plan for 

each Enterprise and CSS for every annual supervisory 

cycle. To conduct risk-focused supervision and 

examinations, the examination plans should be 

approved prior to the commencement of the upcoming 

supervisory cycle. The target date for approval of the 

2023 examination plans was January 31, 2023. Each 

plan enumerates examination activities for different 

risk management and business areas. Examination areas 

include credit risk, market risk, operational risk, model 

risk, and governance. Examination plans are reviewed 

during the supervisory cycle and may be amended to 

reflect changes in risk profile or the Enterprise’s or 

CSS’s operations. The 2023 examination plans for 

Fannie Mae, Freddie Mac, and CSS were approved by 

the DER Deputy Director by the target date.

• FHLBanks and OF: FHFA examines the FHLBanks 

and OF annually on a Calendar Year (CY) basis. 

Examinations have specified beginning and end dates 

and are generally performed at a pace of three entities 

each quarter. FHFA’s examination plans are called 

scope memoranda, which include analyses of the 

institution’s risks, a schedule of examination work, and 

details regarding staff responsibilities. For FY 2023, 

scope memoranda were in place prior to the start of 

every FHLBank and OF examination.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 38

Performance Section
PERFORMANCE MEASURE 1 .1 .2A:

Approve reports of examination by 

April 1518 for the Enterprises and 

Common Securitization Solutions

PERFORMANCE MEASURE 1 .1 .2B:

Approve reports of examination within 

90 days after completing examination 

work for each of the FHLBanks

FHFA communicates supervisory results, findings, and 

expectations for remedial action to the Enterprises, the 

FHLBanks, and OF through supervisory correspondence 

and reports of examination (ROEs). ROEs summarize 

key examination findings for the prior year and include 

ratings assigned in accordance with the Capital, Asset 

Quality, Management, Earnings, Liquidity, Sensitivity to 

Market Risk, and Operational Risk (CAMELSO) ratings 

framework. In FY 2023, FHFA met the target dates for 

approving ROEs for the Enterprises and CSS. However, 

the Agency missed the target for FHLBanks and OF due 

to unexpected delays with one ROE.

18 Or the first business day after if the date falls on a weekend.

• The Enterprises and CSS: FHFA issues ROEs that 

document and communicate its supervisory findings 

and conclusions for the examination year. The ROE 

reflects FHFA’s view of the regulated entity’s financial 

condition, its risk profile, and the adequacy of its risk 

management practices. Each Enterprise’s ROE includes 

the composite and CAMELSO ratings and CSS’s 

ROE includes the composite and the Management and 

Operational Risk component ratings assigned by the 

Examiner-in-Charge. The target date for approval by 

the DER Deputy Director for each ROE was April 15. 

FHFA approved the ROEs for Fannie Mae, Freddie 

Mac, and CSS by the target date.

• FHLBanks: ROEs summarize DBR’s examination 

conclusions and principal findings, communicating them 

to the Bank and outlining supervisory expectations. The 

Deputy Director for DBR approves each ROEs within 

90 days of the exit meeting that concludes examination 

work. DBR assesses this measure’s status each quarter, 

typically with three ROEs per quarter. During 2023, the 

DBR Deputy Director approved 11 of 12 (92 percent) 

ROEs within 90 days of the exit meetings. The target 

for this measure is 100 percent.

39| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
FINANCIAL CONDITION OF THE ENTERPRISES

Under the Preferred Stock Purchase Agreements (PSPAs), the Enterprises are constrained in their ability to 

take certain actions without the prior written consent of the U.S. Department of the Treasury (Treasury) while 

in conservatorship. In September 2019, FHFA and Treasury agreed to remove the existing requirement that the 

Enterprises pay out to the Treasury any excess capital beyond a combined $6 billion as dividend to the senior 

preferred shares, a provision also known as the net worth sweep. As amended in September 2019, FHFA and 

Treasury agreed to increase the Capital Reserve Amount to $25 billion for Fannie Mae19 and $20 billion for 

Freddie Mac20 beginning with the July 1, 2019 dividend period. In January 2021, FHFA and Treasury again 

amended the PSPA to effectively end the net worth sweep through a Letter Agreement that further increased the 

amount of retained earnings that each Enterprise could keep as of October 1, 2020, to the amount of adjusted total 

capital necessary to meet the capital requirements and buffers set forth in the final capital rule.21 As a result, the 

Enterprises’ net worth increased to $73.7 billion for Fannie Mae and $44.7 billion for Freddie Mac by the end of 

FHFA’s FY 2023.

However, the agreement also increases the liquidation preference of the Senior Preferred Stock by the amount 

of any increase in the Enterprises’ net worth each quarter.22 In September 2021, FHFA and Treasury suspended 

certain provisions that were added to the PSPA in January 2021.23 The suspended provisions include limits on 

the Enterprises’ cash windows (loans acquired for cash consideration), multifamily lending, loans with higher 

risk characteristics, and second homes and investment properties. The Enterprises will continue to build capital 

under the continuing provisions of the PSPAs. FHFA also continues to direct the Enterprises to operate in a safe 

and sound manner consistent with their statutory mission and to foster resilient housing finance markets given 

prevailing housing market conditions, which include elevated demand relative to available inventory.

The housing market contracted in 2022 as higher interest rates combined with high house prices reduced housing 

affordability. Refinancing activity was most affected by higher mortgage rates, but purchase activity was also 

diminished from recent years. Throughout FY 2023, mortgage rates continued to rise and house prices did not 

decline, keeping housing market activity depressed and negatively impacting housing affordability. Despite the 

higher interest rates since 2022, home prices remained strong in most areas due to a shortage of available housing 

supply. These market conditions had a significant effect on the Enterprises’ net interest income, as lower refinance 

volume resulted in lower amortization income at the same time as lower new originations reduced net interest 

income from their guarantee books of business. Table 6 shows the recent performance of the two Enterprises.

19 https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/9-27-19_FNMA-Capital-Agreement.pdf.

20 https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/9-27-19_FRE-Capital-Agreement.pdf.

21 In November 2020, FHFA released a final capital rule that establishes the ERCF as a new regulatory capital framework for the Enterprises. 

The final capital rule became effective on February 16, 2021.

22 Refer to the Fannie Mae and Freddie Mac letter agreements, dated January 14, 2021, available on the Treasury website for more details.

23 https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-and-Treasury-Suspending-Certain-Portions-of-the-2021-Preferred-StockPurchase-Agreements.aspx.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 40

Performance Section
Table 6: Enterprise Financial Results Summary of First 3 Quarters of 2023 and Full Year 2022

(dollars in billions)

Fannie Mae Freddie Mac

2023 2022 

Annual

2023 2022 

Q1 Q2 Q3 Q1 Q2 Q3 Annual

Net Income (Loss) 3.8 5.0 4.7 12.9 3.8 5.0 2.7 12.9

Comprehensive 

Income (Loss)* 3.8 5.0 4.7 12.9 3.8 5.0 2.7 12.9

* Comprehensive income is the sum of net income and changes in other comprehensive income, which consists of items excluded from net 

income on the income statement because they have not been realized. For both Enterprises, the comprehensive income items primarily 

consist of changes in unrealized gains (losses) in available-for-sale securities and changes in defined benefit plans. Freddie Mac’s other 

comprehensive income also includes unrealized gains (losses) on cash flow hedging relationships.

The Enterprises’ portfolios of seriously delinquent (SDQ) single-family loans, defined as loans that are more 

than 90 days overdue, decreased in FY 2023 as more borrowers exited forbearance. As of September 30, 2023, 

the single-family SDQ rates were slightly lower than pre-COVID levels at 0.54 percent and 0.55 percent for 

Fannie Mae and Freddie Mac, respectively. By comparison, on September 30, 2022, the single-family SDQ rates 

were 0.69 percent and 0.67 percent, respectively. FHFA continues to monitor the effects of COVID-19 on the 

Enterprises and their related risk management practices to ensure identification, monitoring, and management of 

credit risks.

The Enterprises have two primary sources of revenue: 1) guarantee fees on mortgages held by consolidated trusts 

holding Enterprise MBS, and 2) the difference between the interest income earned on the assets in the Enterprises’ 

retained mortgage portfolios and the interest expense paid on the debt that funds those assets. In FHFA’s FY 2023, 

as in prior years, the Enterprises earned the majority of their net income from guarantee fees rather than from 

other sources of net interest income. This is primarily driven by the reduction in the size of the retained portfolios 

in accordance with the requirements of the PSPAs between Treasury and the Enterprises.

The Enterprises have met conservatorship objectives by reducing the size of their retained portfolios and engaging 

in Credit Risk Transfer (CRT) transactions. The terms of the PSPAs require the Enterprises to reduce the size of 

their retained mortgage portfolios, which reduces their interest rate risk. Also, as conservator, FHFA has required the 

Enterprises to conduct CRT transactions that reduce risk to taxpayers by sharing credit risk with the private sector.

The Enterprises’ earnings continue to be highly sensitive to fluctuations in macroeconomic conditions, housing 

prices, and interest rates. For example, given the large size of the Enterprises’ guarantee portfolios, small changes 

in home prices may have a significant impact on financial performance through changes to loan loss reserves. To 

reduce the impact of interest rate fluctuations and mitigate the volatility in their financial results, Freddie Mac and 

Fannie Mae implemented hedge accounting in 2017 and 2021, respectively.

41| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
FINANCIAL CONDITION OF THE FHLBANKS

The financial condition and performance of the FHLBanks was sound during the 12-month period ending 

September 30, 2023. All 11 FHLBanks were profitable, with a combined net income of $6.2 billion on $8.4 billion 

of net interest income after provision for credit losses, with improved performance from the $2.5 billion and 

$4.3 billion earned, in the prior 12-month period. The FHLBanks recaptured $37 million of losses through interest 

income previously taken as credit other-than-temporary impairments. Operating expenses totaled $1.4 billion for 

the 12-month period that ended September 30, 2023. FHLBank advances increased by $171.9 billion over the 

past 12 months, resulting in $826.9 billion of advances outstanding on September 30, 2023. Advances represented 

63.1 percent of total FHLBank System assets. The balance of mortgages purchased from FHLBank members was 

$59.8 billion, or 4.6 percent of total FHLBank System assets.

During the 12-month period ending September 30, 2023, the FHLBanks purchased $9.0 billion of mortgages 

and collected principal payments of $5.1 billion. The FHLBanks’ remaining assets were primarily investments, 

which include liquidity assets, MBS, and other investments. Investments totaled $413.3 billion and represented 

31.6 percent of FHLBank System assets. Of the total investments, MBS were $169.5 billion and most of the 

MBS portfolio was agency MBS ($153.7 billion or 90.7 percent), with only $1.4 billion (0.8 percent) of privatelabel MBS. Aggregate consolidated obligations, which is the debt issued jointly and used by each FHLBank to 

fund its operations, totaled $1.2 trillion as of September 30, 2023, of which 25.2 percent were discount notes. 

Consolidated obligations with a remaining contractual maturity of less than one year by par value represented 

70.7 percent of total consolidated obligations. Table 7 provides a summary of the FHLBanks’ financial results 

through September 30, 2023.

Table 7: FHLBanks’ Financial Results Summary of First 3 Calendar Quarters of 

2023 and Full Calendar Year 2022

(in $ millions)

Net Income (Loss)*

2023

2021 Annual

Q1 Q2 Q3

FHLBank of Boston 57 79 70 184

FHLBank of New York 199 216 182 417

FHLBank of Pittsburgh 123 176 156 227

FHLBank of Atlanta 123 174 179 184

FHLBank of Cincinnati 127 218 170 252

FHLBank of Indianapolis 92 91 91 177

FHLBank of Chicago 143 167 183 415

FHLBank of Des Moines 191 250 265 430

FHLBank of Dallas 175 240 248 317

FHLBank of Topeka 85 106 92 241

FHLBank of San Francisco 195 121 103 323

FHLBank System Total Net Income 1,510 1,836 1,738 3,168

* Numbers may not add due to rounding.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 42

Performance Section
PERFORMANCE MEASURE 1 .1 .3:

Ensure a quarterly Market Value of Equity 

to par value of capital stock ratio greater 

than or equal to one for each FHLBank

The Market Value of Equity (MVE) to par value of capital 

stock (PVCS) ratio is an indicator of each FHLBank’s 

condition. A ratio of one or above is desirable because it 

reflects an FHLBank’s ability to repurchase or redeem 

its capital stock at par without detriment to the remaining 

shareholders. FHFA uses FHLBank reporting by way of 

the Call Report System to verify that the MVE-to-par 

ratio is greater than or equal to one at each FHLBank 

at quarter end. For each quarter during FY 2023, each 

FHLBank reported market value information to FHFA 

for the preceding quarter. All FHLBanks reported MVE 

greater than the PVCS. The below graph reports MVE to 

PVCS ratios for all FHLBanks as of September 30, 2023.

Figure 10: Quarterly MVE to PVCS Ratios 

PERFORMANCE MEASURE 1 .1 .4:

Ensure each FHLBank is adequately 

capitalized on a quarterly basis

Capital adequacy is a critical component of safe 

and sound FHLBanks. FHFA determines the capital 

classification for each FHLBank for the prior quarter 

and communicates it to the Bank. These communications 

are made via letter and were in accordance with Subpart 

A of Part 1229 of FHFA’s rule, “Capital Classifications 

and Prompt Corrective Action.” In each quarter of 2023, 

FHFA deemed all FHLBanks “adequately capitalized” for 

the prior quarter and communicated these classifications 

to the FHLBanks via letter.

PERFORMANCE MEASURE 1 .1 .5:

Conduct quarterly reviews of 

regulated entity public filings 

The measure ensures oversight of the public financial 

statements released by the regulated entities. For the 

Enterprises, FHFA review must be completed prior to 

filing with the SEC. Through the supervisory process and 

through the financial statement acknowledgement process, 

FHFA, as regulator and as conservator, conducts oversight 

of the information released by its regulated entities, which 

informs decisions by a wide range of government and 

non-government stakeholders and market participants. For 

the FHLBanks, FHFA as regulator reviews the individual 

bank filings, and FHFA conducts oversight of combined 

Boston

Sep-22 Dec-22 Mar-23 Jun-23 Sep-23

New York Pittsburgh Atlanta Cincinnati Indianapolis Chicago Des Moines Dallas Topeka San Francisco

3.0

2.5

2.0

1.5

1.0

0.5

0.0

43| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
financial reports for the System. In FY 2023, FHFA 

documented reviews of (i) Enterprise financial statements 

prior to each quarterly and year-end SEC filing, and (ii) 

FHLBank financial statements prior to conclusion of annual 

examination fieldwork for each FHLBank.

PERFORMANCE MEASURE 1 .1 .6A:

Approve Diversity and Inclusion reports of 

examination by April 15 for the Enterprises 

and Common Securitization Solutions

This measure reports progress towards meeting FHFA’s 

requirement to issue D&I ROEs to the Enterprises and 

CSS. FHFA completed the 2022 examinations of Fannie 

Mae, Freddie Mac, and CSS and issued the ROEs to each 

entity by April 15, 2023.

PERFORMANCE MEASURE 1 .1 .6B:

Approve Diversity and Inclusion reports 

of examination for at least four of the 

FHLBank System regulated entities

This measure reports progress towards meeting FHFA’s 

requirement to issue D&I ROEs to the FHLBanks. These 

reports demonstrate the Agency’s commitment to its 

mission to promote financial inclusion and economic 

opportunity by ensuring regulated entity compliance. In 

FY 2023, FHFA approved D&I ROEs for four of the 

FHLBank System regulated entities by September 30, 2023.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 44

Performance Section
STRATEGIC OBJECTIVE 1 .2: REQUIRE TIMELY REMEDIATION OF 

MATTERS REQUIRING ATTENTION

FHFA continues to identify, communicate, monitor, and assess the status of matters requiring attention at the regulated 

entities to ensure timely remediation. In FY 2023, FHFA monitored three measures for Strategic Objective 1.2 and met the 

targets for all three of these measures. The table below reports progress on these measures.

Table 8: Strategic Objective 1 .2 – Summary of Performance Measures and Results

Strategic Objective 1 .2: Require timely remediation of matters requiring attention

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

1 .2 .1a: Determine that the 

Enterprises have satisfactorily 

addressed safety and soundness 

Matters Requiring Attention in 

accordance with agreed upon 

remediation plans and timeframes

NOT MET MET MET MET MET 90 percent 

of the time MET

1 .2 .1b: Determine that the FHLBanks 

and OF have satisfactorily addressed 

safety and soundness Matters 

Requiring Attention in accordance 

with agreed upon remediation plans 

and timeframes

MET MET MET MET MET 90 percent 

of the time MET

1 .2 .2: Determine regulated 

entities have satisfactorily addressed 

Matters Requiring Attention 

relating to their Diversity and 

Inclusion programs, in accordance 

with agreed-upon timeframes

N/A N/A N/A MET MET 90 percent 

of the time MET

PERFORMANCE MEASURE 1 .2 .1A:

Determine that the Enterprises have 

satisfactorily addressed safety and 

soundness Matters Requiring Attention 

in accordance with agreed upon 

remediation plans and timeframes

PERFORMANCE MEASURE 1 .2 .1B:

Determine that the FHLBanks and OF 

have satisfactorily addressed safety and 

soundness Matters Requiring Attention 

in accordance with agreed upon 

remediation plans and timeframes

Where there is a significant supervisory concern or 

violation of law or regulation by one of the regulated 

entities, FHFA may issue an MRA that requires the 

entity’s board of directors and/or management take 

corrective action to address deficiencies and violations. 

FHFA tracks the remediation of MRAs to ensure that the 

regulated entity has addressed the supervisory concern 

or violation of law or regulation. The FY 2023 target 

for Performance Measure 1.2.1 for both the Enterprises 

and the FHLBanks was for FHFA to determine that the 

regulated entities have satisfactorily addressed safety 

and soundness MRAs in accordance with agreed upon 

remediation plans and timeframes 90 percent of the time.

45| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
FHFA follows different processes for the closure of 

MRAs at the Enterprises and the FHLBanks.

• The Enterprises: The Enterprises address MRAs 

by implementing corrective action by the FHFAcommunicated remediation completion date. For all 

MRAs scheduled to be remediated during the fiscal 

year, FHFA will determine whether the Enterprise has 

satisfactorily addressed the MRA in accordance with 

agreed upon remediation plans and timeframes. In 

FY 2023, the Enterprises satisfactorily addressed more 

than 90 percent of their safety and soundness MRAs 

in accordance with agreed upon remediation plans 

and timeframes.

• FHLBanks and OF: For each FHLBank and for OF, 

FHFA reviews satisfactory resolution of MRAs in 

conjunction with FHFA’s annual examination cycle. 

FHFA gathers information about MRA resolution in the 

course of annual exam work and determines whether 

the Bank or OF addressed MRAs outstanding prior 

to the examination within agreed upon timeframes 

or if it is sufficiently on track to address them within 

the established remediation plan. At FHLBank and 

OF examinations conducted during FY 2023, FHFA 

followed up on outstanding MRAs to determine 

whether the entities had remediated them or if they 

were making progress according to their remediation 

plans. During the year, FHFA found that the FHLBanks 

and OF satisfactorily addressed more than 90 percent of 

their MRAs.

PERFORMANCE MEASURE 1 .2 .2:

Determine regulated entities have 

satisfactorily addressed Matters 

Requiring Attention relating to their 

Diversity and Inclusion programs, in 

accordance with agreed upon timeframes

The regulated entities are evaluated by FHFA to ensure 

compliance with statutory and regulatory requirements 

for advancing diversity and ensuring inclusion in 

all their business activities. The D&I examination 

module establishes how FHFA examines the regulated 

entities’ compliance with Section 1116 of HERA and 

FHFA regulations at 12 CFR 1223. The target for 

this performance measure is a 90 percent success rate 

for MRAs reviewed during the year. In FY 2023, the 

FHLBanks, OF, Fannie Mae, Freddie Mac, and CSS 

satisfactorily addressed more than 90 percent of their safety 

and soundness MRAs in accordance with agreed upon 

remediation plans and timeframes.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 46

Performance Section
STRATEGIC OBJECTIVE 1 .3: PRESERVE AND CONSERVE ENTERPRISE 

ASSETS WHILE MANAGING THE CONSERVATORSHIPS

FHFA continues to focus on managing the ongoing conservatorships to preserve and conserve the assets of the Enterprises 

for the benefit of the taxpayers, as well as reducing taxpayer risk from Enterprise operations. In FY 2023, FHFA monitored 

two performance measures for Strategic Objective 1.3 and met the target for one of these measures. The table below reports 

progress on these measures.

Table 9: Strategic Objective 1 .3 – Summary of Performance Measures and Results

Strategic Objective 1 .3: Preserve and conserve Enterprise assets while managing the conservatorships

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

1 .3 .1: Provide decision to Enterprises 

regarding completeness of resolution 

plan submissions in conjunction with 

readiness activities 

N/A24 N/A N/A N/A N/A July 31, 2023 NOT MET

1 .3 .2: Monitor and rate the 

Enterprises’ performance against 

current Scorecard objectives

N/A N/A N/A N/A N/A

Complete quarterly 

assessment within 

30 days of quarter 

end (within 60 

days for year-end 

assessment

MET

24 “N/A” or “not available” means that FHFA did not report data in prior PARs for the marked measures. 

PERFORMANCE MEASURE 1 .3 .1:

Provide decision to Enterprises 

regarding completeness of resolution 

plan submissions in conjunction with 

readiness activities

FHFA published a final rule on May 4, 2021, which 

required the Enterprises to develop plans to facilitate their 

rapid and orderly resolution in the event that FHFA is 

appointed receiver. This measure tracks compliance with 

the rule by requiring FHFA to complete and communicate 

its completeness review of the Enterprise resolution plans 

by June 31, 2023. The target for this measure was not met. 

The plans are currently under Agency review.

PERFORMANCE MEASURE 1 .3 .2:

Monitor and rate the Enterprises’ 

performance against current 

Scorecard objectives

Each quarter, FHFA evaluated the Enterprises’ progress 

against the goals contained in the annual conservatorship 

scorecard within 30 days of the end of each quarter 

(within 60 days for year-end assessment). Results of 

this evaluation were approved by the Director and 

communicated to the Enterprises.

47| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
STRATEGIC OBJECTIVE 1 .4: IDENTIFY OPTIONS FOR INCORPORATING 

CLIMATE CHANGE INTO REGULATED ENTITY GOVERNANCE

In FY 2023, FHFA monitored one performance measures for Strategic Objective 1.4 and met the target for this measure. The 

table below reports progress on these measures.

Table 10: Strategic Objective 1 .4 – Summary of Performance Measures and Results

Strategic Objective 1 .3: Identify options for incorporating climate change into regulated entity governance

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

1 .4 .1: Continue to develop the 

Enterprises’ and FHFA’s climate 

research agendas

N/A N/A N/A N/A N/A Q4 FY 2023 MET

25 https://www.fhfa.gov/PolicyProgramsResearch/Research/Pages/wp2305.aspx.

PERFORMANCE MEASURE 1 .4 .1:

Continue to develop the Enterprises’ and 

FHFA’s climate research agendas

The Enterprises have made progress on their 2023 

research agendas, including newly initiated research 

projects for 2023 and continuing projects from 2022. 

Both Enterprises provided FHFA with regular updates on 

progress made on research projects as well as progress 

made in addressing climate-related data gaps. FHFA has 

similarly made progress on internal research projects 

on the Agency’s climate research agenda. For example, 

FHFA published a literature review of research on climate 

change and mortgage finance in August 2023.25 FHFA 

staff presented their research projects, such as the effects 

of hurricanes on public transportation and house prices, 

and house prices following natural disasters, during 

FY 2023 at academic conferences.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 48

Performance Section
X STRATEGIC GOAL 2: FOSTER HOUSING FINANCE 

MARKETS THAT PROMOTE EQUITABLE ACCESS TO 

AFFORDABLE AND SUSTAINABLE HOUSING

26 The report is available on FHFA’s website, at https://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/FHLBank-Focusing-on-the-Future.aspx.

27 See the Velocity TechSprint webpage at https://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/Fintech-Velocity-Tech-Sprint.aspx.

FHFA has the statutory obligation to foster liquid, 

efficient, competitive, and resilient national housing 

finance markets, while ensuring that the regulated 

entities meet their fundamental safety and soundness 

obligations. Achieving a liquid, healthy housing finance 

market throughout the country also requires improved 

access to responsible mortgage credit across different 

market segments of creditworthy borrowers. FHFA is 

committed to fair and equitable access to the regulated 

entities’ financial services by qualified institutions and 

creditworthy borrowers.

STRATEGIC GOAL 2 – SELECTED 

ACCOMPLISHMENTS

FHFA achieved several accomplishments in FY 2023 that 

contributed to progress toward the strategic goal.

FHLBank System at 100: 

Focusing on the Future

In August 2022, FHFA announced the launch of a 

comprehensive review of the FHLBank System. The 

purpose of the FHLBank System at 100: Focusing on the 

Future initiative was to ensure the FHLBanks remain 

positioned to meet the needs of their members and the 

communities they serve. FHFA launched the initiative with 

a public listening session, followed by regional roundtable 

discussions covering a variety of topics, including issues of 

local importance as well as more foundational questions about 

the FHLBank System’s mission, purpose, and organization. 

FHFA also held a wrap-up public listening session and 

accepted written comments during the public input phases. 

Together, nearly 800 stakeholders shared their thoughts on 

the FHLBank System.

FHFA drew on the feedback received through this public 

engagement along with its own extensive analysis when 

preparing a report, published in November 2023, which 

includes recommendations for how the FHLBank System 

could effectively fulfill its mission. FHFA has begun to 

address the actions in the report and will continue to do so 

in FY 2024 and beyond.26

Financial Technology (Fintech) Outreach 

and Engagement

In FY 2023, FHFA engaged with market participants, 

nonprofits, consumer groups, and academia to facilitate 

the sharing of best practices and establish an ongoing 

dialogue on the role of financial technology and 

innovation in housing finance. FHFA’s Office of Financial 

Technology analyzed public input on this topic received 

in response to a Request for Information (RFI) issued in 

July 2022 and from a listening session held in October 

2022. The Agency published a public summary of the RFI 

responses and themes in March 2023.

In July 2023, FHFA hosted an inaugural TechSprint, 

a team based, in-person problem-solving event. The 

Velocity TechSprint27 brought together experts and 

practitioners from the technology and mortgage finance 

sectors to propose solutions for reducing mortgage costs 

and delivery times while creating a more inclusive and 

transparent process. The Velocity TechSprint culminated 

in a Demo Day where each team presented their ideas 

to a panel of judges drawn from subject matter experts 

in industry, the nonprofit sector, and government. The 

Velocity TechSprint also featured in-person and virtual 

panels with experts from industry, academia, the nonprofit 

sector, and the regulatory community.

49| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
Updates to Enterprise Credit 

Score Requirements

Since 2014, FHFA has been exploring updates to the 

Enterprises’ credit score requirements, culminating in an 

Agency decision in October 2022 to validate and approve 

the FICO 10T and VantageScore 4.0 credit score models 

for use by the Enterprises, as well as to require the use 

of a minimum of two, rather than three, credit reports 

for each borrower from the national consumer reporting 

agencies on loans acquired by the Enterprises. The 

Agency expects these changes will result in more accurate 

and inclusive credit scores and increased competition 

in the market, which in turn should promote sustainable 

access to affordable mortgage credit for consumers.

To ensure smooth implementation of these updated 

requirements, FHFA and the Enterprises have undertaken 

extensive stakeholder engagement. In March 2023, FHFA 

announced a public engagement process and issued a 

proposed implementation timeline. FHFA sought to 

better understand stakeholder needs for data, education, 

technology, and guidance, while providing further clarity 

on the next steps in the initiative. In September 2023, 

FHFA expanded upon this public engagement process 

by announcing a series of stakeholder forums and 

listening sessions on the updated Enterprise credit score 

requirements. These forums will allow discussion of a 

wide variety of issues, opportunities, and challenges related 

to implementation of the new requirements.

During FY 2023, the Enterprises published a “partner 

playbook” with information on timelines and resources, 

including frequently asked questions and answers, as well 

as training opportunities. After the initial publication, the 

Enterprises updated the playbook and will continue to 

provide at least quarterly updates. They have also held 

industry education webinars, conducted approximately 

100 targeted outreach meetings, received almost 1,000 

survey responses, and participated in panel sessions 

and meetings at various industry events. FHFA and 

the Enterprises will continue robust engagement with 

stakeholders to support a smooth implementation as the 

initiative moves forward.

CREDIT SCORE MODELS

Credit score models are statistical tools or algorithms 

used to produce a numerical value or categorization 

to predict the likelihood of certain credit behaviors. 

Credit score models are used in many types of 

consumer credit decisions, including mortgages. 

These models typically consider various factors when 

calculating credit scores, such as an individual’s 

payment history, outstanding debts, length of 

credit history, types of credit accounts, and recent 

credit inquiries. The goal is to provide a numerical 

representation of an individual’s credit risk, typically 

expressed as a credit score. Today, the Enterprises use 

credit scores to establish minimum credit thresholds 

for mortgage loans they acquire, provide a foundation 

for risk-based pricing, and support their public 

financial statements and disclosures.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 50

Performance Section
Implemented Multifamily 

Radon Testing Standards

In January 2023, FHFA instructed the Enterprises to adopt 

more stringent radon standards for multifamily properties 

with mortgage loans backed by the Enterprises. The 

Enterprises’ aligned radon standards require additional 

radon testing for multifamily properties with loan 

applications received after June 30, 2023. Enhancements 

to the radon standards require testing at Enterprise-backed 

multifamily properties, regardless of where the property 

is located (subject to some exceptions and deferrals), in 

addition to:

• Increasing the amount of required testing from 

10 percent of ground floor units to 25 percent of ground 

floor units,

• Requiring an environmental professional to oversee 

radon testing,

• Requiring the environmental professional or property 

representative to notify tenants of radon testing, and

• Providing additional guidance for lenders and 

environmental consultants on the Enterprises’ radon 

standards. As part of this guidance, the Enterprises will 

reinforce the need for compliance with state and local 

radon laws. 

The new radon testing requirements and standards 

represent a robust improvement over the Enterprises’ 

prior policies. In FY 2024, FHFA will continue to work 

closely with the Enterprises, industry participants, and 

the public to ensure the successful implementation of 

the standards. Furthermore, FHFA partnered with the 

Centers for Disease Control and Prevention to identify 

opportunities and challenges in collecting radon data at 

multifamily properties with Enterprise-backed mortgages. 

Data collection efforts will help better inform industry and 

other stakeholders on radon issues moving forward.

Engaged the Public on Multifamily 

Tenant Protections

In January 2023, FHFA released a statement that, as 

part of the Administration’s Blueprint for a Renters Bill 

of Rights, the Agency will conduct a public process to 

identify tangible solutions for addressing the challenges 

faced by renters nationwide, focusing on properties with 

mortgage loans backed by the Enterprises. This year, 

FHFA has led a transparent stakeholder engagement 

process to explore the Enterprises’ role in protecting the 

nation’s tenants, including policies that limit excessive 

rent increases at Enterprise-backed properties. 

In May 2023, FHFA issued an RFI to solicit feedback 

from a diverse set of viewpoints on issues related to 

multifamily tenant protections. Additionally, the RFI 

asked stakeholders to identify opportunities for the 

industry to improve data collection to better quantify the 

size and scope of tenant protections nationwide. FHFA 

also instructed the Enterprises to explore the feasibility of 

expanding multifamily tenant protections for properties 

they finance and to identify strategies and activities that 

could facilitate a greater amount of affordable rental 

housing supply. 

The feedback that FHFA receives from the RFI and the 

Enterprises will be analyzed and used to inform future 

decision making. The Agency’s decision to evaluate 

the Enterprises’ multifamily tenant standards is based 

on lessons learned from COVID-19, rising rents, and a 

consensus among stakeholders that the United States lacks 

sufficient safe and affordable housing. 

Promoted Equity in Appraisals 

FHFA remains committed to addressing misvaluation in 

residential property appraisals and advancing valuation 

equity as an active participant in the Interagency Task Force 

on Property Appraisal and Valuation Equity (PAVE). In 

February 2023, FHFA worked with other federal regulators 

to raise concerns about the non-discrimination language 

contained in the Uniform Standards of Professional 

Appraisal Practice (USPAP), published by the Appraisal 

Foundation, through a joint public letter to the Appraisal 

Foundation. In May 2023, the Appraisal Foundation 

published a revised USPAP standard that incorporated 

significant improvements in non-discrimination standards. 

In May 2023, FHFA also hosted the second Appraisal 

Subcommittee hearing on appraisal bias. 

In October 2022, FHFA published the Uniform Appraisal 

Dataset (UAD) Aggregate Statistics Data File, the first 

comprehensive publicly available data on appraisals. 

FHFA simultaneously launched the UAD Aggregate 

Statistics Dashboards on its website to provide userfriendly visualizations of the newly available data. The 

Agency used appraisal records collected from 2013 

through the second quarter of 2022 on Enterprise singlefamily properties to create a data file of more than 

51| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
23 million UAD aggregate statistics, in a manner that 

protects borrower privacy. The UAD Aggregate Statistics 

Data File and Dashboards give stakeholders and the 

public new access to a broad set of data points and trends 

found in appraisal reports. FHFA publishes the UAD 

Aggregate Statistics quarterly.

In June 2023, FHFA expanded the public UAD 

Aggregate Statistics with new statistics and property 

characteristics. The new information includes comparable 

property statistics and structural, lot, and neighborhood 

characteristics for the subject property. FHFA also added 

two new user-friendly dashboards that present census 

tract data and appraisal gap statistics. The Agency plans to 

continue to take action to address issues of misvaluation 

and advance valuation equity.

INTERAGENCY TASK FORCE ON 

PROPERTY APPRAISAL AND 

VALUATION EQUITY

PAVE is composed of thirteen federal agencies and 

offices and is co-led by the U.S. Department of 

Housing and Urban Development and the Domestic 

Policy Council. The task force is dedicated to 

ending bias in home valuation. On March 23, 2022, 

PAVE released the Action Plan to Advance Property 

Appraisal and Valuation Equity, which outlines the 

historical role of racism in the valuation of residential 

property, examines the various forms of bias that can 

appear in residential property valuation practices, 

and describes how government and industry 

stakeholders will advance equity through actions 

and recommendations.

Rulemaking on Fair Lending Oversight 

and Equitable Housing Finance Plans

In April 2023, FHFA published a proposed rule that 

addresses barriers to sustainable housing opportunities 

for underserved communities by codifying existing FHFA 

practices in regulation and adding new requirements 

related to fair lending, fair housing, and Equitable 

Housing Finance Plans. The proposed rule would 

improve FHFA’s and the regulated entities’ fulfillment of 

their statutory purposes. FHFA expects this rulemaking 

to provide increased public transparency and greater 

oversight and accountability of the regulated entities’ fair 

housing and fair lending compliance. The comment period 

for the proposed rule closed on June 26, 2023. FHFA received 

over a hundred comment letters from individuals, think tanks, 

trade organizations, advocacy groups, and the Enterprises. 

The Agency is currently reviewing the feedback.

Enhancement of Payment Deferral

In March 2023, FHFA announced the Enterprises would 

enhance their payment deferral policies to allow borrowers 

facing a financial hardship to defer up to six months of 

mortgage payments as part of the standard loss mitigation 

toolkit. This enhancement was based on the success of the 

COVID-19 payment deferral offering. Payment deferral is a 

key part of the loss mitigation toolkit that allows borrowers 

who are able to resolve a financial hardship to keep the 

same monthly mortgage payment by moving past due 

amounts to the end of the loan as a non-interest-bearing 

balance, due and payable at maturity, sale, refinance, or 

payoff. Servicers were required to implement the enhanced 

payment deferral by October 1, 2023.

Single-Family Pricing Framework

In May 2023, FHFA issued an RFI on the Enterprises’ 

single-family pricing framework. The RFI solicited 

public feedback on the goals and policy priorities that 

FHFA should pursue in its oversight of the pricing 

framework. The RFI also sought input on the process for 

setting the Enterprises’ single-family upfront guarantee 

fees, including whether it is appropriate to continue to 

link upfront guarantee fees to the ERCF, a set of capital 

requirements established by FHFA through notice and 

comment rulemaking in 2020.

The RFI will help FHFA build on the significant updates 

to the pricing framework that have been made since the 

beginning of 2022 in a manner that is transparent and 

considers views from a diverse set of stakeholders and 

market participants. Through the RFI, FHFA sought 

input on how to ensure the pricing framework adequately 

protects the Enterprises and taxpayers against potential 

future losses; supports affordable, sustainable housing 

and first-time homebuyers; and fosters liquidity in the 

secondary mortgage market. FHFA is currently reviewing 

the feedback received. 

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 52

Performance Section
STRATEGIC OBJECTIVE 2 .1: PROMOTE SUSTAINABLE ACCESS 

TO MORTGAGE CREDIT

FHFA is responsible for promoting sustainable access to mortgage credit, and the Agency evaluates policies and takes 

appropriate actions to promote this objective. As both regulator and conservator, FHFA requires the Enterprises, where 

feasible, to identify specific actions to increase and preserve sustainable mortgage purchase and refinance credit for all 

qualified borrowers, with additional focus on low- and moderate-income families, communities of color, rural areas, and 

other underserved populations. In FY 2023, FHFA monitored two performance measures for Strategic Objective 2.1 and met 

the targets for both of these measures. The table below reports progress on these measures.

Table 11: Strategic Objective 2 .1 – Summary of Performance Measures and Results

Strategic Objective 2 .1: Promote sustainable access to mortgage credit

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

2 .1 .1: Issue annual ratings for 

each Enterprise’s Duty to Serve 

performance in 2022

N/A N/A N/A MET MET Q1 FY 2023 MET

2 .1 .2: Publish final Enterprise 

multifamily housing goals rule 

for 2023-24

N/A N/A N/A NOT MET MET Q1 FY 2023 MET

PERFORMANCE MEASURE 2 .1 .1:

Issue annual ratings for each Enterprise’s 

Duty to Serve performance in 2022

The Enterprises have important roles in supporting access 

to mortgage credit for very low-, low-, and moderateincome families, as well as those in underserved areas. 

The Safety and Soundness Act establishes a duty for 

the Enterprises to serve very low-, low-, and moderateincome families in three underserved markets—

manufactured housing, affordable housing preservation, 

and rural housing.

Under FHFA’s regulation, each Enterprise submits a Duty 

to Serve (DTS) Underserved Markets Plan to FHFA for 

review and nonobjection. The plan covers a three-year 

period and describes the activities and objectives the 

Enterprise will carry out in each underserved market to 

meet its DTS obligations. While the plans cover three 

years, FHFA is required by statute to evaluate and rate the 

Enterprises’ DTS performance under the plans each CY. In 

October 2022, FHFA issued its annual evaluations for each 

Enterprise’s 2021 DTS performance as part of FHFA’s 

Annual Housing Report.

PERFORMANCE MEASURE 2 .1 .2:

Publish final Enterprise multifamily 

housing goals rule for 2023-24

The Enterprises have important roles in supporting 

access to mortgage credit for low- and moderate-income 

families. Sections 1331 through 1333 of the Safety and 

Soundness Act require the Director to establish annual 

housing goals for mortgage purchases by Fannie Mae and 

Freddie Mac, covering at most a three-year period. The 

Enterprise housing goals are based on CY and include 

separate affordable housing categories for single-family 

and multifamily mortgages. FHFA issued its Final 

Multifamily Housing Goals Rule for 2023-2024 on 

December 23, 2022.

53| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
STRATEGIC OBJECTIVE 2 .2: ADVANCE EQUITY IN HOUSING 

FINANCE, INCLUDING THROUGH COMPLIANCE WITH FAIR 

LENDING LAWS AND REGULATIONS 

FHFA works with the Enterprises to develop and monitor programs that expand access to housing finance to all qualified 

financial institutions and qualified borrowers. FHFA also oversees the FHLBanks’ affordable housing and community 

investment activities. In FY 2023, FHFA monitored two performance measures for Strategic Objective 2.2 and met both of 

the targets for these measures. The table below reports progress on these measures.

Table 12: Strategic Objective 2 .2 – Summary of Performance Measures and Results

Strategic Objective 2 .2: Advance equity in housing finance, including through compliance with fair lending laws and regulations

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 

Target

FY 2023

Result

2 .2 .1: Issue an FHFA Enterprise 

Fair Lending Rating System N/A N/A N/A N/A N/A Q4 FY 2023 MET

2 .2 .2: Ensure Enterprises’ updated 

Equitable Housing Finance Plans 

are published

N/A N/A N/A N/A MET Q3 FY 2023 MET

PERFORMANCE MEASURE 2 .2 .1:

Issue an FHFA Enterprise Fair Lending Rating System

FHFA’s fair lending supervisory program seeks to ensure 

that all Americans, especially those in underserved 

communities, have access to a fair and sustainable 

housing finance system by assessing the Enterprises’ 

compliance with fair lending laws. The FHFA Enterprise 

Fair Lending Rating System provides a means to clearly 

communicate FHFA’s supervisory view of an Enterprise’s 

fair lending program, including the Enterprise’s 

compliance management system for fair lending laws and 

regulations. An FHFA Enterprise Fair Lending Rating 

System was developed and approved by the Division of 

Housing Mission and Goals Deputy Director in FY 2023.

PERFORMANCE MEASURE 2 .2 .2:

Ensure Enterprises’ updated Equitable 

Housing Finance Plans are published 

In September 2021, FHFA instructed Fannie Mae and Freddie 

Mac to develop Equitable Housing Finance Plans that identify 

and address barriers to sustainable housing opportunities and 

include the Enterprises’ goals and action plans to advance 

equity in housing finance for the next three years. In June 

2022, FHFA announced the release of the Enterprises’ 

Equitable Housing Finance Plans for 2022-2024.

FHFA instructed the Enterprises to submit annual updates 

to the Plans for review. In April 2023, Fannie Mae and 

Freddie Mac refreshed their 2022-2024 Equitable 

Housing Finance Plans with updates to the previous year’s 

strategies and added new strategies for 2023. The 

Enterprises also issued Performance Reports that outlined 

their progress during 2022 and actions they are taking to 

advance equity in their automated underwriting systems.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 54

Performance Section
STRATEGIC OBJECTIVE 2 .3: SERVE AS A RELIABLE SOURCE OF 

INFORMATION AND ANALYSIS ON THE STATE OF HOUSING FINANCE 

MARKETS AND RELATED ISSUES

In FY 2023, FHFA continued to conduct research, collect and analyze data, and publish important information on housing 

market conditions. This informs policy decisions and the public and promotes market efficiency and stability. Selected 

examples include:

28 FHFA HPI data are available at https://www.fhfa.gov/HPI.

• Continuing regular publication on FHFA’s website 

of monthly and quarterly FHFA House Price Index 

(FHFA HPI®) information, which provides indications 

of housing price movements for geographic areas;

• Producing and certifying the quarterly update of the 

National Mortgage Database (NMDB) and making the 

data available to FHFA and the Consumer Financial 

Protection Bureau (CFPB) in a production environment;

• Conducting the nationally representative National 

Survey of Mortgage Originations (NSMO) every 

quarter and publishing public use NSMO data on 

FHFA’s website annually; and

• Continuing to publish the monthly and quarterly FHFA 

Foreclosure Prevention and Refinance Report, which 

monitors the Enterprises’ foreclosure prevention and 

refinance activities.

In FY 2023, FHFA monitored four measures for 

Strategic Objective 2.3 and met all four of the targets 

for these measures. The table below reports progress on 

these measures.

Table 13: Strategic Objective 2 .3 – Summary of Performance Measures and Results

Strategic Objective 2 .3: Serve as a reliable source of information and analysis on the state of housing 

finance markets and related issues 

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 

Target

FY 2023

Result

2 .3 .1: Publish FHFA House Price Indexes MET MET MET MET MET

12 monthly 

and

4 quarterly

MET

2 .3 .2: Publish annual Public Use Database N/A N/A N/A NOT MET MET September 

2023 MET

2 .3 .3: Publish quarterly aggregate statistics 

on mortgage profiles and delinquencies 

from National Mortgage Database

N/A N/A N/A MET MET One per 

quarter MET

2 .3 .4: Publish annual guarantee fee report N/A N/A N/A MET MET December 

2022 MET

PERFORMANCE MEASURE 2 .3 .1:

Publish FHFA House Price Indexes

The statutorily required monthly FHFA HPI is a broad 

measure of the movement of single-family house prices, 

calculated using home sales price information for 

mortgages sold to, or guaranteed by, the Enterprises. 

The FHFA HPI serves as a timely, accurate indicator 

of house price trends at various geographic levels. In 

FY 2023, FHFA successfully published 12 monthly and 

four quarterly FHFA HPI releases. Figure 11 shows 

the FHFA HPI from 1991 to July 2023 as released in 

September 2023.28

55| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
Figure 11: Monthly House Price Index from January 1991 – Present

Purchase-Only FHFA HPI® (Seasonally Adjusted, Nominal)

425

400

375

350

325

300

275

250

225

200

175

150

125

100

Jan-91

Nov-91

Sep-92

Jul-93

May-94

Mar-95

Jan-96

Nov-96

May-04

Mar-05

Jan-06

Nov-06

Compound Annual Growth Rate Since January 1991: 4.4%

Compound Annual Growth Rate Since January 2000: 4.8%

Compound Annual Growth Rate Since January 2012: 7.5%

Source: FHFA

Sep-97

Jul-98

Jan-01

Nov-01

Sep-02

Jul-03

Sep-07

May-09

Mar-10

Jul-08

Jan-11

Nov-11

Sep-12

May-14

Mar-15

Jul-13

Jan-16

Nov-16

Sep-17

May-19

Mar-20

Jul-18

Jan-21

Nov-21

Sep-22

Jul-23

May-99

Mar-00

HOUSE PRICE INDEX

The FHFA HPI is a broad economic measure of the movement of single-family house prices in the United States. FHFA 

constructs several indexes for different market geographies and periods, and often references the entire suite of indexes 

as the “FHFA HPI.” The FHFA HPI is the purchase-only (PO) index that uses seasonally adjusted, PO data—it is the 

data most commonly referenced in press releases, news stories, and social media. FHFA created additional indexes to 

address questions about house price changes in other market segments such as the all-transactions index, which includes 

refinance data, or the expanded PO index, which includes purchase data on the entire single-family property market.

The FHFA HPI measures average price changes in sales or refinancings on the same properties. FHFA obtains this 

information by reviewing transactions on single-family properties with mortgages purchased or securitized by Fannie 

Mae, Freddie Mac, and other sources. FHFA updates the FHFA HPI monthly and quarterly. The new mortgage 

acquisitions are used to identify repeat transactions for the most recent period and each subsequent period since 1975.

The FHFA HPI provides housing economists with input data that is useful for estimating changes in the rates of mortgage 

defaults, prepayments, and housing affordability in specific geographic areas.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 56

Performance Section
PERFORMANCE MEASURE 2 .3 .2:

Publish annual Public Use Database

The Enterprise Public Use Database (PUDB) is released 

annually by FHFA as required by 12 U.S.C. § 4543(d). 

It provides loan and unit information for single-family 

and multifamily mortgages acquired by Fannie Mae and 

Freddie Mac in the prior CY. The data provide the public 

with a deeper understanding of housing and mortgage 

markets. The PUDB single-family dataset includes 

detailed information such as the income, race, and gender 

of the borrower as well as the census tract location of the 

property, loan-to-value ratio, age of mortgage note, and 

affordability of the mortgage. The PUDB multifamily 

property-level dataset includes information on the size 

of the property, unpaid principal balance, and type of 

seller/servicer from which the Enterprise acquired the 

mortgage. The multifamily unit-class file also includes 

information on the number and affordability of the units in the 

property. Both the single-family and multifamily data include 

indicators of whether the purchases are from “underserved” 

census tracts, as defined in terms of median income and 

minority percentage of population. The 2022 PUDB data sets 

were released in September 2023.

PERFORMANCE MEASURE 2 .3 .3:

Publish quarterly aggregate statistics 

on mortgage profiles and delinquencies 

from National Mortgage Database

The NMDB is a nationally representative 5 percent 

sample of residential mortgages in the United States. 

Publication of aggregate data from NMDB is a step 

toward implementing the statutory requirements of 

section 1324(c) of the Safety and Soundness Act, as 

amended by HERA. The statute requires FHFA to conduct 

a monthly mortgage market survey to collect data on the 

characteristics of individual mortgages, both Enterprise 

and non-Enterprise, and to make the data available to 

the public while ensuring that the data are not released 

in an identifiable form in order to protect the privacy of 

borrowers. The data help FHFA gain a better understanding 

of housing and mortgage markets. The purpose of NMDB 

is to inform and educate FHFA, CFPB, and other federal 

agencies about lending products and mortgage market 

29 These data can be found at https://www.fhfa.gov/nmdbdata.

health. The database is comprehensive, and there are many 

possibilities for how it may be used, including:

• Monitoring new and emerging products in the 

mortgage market;

• Monitoring the relative health of mortgage markets 

and consumers;

• Evaluating loss mitigation, borrower counseling, and 

loan modification programs;

• Monitoring affordable lending; and

• Performing stress tests and prepayment/default modeling

In FY 2023, NMDB aggregate statistics were 

published quarterly.29

PERFORMANCE MEASURE 2 .3 .4:

Publish annual Guarantee Fee Report

HERA requires FHFA to conduct an ongoing study of 

the guarantee fees charged by the Enterprises and to 

submit a report to Congress each year. Guarantee fees 

are intended to cover the credit risk and other costs that 

Fannie Mae and Freddie Mac incur when they acquire 

single-family loans from lenders. These include projected 

credit losses from borrower defaults over the life of 

the loans, administrative costs, and a return on capital. 

The 2022 report compares year-over-year 2021 to 2020 

and 2019. The report “Fannie Mae and Freddie Mac 

Single-Family Guarantee Fees in 2021” was published 

December 21, 2022.

57| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
STRATEGIC OBJECTIVE 2 .4: FACILITATE GREATER AVAILABLITY 

OF AFFORDABLE HOUSING SUPPLY, INCLUDING AFFORDABLE 

RENTAL HOUSING

FHFA is committed to equitable access to the regulated entities’ financial services by qualified institutions and borrowers and 

to affirmatively furthering fair housing. In FY 2023, FHFA monitored two measures for Strategic Objective 2.4 and met both 

of the targets for these measures. The table below reports progress on these measures.

Table 14: Strategic Objective 2 .4 – Summary of Performance Measures and Results

Strategic Objective 2 .4: Facilitate greater availability of affordable housing supply, including affordable rental housing 

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Target FY 2023

Result

2 .4 .1: Determine the Enterprises have 

met the mission-driven requirements 

in Appendix A of the Conservatorship 

Scorecard N/A N/A N/A N/A N/A

By the end of calendar year 

2022, (1) each Enterprise’s 

mission driven business meets 

or exceeds 50 percent of total 

multifamily business, and 

(2) at least 25 percent of each 

Enterprise’s total business 

is affordable at or below 60 

percent of area median income

MET

2 .4 .2: Determine that Real Estate Owned 

properties held by the Enterprises 

are marketed providing an exclusive 

opportunity for owner-occupants and 

community-oriented organizations to 

purchase the property prior to investors

N/A N/A N/A N/A N/A More than 90% of vacant 

properties marketed MET

30 The 2022 Conservatorship Scorecard expands the definition of naturally occurring affordable housing to include affordability adjustments in certain markets 

FHFA designates as cost-burdened to renters and classifies as mission-driven, financing that facilitates energy and water conservation measures for low-income 

tenants. Other mission-driven business includes loans on manufactured housing, community blanket loans, loans that finance properties in rural markets, 

loans that finance small multifamily (5-50 unit) properties, loans that finance seniors housing assisted living properties, and loans on properties encumbered 

by a regulatory agreement or recorded use restriction that restricts the unit rents and the incomes of the tenants occupying the units. The 2022 Conservatorship 

Scorecard can be found here: https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/2022-Appendix-A-10132021.pdf.

PERFORMANCE MEASURE 2 .4 .1:

Determine the Enterprises have met the 

mission-driven requirements in Appendix 

A of the Conservatorship Scorecard30

This measure determines if the Enterprises’ multifamily 

loan purchases for the CY met FHFA’s mission-driven 

requirements. The measure helps ensure that the 

Enterprises purchase a certain amount of mission-driven 

multifamily loans and meet FHFA’s minimum mission 

driven requirements. In CY 2022, each Enterprise’s 

mission-driven business met or exceeded 50 percent of 

total multifamily business, and at least 25 percent of each 

Enterprise’s total business was affordable at or below 

60 percent of area median income.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 58

Performance Section
PERFORMANCE MEASURE 2 .4 .2:

Determine that Real Estate Owned properties held by the Enterprises are marketed 

providing an exclusive opportunity for owner-occupants and community-oriented 

organizations to purchase the property prior to investors

The measure determines if the Enterprise is disposing of Real Estate Owned (REO) properties in a way that supports 

homebuyers and affordability. Each Enterprise must be in compliance with FHFA’s requirements by the end of CY 2023. 

The measure focuses the Enterprises on enabling purchases of REO properties, which have a median home price below the 

national median home price, by owner-occupants to the greatest extent possible, in lieu of investors. This measure ensures 

that FHFA remains focused on using all aspects of the Enterprises’ portfolios to promote affordable housing. For FY 2023, 

Fannie Mae and Freddie Mac marketed more than 90 percent of vacant properties to owner-occupants.

STRATEGIC OBJECTIVE 2 .5: SUPPORT LEVERAGING OF TECHNOLOGY 

AND DATA TO FURTHER PROMOTE EFFICIENCY AND COST SAVINGS IN 

MORTGAGE PROCESSES 

FHFA continues to research and explore opportunities for further incorporation of financial technology (fintech) in activities 

of the regulated entities and other mortgage market participants. The Agency is also exploring opportunities to leverage 

non-traditional data, alternative approaches, and new technology in the mortgage underwriting process. In FY 2023, FHFA 

monitored one measure for Strategic Objective 2.5 and met the target for this measure. The table below reports progress on 

this measure.

Table 15: Strategic Objective 2 .5 – Summary of Performance Measures and Results

Strategic Objective 2 .5: Support leveraging of technology and data to further promote efficiency and 

cost savings in mortgage processes

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

2 .5 .1: Complete analysis of input 

received from the Request for Input 

on Fintech in Housing Finance issued 

in FY 2022, capturing an overview of 

responses received

N/A N/A N/A N/A N/A March 31, 2023 MET

PERFORMANCE MEASURE 2 .5 .1:

Complete analysis of input received from the Request for Input on Fintech in Housing 

Finance issued in FY 2022, capturing an overview of responses received

In July 2022, FHFA issued an RFI to solicit public input on the role of technology in housing finance, broadly seeking 

to understand the current landscape of innovation throughout the mortgage lifecycle and related processes, risks, and 

opportunities. This measure reported FHFA’s progress towards completing an analysis of the feedback by March 31, 2023. 

The analysis summary was published on March 28, 2023.31

31 https://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/Fintech-RFI-Summary_FINAL.pdf.

59| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
X STRATEGIC GOAL 3: RESPONSIBLY STEWARD 

FHFA’S INFRASTRUCTURE

FHFA is dedicated to developing and maintaining a 

results-oriented performance culture through effective 

and efficient management of its resources. FHFA’s 

success in meeting its mission depends on an environment 

supportive of staff growth and development, as well 

as business practices that orient towards innovation, 

cooperation, and results. Achievement of FHFA’s mission 

requires communication, collaboration, and coordination 

by staff across all offices and divisions within the Agency.

STRATEGIC GOAL 3 – SELECTED 

ACCOMPLISHMENTS

FHFA achieved several accomplishments in FY 2023 

that contributed to progress in this area. Selected 

accomplishments for FY 2023 include:

Agency’s People Plan

• The FHFA People Plan for Fiscal Years 2023-2026 

(People Plan), published in April 2023, provides a 

holistic, people-centric strategy to equip and empower 

the FHFA workforce to fulfill the Agency’s mission 

and goals. The People Plan integrates human capital 

strategy, FHFA’s Values-Based Culture Initiative 

(VBCI) and FAIR values (Fairness, Accountability, 

Integrity, and Respect), and the Agency’s strategic 

approach to Diversity, Equity, Inclusion, and 

Accessibility (DEIA). FHFA’s People Plan also 

prepares the Agency to build workforce capacity, 

develop workforce capability, and cultivate a 

performance culture. The People Plan serves as the 

roadmap for how FHFA will evolve the employee 

experience and further engage the Agency’s talented 

and motivated workforce.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 60

Performance Section
PERFORMANCE CULTURE

In developing a performance culture, the focus 

is sustaining superior performance through the 

empowerment and engagement of a high-performing 

workforce, while establishing and maintaining 

an inclusive work environment. FHFA’s FAIR 

values and strategic approach to DEIA, along with 

employing effective performance management, 

are crucial to this culture. Rooted in shared values, 

a performance culture builds an environment that 

rewards superior performance and holds employees 

accountable based on the quality of their work, not 

personal attributes.

Risk Management Capabilities

FHFA continues to expand its risk management practices 

and processes. To identify emerging trends that may 

prevent FHFA from achieving its strategic goals, the 

Agency implemented an internal process using the 

Political, Economic, Social, Technological, Legal, 

and Environmental strategic framework to assess for 

risks and opportunities. A new internal controls testing 

approach also enables continuous testing earlier in the 

fiscal year, which provides a proactive assessment of 

FHFA’s internal controls and risk mitigation activities. 

FHFA also implemented a Root Cause Analysis process, 

instituting a collaborative review to assess internal controls 

and deficiencies, and to determine corrective actions. In 

addition, FHFA established the Senior Assessment Team, 

which is responsible for overseeing the effective execution 

of internal control governance activities.

Information Technology Security

To address federal cybersecurity mandates, FHFA 

established an Identity, Credential, and Access 

Management (ICAM) Steering Committee in FY 2023 to 

facilitate oversight of FHFA’s implementation of ICAM 

and Zero Trust requirements. 

The ICAM Steering Committee will serve as FHFA’s 

governance structure for overseeing FHFA’s ICAM 

Program and related initiatives, such as Zero Trust. 

Governance for ICAM and Zero Trust implementation 

will lead to more consistent and efficient implementations 

and improved cybersecurity across FHFA.

61| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
ZERO TRUST

Executive Order (EO) 14028, “Improving the 

Nation’s Cybersecurity” directs major advancements 

in protection and resiliency of federal systems against 

highly sophisticated cyber threats. The intent is for 

the Federal Government to improve its capabilities in 

identifying, deterring, protecting against, detecting, 

and responding to these threats.

One way to accomplish this goal is through an 

architectural concept known as Zero Trust. The 

National Institute of Standards and Technology 

defines zero trust as: “... a cybersecurity paradigm 

focused on resource protection and the premise 

that trust is never granted implicitly but must be 

continually evaluated.” Traditional security models 

have been built with the notion of implicit trust – 

that any user or IT resource operating inside the 

network is considered a trusted entity. Zero trust on 

the other hand assumes that the user or IT resource is 

untrusted, regardless of where it resides. In general 

terms, zero trust implies:

• Never trust and always verify users, resources, 

applications, and systems;

• Assume a breach has occurred where threat 

actors are assumed to be present.

• Implement least-privilege access, where users 

are only provided access to resources and data 

needed to accomplish the task.

Data Governance 

In FY 2023, FHFA formally began monthly meetings of 

its new Data Governance Committee (DGC). Established 

as part of the Agency’s efforts to comply with the 

OPEN Government Data Act of 2019, the DGC worked 

throughout the year to develop new data governance 

policies and respond to emerging issues.

In FY 2023, the DGC focused on improving FHFA’s 

ability to serve as a reliable source of data on the state 

of housing finance markets and related issues. The DGC 

developed two new data governance policies to improve the 

quality and usability for FHFA’s public data resources. First, 

the DGC developed new machine readability data standards 

for public data products. These standards implement new 

and existing federal requirements aimed at making data 

usable by the public to the greatest extent possible. Second, 

the DGC developed new procedures for implementing 

FHFA’s Information Quality Guidelines, which help ensure 

the quality, objectivity, utility, and integrity of information 

that FHFA disseminates to the public.

The DGC also helped produce FHFA’s first Artificial 

Intelligence (AI) Use Cases Inventory, which helps 

the federal government identify similar AI use cases 

across government, so that agencies can share and reuse 

methodologies, technologies, and best practices.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 62

Performance Section
STRATEGIC OBJECTIVE 3.1: CULTIVATE A HIGH-PERFORMING, DIVERSE, 

ACCOUNTABLE, AND ENGAGED WORKFORCE

FHFA is dedicated to fostering a high-performing culture that exemplifies the Agency’s values and supports its work through 

effective and efficient management of its resources and infrastructure. FHFA’s infrastructure is inclusive of all people, tools, 

resources, and programs that provide support for its mission. In addition, the Agency integrates DEIA in all employment, 

management, and business activities at FHFA. In FY 2023, FHFA monitored four measures for Strategic Objective 3.1 and 

met three of the targets for these measures. The table below reports progress on these measures.

Table 16: Strategic Objective 3 .1 – Summary of Performance Measures and Results

Strategic Objective 3 .1: Cultivate a high-performing, diverse, accountable, and engaged workforce

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

3 .1 .1: Federal Employee 

Viewpoint Survey Performance 

Confidence Index

N/A N/A N/A N/A N/A 70 percent 

positive MET

3 .1 .2: Federal Employee Viewpoint 

Survey Employee Engagement Index N/A N/A MET MET MET 70 percent 

positive MET

3 .1 .3: Improve Time-to-Hire N/A N/A N/A NOT MET MET 80 calendar 

days NOT MET

3 .1 .4: Develop FHFA Culture Plan N/A N/A N/A N/A N/A Q1 FY 2023 MET

63| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
PERFORMANCE MEASURE 3 .1 .1:

Federal Employee Viewpoint Survey 

Performance Confidence Index

The Federal Employee Viewpoint Survey (FEVS) is 

conducted on an annual basis to measure employees’ 

perceptions of many work issues. The results provide federal 

agency leaders insight into areas where improvements 

have been made, as well as areas where improvements are 

needed. The FEVS Confidence Index is designed to gauge 

the Agency’s performance health, not on one question, but 

multiple questions related to the Agency’s Performance 

Culture, which is one of three goals in the FHFA People 

Plan. FHFA’s 2022 FEVS Index score for Performance 

Confidence was 92 percent positive, well above the 

70 percent target.

PERFORMANCE MEASURE 3 .1 .2:

Federal Employee Viewpoint Survey 

Employee Engagement Index 

FHFA measures agency-wide employee engagement as 

compared to what is considered an overall strength as 

defined by the Office of Personnel Management (OPM). 

FHFA compared the Agency’s Employee Engagement Index 

in the FEVS report against the results for the entire federal 

government. The FEVS is conducted on an annual basis to 

measure employees’ perceptions of many work issues. OPM 

uses the results of these surveys to determine an engagement 

index based on a selection of these questions. FHFA’s 

2022 FEVS Index score for Employee Engagement was 

77 percent positive, above the 70 percent target.

PERFORMANCE MEASURE 3 .1 .3:

Improve Time-to-Hire

The purpose of this measure is to monitor the time 

required to hire job applicants and fill vacant positions. 

The average hiring time for FY 2023 was 112 calendar 

days, missing the target of 80 calendar days.

In FY 2023, FHFA transitioned from counting workdays to 

calendar days to align with federal standards for tracking 

Time-to-Hire (T2H). This accounts for the change from 

95 workdays in FY 2022 to 112 calendar days in FY 2023 

while still demonstrating improvement in overall T2H.

PERFORMANCE MEASURE 3 .1 .4:

Develop FHFA Culture Plan

FHFA is undertaking the VBCI to closely review its current 

culture and to define an Agency culture that is firmly 

grounded in the FAIR values. The FHFA Culture Plan offers 

a roadmap for achieving FHFA’s desired, unified culture. 

Culture change takes time and will be incremental. The 

Agency completed and finalized the FHFA Culture Plan in 

December 2022.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 64

Performance Section
STRATEGIC OBJECTIVE 3 .2: ENSURE EFFICIENT AND EFFECTIVE 

STEWARDSHIP OF AGENCY RESOURCES

Success in meeting FHFA’s mission and goals requires empowered and supported staff and prudent business practices. FHFA 

employs financial, contracting, and performance information to ensure that resources are managed responsibly. In FY 2023, 

FHFA monitored three measures for Strategic Objective 3.2 and met the targets for all three of these measures. The table 

below reports progress on these measures.

Table 17: Strategic Objective 3 .2 – Summary of Performance Measures and Results

Strategic Objective 3 .2: Ensure efficient and effective stewardship of Agency resources 

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

3 .2 .1: Ensure FHFA’s financial 

statements audit receives an 

unmodified opinion with no 

material weaknesses

MET MET MET MET MET 100 percent 

of the time MET

3 .2 .2: Increase the dollar amount 

of FHFA contracts awarded to 

minority- and women-owned 

businesses consistent with 

legal standards 

MET MET NOT MET MET MET

Total dollar 

amount of 

contracts 

greater than the 

five-year average

MET

3 .2 .3: Management 

completes corrective actions 

to address FHFA Office of 

Inspector General recommendations 

in a timely manner N/A N/A N/A NOT MET NOT MET

90 percent of 

the corrective 

actions to 

address Office of 

Inspector General 

recommendations 

are completed 

within one year of 

the resolution date 

or the approved 

timeframe

MET

PERFORMANCE MEASURE 3 .2 .1:

Ensure FHFA’s financial statements audit 

receives an unmodified opinion with no 

material weaknesses

Financial statements provide information that is essential 

to evaluating FHFA’s financial condition. The financial 

statements show where FHFA’s money came from, where 

it went, and where it is now. The financial statements 

audit tests: (1) accuracy, consistency, and FHFA 

adherence to applicable government accounting standards; 

and (2) the internal controls to determine whether the 

financial statements are reliable. An unmodified opinion 

with no material weaknesses or unacceptable risks is the 

best result of any audit. Achieving this level of excellence 

indicates the use of proper accounting controls and the 

proper application of accounting standards. It means 

that the financial statements are reliable, accurate, and 

complete. FHFA has received a clean audit every year 

since the creation of the Agency in 2008.

65| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
PERFORMANCE MEASURE 3 .2 .2:

Increase the dollar amount of FHFA 

contracts awarded to minority- and 

women-owned businesses consistent 

with legal standards

This measure demonstrates the effectiveness of the initiatives 

and actions in which FHFA engaged in FY 2023 to increase 

greater opportunities for diverse firms, as required by 

Section 342 of the Dodd Frank Wall Street Reform and 

Consumer Protection Act of 2010. The measure reports 

the total obligated amount of FHFA contracts awarded to 

minority- and women-owned businesses (MWOBs). In 

FY 2023, $36,414,043 of Agency contract dollars went 

to MWOBs, representing 36.9 percent of the Agency’s total 

obligated amount. This amount exceeded FHFA’s five-year 

annual historical average of $15.67 million in MWOB 

contract obligations by $20.74 million. During FY 2023, 

FHFA continued to engage external and internal partners 

and stakeholders and look for opportunities that provide 

FHFA access to MWOB goods or services. FHFA awarded 

various information technology (IT) infrastructure and service 

projects to MWOBs and created multiple-award contracting 

vehicles in the areas of administrative and program 

management services, human resources, and training, which 

included various qualified MWOBs. FHFA’s expanded 

market research efforts in these industries and its ability to 

create multiple-award contracting environments provided 

increased opportunities for MWOBs throughout FHFA’s 

contracting portfolio.

Figure 12: Obligated Amounts to MWOBs32

(dollars in millions)

2018 2019 2020 2021 2022 2023

11.56

14.47

9.76

13.79

28.76

36.41

Note: Historical data may slightly differ due to correc on in 

methodology year over year. 

32 Obligated amounts may not align with previous years’ PAR reporting due to updated transaction records and in the event the MWOB status of a business 

has been revised.

PERFORMANCE MEASURE 3 .2 .3:

Complete corrective actions to 

address audit recommendations 

in a timely manner

FHFA’s target for timely audit follow-up is to complete 

90 percent of the corrective actions to address OIG 

recommendations within one year of the resolution date 

or the approved timeframe. In FY 2023, FHFA completed 

35 out of 39 recommendations within the targeted 

timeframe. This resulted in a completion rate of 90 percent 

of recommendations completed within that timeframe.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 66

Performance Section
STRATEGIC OBJECTIVE 3.3: DELIVER HIGH-QUALITY SUPPORT SERVICES 

THAT PROMOTE THE AGENCY’S MISSION EFFECTIVENESS AND 

SAFEGUARD THE AGENCY’S INFRASTRUCTURE 

The Agency provides responsive, secure, and efficient IT capabilities that are essential to FHFA’s ability to accomplish its 

mission. In FY 2023, FHFA monitored two measures for Strategic Objective 3.3 and met the target for one of these measures. 

The table below reports progress on these measures.

Table 18: Strategic Objective 3 .3 – Summary of Performance Measures and Results

Strategic Objective 3 .3: Deliver high-quality support services that promote the Agency’s mission effectiveness and 

safeguard the Agency’s infrastructure

Performance Measure FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Target

FY 2023

Result

3 .3 .1: Ensure FHFA’s Federal 

Information Security 

Modernization Act audit identifies 

no significant deficiencies

MET MET MET MET MET 100 percent 

of the time MET

3 .3 .2: Develop FHFA Information 

Technology Strategic Plan N/A N/A N/A N/A N/A Q4 FY 2023 NOT MET

33 The final report can be found at Audit of the Federal Housing Finance Agency’s Information Security Programs and Practices Fiscal Year 2023 

Audit | FHFA-OIG (fhfaoig.gov).

PERFORMANCE MEASURE 3 .3 .1:

Ensure FHFA’s Federal Information 

Security Modernization Act audit 

identifies no significant deficiencies

This measure reports on the effectiveness of security and 

privacy controls that FHFA uses to secure the Agency’s 

information and systems. The FY 2023 Federal Information 

Security Modernization Act of 2014 audit identified no 

significant deficiencies or material weaknesses.33

PERFORMANCE MEASURE 3 .3 .2:

Develop FHFA Information Technology 

Strategic Plan

Effective business technology is critical to enabling 

the Agency mission. Technology deployment requires 

significant advance planning, and having an associated 

plan is critical to long-term stewardship of the Agency 

infrastructure. This measure accounts for FHFA’s 

progress towards developing a plan that captures the 

Agency’s information technology vision and longterm requirements and appropriately outlines steps 

and strategies to ensure that the Agency develops and 

maintains the business technologies necessary to support 

the Agency’s mission. FHFA’s IT Strategic Plan is under 

review and planned for release in FY 2024.

67| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section
X ADDED, CHANGED, AND DISCONTINUED MEASURES

Table 19: Performance Measures Added, Changed, and Discontinued in FY 2023

STRATEGIC GOAL 1: SECURE THE REGULATED ENTITIES’ SAFTEY AND SOUNDNESS 

Language in 2022 Language in 2023 Explanation

1 .1 .1a: Conduct risk-focused supervision 

and examinations of the Enterprises by 

having written risk-based examination plans 

approved by January 31, 2022

Target: 100 percent of the time

1 .1 .1a: Conduct risk-focused supervision and 

examinations of the Enterprises and Common 

Securitization Solutions by having written risk-based 

examination plans approved by January 31

Target: 100 percent of the time

For FY 2023, FHFA included 

Common Securitization Solutions in 

the scope of the measure. 

1 .1 .2a: Approve reports of examination by 

March 31, 2022, for the Enterprises

Target: 100 percent of the time

1 .1 .2a: Approve reports of examination by 

April 15 for the Enterprises and Common 

Securitization Solutions

Target: 100 percent of the time

For FY 2023, FHFA changed the 

deadline for the measure and 

included Common Securitization 

Solutions in the scope of 

the measure.

2 .2 .5: Determine regulated entities have 

satisfactorily addressed Matters Requiring 

Attention relating to their Diversity and Inclusion 

programs, in accordance with agreed-upon 

remediation plans and timeframes

Target: 90 percent of the time

1 .2 .2: Determine regulated entities have 

satisfactorily addressed Matters Requiring 

Attention relating to their Diversity and Inclusion 

programs, in accordance with agreed-upon 

remediation plans and timeframes

Target: 90 percent of the time

This measure was moved under a 

new objective based on the new 

Strategic Plan.

1 .3 .1: Issue a proposed rule on Enterprise 

disclosures under the Enterprise Regulatory 

Capital Framework

Target: FY 2022

FHFA discontinued the measure 

after meeting the target.

1 .3 .1: Provide decision to Enterprises regarding 

completeness of resolution plan submissions in 

conjunction with readiness activities

Target: July 31, 2023

New measure in FY 2023. 

1 .3 .2: Issue a proposed rule on Enterprise 

Capital Planning

Target: FY 2022

FHFA discontinued the measure 

after meeting the target.

1 .3 .2: Monitor and rate the Enterprises’ 

performance against current Scorecard objectives

Target: Complete quarterly assessment within 

30 days of quarter end (within 60 days for 

year-end assessment)

New measure in FY 2023.

STRATEGIC GOAL 2: FOSTER HOUSING FINANCE MARKETS THAT PROMOTE EQUITABLE ACCESS TO AFFORDABLE AND SUSTAINABLE HOUSING 

Language in 2022 Language in 2023 Explanation

2 .1 .2: Publish annual Guarantee Fee Report

Target: December 2021

FHFA reorganized this measure 

under Strategic Objective 2.3 

for FY 2023 as Measure 2.3.4.

2 .2 .1: Publish final Enterprise housing goals 

rule for 2022-24

Target: December 2021

FHFA met the FY 2022 target. 

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 68

Performance Section
Table 19: Performance Measures Added, Changed, and Discontinued in FY 2023

2 .2 .1: Issue an FHFA Enterprise Fair Lending 

Rating System

Target: Q4 FY 2023

New measure in FY 2023.

2 .2 .2: Issue annual ratings for each Enterprise’s 

Duty to Serve performance in 2020

Target: October 2021

FHFA met the FY 2022 target.

2 .2 .2: Ensure Enterprises’ updated Equitable 

Housing Finance Plans are published

Target: Q3 FY 2023

New measure in FY 2023.

2 .2 .3: Determine that the Enterprises have 

met the mission-driven requirements in 

Appendix A of the Conservatorship Scorecard

Target:

1. Each Enterprise’s mission driven 

business meets or exceeds 50% of total 

multifamily business for CY 2021, and 

2. at least 20 percent of each Enterprise’s 

total business is affordable at or below 60 

percent of area median income (AMI)

2 .4 .1: Determine that the Enterprises have met 

the mission-driven requirements in Appendix A 

of the Conservatorship Scorecard

Target: By the end of calendar year 2022,

1. Each Enterprise’s mission driven business 

meets or exceeds 50 percent of total 

multifamily business, and 

2. at least 25 percent of each Enterprise’s total 

business is affordable at or below 60 percent 

of area median income 

FHFA kept and reorganized the 

FY 2022 measure under Strategic 

Objective 2.4 for FY 2023. FHFA 

made the FY 2023 target more 

ambitious as a stretch goal. 

2 .2 .4: Issue an Operating Procedures Bulletin 

on fair lending examinations for the Enterprises

Target: July 2022

N/A After meeting the FY 2022 target, 

FHFA discontinued this measure.

2 .2 .6a: Approve Diversity and Inclusion 

reports of examination by March 31, 

2022, for the Enterprises and Common 

Securitization Solutions

Target: 100 percent of the time

1 .1 .6a: Approve Diversity and Inclusion reports of 

examination by April 15, for the Enterprises and 

Common Securitization Solutions

Target: 100 percent of the time

For FY 2023, revised the deadline 

to April 15.

2 .2 .6b: Approve Diversity and Inclusion 

reports of examination for at least nine of the 

FHLBank System regulated entities

Target: 100 percent of the time

1 .1 .6b: Approve Diversity and Inclusion reports 

of examination for at least four of the FHLBank 

System regulated entities

Target: 100 percent of the time

For FY 2023, FHFA changed the 

scope to include at least four of the 

FHLBank System regulated entities.

2 .3 .4: Publish annual Guarantee Fee Report

Target: December 2022

FHFA reorganized this measure 

under Strategic Objective 2.3 

for FY 2023. In FY 2022, the 

Agency reported this measure as 

Measure 2.1.2. 

2 .4 .2: Determine that Real Estate Owned 

properties held by the Enterprises are marketed 

providing an exclusive opportunity for owneroccupants and community-oriented organizations 

to purchase the property prior to investors

Target: More than 90 percent of vacant 

properties marketed

New measure in FY 2023. 

2 .5 .1: Complete analysis of input received from 

the Request for Input on Fintech in Housing 

Finance issued in FY 2022, capturing an overview 

of responses received

Target: March 31, 2023

New measure in FY 2023. 

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Table 19: Performance Measures Added, Changed, and Discontinued in FY 2023

STRATEGIC GOAL 3: RESPONSIBLY STEWARD FHFA’S INFRASTRUCTURE

Language in 2022 Language in 2023 Explanation

3 .1 .1: Responses to the Federal Employee 

Viewpoint Survey reflect that “My work unit 

has the job-relevant knowledge and skills 

necessary to accomplish organizational goals”

Target: Positive responses equal to or higher 

than both the small agency and governmentwide averages

FHFA discontinued this measure 

and replaced it with a new 

measure. FHFA continuously met 

the FY 2022 measure 3.1.1.

3 .1 .1: Federal Employee Viewpoint Survey 

Performance Confidence Index

Target: 70 percent positive

New measure in FY 2023.

3 .1 .2: Federal Employee Viewpoint Survey 

Employee Engagement Index is at or above 

the percent that the Office of Personnel 

Management considers an agency “Strength”

Target: 65 percent positive

FHFA discontinued this measure 

and replaced it with a new 

measure. FHFA continuously met 

the FY 2022 measure 3.1.2.

3 .1 .2: Federal Employee Viewpoint Survey 

Employee Engagement Index

Target: 70 percent positive

New measure in FY 2023.

3.1.4: Develop FHFA Human Capital Plan

Target: July 2022

FHFA did not meet this measure in 

FY 2022 but completed it in FY 2023. 

FHFA replaced the previous measure 

with a new measure in FY 2023. 

3 .1 .4: Develop FHFA Culture Plan

Target: Q1 FY 2023

New measure in FY 2023.

3 .2 .2: Award FHFA contracts competitively

Target: 75 percent

This measure was discontinued 

because FHFA continuously met 

the target.

3 .2 .4: Increase the obligated dollar amount of 

FHFA contract actions awarded to minority- and 

women-owned businesses consistent with 

legal standards and best value assessments

Target: Total dollar amount of contracts 

greater than the five-year average

N/A The measure was renumbered as 

Measure 3.2.2 in FY 2023.

3 .3 .2: Ensure FHFA’s infrastructure systems are 

continuously available for use by FHFA staff

Target: 99.5 percent of the time

This measure was discontinued 

because FHFA continuously met 

the target. 

3 .3 .2: Develop FHFA 

Information Technology Strategic Plan

Target: Q4 FY 2023

New measure in FY 2023.

3 .3 .3: Determine average user response on 

FHFA Help Desk ticket surveys

Target: 4.5 rating on a scale of 0 to 5

N/A This measure was discontinued 

because FHFA continuously met 

the target.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 70

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XFinancial Section

72 MESSAGE FROM THE CHIEF FINANCIAL OFFICER

73 INDEPENDENT AUDITOR’S REPORT

81 APPENDIX I: FHFA’S RESPONSE TO AUDITOR’S REPORT

82 FINANCIAL STATEMENTS AND NOTES

71| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
X MESSAGE FROM THE CHIEF FINANCIAL OFFICER

I am pleased to report that FHFA received an unmodified audit opinion on its FY 2023 financial 

statements from the Government Accountability Office (GAO). We are proud of the fact that 

FHFA has received an unmodified audit opinion every year since its inception in July 2008.

At the heart of our sustained record of unmodified opinions on the Agency’s financial 

statements is a strong control environment that ensures our internal controls over financial 

reporting are operating effectively in their design and operation. In FY 2024, we will continue 

to strengthen our controls in contract administration and oversight, and payroll processing. 

We will also increase our oversight of the consolidation of the Office of Inspector General’s 

financial statements into the overall FHFA Financial Statements.

I am very proud of the professionalism of our employees charged with the planning, executing, and accounting for the 

Agency’s resources. It is through their efforts and commitment that we continue to achieve unmodified audit opinions on 

our financial statements. Clean financial statement audits reflect strong stewardship of our resources which strengthens the 

public’s confidence in the ability of FHFA to achieve its important mission.

Sincerely,

Mark Kinsey

Chief Financial Officer

November 8, 2023

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 72

Financial Section
INDEPENDENT AUDITOR’S REPORT

441 G St. N.W.

Washington, DC 20548

Independent Auditor’s Report

To the Director of the Federal Housing Finance Agency

In our audits of the fiscal years 2023 and 2022 financial statements of the Federal Housing 

Finance Agency (FHFA), we found 

• FHFA’s financial statements as of and for the fiscal years ended September 30, 2023, and 

2022, are presented fairly, in all material respects, in accordance with U.S. generally 

accepted accounting principles;

• although internal controls could be improved, FHFA maintained, in all material respects, 

effective internal control over financial reporting as of September 30, 2023; and

• no reportable noncompliance for fiscal year 2023 with provisions of applicable laws, 

regulations, contracts, and grant agreements we tested.

The following sections discuss in more detail (1) our report on the financial statements and on 

internal control over financial reporting, which includes an emphasis-of-matter—FHFA Reporting 

Entity, required supplementary information (RSI)1 and other information included with the 

financial statements;2 (2) our report on compliance with laws, regulations, contracts, and grant 

agreements; and (3) agency comments. 

Report on the Financial Statements and on Internal Control over Financial Reporting

Opinion on the Financial Statements

In accordance with the Housing and Economic Recovery Act of 2008 (HERA),3 we have audited 

FHFA’s financial statements. FHFA’s financial statements comprise the balance sheets as of 

September 30, 2023, and 2022; the related statements of net cost, changes in net position, and 

budgetary resources for the fiscal years then ended; and the related notes to the financial 

statements. In our opinion, FHFA’s financial statements present fairly, in all material respects, 

FHFA’s financial position as of September 30, 2023, and 2022, and its net cost of operations, 

changes in net position, and budgetary resources for the fiscal years then ended in accordance 

with U.S. generally accepted accounting principles.

1The RSI consists of “Management’s Discussion and Analysis”, which is included with the financial statements. 

2Other information consists of information included with the financial statements, other than the RSI and the auditor’s 

report. 

3Pub. L. No. 110-289, § 1106, 122 Stat. 2654, 2671 (July 30, 2008), classified at 12 U.S.C. § 4516.

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Opinion on Internal Control over Financial Reporting

We also have audited FHFA’s internal control over financial reporting as of September 30, 2023, 

based on criteria established under 31 U.S.C. § 3512(c), (d), commonly known as the Federal 

Managers’ Financial Integrity Act of 1982 (FMFIA). In our opinion, although certain internal 

controls could be improved, FHFA maintained, in all material respects, effective internal control 

over financial reporting as of September 30, 2023, based on criteria established under FMFIA. 

As discussed below in more detail, our 2023 audit identified deficiencies in FHFA’s controls over 

its review of payroll accruals that collectively represents a significant deficiency in FHFA’s 

internal control over financial reporting.4 We considered this significant deficiency in determining 

the nature, timing, and extent of our audit procedures on FHFA’s fiscal year 2023 financial 

statements.

Although the significant deficiency in internal control did not affect our opinion on FHFA’s 2023 

financial statements, misstatements may occur in unaudited financial information reported 

internally and externally by FHFA because of this significant deficiency. 

We will be reporting additional details concerning this significant deficiency separately to FHFA 

management, along with recommendations for corrective actions. In addition to the significant 

deficiency in internal control over FHFA’s review of payroll accruals, we also identified other 

deficiencies in FHFA’s internal control over financial reporting that we do not consider to be 

material weaknesses or significant deficiencies. Nonetheless, these deficiencies warrant FHFA

management’s attention. We have communicated these matters to FHFA management and, 

where appropriate, will report on them separately.

Significant Deficiency in Internal Control over Review of Payroll Accruals

During our 2023 audit, we identified deficiencies in FHFA’s review of payroll accruals that 

represent a significant deficiency in FHFA’s internal control over financial reporting. Specifically, 

FHFA’s internal controls did not timely prevent, or detect and correct, a misstatement in its 

accrual of the Federal Employee Compensation Act (FECA) actuarial liability as of September 

30, 2023.5 

The Department of the Treasury’s Bureau of the Fiscal Service (Fiscal Service) provides 

accounting services to FHFA, including (1) preparation of various year-end accruals for FHFA 

and (2) preparation of its consolidated financial statements. Our audit identified that Fiscal 

Service incorrectly calculated the FECA actuarial liability amount as of September 30, 2023, 

which resulted in overstating the $660,000 liability by $1.3 million in FHFA’s draft financial 

statements. Although FHFA has procedures for reviewing both the accrual and the financial 

4A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting 

that is less severe than a material weakness, yet important enough to merit attention by those charged with 

governance. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial 

reporting, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements 

will not be prevented, or detected and corrected, on a timely basis. A deficiency in internal control exists when the 

design or operation of a control does not allow management or employees, in the normal course of performing their 

assigned functions, to prevent, or detect and correct, misstatements on a timely basis.

5FECA (5 U.S.C. § 8101 et seq.) provides compensation to federal employees for disability due to work-related injury 

or illness.

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INDEPENDENT AUDITOR’S REPORT

statements for reasonableness, such reviews were not adequate to identify the misstatement. 

After we brought the misstatement to FHFA’s attention, FHFA corrected it. 

Standards for Internal Control in the Federal Government states that management should 

design control activities to achieve objectives and respond to risks.6 This includes control 

activities to help ensure that transactions are accurately recorded. Without adequate processes 

for reviewing year-end accruals, FHFA increases the risk that misstatements in the financial 

statements will not be prevented, or detected and corrected, on a timely basis. 

While these deficiencies do not individually or collectively constitute a material weakness, they 

are important enough to merit the attention of those charged with governance of FHFA. Thus, 

these deficiencies represent a significant deficiency in FHFA’s internal control over financial 

reporting as of September 30, 2023. Management commitment and attention will be essential to 

addressing these deficiencies and improving FHFA’s controls over its review of payroll accruals. 

Basis for Opinions

We conducted our audits in accordance with U.S. generally accepted government auditing 

standards. Our responsibilities under those standards are further described in the Auditor’s 

Responsibilities for the Audits of the Financial Statements and Internal Control over Financial 

Reporting section of our report. We are required to be independent of FHFA and to meet our 

other ethical responsibilities, in accordance with the relevant ethical requirements relating to our 

audits. We believe that the audit evidence we have obtained is sufficient and appropriate to 

provide a basis for our audit opinions.

Emphasis-of-Matter

FHFA Reporting Entity 

As discussed in note 1A of the financial statements, FHFA’s fiscal years 2023 and 2022 

financial statements do not include the assets, liabilities, and activities associated with Fannie 

Mae and Freddie Mac. In early September 2008, less than 2 months after FHFA’s 

establishment, FHFA placed Fannie Mae and Freddie Mac into conservatorship under the

authority of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as 

amended by HERA.7 FHFA’s goal in placing the two entities into conservatorship was to 

stabilize them with the objective of maintaining normal business operations and restoring safety 

and soundness. Following criteria in Statement of Federal Financial Accounting Standards No. 

47 (SFFAS 47), Reporting Entity, the Office of Management and Budget (OMB) and the 

Department of the Treasury (Treasury) determined that the assets, liabilities, and activities of 

Fannie Mae and Freddie Mac would not be consolidated into federal reporting entity financial 

statements. However, the values of the investment in the entities and related activities are 

presented in Treasury’s financial statements. 

In making this determination, OMB and Treasury concluded that the entities are owned or 

controlled by the federal government as a result of regulatory actions, such as organizations in 

receivership or conservatorship, or other federal government intervention actions. Under such 

6GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: September 

2014). 

7Pub. L. No. 102-550, title XIII, § 1367, 106 Stat. 3672, 3980 (Oct. 28, 1992), classified as amended at 12 U.S.C. § 

4617.

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INDEPENDENT AUDITOR’S REPORT

regulatory or other intervention actions, the relationship with the federal government is not 

expected to be permanent. These entities are classified as disclosure entities when considering 

their characteristics taken as a whole.8 

FHFA management concurred with this conclusion, and FHFA did not include the assets, 

liabilities, and activities of Fannie Mae and Freddie Mac in its fiscal years 2023 and 2022 

financial statements. However, as Fannie Mae and Freddie Mac are considered to be disclosure 

entities, FHFA disclosed certain financial and other information about the entities in the notes to 

its financial statements. Our opinion on FHFA’s financial statements is not modified with respect 

to this matter.

Responsibilities of Management for the Financial Statements and Internal Control over Financial 

Reporting

Management is responsible for 

• the preparation and fair presentation of the financial statements in accordance with U.S. 

generally accepted accounting principles; 

• preparing, measuring, and presenting the RSI in accordance with U.S. generally accepted 

accounting principles; 

• preparing and presenting other information included in FHFA’s performance and 

accountability report, and ensuring the consistency of that information with the audited 

financial statements and the RSI; 

• designing, implementing, and maintaining effective internal control over financial reporting 

relevant to the preparation and fair presentation of financial statements that are free from 

material misstatement, whether due to fraud or error; 

• assessing the effectiveness of internal control over financial reporting based on the criteria 

established under FMFIA; and 

• its assessment about the effectiveness of internal control over financial reporting as of 

September 30, 2023, included in the FHFA Statement of Assurance section of the agency’s 

performance and accountability report. 

Auditor’s Responsibilities for the Audits of the Financial Statements and Internal Control over 

Financial Reporting

Our objectives are to (1) obtain reasonable assurance about whether the financial statements 

as a whole are free from material misstatement, whether due to fraud or error, and whether 

effective internal control over financial reporting was maintained in all material respects, and (2) 

issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of 

assurance but is not absolute assurance and therefore is not a guarantee that an audit of the 

financial statements or an audit of internal control over financial reporting conducted in 

accordance with U.S. generally accepted government auditing standards will always detect a 

material misstatement or a material weakness when it exists. The risk of not detecting a material 

8Disclosure entities are organizations that meet SFFAS 47 criteria for inclusion in the financial statements but not the 

SFFAS 47 criteria to be consolidated.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 76

Financial Section
INDEPENDENT AUDITOR’S REPORT

misstatement resulting from fraud is higher than for one resulting from error, as fraud may 

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal 

control. Misstatements, including omissions, are considered to be material if there is a 

substantial likelihood that, individually or in the aggregate, they would influence the judgment 

made by a reasonable user based on the financial statements. 

In performing an audit of financial statements and an audit of internal control over financial 

reporting in accordance with U.S. generally accepted government auditing standards, we:

• Exercise professional judgment and maintain professional skepticism throughout the audits.

• Identify and assess the risks of material misstatement of the financial statements, whether 

due to fraud or error, and design and perform audit procedures responsive to those risks. 

Such procedures include examining, on a test basis, evidence regarding the amounts and 

disclosures in the financial statements. 

• Obtain an understanding of internal control relevant to our audit of the financial statements 

in order to design audit procedures that are appropriate in the circumstances.

• Obtain an understanding of internal control relevant to our audit of internal control over 

financial reporting, assess the risks that a material weakness exists, and test and evaluate 

the design and operating effectiveness of internal control over financial reporting based on 

the assessed risk. Our audit of internal control also considered FHFA’s process for 

evaluating and reporting on internal control over financial reporting based on criteria 

established under FMFIA. We did not evaluate all internal controls relevant to operating 

objectives as broadly established under FMFIA, such as those controls relevant to preparing 

performance information and ensuring efficient operations. We limited our internal control 

testing to testing controls over financial reporting. Our internal control testing was for the 

purpose of expressing an opinion on whether effective internal control over financial 

reporting was maintained, in all material respects. Consequently, our audit may not identify 

all deficiencies in internal control over financial reporting that are less severe than a material 

weakness. 

• Evaluate the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluate the overall 

presentation of the financial statements.

• Perform other procedures we consider necessary in the circumstances.

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control-related matters that we identified during the financial statement audit.

Definition and Inherent Limitations of Internal Control over Financial Reporting 

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel. The objectives of internal control over financial 

reporting are to provide reasonable assurance that 

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INDEPENDENT AUDITOR’S REPORT

• transactions are properly recorded, processed, and summarized to permit the preparation of 

financial statements in accordance with U.S. generally accepted accounting principles, and 

assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and

• transactions are executed in accordance with provisions of applicable laws, including those 

governing the use of budget authority, regulations, contracts, and grant agreements, 

noncompliance with which could have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements due to fraud or error. We also caution that projecting any 

evaluation of effectiveness to future periods is subject to the risk that controls may become 

inadequate because of changes in conditions, or that the degree of compliance with the policies 

or procedures may deteriorate. 

Required Supplementary Information

U.S. generally accepted accounting principles issued by the Federal Accounting Standards 

Advisory Board (FASAB) require that the RSI be presented to supplement the financial 

statements. Such information is the responsibility of management and, although not a part of the 

financial statements, is required by FASAB, which considers it to be an essential part of 

financial reporting for placing the financial statements in appropriate operational, economic, or 

historical context. 

We have applied certain limited procedures to the RSI in accordance with U.S. generally 

accepted government auditing standards. These procedures consisted of (1) inquiring of 

management about the methods used to prepare the RSI and (2) comparing the RSI for 

consistency with management’s responses to our inquiries, the financial statements, and other 

knowledge we obtained during the audit of the financial statements, in order to report omissions 

or material departures from FASAB guidelines, if any, identified by these limited procedures. We 

did not audit and we do not express an opinion or provide any assurance on the RSI because 

the limited procedures we applied do not provide sufficient evidence to express an opinion or 

provide any assurance. 

Other Information 

FHFA’s other information contains a wide range of information, some of which is not directly 

related to the financial statements. This information is presented for purposes of additional 

analysis and is not a required part of the financial statements or the RSI. Management is 

responsible for the other information included in FHFA’s performance and accountability report. 

The other information comprises the following sections of the FHFA FY 2023 Performance and 

Accountability Report: Message from the Director; FHFA’s Mission, Vision, and Values; 

Performance Section, Other Information, and Appendices, but does not include the financial 

statements and our auditor’s report thereon. Our opinion on the financial statements does not 

cover the other information, and we do not express an opinion or any form of assurance 

thereon.

In connection with our audit of the financial statements, our responsibility is to read the other 

information and consider whether a material inconsistency exists between the other information 

and the financial statements, or the other information otherwise appears to be materially 

misstated. If, based on the work performed, we conclude that an uncorrected material 

misstatement of the other information exists, we are required to describe it in our report. 

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 78

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Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

In connection with our audits of FHFA’s financial statements, we tested compliance with 

selected provisions of applicable laws, regulations, contracts, and grant agreements consistent 

with our auditor’s responsibilities discussed below. 

Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant Agreements

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and 

grant agreements disclosed no instances of noncompliance for fiscal year 2023 that would be 

reportable under U.S. generally accepted government auditing standards. However, the 

objective of our tests was not to provide an opinion on compliance with laws, regulations, 

contracts, and grant agreements applicable to FHFA. Accordingly, we do not express such an 

opinion. 

Basis for Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant 

Agreements

We performed our tests of compliance in accordance with U.S. generally accepted government 

auditing standards. 

Responsibilities of Management for Compliance with Laws, Regulations, Contracts, and Grant 

Agreements

FHFA management is responsible for complying with laws, regulations, contracts, and grant 

agreements applicable to FHFA. 

Auditor’s Responsibilities for Tests of Compliance with Laws, Regulations, Contracts, and Grant 

Agreements

Our responsibility is to test compliance with selected provisions of laws, regulations, contracts, 

and grant agreements applicable to FHFA that have a direct effect on the determination of 

material amounts and disclosures in FHFA’s financial statements, and perform certain other 

limited procedures. Accordingly, we did not test compliance with all provisions of laws, 

regulations, contracts, and grant agreements applicable to FHFA. We caution that 

noncompliance may occur and not be detected by these tests.

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

The purpose of this report is solely to describe the scope of our testing of compliance with 

selected provisions of applicable laws, regulations, contracts, and grant agreements, and the 

results of that testing, and not to provide an opinion on compliance. This report is an integral 

part of an audit performed in accordance with U.S. generally accepted government auditing 

standards in considering compliance. Accordingly, this report on compliance with laws, 

regulations, contracts, and grant agreements is not suitable for any other purpose.

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INDEPENDENT AUDITOR’S REPORT

Agency Comments 

In commenting on a draft of this report, FHFA stated that it was pleased to accept GAO’s 

unmodified audit opinions. In addition, it will continue to enhance its internal control and ensure 

the reliability of its financial reporting. This includes coordinating with its stakeholders involved in 

the financial statement consolidation process to implement additional controls to address the 

significant deficiency. The complete text of FHFA’s response is reprinted in appendix I.

Anne Sit-Williams

Director

Financial Management and Assurance

November 8, 2023

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 80

Financial Section
APPENDIX I: FHFA’S RESPONSE TO AUDITOR’S REPORT

November 8, 2023

Ms. Anne Sit-Williams

Director, Financial Management and Assurance

U. S. Government Accountability Office

441 G Street, NW

Washington, D. C. 20548

Dear Ms. Sit-Williams:

Thank you for the opportunity to respond to the Government Accountability Office’s (GAO) 

draft audit report titled, Financial Audit: Federal Housing Finance Agency’s Fiscal Years 2023 

and 2022 Financial Statements. This report presents GAO’s opinion on the consolidated financial 

statements of the Federal Housing Finance Agency (FHFA) for fiscal years 2023 and 2022, 

GAO’s opinion on the effectiveness of FHFA’s internal controls as of September 30, 2023, and 

GAO’s evaluation of FHFA’s compliance with laws and regulations.

I am pleased to accept GAO’s unmodified opinion on the FHFA consolidated financial statements. 

FHFA also received an opinion that it maintained, in all material respects, effective internal 

control over financial reporting. GAO found no instances of reportable noncompliance with 

provisions of applicable laws, regulations, contracts, and grant agreements it tested.

FHFA will continue to work to enhance our internal controls and ensure the reliability of 

our financial reporting. GAO identified a significant deficiency in the internal controls over 

financial reporting. While the individual transaction was corrected prior to the publication of the 

consolidated financial statements, FHFA will coordinate with our stakeholders involved in the 

financial statement consolidation process to implement additional controls that will address the 

significant deficiency. We appreciate your support of these efforts. In addition, we would like to 

acknowledge the dedicated GAO staff that worked with FHFA to meet the reporting deadline for 

our audited financial statements.

If you have any questions relating to our response, please contact Mark Kinsey, Chief Financial 

Officer, at (202) 649-3780.

Sincerely,

Sandra L. Thompson

Director

Federal Housing Finance Agency Constitution Center

400 7th Street, S.W.

Washington, D.C. 20219

Telephone: (202) 649-3800

Facsimile: (202) 649-1071

www.fhfa.gov

81| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Federal Housing Finance Agency

Consolidated Balance Sheets

As of September 30, 2023 and 2022

(In Thousands)

2023 2022

Assets:

Intragovernmental

Fund Balance With Treasury (Note 2) $ 21,125 $ 15,938

Investments, Net (Note 3) 134,628 113,898

Accounts Receivable, Net (Note 4) 22 -

Advances and Prepayments 766 607

Total Intragovernmental 156,541 130,443

With the Public:

Accounts Receivable, Net (Note 4) 28 3

General Property, Plant, and Equipment, Net (Note 5) 9,646 11,676

Advances and Prepayments 5,402 5,594

Total With the Public 15,076 17,273

Total Assets $ 171,617 $ 147,716

Liabilities (Note 6):

Intragovernmental:

Accounts Payable $ 815 $ 961

Advances From Others and Deferred Revenue 2,229 1,607

Other Liabilities, Net (Note 7) 1,614 1,329

Total Intragovernmental 4,658 3,897

With the Public:

Accounts Payable 11,625 11,631

Federal Employee Benefits Payable, Net

Unfunded Accrued Annual Leave 21,422 20,714

FECA Actuarial Liability 666 139

Employer Contributions and Payroll Taxes Payable 332 325

Advances from Others and Deferred Revenue 3 -

Other Liabilities, Net (Note 7)

Deferred Lease Liability 12,619 15,489

Other Liabilities 4,211 4,060

Total With the Public 50,878 52,358

Total Liabilities $ 55,536 $ 56,255

Commitments and Contingencies (Note 9)

Net Position:

Cumulative Results of Operations - Funds from Other Than 

Dedicated Collections 116,081 91,461

Total Cumulative Results of Operations 116,081 91,461

Total Net Position 116,081 91,461

Total Liabilities and Net Position $ 171,617 $ 147,716

The accompanying notes are an integral part of these financial statements.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 82

Financial Section
Federal Housing Finance Agency

Consolidated Statements of Net Cost

For the Years Ended September 30, 2023 and 2022

(In Thousands)

2023 2022

Gross Program Costs by Strategic Goals - (Note 10)

Safety and Soundness $ 196,493 $ 180,273

Equitable Access to Affordable and Sustainable Housing 63,260 59,263

Responsibly Steward FHFA’s Infrastructure 126,249 98,818

Gross Program Costs 386,002 338,354

Less: Total Earned Revenue not Attributable to Strategic Goals (397,513) (320,327)

Net (Income From)/Cost of Operations $ (11,511) $ 18,027

The accompanying notes are an integral part of these financial statements.

83| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Federal Housing Finance Agency

Consolidated Statements of Changes in Net Position

For the Years Ended September 30, 2023 and 2022

(In Thousands)

2023 2022

Cumulative Results of Operations:

Beginning Balance $ 91,461 $ 101,589

Imputed Financing Sources 13,109 7,899

Net Cost of Operations 11,511 (18,027)

Net Change in Cumulative Results of Operations 24,620 (10,128)

Total Cumulative Results of Operations $ 116,081 $ 91,461

Net Position $ 116,081 $ 91,461

The accompanying notes are an integral part of these statements.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 84

Financial Section
Federal Housing Finance Agency

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2023 and 2022

(In Thousands)

2023 2022

Budgetary Resources:

Unobligated Balance From Prior Year Budget Authority, Net (Note 11) $ 75,093 $ 99,284

Appropriations (Note 1.D.) 396,032 318,739

Spending Authority From Offsetting Collections 56,240 49,104

Total Budgetary Resources $ 527,365 $ 467,127

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) $ 450,204 $ 407,349

Unobligated Balance, End of Year:

Exempt From Apportionment, Unexpired Accounts 77,161 59,778

Unexpired Unobligated Balance, End of Year 77,161 59,778

Unobligated Balance, End of Year (Total) 77,161 59,778

Total Budgetary Resources $ 527,365 $ 467,127

Outlays, Net:

Outlays, Net (Total) $ 370,137 $ 334,553

Distributed Offsetting Receipts (396,034) (318,739)

Agency Outlays, Net $ (25,897) $ 15,814

The accompanying notes are an integral part of these statements.

85| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Federal Housing Finance Agency

Notes to the Financial Statements

For the Years Ended September 30, 2023 and 2022 

 Note 1. Summary of Significant Accounting Policies

A . REPORTING ENTITY

The Federal Housing Finance Agency (FHFA) was established on July 30, 2008, when the President signed into law the 

Housing and Economic Recovery Act of 2008 (HERA). FHFA is an independent agency in the Executive branch empowered 

with supervisory and regulatory oversight of the 11 Federal Home Loan Banks (FHLBanks), Federal National Mortgage 

Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, regulated entities), and the 

Office of Finance. FHFA is responsible for ensuring that each regulated entity operates in a safe and sound manner, including 

maintenance of adequate capital and internal control, and carries out its housing and community development finance missions.

HERA provided for an FHFA Office of the Inspector General (FHFA OIG), which has maintained its own Agency Location 

Code and set of accounting books since April 2011. The Inspector General Act of 1978, as amended, sets forth the functions 

and authorities of the FHFA OIG. The reporting entity for purposes of financial statements includes FHFA and FHFA OIG. 

Under the authority of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by HERA, 

FHFA placed Fannie Mae and Freddie Mac (the Enterprises) under conservatorships on September 6, 2008 to stabilize the 

two entities with the objective of maintaining normal business operations and restoring safety and soundness. FHFA, as 

Conservator, assumed the power of stockholders, boards, and management. FHFA has assigned to the Enterprises’ boards and 

management certain business and operational authority. FHFA personnel monitor the operations of the Enterprises.

In September 2008, after the Enterprises were placed in conservatorships under FHFA, OMB and the U.S. Department of 

the Treasury (Treasury) determined that the assets, liabilities and activities of the companies would not be consolidated 

in the financial statements of the federal government. OMB and the Treasury concluded that the Enterprises did not meet 

the criteria for a federal entity contained in OMB Circular A-136, Financial Reporting Requirements, and the Statement of 

Federal Financial Accounting Concepts 2, Entity and Display. This determination was made because the Enterprises were 

not listed in the section of the federal government’s budget entitled “Federal Programs by Agency and Account,” because 

of the nature of FHFA’s conservatorships over the Enterprises, and because the federal government’s ownership and control 

of the entities were considered to be temporary. OMB continued to hold this view in the President’s budget submissions to 

Congress. Consequently, the assets, liabilities, and activities of the Enterprises were not consolidated into FHFA’s financial 

statements. However, the Treasury Department records the value of the federal government’s investments in the Enterprises, 

and related activity in the Department’s and government-wide financial statements. Under the Statement of Federal Financial 

Accounting Standards (SFFAS) 47, Reporting Entity, which became effective for FY 2018, the Enterprises continue to not 

be consolidated in FHFA’s financial statements and are included instead as disclosure entities based on their characteristics as a 

whole. Specifically, the Enterprises are owned or controlled by the federal government as a result of (a) regulatory actions (such 

as organizations in receivership or conservatorship); or (b) other federal government intervention actions. Under the regulatory 

or other intervention actions, the federal government’s ownership and control of the Enterprises is not expected to be permanent.

Both Enterprises, acting through FHFA as their Conservator, entered into separate Senior Preferred Stock Purchase 

Agreements (SPSPAs) with Treasury on September 7, 2008. The SPSPAs were amended and restated on September 26, 2008. 

The SPSPAs were further amended by the first (May 6, 2009), second (December 24, 2009), and third (August 17, 2012) 

amendments, and the SPSPAs and the senior preferred stock certificates of designation were amended by letter agreements 

between the Enterprises and Treasury, executed in 2017, 2019, and 2021. The SPSPAs commit Treasury to provide funding 

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 86

Financial Section
for each Enterprise, up to a maximum available funding commitment, to ensure that each Enterprise maintains a nonnegative net worth, thereby avoiding a statutory requirement that an Enterprise be put in receivership. Under the SPSPAs, 

each Enterprise notifies FHFA of its net worth position as established by its financial statements (e.g., 10-K or 10-Q). Each 

Enterprise also submits a statement certifying compliance with SPSPA covenants, which include limits on portfolio size and 

indebtedness. FHFA, in its role as Conservator, reviews Enterprise financial statements, and, if an Enterprise’s liabilities 

exceed its assets, may submit a request to Treasury to draw upon Treasury’s remaining funding commitment. 

The SPSPAs also require the Enterprises to pay a dividend in exchange for the Treasury Department’s investment. The Third 

amendment changed the dividend owed to Treasury from a fixed 10 percent payable each quarter to a variable amount tied 

directly to quarterly performance (equivalent to positive net worth above a minimum capital reserve amount). The September 

27, 2019 letter amendments increased the minimum capital reserve amounts for the Enterprises, which conditionally eliminated 

the Enterprises’ quarterly dividend obligation to Treasury. Amendments to the SPSPAs and stock certificates made pursuant 

to January 14, 2021 letter agreements between the Enterprises and Treasury currently allow the Enterprises to continue to 

retain earnings until they satisfy the requirements, including buffers, of FHFA’s 2020 Enterprise capital rule. Pursuant to the 

January 14, 2021 letter agreements, upon achievement of the requirements the Enterprises will resume quarterly dividend payments. 

B . BASIS OF PRESENTATION

FHFA’s principal statements were prepared from its official financial records and general ledger in conformity with U.S. 

Generally Accepted Accounting Principles (GAAP) and follow the presentation guidance established by OMB Circular No. 

A-136 “Financial Reporting Requirements” as revised. The statements are a requirement of the Government Management 

Reform Act of 1994, the Accountability of Tax Dollars Act of 2002, and HERA. These financial statements are in addition 

to the financial reports prepared by FHFA, pursuant to OMB directives, which are used to monitor and control budgetary 

resources. The financial statements include the activities and transactions that make up the balances in the statements of the 

FHFA OIG. The amounts reported in the financial statements are consolidated totals net of intra-entity transactions, except for 

the Statement of Budgetary Resources, which is presented on a combined basis. The financial statements have been prepared 

to report the financial position, net cost of operations, changes in net position, and the status and availability of budgetary 

resources of FHFA. Unless specified otherwise, all amounts are presented in thousands. Changes in the presentation in the 

current year in comparison to the prior year presentation are to conform to current reporting standards and requirements, such 

as aggregation or disaggregation of line items in the Balance Sheet or other statements. 

C . BASIS OF ACCOUNTING

The Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position are prepared using the accrual basis of 

accounting. Under the accrual basis of accounting, revenues are recognized when earned, and the liability or expenses are 

generally recognized when incurred, without regard to receipt or payment of cash. These principles differ from budgetary 

accounting and reporting principles, which are used for preparing the Statement of Budgetary Resources. The Statement of 

Budgetary Resources reflects how budgetary resources were made available to the entity during the year and reports the net 

outlays of these items at year-end. The budgetary method recognizes the obligation of funds according to legal requirements, 

which in many cases records obligations before the occurrence of an accrual-based transaction. The differences relate 

primarily to the recording of capitalization and depreciation of property and equipment, as well as the recognition of other 

assets and liabilities. Budgetary accounting facilitates compliance with legal requirements and controls over the use of 

funds. FHFA’s financial statements conform with U.S. GAAP for federal entities as prescribed by the standards set forth by 

the Federal Accounting Standards Advisory Board (FASAB). FASAB is recognized by the American Institute of Certified 

Public Accountants as the body designated to establish U.S. GAAP for federal reporting entities. Certain assets, liabilities, 

earned revenues, and costs have been classified as intragovernmental throughout the financial statements and notes. 

Intragovernmental is defined as transactions made between two reporting entities within the federal government.

87| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
D . REVENUES

Although our assessments are reported as Appropriations in the Combined Statement of Budgetary Resources, FHFA is not 

subject to appropriations. Operating revenues of FHFA are obtained through assessments of the regulated entities. The head 

of the Agency approved the annual budget for FY 2023 and FY 2022 in August 2022 and 2021, respectively. By law, FHFA 

is required to charge semi-annual assessments to the regulated entities. Assessments collected shall not exceed the amount 

sufficient to provide for the reasonable costs associated with overseeing the regulated entities, plus amounts determined by 

the head of the Agency to be necessary for maintaining a working capital fund.

FHFA develops its annual budget using a ‘bottom up’ approach. Each office within the Agency is asked to bifurcate their 

budget request between the amount of resources needed for the regulation of Fannie Mae and Freddie Mac and the resources 

needed for the regulation of the FHLBanks. The office requests are then aggregated (with overhead costs distributed 

proportionately) to determine the total expected costs associated with regulating Fannie Mae and Freddie Mac and the 

total expected costs associated with regulating the FHLBanks. These two totals, along with any expected collection for the 

working capital fund, comprise the fiscal year budget for the Agency.

FHFA calculates the assessments for each Enterprise by determining the proportion of each Enterprise’s assets and offbalance sheet obligations to the total for both Enterprises and then applying each of the Enterprise’s proportion (expressed 

as a percentage) to the total budgeted costs for regulating the Enterprises. FHFA calculates the assessments for each of 

the FHLBanks by determining each FHLBank’s share of minimum required regulatory capital as a percentage of the total 

minimum capital of all the FHLBanks and applying this percentage to the total budgeted costs for regulating the banks. 

Assessment letters are sent to the regulated entities 30 days prior to the assessment due dates of October 1st and April 1st.

E . USE OF ESTIMATES

The preparation of the accompanying financial statements in accordance with U.S. GAAP requires management to make 

certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results 

could differ from those estimates. Significant transactions subject to estimates include costs regarding benefit plans for FHFA 

employees that are administered by the Office of Personnel Management (OPM) and cost allocations among the strategic 

goals on the Statement of Net Cost.

F . FUND BALANCE WITH TREASURY

The Treasury processes cash receipts and disbursements on FHFA’s behalf. Funds held at Treasury are available to pay 

Agency liabilities and finance authorized purchase obligations. FHFA does not maintain cash in commercial bank accounts or 

foreign currency balances.

During the year, increases to FHFA’s Fund Balance with Treasury are comprised of semi- annual assessments, investment 

interest, collections on reimbursable agreements, employee administrative billing and collections, and Freedom of 

Information Act (FOIA) request fees, when applicable. FHFA is not authorized to retain fees and penalties associated with 

employee administrative billings (corrections to payroll and travel payments) and collections, FOIA fees, and as such, records 

these as liabilities until transferred to the Treasury General Fund. 

HERA provides authority for FHFA to maintain a working capital fund. The working capital fund is defined in FHFA’s 

Assessment Regulation as an account for amounts collected from the regulated entities to establish an operating reserve 

that is intended to provide for the payment of large or multiyear capital and operating expenditures, as well as unanticipated 

expenses. The balance in the working capital fund is evaluated annually.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 88

Financial Section
G . INVESTMENTS

FHFA has the authority to invest in Treasury securities with maturities suitable to FHFA’s needs. Non-marketable, 

Government Account Series (GAS) market-based securities are Treasury notes and bills issued to governmental accounts 

that are not traded on any securities exchange but mirror the prices of marketable securities with similar terms (see Treasury 

Financial Manual, Chapter 4300). FHFA invests solely in Treasury securities. During FY 2023 and FY 2022, FHFA invested 

in one-day certificates of indebtedness, a type of market-based GAS security issued by Treasury.

H . ACCOUNTS RECEIVABLE

Accounts receivable consists of amounts owed to FHFA by other federal entities and the public. Amounts due from federal 

entities are considered fully collectible and consist of interagency agreements. Accounts receivable from the public include 

reimbursements from employees, FOIA request fees, and an allowance for uncollectible accounts. An allowance for 

uncollectible accounts receivable from the public is established when either 1) management determines that collection is 

unlikely to occur after a review of outstanding accounts and the failure of all collection efforts, or 2) an account for which no 

allowance has been previously established is submitted to Treasury for collection, which takes place when it becomes 120 

days delinquent. 

I . GENERAL PROPERTY, AND EQUIPMENT, NET 

General Property, Plant, and Equipment is recorded at historical cost. It consists of tangible assets and software. The 

following are the capitalization thresholds and useful life classifications:

Description Threshold Useful Life (Years)

Furniture and Equipment $ 50,000 3

Leasehold Improvements $ 250,000 The useful life of the asset or the remaining term of lease at 

the time of improvement completion, whichever is shorter.

Software: Internally Developed $ 500,000 3

Software: Off-the-Shelf $ 500,000 3

Capitalized Leases $ 250,000 Term of lease

Depreciation is calculated using the straight-line method over the estimated useful life of the asset. Applicable standard 

governmental guidelines regulate the disposal and convertibility of Agency property and equipment. 

FHFA has no real property holdings, stewardship, or heritage assets. Other property items and normal repairs and 

maintenance are charged to expense as incurred.

J . ADVANCES AND PREPAID CHARGES

Advance payments are generally prohibited by law. There are some exceptions, such as reimbursable agreements, 

subscriptions, and payments to contractors and employees. Payments above $50,000, made in advance of the receipt of goods 

and services, are recorded as advances or prepaid charges at the time of prepayment and recognized as expenses when the 

related goods and services are received. Advance payments below $50,000 will be expensed as incurred.

89| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
K . LIABILITIES

Liabilities represent the amount of funds that are obligations to be paid by FHFA as the result of a transaction or event that 

has already occurred.

FHFA reports its liabilities under two categories, Intragovernmental and With the Public. Intragovernmental liabilities represent 

funds owed to another federal entity. Liabilities With the Public represent funds owed to any entity or person that is not a federal 

entity, including private sector firms and federal employees. Each of these categories may include liabilities that are covered by 

budgetary resources and liabilities that are not covered by budgetary resources. Note 6 contains a breakout by these categories.

Liabilities covered by budgetary resources are liabilities funded by realized budgetary resources including new budget 

authority, unobligated balances of budgetary resources at the beginning of year or net transfers of prior year balances 

during the year, spending authority from offsetting collections and recoveries of unexpired budget authority. These consist 

of accounts payable, advances from others and deferred revenue, other intragovernmental liabilities, other liabilities, and 

employer contributions and payroll taxes payable. Accounts payable represents amounts owed to employees for travel 

related expenses and other entities for goods ordered and received and for services rendered. Advances from others and 

deferred revenue are amounts received for goods or services to be delivered or performed in the future and reflect amounts 

that have yet to be earned. Other intragovernmental liabilities may include interest payable to federal entities and advances 

and prepayments from other federal entities. Employer contributions and payroll taxes payable represents the amount of the 

employer portion of payroll taxes and benefit contributions, such as retirement, including the federal entity’s contribution to 

the Thrift Savings Plan, and health and life insurance for covered employees. Other liabilities can include accrued payroll 

and benefits earned by employees during the fiscal year which are not paid until the next fiscal year. The Department of Labor 

(DOL) is the central paying agent for all workers’ compensation claims filed under the Federal Employees’ Compensation Act 

(FECA). FHFA obligates funds for potential FECA claims each fiscal year; the funds remain on the books for two years 

and three months. Unused funds after the two-year period are deobligated within three months from the end of the two-year 

period. Funded FECA liability represents the amount FHFA is to reimburse DOL for claims paid to FHFA employees.

Liabilities not covered by budgetary resources are liabilities that are not funded by any current appropriation or other funding 

source. These liabilities consist of unfunded accrued annual leave, FECA actuarial liabilities, and deferred lease liabilities 

Accrued annual leave is earned throughout the fiscal year and is paid when leave is taken by the employee; unfunded annual 

leave represents the balance earned but not yet taken. The FECA actuarial liabilities is an estimated actuarial liability for 

future workers’ compensation benefits. The estimated actuarial liability for future workers’ compensation benefits is based 

on the DOL’s FECA actuarial model that takes the amount of benefit payments over the last 12 quarters (three years) and 

calculates the annual average of payments for medical expenses and compensation. This average is then multiplied by the 

liabilities-to- benefits paid ratios for the whole FECA program. The ratios may vary from year to year as a result of economic 

assumptions and other factors, but the model calculates a liability approximately 12 times the annual payments.

Deferred lease liabilities consist of deferred rent and the Constitution Center tenant allowance. Deferred rent is the difference 

at year-end between the sum of monthly cash disbursements paid to-date for rent and the sum of the average monthly rent 

calculated based on the term of the lease. The Constitution Center tenant allowance is the unamortized portion of the tenant 

allowance granted to FHFA at the inception of the lease. The tenant allowance began at inception of the lease and extends 

through the life of the lease, ending in January 2027. Monthly FHFA reduces the tenant allowance and charges the amount 

to the Deferred lease liability account, which reduces the lease expense over the lease term. Lease costs are based on the 

straight-line method. Deferred rent is applicable to the lease agreements on the properties with non-cancellable lease terms. 

See Note 8. Leases for specific lease information. 

Liabilities related to capital leases are also discussed in Note 8. Leases.

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Financial Section
L . EMPLOYEE LEAVE AND BENEFITS

Employee Leave: All full-time FHFA employees are entitled to accrue sick leave at a rate of four hours per pay period. 

Full- time employees are eligible to earn sick leave immediately upon being hired. Annual leave is accrued based on years of 

creditable federal service and military service, with the following exceptions: Former Office of Federal Housing Enterprise 

Oversight employees hired between April 25, 2005 and July 30, 2008 accrue annual leave based on years of creditable federal 

and military service as well as years of relevant private sector experience (HERA abolished the Office of Federal Housing 

Enterprise Oversight when FHFA was established in July (2008). Additionally, FHFA employees hired into mission critical 

positions at or above the EL-13 level, after May 2011 accrue annual leave under this same formula. Some employees who 

transfer from other federal entities may also have been authorized to receive credit for private sector time. Employees in nonsupervisory and non-manager positions may carry-over up to 240 hours of annual leave each year. Supervisors and managers 

(below EL-15) may carryover up to 480 hours of annual leave each year. The FHFA Leadership Level’s equivalent to the 

Senior Executive Service employees may accrue annual leave of eight (8) hours each pay period, which is consistent with the 

government-wide rules for Senior Executive Service level employees and FHFA executives may carry over annually up to 

720 hours of annual leave. Accrued annual leave is treated as an unfunded expense with an offsetting liability when earned. 

This represents amounts of annual leave that have been earned and are payable, and will be paid from future years funds. The 

accrued liability is reduced when the annual leave is taken. Any unused annual leave balance is paid to an employee upon 

leaving federal service and calculated based on the employee’s earnings per hour. There is no maximum limit on the amount 

of sick leave that may be accrued. Upon retirement, any unused sick leave under the Civil Service Retirement System (CSRS) 

and the Federal Employees Retirement System (FERS) is creditable towards an employee’s annuity computation.

Employee Benefits: FHFA, through benefit programs established for all agencies by the federal government, offers its 

employees’ health and life insurance coverage through the Federal Employees Health Benefits Program (FEHB) and Federal 

Employees Group Life Insurance Program. The cost of each is shared by FHFA and its employees. FHFA pays 90 percent of 

the FEHB premium. In addition, all employees have 1.45 percent of adjusted gross earnings withheld to pay for Medicare 

coverage. High-earning employees pay an additional Medicare tax. The Additional Medicare Tax is calculated as 0.9 percent 

of adjusted gross earnings over the threshold regardless of their filing status.

M . RETIREMENT PLANS

FHFA employees participate in the retirement plans offered by OPM, which consist of CSRS, CSRS Offset, FERS, FERSRevised Annuity Employee (RAE), or FERS-Further Revised Annuity Employee (FRAE).

FERS, RAE, and FRAE are provided under calculations for both regular employees as well as law enforcement employees 

in the OIG. FHFA remits the employer’s share of the required contribution, which is 7.0 percent for CSRS and CSRS Offset, 

18.4 percent for FERS, 37.6 percent for FERS Law Enforcement Officer (LEO), 16.6 percent for FERS-RAE and FERSFRAE, and 35.8 percent for FERS-RAE LEO and FERS-FRAE LEO. Effective January 1, 2014, any employee who begins 

employment with FHFA with less than five years of prior federal service as of December 31, 2013 is placed under FERSFRAE. Both CSRS and FERS employees may participate in the federal Thrift Savings Plan (TSP). FERS employees receive 

an automatic Agency contribution equal to 1.0 percent of pay. FERS employees are automatically enrolled in TSP and 5.0 

percent of their pay is deposited into the plan unless they make an election to stop or change the contribution. FHFA matches 

any FERS employee contribution up to an additional 4.0 percent of pay. For FERS and CSRS Offset participants, FHFA also 

contributes the employer’s share of Social Security. The 2023 maximum taxable wage base for Social Security is $160,200.

91| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
FHFA expenses its contributions to the retirement plans of covered employees as the expenses are incurred. As discussed 

in Note 1.P and reflected in the Consolidated Statements of Changes in Net Position and Note 16, FHFA reports imputed 

financing costs with respect to retirement plans, health benefits and life insurance pursuant to guidance received from OPM. 

These costs are paid by OPM and not by FHFA. Disclosure of imputed cost in the Statement of Net Cost is intended to 

provide information regarding the full cost of FHFA’s program in conformity with U.S. GAAP. 

FHFA’s financial statements do not report plan assets, accumulated plan benefits, and related unfunded liabilities, if any, for 

the retirement plans covering its employees. Reporting these amounts is the responsibility of OPM, as the administrator of 

these plans.

In addition to the TSP, FHFA offers a supplemental 401(K) plan. All CSRS and FERS employees are eligible to contribute 

to the 401(K). All eligible employees that participate will receive matching contributions from FHFA up to 3.0 percent of 

the employee’s salary. Qualified employees may participate in the TSP and/or FHFA’s 401(K) Savings Plan, up to the annual 

Internal Revenue Code limitations established for salary deferral and annual additions.

N . CONTINGENCIES

FHFA recognizes contingent liabilities, in the accompanying Balance Sheet and Statement of Net Cost, when future outflows 

are both probable and can be reasonably estimated. FHFA discloses contingencies in the notes to the financial statements 

when a loss from the outcome of future events is more than remote but less than probable or when the liability is probable but 

cannot be reasonably estimated.

O . CLASSIFIED ACTIVITIES

Accounting standards require all reporting entities to disclose that accounting standards allow certain presentations and 

disclosures to be modified, if needed, to prevent the disclosure of classified information.

P . INTER-ENTITY COSTS

Goods and services are received from other federal entities at no cost or at a cost less than the full cost to the providing 

federal entity. Consistent with accounting standards, certain costs of the providing entity that are not fully reimbursed by the 

component reporting entity are recognized as imputed cost in the Statement of Net Cost, and are offset by imputed revenue in 

the Statement of Changes in Net Position. Such imputed costs relate to employee benefits. However, unreimbursed costs of 

goods and services other than those identified above are not included in our financial statements.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 92

Financial Section
Note 2 . Fund Balance with Treasury 

Fund Balance with Treasury (FBWT) consists of operating funds and a working capital fund. The unobligated and obligated 

balances reported in the FBWT may not equal related amounts reported on the Combined Statements of Budgetary 

Resources. The unobligated and obligated balances reported on the Combined Statements of Budgetary Resources are 

supported by the FBWT, as well as other budgetary resources that do not affect the FBWT (i.e., unfilled customer orders). 

The funds in the working capital fund were fully invested during FY 2023 and FY 2022. FBWT account balances as of 

September 30, 2023 and 2022 were as follows (dollars in thousands):

2023 2022

Status of Fund Balance with Treasury:

Unobligated Balance

Available $ 77,161 $ 59,778 

Unavailable 3 -

Obligated Balance Not Yet Disbursed 78,569 70,058

Investments (134,608) (113,898)

Total $ 21,125 $ 15,938 

Note 3 . Investments 

Investments as of September 30, 2023 consist of the following (dollars in thousands):

Cost

Amortized 

(Premium) 

Discount

Interest 

Receivable

Investments 

Net

Market Value 

Disclosure

Intragovernmental Securities:

Non-Marketable 

Market-Based $ 134,608 $ - $ 20 $ 134,628 $ 134,628

Investments as of September 30, 2022 consist of the following (dollars in thousands):

Cost

Amortized 

(Premium) 

Discount

Interest 

Receivable

Investments 

Net

Market Value 

Disclosure

Intragovernmental Securities:

Non-Marketable

Market-Based $ 113,898 $ - $ - $ 113,898 $ 113,898

Non-marketable, Government Account Series market-based securities are Treasury notes and bills issued to governmental 

accounts that are not traded on any securities exchange but mirror the prices of marketable securities with similar terms. 

FHFA is currently investing in one-day certificates issued by Treasury. There were no amortized premiums/discounts on 

investments as of September 30, 2023 or 2022. Interest earned on investments was $10.0 million and $1.3 million for FY 

2023 and FY 2022, respectively.

93| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Note 4 . Accounts Receivable, Net

Accounts Receivable balances as of September 30, 2023 and 2022 were as follows (dollars in thousands):

2023 2022

Intragovernmental

Accounts Receivable $ 22 $ -

Total Intragovernmental Accounts Receivable $ 22 $ -

With the Public

Accounts Receivable $ 28 $ 3

Total With the Public Accounts Receivable $ 28 $ 3

Total Accounts Receivable $ 50 $ 3

Note 5 . General Property, Plant, and Equipment, Net

Schedule of General Property, Plant, and Equipment as of September 30, 2023 (dollars in thousands):

Major Class Acquisition Cost

Accumulated 

Amortization/ 

Depreciation

Net Book Value

Equipment $ 23,556 $ 22,723 $ 833

Leasehold Improvements 36,263 27,453 8,810

Internal-Use Software 1,728 1,728 -

Machinery and Equipment 

Under Capital Lease 274 274 -

Construction-in-Progress 3 - 3

Total $ 61,824 $ 52,178 $ 9,646 

Schedule of General Property, Plant, and Equipment as of September 30, 2022 (dollars in thousands):

Major Class Acquisition Cost

Accumulated 

Amortization/ 

Depreciation

Net Book Value

Equipment $ 22,740 $ 22,544 $ 196

Leasehold Improvements 36,135 24,895 11,240

Internal-Use Software 1,728 1,728 -

Machinery and Equipment 

Under Capital Lease 274 250 24

Construction-in-Progress 216 - 216

Total $ 61,093 $ 49,417 $ 11,676

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 94

Financial Section
The leasehold improvement acquisition cost related to Constitution Center was financed in part by a tenant allowance in the 

amount of $20.8 million during FY 2012.

Note 6. Liabilities Covered and Not Covered by Budgetary Resources

There are not any liabilities under the category of not requiring Budgetary Resources. Refer to Note 1.K. for a description of 

the types of liabilities contained in the tables below. Changes in the presentation in the current year in comparison to the prior 

year presentation are to conform to current reporting standards and requirements, such the addition of Advances from Others 

and Deferred Revenue and disaggregation of Other Liabilities into two lines, Employer Contributions and Payroll Taxes 

Payable and Other Liabilities. 

Liabilities Covered and Not Covered by Budgetary Resources as of September 30, 2023 consist of the following 

(dollars in thousands):

Covered Not Covered Total

Intragovernmental Liabilities

Accounts Payable $ 815 $ - $ 815

Advances from Others and Deferred Revenue 2,229 - 2,229

Other Intragovernmental Liabilities 1,614 - 1,614

Total Intragovernmental Liabilities $ 4,658 $ - $ 4,658

With the Public

Accounts Payable $ 11,625 $ - $ 11,625

Unfunded Accrued Annual Leave - 21,422 21,422

FECA Actuarial Liabilities - 666 666

Employer Contributions and Payroll Taxes Payable 332 - 332

Advances from Others and Deferred Revenue 3 - 3

Deferred Lease Liabilities - 12,619 12,619

Other Liabilities 4,211 - 4,211

Total With the Public Liabilities $ 16,171 $ 34,707 $ 50,878

Total Liabilities $ 20,829 $ 34,707 $ 55,536

95| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Liabilities Covered and Not Covered by Budgetary Resources as of September 30, 2022 consist of the following 

(dollars in thousands):

Covered Not Covered Total

Intragovernmental Liabilities

Accounts Payable $ 961 $ - $ 961

Advances from Others and Deferred Revenue 1,607 - 1,607

Other Intragovernmental Liabilities 1,329 - 1,329

Total Intragovernmental Liabilities $ 3,897 $ - $ 3,897

With the Public

Accounts Payable $ 11,631 $ - $ 11,631

Unfunded Accrued Annual Leave - 20,714 20,714

FECA Actuarial Liabilities - 139 139

Employer Contributions and Payroll Taxes Payable 325 - 325

Deferred Lease Liabilities - 15,489 15,489

Other Liabilities 4,060 - 4,060

Total With the Public Liabilities $ 16,016 $ 36,342 $ 52,358

Total Liabilities $ 19,913 $ 36,342 $ 56,255 

Note 7. Other Liabilities

Current liabilities are amounts owed by a federal entity as the result of past transactions or events that are payable within the 

fiscal year following the reporting date. All Other Liabilities are considered current liabilities. Accrued funded payroll represents 

payroll expenses that were incurred prior to year-end but were not paid. Changes in the presentation in the current year in 

comparison to the prior year presentation are to conform to current reporting standards and requirements, such as changes to the 

statements or notes. For this reporting period, the Employer Benefit Contributions line was adjusted and is reflected in Note 6. 

Other Liabilities as of September 30, 2023 and September 30, 2022 consist of the following (dollars in thousands):

2023 2022

Intragovernmental Liabilities

Benefit Program Contributions Payable $ 1,361 $ 1,106

Employer Contributions and Payroll Taxes Payable 253 223

Total Intragovernmental Other Liabilities $ 1,614 $ 1,329

With the Public

Deferred Lease Liability $ 12,619 $ 15,489

Accrued Funded Payroll 4,208 4,032

Employee Related Refunds Due 3 3

Capital Lease Liability - 24

Total With the Public Other Liabilities $ 16,830 $ 19,548

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 96

Financial Section
Note 8 . Leases 

Operating Leases

NON-FEDERAL LEASES:

400 7th Street SW – Constitution Center

FHFA entered into a lease for office space at 400 7th Street SW - Constitution Center on January 31, 2011. FHFA took 

occupancy in January 2012. FHFA does not have the right to terminate the lease for the convenience of the government. The 

lease terms of 400 7th Street SW expire on January 31, 2027. In addition, the lease stipulates that FHFA shall pay additional 

rent for its share of increases in the operating expenses and real estate property taxes.

FHFA OIG entered into an Occupancy Agreement (OA) with the General Services Administration (GSA) for its regional 

office spaces in Los Angeles, CA, Tampa, FL, Newark, NJ, Chicago, IL, St. Louis, MO, and Plano, TX. In these leases, 

FHFA OIG has the right to terminate the OA based on the availability of funds or with a four-month notice.

Future Payments Due for Non-Cancellable Operating Leases (dollars in thousands) consist of the following:

Future Payment Due Land & Buildings Totals

Federal Non-Federal Federal Non-Federal

Fiscal Year 2024 $ 21,515 $ 21,515

Fiscal Year 2025 $ 21,946 $ 21,946

Fiscal Year 2026 $ 22,385 $ 22,385

Fiscal Year 2027 $ 7,518 $ 7,518

After 5 Years $ - $ -

Total Future Lease Payments $ 73,364 $ 73,364

97| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Capital Lease

FHFA entered into a non-federal capital lease for 28 copiers located at 400 7th Street SW - Constitution Center on 

February 1, 2018. The leased equipment is amortized on a straight line basis over five years. The original lease was fully 

funded at its inception. The original interest rate related to the lease obligation was 2.5 percent and the maturity date was 

January 31, 2023.There was no salvage value, and the copiers were expected to be returned to the vendor upon termination 

of the lease at the end of January 2023. Due to the global pandemic, the useful life of the equipment was extended, and a new 

copier lease was entered into for two years, through January 31, 2025. The new lease is fully funded for the two-year period. 

The equipment under the capital lease was fully amortized as of the period ending FY 2023. The contract extension is not 

considered a capital lease.

FHFA OIG does not have capital leases arrangements.

2023 2022

Summary of Assets Under Capital Lease

Machinery and Equipment (Copiers) $ 274 $ 274 

Accumulated Amortization (274) (250)

Total Net Value $ 0 $ 24 

Note 9. Commitments and Contingencies

FHFA did not have any material commitments or contingencies that met disclosure requirements as of September 30, 2023 

and 2022.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 98

Financial Section
 Note 10 . Program Costs

Pursuant to HERA, FHFA was established to supervise and regulate the regulated entities. The regulated entities include 

Freddie Mac, Fannie Mae, the FHLBanks, and the Office of Finance, a joint office of the FHLBanks. FHFA tracks program 

costs to the strategic goals (responsibility segments) developed for FHFA’s strategic plan. Strategic Goals 1) Safety and 

Soundness; 2) Equitable Access to Affordable and Sustainable Housing; and 3) Responsibly Steward FHFA’s Infrastructure, 

guide program offices to carry out FHFA’s vision and mission. FHFA has an indirect program support element which is 

distributed proportionately to Strategic Goals 1 – 3 based on the percentage of direct costs of each goal to the total direct 

costs for FHFA. FHFA OIG costs are allocated as part of FHFA’s indirect program support element. Earned revenue is 

reported at the total level only. In mid-FY 2022, FHFA issued a new Strategic Plan which renamed Strategic Goal 2 to 

emphasize the focus on promoting equitable access to affordable housing, while Strategic Goals 1 and 3 remained relativity 

static in both name and anticipated outcomes. The costs by strategic goal presented in the table below and in the Statement of 

Net Cost is a comparative representation of FHFA’s program costs between the two years.

FHFA’s revenue was provided by the regulated entities through assessments. FHFA OIG’s spending authority is a 

combination of unobligated funds carried forward from the previous year and the transfer of new assessments from FHFA for 

the current year. The combined total spending authority for the FHFA OIG in FY 2023, was $55.0 million and $49.9 million 

in FY 2022. FHFA OIG’s gross expenses for FY 2023 and FY 2022 were $53.6 million and $49.6 million, respectively.

Program costs and revenue are broken out into two categories – “Intragovernmental” and “With the Public.” 

Intragovernmental costs are costs FHFA incurs through contracting with other federal entities for goods and/or services, such 

as payroll processing services received from the Department of Agriculture/Department of the Interior and imputed financing 

costs for post-retirement benefits with OPM. With the Public costs are costs FHFA incurs through contracting with the 

private sector for goods or services, payments for employee salaries, depreciation, annual leave, and deferred rent expenses. 

Intragovernmental revenue is funds collected from reimbursable agreements and investment interest. With the Public revenue 

is assessment funds collected from the regulated entities. and FOIA collections, when applicable. Intragovernmental expenses 

relate to the source of goods and services purchased by the Agency and not to the classification of related revenue.

99| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
 Such costs and revenue are summarized as follows (dollars in thousands):

2023 2022

Safety and Soundness

Intragovernmental Costs $ 37,209 $ 34,985

With the Public Costs 159,284 145,288 

Gross Safety and Soundness Program Costs 196,493 180,273

Equitable Access to Affordable and Sustainable Housing

Intragovernmental Costs 12,602 12,352

With the Public Costs 50,658 46,911

Gross Equitable Access to Affordable and 

Sustainable Housing Program Costs 63,260 59,263

Responsibly Steward FHFA’s Infrastructure

Intragovernmental Costs 25,902 19,473

With the Public Costs 100,347 79,345 

Gross Responsibly Steward FHFA’s Infrastructure Program Costs 126,249 98,818 

Total Intragovernmental Costs 75,713 66,810 

Total With the Public Costs 310,289 271,544

Gross Program Costs 386,002 338,354

Less: Total Intragovernmental Earned Revenue (11,414) (2,832)

Less: Total With the Public Earned Revenue (386,099) (317,495)

Total Net Cost of Operations $ (11,511) $ 18,027

Note 11 . Net Adjustments to Unobligated Balance Brought Forward, October 1

There were no material adjustments to correct amounts in the unobligated balance brought forward, October 1. Below is 

a reconciliation of the unobligated balance brought forward, October 1 to the unobligated balance from prior year budget 

authority, net (dollars in thousands):

2023 2022

Unobligated Balance Brought Forward, October 1 $ 59,779 $ 85,455

Recoveries of Prior Year Obligations 14,707 13,165

Other Changes in Unobligated Balance 607 664

Unobligated Balance from Prior Year Budget Authority, Net $ 75,093 $ 99,284

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 100

Financial Section
Note 12. Legal Arrangements Affecting Use of Unobligated Balances

HERA requires that any balance that remains unobligated at the end of the fiscal year, except for amounts assessed for 

contribution to FHFA’s working capital fund, must be credited against the next year’s assessment to the regulated entities. 

The Director also has the authority to retain prior year unobligated funds for conservatorship-related activities that were 

not anticipated during the budget process. As of September 30, 2023, and 2022, the unobligated balance was $77.1 million 

and $59.8 million, respectively. FHFA may retain the FY 2023 unobligated balance of $22.4 million for operating expenses, 

for the working capital fund, or for conservatorship/Enterprise-related expenses during FY 2024. FHFA retained the 

FY 2022 unobligated balance for conservatorship/Enterprise-related expenses during FY 2023 (See Note 2. Fund Balance 

With Treasury).

Note 13 . Budgetary Resource Comparisons to the Budget of the United States Government

Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other Financing Sources and 

Concepts for Reconciling Budgetary and Financial Accounting, calls for explanations of material differences between 

amounts reported in the Statement of Budgetary Resources and the actual balances published in the Budget of the United 

States Government (President’s Budget). The FY 2025 President’s Budget will include the actual budgetary execution 

information for FY 2023. The FY 2025 President’s Budget is scheduled for publication in February 2024 and can be found at 

the OMB Website.34 The FY 2024 President’s Budget, with the “Actual” column completed for 2022, has been reconciled to 

the FY 2022 Statement of Budgetary Resources and there were no material differences (dollars in thousands):

Budgetary 

Resources

New Obligations 

and Upward 

Adjustments

Distributed 

Offsetting 

Receipts

Net Outlays

Combined Statement of 

Budgetary Resources $ 467,127 $ 407,349 $ 318,739 $ 334,552

Rounding (127) (349) (739) (552)

Budget of the 

U.S. Government 467,000 407,000 318,000 334,000

Total Unreconciled 

Difference $ - $ - $ - $ -

34 http://www.whitehouse.gov/omb

101| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
Note 14 . Undelivered Orders at the End of the Period

Undelivered Orders balance as of September 30, 2023 (dollars in thousands):

Federal Non-Federal

Paid Undelivered Orders $ 766 $ 5,401

Unpaid Undelivered Orders 3,384 56,954

Total Undelivered Orders $ 4,150 $ 62,355

Undelivered Orders balance as of September 30, 2022 (dollars in thousands):

Federal Non-Federal

Paid Undelivered Orders $ 607 $ 5,594

Unpaid Undelivered Orders 4,053 48,019

Total Undelivered Orders $ 4,660 $ 53,613

Note 15. Incidental Custodial Collections 

FHFA’s custodial collections primarily consist of fines and penalties associated with employee administrative billings 

(corrections to payroll and travel payments) and collections. Custodial collections are reflected in Fund Balance with 

Treasury during the year. While these collections are considered custodial, they are neither primary to the mission of 

the Agency nor material to the overall financial statements. FHFA’s custodial collections are $607 for the year ended 

September 30, 2023. Custodial collections totaled $244 for the year ended September 30, 2022. Custodial collections are 

transferred to the Treasury General Fund on September 30 and are not reflected in the financial statements of the Agency.

Note 16. Budget and Accrual Reconciliation

Budgetary and financial accounting information differ. Budgetary accounting is used for planning and control purposes and 

relates to both the receipt and use of cash, as well as reporting the federal deficit. Financial accounting is intended to provide 

a picture of the government’s financial operations and financial position, so it presents information on an accrual basis. The 

accrual basis includes information about costs arising from the consumption of assets and the incurrence of liabilities. The 

reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an accrual basis, provides an 

explanation of the relationship between budgetary and financial accounting information. The reconciliation serves not only 

to identify costs paid for the past and those that will be paid in the future, but also to assure integrity between budgetary and 

financial accounting. The analysis below illustrates this reconciliation by listing the key differences between net cost and 

net outlays (dollars in thousands). Amounts in the following tables may be rounded for presentation purposes. Underlying 

financial statement lines conform to previously presented information in other tables and figures.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 102

Financial Section
For the Year Ended September 30, 2023 Intragovernmental With the Public Total

Net (Income From)/Cost of Operations $ 64,300 $ (75,811) $ (11,511) 

Components of Net Cost Not Part of the Budgetary Outlays

Property, Plant, and Equipment Depreciation Expense - (2,761) (2,761)

Increase/(Decrease) in Assets:

Accounts Receivable, Net 688 25 713

Securities and Investments 20 - 20

Advances and Prepayments 159 (193) (34)

(Increase)/Decrease in Liabilities:

Accounts Payable (620) 7 (613)

Advances from Others and Deferred Revenue (622) (3) (625)

 Federal Employee Benefits Payable, Net - (1,242) (1,242)

Other Liabilities, Net (184) 2,719 2,535

Financing Sources:

Imputed Cost (13,110) (13,110)

Total Components of Net Operating Cost Not Part of the 

Budgetary Outlays $ (13,669) $ (1,448) $ (15,117)

Components of the Budget Outlays That Are Not Part of 

Net Operating Cost

Acquisition of Capital Assets 4 727 731

Total Components of the Budget Outlays That Are Not Part 

of Net Operating Cost $ 4 $ 727 $ 731 

Miscellaneous Items

Distributed Offsetting Receipts (9,933) (386,101) (396,034)

Custodial/Non-Exchange Revenue 1 (1) - 

Appropriated Receipts for Trust/Special Funds 9,933 386,101 396,034

Total Other Reconciling Items $ 1 $ (1) $ - 

Total Net Outlays (Calculated Total) $ 50,636 $ (76,533) $ (25,897) 

Budgetary Agency Outlays, Net

Agency Outlays, Net $ (25,897) 

103| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section
For the Year Ended September 30, 2022 Intragovernmental With the Public Total

Net (Income From)/Cost of Operations $ 63,978 $ (45,951) $ 18,027

Components of Net Cost Not Part of the Budgetary Outlays

Property, Plant, and Equipment Depreciation Expense - (2,806) (2,806)

Increase/(Decrease) in Assets:

Accounts Receivable, Net 118 (2) 116

Advances and Prepayments (48) 3,433 3,385

Other Assets - - -

(Increase)/Decrease in Liabilities:

Accounts Payable (166) (3,579) (3,745)

Advances from Others and Deferred Revenue 3 - 3

Federal Employee Benefits Payable, Net - 243 243

Other Liabilities, Net 1,166 6,477 7,643

Financing Sources:

Imputed Cost (7,899) (7,899)

Total Components of Net Operating Cost Not Part of the 

Budgetary Outlays $ (6,826) $ 3,766 $ (3,060)

Components of the Budget Outlays That Are Not Part of 

Net Operating Cost

Acquisition of Capital Assets 632 215 847

Total Components of the Budget Outlays That Are Not Part 

of Net Operating Cost $ 632 $ 215 $ 847 

Miscellaneous Items

Distributed Offsetting Receipts (1,254) (317,485) (318,739)

Non-Entity Activity - - -

Appropriated Receipts for Trust/Special Funds 1,254 317,485 318,739

Total Other Reconciling Items $ - $ - $ -

Total Net Outlays (Calculated Total) $ 57,784 $ (41,970) $ 15,814

Budgetary Agency Outlays, Net

Agency Outlays, Net $ 15,814

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 104

Financial Section
XOther Information

106 AUDITS AND EVALUATIONS

108 MANAGEMENT REPORT ON FINAL ACTIONS

110 OFFICE OF INSPECTOR GENERAL MANAGEMENT AND 

PERFORMANCE CHALLENGES

124 SUMMARY OF FINANCIAL STATEMENTS AUDIT AND MANAGEMENT 

ASSURANCES

125 PAYMENT INTEGRITY

126 CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

105| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information
X AUDITS AND EVALUATIONS

Every year, the FHFA receives and responds to numerous performance audits, assessments, and evaluations concerning the 

effectiveness and efficiency of projects, policies, and programs. The FHFA OIG conducts performance audits, compliance 

reviews, and evaluations of Agency systems and programs. The GAO conducts an annual financial statements audit of FHFA 

and periodically conducts other assessments or reviews of the Agency. OIG also issues an annual assessment of FHFA’s 

Management and Performance Challenges, presented on pages 110-123.

Table 20: Audits and Evaluations

FHFA OIG REPORTS

1 Deficiencies in FHFA’s Travel Program From April 1, 2022, Through March 31, 2023 

Management Advisory OIG-2023-001 2023-09-28

2 Risk Assessment of FHFA’s Charge Card Programs April 1, 2022 – March 31, 2023 OIG-RA-2023-001 2023-09-28

3 DBR Conducted Effective Oversight of FHLBanks’ Employee Expense Reimbursement 

Processes But Lacked Documented Examination Guidance AUD-2023-009 2023-09-28

4 FHFA Effectively Blocked Phishing Emails, But Requires Improvement in Managing 

Vulnerabilities on Its Public Websites AUD-2023-008 2023-09-27

5 DBR Adapted the Scope of Its Federal Home Loan Bank Supervisory Activities in 2023 in 

Response to Market Disruptions EVL-2023-004 2023-09-21

6 People Risk at FHFA’s Regulated Entities WPR-2023-003 2023-09-21

7 FHFA Performed Active Oversight and Made Efforts to Ensure Fannie Mae’s Compliance with 

Its Directions to Improve Audit Committee Operations COM-2023-007 2023-09-06

8 DER Implemented Controls to Ensure that the Enterprises and CSS Remediated Adverse 

Examination Findings Within FHFA Determined Reasonable Timeframes AUD-2023-007 2023-09-06

9 FHFA Did Not Effectively Implement Records Management Training Controls for Onboarding 

and Offboarding Personnel COM-2023-006 2023-08-23

10 Audit of the Federal Housing Finance Agency’s Privacy Program Fiscal Year 2023 AUD-2023-006 2023-08-23

11 FHFA Has Initiatives to Advance Equity and Support for Underserved Communities, but 

Tracking and Documentation Need Improvement AUD-2023-005 2023-07-26

12 Audit of the Federal Housing Finance Agency’s Information Security Programs and Practices 

Fiscal Year 2023 Audit AUD-2023-004 2023-07-26

13 FHFA Did Not Effectively Implement Controls Intended to Ensure the Integrity of Its Employee 

Transportation Benefits Program COM-2023-005 2023-06-21

14 FHFA Completed Examination Work Sufficient to Determine Whether the Enterprises’ Credit 

Default Models Met Supervisory Expectations EVL-2023-003 2023-04-19

15 An Overview of the Federal Home Loan Bank System WPR-2023-002 2023-03-31

16

FHFA Followed Its Guidance When Making Conservatorship Decisions But Needs to 

Improve Retention of Decision Documentation and Update the Conservatorship Decision 

Policy and Procedures

AUD-2023-003 2023-03-29

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 106

Other Information
Table 20: Audits and Evaluations

17 DBR Adhered to Its Work Program Minimum Frequency Guidelines for Annual Examinations COM-2023-004 2023-03-22

18 FHFA Examinations of CSS Include Review of the Board of Managers but Supervision Has a 

Key Person Dependency and Outdated Guidance EVL-2023-002 2023-03-20

19 FHFA Did Not Fully Implement Select Security Controls Over One of Its Cloud Systems as 

Required by NIST and FHFA Standards and Guidelines AUD-2023-002 2023-03-08

20

The Division of Federal Home Loan Bank Regulation Followed Its Guidance in Performing 

Annual Examinations of Each Federal Home Loan Bank’s Affordable Housing Program but the 

AHP Examination Planning Processes Require Improvement

AUD-2023-001 2023-02-09

21 An Overview of Common Securitization Solutions, LLC WPR-2023-001 2023-02-09

22 FHFA Secured Electronic Media It Designated for Disposal, But Did Not Inventory Items 

Consistently or Reconcile Inventory Discrepancies COM-2023-003 2023-02-02

23 FHFA Adhered to Its Corrective Actions for Hiring Pathways Interns COM-2023-002 2023-01-26

24 The Company That Issues and Administers the Enterprises’ Mortgage-Backed Securities 

Adhered to FHFA’s Cybersecurity Incident Reporting Standards COM-2023-001 2023-01-05

25 FHFA Could Further Combat Appraisal Bias by Ensuring That Complaints Are Filed with State 

Authorities and Ensuring the Enterprises Use Appraisals That Comply with Federal Law EVL-2023-001 2022-12-20

GAO REPORTS

1 Manufactured Housing: Further HUD Action is Needed to Increase Available Loan Products GAO-23-105615 2023-09-26

2 Financial Stability Oversight Council: Assessing Effectiveness Could Enhance Response to 

Systemic Risks GAO-23-105708 2023-09-14

3 Affordable Housing: Improvements Needed in HUD’s Oversight of the 

Housing Trust Fund Program GAO-23-105370 08-08-2023

4 Federal Housing Finance Agency: Enterprise Duty To Serve Underserved Markets--Colonia 

Census Tract Amendments B-335244 2023-05-04

5 Management Report: Federal Housing Finance Agency Should Improve Controls over 

Personnel and Payroll Information GAO-23-106487 2023-04-19

6 Financial Audit: FY 2022 and FY 2021 Consolidated Financial Statements of the 

U .S . Government GAO-23-105837 2023-02-16

7 Federal Housing Finance Agency: Prior Approval for Enterprise Products B-334889 2023-01-06

8 Federal Housing Finance Agency: 2023–2024 Multifamily Enterprise Housing Goals B-334887 2023-01-06

9 Financial Audit: Federal Housing Finance Agency’s FY 2022 and FY 2021 Financial Statements GAO-23-105910 2022-11-15

107| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information
X MANAGEMENT REPORT ON FINAL ACTIONS

As required under amended Section 5 of the Inspector General Act of 1978, FHFA must report information on final 

action taken by management on certain audit reports. Tables 21, 22, and 23 provide information on final action taken by 

management on audit reports for Fiscal Year (FY) 2023.

Table 21: Management Report on Final Action on Audits with Disallowed Costs for FY 2023

Audit Report Number of Reports Disallowed Costs

A Management decisions—final action not taken at beginning of period 0 $0

B Management decisions made during the period 0 $0

C Total reports pending final action during the period (A and B) 0 $0

D Final action taken during the period: 0 $0

1. Recoveries: 0 $0

(a) Collections and offsets 0 $0

(b) Other 0 $0

2. Write-offs 0 $0

3. Total of 1(a), 1(b), and 2 0 $0

E Audit reports needing final action at the end of the period 0 $0

Table 22: Management Report on Final Action on Audits with 

Recommendations to Put Funds to Better Use for FY 2023

Audit Report Number of Reports Funds Put to Better Use

A Management decisions—final action not taken at beginning of period 0 $0

B Management decisions made during the period 0 $0

C Total reports pending final action during the period (A and B) 0 $0

D Final action taken during the period: 0 $0

1. Value of recommendations implemented (completed) 0 $0

2. Value of recommendations that management concluded should not or 

could not be implemented or completed

0 $0

3. Total of 1 and 2 0 $0

E Audit reports needing final action at the end of the period 0 $0

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 108

Other Information
Table 23: Audit Reports Without Final Actions but with Management Decisions Over One Year Old 

for FY 2023

Report No . and Issue Date Recommendation Management Action

FHFA Could Enhance the Efficiency of the Agency’s Oversight of Enterprise 

Executive Compensation by Ensuring Sufficient Human Capital Resources and 

Updating Procedures (EVL-2022-003), September 27, 2022

Recommendation 3

Actions are expected 

to be completed by 

November 17, 2023

109| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information
X OFFICE OF INSPECTOR GENERAL MANAGEMENT 

AND PERFORMANCE CHALLENGES

1

1

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 110

Other Information

October 6, 2023 

TO: Sandra L. Thompson, Director, FHFA 

FROM: Brian M. Tomney, Inspector General /s/

SUBJECT: Fiscal Year 2024 Management and Performance Challenges

This memorandum, issued pursuant to the Reports Consolidation Act of 2000 (P.L. 106-531), 

provides OIG’s identification of the most serious management and performance challenges 

facing the Agency.

The Housing and Economic Recovery Act of 2008 created FHFA, which is responsible for the 

effective supervision, regulation, and housing mission oversight of Fannie Mae and Freddie Mac, 

collectively the Enterprises, and the 11 Federal Home Loan Banks (FHLBanks) (collectively, the 

regulated entities). In addition, since September 2008, FHFA has served as the Enterprises’ 

conservator. 

This memorandum is based on OIG work and a review of public and non-public FHFA and 

regulated entity sources, along with other public information. For fiscal year 2024, we have 

identified the following management and performance challenges facing FHFA:

• Continue Strengthening Supervision of the Regulated Entities 

• Continue Stewardship of the Enterprise Conservatorships 

• Respond to Market Volatility and Change 

• Enhance Oversight of Cybersecurity at the Regulated Entities and Ensure an Effective 

Information Security Program at FHFA

• Ensure Oversight of Counterparty Risk, Third-party Risk, and Fourth-party Risk at the 

Regulated Entities

• Strengthen Oversight of the Regulated Entities’ Model Risk 

The Office of Finance and Common Securitization Solutions, LLC (CSS) are not separate “regulated entities” 

as the term is defined by statute (see 12 U.S.C. 4502(20)). Rather, the Office of Finance is a part of the FHLBank 

System, and CSS is an affiliate of the Enterprises. However, for convenience, references to the “regulated entities” 

in this document should be read to also apply to the Office of Finance and CSS, unless otherwise noted.
2 

• Oversee People Risk at the Regulated Entities and Enhance FHFA’s Human Capital 

Management

• Ensure Resiliency at the Regulated Entities and at FHFA

Many of these challenges reiterate themes we identified in prior years. However, continued 

inclusion of a challenge area does not necessarily indicate a lack of progress by FHFA; rather, 

it indicates that a particular challenge persists. In some instances, for example, a challenge is

simply inherent to the Agency’s and the regulated entities’ missions. This year, in addition to 

highlighting the persistent challenges facing FHFA, we highlight a new challenge: FHFA’s

response to market volatility and change. 

We perform our mission primarily through audits, evaluations, compliance reviews, and 

investigative work. We use a risk-based approach, focusing our FHFA-OIG FY 2024 Annual 

Plan on the most significant risks facing the Agency. Specific information on our ongoing and 

anticipated oversight work is available in that plan. 

Challenge: Continue Strengthening Supervision of the Regulated Entities

The regulated entities serve a vital function by providing liquidity and stability to the secondary 

mortgage market, and they manage trillions in assets. FHFA is charged with supervising them 

and ensuring they operate in a safe and sound manner. For these reasons, we have previously 

identified supervision as a longstanding and inherent challenge for FHFA.

In our prior work over numerous years, including in the FY2022 management and performance 

challenges memorandum, we identified several recurring challenges for the supervision program. 

For example, personnel challenges, both in terms of maintaining stable leadership and a 

sufficient cadre of skilled examiners, have been persistent. The Agency also faces continued 

challenges in supervising the Enterprises to ensure they meet regulatory capital requirements 

and in managing emerging risks associated with technology (addressed more fully in the 

cybersecurity and information technology challenge, below). 

Our recent work has recognized FHFA’s progress in strengthening its supervision program. 

For example, we saw that the Division of Enterprise Regulation (DER) implemented controls to 

ensure that the Enterprises and CSS remediate adverse examination findings within reasonable 

timeframes (as determined by FHFA). We also found that the Division of Federal Home Loan 

Bank Regulation (DBR) adhered to its work program minimum frequency guidelines for annual 

examinations and followed its guidance in performing annual examinations of each FHLBank’s 

Affordable Housing Program (AHP). 

We also identified areas for improvement. For example, we found certain areas of DBR’s AHP 

examination planning process that, if not addressed, could increase the risk that issues with the 

FHLBanks’ administration of their AHPs would not be identified and corrected in a timely 

manner. First, DBR did not plan or perform an in-depth review of a significant area within one 

of the higher risk AHP programs for more than 10 years. DBR officials told us that this in-depth 

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review was delayed awaiting the amendment of an AHP regulation, which took longer than 

expected, and was not fully applied until 2021. Further, we determined that DBR had not 

performed an AHP workforce planning analysis since 2013 to assess current and future 

examination needs and determine the staffing levels required to provide adequate examination 

coverage. This was because DBR’s planning process for AHP examinations does not require 

periodic workforce planning. Finally, DBR’s publicly available AHP examination module 

is out of date. Internal updates to the module have not been subject to the level of structure, 

collaboration, and review required by FHFA policy due to a lack of needed collaboration 

between DBR offices. We also identified that the CSS examination module had not been 

updated since it was issued in 2016 and it is materially inaccurate. Instead of using that module 

for examination planning, the examiner-in-charge relied on another module focused on the 

Enterprises that made no mention of CSS specifically. FHFA agreed with our recommendations 

on these issues and is in the process of addressing these areas in need of improvement.

As noted above, maintaining consistent leadership is a persistent challenge in FHFA’s 

supervisory role, and FHFA continues to experience leadership changes within its supervisory 

programs. Additionally, DER has not yet fully addressed our critical recommendations 

regarding workforce planning. Although FHFA has provided us with a high-level description 

of identified gaps and an action plan, the Agency has not provided the supporting analysis for 

the identified gaps or project plans or milestones for the workforce action plan. The Agency 

committed to develop project plans for a multi-year workforce strategy, and full implementation 

of such a strategy remains an important component of strengthening the supervision program. 

Strong supervision is especially important for the Enterprises because they have a combined 

adjusted total risk-based capital shortfall of $421 billion. FHFA must supervise them to ensure 

that they work to meet regulatory capital requirements. 

While FHFA has made progress in enhancing its supervision program, the longstanding nature 

and scope of the Agency’s supervision challenge necessitates continued attention to these issues.

Select OIG Reports Issued During FY2023 on Supervision Matters: 

DER Implemented Controls to Ensure that the Enterprises and CSS Remediated Adverse 

Examination Findings Within FHFA Determined Reasonable Timeframes, AUD-2023-007, 

September 6, 2023 

FHFA Completed Examination Work Sufficient to Determine Whether the Enterprises’ Credit 

Default Models Met Supervisory Expectations, EVL-2023-003, April 19, 2023 

DBR Adhered to Its Work Program Minimum Frequency Guidelines for Annual Examinations, 

COM-2023-004, March 22, 2023 

FHFA Examinations of CSS Include Review of the Board of Managers but Supervision Has a 

Key Person Dependency and Outdated Guidance, EVL-2023-002, March 20, 2023 

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The Division of Federal Home Loan Bank Regulation Followed Its Guidance in Performing 

Annual Examinations of Each Federal Home Loan Bank’s Affordable Housing Program but the 

AHP Examination Planning Processes Require Improvement, AUD-2023-001, February 9, 2023 

Challenge: Continue Stewardship of the Enterprise Conservatorships

As conservator, FHFA is vested with express authority under the Housing and Economic 

Recovery Act of 2008 to operate the Enterprises, which includes exercising broad authority over 

trillions of dollars in assets and billions of dollars in annual revenue. In this role, FHFA makes 

business and policy decisions that can influence the entire mortgage finance industry. Given the 

taxpayers’ sizeable investment in the Enterprises, the conservatorships’ unknown duration, the 

Enterprises’ critical role in the secondary mortgage market, and the necessity to sustain their own 

future profitability, OIG determined that FHFA’s administration of the conservatorships remains 

a critical challenge.

In its 2022 Scorecard, FHFA defined its first conservatorship goal as promoting sustainable 

and equitable access to affordable housing. In June 2022, the Enterprises released Equitable 

Housing Finance Plans for 2022-2024. According to FHFA, the plans are designed to promote 

the Enterprises’ safety and soundness and to foster housing finance markets that provide 

equitable access to affordable and sustainable housing. They are also intended to identify and 

address barriers experienced by renters, aspiring homeowners, and current homeowners in 

underserved communities. While the activities are focused on addressing barriers and using 

technology to identify ways to responsibly serve more borrowers, FHFA must balance meeting 

program goals while simultaneously ensuring the Enterprises’ safety and soundness. 

To further this conservatorship goal, FHFA has directed the Enterprises to continue work related 

to the appraisal policy and process modernization initiative. That work includes engaging with 

industry stakeholders, such as appraisers, software providers, insurance companies, appraisal 

management companies, inspection companies, mortgage insurers, and industry trade groups. 

Considering input from multiple stakeholders and technologies can support FHFA in meeting its 

goals of improving data quality, reducing potential appraisal bias, and supporting effective risk 

management and process efficiency, yet accounting for the various viewpoints and information 

can also present challenges. 

Another challenge for FHFA is providing sufficient oversight of the Enterprises’ use of 

appraisals to ensure those appraisals do not improperly consider bases that are prohibited by 

federal fair lending law. FHFA’s independent review of a sample of appraisal reports concluded 

that valuation bias persists in housing finance in America. In its review, the Agency identified 

several overt references to race, color, and other prohibited bases in appraisals. During our 

evaluation, FHFA told us they made 17 referrals to the U.S. Department of Housing and Urban 

Development and made appraisal information available to the U.S. Department of Justice. The 

Agency also told us it shared information with the Consumer Financial Protection Bureau. 

Although the Agency had not taken the additional step of filing complaints with the state 

licensing authorities responsible for investigating complaints against appraisers, in April 2023 

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it required the Enterprises to submit complaints to those authorities. Working to identify 

and address appraisal bias will continue to be an important challenge facing FHFA and the 

Enterprises. 

Other recent OIG work indicates that while FHFA has undertaken initiatives to advance equity 

and support for underserved communities, its documentation processes could be improved. In 

our review, FHFA identified several relevant initiatives, and our review concluded that the four 

initiatives we studied generally complied with their stated purposes. However, we identified 

weaknesses in the Office of Fair Lending’s fair lending assessment tracking and documentation 

processes and made recommendations for improvements. 

We identified recommended improvements to documentation practices in other areas as well. 

For example, a recent audit concluded that while FHFA made conservatorship decisions in 

accordance with its conservatorship decision policy and procedures and performed 

conservatorship monitoring and surveillance, in some instances FHFA’s document management 

and retention practices adversely impacted FHFA’s ability to demonstrate its rationale for certain 

decisions. We also found that FHFA’s current policies and procedures increase the risk that 

conservatorship decision activity would not be conducted in accordance with FHFA 

management’s intentions. 

Select OIG Reports Issued During FY2023 on Conservatorship Matters:

FHFA Performed Active Oversight and Made Efforts to Ensure Fannie Mae’s Compliance with 

Its Directions to Improve Audit Committee Operations, COM-2023-007, September 6, 2023 

FHFA Has Initiatives to Advance Equity and Support for Underserved Communities, but 

Tracking and Documentation Need Improvement, AUD-2023-005, July 26, 2023 

FHFA Followed Its Guidance When Making Conservatorship Decisions But Needs to Improve 

Retention of Decision Documentation and Update the Conservatorship Decision Policy and 

Procedures, AUD-2023-003, March 29, 2023 

FHFA Could Further Combat Appraisal Bias by Ensuring That Complaints Are Filed with State 

Authorities and Ensuring the Enterprises Use Appraisals That Comply with Federal Law, 

EVL-2023-001, December 20, 2022 

Challenge: Respond to Market Volatility and Change

Over the past few years, the housing market has shifted significantly. High interest rates, limited 

home supply that continues to keep prices elevated, and high inflation pose challenges to the 

housing market. Considering this volatility, FHFA must continue to provide leadership in 

responding to today’s market and preparing for the effects of future changes on the regulated 

entities.

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High interest rates directly influence the regulated entities’ mortgage acquisitions. The 

Enterprises’ financial performance, as measured by earnings and mortgage purchase activities 

in 2022, was down year-over-year. Moreover, rising interest rates significantly altered the 

Enterprises’ mortgage acquisitions from lower-risk refinance loans to purchase loans whose 

attributes, such as generally higher loan-to-value ratios and lower credit scores, are associated 

with higher credit risk. Temporary interest rate buydowns and other lender strategies to assist 

borrowers with purchasing homes in this high interest rate environment require the regulated 

entities to monitor those loans’ characteristics to accurately assess risk. 

Market changes – in addition to providing their own challenges – also make some of the other 

challenges identified in this memorandum more difficult. As just one example, both FHLBanks 

and the Enterprises rely on models to conduct their business and to make necessary decisions. 

When there are substantial changes in the market, existing models may rely on data generated in 

other economic environments, meaning they may not currently perform as expected. In this way, 

market volatility also contributes to challenges related to model risk.

Changes in the nation’s economic situation can also have direct effects on the regulated entities. 

For example, when a major credit rating agency downgraded the nation’s credit rating, it 

triggered a downgrade in certain Enterprise credit ratings. 

FHFA must continue to adapt its oversight of the regulated entities to respond to market 

volatility and change. In recent work, we found that the Agency had done so; examiners 

adjusted their FHLBank examination planning in response to the heightened risk environment 

resulting from the March 2023 market disruption. In other work, we saw that the Enterprises 

offered forbearance in response to many homeowners’ difficulties in paying their mortgages 

during the COVID-19 pandemic. We found that during a time of fluid circumstances and 

evolving data, the Agency measured, monitored, and identified ways to mitigate the Enterprises’ 

forbearance-related costs.

FHFA must continue to ensure the regulated entities are well positioned to respond to market 

volatility and change. It is critical that the Agency, too, adjusts its oversight to address the effect 

of market factors on the regulated entities.

Select OIG Report Issued During FY2023 Related to Responding to Market Volatility and Change:

DBR Adapted the Scope of Its Federal Home Loan Bank Supervisory Activities in 2023 in 

Response to Market Disruptions, EVL-2023-004, September 21, 2023 

Challenge: Enhance Oversight of Cybersecurity at the Regulated Entities and Ensure an 

Effective Information Security Program at FHFA

FHFA’s regulated entities comprise central components of the U.S. financial system and 

electronically connect with other large financial institutions. As part of their business processes, 

they receive, store, and transmit highly sensitive private information about borrowers and 

businesses, including financial data and personally identifiable information. Protecting this 

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information is critically important and reflects an ongoing challenge to FHFA and the regulated 

entities. Unfortunately, but perhaps not unexpectedly, both the Enterprises and the FHLBanks 

have been the targets of cyberattacks.

The threat landscape in this area is ever-changing, requiring constant vigilance and monitoring. 

FHFA has engaged in oversight of cybersecurity at the regulated entities and assessed that 

cybersecurity continues to be a top operational risk for the Enterprises and CSS. Similarly, the 

Agency assessed elevated risk at the FHLBanks because of ongoing information technology 

initiatives at many FHLBanks, and examiners identified areas that exhibited or could exhibit 

unacceptable operational risk in information security management. 

FHFA’s own assessment of cybersecurity risk is underscored by a recent report from the 

Financial Stability Oversight Council. It reported that a destabilizing cybersecurity incident 

could potentially threaten the stability of the U.S. financial system by disrupting a key financial 

service or utility, causing a loss of confidence among a broad set of customers or market 

participants, or compromising the integrity of critical data.2

 Considering the regulated entities’ 

footprint and role in the financial markets, it is clear that managing this risk is critical for the 

regulated entities and important for FHFA to oversee. 

Because FHFA’s management of these cybersecurity-related challenges remains important, 

we regularly assess how FHFA oversees cybersecurity risk at the regulated entities. Previously, 

in a 2019 evaluation, we found that DER did not collect and review consistent cybersecurity 

information necessary to oversee risks to the Enterprises. Consequently, FHFA lacked useful 

data that could help it oversee the Enterprises’ controls against cyberattacks and associated risks. 

Subsequently, the Agency issued an advisory bulletin regarding reporting and notification to 

FHFA of cybersecurity incidents. Recent reviews demonstrate that FHFA and the Enterprises 

have made progress in this area, finding that the Enterprises generally adhered to the reporting 

format and timeliness standards and CSS adhered to the standard for which it had reportable 

information. 

In addition to FHFA’s oversight of the regulated entities in this area, it must also ensure the 

effectiveness of its own information security program. As conservator of and supervisor for 

the Enterprises, and supervisor for the FHLBanks, FHFA collects and manages sensitive 

information, including personally identifiable information, which it must safeguard from 

unauthorized access or disclosure. An independent public accounting firm under contract 

with our office audited FHFA’s 2023 privacy program and concluded that FHFA had generally 

implemented effective privacy and data protection policies and procedures in accordance with 

law, regulation, and policy. However, the Agency did not fully achieve implementation of 

certain privacy requirements.

In addition to the privacy audit, we perform an annual audit pursuant to the Federal Information 

Security Modernization Act of 2014 (FISMA) to ensure FHFA’s compliance with information 

2 See Financial Stability Oversight Council’s 2022 Annual Report. The FHFA Director is a member of the Council 

and voted in favor of the 2022 Annual Report.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 116

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security program standards and help FHFA strengthen its network protections. For FY 2023, an 

independent public accounting firm under contract with OIG determined that collectively the 

Agency’s information security programs and practices were effective and complied with FISMA 

and related information security policies and procedures, standards, and guidelines. Although 

the Agency implemented effective information security programs and practices, a subset of 

selected controls was not fully effective.

Select OIG Reports Issued During FY2023 on Oversight of the Regulated Entities’ Cybersecurity 

and FHFA’s Internal Controls Over Security:

Audit of the Federal Housing Finance Agency’s Privacy Program Fiscal Year 2023, 

AUD-2023-006, August 23, 2023 

Audit of the Federal Housing Finance Agency’s Information Security Programs and Practices 

Fiscal Year 2023, AUD-2023-004, July 26, 2023 

FHFA Did Not Fully Implement Select Security Controls Over One of Its Cloud Systems as 

Required by NIST and FHFA Standards and Guidelines, AUD-2023-002, March 8, 2023 

The Company That Issues and Administers the Enterprises’ Mortgage-Backed Securities 

Adhered to FHFA’s Cybersecurity Incident Reporting Standards, COM-2023-001, January 5, 

2023 

Challenge: Ensure Oversight of Counterparty Risk, Third-party Risk, and Fourth-party Risk at 

the Regulated Entities

The regulated entities rely on counterparties for business-critical matters. The Enterprises’ 

counterparties include entities that carry out core functions, such as sellers, servicers, mortgage 

insurers, custodial depository institutions, and reinsurers. The FHLBanks’ primary exposure 

to institutional counterparty credit risk stems from unsecured money market transactions with 

domestic and foreign counterparties, derivative counterparties, and mortgage servicers that 

service loans the FHLBanks purchased from members or housing associates. 

This broad reliance on counterparties requires the regulated entities to identify and mitigate 

related risks. Counterparty credit risk is the risk that a counterparty either defaults on amounts 

owed or deteriorates in creditworthiness before a transaction settles, or both, and such risk can 

increase when a regulated entity engages with a limited number of counterparties. FHFA 

recognizes that counterparty credit risk is significant. Recent economic changes have increased 

stress on many counterparties, particularly nonbank seller/servicers, which do not necessarily 

have the same financial strength or operational capacity and regulatory oversight as traditional 

banks. In addition, reliance on nonbanks is increasing. According to FHFA, the Enterprises 

continue to monitor counterparty risks, particularly in light of declining earnings among many of 

their sellers and servicers throughout 2022. Nevertheless, FHFA continues to have supervisory 

concerns, and oversight of counterparty risk remains a challenge during this reporting cycle. 

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The regulated entities also rely on third parties to provide numerous products and services. For 

example, third parties provide critical operational support and information technology services. 

As with counterparties, this third-party reliance comes with risk, namely that the third party will 

not deliver the product or service as expected. The regulated entities’ third parties rely, in turn, 

on their own third parties; these “third parties’ third parties” are considered to be fourth parties 

to the regulated entities. As we discussed in a recent white paper, managing fourth-party risk 

can be challenging for a regulated entity due to limited direct oversight of the fourth parties. 

Typically, the regulated entities do not have contracts with their fourth parties. Instead, the third 

parties have the direct contractual relationship with the fourth parties. 

Third-party relationships can pose risks to other areas. For example, two recent audits revealed 

information risk heightened by third-party related matters. In one, we found that FHFA did not 

fully implement select security controls over its third-party cloud computing system as required 

by National Institute of Standards and Technology and FHFA standards and guidelines. In 

another, we found that FHFA did not configure all its publicly accessible websites and web 

services with a secured connection, as required, because they were managed by a third-party 

vendor and not under the Agency’s control. In public reporting FHFA indicates that, in addition 

to posing information security risks, third-party relationships can also pose risks related to 

resiliency and safety and soundness issues. 

The regulated entities are exposed to fraud risk through the activities of third parties, including 

borrowers, loan originators, mortgage brokers, sellers, servicers, attorneys, appraisers, and 

others. OIG’s publicly reportable criminal investigations include alleged fraud by different 

types of counterparties, reinforcing the need to ensure strong controls to prevent fraud. 

Recently, FHFA has taken action in response to our prior counterparty-related work. For 

instance, FHFA made progress in addressing our recommendations on supervisory protocols for 

sharing critical information, such as counterparty performance issues.3

 The Agency issued new 

guidance and trained the relevant employees on how to appropriately share counterparty issues 

that affect the Enterprises.4

 As another example, we previously reported on challenges with 

FHFA’s management of its suspended counterparty program, and FHFA has proposed amending 

its regulation.5

 Specifically, the Agency proposed to expand its categories of covered 

misconduct that serve as a basis for suspension under the program and eliminate the requirement 

that any final suspension order based on an administrative sanction be preceded by a proposed 

suspension order. The final rule has not yet been issued. 

Ultimately, though, the Agency is challenged to oversee the regulated entities’ counterparty and 

third-party risk management, because its oversight ability is limited. Unlike most other federal 

3 An examination team may identify supervisory concerns through examination activity or from information 

received from other internal [FHFA] or external sources relative to the performance or condition of a counterparty 

that transacts business with both Enterprises.

4 The audit report identified that DBR already followed information-sharing practices.

5 FHFA, Suspended Counterparty Program, 88 FR 47077 (July 21, 2023). 

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safety and soundness supervisors, FHFA lacks examination and enforcement authority for the 

counterparties and third parties.

Select FY2023 Results from OIG Criminal Investigations on Counterparty, Third-Party, and 

Fourth-Party Matters: 

Nomura Securities International Agrees to Pay $35 Million Penalty Stemming from Its 

Participation in Securities Fraud Scheme, Press Release, August 22, 2023 

UBS Agrees to Pay $1.435 Billion for Fraud in the Sale of Residential Mortgage-Backed 

Securities, Press Release, August 14, 2023 

Pinellas County Man Sentenced for Wire and Bank Fraud Offenses, Press Release, July 17, 2023 

Osceola County Mortgage Loan Officer Charged with Bank Fraud and Aggravated Identity 

Theft, Press Release, April 12, 2023 

Challenge: Strengthen Oversight of the Regulated Entities’ Model Risk

Models explain relationships by processing data into estimates. The Enterprises rely heavily on 

models to measure and monitor risk exposures and to inform and support business decisions. For 

example, they use models extensively for collateral valuation, home price forecasting, mortgage 

cash flow analysis, financial reporting, and stress testing, among other uses. The FHLBanks also 

use models in making business decisions and for financial reporting. They each make significant 

use of models to manage, measure, and monitor risks, as well as to determine the fair value of 

financial instruments when independent price quotations are not available. 

The use of models naturally injects model risk, which FHFA defines as “the risk of loss resulting 

from model errors or the incorrect use or application of model output.” FHFA has observed that 

although models are often essential, reliance on inaccurate or inappropriate models may lead to 

poor or costly decisions. For example, a model could be based on inappropriate methodology 

or data, or it might not receive necessary updates; users may lack understanding of model 

limitations; or adjustments, known as “overlays,” could be inappropriately applied to model 

results. Further, many of the regulated entities’ models interconnect, so a problem or error in 

one model can spread to other models. Because of the entities’ heavy reliance on models and 

the potential results if they are inaccurate, they present a challenge for which FHFA oversight 

and management is crucial.

The Agency has identified model concerns at the regulated entities. FHFA examiners found that 

both Enterprises need to strengthen controls related to models. Examiners similarly identified 

areas for improvement in risk management practices at the FHLBanks, including related to 

modeling. Without adequate controls over complex models, errors might occur. For example, 

in 2023 Fannie Mae had to restate its required financial stress test results for multiple years after 

discovering modeling errors. 

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We recently assessed whether DER completed sufficient examination work to conclude whether 

certain Enterprise credit default models met FHFA’s supervisory expectations. We found that 

FHFA examiners had completed work sufficient to make such a determination. DER identified 

practices that prompted it to issue adverse examination findings to Enterprise management, but 

it did not conclude that the criticized practices rose to the level of unsafe or unsound practices. 

The Agency faces several challenges in adequately overseeing model risk at the regulated 

entities. Unprecedented events, such as the COVID-19 pandemic and changing economic 

conditions, challenge existing model assumptions and model performance. For instance, FHFA 

considers the Enterprises’ model risk as elevated in part because many models rely on data 

generated in other economic environments. 

In addition, model technology continues to evolve and increase in complexity. Advances in 

artificial intelligence and machine learning continue to expand how the Agency must oversee the 

regulated entities’ models, including how such technology avoids unfair outcomes. Moreover, 

the Agency stated that it formerly considered the FHLBanks and the Office of Finance as “less 

complex” entities based on their use of models; however, FHFA notes that the FHLBanks’ 

modeling activities have become more complex and pervasive in their operations. FHFA has 

recently taken steps to enhance its model-related guidance by releasing supplemental guidance 

to its model risk management guidance advisory bulletin. It is intended to address gaps in the 

advisory bulletin arising from changes in technology and model complexity. 

To ensure it can supervise the regulated entities’ high-risk models, FHFA must have a sufficient 

examination corps with the relevant modeling skills. The Agency’s execution of our longstanding recommendation to implement a workforce plan that addresses the examiner capacity 

and competencies required to meet supervisory needs will further its efforts to ensure the 

regulated entities operate their models safely and soundly. 

Select OIG Report Issued During FY2023 on FHFA Oversight of the Regulated Entities’ Model 

Risk: 

FHFA Completed Examination Work Sufficient to Determine Whether the Enterprises’ Credit 

Default Models Met Supervisory Expectations, EVL-2023-003, April 19, 2023 

Challenge: Oversee People Risk at the Regulated Entities and Enhance FHFA’s Human Capital 

Management

To accomplish their missions, FHFA and the regulated entities must maintain a skilled 

workforce. People risk, or human capital risk, can occur when an organization is unable to 

attract, develop, and retain a highly qualified, diverse workforce with specialized skills. This 

risk can jeopardize the institution’s ability to meet its business objectives. People risk manifests 

across a range of human capital related issues, such as an organization not planning for the effect 

of retirements or failing to address pervasive critical skill gaps.

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FHFA’s annual examination and rating for each regulated entity covers operational risk, which 

includes people risk. Examiners have noted concerns with people risk and flagged it as a 

heightened risk area with challenges.

Certain factors affecting human capital are outside of the regulated entities’ direct control. 

Attrition at the regulated entities is largely correlated to general labor market conditions, and 

the regulated entities experienced high turnover during the pandemic’s tight labor market. In 

addition, increasing competition from financial services and technology companies for 

information technology and modeling skills increased turnover, especially at the Enterprises. 

FHFA must ensure the regulated entities navigate these external forces while maintaining the 

human capital required to achieve their missions. 

In addition to ensuring strong oversight of the regulated entities’ people risk, FHFA must 

strengthen its own human capital management. We previously found that FHFA had multiple 

deficiencies in its hiring practices and its housing finance examiner commissioning program. 

Concerning its hiring, FHFA used incomplete and inaccurate monthly staffing plans and lacked 

sufficient policies, procedures, and training, among other issues. The Agency has addressed 

some aspects of our recommendations related to its hiring process, especially for mission critical 

occupations, such as examiners. For instance, FHFA documented and streamlined its hiring 

process, and it also implemented a tracking mechanism to report accurately on hiring timelines. 

With respect to the housing finance examiner commissioning program, the Agency issued a 

new internal guidance to identify training opportunities and monitor examiners’ progress in 

completing the program. 

Nevertheless, we have long-standing recommendations for the Agency to improve its human 

capital management. FHFA has not resolved its workforce planning deficiencies, particularly 

as they relate to its examination function. FHFA has initiated reviews into its examination 

resources and competencies; however, the Agency has not fully addressed identified gaps so it 

can implement a systematic workforce plan. 

Select OIG Reports Issued During FY2023 on FHFA’s Oversight of the Regulated Entities’ People 

Risk and FHFA’s Human Capital Management: 

People Risk at FHFA’s Regulated Entities, WPR-2023-003, September 21, 2023 

FHFA Examinations of CSS Include Review of the Board of Managers but Supervision Has a 

Key Person Dependency and Outdated Guidance, EVL-2023-002, March 20, 2023 

FHFA Adhered to Its Corrective Actions for Hiring Pathways Interns, COM-2023-002, 

January 26, 2023 

Challenge: Ensure Resiliency at the Regulated Entities and at FHFA

As noted, the regulated entities perform important roles in providing a stable source of funding 

for housing finance. FHFA recognizes that “[u]ncontrolled events, such as natural disasters, 

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pandemics, and cyberattacks, can threaten the regulated entities’ ability to perform mission 

critical operations, such as providing liquidity and access to credit in the mortgage market.” As 

FHFA officials have explained, should the Enterprises be unable to play their role, there could be 

a huge immediate impact on the mortgage finance industry and mortgage liquidity gridlock, with 

disruptions having widespread impacts on the financial services industry, homeowners, and 

investors. 

FHFA defines business resiliency management to include the ability to minimize the impact 

of disruptions and maintain business operations at predefined levels. It includes the ability 

to withstand and recover from deliberate attacks, accidents, or naturally occurring threats or 

incidents. The regulated entities’ resiliency is particularly vital given their critical mission and 

importance to financial markets.

Resiliency for the regulated entities is complex and multifaceted. They require planned 

responses for disruptions related to people, operations and processes, equipment and facilities, 

and information technology and data across a wide array of hazards and risk scenarios in 

multiple geographic locations. Additionally, their resiliency programs must assess and ensure 

the resiliency of critical third parties because they rely on thousands of third parties, including 

for key components of their business operations. As examples of reliance that must be 

considered, the Enterprises report that a failure in CSS’ information systems could prevent the 

issuance of new mortgage-backed securities (MBS), inhibit payments to investors on existing 

securities, and ultimately adversely affect the value and liquidity of Enterprise MBS. Similarly, 

a failure or interruption of the Office of Finance’s services, due to a system failure or 

cybersecurity incident, could disrupt the FHLBanks’ access to funding. To help prepare the 

Enterprises to respond to such events and ensure the continuity of safe and sound operations, 

FHFA expects that each will have established, and will continue to maintain, a business 

resiliency program. However, FHFA has not always enforced that requirement. In 2021, we 

reported that for nine years, FHFA had not taken timely and decisive supervisory action to bring 

Fannie Mae into compliance with its prudential standard to ensure business resiliency. DER was 

aware that the Enterprise’s deficient practices had not been corrected, but the Agency did not 

make a formal assessment against the relevant standard, instead allowing the Enterprise to set 

its own pace. More recently, examiners have noted progress in this area, while simultaneously 

noting heightened resiliency risks. 

In addition to ensuring resiliency at the regulated entities, FHFA must ensure its own resiliency 

and has taken steps toward that end. For example, we examined contingency planning controls 

for two FHFA systems and found that FHFA developed a contingency plan for one, established 

an alternate storage location, and performed backups at the alternate storage location. However, 

FHFA did not review or test the systems’ contingency plans. Further, FHFA’s higher level 

contingency plan and annual plan testing did not include the second system. FHFA agreed with 

our recommendations and is further enhancing its contingency planning controls. 

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 122

Other Information
14 

Select OIG Reports Issued on FHFA’s Oversight of the Regulated Entities’ Resiliency and FHFA’s 

Resiliency Efforts:

FHFA Did Not Follow All of its Contingency Planning Requirements for the National Mortgage 

Database (NMDB) or its Correspondence Tracking System (CTS), AUD-2022-003, 

December 13, 2021 

For Nine Years, FHFA Has Failed to Take Timely and Decisive Supervisory Action to Bring 

Fannie Mae into Compliance with its Prudential Standard to Ensure Business Resiliency, 

EVL-2021-002, March 22, 2021 

Conclusion

Collectively, the challenges described above are significant and, thus, merit continued attention 

by the Agency. While we have identified areas of progress in several challenging areas, FHFA 

must continue to identify the elements of highest risk and, in turn, effectively supervise the 

regulated entities while they engage in these areas. OIG’s risk-based work will remain grounded 

in these areas, and our audits, evaluations, and other projects will continue to identify findings 

and make appropriate recommendations to FHFA to strengthen its work. 

cc: Edom Aweke, Acting Chief Information Officer

Katrina D. Jones, Chief Operating Officer 

Clinton Jones, General Counsel 

John Major, Acting Associate Director

123| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information
X SUMMARY OF FINANCIAL STATEMENTS AUDIT AND 

MANAGEMENT ASSURANCES

Table 24: Summary of Financial Statements Audit

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning Balance New Resolved Consolidated Ending Balance

Total Material Weaknesses 0 0 0 0 0

Table 25: Summary of Management Assurances

Effectiveness of Internal Control Over Financial Reporting

(Federal Management Financial Integrity Act Paragraph 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

Total Material Weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control Over Operations

(Federal Management Financial Integrity Act Paragraph 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Federal Financial Management System Requirements

(Federal Management Financial Integrity Act Paragraph 4)

Statement of Assurance Systems conform to financial management system requirements

Non-Conformances Beginning Balance New Resolved Consolidated Reassessed Ending Balance

Total Non-Conformances 0 0 0 0 0 0

Compliance with Section 803(a) of the Federal Financial Management Improvement Act

(Federal Management Financial Integrity Act Paragraph 4)

Agency Auditor

1) Federal Financial Management System Requirements No lack of 

compliance noted

No lack of 

compliance noted

2) Applicable Federal Accounting Standards No lack of 

compliance noted

No lack of 

compliance noted

3) USSGL at Transaction Level No lack of 

compliance noted

No lack of 

compliance noted

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 124

Other Information
X PAYMENT INTEGRITY

The Payment Integrity Information Act of 2019 (PIIA), effective March 2, 2020, and its predecessor, the Improper Payments 

Information Act of 2002, as amended requires that agencies: (1) review programs’ and activities’ susceptibility to significant 

improper payments; (2) estimate the amount of annual improper payments for those programs and activities and implement a 

plan to reduce them; and (3) report the estimated amount of improper payments and the progress to reduce them. PIIA defines 

“improper payment” as any payment that should not have been made or that was made in an incorrect amount, including an 

overpayment or underpayment, under a statutory, contractual, administrative, or other legally applicable requirement. The 

act defines “significant improper payments” as the gross annual improper payments exceeding either: a) both 1.5 percent of 

program outlays and $10 million of all program or activity payments made during the fiscal year reported; or b) $100 million 

(regardless of the percentage of total program outlays).

FHFA, which is funded with non-appropriated funds, complies in spirit with the Act, and as part of its sound internal control 

structure, has established controls to detect and prevent improper vendor payments. FHFA contracts with the Bureau of the 

Fiscal Service (Fiscal Service) for accounting services, including payments to vendors. The supplier database is compared to 

the Do Not Pay portal weekly, and the vendor database is compared against the System for Award Management daily. A copy 

of the supplier database is validated against the Do Not Pay portal weekly, and matching results are pulled from the Do Not 

Pay portal weekly. The matching results are researched and acted on by Fiscal Service and FHFA, as appropriate. FHFA has 

not identified any programs or activities susceptible to significant improper payments that meet the Act’s thresholds.

125| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information
X CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

Table 26: Civil Monetary Penalty Adjustment for Inflation

ENFORCEMENT REGULATIONS:

Statutory Authority Penalty Year Enacted Latest Year of 

Adjustment

Current 

Penalty Level

Location for Penalty 

Update Details

Safety and Soundness Act 12

U.S.C. 4636 (b) (1) First Tier 2008 2022 $13,760

Federal Register 87

(December 2022)

80023-80025

Safety and Soundness Act - 12 

U.S.C. 4636 (b) (2) Second Tier 2008 2022 $68,801

Federal Register 87

(December 2022)

80023-80025

Safety and Soundness Act - 12 

U.S.C. 4636 (b) (4)

Third Tier – Entity 

affiliated party and 

regulated entity

2008 2022 $2,752,048

Federal Register 87

(December 2022)

80023-80025

PROGRAM FRAUD CIVIL REMEDIES REGULATION:

Statutory Authority Penalty Year Enacted Latest Year of 

Adjustment

Current 

Penalty Level

Location for Penalty 

Update Details

Program Fraud Civil Remedies Act 

31 U.S.C. 3802 (a) (1)

Maximum penalty 

per false claim 2009 2022 $13,508

Federal Register 87

(December 2022)

80023-80025

Program Fraud Civil Remedies Act 

31 U.S.C. 3802 (a) (2)

Maximum penalty 

per false statement 2009 2022 $13,508

Federal Register 87

(December 2022)

80023-80025

FLOOD INSURANCE REGULATION:

Statutory Authority Penalty Year Enacted Latest Year of 

Adjustment

Current 

Penalty Level

Location for Penalty 

Update Details

National Flood Insurance Act of 1968

42 U.S.C. 4012a (f) (5)

Maximum penalty

per violation 2009 2022 $669

Federal Register 87

(December 2022)

80023-80025

National Flood Insurance Act of 1968

42 U.S.C. 4012a (f) (5)

Maximum total

penalties assessed 

against an Enterprise 

in a CY

2009 2022 $192,996

Federal Register 87

(December 2022)

80023-80025

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 126

Other Information
XAppendices

128 GLOSSARY

129 PERFORMANCE MEASURE VALIDATION AND VERIFICATION TEMPLATE

131 LIST OF FIGURES AND TABLES

132 ACKNOWLEDGEMENTS

132 CONTACT INFORMATION

133 FHFA KEY MANAGEMENT OFFICIALS

133 OFFICE OF THE INSPECTOR GENERAL

133 FEDERAL HOUSING FINANCE OVERSIGHT BOARD

Appendices

127| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT
X GLOSSARY

Advance – A fully secured extension of credit or loan from an FHLBank to a member or housing associate.

Common Securitization Solutions, LLC (CSS) – The joint venture of Fannie Mae and Freddie Mac that owns and operates 

the Common Securitization Platform.

Conservatorship – A statutory process designed to stabilize a troubled institution with the objective of maintaining normal 

business operation and restoring safety and soundness.

Credit Risk Transfer (CRT) – The transfer of a portion of mortgage credit risk from the Enterprises to private investors.

Enterprise(s) – Fannie Mae or Freddie Mac.

GAO Green Book – GAO Standards for Internal Control in the Federal Government, GAO 14-704G

Loan-to-Value Ratio – A measurement that compares the principal balance of a loan (the amount currently owed) to the 

actual value of the house.

Matter Requiring Attention (MRA) – A specific written recommendation made to an Enterprise or FHLBank for 

supervisory matters that require attention and correction, but that does not include consent order items. Each MRA response 

requires a due date for correction.

Mortgage-Backed Security (MBS) – A type of asset-backed security that is secured by a mortgage or collection of mortgages.

Regulated Entities – Fannie Mae, Freddie Mac, CSS, OF, and the FHLBanks. For convenience, references to the “regulated 

entities” in this report should be read to also apply to Common Securitization Solutions and the Office of Finance, unless 

otherwise noted.

Retained Portfolios – The investment portfolio of mortgage loans and mortgage securities held by the Enterprises that is 

funded by unsecured debt issued by the Enterprises. The retained portfolio is primarily utilized to support loss mitigation 

activities, provide liquidity for the mortgage market, and generate income. The retained portfolio does not include liquidityrelated investments, such as Treasury securities.

Senior Preferred Stock Purchase Agreements (PSPAs or SPSPAs) – Capital stock owned by Treasury, which pays 

specific dividends before preferred stock or common stock dividends. In the event of liquidation, senior preferred stock takes 

precedence over preferred and common stock.

Uniform Mortgage-Backed Security (UMBS) – A single-class MBS backed by fixed-rate mortgage loans on 1-to-4 unit 

(single-family) properties issued by either Enterprise, which has the same characteristics (such as payment delay, pooling prefixes, 

and minimum pool submission amounts) regardless of which Enterprise is the issuer. The UMBS was launched June 3, 2019.

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 128

Appendices
X PERFORMANCE MEASURE VALIDATION AND 

VERIFICATION TEMPLATE

This is an illustrative example of FHFA’s Verification & Validation Template. This template is used to provide transparency 

and information on how we will validate and verify that performance data is accurate. For a detailed explanation of the 

verification and validation process. Please refer to page 32 of this report.

Strategic Goal: _______________________________________________________________________

Strategic Objective: ___________________________________________________________________

Measure: ____________________________________________________________________________

____________________________________________________________________________________

Target: ______________________________________________________________________________

Goal Leader: _________________________________________________________________________

Contact: ____________________________________________________________________________

Office: ______________________________________________________________________________

DEFINITION 

a. What is the purpose or meaning of the measure?

b. Is there a certain timeframe that the activities in this 

measure must be completed by?

___________________________________________

___________________________________________

___________________________________________

RELEVANCE OF MEASURE

a. Why is this measure important to the agency?

b. How does this measure keep FHFA focused on 

its mission? (Please describe in detail.)

___________________________________________

___________________________________________

___________________________________________

129| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Appendices
VERIFICATION

a. How will the status be measured? (Please describe the 

process in detail.) 

b. How will you know if the measure has been met? 

c. How will the status of this measure be tracked on 

a quarterly basis? 

(EXAMPLE: In order to calculate whether or not we 

have responded to at least 95 percent of the requests sent 

to FHFA during the same fiscal year that they were sent, 

we will begin by finding the total number of requests 

sent to FHFA during this fiscal year. Then, we will find 

the summation of the requests that we have responded to 

and take this number and divide it by the total number of 

requests. If this total is greater than 95 percent, we have 

met our target.) 

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

DATA CONSTRAINTS 

a. What challenges could potentially arise that 

could impact the availability of the data you need to 

substantiate your measure status claim? (i.e., lag time, 

data availability, etc.) 

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

VERIFICATION SOURCE 

a. What evidence will you provide to the database 

to help substantiate the claim of whether the measure 

has been met, not met, or is on target? (Describe the 

methodology used.)

(Focus on verification sources that are explicit: If your 

measure says you will do something by a certain date, the 

verification source needs to make it clear that the task was 

completed by the date. If your measure says you will do 

something before another task begins, your verification 

source needs to show the date the task was completed and 

the date the dependent task begins.)

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

OPEN RECOMMENDATIONS 

a. Are there any open recommendations or findings 

from FHFA OIG or GAO that directly pertain to 

this measure? 

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 130

Appendices
X LIST OF FIGURES AND TABLES

LIST OF FIGURES

Figure 1: FHFA’s Oversight Role – Fannie Mae and Freddie Mac ................................................... 8

Figure 2: FHFA’s Oversight Role – Federal Home Loan Banks and Office of Finance ................................... 9

Figure 3: FHFA Principal Organization Structure ............................................................... 10

Figure 4: FHFA’S FY 2022-2026 Strategic Plan: Goals and Objectives .............................................. 14

Figure 5: Distribution of Total Assets for FY 2023 .............................................................. 22

Figure 6: Distribution of Total Liabilities for FY 2023 ........................................................... 22

Figure 7: Gross Costs by Strategic Goal ...................................................................... 24

Figure 8: FHFA’s Performance Management Cycle ............................................................. 30

Figure 9: FHFA’s Performance Planning and Review Process ..................................................... 31

Figure 10: Quarterly MVE to PVCS Ratios .................................................................... 43

Figure 11: Monthly House Price Index from January 1991 – Present .............................................. 56

Figure 12: Obligated Amount to MWOBs .................................................................... 66

LIST OF TABLES

Table 1: FHFA Staffing Summary ............................................................................ 10

Table 2: Summary of Performance Measures and Results ....................................................... 15

Table 3: FHFA Condensed Balance Sheets .................................................................... 23

Table 4: Summarized Costs and Revenue .................................................................... 23

Table 5: Strategic Objective 1.1 – Summary of Performance Measures and Results .................................. 37

Table 6: Enterprise Financial Results Summary of First 3 Quarters of 2023 and Full Year 2022 ......................... 41

Table 7: FHLBanks’ Financial Results Summary of First 3 Calendar Quarters of 2023 and Full Calendar Year 2022 ......... 42

Table 8: Strategic Objective 1.2 – Summary of Performance Measures and Results .................................. 45

Table 9: Strategic Objective 1.3 – Summary of Performance Measures and Results .................................. 47

Table 10: Strategic Objective 1.4 – Summary of Performance Measures and Results ................................. 48

Table 11: Strategic Objective 2.1 – Summary of Performance Measures and Results ................................. 53

Table 12: Strategic Objective 2.2 – Summary of Performance Measures and Results ................................. 54

Table 13: Strategic Objective 2.3 – Summary of Performance Measures and Results ................................. 55

Table 14: Strategic Objective 2.4 – Summary of Performance Measures and Results ................................. 58

Table 15: Strategic Objective 2.5 – Summary of Performance Measures and Results ................................. 59

Table 16: Strategic Objective 3.1 – Summary of Performance Measures and Results ................................. 63

Table 17: Strategic Objective 3.2 – Summary of Performance Measures and Results ................................. 65

Table 18: Strategic Objective 3.3 – Summary of Performance Measures and Results ................................. 67

Table 19: Performance Measures Added, Changed, and Discontinued in FY 2023 ................................... 68

Table 20: Audits and Evaluations .......................................................................... 106

Table 21: Management Report on Final Action on Audits with Disallowed Costs for FY 2023 ......................... 108

Table 22: Management Report on Final Action on Audits with Recommendations to Put Funds to Better Use for FY 2023 .... 108

Table 23: Audit Reports without Final Actions but with Management Decisions Over One Year Old for FY 2023 ......... 109

Table 24: Summary of Financial Statements Audit ............................................................ 124

Table 25: Summary of Management Assurances ............................................................. 124

Table 26: Civil Monetary Penalty Adjustment for Inflation ..................................................... 126

131| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Appendices
X ACKNOWLEDGEMENTS

This PAR was produced through the energies and talents 

of FHFA staff. To them we offer our sincerest thanks 

and acknowledgement. We would like to acknowledge 

the U.S. Government Accountability Office for the 

professional manner in which it conducted the audit of 

FHFA’s FY 2023 Financial Statements. This PAR was 

published with the assistance of Lista Design Studio, Inc.

CONTACT INFORMATION

We welcome your comments on how we can improve 

our report. The PAR can be found at https://www.fhfa.

gov/AboutUs/Pages/Budget--Performance.aspx. 

Please provide comments or questions to:

Toni R. Harris

Performance Improvement Officer 

202-649-3800

FHFAinfo@fhfa.gov

CONNECT WITH FHFA 

Appendices

FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT | 132
X FHFA KEY MANAGEMENT OFFICIALS

SANDRA L. THOMPSON

Director

CHRISTOPHER BOSLAND

Acting Deputy Director, Division of Enterprise Regulation

JASON CAVE

Deputy Director, Division of Conservatorship Oversight 

and Readiness

KAREN CHANG

Chief of Staff

DEBRA CHEW

Director, Office of Equal Opportunity and Fairness

DANIEL E. COATES

Deputy Director, Division of Research and Statistics

CHRISTOPHER H. DICKERSON

Senior Advisor

DAN FICHTLER

Senior Advisor, Capital Markets

SAMUEL FRUMKIN

Executive Secretary

CLINTON JONES

General Counsel

KATRINA D. JONES

Chief Operating Officer

NINA NICHOLS

Deputy Director, Division of Accounting and 

Financial Standards

LOUIS SCALZA

Acting Director, Office of Minority and Women Inclusion

JOSHUA STALLINGS

Deputy Director, Division of Federal Home Loan 

Bank Regulation

NAA AWAA TAGOE

Deputy Director, Division of Housing Mission and Goals

CHARLES C. YI

Senior Advisor, Legal Affairs and Policy

OFFICE OF THE 

INSPECTOR GENERAL

BRIAN M. TOMNEY

Inspector General

FEDERAL HOUSING FINANCE 

OVERSIGHT BOARD

SANDRA L. THOMPSON

Chair

MARCIA L. FUDGE

Secretary, U.S. Department of Housing and 

Urban Development

GARY GENSLER

Chair, U.S. Securities and Exchange Commission

JANET L. YELLEN

Secretary, U.S. Department of the Treasury

133| FY 2023 PERFORMANCE & ACCOUNTABILITY REPORT

Appendices
INTENTIONALLY LEFT BLANK
INTENTIONALLY LEFT BLANK

Federal Housing Finance Agency

400 7th Street, SW

Washington, D.C. 20219

202-649-3800

www .fhfa .gov