PERFORMANCE & 

ACCOUNTABILITY

FY 2022 REPORT
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

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

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

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

FHFA Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Strategic Goals and Strategic Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Summary of Performance Measures and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Looking Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Analysis of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

FY 2022 COVID-19 – Financial Impact on FHFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

What Is FHFA’s Net Position and Net Costs? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

How Does FHFA Align Costs to Strategic Goals? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

How Does FHFA Comply with Internal Controls? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

FHFA Statement of Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

PERFORMANCE SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

FHFA’s Performance Planning and Review Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Validation and Verification of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Strategic Goal 1: Ensure Safe and Sound Regulated Entities Through World-Class Supervision . . . . 35

Strategic Goal 2: Foster Competitive, Liquid, Efficient, and Resilient (CLEAR) 

National Housing Finance Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Strategic Goal 3: Position the Agency as a Model of Operational Excellence by 

Strengthening the Workforce and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Added, Changed, and Discontinued Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Table of Contents
FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

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

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

Appendix I: FHFA’s Response to Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Audits and Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Management Report on Final Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Office of Inspector General Management and Performance Challenges . . . . . . . . . . . . . . . . . . . . 109

Summary of Financial Statements Audit and Management Assurances . . . . . . . . . . . . . . . . . . . . 119

Payment Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Civil Monetary Penalty Adjustment for Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Performance Measure Validation and Verification Template . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

List of Figures and Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

FHFA Key Management Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Office of the Inspector General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Federal Housing Finance Oversight Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
1 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Message from the Director

This Fiscal Year (FY) 2022 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 of the Federal Home Loan Bank (FHLBank) System and 

as regulator and conservator of the Federal National Mortgage Association (Fannie Mae) and 

the Federal Home Loan Mortgage Corporation (Freddie Mac) – together, the Enterprises. 

This report meets the requirements of the Government Performance and Results Modernization 

Act of 2010, and its 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 before my appointment 

as Acting Director. Accordingly, I focused on meeting the pre-established goals during FY 2022, while also transitioning 

the Agency and its regulated entities toward new goals that I believe are necessary to enable FHFA to fulfill its statutory 

responsibilities. In April 2022, FHFA released a new Strategic Plan that reflects and advances these priorities:

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. Following issuance of a regulatory capital 

rule in FY 2021 designed to ensure the financial health of Fannie Mae and Freddie Mac throughout the economic cycle, the 

Agency finalized important enhancements to the Enterprise Regulatory Capital Framework in FY 2022. These enhancements 

provide the Enterprises with the necessary incentives to transfer credit risk to private investors, which will help protect 

taxpayers from the risks posed by the Enterprises. In FY 2022, FHFA finalized additional capital planning requirements 

to ensure the Enterprises properly assess their risks and maintain the appropriate level of capital and finalized disclosure 

requirements to provide market participants with more information to assess an Enterprise’s risks and capital adequacy. 

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

long worked with the Enterprises to develop effective disaster response loss mitigation toolkits to support borrowers and 

renters affected by natural disasters, such as hurricanes, floods, and wildfires. FHFA leveraged this experience to support 

the Financial Stability Oversight Council’s annual climate risk review, while requiring the Enterprises to prioritize climate 

risks in their governance and decision-making.

FHFA is strengthening core statutory mission programs such as Duty to Serve and the housing goals for the Enterprises, and 

the Affordable Housing Program (AHP) and community development programs of the FHLBanks. FHFA is, for example, 

ensuring that the FHLBanks serve each state in their districts under the AHP, and that the FHLBanks’ Targeted Community 

Lending Plans identify and seek to fulfill the needs of communities throughout the district, including tribal communities. These 

programs, like all regulated entity activities, must support access to credit that is sustainable and affordable, especially when 

reaching underserved populations like low- and moderate-income families, communities of color, and residents of rural areas. 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 2

As FHFA ensures the Enterprises responsibly meet their mission obligations, the Agency continues to oversee their 

development and implementation of the Equitable Housing Finance Plans. The Enterprises developed Equitable Housing 

Finance Plans following FHFA’s Request for Input and public listening session in September 2021. The 2022-2024 plan 

activities, which will be updated annually, seek to sustainably address barriers experienced by renters, aspiring homeowners, 

and current homeowners – particularly in Black and Latino communities. FHFA also continues to build and advance its fair 

lending program to ensure that fair lending and equity considerations are integrated into the mission and business activities 

of its regulated entities.

As the FHLBank System nears its 100th year, FHFA is undertaking a comprehensive review to ensure the System remains 

positioned to meet the needs of today and tomorrow. As part of the review process, FHFA is hosting public listening sessions 

and a series of regional roundtable discussions to consider and evaluate the mission, membership eligibility requirements, 

and operational efficiencies of the FHLBank. FHFA will hear from stakeholders on the FHLBanks’ role or potential role in 

addressing housing finance, community and economic development, affordability, and related issues.

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. All of FHFA’s work reflects the Agency’s values of fairness, accountability, 

integrity, and respect (FAIR values), built on a foundation of competence, diversity, equity, and inclusion.

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

of this report is just one of the ways FHFA informs the public about our planned actions and decision making to facilitate 

this ongoing dialogue.

This report demonstrates that FHFA performed well under the existing 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, 2022
3 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

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 FHFA published the FHFA Strategic Plan: 2022-2026 on April 14. Due to timing, the performance reporting in the FY 2022 FHFA 

Performance and Accountability Report is based on the Agency’s FY 2022 Annual Performance Plan (APP), which is based on the previous 

FHFA Strategic Plan: 2021-2024. The FHFA FY 2022 APP can be found at FHFA Annual Performance Plan for Fiscal Year 2022. Per the 

new FHFA Strategic Plan, the Agency’s mission, vision, and values have been revised. The language above reflects the mission, vision, and values 

of FHFA reflected in the FHFA Strategic Plan: 2022-2026.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 4

List of Abbreviations 

Abbreviation Description

AB Advisory Bulletin

AHP Affordable Housing Program

AI/ML Artificial Intelligence and Machine Learning

AMA Acquired Member Assets

APP Annual Performance Plan

ARCC Audit, Risk, and Control Committee

Bank Act Federal Home Loan Bank Act

Bureau of the 

Fiscal Service

Fiscal Service

CAMELSO Capital, Asset Quality, Management, Earnings, 

Liquidity, Sensitivity to Market Risk, and 

Operational Risk

CEAR Certificate of Excellence in 

Accountability Reporting

CFPB Consumer Financial Protection Bureau

CLEAR Competitive, Liquid, Efficient, And Resilient 

CRS Call Report System

CRT Credit Risk Transfer

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

DER Division of Enterprise Regulation

DHMG Division of Housing Mission and Goals

DCOR Division of Conservatorship Oversight 

and Readiness

DRS Division of Research and Statistics

DTS Duty to Serve

ERCF Enterprise Regulatory Capital Framework

ESG Environmental, Social, and Governance

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 2014 Federal Information Security Modernization 

Act of 2014

FMFIA Federal Managers’ Financial Integrity Act

FMS Financial Management System

Abbreviation Description

Freddie Mac Federal Home Loan Mortgage Corporation

FY Fiscal Year

GAO U.S. Government Accountability Office

Ginnie Mae Government National Mortgage Association

HERA Housing and Economic Recovery Act of 2008

IT Information Technology

LTV Loan-to-Value

MBS Mortgage-Backed Security

MRA Matter Requiring Attention

MVE Market Value of Equity

MWOB Minority- and Women-Owned Business

NMDB® National Mortgage Database®

NPR Notice of Proposed Rulemaking

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

OPB Operating Procedure Bulletin

OPM U.S. Office of Personnel Management

OPPR Office of Planning, Performance, and Risk

PAR Performance and Accountability Report

PIIA Payment Integrity Information Act of 2019 

PSPA Preferred Stock Purchase Agreement

PUDB Public Use Database

PVCS Par Value of Capital Stock

ROE Report of Examination

Safety and 

Soundness Act

Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992

Taxonomy Supervision Taxonomy

Treasury U.S. Department of the Treasury

UMBS Uniform Mortgage-Backed Security

U .S .C . United States Code

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

USSGL U.S. Standard General Ledger 
MANAGEMENT’S 

DISCUSSION AND ANALYSIS

ABOUT THE FEDERAL HOUSING FINANCE AGENCY . . . . . . . . . . . . .6

FHFA ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

PERFORMANCE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

LOOKING FORWARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

FINANCIAL SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

FHFA STATEMENT OF ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .29

5 | 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 6

Management’s Discussion and Analysis

About the Federal Housing Finance Agency

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.

2 OF is not a “regulated entity” as the term is defined by statute (12 U.S.C. § 4502(20)). However, for convenience, references to the “regulated entities” 

in this report should be read to also apply to OF unless otherwise noted.

3 12 U.S.C. § 4513.

4 12 U.S.C. § 4513(a)(1).

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 moderateincome 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
7 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 8

Management’s Discussion and Analysis

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. As shown 

in Figure 1, most single-family mortgages are pooled 

into mortgage-backed securities (MBS), which are 

guaranteed by the Enterprises and then sold to investors. 

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 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 mortgages in 

targeted categories to the private sector. The Enterprises 

also purchase multifamily mortgages, and each Enterprise 

uses 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.

Figure 1: FHFA’s Oversight Role – Fannie Mae and Freddie Mac
9 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

The Federal Home Loan Banks

7 Consolidated obligations refer to the joint obligations of the 11 FHLBanks and are debt instruments sold to the public through OF but that are not 

guaranteed by the U.S. government.

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 Office of Finance (OF), which 

issues consolidated obligations7 to fund the FHLBanks’ 

operations. The FHLBanks are private member-owned 

cooperatives that provide a reliable source of liquidity to 

member financial institutions by making loans, known as 

advances, to member institutions and housing associates 

(see Figure 2). These advances increase the available 

funding for residential mortgages. The FHLBanks 

secure these advances with eligible collateral, consisting 

primarily of single-family 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.

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

As of September 30, 2022, there were 6,513 active FHLBank members, consisting of commercial banks, credit unions, 

thrifts, insurance companies, and community development financial institutions.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 10

Management’s Discussion and Analysis

Table 1 illustrates selected items of the regulated entities’ involvement in the housing market for Calendar Year (CY) 2021 

and CY 2022 through the third quarter.

Table 1: Regulated Entities’ Business Activity

(dollars in billions)

Jan. – Dec. 2021 Jan. – Sep. 2022

Enterprise New Business Single-Family Purchase $881 $584

Single-Family Refinance $1,694 $411

Multifamily $139 $95

TOTAL $2,714a $1,090a

FHLBank New Businessb On-Balance Sheet Acquired 

Member Assets Mortgages $14 $7

Off-Balance Sheet Mortgages $7 $1

FHLBank AMA Mortgages Outstandingc $56 $56

FHLBank Advances Outstandingc $351 $655

a

 Publicly available 10-K and 10-Q financial reports submitted by public companies to the U.S. Securities and Exchange Commission and Credit 

Supplement Reports.

b

 Under AMA programs, the FHLBanks acquire conforming and government-guaranteed or -insured loans. AMA mortgages are mortgages purchased by 

the FHLBanks generally as investments to hold on their books. Off-balance sheet mortgages are mortgages that the FHLBanks pass through directly to 

third-party investors or securitization.

c

 Annual data reported as of September 30, 2022.
11 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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. 

Figure 3: FHFA Principal Organization Structure
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 12

Management’s Discussion and Analysis

The Agency operated with an approved operating budget 

of $279.1 million in Fiscal Year (FY) 2022 and ended 

the year with 717 employees on board. For FY 2023, the 

Agency’s budget increased to $309.4 million and supports 

804 positions. FHFA’s Office of Inspector General (OIG) 

operated with a FY 2022 budget of $49.9 million and 

ended the year with 113 positions on board. The OIG 

FY 2023 budget increased to $55.0 million which will 

support 155 positions. See Table 2 for staff distribution by 

major FHFA divisions and offices.

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. As the asset managers of FHFA, 

the office ensures the Agency uses systematic, structured, 

and coordinated approaches to optimally manage 

agency resources. This balancing of investments against 

performance towards the desired agency outcomes is 

essential for the greatest return on investment and to 

attain the Agency’s strategic plan objectives.

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, providing examiner training, 

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 

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.

Table 2: FHFA Staffing Summary

FY 2022 (Actuala) % by Functional Area FY 2023 (Budget) % by Functional Area

Number of FHFA Employees

Mission Division/Officesb 511 71% 564 70%

Mission Support Division/Officesc 206 29% 240 30%

Total FHFA Employees 717 100% 804 100%

Number of OIG Employees 113 155

a Actuals are as of September 30, 2022.

b Mission Divisions and Offices include: Division of Accounting and Financial Standards, Division of Bank 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.
13 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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.

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, 

and enforcement actions. OGC oversees the bringing or 

defense of litigation. OGC also manages the Freedom of 

Information Act and Privacy Act programs. The ethics 

official 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, as well as liquid, competitive, efficient, 

and resilient mortgage markets. The Office of the Chief 

Accountant performs oversight of the regulated entities’ 

accounting policies, internal controls over financial 

reporting, financial disclosures, internal and external 

audit functions, and financial crimes compliance and 

risk management. DAFS provides supervisory guidance 

and support in these areas, and researches and analyzes 

accounting and auditing standards developments, rule 

changes, and guidance pertinent to financial crimes 

compliance and risk management. 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®, FHFA’s National Mortgage Database®, 

the National Survey of Mortgage Originations data, 

and the Enterprise Public Use Database. The division 

also leads the Agency’s 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 (ESG) 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.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 14

Management’s Discussion and Analysis

The Office of Minority and Women Inclusion (OMWI) 

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

and inclusion among its workforce and senior-level 

management. OMWI is responsible for increasing the 

participation of minority- and women-owned businesses 

in Agency programs and contracts, including standards 

for coordinating technical assistance to such businesses, 

assessing the diversity policies and practices of the 

regulated entities, 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), anti-harassment, 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 various modalities of 

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 problems 

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.
15 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

Performance Summary

8 FHFA published the FHFA Strategic Plan: 2022-2026 on April 14, 2022, available at https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/

FHFA_StrategicPlan_2022-2026_Final.pdf. However, performance reporting in the FY 2022 FHFA PAR is based on the Agency’s FY 2022 APP at 

https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FY2022_APP.pdf, which is based on the FHFA Strategic Plan: 2021-2024.

STRATEGIC GOALS AND 

STRATEGIC OBJECTIVES

FHFA’s Strategic Plan8 provides the foundation for 

Agency planning, budgeting, operations, and reporting. 

The Agency’s Strategic Plan establishes long-term 

strategic goals to achieve FHFA’s mission and the 

strategic objectives to achieve those strategic goals. 

It also identifies planned means and strategies to achieve 

the strategic objectives. Key elements from FHFA’s 

FY 2022 Annual Performance Plan (APP), which reports 

progress on the Agency’s Strategic Plan, are presented 

in Figure 4, including the Agency’s vision and mission, 

as well as the three strategic goals and their corresponding 

strategic objectives that were in effect during FY 2022, 

the period covered by this report. The performance 

measures associated with the strategic objectives are 

presented on pages 35-66. Validation and verification 

activities, conducted to confirm that performance results 

are reported accurately, are described on page 34, and a 

template that FHFA uses to validate and verify its measures 

and data can be found in the Appendices on page 124.

Figure 4: FHFA’S FY 2021-2024 Strategic Plan: Goals and Objectives

Strategic Goal 1: 

Ensure safe and sound 

regulated entities through 

world-class supervision 

1.1. Ensure the safety and 

soundness of the regulated 

entities through risk-focused 

supervision

2.1. Institute reforms at the 

regulated entities that serve to 

foster CLEAR national housing 

finance markets

2.2. Ensure that the regulated 

entities fulfill their statutory 

missions to support affordable 

housing, community 

development, and diversity 

and inclusion requirements

3.1. Cultivate a high-performing, 

diverse, accountable, and 

engaged workforce

3.2. Ensure sound governance 

and good stewardship of 

Agency resources

3.3. Deliver information technology 

resources and systems that support 

the Agency’s mission and safeguard 

the Agency’s resources

1.2. Develop and 

maintain a world-class 

supervision program

1.3. Responsibly end 

the conservatorships of 

the Enterprises

Strategic Goal 2:

Foster Competitive, Liquid, Efficient, 

And Resilient (CLEAR) national 

housing finance markets

2.3. Position FHFA as a leader 

in providing the public with 

information and analysis on the 

state of the housing finance 

markets and related matters

Strategic Goal 3: 

Position the Agency as a model of 

operational excellence by strengthening 

the workforce and infrastructure 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 16

Management’s Discussion and Analysis

SUMMARY OF PERFORMANCE 

MEASURES AND RESULTS

For FY 2022, FHFA identified a total of 33 performance 

measures and associated targets to monitor progress 

toward achieving the Agency’s strategic goals and 

strategic objectives. FHFA met the targets for 30 of 

these measures at a 91 percent success rate. The overall 

results indicate progress toward achieving FHFA’s goals 

and mission.

Table 3 presents a summary of FY 2022 performance 

measures and results. More information on FHFA’s 

performance organized by strategic goal can be found in 

the Performance Section, starting on page 31.

Table 3: Summary of Performance Measures and Results

Performance Measure FY 2022 Target FY 2022 Result

STRATEGIC GOAL 1: ENSURE SAFE AND SOUND REGULATED ENTITES THROUGH WORLD-CLASS SUPERVISION

Strategic Objective 1 .1: Ensure the safety and soundness of the regulated entities through risk-focused supervision

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

Enterprises by having written risk-based examination plans approved by 

January 31, 2022

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 March 31, 2022 for 

the Enterprises 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 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
17 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

Table 3: Summary of Performance Measures and Results

Performance Measure FY 2022 Target FY 2022 Result

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

Strategic Objective 1 .2: Develop and maintain a world-class supervision program

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

Strategic Objective 1 .3: Responsibly end the conservatorships of the Enterprises

1 .3 .1: Issue a proposed rule on Enterprise disclosures under the 

Enterprise Regulatory Capital Framework FY 2022 MET

1 .3 .2: Issue a proposed rule on Enterprise Capital Planning FY 2022 MET

STRATEGIC GOAL 2: FOSTER COMPETITVE, LIQUID, EFFICIENT, AND RESILIENT (CLEAR) NATIONAL HOUSING FINANCE MARKETS

Strategic Objective 2 .1: Institute reforms at the regulated entities that serve to foster CLEAR national housing finance markets

2 .1 .1: Document review of regulated entity public filings Quarterly documentation of 

reviews within 45 days after the 

required filing date

MET

2 .1 .2: Publish annual Guarantee Fee Report December 2021 MET

Strategic Objective 2 .2: Ensure that the regulated entities fulfill their statutory missions to support affordable housing, 

community development, and diversity and inclusion requirements

2 .2 .1: Publish final Enterprise housing goals rule for 2022-24 December 2021 MET

2 .2 .2: Issue annual ratings for each Enterprise’s Duty to Serve 

performance in 2020 October 2021 MET

2 .2 .3: Determine that the Enterprises have met the mission-driven 

requirements in Appendix A of the Conservatorship Scorecard9

1. Each Enterprise’s 

mission-driven business 

meets or exceeds 50 percent 

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

MET

2 .2 .4: Issue an Operating Procedures Bulletin on fair lending examinations 

for the Enterprises July 2022 MET

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

90 percent MET

9 The 2022 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.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 18

Management’s Discussion and Analysis

Table 3: Summary of Performance Measures and Results

Performance Measure FY 2022 Target FY 2022 Result

2 .2 .6a: Approve Diversity and Inclusion reports of examination by 

March 31, 2022, for the Enterprises and Common Securitization Solutions 100 percent of the time NOT MET

2 .2 .6b: Approve Diversity and Inclusion reports of examination for at least 

nine of the FHLBank System regulated entities 100 percent of the time MET

Strategic Objective 2 .3: Position FHFA as a leader in providing the public with information and analysis on the state of the housing 

finance markets and related matters

2 .3 .1: Publish FHFA House Price Indexes 12 monthly and 4 quarterly MET

2 .3 .2: Publish annual Public Use Database September 2022 MET

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

delinquencies from National Mortgage Database One per quarter MET

STRATEGIC GOAL 3: POSITION THE AGENCY AS A MODEL OF OPERATIONAL EXCELLENCE BY STRENGTHENING 

THE WORKFORCE AND INFRASTRUCTURE

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

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”

Positive responses equal 

to or higher than both 

the small agency and 

government-wide averages

MET

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”

65 percent positive MET

3 .1 .3: Improve the number of days to hire 95 workdays MET

3 .1 .4: Develop FHFA Human Capital Plan July 2022 NOT MET

Strategic Objective 3 .2: Ensure sound governance and good 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: Award FHFA contracts competitively 75 percent MET

3 .2 .3: Complete corrective actions to address audit recommendations in a 

timely manner 95 percent of the corrective 

actions to address Office 

of Inspector General 

recommendations are 

completed within one year 

of the resolution date

NOT MET

3 .2 .4: Increase the dollar amount of FHFA contracts awarded to minorityand women-owned businesses consistent with legal standards

Total dollar amount of contracts 

greater than the five-year average MET

Strategic Objective 3 .3: Deliver information technology resources and systems that support the Agency’s mission and safeguard the 

Agency’s resources

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: Ensure FHFA’s infrastructure systems are continuously available for 

use by FHFA staff 99.5 percent of the time MET

3 .3 .3: Determine average user response on FHFA help desk ticket surveys 4.5 rating on a scale of 0 to 5 MET
19 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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.

Promote Equitable Access to Housing

In FY 2022, FHFA instructed the Enterprises to develop 

Equitable Housing Finance Plans that identify and 

address barriers to sustainable housing opportunities 

and include the Enterprises’ goals and proposed 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. The plans address barriers experienced by 

aspiring homeowners and current homeowners before, 

during, and after getting a mortgage, as well as barriers 

experienced by renters. Importantly, the plans recognize that 

unsustainable credit is not equitable credit. The proposed 

activities are focused on removing unnecessary barriers and 

using technology to identify ways to responsibly serve more 

borrowers, without weakening credit standards that put a 

family’s home—often its largest source of wealth—at risk.

In FY 2023, FHFA will continue to work closely with the 

Enterprises, industry participants, and the public to ensure 

successful implementation of plan activities. Similar 

to the Enterprises’ Duty to Serve Plans, each activity 

contemplated as part of an Equitable Housing Finance 

Plan will be subject to safety and soundness reviews, 

ongoing engagement with stakeholders, and further 

refinement and development. FHFA will host another 

listening session to solicit additional public input as the 

Enterprises look to update their plans based on feedback 

and key lessons learned in FY 2022. Since many activities 

will test new concepts for the first time, the Enterprises 

will report on their accomplishments and progress to 

date in FY 2023.

Looking Forward
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 20

Management’s Discussion and Analysis

Strengthen Fair Lending Programs

FHFA established the Office of Fair Lending Oversight in 

2018 to ensure comprehensive fair lending oversight of its 

regulated entities. FHFA continues to build and advance 

its fair lending program to ensure fair lending and 

equity considerations are integrated into the mission and 

business activities of its regulated entities. In FY 2022, 

FHFA continued to strengthen its supervisory program 

by issuing supervision guidance describing its fair 

lending examination procedures and setting appropriate 

expectations for Enterprise oversight of their fair lending 

responsibilities. FHFA’s first fair lending examination 

guidance document, Advisory Bulletin 2021-04: Enterprise 

Fair Lending and Fair Housing Compliance, articulates 

substantive policy on how FHFA will supervise and enforce 

fair lending and explicitly adopts certain other procedural 

guidance for fair lending supervisory examinations.

During FY 2023, FHFA will focus on continuing to 

mature its fair lending supervision and monitoring 

program. FHFA’s fair lending supervision program will 

work to further align with other supervisory offices 

on adverse findings, formal feedback on fair lending 

compliance, and risk-based prioritization. Finally, FHFA will 

expand its supervisory engagements with the FHLBanks 

and continue to use its regulatory, supervisory, and 

conservatorship authorities to address significant fair lending 

risks or violations of fair housing laws by the Enterprises. 

Office of Financial Technology

In FY 2022, FHFA established an Office of Financial 

Technology (Fintech Office) to support the Agency’s 

efforts to understand technology-driven developments 

in housing finance and the associated risks. The Fintech 

Office facilitates responsible innovation across FHFA’s 

regulated entities, balancing the value of new ideas, 

products, and operational approaches with the need 

for effective risk management and governance. The 

Fintech Office is a centralized resource for the Agency 

on mortgage-related innovations, general trends, and 

emerging risks in the use of fintech. The office engages 

internally through the FHFA Fintech Working Group, 

10 See Fintech in Housing Finance at https://www.fhfa.gov/PolicyProgramsResearch/Programs/Documents/Fintech-in-Housing-Finance-Requestfor-Information.pdf. See also Public Listening Session on Financial Technology in Housing Finance, available at https://www.fhfa.gov/Media/Pages/

Public-Engagements.aspx12.

which consists of Agency leadership and experts across 

divisions and offices.

In FY 2023, the Fintech Office plans to engage with 

market participants, industry, nonprofits, consumer 

groups, and academia to facilitate the sharing of best 

practices and establish ongoing outreach and dialogue. 

The Fintech Office will also analyze public input received 

in response to a Request for Information on the role of 

technology in housing finance issued in July and from a 

listening session on the same topic held in October.10

Climate and Natural Disaster Risk

In FY 2022, FHFA established a Climate Risk ESG 

Steering Committee and supporting working groups with 

staff from across the Agency to focus on identifying 

the channels through which climate events and natural 

disasters can lead to adverse financial effects for the 

Agency’s regulated entities, as well as for homeowners 

and renters. FHFA’s working groups focus on data 

and research, assessing climate exposure, governance, 

reporting and disclosures, consumer protections, green 

bonds, Agency operations, and climate-related legal 

issues. FHFA has been holding meetings with other 

federal agencies and stakeholders and has joined national 

and international climate-focused groups such as the 

Financial Stability Oversight Council’s Climate-related 

Financial Risk Committee, the U.S. Department of the 

Treasury’s (Treasury) Financial Literacy and Education 

Commission, and the Network of Central Banks and 

Supervisors for Greening the Financial System.

In FY 2023, FHFA intends to further develop the 

Enterprises’ and Agency’s climate research agendas. 

Additionally, FHFA plans to issue climate risk 

examination guidance for evaluating the incorporation of 

climate risk into decision making of the Enterprises and 

FHLBanks and to provide training to examination staff. 

FHFA will also continue to seek opportunities to provide 

greater incentives for investments in climate resiliency 

and energy efficiency through its regulated entities.
21 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

FHLBank System At 100: Focusing on 

the Future

In FY 2023, FHFA will conduct a comprehensive review 

of the FHLBank System to ensure the FHLBanks remain 

positioned to meet the needs of today and tomorrow. 

The FHLBanks have been a critical source of liquidity 

for their members for the past 90 years, especially during 

times of market stress, such as the Great Recession and 

the outset of the COVID-19 pandemic. The FHLBanks 

also support low-income housing and community 

development directly by offering a variety of programs 

to their members, including the Affordable Housing 

Program, the Community Investment Program, and 

Community Investment Cash Advance Programs.

As part of the review process, FHFA is hosting public 

listening sessions and a series of regional roundtable 

discussions to consider and evaluate the mission, 

membership eligibility requirements, and operational 

efficiencies of the FHLBanks. FHFA will hear from 

stakeholders on the FHLBanks’ role or potential role in 

addressing housing finance, community and economic 

development, affordability, and other related issues.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 22

Management’s Discussion and Analysis

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 semiannually, with the collections occurring October 1 and 

April 1. In FY 2022, FHFA assessed the entities a total of 

$317.5 million, including $49.9 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 2022, the FHFA 

working capital fund had a balance of $37.0 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 Sheet), Statement of Net Cost 

of Operations, Statement of Changes in Net Position, 

and Statement of Budgetary Resources for FY 2022 

and FY 2021. GAO’s audit report, along with complete 

financial statements and notes for FY 2022 and FY 2021, 

appear on pages 73-103.
23 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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.

FY 2022 COVID-19 – 

FINANCIAL IMPACT ON FHFA

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, 2022, 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 2022, FHFA had $147.7 million in assets. 

The largest asset groups include: Investments (77 percent), 

Fund Balance with Treasury (11 percent), General Property, 

Plant, and Equipment, Net (8 percent), and Other Assets 

(including Advances and Prepayments and Accounts 

Receivable) (4 percent), as displayed in Figure 5. FHFA 

had less than 1 percent in Accounts Receivable at the 

end of the year. Accounts Receivable is not displayed in 

Figure 5 since it accounts for less than 1 percent.

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.

Liabilities

At year-end FY 2022, FHFA had $56.3 million in liabilities. 

FHFA’s major liabilities (amounts owed by FHFA to other 

entities) include Federal Employee Benefits Payable 

(37 percent), Deferred Lease Liability (28 percent), 

Accounts Payable (22 percent), and Other Liabilities 

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

Federal Employee Benefits Payable, consists of both 

Unfunded Accrued Annual Leave for FHFA employees and 

FECA Actuarial Liability. The largest component in the 

Federal Employee Benefits Payable category is Unfunded 

Accrued Annual Leave, consisting of amounts resulting 

from accumulated, unused employee leave.

The second largest category, Deferred Lease Liability 

(rent) is the difference at year-end between the sum of 

monthly cash disbursement paid to date for rent and the 

sum of average monthly rent calculated based on the term 

of the lease. 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.

Figure 5: Distribution of Total Assets for FY 2022
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 24

Management’s Discussion and Analysis

Figure 6: Distribution of Total Liabilities for FY 2022

Net Position

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

(10 percent), or $10.1 million, in FY 2022, primarily due 

to the decrease in investments. The Total Asset decrease is 

related to the use of its working capital fund to finance large 

capital projects to modernize its technology infrastructure 

and the decrease in Special Assessments collections for 

FY 2022. In accordance with the FHFA regulation, Special 

Assessments can be used to support conservatorshiprelated activities. The 7 percent change in Total Liabilities 

is a combination of reductions in Deferred Lease Liability 

($2.4 million) and Other Liabilities ($5.6 million). A 

comparison of the condensed FY 2022 and FY 2021 

Balance Sheets is displayed in Table 4. The complete 

Balance Sheets can be found on page 81.

Table 4: FHFA Condensed Balance Sheets

(dollars in thousands*)

FY 2022 FY 2021 Percent 

change

Total Assets $147,716 $162,105 (9%) 

Total Liabilities $56,255 $60,516 (7%) 

Total Net 

Position $91,461 $101,589 (10%) 

*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 2022 are $338.4 million, 

which is an increase of $20.8 million above the FY 2021 

gross program costs of $317.6 million.

HOW DOES FHFA 

GENERATE REVENUE?

In accordance with HERA, FHFA collected through the 

semi-annual assessment process $317.5 million during 

FY 2022, which included a $49.9 million assessment 

for costs related to the operations of the FHFA OIG. 

Regulated entity assessments account for approximately 

99.1 percent of Agency revenues.

Less than 1 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 2022 was 5 percent less than FY 2021 

due to lower assessments for legal and financial 

services related to efforts to develop a plan to end the 

conservatorships of the Enterprises. FHFA’s summary 

costs and revenue are reflected in the Statements of Net 

Cost for FY 2022 and FY 2021 as presented in Table 5.

Table 5: Summarized Costs and Revenue

(dollars in thousands*)

FY 2022 FY 2021

Costs $338,354 $317,555

Revenue $(320,327) $(336,854) 

Net Cost from Operations $18,027 $(19,299) 

*Amounts are rounded for presentation purposes.

HOW DOES FHFA ALIGN COSTS 

TO STRATEGIC GOALS?

For FY 2022, FHFA assigned costs to the three 

strategic goals established by FHFA’s 2021-2024 

Strategic Plan. These Strategic Goals are: (1) Ensure 

safe and sound regulated entities through world-class 

supervision, (2) Foster CLEAR national housing finance 

markets, and (3) Position the Agency as a model of 

operational excellence by strengthening the workforce 

and infrastructure.
25 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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 2022 and FY 2021 are presented in 

Figure 7.

In FY 2022, Goal 1 was FHFA’s largest program area 

at $180.3 million or 53 percent of total gross costs. The 

next largest program area was Goal 3 at $98.8 million, or 

29 percent. Goal 2 was the smallest of the three program 

areas at $59.3 million. Overall, gross costs increased 

from FY 2021 to FY 2022 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 COMPLY WITH 

INTERNAL CONTROLS?

FHFA uses systems, controls, and legal compliance 

to determine Management Assurances. It is through 

the activities described below that FHFA can state its 

Management Assurances.

11 As of March 3, 2022, FHFA replaced the Executive Committee on Internal Controls with the ARCC.

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 2022, 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)11

met quarterly to oversee internal controls and provide 

recommendations to the FHFA Director on the 

effectiveness of FHFA’s internal controls.

During FY 2022, 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, the chief information 

security officer, and the budget and finance director.

Figure 7: Gross Costs by Strategic Goal
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 26

Management’s Discussion and Analysis

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’s Office of Planning, Performance, and Risk 

(OPPR) conducted an independent assessment of the 

Agency’s controls over financial reporting using a riskbased approach. OPPR 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.

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

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).12 Division management officials 

and staff reviewed the completed assessments. OPPR 

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 OGC reviewed the submissions, 

and OPPR reported the results to the SAT and the ARCC. 

The assessment determined that there were no material 

weaknesses that adversely affect the compliance with 

laws and regulations.
27 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

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. 

OPPR 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 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, 2022, 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 (USSGL) 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), which includes: 1) a core accounting system—

Oracle Federal Financials; 2) four feeder systems—

Procurement Request Information System Management, 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 28

Management’s Discussion and Analysis

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

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

Oracle Business Intelligence; and 4) an inventory 

tracking system. 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, respectively. FHFA has streamlined 

accounting processes by electronically interfacing data 

from charge cards, investment activities, the Concur travel 

system, the procurement system, 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 of 2014 (FISMA 2014)

FISMA 2014 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 2014 mandates that 

agencies undergo an annual independent evaluation of 

Information Security Program and practices, as well as an 

assessment of compliance with FISMA 2014 requirements.

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 

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

as per U.S. Generally Accepted Government Auditing 

Standards. Specifically, 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 2022 

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.13

The audit concluded that both FHFA and FHFA OIG’s 

Information Security Programs operated an effective 

information security program and complied with FISMA 

2014 and related information security policies and 

procedures, standards, and guidelines. The independent 

external auditor concluded that there were no significant 

deficiencies for the FHFA and FHFA OIG information 

security programs. The auditor reviewed and verified 

corrective actions taken by FHFA and FHFA OIG during 

the FY 2022 FISMA audit.

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 2022, the dollar amount subject 

to prompt payment was $96.9 million. The amount of 

interest penalty paid in FY 2022 was $27.00.

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.
29 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Management’s Discussion and Analysis

FHFA STATEMENT 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, 2022

Federal Managers’ Financial Integrity Act

Statement of Assurance

Fiscal Year 2022

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, 2022, 

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 controls, in accordance with OMB Circular A-123. Based on the results of this 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 30

Management’s Discussion and Analysis

evaluation, FHFA can provide reasonable assurance that its internal controls over financial 

reporting, as of September 30, 2022, 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, 2022.

Sincerely,

Sandra L. Thompson

Director

Mark Kinsey

Chief Financial Officer
PERFORMANCE SECTION

FHFA’S PERFORMANCE PLANNING AND REVIEW PROCESS . . . . .32

VALIDATION AND VERIFICATION OF PERFORMANCE DATA . . . . .34

STRATEGIC GOAL 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

STRATEGIC GOAL 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

STRATEGIC GOAL 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

ADDED, CHANGED, AND DISCONTINUED MEASURES . . . . . . . . . .67

31 | 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 32

Performance Section

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
33 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

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 2022 Annual Performance Plan (APP) forms 

the basis of this FY 2022 Performance and Accountability 

Report (PAR). The APP provides operational detail on 

how progress will be made toward the strategic goals and 

strategic objectives and identifies performance measures 

with 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 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 objectives

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 initiatives are proposed

FHFA’S ANNUAL PERFORMANCE PLAN

MANAGEMENT, MONITORING, AND ACCOUNTABILITY

• Oversight and coordination of key means and strategies

• Quarterly execution review of progress toward 

goals and strategies

• Accountability for results

• Strategic plans for systems

• Employee performance evaluation management systems
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 34

Performance Section

Validation and Verification 

of Performance Data

To ensure that the information reported in FHFA’s 

FY 2022 PAR is complete and reliable, FHFA identifies, 

verifies, and validates the data for each performance 

measure. 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.

FHFA has included a template of its Performance Measure 

Validation and Verification form in the Appendices on 

page 124.
35 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

Strategic Goal 1: Ensure Safe and 

Sound Regulated Entities Through 

World-Class Supervision

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, to evaluate overall effectiveness of each regulated 

entity’s risk management systems and controls, and to 

assess compliance with laws and regulations applicable to 

the regulated entity.

STRATEGIC GOAL 1 – 

SELECTED ACCOMPLISHMENTS

FHFA achieved several accomplishments in Fiscal Year (FY) 

2022 that contributed to progress toward the strategic 

goal. Selected FY 2022 accomplishments include:

Issuance of Advisory Bulletin on 

Artificial Intelligence/Machine 

Learning Risk Management

• On February 10, 2022, FHFA issued Advisory Bulletin 

(AB) 2022-02, Artificial Intelligence/Machine Learning 

(AI/ML) Risk Management. The AB articulates FHFA’s 

supervisory expectations to maintain safe and sound 

practices for managing risks associated with the use of 

AI/ML at Fannie Mae and Freddie Mac (the Enterprises) 

and Common Securitization Solutions (CSS). The AB 

is grounded in FHFA’s existing supervisory guidance on 

managing model, data, third-party, and other operational 

risks, as well as compliance risk.

The AB provides detail into the supervisory 

expectations for managing heightened and unique 

risks posed by the use of AI/ML, such as leveraging 

existing enterprise-wide risk management and 

control frameworks, including those for model, data, 

technology, information security, third-party, and risk 

management, making appropriate enhancements to 

address the risk and control considerations highlighted 

in the AB. The AB recognizes AI/ML is an evolving 

field and encourages responsible innovation and use of 

AI/ML consistent with safe and sound operations.

During the development of the AB, FHFA staff 

utilized various resources, such as National Institute of 

Standards and Technology guidance and activities to 

develop an AI Risk Management Framework indicative 

of industry best practices, the U.S. Government 

Accountability Office framework for AI accountability 

for federal agencies and other entities, and the Office 

of Management and Budget’s (OMB) guidance for 

regulation of AI. Staff engaged in extensive outreach to 

other federal financial regulators to better understand 

plans for future guidance development and consistent 

risk management expectations across regulated 

institutions. Staff also reviewed the Enterprises’ 

existing approaches to AI/ML risk management and 

efforts to incorporate them into the risk management 

structure for model and other operational risks.

Transparent, Repeatable, and 

Sustainable Supervision Program

• FHFA introduced a collaborative effort to identify 

high-level Supervisory Priorities, which are emerging 

supervisory issues and areas for special focus during 

the upcoming year. The Supervisory Priorities were 

informed by prior Reports of Examination, outstanding 

Matters Requiring Attention (MRAs), Enterprise and 

CSS Supervisory Risk Assessments, and supervisory 

knowledge. FHFA also considered information 

included in publications from other federal regulatory 

agencies that identified risks facing their regulated 

institutions and outlined their priorities for supervision. 

The work to address the Supervisory Priorities is 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 36

Performance Section

completed through examinations, ongoing monitoring, 

risk analysis and monitoring, and, when appropriate, 

through horizontal reviews.14 The Agency provides 

the Supervisory Priorities to the regulated entities to 

implement transparent supervision.

• FHFA also implemented a Supervisory Taxonomy 

(Taxonomy) to inform the Division of Enterprise 

Regulation’s (DER) supervisory planning process. 

The Taxonomy is an inventory of common and 

comprehensive risk categories and processes of 

supervisory interest at the Enterprises and CSS, aligned 

to the Capital, Asset Quality, Management, Earnings, 

Liquidity, Sensitivity to Market Risk, and Operational 

Risk (CAMELSO) rating framework and makes the 

risk-based approach to examination planning and other 

supervisory activities more efficient. Its development 

involved a comprehensive review of existing 

examination guidance, as well as the Enterprises’ 

Corporate Risk Taxonomies, DER’s historical 

Examination Plans and Office Plans, and processes for 

risk taxonomy used by other federal financial regulators.

• Finally, FHFA enhanced its risk assessment process 

to support the supervisory program as a key input 

to updates to the Taxonomy and to the supervisory 

planning process. By performing the risk assessments, 

FHFA assesses risk exposure in each of the CAMELSO 

14 A horizontal review occurs when FHFA conducts the same risk analysis or risk-based review at both Enterprises.

component areas and forms conclusions on FHFA’s 

view of the quantity of risk, direction of risk, quality of 

risk management, and direction of risk management of 

the Enterprises and CSS.

Capital Rule Amendments

• In FY 2022, FHFA enhanced its Enterprise Regulatory 

Capital Framework (ERCF) through three separate final 

rules that:

1) Refined the leverage buffer and risk-based capital 

treatment of credit risk transfers,

2) Added public disclosure requirements, and

3) Required the submission of annual capital plans 

to FHFA.

These changes support the safety and soundness of 

the Enterprises and are generally consistent with the 

banking regulatory framework.

The first amendment in February 2022 replaces 

the fixed leverage buffer in ERCF with a dynamic 

leverage buffer equal to 50 percent of an Enterprise’s 

stability capital buffer. The rule also reduces the floor 

on the risk weight assigned to any retained credit risk 

transfer exposure and removes the overall effectiveness 

adjustment. These amendments allow the Enterprises to 
37 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

better support the housing market through the economic 

cycle and provide the necessary incentives to transfer 

credit risk.

The second amendment in May 2022 adds public 

disclosure requirements for the Enterprises, which 

includes quarterly quantitative and annual qualitative 

disclosures related to risk management, corporate 

governance, capital structure, capital requirements, 

and buffers under the standardized approach. Allowing 

market participants access to this information promotes 

transparency and encourages sound risk management 

practices at the Enterprises.

The third amendment in June 2022 requires the 

Enterprises to submit annual capital plans to FHFA and 

provide prior notice for certain capital actions. The rule 

also incorporates the stress capital buffer determination 

into the capital planning process. The capital plans 

must include an assessment of the expected sources and 

uses of capital over the planning horizon under a range 

of Enterprise and FHFA scenarios, a description of all 

planned capital actions, and any changes to the business 

plan that materially impact capital.

Enterprises’ Credit Risk Transfer 

Activities in 2022

• Under the 2022 Conservatorship Scorecard, FHFA 

required both Enterprises to continue to transfer credit 

risk to private markets in a commercially reasonable 

and safe and sound manner, including actively pursuing 

sales of less liquid assets such as non-performing and 

re-performing loans. In February 2022, FHFA amended 

the ERCF to lessen the disincentives for engaging in 

Credit Risk Transfer (CRT) transactions and to facilitate 

an environment where leverage is not the binding 

capital constraint for the Enterprises, and they have 

incentives to distribute acquired credit risk to private 

investors through CRT rather than to buy and hold 

that risk.

As a result, in FY 2022, both Enterprises actively 

continued to transfer a meaningful amount of singlefamily credit risk to the private sector through both 

securities issuances and insurance/reinsurance CRT 

transactions. Additionally, both Enterprises continued 

to sell single-family re-performing and non-performing 

loans, effectively reducing less liquid assets and the 

number of delinquent loans held in their inventories, 

as well as further transferring credit risk to the 

private sector.

• In FY 2022, CRT also continued to be an integral 

part of the multifamily business models of both 

Enterprises. Freddie Mac’s program continued to 

transfer a meaningful amount of credit risk through 

its multifamily securitization program that focuses 

on senior/subordinate structures via capital markets 

transactions. Fannie Mae’s program continued to 

transfer a meaningful portion of credit risk through its 

pro-rata risk sharing directly with lenders. Additionally, 

in FY 2022, both Enterprises executed multifamily CRT 

insurance/reinsurance transactions to further transfer 

multifamily credit risk to the private market.

Enhanced Monitoring of Enterprises’ 

Boards of Directors

• FHFA, under its conservatorship authorities, enhanced 

its monitoring of the Enterprises’ boards of directors. 

Processes were initiated for the review of board 

and board-level committee meeting materials and 

production of board summaries. These summaries 

were provided in preparation for the FHFA Director’s 

quarterly meetings with the Enterprises’ boards of 

directors and discussion of FHFA priorities. Key 

highlights from FHFA conservatorship attendance 

at board and board committee meetings were also 

developed. Collectively, these processes enhanced 

conservatorship evaluation of effectiveness of the 

Enterprises’ boards in conducting their oversight 

function of Enterprise management. A board’s ability 

to effectively challenge management, for example 

on strategies, objectives, decisions, policies, risk 

management, or other behaviors, is critical to the 

board’s corporate oversight function, which includes 

ensuring alignment of management behavior and 

business outcomes with board objectives.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 38

Performance Section

STRATEGIC OBJECTIVE 1 .1: ENSURE THE SAFETY AND SOUNDNESS OF 

THE REGULATED ENTITIES THROUGH RISK-FOCUSED SUPERVISION

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

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

ratings to the Enterprises, the Federal Home Loan Banks (FHLBanks), and the Office of Finance (OF). FHFA annually 

assigns each regulated entity a composite rating for the overall condition of the entity. In FY 2022, FHFA monitored six 

measures for Strategic Objective 1.1 and met the targets for all six measures. Table 6 reports progress on these measures.

Table 6: Strategic Objective 1 .1 – Summary of Performance Measures and Results

Strategic Objective 1 .1: Ensure the safety and soundness of the regulated entities through risk-focused supervision

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

Result

1 .1 .1a: Conduct risk-focused 

supervision and examinations of the 

Enterprises by having written riskbased examination plans approved 

by January 31, 2022

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 March 31, 2022, for 

the Enterprises

MET NOT 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 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
39 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

PERFORMANCE MEASURE 1 .1 .1A: 

Conduct risk-focused supervision and 

examinations of the Enterprises by 

having written risk-based examination 

plans approved by January 31, 2022

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 2022 as explained below.

• The Enterprises: FHFA examiners examine each 

Enterprise on a continuous basis. DER maintains a 

written risk-based examination plan for each Enterprise 

for every annual examination cycle. To conduct riskfocused supervision and examinations, the examination 

plans should be approved prior to the commencement 

of the upcoming examination cycle. The target date 

for approval of the 2022 examination plans was 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 40

Performance Section

January 31, 2022. 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 examination 

cycle and may be amended to reflect changes in 

risk profile or the Enterprise’s operations. The 2022 

examination plans for Fannie Mae and Freddie Mac 

were approved by the DER Deputy Director on 

December 31, 2021.

• FHLBanks and OF: FHFA examines each of 

the FHLBanks and OF annually on a CY basis. 

Examinations have specified beginning and end dates 

and are generally performed at a pace of three entities 

each quarter. The Division of Federal Home Loan 

Bank Regulation’s (DBR’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 2022, 

scope memoranda were in place prior to the start of 

every FHLBank and OF examination.

PERFORMANCE MEASURE 1 .1 .2A:

Approve reports of examination by 

March 31, 2022, for the Enterprises

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 CAMELSO 

ratings framework. In FY 2022, FHFA met the target 

dates for approving ROEs for the Enterprises as well as 

the FHLBanks and OF, ensuring timely documentation of 

FHFA’s overall assessment of the safety and soundness 

of the regulated entities’ operations and contributing to 

achievement of Strategic Objective 1.1.

• The Enterprises: DER summarizes the Agency’s 

view of the safety and soundness of the Enterprise’s 

operations based on examination work of the 

previous year. DER communicates and explains the 

CAMELSO composite and component ratings and lists 

all outstanding MRAs. DER documents this overall 

assessment of the safety and soundness of Enterprise 

operations by preparing an annual ROE for each 

Enterprise. The target date for approval by the Deputy 

Director for each ROE is March 31. FHFA approved the 

ROEs for Fannie Mae and for Freddie Mac by the target 

date of March 31, 2022.

• 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 Report 

of Examination 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 2022, the DBR Deputy 

Director approved each ROE within 90 days of the 

exit meetings.
41 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

FINANCIAL CONDITION OF THE ENTERPRISES 

Under the Preferred Stock Purchase Agreement (PSPA), the Enterprises are constrained by their ability to build 

capital while in conservatorship. In September 2019, FHFA and the U.S. Department of the Treasury (Treasury) 

agreed to remove the existing requirement that the Enterprises pay out to 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 Mae15 and $20 billion for Freddie Mac16 beginning with the July 1, 2019 dividend period. 

In January 2021, FHFA and Treasury again amended the PSPAs to effectively end the net worth sweep through 

a Letter Agreement that further increased the amount of retained earnings 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.17 Consequently, the Enterprises’ net worth increased to $58.8 billion and $35.2 billion 

for Fannie Mae and Freddie Mac, respectively, by the end of FY 2022. However, the agreement also increases 

the liquidation preference18 of the Senior Preferred Stock by the amount of any increase in the Enterprises’ net 

worth each quarter. In September 2021, FHFA and Treasury suspended certain provisions added to the PSPA in 

January 2021.19 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 remained relatively strong in the first half of FY 2022, as housing demand remained elevated 

despite rising mortgage rates from historically low mortgage rates available during the COVID-19 pandemic. 

The prolonged low interest rate environment combined with a shortage of available housing, contributed to strong 

house prices early in FY 2022. However, a higher interest rate environment emerged in the second quarter of FY 2022 

(January 2022 to March 2022), leading to a significant decrease in single-family refinance activity and overall 

lower new mortgage originations.

Such market conditions have a significant effect on the Enterprises’ net interest income. Lower refinance volume 

results in lower amortization income at the same time as lower new originations reduce net interest income from the 

guarantee book of business, both of which put downward pressure on the Enterprises’ net interest income.

The Enterprises’ seriously delinquent single-family loans, defined as loans that are more than 90 days overdue, 

decreased in FY 2022 as borrowers exit forbearance due to improving economic conditions a year on from the 

COVID-19 pandemic. As of September 30, 2022, the single-family serious delinquency rates were slightly 

elevated from pre-COVID levels at 0.69 percent and 0.67 percent for Fannie Mae and Freddie Mac, respectively. By 

comparison, on September 30, 2021, the single-family serious delinquency rates were 1.62 percent and 1.46 percent, 

respectively, for Fannie Mae and Freddie Mac. FHFA continues to monitor the Enterprises’ assessment of the effects 

of COVID-19 and the related risk management practices to ensure identification, monitoring, and management of 

related credit risks.

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

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

17 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.

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

19 https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-and-Treasury-Suspending-Certain-Portions-of-the-2021-Preferred-StockPurchase-Agreements.aspx.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 42

Performance Section

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 fiscal 

year 2022, as in prior years,20 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 reduction in the size of the retained 

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

The Enterprises’ net interest income continues to be negatively affected by the declining size of retained portfolios 

and lower amortization income as the U.S. economy enters a higher interest rate environment. In addition, future 

elevated CRT issuances could further reduce income while offering protection from economic stressed losses 

by transferring credit risk exposure away from taxpayers. Smaller retained portfolios and CRT issuances meet 

conservatorship objectives. The terms of the PSPAs require the Enterprises to reduce the size of their retained 

mortgage portfolios, which reduces the credit risk of these portfolios. As conservator, FHFA has also required the 

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

The Enterprises’ earnings could continue to experience some volatility in the future as market conditions change. 

Market volatility could result in fluctuations in the estimated fair value of the financial instruments that are marked 

to market through earnings. These financial instruments, which include derivatives and certain securities, could 

fluctuate substantially from period to period because of changes in interest rates, the yield curve, mortgage and 

credit spreads, and implied volatility. To minimize the impact of interest rate fluctuations and mitigate the volatility 

in its financial results, Freddie Mac and Fannie Mae implemented hedge accounting in 2017 and 2021, respectively. 

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. 

In addition, the continued reduction in the retained portfolios will reduce the Enterprises’ interest-earning assets. 

Table 7: Enterprise Financial Results Summary of First 3 Quarters of 2022 and Full Year 2021

(dollars in billions)

Fannie Mae Freddie Mac

2022 2021 

Annual

2022 2021 

Q1 Q2 Q3 Q1 Q2 Q3 Annual

Net Income (Loss) $4.4 $4.7 $2.4 $22.2 $3.8 $2.5 $1.3 $12.1

Comprehensive 

Income (Loss)* $4.4 $4.6 $2.4 $22.1 $3.7 $2.4 $1.1 $11.6

* 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.

20 https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA-2021-Annual-Report-to-Congress.pdf.
43 | FY 2022 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, 2022. All 11 FHLBanks were profitable, with a combined net income of $2.5 billion on $4.3 billion 

of net interest income after provision for credit losses, with improved performance from the $2.0 billion and 

$4.0 billion earned, respectively, in the prior 12-month period. The FHLBanks recaptured $54 million of losses 

through interest income previously taken as credit other-than-temporary impairments. Operating expenses totaled 

$1.2 billion for the 12-month period that ended September 30, 2022. FHLBank advances increased by $305.0 billion 

over the past 12 months, resulting in $655.0 billion of advances outstanding on September 30, 2022. Advances 

represented 59.7 percent of total FHLBank System assets. The balance of mortgages purchased from FHLBank 

members was $56.0 billion, or 5.1 percent of total FHLBank System assets. During the 12-month period ending 

September 30, 2022, the FHLBanks purchased $10.4 billion of mortgages and collected principal payments of 

$10.2 billion. The FHLBanks’ remaining assets were primarily investments, which include liquidity assets,21 MBS, and 

other investments. Investments totaled $380.2 billion and represented 34.6 percent of FHLBank System assets. Of 

the total, liquidity assets (including cash and Treasury securities) represented $232.4 billion,22 while total MBS was 

$128.9 billion. Most of the MBS portfolio was agency MBS ($118.3 billion or 91.8 percent), with only $1.7 billion 

(1.3 percent) of private-label MBS. Aggregate consolidated obligations, which is the debt issued jointly and used 

by each FHLBank to fund its operations, totaled $1.0 trillion as of September 30, 2022, of which 44.4 percent were 

discount notes. Consolidated obligations with a remaining contractual maturity of less than one year by par value 

represented 68.4 percent of total consolidated obligations. Table 8 provides a summary of the FHLBanks’ financial 

results through September 30, 2022.

Table 8: FHLBanks’ Financial Results Summary of First 3 Calendar Quarters of 2022 and 

Full Calendar Year 2021

(in $ millions)

Net Income (Loss)*

2022

2021 Annual

Q1 Q2 Q3

FHLBank of Boston 28 41 60 69

FHLBank of New York 57 76 130 266

FHLBank of Pittsburgh 19 37 74 86

FHLBank of Atlanta 36 27 47 133

FHLBank of Cincinnati 16 41 91 42

FHLBank of Indianapolis 29 32 47 94

FHLBank of Chicago 95 91 95 275

FHLBank of Des Moines 54 99 132 206

FHLBank of Dallas 41 66 95 164

FHLBank of Topeka 50 50 67 161

FHLBank of San Francisco 78 48 80 287

FHLBank System Total Net Income 503 609 916 1,783

* Numbers may not add due to rounding

21 Liquidity assets primarily include federal funds, reverse repurchase agreements, Treasury securities, and interest-bearing deposits.

22 On January 1, 2019, FHFA began counting Treasury securities toward the FHLBanks liquidity as part of the new FHLBank Liquidity 

Guidance in Advisory Bulletin 2018-07.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 44

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 a 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 2022, each 

FHLBank reported market value information to FHFA 

for the preceding quarter. All FHLBanks reported MVE 

greater than the PVCS.

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 2022, 

FHFA deemed all FHLBanks “adequately capitalized” for 

the prior quarter and communicated these classifications 

to the FHLBanks via letter.

Figure 10: Quarterly MVE to PVCS Ratios
45 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

STRATEGIC OBJECTIVE 1.2: DEVELOP AND MAINTAIN A WORLD-CLASS 

SUPERVISION PROGRAM 

FHFA conducts ongoing risk analysis, examinations, and review and monitoring. FHFA develops and maintains highly 

skilled examiners and continues to modernize and improve its supervision practices, processes, and tools. In FY 2022, 

FHFA monitored two measures for Strategic Objective 1.2 and met the targets for both of these measures. The table below 

reports progress on these measures.

Table 9: Strategic Objective 1 .2 – Summary of Performance Measures and Results

Strategic Objective 1 .2: Develop and maintain a world-class supervision program

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

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

MET NOT 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

NOT MET MET MET 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 a 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 2022 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. 

FHFA follows different processes for the closure of 

MRAs at the Enterprises and the FHLBanks.

• The Enterprises: The Enterprises address MRAs 

by submitting proposed remediation plans to FHFA 

for review. Enterprise management executes the 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 46

Performance Section

actions required in each remediation plan and submits 

documentation demonstrating remediation activities to 

the Enterprise’s internal audit function for validation. 

For each MRA for which an Enterprise submits a 

closure package, which includes the internal audit 

function’s validation, to FHFA between June 1 of the 

prior fiscal year and May 31 of the current fiscal year, 

FHFA reviews the Enterprise’s actions and the internal 

audit function’s validation by the end of the fiscal year 

to determine whether the Enterprise has satisfactorily 

addressed the MRA. In FY 2022, the Enterprises 

satisfactorily addressed 93 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 2022, 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, DBR found that the FHLBanks and OF 

satisfactorily addressed 97 percent of their MRAs.
47 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

STRATEGIC OBJECTIVE 1 .3: RESPONSIBLY END THE CONSERVATORSHIPS 

OF THE ENTERPRISES

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 2022, FHFA monitored 

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

progress on these measures.

Table 10: Strategic Objective 1 .3 – Summary of Performance Measures and Results

Strategic Objective 1 .3: Responsibly end the conservatorships of the Enterprises

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

Result

1 .3 .1: Issue a proposed rule on 

Enterprise disclosures under the 

Enterprise Regulatory Capital 

Framework

N/A23 N/A N/A N/A N/A FY 2022 MET

1 .3 .2: Issue a proposed rule on 

Enterprise Capital Planning N/A N/A N/A N/A N/A FY 2022 MET

23 “N/A” or “not available” means that FHFA did not report data in prior PARs for the marked measures. 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 48

Performance Section

PERFORMANCE MEASURE 1 .3 .1:

Issue a proposed rule on Enterprise 

disclosures under the Enterprise 

Regulatory Capital Framework

In December 2020, FHFA published a capital framework 

for the Enterprises. The ERCF is designed to ensure each 

Enterprise is capitalized to remain a viable going concern 

both through and after a severe economic downturn and 

is positioned to fulfill its statutory mission to provide 

stability and on-going assistance to the secondary 

mortgage market across the economic cycle. However, the 

original ERCF included only minimal public disclosure 

requirements related to several high-level, aggregate 

measures. To fill this gap in the framework, FHFA 

proposed a regulation in November 2021 that would expand 

the disclosure requirements set forth in the ERCF in 

order to improve market discipline and encourage sound 

risk-management practices at the Enterprises through 

meaningful public disclosure. The proposed rule would 

implement disclosure requirements that align with many 

of the public disclosure requirements for large banking 

organizations in the U.S. banking framework related to 

risk management, corporate governance, and regulatory 

capital, including risk-weighted assets calculated under 

the ERCF’s standardized approach, statutory capital 

requirements, supplemental capital requirements, and 

capital buffers. The quarterly disclosures would be both 

quantitative and qualitative in nature, covering credit, 

market, and operational risk, as well as leverage capital 

requirements and buffers. FHFA published the notice 

of the proposed rulemaking in the Federal Register on 

November 3, 2021, and the amendments were adopted in 

final form on May 26, 2022. 
49 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

PERFORMANCE MEASURE 1 .3 .2: 

Issue a proposed rule on Enterprise 

capital planning

Capital planning builds on the supervisory expectation 

that financial institutions should have processes in place 

to incorporate forward-looking projections of revenue 

and losses to monitor and maintain their internal capital 

adequacy. A proposed rulemaking for Enterprise capital 

planning would support sound capital management and be 

consistent with the regulatory framework for large banks. 

The rule would require each Enterprise to develop and 

maintain a capital plan. The annual plans would assess 

the expected uses and sources of capital, by estimating 

revenue, losses, and capital levels over a defined planning 

horizon, under both expected and stressful conditions, 

including scenarios provided by FHFA and at least 

one scenario developed by the Enterprise. In 2021, 

FHFA asked each Enterprise to submit a capital plan in 

substantially the same form as would be required under a 

rulemaking. The first capital plans were submitted to the 

Agency in September 2021. FHFA published the proposed 

rule in the Federal Register on December 27, 2021, 

and the rule was adopted in final form on June 1, 2022.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 50

Performance Section

Strategic Goal 2: Foster Competitive, 

Liquid, Efficient, and Resilient (CLEAR) 

National Housing Finance Markets

24 https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA-2021-Mission-Report.pdf.

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 2022 

that contributed to progress toward the strategic goal.

Published Data and Analysis on 

Mission Activities

• In addition to the fair lending data included within the 

Mission Report published in June24, FHFA built upon 

its inaugural fair lending data release by providing new 

and updated information on single-family Enterpriseacquired applications and loans, subset by race and 

ethnicity. This information provides key data over time, 

highlighting important trends that may serve as the basis 

for further research, reviews, and policy interventions.

Strengthened Fair Lending Toolbox

• In FY 2022, FHFA continued to build and advance its 

fair lending program to ensure fair lending and equity 

considerations are integrated into the mission and 

business activities of its regulated entities. FHFA worked 

closely with the Enterprises to assess how fair lending 

considerations are incorporated into policy development, 

new initiatives, and ongoing programs at each Enterprise 

and identified ways to strengthen integration of fair lending 

considerations throughout key business processes.

• FHFA also issued Fair Lending and Fair Housing 

Compliance Examination Policies and Procedures 

for the Enterprises. The Operational Procedures 

Bulletin (OPB) describes FHFA’s internal procedures 

for conducting fair lending examinations pursuant to 

FHFA’s Policy Statement on Fair Lending and the related 

AB. The OPB comprehensively outlines FHFA’s fair 

lending supervisory risk assessments, the examination 

process, roles and responsibilities, default timeframes, 

and remediation oversight. Finalization of this bulletin 

provides fair lending examination staff with processes and 

procedures for conducting fair lending examinations.

• FHFA issued its annual fair lending oversight letters 

to each Enterprise communicating FHFA’s holistic view 

of fair lending supervision and oversight. The letters 

summarize fair lending supervisory matters that FHFA 

engaged in with each Enterprise in Calendar Year (CY) 

2021, including targeted examinations and ongoing 

monitoring. The oversight letters discuss ongoing and 

emerging fair lending risk issues that the Enterprises 

should continue focusing on in the coming year. Identified 

risk issues include implementation of the Equitable

Housing Finance Plans, appraisals and valuations, 

and underwriting model overlays and overrides.

• FHFA increased its engagement with the FHLBanks 

by conducting outreach and developing regular 

“office hours.” The “office hours” provide FHLBanks 

an opportunity to ask questions, receive technical 

assistance, and increase collaboration with FHFA.
51 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

Mandatory Adoption of the Supplemental 

Consumer Information Form

• In October 2021, the Enterprises introduced the 

Supplementary Consumer Information Form (SCIF) 

(Fannie Mae/Freddie Mac 110325), with standardized 

questions about homeownership education, housing 

counseling, and language preference, which lenders 

could use voluntarily to collect borrower information. 

In May 2022, at FHFA’s instruction, the Enterprises 

announced that lenders will be required to use the SCIF 

as part of the application process for loans that will be 

sold to the Enterprises, so lenders can better understand 

borrower needs during the home buying process. 

Lenders will present the SCIF questions to borrowers 

and report any data collected from the SCIF to the 

Enterprise purchasing the loan. Lenders will be required 

to adopt these changes and reporting requirements for 

loans with application dates on or after March 1, 2023. 

Responses by borrowers to the preferred language 

question in the SCIF will remain voluntary.

Translated versions of the SCIF are available in 

Spanish, traditional Chinese, Vietnamese, Korean, and 

Tagalog and can be accessed via Mortgage Translations, 

https://www.fhfa.gov/MortgageTranslations. 

Mortgage Translations—created by FHFA, Fannie Mae, 

and Freddie Mac—is a clearinghouse of translated 

mortgage documents and resources to assist lenders, 

servicers, housing counselors, and others in helping 

mortgage borrowers who have limited English proficiency.

Assessed COVID-19 Forbearance Exits 

to Inform Ongoing Policy Response

• Single-Family: Since the beginning of the COVID-19 

pandemic in 2020, FHFA has been closely monitoring 

COVID-19 forbearance plans and loss mitigation 

outcomes to inform future policy refinement. Since 

March 2020, approximately 2.25 million COVID-19 

forbearance plans were initiated on Enterprise loans, 

and as of June 2022 about 4 percent remain in 

active forbearance. Approximately 20 percent of all 

25 SCIF forms for Freddie Mac and Fannie Mae can be found at SCIF Form 1103 Form (freddiemac.com) and Supplemental Consumer Information Form

(fanniemae.com).

COVID-19 forbearance plans were able to self-cure 

through reinstatement or remain current. Upon exiting 

forbearance, nearly 35 percent of loans successfully 

performed under a loss mitigation solution, and a 

majority (roughly 600,000 borrowers) were able to 

bring their loans current and continue performing with 

a COVID-19 Payment Deferral. Since the start of 

2022, FHFA has seen an increase in the proportion of 

borrowers exiting forbearance plans into a COVID-19 

Flex Modification, which offers expanded eligibility 

for borrowers who may have reached the previous 

modification limit under the standard Flex Modification 

and may offer a rate reduction. Lastly, some 40 percent 

of borrowers entering into a COVID-19 forbearance 

plan have taken advantage of the recent home price 

appreciation to access their equity by selling or 

refinancing their homes, and a small proportion of 

loans, nearly 6 percent of COVID-19 forbearance plan 

exits, remain delinquent as of June 2022.

• Multifamily: FHFA worked closely with the 

Enterprises to assess the impact of their multifamily 

COVID-19 response, which included the multifamily 

COVID-19 forbearance programs, as well as policies 

regarding loan originations, loan servicing, and 

property management (particularly around tenant 

protections). Currently, the Enterprises’ multifamily 

COVID-19 forbearance programs remain available to 

property owners. However, demand for multifamily 

forbearance has dropped considerably over the past year 

with very few loans remaining in active forbearance as 

of September 30, 2022.

Published Final Enterprise Housing 

Goals Rule for 2022-2024 Single-Family 

Housing Goals and 2022 Multifamily 

Housing Goals

• The Safety and Soundness Act requires FHFA to 

establish annual housing goals for Enterprise purchases 

of both single-family and multifamily mortgages. In 

December 2021, FHFA published a final rule establishing 

benchmark levels for each of the single-family housing 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 52

Performance Section

goals and subgoals for 2022-2024 and benchmark 

levels for the multifamily housing goals for 2022. The 

final rule included two new single-family subgoals 

to replace the previous low-income areas subgoal. 

The new minority census tract subgoal is designed 

to focus on providing mortgage financing for lowand moderate-income borrowers in communities of 

color. The minority census tract goal will encourage 

the Enterprises to develop business strategies aimed 

specifically at meeting homeownership needs in 

communities of color and reflects FHFA’s commitment 

to improving access to credit in these communities. 

The new low-income census tract subgoal continues to 

target loans in low-income neighborhoods.

Published Proposed Enterprise 

Multifamily Housing Goals Rule for 2023 

and 2024

• In July 2022, FHFA proposed new benchmark levels 

for the multifamily housing goals covering 2023 and 

2024. The proposed rule would measure Enterprise 

performance as the percentage of affordable units 

in multifamily properties financed by mortgages 

purchased by the Enterprises, rather than the number 

of affordable units in the properties.

Established Federal Advisory 

Committee on Affordable, Equitable, 

and Sustainable Housing

• In August 2022, FHFA announced its intent to establish 

an Advisory Committee on Affordable, Equitable, 

and Sustainable Housing. The Committee will better 

position FHFA to fulfill its strategic goal to foster 

housing finance markets that promote equitable access 

to affordable and sustainable housing by providing the 

FHFA Director with advice and input on those markets, 

which include barriers to access, and any regulatory or 

policy changes that may be necessary or beneficial in 

those areas.

Updated Minimum Financial 

Eligibility Requirements for 

Enterprise Seller/Servicers

• In August 2022, FHFA updated minimum financial 

eligibility requirements for Enterprise seller/servicers. 

The updated eligibility requirements represent an 

ongoing commitment to the safety and soundness 

of Fannie Mae and Freddie Mac by strengthening 

the capacity of seller/servicers to meet the financial 

responsibilities associated with doing business with 

the Enterprises. The updated requirements contain 

changes related to incorporating enhanced definitions 

of capital and liquidity, reducing the procyclicality of 

the previous liquidity requirements, and incorporating 

lessons learned from the COVID-19 pandemic. 

The requirements also include higher supplemental 

requirements applicable only to large non-depositories, 

defined as non-depositories having $50 billion 

or more of total single-family servicing unpaid 

principal balance.

Since 2020, FHFA and the Government National 

Mortgage Association (Ginnie Mae) have coordinated 

their analyses, engaged in stakeholder outreach, and 

held an April 2022 joint listening session to consider 

feedback on the impact the revised requirements 

will have on the mortgage industry. To reduce 

regulatory burden and provide greater consistency and 

predictability for seller/servicers and issuers, FHFA and 

Ginnie Mae worked closely to align their respective 

standards and implementation timelines to the greatest 

extent possible. The majority of the requirements are 

effective on September 30, 2023.
53 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

STRATEGIC OBJECTIVE 2 .1: INSTITUTE REFORMS AT THE REGULATED 

ENTITIES THAT SERVE TO FOSTER CLEAR NATIONAL HOUSING 

FINANCE MARKETS

26 https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/GFee-Report-2020.pdf.

FHFA’s responsibilities for housing finance market 

liquidity and safety and soundness are inherently 

intertwined, and the Agency evaluates policies and 

takes appropriate action to promote both goals. As both 

regulator and conservator, FHFA requires the Enterprises, 

where feasible, to: (1) take actions to improve liquidity in 

the single-family housing finance market; (2) continue to 

improve servicing standards and foreclosure prevention 

actions; and (3) maintain a critical ongoing role in the 

multifamily sector, particularly for affordable multifamily 

properties and underserved market segments. As regulator 

of the FHLBank System under the Safety and Soundness 

Act and the Bank Act, FHFA works to ensure that the 

FHLBanks continue to fulfill their statutory mission 

of providing a reliable source of liquidity to their 

member institutions in support of housing finance and 

community lending.

In FY 2022, 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: Institute reforms at the regulated entities that serve to foster CLEAR national housing finance markets

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

Result

2 .1 .1: Document review of regulated entity 

public filings N/A N/A N/A N/A MET

Quarterly 

documentation 

of reviews within 

45 days after the 

required filing date

MET

2 .1 .2: Publish annual guarantee fee report N/A N/A N/A N/A MET December 30, 2021 MET

PERFORMANCE MEASURE 2 .1 .1:

Document review 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 U.S. Securities and Exchange Commission. 

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 financial 

reports for the System. In FY 2022, FHFA provided 

quarterly documentation of reviews within 45 days after 

the required filing date. 

PERFORMANCE MEASURE 2 .1 .2:

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 2021 

report compares year-over-year 2020 to 2019 and 2018. 

The report “Fannie Mae and Freddie Mac Single-Family 

Guarantee Fees in 2020” was published December 21, 2021.26
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 54

Performance Section

STRATEGIC OBJECTIVE 2 .2: ENSURE THAT THE REGULATED ENTITIES 

FULFILL THEIR STATUTORY MISSIONS TO SUPPORT AFFORDABLE 

HOUSING, COMMUNITY DEVELOPMENT, AND DIVERSITY AND 

INCLUSION REQUIREMENTS

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 oversees the FHLBanks’ affordable housing and community investment 

activities. In FY 2022, FHFA monitored seven performance measures for Strategic Objective 2.2 and met six 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: Ensure that the regulated entities fulfill their statutory missions to support affordable housing, community 

development, and diversity and inclusion requirements

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Target FY 2022 

Result

2 .2 .1: Publish proposed Enterprise housing 

goals rule for 2022-24 N/A N/A N/A N/A NOT 

MET December 2021 MET

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

Duty to Serve performance in 2020 N/A N/A N/A N/A MET October 2021 MET

2 .2 .3: Determine that the Enterprises 

have met the mission-driven requirements 

in Appendix A of the Conservatorship 

Scorecard27

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

1. Each Enterprise’s 

mission driven business 

meets or exceeds 

50 percent 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

MET

2 .2 .4: Issue an Operating Procedures 

Bulletin on fair lending examinations for 

the Enterprises

N/A N/A N/A N/A N/A July 2022 MET

2 .2 .5: Determine regulated entities have 

satisfactorily addressed Matters Requiring 

Attention relating to their Diversity and 

Inclusion programs, in accordance with agreedupon remediation plans and timeframes

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

2 .2 .6a: Approve Diversity and Inclusion 

reports of examination by March 31, 2022, 

for the Enterprises and Common 

Securitization Solutions

N/A N/A N/A N/A N/A 100 percent of the time NOT 

MET

2 .2 .6b: Approve Diversity and Inclusion 

reports of examination for at least nine of 

the FHLBank System regulated entities

N/A N/A N/A N/A N/A 100 percent of the time MET 

27 The 2022 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.
55 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

PERFORMANCE MEASURE 2 .2 .1:

Publish proposed Enterprise housing 

goals rule for 2022-24

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 annual based on CY 

and include separate affordable housing categories for 

single-family and multifamily mortgages. In December 

2021, the Agency published a final rule establishing 

benchmark levels for each of the single-family housing 

goals and subgoals for 2022-2024 and benchmark levels 

for multifamily housing goals for 2022. In July 2022, 

FHFA proposed new benchmarks for the multifamily 

housing goals covering 2023 and 2024. The proposed rule 

would measure Enterprise performance as the percent 

of affordable units in multifamily properties financed by 

mortgages purchased by the Enterprises, rather than the 

number of affordable units in the properties.

PERFORMANCE MEASURE 2 .2 .2:

Issue annual ratings for each Enterprise’s 

Duty to Serve performance in 2020

The Enterprises have important roles in supporting 

access to mortgage credit for low- and moderate-income 

families, as well as those in underserved areas. The 

Safety and Soundness Act establishes a duty for Fannie 

Mae and Freddie Mac to serve very low-, low-, and 

moderate-income 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 for 

review and non-objection. The plan covers a three-year 

28 The 2022 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.

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 each CY. In October 2021, FHFA issued 

its annual evaluations for each Enterprise’s 2020 DTS 

performance as part of FHFA’s Annual Housing Report.

PERFORMANCE MEASURE 2 .2 .3:

Determine that the Enterprises 

have met the mission-driven 

requirements in Appendix A of the 

Conservatorship Scorecard28

The 2022 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.

This measure determines if the Enterprises’ multifamily 

loan purchases for the calendar year met FHFA’s missiondriven requirements. The measure helps ensure that the 

Enterprises purchase a certain amount of mission-driven 

multifamily loans and meet FHFA’s minimum missiondriven requirements. In CY 2021, each Enterprise’s 

mission-driven business met or exceeded 50 percent of 

total multifamily business and at least 20 percent of each 

Enterprise’s total business was affordable at or below 

60 percent of area median income.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 56

Performance Section

PERFORMANCE MEASURE 2 .2 .4:

Issue an Operating Procedures 

Bulletin on fair lending examinations 

for the Enterprises

This performance measure provides a target for the 

Office of Fair Lending Oversight’s publication of 

examination operating procedures for the Enterprises. 

Release of operating procedures is designed to provide 

transparency regarding FHFA’s supervisory oversight and set 

expectations with the Enterprises regarding examination 

procedures. Fair lending examinations ensure that all 

Americans, especially those in underserved communities, 

have access to a fair and sustainable housing finance 

system. By clearly communicating how fair lending 

examinations will proceed, FHFA increases examination 

process efficiency, improves risk-based supervision, 

and supports its goal of ensuring equitable housing 

opportunities. Because the operating bulletin is non-public 

information, FHFA will not publish it on the Agency’s 

website. However, FHFA sent memoranda formalizing 

the operating bulletin to the Enterprises in July 2022. 

The target for this measure was met.

PERFORMANCE 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

The regulated entities are evaluated by FHFA to ensure 

compliance with statutory and regulatory requirements for 

advancing diversity and ensuring inclusion in all of their 

business activities. FHFA executes supervisory strategies 

that establish areas of focus and set the expectations for 

the regulated entities to ensure their compliance. The 

Diversity and Inclusion (D&I) examination module 

establishes a framework within which the regulated 

entities are examined by FHFA for such compliance and 

hold the regulated entities accountable in this area. The 

performance measure relies on the D&I supervisory 

strategies and examination plans that FHFA has developed 

and uses to evaluate compliance by the regulated entities 

with Section 1116 of HERA and FHFA regulations 

at 12 CFR 1207. The target is a 90 percent success 

rate for MRAs reviewed during the year. In FY 2022, 

100 percent (20/20) of the open MRAs issued at previous 

examinations to the regulated entities were remediated or 

on track to be remediated.

PERFORMANCE MEASURE 2 .2 .6A:

Approve Diversity and Inclusion reports 

of examination by March 31, 2022, 

for the Enterprises and Common 

Securitization Solutions

This measure reports progress towards meeting FHFA’s 

requirement to issue D&I ROEs to FHFA’s regulated 

entities. FHFA missed its target for meeting this measure. 

As of publication of the PAR on November 15, 2022, 

the ratings for Fannie Mae, Freddie Mac, and CSS are 

non-public and under review.

PERFORMANCE MEASURE 2 .2 .6B:

Approve Diversity and Inclusion reports 

of examination for at least nine of the 

FHLBank System regulated entities

This measure reports progress towards meeting FHFA’s 

requirement to issue D&I ROEs to FHFA’s regulated 

entities. These reports demonstrate the Agency’s 

commitment to its mission to promote financial inclusion 

and economic opportunity by ensuring regulated entity 

compliance with statutory and regulatory compliance. 

In FY 2022, FHFA approved D&I ROEs for nine of the 

FHLBank System regulated entities.
57 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

STRATEGIC OBJECTIVE 2 .3: POSITION FHFA AS A LEADER IN PROVIDING 

THE PUBLIC WITH INFORMATION AND ANALYSIS ON THE STATE OF THE 

HOUSING FINANCE MARKETS AND RELATED MATTERS

In FY 2022, FHFA continued to conduct research, collect and analyze data, and publish important information in FY 2022 on 

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

Selected examples include:

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

Strategic Objective 2 .3: Position FHFA as a leader in providing the public with information and analysis on the state of the housing 

finance markets and related matters

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

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 N/A NOT 

MET September 2022 MET

2 .3 .3: Publish quarterly aggregate statistics 

on mortgage profiles and delinquencies from 

National Mortgage Database

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

• 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 2022, FHFA monitored three measures for 

Strategic Objective 2.3 and met all three of the targets 

for these measures. The table below reports progress on 

these measures.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 58

Performance Section

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. Because of the breadth of the 

sample used for the survey, it provides more information 

than is available in other house price indices. The FHFA 

HPI provides housing economists with an analytical 

tool that is useful for estimating changes in the rates of 

mortgage defaults, prepayments, and housing affordability 

in specific geographic areas. FHFA HPI data are available 

at https://www.fhfa.gov/HPI. In FY 2022, FHFA 

successfully published 12 monthly and four quarterly 

FHFA HPI releases. Figure 11 shows the FHFA HPI from 

1991 to July 2022 as released in September 2022.

Figure 11: Monthly House Price Index for U .S . from January 1991 – Present

Purchase-Only FHFA HPI® (Seasonally Adjusted, Nominal)
59 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

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. 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 

general public with a deeper understanding of housing 

and mortgage markets. The PUDB single-family data 

set 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 (LTV) ratio, 

age of mortgage note, and affordability of the mortgage. 

The PUDB multifamily property-level data set 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 PUDB data sets were 

released in September 2022.29

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, 

29 https://www.fhfa.gov/DataTools/Downloads/Pages/Public-Use-Databases.aspx. 

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 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

The data were published quarterly on 

https://www.fhfa.gov/nmdbdata.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 60

Performance Section

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 2022 

that contributed to progress in this area. Selected 

accomplishments for FY 2022 include:

Established FHFA Data 

Governance Committee

• FHFA is committed to implementing the Evidence-Based 

Policy Making Act of 2018 and the corresponding 

guidance provided by OMB. In FY 2022, FHFA 

formally established an agency-level data governance. 

The FHFA Data Governance Committee’s purpose 

is to ensure the Agency makes strategic decisions 

(e.g., policies, strategic plans, investments) and tactical 

decisions (e.g., procedures, standards, controls) 

concerning data governance and lifecycle data 

management in a collaborative and informed manner in 

furtherance of FHFA’s mission.

• The committee will serve as a forum for discussion and 

review, making recommendations to senior Agency 

officials with respect to data governance and lifecycle 

data management matters. FHFA also completed an 

update to the agency-wide data catalog in FY 2022 

and began developing a draft Comprehensive Data 

Inventory Standard that would implement the statutory 

requirement to maintain the inventory.

Strategic Goal 3: Position the Agency 

as a Model of Operational Excellence 

by Strengthening the Workforce 

and Infrastructure
61 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

Established Internal Controls Policy and 

Enterprise Risk Management Policy

• In FY 2022, FHFA implemented the Internal Controls 

Policy which defines the responsibilities for all levels of 

FHFA to perform Agency processes, promote the proper 

stewardship of Agency resources, and report on Agency 

controls in accordance with statutory requirements. 

The Internal Controls Policy builds the framework for root 

cause analysis and corrective action planning to remediate 

known deficiencies in an effective and timely manner.

• In FY 2022, FHFA established an Enterprise 

Risk Management (ERM) Framework and ERM 

Policy to further mature its practices and provide 

awareness of the Agency’s enterprise-wide risk. This 

Policy establishes ERM program requirements for 

implementing a continual systematic method and 

governance structure for managing Agency-level 

risks. The Agency also chartered the Audit, Risk, and 

Control Committee (ARCC). The ARCC provides 

the governance and oversight for the Agency’s Audit 

Coordination, ERM, and Internal Controls program and 

replaced the Executive Committee on Internal Controls 

that was more narrowly focused.

COVID-19 Response and Return 

to Office Phase 3

• After the Agency’s success in transitioning to a remote 

environment at the onset of the pandemic, the Agency 

made changes in its policies and procedures that 

enabled a hybrid work model to be implemented in 

June 2022. The Agency’s technology infrastructure 

has continued to support employees working remotely 

while ensuring secure access to Agency information 

resources and collaboration tools. The Agency has 

further enabled its workforce by making information 

technology (IT) upgrades throughout the building to 

facilitate an effective hybrid workforce.

• The Agency’s other operations functions have adapted 

service models and implemented policies to support a 

hybrid workforce. This included expanding the number 

of days a week that employees may telework, as well 

as expanding options for flexible work schedules. 

Additional policies have been updated to maximize 

space utilization and to allow for repurposing space 

for future Agency needs. The Agency also instituted a 

Wellness Program that provides increased opportunities 

and programs geared at improving the overall health 

of employees.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 62

Performance Section

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

ACCOUNTABLE, AND ENGAGED WORKFORCE

 In FY 2022, 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 14: 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 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

Result

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”

N/A N/A N/A MET MET

Positive responses 

equal to or higher 

than both the 

small agency and 

government-wide 

averages

MET

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”

N/A N/A N/A MET MET 65 percent positive MET

3 .1 .3: Improve the number of days to hire N/A N/A N/A N/A NOT 

MET 95 workdays MET 

3 .1 .4: Develop FHFA Human Capital Plan30 N/A N/A N/A N/A N/A July 2022 NOT 

MET 

30 The Agency has renamed the FHFA Human Capital Plan, which is now the FHFA People Plan.

PERFORMANCE MEASURE 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”

The Federal Employee Viewpoint Survey (FEVS) is 

conducted on an annual basis to measure employees’ 

perceptions of many work issues. The results provide 

agency leaders insight into areas where improvements 

have been made, as well as areas where improvements 

are needed. Tracking FHFA’s response to the question 

on its workforce having the job-relevant knowledge 

and skills necessary to accomplish organizational 

goals provides a high-level valuation of core human 

resources programs, such as recruitment, performance 

management, and training and development. This measure 

determines how well FHFA compares with the rest of 

the federal government in having a workforce with 

the job-relevant knowledge and skills necessary to 

accomplish organizational goals. It also informs FHFA if 

its employees perceive that the Agency is hiring, retaining, 

and developing the right talent to accomplish its mission. 

The FY 2021 FEVS response for this measure is 89 percent 

positive, which is 3 percent higher than the small agency 

average (86 percent) and 9 percent higher than the 

government-wide average (80 percent).
63 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

PERFORMANCE MEASURE 3 .1 .2:

FEVS Employee Engagement Index is at 

or above the percent that the Office of 

Personnel Management considers an 

agency “Strength”

FHFA measures agency-wide employee engagement as 

compared to what is considered an overall strength as 

defined by the Office of Personnel Management (OPM). 

The Agency has committed to maintaining an engaged 

workforce with the assumption that more engaged 

employees are more productive and therefore improve 

overall Agency operations. The FY 2021 FEVS response 

for this measure is 75 percent positive and considered a 

“strength” by OPM.

PERFORMANCE MEASURE 3 .1 .3:

Improve the number of days to hire

The purpose of this measure is to monitor the time 

required to hire job applicants and fill vacant positions. 

The Agency determined that 95 workdays should be the 

target for completing the hiring process. The average 

hiring time for FY 2022 was 91 workdays. Measurement 

of the hiring cycle begins when a vacancy announcement 

or hiring action has been authorized by the hiring manager 

and concludes when an applicant accepts a job offer.

The number of days to hire is tracked on a monthly 

basis and it is reported quarterly. In addition, FHFA 

implemented a tool to track the time-to-hire from the date 

an action is initiated until an offer is accepted.

PERFORMANCE MEASURE 3 .1 .4:

Develop FHFA Human Capital Plan

The FHFA People Plan, renamed from the FHFA Human 

Capital Plan, will provide a combination of strategies, 

objectives, actions, and metrics to enable organized, 

efficient, and steady progress for the Agency’s workforce. 

FHFA missed its target for completing the FHFA People Plan. 

Although a draft of the Plan was completed in July 2022, it 

is still under review to be finalized as of November 15, 2022, 

which is the publication date of the PAR.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 64

Performance Section

STRATEGIC OBJECTIVE 3 .2: ENSURE SOUND GOVERNANCE AND GOOD 

STEWARDSHIP OF AGENCY RESOURCES 

FHFA employs financial, contracting, and performance information to ensure that resources are managed responsibly. 

In FY 2022, FHFA monitored four measures for Strategic Objective 3.2 and met the targets for three of these measures. 

The table below reports progress on these measures.

Table 15: Strategic Objective 3 .2 – Summary of Performance Measures and Results

Strategic Objective 3 .2: Ensure sound governance and good stewardship of Agency resources

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

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: Award FHFA contracts competitively N/A N/A N/A N/A MET 75 percent MET

3 .2 .3: Complete corrective actions to address 

audit recommendations in a timely manner N/A N/A N/A N/A NOT 

MET

95 percent of the 

corrective actions 

to address Office of 

Inspector General 

recommendations 

are completed within 

one year of the 

resolution date

NOT 

MET

3 .2 .4: Increase the dollar amount of 

FHFA contracts awarded to minority- and 

women-owned businesses consistent with 

legal standards

MET MET MET NOT 

MET MET

Total dollar amount 

of contracts 

greater than the 

five-year average

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 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

PERFORMANCE MEASURE 3 .2 .2:

Award FHFA contracts competitively

Per the Competition in Contracting Act, competition is 

critical for procurement and a key component of sound 

fiscal responsibility. Competitively awarding contracts 

(i.e., not directly awarding to a particular vendor, 

but allowing multiple vendors to submit proposals in 

response to a solicitation) is a proven tool for:

• Realizing cost savings because vendors must put

forth fair and reasonable pricing to be considered for

an award;

• Spurring innovation, since the commercial marketplace

can set forth various, unique processes and approaches

to meet the federal government’s needs; and

• Increasing business opportunities for diverse

vendors, to include small, women-owned,

and minority-owned businesses.

As good stewards of agency resources, FHFA is 

committed to securing the goods and services needed 

to execute its mission at fair and reasonable prices 

and considering solutions that are the best value to the 

Agency. Competing contracts supports this commitment. 

In FY 2022, FHFA competed 87.95 percent of its 

contract actions.

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 

95 percent of the corrective actions to address OIG 

recommendations within one year of the resolution date. In 

FY 2022, FHFA completed 41 out of 49 recommendations 

within 365 days. This resulted in a completion rate of 

84 percent of recommendations completed within 365 days. 

The measure is calculated by counting the time it has 

taken to resolve those corrective actions that are closed 

out during the course of a fiscal year. Some of the 

31 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.

corrective actions were tied to exam cycles and could 

not be resolved within one year due to the timing of 

exams. FHFA is working to revise its service models and 

automate manual audit tracking and follow up processes. 

This is expected to improve visibility and accountability 

and will enhance FHFA’s ability to meet this target in 

the future.

PERFORMANCE MEASURE 3 .2 .4: 

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 2022 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 womenowned businesses (MWOBs). In FY 2022, $28,756,196 

of the Agency’s contract dollars went to MWOBs, which 

represents 37 percent of the Agency’s total spend. By 

comparison, 63 percent of the Agency’s contract dollars 

went to non-MWOBs. During FY 2022, FHFA continued 

to engage external and internal partners and stakeholders 

and look for opportunities that might provide FHFA 

access to MWOB goods or services.

Figure 12: Obligated Amounts to MWOBs31

(dollars in millions)
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 66

Performance Section

STRATEGIC OBJECTIVE 3 .3: DELIVER INFORMATION TECHNOLOGY 

RESOURCES AND SYSTEMS THAT SUPPORT THE AGENCY’S MISSION 

AND SAFEGUARD THE AGENCY’S RESOURCES

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

mission. In FY 2022, FHFA monitored three measures for Strategic Objective 3.3 and met the targets for all three measures. 

The table below reports progress on these measures.

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

Strategic Objective 3 .3: Deliver information technology resources and systems that support the Agency’s mission and safeguard the 

Agency’s resources

Performance Measure FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 

Target

FY 2022 

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: Ensure FHFA’s infrastructure systems are 

continuously available for use by FHFA staff N/A N/A MET MET MET

99.5 

percent of 

the time

MET

3 .3 .3: Determine average user response on 

FHFA help desk ticket surveys N/A N/A N/A N/A MET

4.5 rating 

on a scale 

of 0 to 5

MET

PERFORMANCE MEASURE 3 .3 .1: 

Ensure FHFA’s FISMA 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 Federal Information 

Security Modernization Act of 2014 audit identified no 

significant deficiencies or material weaknesses. The 

audit identified two findings for improvement, neither of 

which rises to significant deficiency or material weakness. 

The final report can be found at https://www.fhfaoig.gov/

sites/default/files/AUD-2022-009.pdf.

PERFORMANCE MEASURE 3 .3 .2: 

Ensure FHFA’s infrastructure systems 

are continuously available for use by 

FHFA staff

Service availability is a metric that represents the percentage 

of time that IT service is successfully operational. Service 

availability is a continuous measure. Each quarter FHFA 

achieved more than 99.5 percent availability.

PERFORMANCE MEASURE 3 .3 .3: 

Determine average user response on 

FHFA help desk ticket surveys

The help desk receives more than 15,000 requests for 

support and services annually. FHFA’s help desk supports 

all critical mission functions, including responding to 

and resolving all break-fix issues or other problems that 

surface, such as email, connectivity, and access control. 

The help desk is also responsible for the deployment of 

new/replacement computers and peripherals.

This measure provides all employees and contractors an 

opportunity to rate the service they received on a rating 

that ranges from 0 to 5 with 5 reflecting outstanding 

service. Each quarter, FHFA averaged greater than the 

4.50 target.
67 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

Added, Changed, and 

Discontinued Measures

Table 17: Performance Measures Added, Changed, and Discontinued in FY 202232

Strategic Goal 1: Ensure Safe and Sound Regulated Entities Through World-Class Supervision

Language in 2021 Language in 2022 Explanation

1 .1 .5a: Determine that the regulated 

entities have satisfactorily addressed 

safety and soundness Matters Requiring 

Attention in accordance with agreed upon 

remediation plans and timeframes

Target – 90 percent of the time

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

Target – 90 percent of the time

For FY 2022, FHFA reorganized this measure 

under Strategic Objective 1.2.

1 .1 .5b: Determine that the FHLBanks and 

OF have satisfactorily addressed safety and 

soundness Matters Requiring Attention in 

accordance with agreed upon remediation 

plans and timeframes

Target – 90 percent of the time

1 .2 .1b: Determine that the Enterprises 

have satisfactorily addressed safety and 

soundness Matters Requiring Attention in 

accordance with agreed upon remediation 

plans and timeframes

Target – 90 percent of the time

For FY 2022, FHFA reorganized this measure 

under Strategic Objective 1.2.

1 .2 .1: Conduct horizontal reviews to provide 

supervisory perspective on the application 

and the implementation of processes, 

activities, and initiatives at the Enterprises in 

the areas of credit, market, and operational 

risk, modeling/data, and governance

Target – Four horizontal reviews during 

FY 2021

Discontinued FHFA’s implementation of a repeatable 

supervisory process for the Enterprises 

through the creation of a supervisory 

taxonomy facilitates the examination of 

a particular risk area for both Enterprises 

in a given supervisory cycle. As horizontal 

reviews are built into this supervisory 

process, FHFA determined that measuring 

the number of horizontal reviews completed 

was no longer a meaningful measure.

1 .2 .2: Expand regular qualitative and 

quantitative reporting by the Enterprises of 

counterparty information in the CRS

Target – June 31, 2021

Discontinued Target Met

1 .2 .3: Develop an action plan to address 

improvement opportunities identified 

in FHFA’s optimization study to further 

the development of a world-class 

supervision program

Target – June 30, 2021

Discontinued Target Met

32 FHFA measures for 2021 can be found in the FHFA FY 2021 Annual Performance Plan. FHFA measures for 2022 can be found in the 

FHFA FY 2022 Annual Performance Plan.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 68

Performance Section

Table 17: Performance Measures Added, Changed, and Discontinued in FY 2022 (continued)

Strategic Goal 1: Ensure Safe and Sound Regulated Entities Through World-Class Supervision

Language in 2021 Language in 2022 Explanation

1 .2 .4: Conduct horizontal review of 

acquired member asset pricing and its 

effect on credit risk sharing structures at 

the FHLBanks

Target – September 30, 2021

Discontinued Target Met

1 .3 .1: Issue a final Enterprise Regulatory 

Capital Framework

Target – 1st Quarter, FY 2021

Discontinued Target Met

1 .3 .2: Publish a proposed regulation 

requiring the Enterprises to submit 

resolution plans (living wills)

Target – March 31, 2021

Discontinued Target Met

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

Capital Planning

Target – FY 2021

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

Capital Planning

Target – FY 2022

Measure 1.3.3 was continued as 1.3.2 until 

it was met in FY 2022.

1 .3 .4: Oversee the Enterprises’ compliance 

with Senior Preferred Stock Purchase 

Agreement’s targets for mortgage assets 

and indebtedness

Target – Retained portfolio balances 

and debt limits are below the PSPA 

requirements of $250 billion and $300 

billion, respectively, at each Enterprise

Discontinued Target Met

1 .3 .5: Make recommendation to the 

Director regarding CSS’s structural options 

post-conservatorship

Target – FY 2021

Discontinued Target Met
69 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Performance Section

Table 17: Performance Measures Added, Changed, and Discontinued in FY 2022 (continued)

Strategic Goal 2: Foster Competitive, Liquid, Efficient, and Resilient (CLEAR) National Housing Finance Markets

Language in 2021 Language in 2022 Explanation

2 .1 .1: Update the minimum financial 

eligibility requirements for Enterprise 

sellers/servicers

Target – June 30, 2021

Discontinued Although the target was not met, 

FHFA determined that progress on this 

activity was sufficiently advanced to 

no longer require the visibility of an 

Agency-wide measure. 

2 .1 .4: Issue a final rule on Prior Approval 

for Enterprise Products

Target – September 30, 2021

Discontinued Although the target was not met, 

FHFA determined that progress on this 

activity was sufficiently advanced to 

no longer require the visibility of an 

Agency-wide measure.

2 .2 .1: Publish proposed Enterprise housing 

goals rule for 2022-24

Target – June 2021

2 .2 .1: Publish final Enterprise housing goals 

rule for 2022-24

Target – December 2021

FY 2021 Target Met

2 .2 .2: Issue annual ratings for each 

Enterprise’s DTS performance in 2019

Target – December 2020

2 .2 .2: Issue annual ratings for each 

Enterprise’s Duty to Serve performance 

in 2020

Target – October 2021

FY 2021 Target Met

2 .2 .3: Complete implementation of the 

Language Access Plan

Target – December 2020

Discontinued and replaced

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 percent 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

FY 2021 Target Met

2 .2 .4: Determine that the regulated entities 

have satisfactorily addressed MRAs relating 

to their diversity and inclusion programs, in 

accordance with agreed-upon remediation 

plans and time frames

Target – 90 percent

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

Continued in FY 2022 as measure 2.2.5.

2 .2 .5: Conduct diversity and inclusion 

examinations of the Enterprises and 

the FHLBanks

Target – 12 exams during FY 2021

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

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

Broken into two measures and reorganized 

under the same Strategic Objective.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 70

Performance Section

Table 17: Performance Measures Added, Changed, and Discontinued in FY 2022 (continued)

Strategic Goal 2: Foster Competitive, Liquid, Efficient, and Resilient (CLEAR) National Housing Finance Markets

Language in 2021 Language in 2022 Explanation

N/A 2 .2 .4: Issue an Operating Procedures 

Bulletin on fair lending examinations for 

the Enterprises

Target – July 2022

FHFA added this measure in FY 2022.

2 .3 .1: Publish 12 monthly and 4 quarterly 

FHFA House Price Indexes

Target – FY 2021

2 .3 .1: Publish 12 monthly and 4 quarterly 

FHFA House Price Indexes

Target – 12 monthly and 4 quarterly

Continued with minor revisions to 

the target.

2 .3 .2: Publish annual Public Use Database 

Target – 3rd Quarter FY 2021

2 .3 .2: Publish annual Public Use Database 

Target – September 2022

Continued with statutory revisions to 

the target.

2 .3 .3: Publish quarterly aggregate statistics 

on mortgage profiles and delinquencies 

from National Mortgage Database

Target – FY 2021

2 .3 .3: Publish quarterly aggregate statistics 

on mortgage profiles and delinquencies 

from National Mortgage Database

Target – One per quarter

Continued with minor revisions to 

the targets.

Strategic Goal 3: Position the Agency as a Model of Operational Excellence by Strengthening the Workforce and Infrastructure

N/A 3 .1 .4: Develop FHFA Human Capital Plan

Target – July 2022

FHFA added this measure in FY 2022.

3 .2 .2: Compete 75 percent or more of 

FHFA contracts

Target – 100 percent of the time

3 .2 .2: Award FHFA contracts competitively

Target – 75 percent

FHFA clarified the intent and target of the 

measure through minor revisions.
Management’s Discussion and Analysis

71 |

FINANCIAL SECTION

MESSAGE FROM THE CHIEF FINANCIAL OFFICER . . . . . . . . . . . . . .72

INDEPENDENT AUDITOR’S REPORT . . . . . . . . . . . . . . . . . . . . . . . . .73

APPENDIX I: FHFA’S RESPONSE TO AUDITOR’S REPORT . . . . . . . .80

FINANCIAL STATEMENTS AND NOTES . . . . . . . . . . . . . . . . . . . . . . . .81

71 | 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 72

Financial Section

Message from the Chief Financial Officer

I am pleased to report that FHFA received an unmodified audit opinion on its FY 2022 financial 

statements from the Government Accountability Office (GAO). 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 

beats a strong, robust control environment that ensures our internal controls over financial 

reporting are operating effectively in their design and operation.

Fiscal Year 2022 was another year of significant change and achievement for FHFA. The Agency 

released a new Strategic plan in April, our Acting Director Sandra L. Thompson was sworn 

in as our permanent Director in June, and the Agency transitioned from maximum telework to a hybrid environment at our 

headquarters in Constitution Center also in June. During the year, the Agency continued to grow, reaching a new high of 

717 employees at year end, and as described in this PAR, achieved all but three of its 33 performance measures.

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. Clean 

audits reflect strong stewardship 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, 2022

Financial Section
73 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

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 2022 and 2021 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, 2022, and 

2021, are presented fairly, in all material respects, in accordance with U.S. generally 

accepted accounting principles;

• FHFA maintained, in all material respects, effective internal control over financial reporting 

as of September 30, 2022; and

• no reportable noncompliance for fiscal year 2022 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 paragraph related 

to the conservatorships of the Federal National Mortgage Association (Fannie Mae) and the 

Federal Home Loan Mortgage Corporation (Freddie Mac), 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, 2022, and 2021; 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, 2022, and 2021, 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.

Opinion on Internal Control over Financial Reporting

We also have audited FHFA’s internal control over financial reporting as of September 30, 2022, 

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

 

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.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 74

Financial Section

INDEPENDENT AUDITOR’S REPORT

Managers’ Financial Integrity Act of 1982 (FMFIA). In our opinion, FHFA maintained, in all 

material respects, effective internal control over financial reporting as of September 30, 2022, 

based on criteria established under FMFIA.

During our 2022 audit, we identified deficiencies in FHFA’s internal control over financial 

reporting that we do not consider to be material weaknesses or significant deficiencies.4

Nonetheless, these deficiencies warrant FHFA management’s attention. We have 

communicated these matters to FHFA management and, where appropriate, will report on them 

separately.

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 2022 and 2021 

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.5 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. The Department of the Treasury has provided Fannie Mae and Freddie Mac 

about $191 billion in direct financial support. Following criteria in Statement of Federal Financial 

Accounting Standards No. 47 (SFFAS 47), Reporting Entity, the Office of Management and 

Budget (OMB) and 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 

 

4A 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. 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 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.

5Pub. L. No. 102-550, title XIII, § 1367, 106 Stat. 3672, 3980 (Oct. 28, 1992), classified as amended at 12 U.S.C. §

4617.
75 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section

INDEPENDENT AUDITOR’S REPORT

receivership or conservatorship, or other federal government intervention actions. Under such 

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.6 

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 2022 and 2021 

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 (1) the preparation and fair presentation of the financial 

statements in accordance with U.S. generally accepted accounting principles; (2) preparing, 

measuring, and presenting the RSI in accordance with U.S. generally accepted accounting 

principles; (3) 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; (4) 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; (5) assessing the 

effectiveness of internal control over financial reporting based on the criteria established under 

FMFIA; and (6) its assessment about the effectiveness of internal control over financial reporting 

as of September 30, 2022, 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 obtain reasonable assurance about whether the financial statements as a 

whole are free from material misstatement, whether due to fraud or error, and about whether 

effective internal control over financial reporting was maintained in all material respects, and to 

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 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. 

 

6Disclosure entities are organizations that meet SFFAS 47 criteria for inclusion in the financial statements but not the 

SFFAS 47 criteria to be consolidated.
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INDEPENDENT AUDITOR’S REPORT

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 in order to obtain audit evidence that is sufficient and 

appropriate to provide a basis for our opinion. 

• 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 which 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, and assets are safeguarded against loss from unauthorized acquisition, 

use, or disposition, and (2) 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. 
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INDEPENDENT AUDITOR’S REPORT

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, which consisted of inquiries of management about the 

methods of preparing the RSI and comparing the information for consistency with 

management’s responses to the auditor’s 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 information included in the performance and accountability 

report 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. 

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 2022 that would be 
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INDEPENDENT AUDITOR’S REPORT

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. Our responsibilities under those standards are further described in the 

Auditor’s Responsibilities for Tests of Compliance section below.

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 to perform certain other 

limited procedures. Accordingly, we did not test compliance with all 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.
79 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

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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 work to enhance its internal control and 

ensure the reliability of its financial reporting. The complete text of FHFA’s response is reprinted 

in appendix I.

Anne Sit-Williams

Director

Financial Management and Assurance

November 8, 2022
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APPENDIX I: FHFA’S RESPONSE TO AUDITOR’S REPORT

November 8, 2022

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 2022 

and 2021 Financial Statements (GAO-23-105910). This report presents GAO’s opinion on the 

financial statements of the Federal Housing Finance Agency (FHFA) for fiscal years 2022 and 

2021. The report also presents GAO’s opinion on the effectiveness of FHFA’s internal controls as 

of September 30, 2022, and GAO’s evaluation of FHFA’s compliance with laws and regulations.

I am pleased to accept GAO’s unmodified opinion on the FHFA 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 will continue to work to enhance our internal controls and ensure the reliability of our financial 

reporting, soundness of operations, and public confidence in the Agency’s mission. 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
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Financial Section

Federal Housing Finance Agency

Consolidated Balance Sheets

As of September 30, 2022 and 2021

(In Thousands)

2022 2021

Assets:

Intragovernmental

Fund Balance With Treasury - Note 2 $ 15,938 $ 15,624 

Investments - Note 3 113,898 130,025 

Advances and Prepayments 607 655 

Total Intragovernmental 130,443 146,304 

With the Public

Accounts Receivable, Net - Note 4 3 5 

General Property, Plant, and Equipment, Net - Note 5 11,676 13,635 

Advances and Prepayments 5,594 2,161 

Total With the Public 17,273 15,801 

Total Assets $ 147,716 $ 162,105 

Liabilities - Note 6

Intragovernmental

Accounts Payable $ 961 $ 883 

Advances from Others and Deferred Revenue 1,607 1,610 

Other Liabilities, Net - Note 7 1,329 2,524 

Total Intragovernmental 3,897 5,017 

With the Public

Accounts Payable 11,631 8,052 

Federal Employee Benefits Payable, Net

Unfunded Accrued Annual Leave 20,714 20,501 

FECA Actuarial Liability 139 201 

Other Liabilities, Net - Note 7

Deferred Lease Liability 15,489 17,923 

Other Liabilities 4,385 8,822 

Total With the Public 52,358 55,499 

Total Liabilities $ 56,255 $ 60,516 

Commitments and Contingencies - Note 9

Net Position:

Cumulative Results of Operations - Funds from Other than 

Dedicated Collections $ 91,461 $ 101,589 

Total Cumulative Results of Operations 91,461 101,589 

Total Net Position 91,461 101,589 

Total Liabilities and Net Position $ 147,716 $ 162,105 

The accompanying notes are an integral part of these financial statements.
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Financial Section

Federal Housing Finance Agency

Consolidated Statements of Net Cost

For the Years Ended September 30, 2022 and 2021

(In Thousands)

2022 2021

Gross Program Costs by Strategic Goal: Note 10:

Safety and Soundness $ 180,273 $ 169,936 

Liquid, Efficient, and Resilient Markets 59,263 58,434 

Strengthen the Workforce and Infrastructure 98,818 89,185 

Gross Program Costs $ 338,354 $ 317,555 

Less: Total Earned Revenue not Attributable to Strategic Goals (320,327) (336,854)

Net (Income From)/Cost of Operations $ 18,027 $ (19,299)

The accompanying notes are an integral part of these financial statements.
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Federal Housing Finance Agency

Consolidated Statements of Changes in Net Position

For the Years Ended September 30, 2022 and 2021

(In Thousands)

2022 2021

Cumulative Results of Operations:

Beginning Balance $ 101,589 $ 75,109 

Imputed Financing 7,899 7,187 

FOIA Collections (Transfer out) - (5)

Net Cost of Operations (18,027) 19,299 

Net Change in Cumulative Results of Operations (10,128) 26,481 

Total Cumulative Results of Operations $ 91,461 $ 101,589 

Net Position $ 91,461 $ 101,589 

The accompanying notes are an integral part of these financial statements.
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Financial Section

Federal Housing Finance Agency

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2022 and 2021

(In Thousands)

2022 2021

Budgetary Resources:

Unobligated Balance From Prior Year Budget Authority, Net - Note 11 $ 99,284 $ 65,847 

Appropriations - Note 1.D 318,739 335,328 

Spending Authority From Offsetting Collections 49,104 47,739 

Total Budgetary Resources $ 467,127 $ 448,914 

Status of Budgetary Resources:

New Obligations and Upward Adjustments (Total) $ 407,349 $ 363,459 

Unobligated Balance, End of Year:

Exempt from Apportionment, Unexpired Accounts 59,778 85,455 

Unexpired Unobligated Balance, End of Year 59,778 85,455 

Unobligated Balance, End of Year, Total 59,778 85,455 

Total Budgetary Resources $ 467,127 $ 448,914 

Outlays, Net:

Outlays, Net (Total) $ 334,553 $ 304,307 

Distributed Offsetting Receipts (318,739) (335,328)

Agency Outlays, Net $ 15,814 $ (31,021)

The accompanying notes are an integral part of these financial statements.
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Federal Housing Finance Agency

Notes to the Financial Statements

For the Years Ended September 30, 2022 and 2021

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) 
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Financial Section

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 

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.

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 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 differences relate primarily 

to the 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.
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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 2022 and FY 2021 in August 2021 and 2020, respectively. By law, FHFA 

is required to charge semi-annual assessments to the entities. Assessments collected shall not exceed the amount sufficient to 

provide for the reasonable costs associated with overseeing the 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 the 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. 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.
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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 2022 and FY 2021, 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 agencies and the public. Amounts due from 

federal agencies 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 established is submitted to Treasury for collection, which takes place when it becomes 120 days delinquent.

I . GENERAL PROPERTY, PLANT, 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:

Description Threshold

Furniture and Equipment $ 50,000

Leasehold Improvements $ 250,000

Software: Internally Developed $ 500,000

Software: Off-the-Shelf $ 500,000

Capitalized Leases $ 250,000

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.

The useful life classifications for capitalized assets are as follows:

Description Useful Life (Years)

Furniture and Equipment 3

Leasehold Improvements The useful life of the asset or the remaining term of lease at 

the time of improvement completion, whichever is shorter

Software: Internally Developed 3

Software: Off-the-Shelf 3

Capitalized Leases Term of lease

FHFA has no real property holdings, stewardship, or heritage assets. Other property items and normal repairs and 

maintenance are charged to expense as incurred.
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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.

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.

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, accrued payroll and benefits, and capital lease liabilities. Accounts payable represents amounts owed to 

employees for travel related expenses, and other entities for goods ordered and received and for services rendered. Accrued 

payroll and benefits represent payroll costs 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 leave, deferred lease liabilities, and an estimated actuarial liability for future 

workers’ compensation benefits. Annual leave is earned throughout the fiscal year and is paid when leave is taken by the 

employee; unfunded leave represents the balance earned but not yet taken.

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. Lease costs are based on the straight-line method. Deferred rent is applicable to the 

lease agreements on 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.

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 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.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 90

Financial Section

L . EMPLOYEE LEAVE AND BENEFITS

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 agencies may also have been authorized to receive credit for private sector time. Employees in non-supervisory 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 governmentwide 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.

Health Benefits and Life Insurance: FHFA, through 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, 

FERS-Revised 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 FERS-FRAE, 

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 FERS-FRAE. 

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 2022 maximum taxable wage base for Social Security is $147,000.
91 | FY 2022 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 does 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 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 they 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 2022 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 2022 and FY 2021. FBWT account balances as of 

September 30, 2022 and 2021 were as follows (dollars in thousands):

2022 2021

Status of Fund Balance with Treasury:

Unobligated Balance

Available $ 59,778 $ 85,455 

Obligated Balance Not Yet Disbursed 70,058 60,194 

Investments (113,898) (130,025)

Total $ 15,938 $ 15,624 

Note 3 . Investments

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

Investments as of September 30, 2021 consist of the following (dollars in thousands):

Cost

Amortized 

(Premium) 

Discount

Interest 

Receivable

Investments 

Net

Market Value 

Disclosure

Intragovernmental Securities:

Non-Marketable 

Market-Based $ 130,025 $ - $ - $ 130,025 $ 130,025

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, 2022 or 2021. Interest earned on investments was $1.3 million and $99 thousand for 

FY 2022 and FY 2021, respectively.
93 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section

Note 4 . Accounts Receivable, Net

Accounts Receivable balances as of September 30, 2022 and 2021 were as follows (dollars in thousands):

2022 2021

Intragovernmental

Accounts Receivable $ - $ -

Total Intragovernmental Accounts Receivable $ - $ -

With the Public

Accounts Receivable $ 3 $ 5

Allowance for Uncollectible Accounts Receivable $ - $ -

Total With the Public Accounts Receivable $ 3 $ 5

Total Accounts Receivable $ 3 $ 5

Note 5 . General Property, Plant, and Equipment, Net

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 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 94

Financial Section

Schedule of General Property, Plant, and Equipment as of September 30, 2021 (dollars in thousands):

Major Class Acquisition Cost

Accumulated 

Amortization/ 

Depreciation

Net Book Value

Equipment $ 22,733 $ 22,421 $ 312

Leasehold Improvements 34,730 22,410 12,320

Internal-Use Software 1,728 1,728 -

Machinery and Equipment 

Under Capital Lease 274 193 81

Construction-in-Progress 922 - 922

Total $ 60,387 $ 46,752 $ 13,635

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. 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

Other Intragovernmental Liabilities 2,936 - 2,936

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

Deferred Lease Liabilities - 15,489 15,489

Other Liabilities 4,385 - 4,385

Total With the Public Liabilities $ 16,016 $ 36,342 $ 52,358

Total Liabilities $ 19,913 $ 36,342 $ 56,255
95 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section

Liabilities Covered and Not Covered by Budgetary Resources as of September 30, 2021 consist of the following 

(dollars in thousands):

Covered Not Covered Total

Intragovernmental Liabilities

Accounts Payable $ 883 $ - $ 883

Other Intragovernmental Liabilities 4,134 - 4,134

Total Intragovernmental Liabilities $ 5,017 $ - $ 5,017

With the Public

Accounts Payable $ 8,052 $ - $ 8,052

Unfunded Accrued Annual Leave - 20,501 20,501

FECA Actuarial Liabilities - 201 201

Deferred Lease Liabilities - 17,922 17,922

Other Liabilities 8,823 - 8,823

Total With the Public Liabilities $ 16,875 $ 38,624 $ 55,499

Total Liabilities $ 21,892 $ 38,624 $ 60,516

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. Payroll accruals represent 

payroll expenses that were incurred prior to year-end but were not paid.

Other Liabilities as of September 30, 2022 and September 30, 2021 consist of the following (dollars in thousands):

2022 2021

Intragovernmental Liabilities

Benefit Program Contributions Payable $ 1,106 $ 2,088

Employer Contributions and Payroll Taxes Payable 223 436

Total Intragovernmental Other Liabilities $ 1,329 $ 2,524

With the Public

Deferred Lease Liability $ 15,489 $ 17,923

Employer Benefit Contributions 326 720

Accrued Funded Payroll 4,032 8,018

Employee Related Refunds Due 3 3

Capital Lease Liability 24 81

Total With the Public Other Liabilities $ 19,874 $ 26,745
FY 2022 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

Future Payment Due Land & Buildings Totals

Federal Non-Federal Federal Non-Federal

Fiscal Year 2023 $ 21,093 $ 21,093

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 $ 94,457 $ 94,457
97 | FY 2022 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 lease was fully funded at 

its inception. There is no salvage value, and the copiers will be returned to the vendor upon termination of the lease. The 

following is a schedule showing the future minimum lease payments under capital lease by years and the present value of the 

minimum lease payments as of September 30, 2022 (dollars in thousands). The interest rate related to the lease obligation is 

2.5 percent and the maturity date is February 2023.

FHFA OIG does not have capital leases arrangements.

2022 2021

Summary of Assets Under Capital Lease

Machinery and Equipment (Copiers) $ 274 $ 274 

Accumulated Amortization (250) (193)

Total Net Value $ 24 $ 81 

The minimum future payments for the capital lease are as follows (dollars in thousands):

Fiscal Year Amount

2023 56

Total Future Payments $ 56 

Less: Imputed Interest $ 0

Less: Executory Costs $ (32)

Net Capital Lease Liability $ 24 

Capital Lease Liabilities Covered By Budgetary Resources $ 56 

Capital Lease Liabilities Not Covered By Budgetary Resources $ - 

Note 9. Commitments and Contingencies

FHFA did not have any material commitments or contingencies that met disclosure requirements as of September 30, 2022 

and 2021.
FY 2022 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. FHFA tracks program costs to the strategic goals 

(responsibility segments) developed for FHFA’s strategic plan. Strategic Goals 1) Safety and Soundness; 2) Liquid, Efficient, 

and Resilient Markets; and 3) Strengthen the Workforce and 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. While FHFA’s Strategic Goals 

were amended in mid-FY 2022, the underlying intention for the Goals is looking forward to FY 2023-2024. The intention and 

reporting of the Goals for FY 2022 remained unchanged. The comparison between the two years is an accurate representation 

of FHFA’s programs.

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. For both FY 2022 and FY 2021, the combined total spending authority for the FHFA OIG was $49.9 million 

annually. FHFA OIG’s gross expenses for FY 2022 and FY 2021 were $49.6 million and $48.4 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. Intragovernmental expenses relate to the 

source of goods and services purchased by the Agency and not to the classification of related revenue. 
99 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section

Such costs and revenue are summarized as follows (dollars in thousands):

2022 2021

Safety and Soundness

Intragovernmental Costs $ 34,985 $ 32,461 

With the Public Costs 145,288 137,475 

Gross Safety and Soundness Program Costs 180,273 169,936 

Liquid, Efficient, and Resilient Markets

Intragovernmental Costs 12,352 12,006 

With the Public Costs 46,911 46,428 

Gross Liquid, Efficient, and Resilient Markets Program Costs 59,263 58,434 

Strengthen the Workforce and Infrastructure

Intragovernmental Costs 19,473 18,073 

With the Public Costs 79,345 71,112 

Gross Strengthen the Workforce and Infrastructure Program Costs 98,818 89,185 

Total Intragovernmental Costs 66,810 62,540 

Total With the Public Costs 271,544 255,015 

Gross Program Costs 338,354 317,555 

Less: Total Intragovernmental Earned Revenue (2,832) (1,620)

Less: Total With the Public Earned Revenue (317,495) (335,234)

Total Net Cost of Operations $ 18,027 $ (19,299)

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):

2022 2021

Unobligated Balance Brought Forward, October 1 $ 85,455 $ 55,995

Recoveries of Prior Year Obligations 13,165 9,476

Other Changes in Unobligated Balance 664 376

Unobligated Balance from Prior Year Budget Authority, Net $ 99,284 $ 65,847
FY 2022 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, 2022, and 2021, the unobligated balance was $59.8 million and 

$85.4 million, respectively. FHFA may retain the FY 2022 unobligated balance of $22.8 million for operating expenses, for 

the working capital fund, or for conservatorship/Enterprise-related expenses during FY 2023. FHFA retained a portion of the 

FY 2021 unobligated balance for conservatorship/Enterprise-related expenses during FY 2022 (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 2024 President’s Budget will include the actual budgetary execution 

information for FY 2022. The FY 2024 President’s Budget is scheduled for publication in February 2023 and can be found at 

the OMB Website.33 The FY 2023 President’s Budget, with the “Actual” column completed for 2021, has been reconciled to 

the FY 2021 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 $ 448,914 $ 363,459 $ 335,328 $ 304,306

Rounding 86 541 (328) 694

Budget of the 

U.S. Government 449,000 364,000 335,000 305,000

Total Unreconciled 

Difference $ - $ - $ - $ -

33 http://www.whitehouse.gov/omb
101 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section

Note 14 . Undelivered Orders at the End of the Period

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

Undelivered Orders balance as of September 30, 2021 (dollars in thousands):

Federal Non-Federal

Paid Undelivered Orders $ 655 $ 2,161

Unpaid Undelivered Orders 3,651 36,261

Total Undelivered Orders $ 4,306 $ 38,422

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 $244 for the year ended 

September 30, 2022. Custodial collections totaled $300 for the year ended September 30, 2021. 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. 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 102

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 

Other Assets (48) 3,433 3,385 

(Increase)/Decrease in Liabilities:

Accounts Payable (166) (3,579) (3,745)

Advances and Prepayments 3 - 3 

Federal Employee and Veteran Benefits Payable - (151) (151)

Other Liabilities 1,166 6,871 8,037 

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 (SBR 4200) (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 (SBR 4210)

Agency Outlays, Net (SBR 4210) $ 15,814 
103 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Financial Section

For the Year Ended September 30, 2021 Intragovernmental With the Public Total

Net (Income From)/Cost of Operations $ 60,921 $ (80,219) $ (19,299)

Components of Net Cost Not Part of the Budgetary Outlays

Property, Plant, and Equipment Depreciation Expense (3,037) (3,037)

Increase/(Decrease) in Assets:

Accounts Receivable, Net 45 1 47 

Other Assets 20 (770) (750)

(Increase)/Decrease in Liabilities:

Accounts Payable (112) 119 7 

Advances and Prepayments (189) - (189)

Federal Employee and Veteran Benefits Payable - (2,203) (2,203)

Other Liabilities (473) 1,057 584 

Financing Sources:

Imputed Cost (7,187) (7,187)

Total Components of Net Operating Cost Not Part of the 

Budgetary Outlays $ (7,896) $ (4,832) $ (12,728)

Components of the Budget Outlays That Are Not Part of 

Net Operating Cost

Acquisition of Capital Assets 250 750 1,001 

Total Components of the Budget Outlays That Are Not Part 

of Net Operating Cost $ 250 $ 750 $ 1,001 

Miscellaneous Items

Distributed Offsetting Receipts (SBR 4200) (99) (335,229) (335,328)

Non-Entity Activity 5 - 5

Appropriated Receipts for Trust/Special Funds 99 335,229 335,328 

Total Other Reconciling Items $ 5 $ - $ 5 

Total Net Outlays (Calculated Total) $ 53,280 $ (84,301) $ (31,021)

Budgetary Agency Outlays, Net (SBR 4210)

Agency Outlays, Net (SBR 4210) $ (31,021)
OTHER INFORMATION

AUDITS AND EVALUATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105

MANAGEMENT REPORT ON FINAL ACTIONS . . . . . . . . . . . . . . . . .107

OFFICE OF INSPECTOR GENERAL MANAGEMENT 

AND PERFORMANCE CHALLENGES . . . . . . . . . . . . . . . . . . . . . . . . .109

SUMMARY OF FINANCIAL STATEMENTS AUDIT AND 

MANAGEMENT ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119

PAYMENT INTEGRITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION . . . . .121

| 104
105 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

Audits and Evaluations

Every year, the Federal Housing Finance Agency (FHFA) 

receives and responds to numerous performance audits, 

assessments, and evaluations concerning the effectiveness 

and efficiency of projects, policies, and programs. The 

FHFA Office of Inspector General (OIG) conducts 

performance audits, compliance reviews, and evaluations 

of Agency systems and programs. 

The U.S. Government Accountability Office (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, which 

is presented on pages 109-118. 

Table 18: Audits and Evaluations

FHFA OIG REPORTS

1 Risk Assessment of FHFA’s Government Purchase Card and Travel Card Programs, April 1, 

2021 – March 31, 2022 OIG-RA-2022-002 2022-09-19

2 Enterprise Use of Artificial Intelligence and Machine Learning WPR-2022-002 2022-09-19

3 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 2022-09-27

4 FHFA is Addressing Deficient Cybersecurity Incident Reports by the Enterprises COM-2022-009 2022-09-22

5 FHFA Has Not Consistently Collected and Destroyed Identification Cards from Separating 

Personnel, but Has Otherwise Substantially Adhered to its Offboarding Procedures COM-2022-008 2022-09-08

6 FHFA Did Not Always Follow Federal Regulations and Its Policy for Employee Financial 

Disclosures During Fiscal Years 2020 and 2021 AUD-2022-011 2022-09-08

7 FHFA Did Not Fully Comply with DHS Binding Operational Directives for Securing Its Public 

Websites and Publishing Its Vulnerability Disclosure Policy AUD-2022-010 2022-08-31

8 Audit of the Federal Housing Finance Agency’s Information Security Program and Practices 

Fiscal Year 2022 AUD-2022-009 2022-07-28

9 FHFA’s Division of Enterprise Regulation Substantially Adhered to its Rotation Policy for 

Examination Leader Assignments Despite Not Tracking Them Consistently COM-2022-007 2022-07-11

10 FHFA’s Visibility Into the Enterprises’ Credit Risks Has Increased by Reviewing Significantly 

More of Their Proposed Mortgage Selling Policies Before Implementation COM-2022-006 2022-07-06

11 Fannie Mae and Freddie Mac Fourth-Party Risk WPR-2022-001 2022-06-28

12

FHFA Has Laid the Groundwork to Integrate Consideration of Climate-Related Financial Risk 

into its Policies and Programs but Plans and Methodologies to Accomplish This Work Are in 

the Early Stages of Development

AUD-2022-008 2022-06-23

13 FHFA Ensured that Fannie Mae Submitted Required Property Valuation Data to the Agency’s 

Mortgage Loan Integrated System COM-2022-005 2022-05-31

14 FHFA Did Not Always Follow its Procedures When Reviewing the Enterprises’ Draft SEC 

Filings, But Plans to Take Corrective Action AUD-2022-007 2022-05-12

15 FHFA Adequately Designed and Implemented Controls to Detect and Prevent Improper 

Vendor Payments During Fiscal Year 2021 AUD-2022-006 2022-03-30
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 106

Other Information

Table 18: Audits and Evaluations

16 Oversight of Multifamily Borrowers’ Compliance with CARES Act and Freddie Mac Tenant 

Protections and Freddie Mac’s Response to the Potential Financial Impact of COVID-19 OIG-2022-003 2022-03-24

17 DER Followed its Guidance to Prepare, Review, and Issue the 2020 CSS Report of Examination AUD-2022-005 2022-03-23

18 FHFA’s Public Reporting of the Enterprises’ Progress Toward the Objectives FHFA Set in the 

2020 Conservatorship Scorecard Lacked the Detail and Transparency of Past Reporting EVL-2022-002 2022-03-17

19 FHFA’s Division of Enterprise Regulation Has Made Progress in Its Quality Control Program 

but Needs to Ensure Adequate Reporting and Feedback Is Provided to Management EVL-2022-001 2022-03-07

20

Contrary to OMWI’s FY 2016-2018 Strategic Plan, FHFA Developed and Implemented Internal 

Diversity Standards to Which it Does Not Adhere Fully, and it Has Not Established a Financial 

Literacy Program

COM-2022-004 2022-02-16

21 Report of Administrative Inquiry into a Whistleblower Complaint Concerning an Enterprise 

Executive Compensation Matter OI/OIG-2022-001 2022-01-28

22 The Enterprises Substantially Complied with FHFA’s Revised Fraud Reporting Requirements COM-2022-003 2022-01-19

23 Fannie Mae Successfully Implemented its Compliance Plan for FHFA’s NPL Post-Sale Data 

Collection Requirements COM-2022-002 2022-01-18

24 FHFA Generally Complied with its Updated Guidance for Procurement Peer Reviews COM-2022-001 2022-01-14

25 FHFA’s Ability to Fill Positions Was Hampered by an Unreliable Internal Management 

Reporting Tool, Failure to Review its Hiring Practices, and Lack of Training AUD-2022-004 2022-01-05

26 FHFA’s Recent Changes to its Housing Finance Examiner Commission Program OIG-2022-002 2021-12-15

27 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 2021-12-13

28 Report of Administrative Inquiry: FHFA Has Determined that the Enterprises Can Absorb the 

Full Cost of CARES Act Mortgage Forbearance OIG-2022-001 2021-11-03

29 Audit of the Federal Housing Finance Agency’s Information Security Program, Fiscal Year 2021 AUD-2022-001 2021-10-15

GAO REPORTS

1 Federal Housing Finance Agency: Capital Planning and Stress Capital Buffer Determination B-334366 2022-06-17

2 Federal Housing Finance Agency: Enterprise Regulatory Capital Framework—Public 

Disclosures for the Standardized Approach B-334361 2022-06-14

3 Federal Housing Finance Agency: Enterprise Regulatory Capital Framework—Prescribed 

Leverage Buffer Amount and Credit Risk Transfer B-334117 2022-03-22

4 Federal Housing Finance Agency: 2022-2024 Single-Family and 2022 Multifamily Enterprise 

Housing Goals B-333875 2022-01-10

5 Financial Audit: Federal Housing Finance Agency’s FY 2021 and FY 2020 Financial Statements GAO-22-105109 2021-11-15
107 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

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 19, 20 and 21 provide information on final action taken by management 

on audit reports for Fiscal Year (FY) 2022.

Table 19: Management Report on Final Action on Audits with Disallowed Costs for FY 2022

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 20: Management Report on Final Action on Audits with Recommendations to Put Funds to 

Better Use for FY 2022

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 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 108

Other Information

Table 21: Audit Reports Without Final Actions but with Management Decisions Over One Year Old 

for FY 2021

Report No . and Issue Date Recommendation Management Action

More than Eight Years After Issuing its Advisory Bulletin, FHFA Has Not Held 

the Enterprises to its Expectations on Charging off Delinquent Loans or 

Communicated New Expectations (EVL-2020-003), September 10, 2020

Recommendation 2

Actions are expected 

to be completed by 

March 31, 2023

Audit of FHFA’s 2021 Privacy Program (AUD-2021-011), August 11, 2021

Recommendation 1

Actions are expected 

to be completed by 

December 31, 2022

FHFA’s Failure to Use its Prudential Management and Operations Standards as 

Criteria for Supervision of the Enterprises Is Inconsistent with the FHFA Director’s 

Statutory Duty to Ensure the Enterprises Comply with FHFA’s Guidelines, 

(OIG-2021-004), September 20, 2021

Recommendation 1

Actions are expected 

to be completed by 

February 15, 2023
109 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

Office of Inspector General Management 

and Performance Challenges

October 6, 2022 

TO: Sandra L. Thompson, Director, FHFA 

FROM: Brian M. Tomney, Inspector General 

SUBJECT: Fiscal Year 2023 Management and Performance Challenges

This memorandum, issued pursuant to the Reports Consolidation Act of 2000 (P.L. 106-531), 

provides the Federal Housing Finance Agency (FHFA or Agency) Office of Inspector General’s 

(OIG) 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 its regulated entities: Fannie 

Mae and Freddie Mac (collectively, the Enterprises); Common Securitization Solutions, LLC 

(CSS), an affiliate of each Enterprise; and the 11 Federal Home Loan Banks (FHLBanks) and 

their fiscal agent, the Office of Finance (collectively, the FHLBank System). In addition, since 

September 2008, FHFA has served as conservator of the Enterprises. 

For fiscal year 2023, we have identified the following management and performance challenges 

facing FHFA:

• Effective supervision of the regulated entities

• Stewardship of the Enterprise conservatorships

• Oversight of information risk for the regulated entities

• Oversight of counterparty risk, third-party risk, and fourth-party risk for the regulated 

entities

• Oversight of model risk for the regulated entities

• Oversight of people risk for the regulated entities

• Oversight of resiliency risk for the regulated entities

The first four challenges reiterate themes we identified in prior years. At the outset, it is 

important to note that continued inclusion of a challenge area does not necessarily indicate a lack 

of progress by FHFA; rather, it indicates that a particular area remains a challenge. This year we 

also highlight FHFA’s oversight of key operational risks at the regulated entities, including 

model risk, people risk, and resiliency risk, as discussed below. 

OFFICE OF INSPECTOR GENERAL 

Federal Housing Finance Agency 

400 7th Street SW, Washington, DC 20219 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 110

Other Information

2

Importantly, these challenges naturally are interconnected. FHFA’s functions as supervisor for 

the regulated entities, as well as conservator for the Enterprises, encompass its oversight of all 

the operational risk challenge areas. Further, the operational risk areas themselves overlap. For 

example, a regulated entity might contract with a third-party for cloud services, which may 

impact information, third-party, people, and resiliency risks. In addition to overseeing the 

regulated entities, FHFA must also manage risks, such as information, people, and resiliency 

risk, in its own operations. 

We conduct our oversight work primarily through audits, evaluations, compliance reviews, and 

investigative work. We use a risk-based approach, focusing our FHFA OIG FY 2023 Annual 

Plan on the top management and performance challenges. Information on specific ongoing and 

planned oversight work is available in that plan. 

Challenge: Effective Supervision of the Regulated Entities

FHFA is charged with supervising the regulated entities, and effective supervision remains 

critical to their safe and sound operation. The regulated entities serve a vital function by 

providing liquidity and stability to the secondary mortgage market, and they manage more than 

$8 trillion of assets. Beginning in 2008, a precipitous decline in the Enterprises’ safety and 

soundness required nearly $200 billion in taxpayer support to keep them afloat. For these 

reasons, we have deemed FHFA’s supervision of the regulated entities a top management 

challenge.

Challenges associated with FHFA’s supervision of the regulated entities arise in various ways. 

For example, FHFA has undergone considerable personnel changes and struggled, at times, to 

maintain stable Enterprise supervision leadership and a sufficient corps of commissioned 

examiners. FHFA changed its Division of Enterprise Regulation (DER) leadership in 2020, with 

another DER leadership change in September 2021. Similarly, FHFA announced a new Deputy 

Director for its Division of Federal Home Loan Bank Regulation in August 2022, following on 

the heels of a September 2021 personnel change in that division. The Agency is also challenged 

to maintain the skilled workforce necessary to supervise the Enterprises. Other federal financial 

regulators have commissioning programs through which they instruct and train staff to become 

commissioned examiners. FHFA established a program in 2013 but has struggled to produce 

and retain commissioned examiners.

In overseeing the Enterprises’ capital, the Agency possesses the dual challenge to consider both 

its supervisory obligation to ensure safety and soundness and its conservator role to position the 

Enterprises to potentially exit conservatorship. Historical transfers of excess capital to the U.S.

Treasury Department (Treasury Department) limited the Enterprises’ ability to retain capital and 

become adequately capitalized. However, as a result of changes in the Senior Preferred Stock 

Purchase Agreements (PSPAs) between FHFA and the Treasury Department, the Enterprises 

now retain more of their earnings and are again building capital. These PSPA changes, along 

with strong income, have increased the Enterprises’ net worth. Fannie Mae’s capital reserves 

increased from $14.6 billion at year-end 2019 to $51.8 billion by March 31, 2022. In the same 
111 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

3

period, Freddie Mac’s capital reserves increased from $9.1 billion to $31.7 billion. FHFA must 

continue to supervise the Enterprises to ensure that they work to meet regulatory capital 

requirements.1

The Agency also must ensure its supervision of the regulated entities includes due consideration 

of a myriad of emerging risks. In particular, there has been increased consumer demand for 

technology in traditional processes, such as buying a home. Rapid technological advances create 

uncertainty, which in turn, can increase risk at the regulated entities. 

Recognizing many of these challenges to effective supervision of the regulated entities, the 

Agency has implemented certain policy and organizational changes.2

 FHFA amended the 

Enterprises’ regulatory capital framework and modified the capital treatment for retained credit 

risk transfer exposure to encourage the use of credit risk transfer without increasing safety and 

soundness risks posed by some transactions. The Agency also established an Office of Financial 

Technology in July 2022. In doing so, it solicited public input on the role of technology in 

housing finance and on how FHFA can most constructively interact with other stakeholders to 

facilitate responsible innovation. It is important for FHFA to continue monitoring the risks 

related to its supervision of the regulated entities, especially in light of the intersection of its 

supervision and conservator responsibilities for the Enterprises. 

Challenge: Stewardship of the Enterprise Conservatorships

As noted above, FHFA’s role as both supervisor and conservator for the Enterprises continues to 

present unique challenges. As supervisor, FHFA has a statutory duty to ensure that its regulated 

entities operate in a safe and sound manner. As conservator, FHFA has broad authority over 

the Enterprises and is directly involved in certain business decisions subject to the Agency’s 

supervisory oversight. Considering the taxpayers’ sizeable investment in the Enterprises, the 

unknown duration of the conservatorships, the Enterprises’ central role in the secondary 

mortgage market, and their unknown ability to sustain future profitability, OIG determined that 

FHFA’s administration of the conservatorships has been, and continues to be, a management 

challenge.

To be sure, uncertainty with regard to the duration of the conservatorships exacerbates this 

challenge. As you have said in congressional testimony, FHFA can take certain actions to 

address the conservatorships of the Enterprises, but the Agency defers to Congress to act to 

resolve the conservatorships. There have been proposals from Congress regarding the Enterprise 

1 The Housing and Economic Recovery Act of 2008 requires FHFA to establish, by regulation, risk-based capital 

requirements for Fannie Mae and Freddie Mac to maintain sufficient capital and reserves to support the risks that 

arise in the operations and management of the Enterprises. The Agency’s Enterprise Regulatory Capital 

Framework, as amended, establishes and governs these requirements. See FHFA, Final Rule to Amend the 

Enterprise Regulatory Capital Framework (Feb. 25, 2022).

2 OIG has no position on the effectiveness of any policy or organizational change unless or until we conduct 

oversight work in a particular area.
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 112

Other Information

4

conservatorships, but no proposed legislation resolving the conservatorships has become law. 

Thus, the Enterprises have remained in conservatorship for 14 years.

In its role as conservator, the Agency is also required to maintain liquidity for the Enterprises’ 

mortgage-backed securities (MBS). In 2014, FHFA directed the Enterprises to build 

infrastructure that would facilitate issuance of the Uniform Mortgage-Backed Security (UMBS) 

to establish and maintain a single liquid market for Fannie Mae and Freddie Mac MBS.3

Subsequent to the launch of the UMBS, the Enterprises also started issuing securities that allow 

commingling of Fannie Mae and Freddie Mac collateral. After FHFA, as conservator, approved 

the Enterprises’ announcement of a new fee for the commingled securities effective July 1, 2022, 

market participants expressed concerns to the Agency about the potential fee’s effects on the 

UMBS market.

Here, as with other areas, FHFA has taken some steps to address the challenges noted. Similar to 

rules issued by the other federal financial regulators requiring plans for the orderly bankruptcy 

resolution of a firm in the event of material financial distress or failure, FHFA established a 

rule in 2021 that the Enterprises must provide resolution plans to the Agency by April 2023. 

According to FHFA, those plans are in progress, but the Enterprises will have to continue to 

work to complete the plans by the established deadline. In response to market feedback on 

the potential fee for commingled Enterprise securities, the Agency stated it would explore 

alternatives to ensure the long-term viability of the UMBS. As FHFA continues in its role 

as conservator, the Agency will need to ensure that it exercises appropriate engagement as 

conservator, while also recognizing that those decisions are subject to supervisory oversight 

by FHFA.

Challenge: Oversight of Information Risk for the Regulated Entities

FHFA’s regulated entities comprise central components of the U.S. financial system and 

interconnect with other large financial institutions. They receive, store, and transmit highly 

sensitive private information about borrowers and businesses, including financial data and 

personally identifiable information. Because FHFA and the regulated entities rely on copious 

amounts of information, the risk of incomplete, inaccurate, unprotected, or inappropriately 

managed information negatively impacting the regulated entities and housing finance sector is 

significant. The large volume of information, along with the interconnectedness of several other 

operational risk areas, leaves FHFA challenged to comprehensively oversee information risk at 

the regulated entities. This includes risks related to data management, information access, 

cybersecurity, information physical security, and privacy. 

The Financial Stability Oversight Council 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 

3 UMBS is a security issued either by Fannie Mae or Freddie Mac and backed by that Enterprise’s single-family 

fixed-rate mortgages.
113 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

5

participants, or compromising the integrity of critical data.4 This risk becomes even more 

critical for the regulated entities to manage and for FHFA to oversee considering the regulated 

entities’ footprint and role in the financial markets.

According to FHFA, while both Enterprises employ information security programs, operational 

risks remain elevated given increased exposure to cybersecurity threats.5

 Similarly, the Agency 

assessed an elevated risk to information at the FHLBanks because of continued remote 

operations, expanded telework related to the COVID-19 pandemic, and ongoing information 

technology initiatives at many FHLBanks. In the current environment of ever-increasing 

cybersecurity attacks and data breaches, it remains imperative that FHFA continues to oversee 

information risk for its regulated entities.

Challenge: Oversight of Counterparty Risk, Third-Party Risk, and Fourth-Party Risk for the 

Regulated Entities 

The regulated entities rely on institutional counterparties for matters that are critical to their 

business. Reliance on counterparties is not unusual in today’s business environment, but it 

requires the regulated entities to account for and mitigate related risks. For example, 

counterparty credit risk, which is the risk associated with the inability or failure of a counterparty 

to meet its contractual obligations, is a heightened risk and must be considered and mitigated. 

The Enterprises’ counterparties include entities, such as sellers, servicers, mortgage insurers, 

custodial depository institutions, and reinsurers. The FHLBanks’ primary exposures to 

institutional counterparty credit risk stem 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.

Counterparty credit risk can arise due to concentration among a limited number of 

counterparties, defaults, or inadequate or ineffective oversight. FHFA recognizes that such risk 

is significant. If an institutional counterparty defaults on its obligations, it could negatively 

impact an entity’s ability to operate. Moreover, as our criminal investigations and prosecutions 

continue to demonstrate, fraud perpetrated by different types of counterparties, including real 

estate brokers and agents, builders and developers, loan officers and mortgage brokers, and title 

and escrow companies, is persistent. Additionally, prolonged periods of financial stress, as seen 

during the pandemic, might cause adverse financial outcomes such as counterparty financial 

difficulties and failures. Of note, non-depository counterparties to the regulated entities might 

pose greater risk because they do not have the same financial strength or operational capacity, 

nor are they subject to the same level of regulatory oversight, as depository institutions. 

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 

4 See Financial Stability Oversight Council’s 2021 Annual Report. 

5 See FHFA’s 2021 Report to Congress. 
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 114

Other Information

6

supporting the regulated entities. 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 

Enterprises, in particular, have risk from CSS, which administers their portfolios of MBS and 

issues UMBS.6

 CSS’s underlying platform stores, processes, and transmits large volumes of 

data. 

Third-parties to the regulated entities rely on their own third-parties, which are fourth-parties 

to the regulated entities. Like third-parties, fourth-parties pose risk that must be managed. 

Managing fourth-party risk can be challenging due to limited direct oversight of fourth-parties. 

Typically, the entities do not have contracts with their fourth-parties. Instead, the third-parties 

have the direct contractual relationship with the fourth-parties. Demonstrating the 

interconnected nature of the risks, the regulated entities must consider information security 

issues related to their third- and fourth-parties.

The regulated entities rely on counter-, third-, and fourth-parties for their businesses, and thus, 

are reliant on them to meet their mission. As explained above, these relationships involve a 

number of risks. FHFA is challenged to oversee those risks, especially when considering the 

multiple ways they can present.

Challenge: Oversight of Model Risk for the Regulated Entities 

The Enterprises rely heavily on models to measure and monitor risk exposures and make 

business decisions. They use models extensively for mortgage underwriting, collateral valuation, 

home price forecasting, mortgage cash flow analysis, financial reporting, risk management, risk 

measurement, stress testing, portfolio management, hedging, financial instrument valuation, 

measuring compliance with internal risk limits, and capital reserves measurement. The 

FHLBanks also use models in making business decisions and for financial reporting. According 

to the FHLBank Combined Financial Report for 2021, each FHLBank makes significant use of 

models for managing, measuring, and monitoring risks. They also use models to determine the 

fair value of financial instruments when independent price quotations are not available.

Models explain relationships by processing data into estimates. Model risk can arise due to a 

model error or the incorrect use of model output and includes risk stemming from how models 

are developed, implemented, monitored, and used. 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. 

FHFA and the regulated entities have recognized the risk presented by models. The Agency 

warns that misuse of models may lead to poor or costly decisions. The Enterprises classify their 

6 CSS is an affiliate of each Enterprise that acts as agent for them to facilitate issuance of single-family mortgage 

securities and related disclosures, as well as administer the securities post-issuance. FHFA considers CSS to be an 

independent service provider to the Enterprises. 
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7

models according to the level of risk, and together, they had more than 50 models in their 

respective highest risk categories during the third quarter of 2021. FHFA’s 2021 Report to 

Congress also identified examination concerns related to models for several FHLBanks.

Although the Agency issued guidance on model risk to its regulated entities, FHFA has been 

challenged to continue supervising the regulated entities’ use of models. As recently as 2020, 

we found that the Agency had not assessed whether it had sufficient staff with the skills and 

competencies to examine the Enterprises’ high-risk models. The complexity and sophistication 

of models require the Agency to have the appropriate examination resources to ensure the safety 

and soundness of its regulated entities. Further, Enterprise use of artificial intelligence and 

machine learning (AI/ML) in models, such as for automated property valuation, continues to 

grow and evolve.7

 This modeling technology requires the Agency to supervise fairness and 

equity concerns as poorly designed models developed using AI/ML may produce outcomes that 

benefit or harm some individuals, groups, or communities.8

 FHFA issued an advisory bulletin in 

February 2022 to provide the Enterprises with guidance on managing risks associated with the 

use of AI/ML, including model risk. 

FHFA’s oversight of this area becomes more challenging because of the uncertainty and shifting 

nature of the current economy. In a rapidly changing economic environment, a regulated entity 

may use more management judgment to adjust or “overlay” their models. At the outset of the 

pandemic, for example, both Enterprises made model adjustments that increased their estimates 

of their single-family credit losses. As another example, with interest rates as an important 

component in several of the regulated entities’ financial models, the rapidly changing interest 

rate environment in 2022 increases the uncertainty of the assumptions and expectations in 

models. The introduction of more change and uncertainty may hinder the accuracy of the 

regulated entities’ models. As both the economy and modeling techniques continue to evolve, it 

is crucial for FHFA to keep abreast of model risk and take appropriate action to address that risk.

Challenge: Oversight of People Risk for the Regulated Entities 

To accomplish their missions, FHFA and the regulated entities must attract, develop, and retain a 

highly qualified, diverse workforce with specialized skills. An inability to do so can jeopardize 

mission accomplishment. People risk can manifest across a range of human capital related 

issues. It encompasses scenarios such as an organization not planning and assessing the effect of 

retirements or the loss of institutional knowledge. People risk also includes pervasive critical 

skill gaps and individuals making decisions adverse to the institution.

The last two years have posed significant changes and challenges to the American workforce. In 

2021, according to the U.S. Bureau of Labor Statistics, over 47 million Americans voluntarily 

quit their jobs – a phenomena now commonly called the “great resignation.” The Enterprises 

7 See OIG, Enterprise Use of Artificial Intelligence and Machine Learning (Sept. 19, 2022) (WPR-2022-02).

8 See FHFA, Office of Minority and Women Inclusion Supervisory Letter on Artificial Intelligence and Machine 

Learning (Feb. 10, 2022).
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have not been immune to turnover. The regulated entities require people with specialized, highly 

in-demand skills, for example, information security and technology-related skills. The rise of 

remote work has further exacerbated competition for employees, as the regulated entities must 

now compete with companies across the country and world to attract and retain top tier talent. 

In addition to the typical recruitment needs, recent workforce pressures can translate to thinned 

ranks, requiring the regulated entities to rebuild depth amidst already difficult recruitment and 

retention circumstances.

Further, several key senior executives departed recently, including both Enterprises’ chief 

executive officers. The FHLBanks and CSS also lost key executives. Such leadership and key 

executive changes require FHFA’s oversight to ensure the regulated entities continue managing 

risks and executing their mission during transitional times. 

In addition to overseeing this risk at the regulated entities, FHFA must manage its own people 

risk. As with other challenges highlighted in this memorandum, change and uncertainty also 

affects FHFA’s people risk. From June 2020 to December 2021, 281 employees, contractors, 

and other persons departed the Agency, including the former Director and other senior 

employees. As context, the Agency employed nearly 700 employees as of December 31, 2021. 

Some departures were long-time employees, with FHFA losing their years of institutional 

knowledge. Changes in FHFA leadership brought accompanying shifts in strategic direction and 

approach. These executive changes reinforce the need to manage people risk and attract and 

retain a workforce with the requisite skills and competencies to oversee its regulated entities. 

We have previously reported concerns about the lack of systematic workforce planning in 

segments of FHFA.9

 Although FHFA has taken steps to address those concerns, that work 

remains ongoing, and FHFA awaits work product from an external partner to determine the 

appropriate path forward. The Agency should continue its efforts to manage its people risk so it 

can execute its oversight responsibilities.

Challenge: Oversight of Resiliency Risk for the Regulated Entities 

As noted, the regulated entities perform important roles in providing a stable source of funding 

for housing finance. Events such as a wide-scale power outage, natural disaster, or cyber-attack 

can jeopardize their ability to perform mission critical operations.

According to the Federal Financial Institutions Examination Council, resilience is “the ability to 

prepare for and adapt to changing conditions and withstand and recover rapidly from disruptions. 

Resilience includes the ability to withstand and recover from deliberate attacks, accidents, or 

naturally occurring threats or incidents.” Resiliency risk describes the risk of loss from the 

inability to adapt to disruptions and maintain business operations. It can stem from risks related 

9 See OIG, Despite FHFA’s Recognition of Significant Risks Associated with Fannie Mae’s and Freddie Mac’s

High-Risk Models, its Examination of Those Models Over a Six Year Period Has Been Neither Rigorous nor Timely

(Mar. 25, 2020) (EVL-2020-001) and Despite Prior Commitments, FHFA Has Not Implemented a Systematic 

Workforce Planning Process to Determine Whether Enough Qualified Examiners are Available to Assess the Safety 

and Soundness of Fannie Mae and Freddie Mac (Feb. 25, 2020) (AUD-2020-004).
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9

to crisis management, business continuity, disaster recovery, or incident response. The regulated 

entities’ resiliency is particularly vital given their critical mission and importance to the financial 

markets.

Recent events, such as the COVID-19 pandemic and the spike in interest rates, underscore the 

role of resiliency at the regulated entities, and FHFA is challenged to ensure regulated entity 

resiliency when a disruption occurs. During the pandemic, more than 6% of Enterprise loans 

went into forbearance.10 While FHFA reports that 96% of the homeowners that relied on 

forbearance have successfully exited the program, the situation underscores that an external 

event can cause uncertainty and payment problems. The pandemic also affected the regulated 

entities’ operations, because they had to adopt strategies to accommodate remote workforces 

while still meeting their missions. In addition to operational complexities, refinances, which 

accounted for 65% of Freddie Mac’s single-family acquisitions in 2021, have precipitously 

declined amid higher interest rates in 2022. Both Enterprises forecast a slowdown in home sales 

and expect mortgage originations to be almost $2 billion lower in 2022 than in 2021, which will 

affect their acquisition volume.

Meanwhile, the FHLBanks have seen significant fluctuations in advances resulting from the 

pandemic and subsequent government policy decisions. FHLBank members sought advances at 

the start of the COVID-19 pandemic in 2020, but the government’s monetary policy provided 

relief, causing FHLBank members to retreat from advances. As of September 30, 2021, the 

FHLBanks had the lowest quarter-end level of advances since 2001; advance balances have 

increased since that time.

As large, complex organizations, the regulated entities 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 thirdparties because they rely on thousands of third-parties, including for key components of their 

business operations. FHFA must continue to oversee the regulated entities’ resiliency to ensure 

they are able to deliver on their mission.

Conclusion

Collectively, the risks posed by the areas described above are significant and, thus, merit 

continued attention by the Agency. The challenge for FHFA is to identify the facets of highest 

risk, effectively supervise the regulated entities while they engage in these areas, and remain 

nimble with their focus as matters continuously evolve. OIG’s risk-based work will remain 

10 A November 2021 OIG administrative inquiry reported that FHFA has determined that the Enterprises can absorb 

the full cost of pandemic-related mortgage forbearance. See OIG, Report of Administrative Inquiry: FHFA Has 

Determined that the Enterprises Can Absorb the Full Cost of CARES Act Mortgage Forbearance (Nov. 3, 2021) 

(OIG-2022-001).
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 118

Other Information

10

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, Associate Director

Katrina D. Jones, Chief Operating Officer

Clinton Jones, General Counsel 

John Major, Risk Management and Compliance Branch Manager
119 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

Summary of Financial Statements 

Audit and Management Assurances

Table 22: 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 23: 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 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 120

Other Information

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 on a weekly basis, and daily 

the vendor database is compared against the System for 

Award Management. A copy of the supplier database is 

validated against the Do Not Pay portal once a week. 

Additionally, matching results are pulled from the Do 

Not Pay portal once a week. 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.
121 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

Other Information

Civil Monetary Penalty Adjustment 

for Inflation

Table 24: 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 2021 $12,771

Federal Register 87

(January 2022)

1659 – 1662

Safety and Soundness Act - 12 

U.S.C. 4636 (b) (2) Second Tier 2008 2021 $63,855

Federal Register 87

(January 2022)

1659 – 1662

Safety and Soundness Act - 12 

U.S.C. 4636 (b) (4)

Third Tier – Entity 

affiliated party and 

regulated entity

2008 2021 $2,554,223

Federal Register 87

(January 2022)

1659 – 1662

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 2021 $12,537

Federal Register 87

(January 2022)

1659 – 1662

Program Fraud Civil Remedies Act 

31 U.S.C. 3802 (a) (2)

Maximum penalty 

per false statement 2009 2021 $12,537

Federal Register 87

(January 2022)

1659 – 1662

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 2021 $621

Federal Register 87

(January 2022)

1659 – 1662

National Flood Insurance Act of 1968

42 U.S.C. 4012a (f) (5)

Maximum total

penalties assessed 

against an Enterprise 

in a CY

2009 2021 $179,123

Federal Register 87

(January 2022)

1659 – 1662
APPENDICES

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123

PERFORMANCE MEASURE VALIDATION 

AND VERIFICATION TEMPLATE . . . . . . . . . . . . . . . . . . . . . . . . . . . .124

LIST OF FIGURES AND TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126

ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127

CONTACT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127

FHFA KEY MANAGEMENT OFFICIALS . . . . . . . . . . . . . . . . . . . . . . .128

OFFICE OF THE INSPECTOR GENERAL . . . . . . . . . . . . . . . . . . . . . . .128

FEDERAL HOUSING FINANCE OVERSIGHT BOARD . . . . . . . . . . . .128

| 122
Appendices

Glossary

Advance – A secured extension of credit or loan from a 

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.

Community Investment Cash Advance (CICA) – 

CICA programs offer FHLBank advances or grants to 

FHLBank members and housing associates to provide 

financing for economic development activities that 

are targeted at specific beneficiaries, including small 

businesses and certain geographic areas, and can be used 

to finance economic development activities that benefit 

households at income levels greater than those permitted 

under the Community Investment Program.

Community Investment Program (CIP) – CIP programs 

offer FHLBank advances at the cost of consolidated Bank 

obligations of comparable maturities, taking into account 

reasonable administrative costs to FHLBank members 

to provide loans to households with incomes up to 115 

percent of the area median income for the purchase or 

rehabilitation of housing, as well as for commercial and 

economic development activities that benefit low- and 

moderate-income families or that are located in low- and 

moderate-income neighborhoods.

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 and Freddie Mac.

GAO Green Book – GAO Standards for Internal Control 

in the Federal Government, GAO 14-704G

Loan-to-Value (LTV) – 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 

management for serious 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, 

and the FHLBanks.

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 liquidity-related investments, 

such as Treasury securities.

Senior Preferred Stock Purchase Agreement (PSPA) – 

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.

Appendices

123 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT
Performance Measure Validation 

and Verification Template 

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.)

___________________________________________

___________________________________________

___________________________________________

___________________________________________

Appendices

FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 124
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? 

___________________________________________

___________________________________________

___________________________________________

___________________________________________

___________________________________________

Appendices

125 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT
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 ............................................................... 11

Figure 4: FHFA’S FY 2021-2024 Strategic Plan: Goals and Objectives .............................................. 15

Figure 5: Distribution of Total Assets for FY 2022 .............................................................. 23

Figure 6: Distribution of Total Liabilities for FY 2022 ........................................................... 24

Figure 7: Gross Costs by Strategic Goal for FY 2021 - Strategic Plan 2021-2024 ..................................... 25

Figure 8: FHFA’s Performance Management Cycle ............................................................. 32

Figure 9: FHFA’s Performance Planning and Review Process ..................................................... 33

Figure 10: Quarterly MVE to PVCS Ratios .................................................................... 44

Figure 11: Monthly House Price Index for U.S. from January 1991 – Present ....................................... 58

Figure 12: Obligated Amount to MWOBs .................................................................... 65

List of Tables

Table 1: Regulated Entities’ Business Activity ................................................................. 10

Table 2: FHFA Staffing Summary ............................................................................ 12

Table 3: Summary of Performance Measures and Results ....................................................... 16

Table 4: FHFA Condensed Balance Sheets .................................................................... 24

Table 5: Summarized Costs and Revenue .................................................................... 24

Table 6: Strategic Objective 1.1 – Summary of Performance Measures and Results .................................. 38

Table 7: Enterprise Financial Results Summary of First 3 Quarters of 2022 and Full Year 2021 ......................... 42

Table 8: FHLBanks’ Financial Results Summary of First 3 Calendar Quarters of 2022 and Full Calendar Year 2021 ......... 43

Table 9: Strategic Objective 1.2 – Summary of Performance Measures and Results .................................. 45

Table 10: Strategic Objective 1.3 – Summary of Performance Measures and Results ................................. 47

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 ................................. 57

Table 14: Strategic Objective 3.1 – Summary of Performance Measures and Results ................................. 62

Table 15: Strategic Objective 3.2 – Summary of Performance Measures and Results ................................. 64

Table 16: Strategic Objective 3.3 – Summary of Performance Measures and Results ................................. 66

Table 17: Performance Measures Added, Changed, and Discontinued in FY 2022 ................................... 67

Table 18: Audits and Evaluations .......................................................................... 105

Table 19: Management Report on Final Action on Audits with Disallowed Costs for FY 2022 ......................... 107

Table 20: Management Report on Final Action on Audits with Recommendations to Put Funds to Better Use for FY 2022 .... 107

Table 21: Audit Reports without Final Actions but with Management Decisions Over One Year Old for FY 2022 ......... 108

Table 22: Summary of Financial Statements Audit ............................................................ 119

Table 23: Summary of Management Assurances ............................................................. 119

Table 24: Civil Monetary Penalty Adjustment for Inflation ..................................................... 121

Appendices

FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 126
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 2022 Financial Statements. This PAR 

was published with the assistance of Lista Design, 

Rancho Cucamonga, CA.

CONNECT WITH FHFA 

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

Appendices

127 | FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT
FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT

FHFA Key Management Officials

SANDRA L. THOMPSON

Director, FHFA

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

SAMUEL FRUMKIN

Executive Secretary

ANDRE D. GALEANO

Deputy Director, Division of Enterprise Regulation

CLINTON JONES

General Counsel

KATRINA D. JONES

Chief Operating Officer

SHARRON P.A. LEVINE

Director, Office of Minority and Women Inclusion

NINA NICHOLS

Deputy Director, Division of Accounting and 

Financial Standards

JOSHUA STALLINGS

Deputy Director, Division of Federal Home Loan 

Bank Regulation

NAA AWAA TAGOE

Deputy Director, Division of Housing Mission and Goals

LAURA THRIFT

Director, Office of Congressional Affairs 

and Communications

CHARLES 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

Chairman

JANET L. YELLEN

Secretary of the Treasury

MARCIA L. FUDGE

Secretary of Housing and Urban Development

GARY GENSLER

Chairman, Securities and Exchange Commission

Appendices

FY 2022 PERFORMANCE & ACCOUNTABILITY REPORT | 128
Federal Housing Finance Agency

400 7th Street, SW

Washington, D.C. 20219

202-649-3800

www .fhfa .gov