OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT

NEWS RELEASE

1700 G STREET N.W., WASHINGTON, D.C. 202.414.6922 FAX 202.414.3823

FOR IMMEDIATE RELEASE Contact: Stefanie Mullin

Friday, June 15, 2001 202.414.6921

 www.ofheo.gov

OFHEO SUBMITS ITS

2001 REPORT TO CONGRESS

WASHINGTON, D.C. ñ Armando Falcon, Jr., Director of the Office of Federal Housing Enterprise

Oversight (OFHEO), financial safety and soundness regulator of Fannie Mae and Freddie Mac, today

released OFHEO's 2001 Report to Congress as required by statute in Section 1319B of the Federal

Housing Enterprises Financial Safety and Soundness Act of 1992 (Title XIII of P.L. 102-550).

Highlights of the Report to Congress:

--Director's Message

--Results and conclusions of OFHEO Examinations of the Enterprises

--A clean, independent audit of OFHEO's finances

--Numerous data tables

###

OFHEO was established as an independent entity within the Department of Housing and Urban

Development by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992

(Title XIII of P.L. 102-550). OFHEOís primary mission is ensuring the capital adequacy and

financial safety and soundness of Fannie Mae and Freddie Mac.
OFHEO 

Report to Congress

JUNE 15, 2001 

TABLE OF CONTENTS

i

Chapter 1 – Year In Review 1 

OFHEO – Safety and Soundness Regulator 

Examinations 

Minimum Capital 

Risk-based Capital 

OFHEO Rulemaking 

Regulatory Infrastructure Project 

The Enterprises’ Financial Condition 

A Continued Strong Economy 

Technology and the Growing Sophistication of Risk Management 

OFHEO Outreach and Coordination 

Chapter 2 - OFHEO’s Examination Program 8 

Introduction 

OFHEO’s Examination Program 

Internal Models 

2000 Examination Results and Conclusions for Fannie Mae 

2000 Examination Results and Conclusions for Freddie Mac 

Chapter 3 - Financing OFHEO’s Operations 21 

OFHEO’S BUDGET 

OFHEO Continues to Receive Unqualified Audit Opinion in FY 2000 

Unqualified Audit Opinion of FY 2000 Audit Statements

Chapter 4 – Historical Data Tables 54 

Table 1. Fannie Mae Mortgage Purchases 57 

Table 2. Fannie Mae MBS Issuances 58 

Table 3. Fannie Mae Earnings 59 

Table 4. Fannie Mae Balance Sheet 60 

Table 5. Fannie Mae Retained Mortgage Portfolio Detail 61 

Table 6. Fannie Mae Financial Derivatives 62 

Table 7. Fannie Mae Non-Mortgage Investments 63 

Table 8. Fannie Mae Asset-Liability Mix 64 

Table 9. Fannie Mae Mortgage Asset Quality 65 
TABLE OF CONTENTS

ii

Table 10. Fannie Mae Capital 66 

Table 11. Freddie Mac Mortgage Purchases 67 

Table 12. Freddie Mac MBS Issuances 68 

Table 13. Freddie Mac Earnings 69 

Table 14. Freddie Mac Balance Sheet 70 

Table 15. Freddie Mac Retained Mortgage Portfolio Detail 71 

Table 16. Freddie Mac Financial Derivatives 72 

Table 17. Freddie Mac Non-Mortgage Investments 73 

Table 18. Freddie Mac Asset-Liability Mix 74 

Table 19. Freddie Mac Mortgage Asset Quality 75 

Table 20. Freddie Mac Capital 76 

Table 21. Aggregate Purchases 77 

Table 22. Aggregate MBS Issuances 78 

Table 23. Aggregate Earnings 79 

Table 24. Aggregate Balance Sheet 80 

Table 25. Aggregate Retained Mortgage Portfolio Detail 81 

Table 26. Aggregate Financial Derivatives 82 

Table 27. Aggregate Non-Mortgage Investments 83 

Table 28. Aggregate Capital 84 

Table 29. Loan Limits 85 

Table 30. Mortgage Interest Rates 86 

Table 31. Housing Market Activity 87 

Table 32. Weighted Repeat Sales House Price Index 88
CHAPTER ONE - THE YEAR IN REVIEW

1

OFHEO completed development of 

its risk-based capital rule and 

continued to adapt its regulatory 

program to the evolution of the 

nation’s housing finance system and 

changes in the mortgage industry’s 

use of technology.

YEAR IN REVIEW

The year 2000 was a 

success for OFHEO. The 

Office finalized its risk-based capital rule, 

conducted risk-based examinations of both 

Enterprises, and determined each Enterprise met its 

regulatory capital requirements throughout the year. OFHEO also continued to adapt its 

regulatory program to the evolution of the nation’s housing finance system and changes in the 

mortgage industry’s use of technology. In 2000, the Office’s oversight of Fannie Mae and 

Freddie Mac continued to ensure that the Enterprises are financially safe and sound, fostering the 

strength and vitality of the nation’s housing finance system. 

OFHEO – SAFETY AND SOUNDNESS REGULATOR 

Examinations – OFHEO conducted annual risk-based examinations of Fannie Mae and Freddie 

Mac in 2000, and provides the results and conclusions of the examinations in Chapter 2 of this 

report. Each quarter, the examination staff updates its evaluations using assessment factors 

covering more than 150 features of financial safety and soundness, which provides OFHEO with 

a comprehensive and timely understanding of the Enterprises’ financial condition and 

performance. The assessments provided by examiners evaluate the key aspects of risk and risk 

management and cover credit risk, interest rate risk, liquidity management, information 

technology, internal controls, business process controls, internal and external audits, 

management information, management processes, and the governance provided by the 

Enterprises’ boards of directors. 

Conducting comprehensive risk-based examinations is an important tool OFHEO 

employs to ensure the Enterprises operate prudently and remain safe and sound. We are 

committed to maintaining an excellent examination program by focusing on four core 

competencies: maintaining a quality examination framework; employing highly skilled 

personnel to conduct the program; utilizing tools that enhance the effectiveness and efficiency of 

examiners; and engaging in a quality improvement process to ensure continuous improvement as 

a cornerstone of the program. 

Like the examination programs of other financial regulators, OFHEO’s includes both onsite examinations and off-site surveillance and monitoring. It is through the on-site examinations 

that specialists make hands-on assessments of qualitative factors – such as management 

capabilities, risk management strategies, and internal control processes – which cannot be 

reflected in routine regulatory reporting. 

Trained examiners with years of regulatory and industry experience verify the quality and 

integrity of risk management tools, risk measurements, financial and management reports, 

operational controls, documentation standards, and a host of other qualitative and quantitative 
CHAPTER ONE – YEAR IN REVIEW

2 

judgments. In short, there is no substitute for the value provided from examining the Enterprises 

on-site. 

OFHEO’s off-site surveillance and monitoring examination function is also an important 

element of prudential oversight. By (1) studying trends, (2) analyzing performance within the 

context of the broader marketplace, and (3) performing sophisticated analysis on features of risk 

at the Enterprises, the examination teams are well prepared to conduct on-site testing and 

evaluate the Enterprise’s performance critically. 

OFHEO continues to upgrade the technology, training, and knowledge-building tools 

used by examiners. By leveraging technology, OFHEO’s examiners are able to perform 

sophisticated analyses more effectively and reach examination judgments more efficiently and 

rapidly. 

Benchmarking is an important mechanism in the evolution of OFHEO’s examinations. 

OFHEO participates in benchmarking initiatives with other federal financial regulators to 

achieve consistent regulatory supervision across large and complex financial firms. Areas 

incorporated in the benchmarking include: approaches employed by regulators, the regulatory 

frameworks employed in supervising, the expertise among regulatory staffs, the standards used 

to assess safety and soundness, the regulatory judgments of best practices for financial operations 

and risk management at institutions, and financial measurements of risk between peer 

institutions. Through benchmarking, OFHEO's examination program remains at the vanguard of 

financial regulation for large and complex financial firms. 

Given the speed of change in the financial markets and at the Enterprises, OFHEO 

continuously improves its examination program. The Office’s commitment to innovation is 

reflected in the quality-improvement process embedded within the examination program, which 

incorporates self- and peer-assessments and a formal feedback process. OFHEO’s examination 

program continues to evolve to better capture the specific risks of the Enterprises. 

Minimum Capital – OFHEO continued to enforce compliance with quarterly minimum capital 

standards for each Enterprise in 2000. Those minimum capital requirements, which are required 

by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 and are similar 

to a bank’s leverage capital requirement, are computed on the basis of capital ratios specified in 

the Act, which are applied to defined on-balance sheet assets and off-balance sheet obligations of 

the Enterprises. For each quarter the requirements have been applied, each Enterprise has 

exceeded its minimum capital requirement and has been classified as adequately capitalized. 

The chart below illustrates each Enterprise’s capital in terms of its minimum capital requirement 

and core capital at the end of each quarter of 2000. 
CHAPTER ONE - YEAR IN REVIEW

3

Risk-based Capital – The 1992 Act requires OFHEO to establish risk-based capital 

requirements for Fannie Mae and Freddie Mac. The Office is required to use a stress test – a 

model that simulates the financial performance of the Enterprises under specified adverse 

economic conditions – to establish those requirements. On March 10, 2000, the comment period 

closed on a second Notice of Proposed Rulemaking for the risk-based capital standard. A 

solicitation of reply comments published on March 13, 2000, afforded an additional month to 

provide public input on the comments received by OFHEO. OFHEO then undertook a 

comprehensive review of all comments received, considered the issues raised, and moved to 

preparation of the Final Rule. In late November 2000, a copy of the text of the Final Rule was 

provided to the Office of Management and Budget, in advance of its official submission for 

review. The rule was officially submitted to OMB on March 29, 2001. 

OFHEO Rulemaking – During 2000, OFHEO began a comprehensive review of its regulatory 

program to ensure appropriate transparency and enforceability. The agency also undertook 

rulemaking on a number of issues within the Office’s jurisdiction. These include: 

! Equal Access to Justice Act – On May 9, 2000, OFHEO published a Final Rule 

implementing the Equal Access to Justice Act. The rule addresses procedures for the 

filing and consideration of applications for award of fees and other expenses to 

individuals or entities that are a party to adverse proceedings before OFHEO, where such 

party is eligible for an award under the statute. 

! OFHEO Organization – On June 28, 2000, OFHEO published a Final Rule revising its 

organization rule to reflect changes made in several departments as to their names, 

functions and responsibilities. 

Source: OFHEO
CHAPTER ONE – YEAR IN REVIEW

4

! E-FOIA – On September 13, 2000, OFHEO published a Final Rule to facilitate access to 

the agency’s publicly-available records through electronic means. The rule incorporates 

and implements changes to the Freedom of Information Act directed by the Electronic 

Freedom of Information Act Amendments Act of 1996. 

Regulatory Infrastructure Project – On July 27, 2000, OFHEO published a notice on a 

regulatory infrastructure project to provide for a comprehensive review of OFHEO’s regulatory 

authorities. The project is designed to implement fully the statutory mandates of OFHEO, to 

provide legal support for OFHEO’s supervisory programs, to provide greater certainty for the 

regulated entities, and to produce greater transparency for the public in understanding OFHEO’s 

administration of its responsibilities. Areas of coverage include OFHEO organization and 

structure, corporate governance practices of the Enterprises, minimum safety and soundness 

standards and other compliance matters. 

In meeting the infrastructure project, the following initiatives were undertaken in 2000: 

! Policy Guidance on Minimum Safety and Soundness Requirements – On December 19, 

2000, OFHEO published a policy guidance setting forth the minimum standards 

applicable to risk management by and the operations of the Enterprises. 

! Policy Guidance on Non-Mortgage Liquidity Investments – On December 19, 2000, 

OFHEO published a policy guidance related to risk management standards for nonmortgage liquidity investments. The guidance highlights the appropriate standards for 

types of investments and risk management and suggests a standard for reporting on the 

investments covered by the guidance. 

! Executive Compensation – On December 26, 2000, OFHEO published for comment a 

proposed rule to codify policies and practices involved in the agency review of executive 

compensation by the Enterprises. The proposal would largely formalize procedures 

currently used by OFHEO in performing its executive compensation oversight 

responsibilities. The processes require the submission of relevant information by the 

Enterprises on a timely basis. 

! OFHEO Regulation Reorganization – In order to accommodate new rules, the numbering 

and listing of OFHEO regulations were reorganized on December 26, 2000. 

! Enforcement Procedures – On December 27, 2000, OFHEO proposed to amend its rules 

to clarify and elaborate on its enforcement procedures for imposing sanctions, including 

civil money penalties and cease and desist orders, on the Enterprises, their officers or 

directors. The rule, which became final on May 7, 2001, addresses procedural aspects of 

the agency’s enforcement regime. 

! Assessments – On December 27, 2000, OFHEO published for comment a proposed rule 

on the manner and procedures for collecting assessments from the Enterprises. The rule, 

which became final May 7, 2001, reiterated the agency’s assessment procedures and 

addressed problems that could result from delays in enactment of appropriations 

legislation. 
CHAPTER ONE - YEAR IN REVIEW

5

The Enterprises’ Financial Condition

Fannie Mae and Freddie Mac achieved a year of record profits in 2000, despite lower 

housing market activity and a 20 percent decline in the volume of mortgage originations. The 

Enterprises’ combined net income rose 14 percent to $7 billion. Growth in the mortgage asset 

portfolios of Fannie Mae and Freddie Mac was less rapid than in 1999, but remained the primary 

cause of profit growth. Also contributing to higher profits was a further decline in each 

Enterprise’s credit losses. 

The combined assets of Fannie Mae and Freddie Mac topped the $1 trillion mark in 2000, 

increasing 18 percent over the year-end 1999 level of $962 billion. Most of the Enterprises’ 

balance sheet growth was due to increases in their mortgage asset portfolios. That growth 

enabled Fannie Mae to raise its net interest income by 16 percent to $5.7 billion. Freddie Mac 

increased its net interest income (defined for consistency with Fannie Mae to include guarantee 

fees on mortgage-backed securities in its mortgage asset portfolio) by 12 percent to $3.3 billion. 

Fannie Mae and Freddie Mac continued to actively manage their exposure to credit risk. 

Each Enterprise increased to 56 percent the proportion of single-family mortgages it purchased 

that were evaluated using that Enterprise’s automated underwriting system prior to sale. The 

Enterprises also continued to reduce their exposure to mortgage credit risk by obtaining credit 

enhancements on higher-risk single-family loans. Credit-related expenses – foreclosed property 

expenses plus provision for losses – declined at Fannie Mae and Freddie Mac despite continued 

growth in their mortgage asset portfolios and MBS held by other investors. Combined 

Enterprise credit-related expenses fell 30 percent during the year to a low $200 million. That 

decline in credit-related expenses was due to continued strength in the economy and housing 

markets coupled with successful Enterprise credit management practices. 

Fannie Mae and Freddie Mac also continued to actively manage their exposure to interest 

rate risk. As in recent years, a significant proportion of long-term debt issued by each Enterprise 

in 2000 had call options or rate-adjustment features, which allow them to manage the average 

expected maturity of their liabilities as interest rates move and the average maturity of their 

mortgage assets is altered. The Enterprises also manage the proportion of their debt that is 

effectively long-term in order to alter the average expected maturity of their liabilities as interest 

rates change, affecting the average expected maturity of their mortgage assets. In addition, 

Fannie Mae and Freddie Mac each utilized interest rate swaps, swaptions, and other financial 

derivatives to hedge its respective exposure to interest rate risk. 

A Continued Strong Economy

The nation’s economy grew 3.4 percent during 2000, with the civilian unemployment rate 

averaging 4.0 percent in 2000. Growth was quite rapid in the first half of the year, but slowed in 

the second half in response to higher interest rates. 

The increased borrowing costs and economic slowdown reduced overall housing market 

activity for the second year in a row, although new construction and home sales remained at high 

levels and inflation of house prices accelerated. Single-family housing starts for the year totaled 
CHAPTER ONE – YEAR IN REVIEW

6

1.3 million, 5 percent lower than 1999 but the third highest level in 22 years. Home sales also 

remained quite strong by historical standards. Combined sales of new and existing homes 

totaled 6 million units, the second-best year behind the 6.1 million level of 1999. Originations of 

single-family mortgages declined 20 percent to slightly over $1 trillion, and the homeownership 

rate for all households increased during the year to 67.5 percent, up 0.6 percentage point from 

late 1999. 

General price inflation, coupled with relatively high demand for housing, caused a 

significant rise in home values in 2000. In the fourth quarter of the year, single-family home 

prices, as measured by OFHEO’s House Price Index (HPI), had increased 8.1 percent from the 

same quarter the previous year. That compares to 6.5 percent for the previous one-year period. 

Technology and the Growing Sophistication of Risk Management 

Finally, the use of technology further spread throughout the economy, notably in the 

financial services industry. Taking risk is an integral part of the financial system. Without 

taking risks and managing them prudently, the Enterprises would not be successful businesses, 

nor would they be able to fulfill their public missions. What has changed in recent years has 

been the degree of sophistication now required to reflect the more complex and fast-paced 

environment in which the Enterprises operate their businesses. 

Risk management is at the heart of many critical decisions at major financial institutions 

like Fannie Mae and Freddie Mac. Risk management affects day-to-day operations, resource 

allocations, strategic planning, capital structure, legal and political exposure, performance 

measurement, and a host of other issues. Increasingly, financial success depends on the 

identification, quantification, and management of a variety of complex and interdependent risks. 

The mortgage industry has been profoundly impacted by technological innovations, 

perhaps most conspicuously the widespread availability and acceptance of technologies 

automating the mortgage process. Perhaps no innovation has had greater impact on the mortgage 

market than the introduction of automated underwriting systems, where Fannie Mae’s and 

Freddie Mac’s systems have been among the most widely used in the marketplace. And now, the 

Enterprises are expanding the availability of those tools through the Internet. 

We can expect further innovation in the mortgage market. This environment of change 

and innovation poses challenges for financial supervisors like OFHEO as well as the entities that 

we regulate. Those challenges require that OFHEO be diligent in upgrading its regulatory 

capabilities and adapt to the changes in the environment and the risks at Fannie Mae and Freddie 

Mac. 
CHAPTER ONE - YEAR IN REVIEW

7

OFHEO Outreach and Coordination 

In 2000, OFHEO continued to educate the public on the mortgage markets and to work in 

partnership with other agencies to address issues of common concern. Director Falcon and 

OFHEO staff met with trade associations, the Wall Street community, public interest groups, and 

others involved or interested in the mortgage markets. OFHEO also participated in professional 

forums and presented research papers on the mortgage market to peer groups. OFHEO 

economists presented research papers related to the supply elasticity of housing. Economists and 

policy analysts also gave presentations on risks associated with a mortgage portfolio, regulating 

the secondary mortgage market, and policy issues related to Fannie Mae and Freddie Mac. 

Governments from other countries sought OFHEO’s expertise and advice on the 

development and oversight of secondary mortgage markets. During 2000, OFHEO participated 

in meetings with officials from Japan, China, Mexico and other nations to enhance their 

understanding of the U.S. housing finance system. 

Finally, OFHEO participated in interagency groups to address issues of common concern. 

This involvement included participation in two Interagency Task Forces on Fair Lending and a 

presentation on mortgage fraud at the Federal Deposit Insurance Corporation’s Financial Crimes 

Unit’s 8th Annual Fraud and Enforcement Conference. 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

8 

OFHEO’S EXAMINATION PROGRAM 

Assessment Factors

Examination Objectives

Evaluation Criteria

Interest Rate Risk 

Liquidity Management 

FHLMC Risk Profile

FHLMC • Balance Sheet and OBS

• Strategy

• Business Initiatives

• Management of Risks

FNMA • Balance Sheet and OBS

• Strategy

• Business Initiatives

• Management of Risks

FNMA Risk Profile

• Strategy Tailored for FNMA

• Strategy Tailored for FHLMC

Examination Strategies

Communicate

Examination

Findings;

Effect Changes

and Follow Up

OFHEO’s Comprehensive 

Risk-Based Examination

Program

Basis for evaluating the 

quantitative and qualitative

features of risk and 

risk management

- these remain constant

Categories of risk and 

risk management

- these remain constant

Program areas for risk 

based examinations

- these remain constant

Annual risk-based examination 

plan

- reviewed and updated quarterly

OFHEO’s risk profile for each 

Enterprise

- updated quarterly

Constant changes at each Enterprise

Continuous communications 

and follow-up

Credit Market Credit Risk Operations Information Technology Business Process Controls Internal Controls 

Board Governance 

Management Processes 

Audits 

Management Information 

Corporate Governance

1

2

3

4

5

CHAPTER TWO
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

9

INTRODUCTION 

OFHEO’s annual risk-based examination program is an integral part of a system designed 

to ensure the ongoing safety and soundness of Fannie Mae and Freddie Mac. The examination 

program assesses the appropriateness and effectiveness of the Enterprises’ policies and processes 

for risk management, and assesses the companies’ financial performance. Using a risk-based 

approach allows OFHEO to recognize the unique operations of each Enterprise while applying 

uniform safety and soundness standards throughout the year. This aspect of the examination 

program’s design ensures that OFHEO is responsive to changes at the Enterprises while not 

imposing unnecessary burdens. The analysis and testing conducted during the examinations add 

further depth and perspective to OFHEO’s oversight of Fannie Mae and Freddie Mac. The 

examination program, together with OFHEO’s capital adequacy framework, informs the 

Director’s judgment about the appropriateness of the balance of risk and capital at each 

Enterprise. 

The 2000 examinations found both Enterprises to be financially sound and well managed. 

The process OFHEO employed in its comprehensive annual risk-based examinations to 

reach these conclusions is briefly described below, and depicted on the chart set forth in Table 1. 

This information is provided to give context for the summary of the examination results and 

conclusions for each Enterprise. The description of the examination process corresponds to the 

chart in Table 1, beginning with the base of the chart and concluding at the top. Numeric 

references to the chart are included in the text that describes the examination process. 

OFHEO’s Examination Program 

Risk Profiles 

Through a wealth of resources (including OFHEO knowledge, external sources and 

proprietary Enterprise information and data), the examination process begins by assessing the 

quantity of risk and quality of risk management at each Enterprise. OFHEO reviews each 

Enterprise’s risk profile at least quarterly, and revises its views if, for example, the Enterprise has 

planned or undertaken substantive new business initiatives, or if the Enterprise has substantially 

changed its level of risk or the manner in which it manages risks. 

Examination Strategies 

Based upon OFHEO’s unique position to understand the Enterprises’ risk profiles, in the 

next step of the examination process OFHEO develops detailed examination strategies to provide 

effective, efficient oversight of each Enterprise. The annual written examination strategies are 

dynamic and represent a blueprint of the examination work to be conducted in the coming year. 

The examination strategies are reviewed and updated quarterly based on Enterprise, industry and 

economic developments. In conjunction with the strategies, OFHEO creates work plans that 

describe how the strategies will be achieved. The work plans outline the scope, timing, and 

resources needed to meet the objectives and examination activities set forth in the strategies. 

2 

1 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

10

Program Areas for Risk-Based Examinations and Categories of Risk and Risk Management 

Once OFHEO has strategies and work plans in place, examiners implement the strategies 

by completing exam work in each of the program areas for risk-based examinations. These are 

the program areas that capture the areas of risk and risk management being assessed at the 

Enterprises, with each program area focusing on specific sources of risk or risk management 

practices and tools. Later in this chapter, OFHEO presents results and conclusions by program 

area for both Fannie Mae and Freddie Mac. 

In order to enhance examinations and maximize expertise, OFHEO has grouped the 

program areas into four categories of risk and risk management, and aligned its examiner force 

expertise into five teams that correspond to the categories of risk and risk management, and 

provide analytical expertise and financial monitoring. 

The 10 program areas, grouped by category, are: 

CREDIT 

! Credit Risk Program - the risk that borrowers and counterparties will fail to meet their 

contractual or other obligations to the Enterprise. 

MARKET 

! Interest Rate Risk Program - the risk from movements in interest rates, including changes 

in: the level of interest rates; the shape of the yield curve; the level of volatility; and the 

relationships or spreads among various yield curves or indices. 

! Liquidity Management Program - the risk that could arise from the Enterprise’s inability to 

efficiently meet its obligations as they come due and to transact the next incremental dollar 

of business cost effectively. 

OPERATIONS 

! Information Technology Program - the infrastructure, or the general controls, needed to 

safeguard data, protect computer application programs, prevent system software from 

unauthorized access, and ensure continued computer operations in case of unexpected 

interruptions. 

! Business Process Controls Program - assesses the process employed to ensure business 

initiatives and endeavors are considered and evaluated within a complete business context 

with particular attention directed to risk assessment and risk management framework. 

! Internal Controls Program - the plan of organization, methods and procedures adopted by 

management to ensure that: goals and objectives are met; resource use is consistent with 

laws, regulations and policies; resources are safeguarded against waste, loss and misuse; and 

reliable data are obtained, maintained and fairly disclosed in reports. 

3 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

11

CORPORATE GOVERNANCE 

! Audit Program - the risk that the Board or management’s reliance on internal or external 

audits is misplaced. 

! Management Information Program - the risk that management will make decisions based 

on ineffective, inaccurate or incomplete information or reports. 

! Management Processes Program - the processes used to drive behaviors to support the 

Enterprise’s defined corporate goals, standards and risk tolerances. 

! Board Governance Program - the manner in which the Board discharges its duties and 

responsibilities. 

Evaluation Criteria, Assessment Factors and Examination Objectives 

OFHEO conducts examination work in each of the 10 program areas by using evaluation 

criteria, assessment factors and examination objectives. The examination objectives are broad in 

scope, the assessment factors are more narrowly focused and the evaluative criteria are narrower 

still. 

The approximately 700 evaluation criteria in the examination program detail both 

qualitative and quantitative items that examiners consider when making decisions about the 

assessment factors. The evaluation criteria are designed to assist the examiners and to ensure 

that the examination work is consistent at both Enterprises by creating transparency and 

understanding of the framework within which examiners make judgments. 

Examiners use the information and data from the evaluation criteria to form their expert 

opinions about the almost 100 assessment factors which in turn link directly to one or more of 

the examination objectives for each of the program areas. Sources for the assessment factors 

include industry standards and benchmarks, best practices and examiner expertise. 

For each program area there are four or five examination objectives. These are the broad 

statements of what OFHEO’s examiners will achieve through their work in each of the 10 

program areas. In order to make a determination on an examination objective, OFHEO’s 

examiners are required to opine on each of the supporting assessment factors. By using the 

evaluation criteria to reach judgments about the approximately 100 assessment factors, OFHEO 

achieves its examination objectives, and reaches the examination results and conclusions that are 

reported in this chapter. 

Communicate Examination Findings 

Throughout the course of conducting examinations, OFHEO communicates with 

Enterprise personnel not only to gather information, but also to share findings and discuss 

observations. OFHEO is committed to continuous, effective communication with the Enterprises. 

OFHEO has the same goal for all communications; that the free flow of information furthers the 

objective of ensuring the safe and sound operations of the Enterprises. Communications are 

tailored to the individual structure and dynamics of the Enterprise, and the timing of the 

5 

4 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

12 

communication depends on the situation being addressed. OFHEO keeps executive management 

and the Board appropriately informed and communicates directly with them as often as required 

by the Enterprise’s condition and the findings from examination activities. OFHEO brings those 

issues that introduce an exposure to the stable operation of the Enterprise, otherwise fall under 

the normal duties and responsibilities of the Board, or warrant the Board’s attention to the 

immediate attention of the Board and executive management. Technical issues and matters 

relating to a single line of business or activity are generally brought to the attention of operating 

managers with the Board and executive management kept appropriately informed. 

Throughout the 2000 annual examination cycle, OFHEO’s examiners had ongoing 

dialogues with the operating management at both Enterprises about the operations and processes 

covered by each of the 10 examination program areas. In these discussions, the examiners 

shared their views about specific opportunities the companies had to strengthen their operations 

and processes, including initiatives that if implemented, would enhance existing tools and 

processes and minimize the resulting exposure to financial risk. The goal of ensuring that the 

Enterprises’ operations meet or exceed financial safety and soundness standards at any given 

point in time is supported by this iterative process and netted results that found both companies 

to be well-managed and financially sound. 

Effect Changes and Follow Up 

A primary goal of the examination process is to influence positive changes at the 

Enterprises to enhance their financial safety and soundness. The intensity of the influence 

exerted by OFHEO relates directly to the risk presented by an issue. If, for example, in the 

course of an examination OFHEO identifies a significant issue in risk management systems or an 

undesirable risk level, OFHEO will require management to develop and execute a corrective 

action plan, and will ensure that the Board holds management accountable for executing the 

action plan. OFHEO will review the action plan to ensure that it identifies the steps or methods 

required to cure the root causes of significant deficiencies, and to determine whether the plan is 

likely to resolve the significant issues within an appropriate time frame. As part of follow up, 

OFHEO will verify that the action plan has been executed and evaluate its success. 

OFHEO will consider the responsiveness of the Enterprise in recognizing the issue and 

formulating an effective solution when determining if OFHEO needs to take incremental action. 

If an Enterprise is unresponsive or unable to effect the resolution of meaningful issues, OFHEO 

will take more formal steps to ensure deficiencies are corrected. 

While “effect changes and follow up” is at the top of the chart for the comprehensive 

annual risk-based examination process, in practice, the final step starts the examination cycle 

anew. 

5
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

13

INTERNAL MODELS 

OFHEO Examinations Will Place Increased Emphasis on the Exposures Arising 

From the Enterprises’ Use of Computer-Based Financial Models 

In 2001 OFHEO is implementing an additional examination program area – Model 

Risk – dedicated to assessing the Enterprises’ exposures that arise from the use 

of internal models to select, price and manage risks. Previously, OFHEO 

assessed each Enterprise’s exposure to the use of internal models as part of its 

other examination activities. In light of the growing reliance by the Enterprises on 

proprietary models to manage and operate their businesses and the central role 

these models play in effective risk management, OFHEO determined that its 

examination program would be enhanced by having dedicated expertise and a 

separate examination program focused solely on the use and controls 

surrounding internal models. The following briefly describes some of the key 

factors that led to OFHEO’s decision. 

Computer-based financial models have become critical elements in the 

operation of the Enterprises’ businesses, providing decision support in such 

areas as measuring credit risk and interest rate risk, balance sheet 

management, and valuation of financial instruments and financial positions. 

These models are fundamental to how the Enterprises operate their 

businesses and have significantly influenced the U.S. housing finance 

system. 

The use of computer-based financial models can result in better decisions 

by bringing powerful analytical techniques to bear on vast amounts of 

information. The use of such models is not, however, without risk. Model 

exposure, or model risk, is the potential for loss that derives from using 

financial models for decision support. Such losses could occur if poor 

business decisions were to result from use of a model that is flawed in the 

information it utilizes, its logical operations, or in its application. Because 

models are frequently very complex, errors in them could go undetected, 

and because of the central role models are routinely given in decisionmaking, potential model errors could prove very costly. Consequently, 

models must be developed, implemented, and maintained within a 

comprehensive and rigorous risk management framework. In fact, financial 

institutions and financial regulators around the world are making progress 

on developing best practices for improving the reliability of financial models 

through back-testing and independent validation. 

(continued on page 14) 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

14

Because Fannie Mae and Freddie Mac make extensive use of financial 

models in many key areas of their business, those models must be utilized 

in a safe and sound manner. To that end, OFHEO issued a guidance on 

February 12, 2001, which reinforces the importance of comprehensive 

validation of financial models and identifies ways in which errors or flaws 

can inadvertently arise in them. The new guidance, “Examining for ‘Model 

Exposure,’” (EG-2001-01) was incorporated into OFHEO’s Examination 

Handbook and posted on the OFHEO web site at www.ofheo.gov. 

While this did not represent a new activity in the Agency’s supervision of 

Fannie Mae and Freddie Mac, OFHEO’s guidance did mark an increased 

emphasis by the Agency on its review of the Enterprises’ independent 

testing and validation of financial models. 

OFHEO’s oversight in the area of model risk will emphasize the importance 

of model reliability – not just when the models are introduced, but as long as 

they are used. The responsibilities of the new examination team will 

encompass the assessment, testing, and validation of financial models and 

other sophisticated quantitative techniques used by the Enterprises’ 

business units. The team will bring specialized expertise to bear in 

considering the Enterprise’s models, and these activities will be coordinated 

with those of the other examination teams. 

Like the examination teams working on the other program areas, the team 

examining the area of model risk will be guided by a set of examination 

objectives, assessment factors, and specific evaluation criteria. These are 

designed to ensure that examination work is consistent at both Enterprises 

by providing transparency and understanding of the framework within which 

examiners will make judgments. The objectives, assessment factors, and 

evaluation criteria the team will utilize will complement those of the other 

program areas and will be published in OFHEO’s Examination Handbook 

later this year. 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

15

2000 EXAMINATION RESULTS AND CONCLUSIONS FOR FANNIE MAE 

In accordance with OFHEO’s examination program, the results and conclusions for each 

program area are reported in relation to safety and soundness standards – whether they meet, 

exceed, or fail to meet safety and soundness standards. At year-end 2000, Fannie Mae exceeded 

safety and soundness standards in all examination program areas. These results reflect the 

examination work conducted from January through December 2000, and do not necessarily 

reflect the current condition or operations of the Enterprise.

Fannie Mae’s credit risk management and credit risk management framework exceed 

safety and soundness standards. The portfolio is diversified and the profile of credit risk is in 

compliance with the internally prescribed limits. Policies, procedures, internal controls and 

management reporting for the credit function are effective. Fannie Mae is appropriately 

compensated for the credit risk it assumes. Management prudently manages counterparty 

exposure. New products and initiatives are well researched prior to implementation. The 

process for determining the reserve for losses and credit risk sharing strategies are effective, as 

are the tolls used to manage credit risk. Fannie Mae effectively identifies, quantifies and tracks 

its credit risk exposures. Management has an effective means for following up on credit related 

issues. The technology and controls supporting the credit risk management function are 

effective. Management effectively reconciles differences between actual and expected credit 

portfolio performance. 

Fannie Mae’s interest rate risk management exceeds safety and soundness standards. The 

policies, procedures, internal controls and management reporting relating to interest rate risk are 

effective. Management has a meaningful methodology for quantifying and monitoring the level 

and nature of interest rate risk. Fannie Mae’s management effectively follows up on issues 

related to interest rate risk. Fannie Mae appropriately researches and controls the extent to which 

new products and initiatives may impact the interest rate risk profile. The technology and 

controls supporting the interest rate risk management function are effective. The tools used to 

model interest rate risk, and the strategies to alter the exposures to interest rates are effective. 

Management effectively incorporates tactical and strategic issues into the management of interest 

rate risk. The responsibilities for strategy and analytics functions are appropriately separated 

from those for the execution functions. Derivative instruments are used prudently and in 

accordance with the standards used by other large financial intermediaries. 

Fannie Mae’s liquidity management exceeds safety and soundness standards. The 

policies, procedures, internal controls and management reporting relating to liquidity 

management are effective. Management has an effective methodology for quantifying and 

monitoring liquidity, and management appropriately evaluates the impact of events and 

alternative environments when developing contingency plans. The planning process for liquidity 

management is effective. Fannie Mae appropriately considers the impact new products and 

initiatives may have on liquidity. Management effectively follows up on issues and initiatives 

that influence liquidity. Technology and controls for liquidity management are effective. The 

quality of tools Fannie Mae uses to manage and monitor liquidity, and the quality of tools used to 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

16

perform scenario analyses are effective. An appropriate separation of duties exists between the 

strategy and analytics functions and the execution function. There are no adverse trends or 

anomalies in funding spreads. Liquidity management is appropriately integrated with other 

management and with financial performance issues. 

The information technology infrastructure and surrounding risk management framework 

exceed safety and soundness standards. Operating processes are in place to ensure secure, 

effective and efficient data center processing and problem management. There are effective 

policies and processes in place to ensure that data, information and computing resources are 

secure and accessed only by authorized users. There are effective policies and processes in place 

to ensure the timely and appropriate resumption of business in the event of a disaster. 

Management has an adequate process to ensure information technology plans effectively address 

business unit and corporate objectives. Effective processes are in place to ensure appropriate 

controls are implemented. Documentation for system development and maintenance is 

complete. Fannie Mae has implemented effective processes to ensure data and information are 

processed accurately and in a timely manner. 

Fannie Mae’s internal control framework and the management of that framework exceed 

safety and soundness standards. Management has an accurate and reliable process for 

identifying risks to business processes and implementing appropriate controls. Implemented 

controls properly address risks assessed by management. Management has a reliable process for 

ensuring the timely resolution of control related issues. Internal Audit appropriately identifies 

and communicates control deficiencies to management and the Board of Directors. There are 

established policies and procedures that delineate internal control process and standards for the 

control environment. Management effectively ensures compliance with established internal 

controls. 

The framework for business process controls and the management of that framework 

exceeds safety and soundness standards. The processes and control environment used when 

Fannie Mae considers and/or develops new or substantially revised business initiatives are 

effective. The use of pilot programs and the communication flows surrounding new or 

substantially revised business initiatives are effective. The balance between risk management, 

internal controls and the pressure to develop new or substantially revised business initiatives is 

appropriate. Fannie Mae’s corporate environment promotes and supports the introduction of 

new ideas and intellectual capital, and the corporate culture effectively guides the plans for 

managing and marketing new or substantially revised business initiatives. Both the analysis and 

review conducted for potential new or substantially revised business initiatives, and the analysis 

conducted after a new or substantially revised business initiative is launched, are effective. 

Executive management and the Board of Directors are appropriately informed of the adequacy of 

due diligence for new or substantially revised business initiatives. 

The audit functions exceed safety and soundness standards. The Internal and External 

Audit functions have the appropriate independence. Auditors performing the work possess 

appropriate professional proficiency. The scope of audit work performed is appropriate, and the 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

17

audit work is complete. The management of the Internal Audit department is effective. 

Executive management and the Board of Directors are appropriately involved with and follow up 

on identified audit issues. The auditor’s risk assessment process is effective. Internal Audit is 

appropriately involved in new products and new initiatives. 

The Board discharges its duties and responsibilities in a manner that exceeds safety and 

soundness standards. The Board is appropriately engaged in the development of a strategic 

direction for the company, and ensures that management appropriately defines the operating 

parameters and risk tolerances of the Enterprise in a manner consistent with the strategic 

direction; legal standards; and ethical standards. The Board has an effective process for hiring 

and maintaining a quality executive management team, and effectively holds the executive 

management team accountable for achieving the defined goals and objectives. The Board is 

appropriately informed of the condition, activities and operations of the Enterprise, and has 

sufficient, well-organized time to carry out its responsibilities. 

The framework used to produce timely, accurate and reliable reports exceeds safety and 

soundness standards. Management and the Board of Directors receive necessary reports on 

Fannie Mae’s performance relative to established goals and objectives. Management reporting 

provides the levels of management with the necessary information to carry out their 

responsibilities efficiently and effectively. Management reporting permits management to gauge 

the quality of their decisions. Information systems are linked to Fannie Mae’s overall strategy, 

and are developed and refined pursuant to a strategic plan. The reports management uses for 

decision making are accurate. Enterprise strategy, roles and responsibility are effectively 

communicated. Employees have effective channels of communication to provide feedback, 

report suspected improprieties and suggest enhancements. Communications across the company 

are effective. 

Key management processes that influence company-wide talent and behaviors exceed 

safety and soundness standards. The strategic planning process is comprehensive. Business unit 

goals, implementation plans and programs designed to achieve the corporate plan are effective. 

Management is able to monitor and manage change. Key performance measures are appropriate, 

effective and align with strategy. The behavior management programs are effectively designed 

to achieve corporate goals and objectives. Fannie Mae has effective programs for career and 

management development, and for recruiting competent people. Fannie Mae’s proprietary risk 

management programs and systems are effective. Management effectively conveys an 

appropriate message of integrity and ethical values. Management’s philosophy and operating 

style have a pervasive effect on the company. The organizational structure and the assignment of 

responsibility provide for accountability and controls. 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

18 

2000 EXAMINATION RESULTS AND CONCLUSIONS FOR FREDDIE MAC 

In accordance with OFHEO’s examination program, the results and conclusions for each 

program area are reported in relation to safety and soundness standards – whether they meet, 

exceed, or fail to meet safety and soundness standards. At year-end 2000, Freddie Mac exceeded 

safety and soundness standards in all examination program areas. These results reflect the 

examination work conducted from January through December 2000, and do not necessarily 

reflect the current condition or operations of the Enterprise.

Freddie Mac’s credit risk management and credit risk management framework exceed 

safety and soundness standards. The portfolio is diversified and the profile of credit risk is in 

compliance with the internally prescribed limits. Policies, procedures, internal controls and 

management reporting for the credit function are effective. Freddie Mac is adequately 

compensated for the credit risk it assumes. Management prudently manages counterparty 

exposure. New products and initiatives are well-researched prior to implementation. The 

process for determining the reserve for credit losses, credit risk sharing strategies, and the credit 

risk management tools management uses are effective. Freddie Mac effectively identifies, 

quantifies and tracks its credit risk exposures. Management has an effective means for following 

up on credit-related issues. The technology and controls supporting the credit risk management 

function are effective. Management effectively reconciles differences between actual and 

expected credit portfolio performance. 

Freddie Mac’s interest rate risk management exceeds safety and soundness standards. 

The policies, procedures, internal controls and management reporting relating to interest rate risk 

are effective. Management has a meaningful methodology for quantifying and monitoring the 

level and nature of interest rate risk. Freddie Mac’s management effectively follows up on issues 

related to interest rate risk. Freddie Mac appropriately researches and controls the extent to 

which new products and initiatives may impact the interest rate risk profile. The technology and 

controls supporting the interest rate risk management function are effective. The tools used to 

model interest rate risk and the strategies to alter the exposures to interest rates are effective. 

Management effectively incorporates tactical and strategic issues into the management of interest 

rate risk. The responsibilities for strategy and analytics functions are appropriately separated 

from those for the execution functions. Derivative instruments are used prudently and in 

accordance with the standards used by other large financial intermediaries. 

Freddie Mac’s liquidity management framework exceeds safety and soundness standards. 

The policies, procedures, internal controls and management reporting relating to liquidity 

management are effective. Management has an effective methodology for quantifying and 

monitoring liquidity, and management appropriately evaluates the impact of events and 

alternative environments when developing contingency plans. The planning process for liquidity 

management is effective. Freddie Mac appropriately considers the impact new products and 

initiatives may have on liquidity. Management effectively follows up on issues and initiatives 

that influence liquidity. Technology and controls for liquidity management are effective. The 

quality of tools Freddie Mac uses to manage and monitor liquidity, and the quality of tools used 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

19

to perform scenario analyses are effective. An appropriate separation of duties exists between 

the strategy and analytics functions and the execution function. There are no adverse trends or 

anomalies in funding spreads. Liquidity management is appropriately integrated with other 

management and with financial performance issues. 

The information technology infrastructure and surrounding risk management framework 

exceed safety and soundness standards. Operating processes are in place to ensure secure, 

effective and efficient data center processing and problem management. There are effective 

policies and processes in place to ensure that data, information and computing resources are 

secure and accessed only by authorized users. There are effective policies and processes in place 

to ensure the timely and appropriate resumption of business in the event of a disaster. 

Management has an adequate process to ensure information technology plans effectively address 

business unit and corporate objectives. Effective processes are in place to ensure appropriate 

controls are implemented. Documentation for system development and maintenance is 

complete. Freddie Mac has implemented effective processes to ensure data and information are 

processed accurately and in a timely manner. 

The internal control framework and the management of that framework exceed safety and 

soundness standards. Management has an accurate and reliable process for identifying risks to 

business processes and implementing appropriate controls. Implemented controls properly 

address risks assessed by management. Management has a reliable process for ensuring the 

timely resolution of control related issues. Internal Audit appropriately identifies and 

communicates control deficiencies to management and the Board of Directors. There are 

established policies and procedures that delineate internal control process and standards for the 

control environment. Management effectively ensures compliance with established internal 

controls. 

The audit functions exceed safety and soundness standards. The Internal and External 

Audit functions have the appropriate independence. Auditors performing the work possess 

appropriate professional proficiency. The scope of audit work performed is appropriate, and the 

audit work is complete. The management of the Internal Audit department is effective. 

Executive management and the Board of Directors are appropriately involved with and follow up 

on identified audit issues. The auditor’s risk assessment process is effective. Internal Audit is 

appropriately involved in new products and new initiatives. 

The Board discharges its duties and responsibilities in a manner that exceeds safety and 

soundness standards. The Board is appropriately engaged in the development of a strategic 

direction for the company, and ensures that management appropriately defines the operating 

parameters and risk tolerances of the Enterprise in a manner consistent with the strategic 

direction; legal standards; and ethical standards. The Board has an effective process for hiring 

and maintaining a quality executive management team, and has processes in placed designed to 

hold the executive management team accountable for achieving the defined goals and objectives. 

The Board of Directors has sufficient, well-organized time to carry out its responsibilities, and is 

appropriately informed of the condition, activities and operations of the Enterprise. 
CHAPTER TWO – OFHEO’S EXAMINATION PROGRAM

20 

The framework used to produce timely, accurate and reliable reports exceeds safety and 

soundness standards. Management and the Board of Directors receive necessary reports on 

Freddie Mac’s performance relative to established goals and objectives. Management reporting 

provides the levels of management with the necessary information to carry out their 

responsibilities efficiently and effectively. Management reporting permits management to gauge 

the quality of their decisions. Information systems are linked to Freddie Mac’s overall strategy, 

and are developed and refined pursuant to a strategic plan. The reports management uses for 

decision making are accurate. Management communicates Enterprise strategy, roles and 

responsibility. Employees have effective channels of communication to provide feedback, report 

suspected improprieties and suggest enhancements. Communications across the company are 

adequate. 

Key management processes that influence corporate-wide behaviors exceed safety and 

soundness standards. The strategic planning process is comprehensive and dynamic. Business 

unit goals are effective. Implementation plans and programs designed to achieve the corporate 

plan are satisfactory. Management monitors and manages change. Key performance measures 

are appropriate, effective and align with strategy. The behavior management programs are 

designed to achieve corporate goals and objectives. Freddie Mac has programs for career and 

management development, and for recruiting competent people. Freddie Mac’s proprietary risk 

management programs and systems are effective. Management effectively conveys an 

appropriate message of integrity and ethical values. Management’s philosophy and operating 

style have a pervasive effect on the company. The organizational structure and the assignment of 

responsibility provide for accountability and controls. 
CHAPTER THREE – FINANCING OFHEO’S OPERATIONS

21 

FINANCING OFHEO’S OPERATIONS

OFHEO’S BUDGET 

OFHEO’s operations are not financed by taxpayer funds. OFHEO’s annual operating 

budget is, however, subject to the Federal appropriations process and is based on the amount 

appropriated by Congress and signed into law by the President. The amounts provided for by the 

appropriations process are collected from Fannie Mae and Freddie Mac in the form of an annual 

assessment paid semi-annually. 

OFHEO Director Armando Falcon has continuously stated that the lengthy appropriations 

process may not allow OFHEO the flexibility necessary to address evolving, dynamic issues 

before those issues impact the financial safety and soundness of the Enterprises or funding for 

the housing market. The Director has asked that OFHEO be removed from the appropriations 

process. OFHEO is seeking the authority to operate like all other financial safety and soundness 

regulators, such as the Office of the Comptroller of the Currency and the Office of Thrift 

Supervision. OFHEO’s operations would remain subject to the oversight of Congress, but its 

budget would be free from the unpredictability of the annual appropriations process. 

For fiscal year 2000, OFHEO’s budgetary resources totaled $19,626,203. Budgetary 

resources represent $19,493,000 appropriated to OFHEO for fiscal year 2000 plus a small 

recovery of prior year funds. The fiscal year 2000 operating budget supported drafting the rule 

for the risk-based capital regulation for Fannie Mae and Freddie Mac, conducting comprehensive 

annual risk-based examinations of Fannie Mae and Freddie Mac, reviewing and classifying the 

capital adequacy of each Enterprise quarterly, and performing other safety and soundness related 

regulatory activities. 

For fiscal year 2001, OFHEO received an appropriation of $22,000,000, which was $3.8 

million less than the $26,770,000 contained in the President’s Budget Request. In last year’s 

Annual Report, OFHEO explained the $26,770,000 budget request would be used to bolster 

OFHEO’s regulatory infrastructure, strengthen OFHEO’s capability to perform qualitative and 

quantitative assessments of risk, and respond to the rapid growth and increasing complexity of 

the Enterprises’ business operations. OFHEO had also planned to hire additional staff to acquire 

the necessary depth and expertise to accomplish the Office’s regulatory mission. The resources 

appropriated OFHEO were not sufficient to carry out OFHEO’s strategic staffing plan and the 

Office shifted internal resource allocations to accomplish its most critical goals. 

OFHEO’s fiscal year 2002 budget request totals $27,000,000. These resources will 

maintain existing staffing levels, continue current examination and oversight programs and 

upgrade OFHEO’s computing capacity which is critical to the efficient implementation of the 

risk-based capital regulation and to support needed research and analysis on the ever-changing 

risk profiles of the Enterprises. 

CHAPTER THREE
CHAPTER THREE – FINANCING OFHEO’S OPERATIONS

22 

OFHEO CONTINUES TO RECEIVE UNQUALIFIED AUDIT OPINION IN FY 2000 

In conjunction with the government’s goal of improved accountability, OFHEO 

voluntarily prepared financial statements for fiscal year 2000 and subjected these statements and 

underlying processes to independent audit. The certified public accounting firm of Dembo, 

Jones, Healy, Pennington and Ahalt audited the statements. The firm issued an unqualified audit 

opinion on OFHEO’s fiscal year 2000 Financial Statements. Following is a copy of the audit 

opinion and the associated principal financial statements and notes. 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

23 
CHAPTER THREE – FINANCING OFHEO’S OPERATIONS

24 

OFHEO
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

25
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 26

Director

Deputy Director

Associate Director for

External Relations

General Counsel

Associate Director for

Risk Analysis & Model

Development

Associate Director for

Examination and Oversight

(Chief Examiner)

Associate Director for

Policy Analysis and

Research

(Chief Economist)

Associate Director for

Finance & Administration

Associate Director for

Information Technology

(Chief Information

Officer)

January 17, 2001

Associate Director for

Strategic Planning

and Management

OFHEO 2 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

27

OFHEO

OFHEO

3 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 28

Distribution of FY 2000 Resources

Across Programs

Legal

6%

Research

4%

All Other

38%

Exam

16%

Capital

18%

Technology

18%

OFHEO

OFHEO

4 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

29

$13,000,000

$14,000,000

$15,000,000

$16,000,000

Net Cost Increased 9% During FY 2000

Net Cost $14,318,046 $15,585,647

FY 1999 FY 2000

OFHEO

OFHEO

5 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 30

OFHEO

OFHEO

6 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

31

 

OFHEO

OFHEO

7
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 32

OFHEO

OFHEO

8 
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33

OFHEO

9 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 34
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

35
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 36
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

37
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 38
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

39
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

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OFHEO

OFHEO

16 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

41

OFHEO

OFHEO

17 
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 42

OFHEO

OFHEO

18 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

43

OFHEO

OFHEO

19 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 44

OFHEO

OFHEO

20 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

45

OFHEO

OFHEO

21 
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 46

OFHEO

OFHEO

22 
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47

OFHEO

OFHEO

23 
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 48

OFHEO

OFHEO

24 
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49

OFHEO

OFHEO

25 
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OFHEO

OFHEO

26 
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51

OFHEO

OFHEO

27 
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 52

OFHEO

OFHEO

28 
CHAPTER THREE - FINANCING OFHEO’S OPERATIONS

 

53

OFHEO

OFHEO

29 
54

CHAPTER FOUR - HISTORICAL DATA TABLES

Table 1. Fannie Mae Mortgage Purchases. . . . . . . . . . . . . . . . . . 55

Table 2. Fannie Mae MBS Issuances . . . . . . . . . . . . . . . . . . . . . . 56

Table 3. Fannie Mae Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table 4. Fannie Mae Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . 58

Table 5. Fannie Mae Retained Mortgage Portfolio Detail . . . . . . . 59

Table 6. Fannie Mae Financial Derivatives. . . . . . . . . . . . . . . . . . 60

Table 7. Fannie Mae Non-Mortgage Investments. . . . . . . . . . . . . 61

Table 8. Fannie Mae Asset-Liability Mix . . . . . . . . . . . . . . . . . . . . 62

Table 9. Fannie Mae Mortgage Asset Quality. . . . . . . . . . . . . . . . 63

Table 10. Fannie Mae Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Table 11. Freddie Mac Mortgage Purchases . . . . . . . . . . . . . . . . . 65

Table 12. Freddie Mac MBS Issuances . . . . . . . . . . . . . . . . . . . . . 66

Table 13. Freddie Mac Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Table 14. Freddie Mac Balance Sheet . . . . . . . . . . . . . . . . . . . . . . 68

Table 15. Freddie Mac Retained Mortgage Portfolio Detail . . . . . . 69

Table 16. Freddie Mac Financial Derivatives . . . . . . . . . . . . . . . . . 70

Table 17. Freddie Mac Non-Mortgage Investments . . . . . . . . . . . . 71

Table 18. Freddie Mac Asset-Liability Mix . . . . . . . . . . . . . . . . . . . 72

Table 19. Freddie Mac Mortgage Asset Quality . . . . . . . . . . . . . . . 73

Table 20. Freddie Mac Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Table 21. Aggregate Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Table 22. Aggregate MBS Issuances . . . . . . . . . . . . . . . . . . . . . . . 76

Table 23. Aggregate Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Table 24. Aggregate Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . 78

Table 25. Aggregate Retained Mortgage Portfolio Detail . . . . . . . . 79

Table 26. Aggregate Financial Derivatives . . . . . . . . . . . . . . . . . . . 80

Table 27. Aggregate Non-Mortgage Investments . . . . . . . . . . . . . . 81

Table 28. Aggregate Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Table 29. Loan Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Table 30. Mortgage Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . 84

Table 31. Housing Market Activity . . . . . . . . . . . . . . . . . . . . . . . . . 85

Table 32. Weighted Repeat Sales House Price Index . . . . . . . . . . 86
CHAPTER FOUR - HISTORICAL DATA TABLES

55

Table 1. Fannie Mae Mortgage Purchases

Business Activity ($ in Millions)

 Period 

 Purchases 

 Single-Family

($)

 Multifamily

($)

 Total 1

($)

1 Cash purchases from lenders plus lender-originated securitizations; excludes non-Fannie Mae securities and repurchased Fannie Mae MBS.

 Mortgage Securities2

($)

2 Not included in total purchases.

4Q00 71,759 3,430 75,189 44,569

3Q00 59,578 2,662 62,240 33,849

2Q00 55,115 2,309 57,424 22,415

1Q00 40,617 1,976 42,593 25,201

Annual Data

2000 227,069 10,377 237,446 126,034

1999 316,136 10,012 326,148 166,431

1998 354,920 11,428 366,348 144,461

1997 159,921 6,534 166,455 48,848

1996 164,456 6,451 170,907 45,016

1995 126,003 4,966 130,969 34,036

1994 158,229 3,839 162,068 24,552

1993 289,826 4,135 293,961 6,275

1992 248,603 2,956 251,559 4,930

1991 133,551 3,204 136,755 2,384

1990 111,007 3,180 114,187 977

1989 80,510 4,325 84,835 Not

Applicable

Before

1990

1988 64,613 4,170 68,783

1987 73,942 1,733 75,675

1986 77,223 1,877 79,100

1985 42,543 1,200 43,743

1984 27,713 1,106 28,819

1983 26,339 140 26,479

1982 25,929 10 25,939

1981 6,827 2 6,829

1980 8,074 27 8,101

1979 10,798 9 10,807

1978 12,302 3 12,305

1977 4,650 134 4,784

1976 3,337 295 3,632

1975 3,646 674 4,320

1974 4,746 2,273 7,019

1973 4,170 2,082 6,252

1972 2,596 1,268 3,864

1971 2,742 1,298 4,040

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

56

Table 2. Fannie Mae MBS Issuances

Business Activity ($ in Millions)

 Period 

MBS Issuances

 Single-Family MBS

($)

 Multifamily MBS

($)

 Total MBS

($)

Multiclass MBS1

($)

1 The majority qualify as Real Estate Mortgage Investment Conduits (REMICs) and are also known as structured securitizations.

4Q00 65,080 2,340 67,420 12,908

3Q00 54,898 1,791 56,689 9,482

2Q00 46,778 1,808 48,586 9,193

1Q00 37,310 1,657 3,8967 7,961

Annual Data

2000 204,066 7,596 211,662 39,544

1999 292,192 8,497 300,689 55,160

1998 315,120 11,028 326,148 84,147

1997 143,615 5,814 149,429 85,415

1996 144,201 5,668 149,869 30,780

1995 106,269 4,187 110,456 9,681

1994 128,385 2,237 130,622 73,365

1993 220,485 959 221,444 210,630

1992 193,187 850 194,037 170,205

1991 111,488 1,415 112,903 112,808

1990 96,006 689 96,695 68,291

1989 66,489 3,275 69,764 41,715

1988 51,120 3,758 54,878 17,005

1987 62,067 1,162 63,229 9,917

1986 60,017 549 60,566 2,400

1985 23,142 507 23,649 Not

Issued

Before

1986

1984 13,087 459 13,546

1983 13,214 126 13,340

1982 13,970 Not

Issued

Before

1983

13,970

1981 717 717

Not

Issued

Before

1981

Not

Issued

Before

1981

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

57

Table 3. Fannie Mae Earnings

Earnings ($ in Millions)

Period

Net

Interest

Income1

($)

1 Interest income net of interest expense, nominal basis.

Guarantee

Fee

 Income

($)

Average

Guarantee

Fee Rate

(basis points)

Administrative

Expenses

($)

CreditRelated

Expenses2

 ($)

2 Credit-related expenses are mortgage loan loss provision plus real estate owned expense.

Net

Income

($)

Return on

Common

Equity3

(%)

3 Average common equity used to calculate return.

4Q00 1485 339 19.3 232 21 1,165 25.3

3Q00 1425 341 19.5 232 22 1,124 25.6

2Q00 1399 339 19.6 224 21 1,097 25.8

1Q00 1362 332 19.4 217 30 1,062 25.7

Annual Data

2000 5,674 1,351 19.5 905 94 4,448 25.6

1999 4,894 1,282 19.3 800 127 3,912 25.2

1998 4,110 1,229 20.2 708 261 3,418 25.2

1997 3,949 1,274 22.7 636 375 3,056 24.6

1996 3,592 1,196 22.4 560 409 2,725 24.1

1995 3,047 1,086 22.0 546 335 2,144 20.9

1994 2,823 1,083 22.5 525 378 2,132 24.3

1993 2,533 961 21.3 443 305 1,873 25.3

1992 2,058 834 21.2 381 320 1,623 26.5

1991 1,778 675 21.0 319 370 1,363 27.7

1990 1,593 536 21.1 286 310 1,173 33.7

1989 1,191 408 21.3 254 310 807 31.1

1988 837 328 21.6 218 365 507 25.2

1987 890 263 22.1 197 360 376 23.5

1986 384 175 23.8 175 306 105 9.5

1985 139 112 25.6 142 206 (7) (0.7)

1984 (90) 78 26.2 112 86 (71) (7.4)

1983 (9) 54 26.3 81 48 49 5.1

1982 (464) 16 27.2 60 36 (192) (18.9)

1981 (429) 0.3 25.0 49 (28) (206) (17.2)

1980 21 Not

Applicable

Before

1981

Not

Applicable

Before

1981

44 19 14 0.9

1979 322 46 35 162 11.3

1978 294 39 36 209 16.5

1977 251 32 28 165 15.3

1976 203 30 25 127 13.8

1975 174 27 16 115 14.1

1974 142 23 17 107 14.7

1973 180 18 12 126 20.3

1972 138 13 5 96 18.8

1971 49 15 4 61 14.4

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

58

Table 4. Fannie Mae Balance Sheet

Balance Sheet 

($ in Millions)

Mortgage Backed

 Securities Outstanding 

($ in Millions)

Period

Total

Assets

 ($)

Retained

Mortgage

Portfolio1

($)

1 Gross retained portfolio net of unamortized purchase premium, discounts and deferred price adjustments.

NonMortgage

Investments2

 ($)

2 Prior to 1982 balances primarily composed of U.S. government and agency securities.

Debt

Outstanding

($)

Stockholders’

Equity

($)

Total MBS

Outstanding3

 ($)

3 Total MBS outstanding net of Fannie Mae MBS in the retained portfolio.

Multiclass

MBS

Outstanding4

($)

4 The majority qualify as REMICs and are also known as structured securitizations. 

4Q00 675,072 607,602 54,982 642,682 20,838 706,684 334,508

3Q00 638,147 571,604 54,963 607,039 19,687 701,024 331,492

2Q00 608,775 550,179 47,398 578,527 18,791 696,573 333,292

1Q00 586,698 537,193 38,326 557,543 18,371 684,684 334,386

Annual Data

2000 675,072 607,602 54,982 642,682 2,838 706,684 334,508

1999 575,167 522,977 39,751 547,619 17,629 679,169 335,514

1998 485,014 415,434 58,515 460,291 15,453 637,143 361,613

1997 391,673 316,592 64,596 369,774 13,793 579,138 388,360

1996 351,041 286,527 56,606 331,270 12,773 548,173 339,798

1995 316,550 252,868 57,273 299,174 10,959 513,230 353,528

1994 272,508 220,815 46,335 257,230 9,541 486,345 378,733

1993 216,979 190,169 21,396 201,112 8,052 471,306 381,865

1992 180,978 156,260 19,574 166,300 6,774 424,444 312,369

1991 147,072 126,679 9,836 133,937 5,547 355,284 224,806

1990 133,113 114,066 9,868 123,403 3,941 288,075 127,278

1989 124,315 107,981 8,338 116,064 2,991 216,512 64,826

1988 112,258 100,099 5,289 105,459 2,260 170,097 26,660

1987 103,459 93,665 3,468 97,057 1,811 135,734 11,359

1986 99,621 94,123 1,775 93,563 1,182 95,568 Not

Available

Before

1987

1985 99,076 94,609 1,466 93,985 1,009 54,552

1984 87,798 84,135 1,840 83,719 918 35,738

1983 78,383 75,247 1,689 74,594 1,000 25,121

1982 72,981 69,356 2,430 69,614 953 14,450

1981 61,578 59,629 1,047 58,551 1,080 717

1980 57,879 55,589 1,556 54,880 1,457 Not

Issued

Before

1981

1979 51,300 49,777 843 48,424 1,501

1978 43,506 42,103 834 40,985 1,362

1977 33,980 33,252 318 31,890 1,173

1976 32,393 31,775 245 30,565 983

1975 31,596 30,820 239 29,963 861

1974 29,671 28,666 466 28,168 772

1973 24,318 23,589 227 23,003 680

1972 20,346 19,652 268 19,239 559

1971 18,591 17,886 349 17,672 460

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

59

Table 5. Fannie Mae Retained Mortgage Portfolio Detail

($ in Millions)

Period

Whole

Loans

($)

Fannie Mae

Securities

($)

Other

Mortgage-Related

Securities

($)

Total Retained

Mortgage Portfolio1

($)

1 Total gross unpaid principal balance.

4Q00 152,505 351,066 106,551 610,122

3Q00 149,718 319,804 104,565 574,087

2Q00 150,477 299,242 102,447 552,166

1Q00 147,879 291,131 99,741 538,751

Annual Data

2000 152,505 351,066 106,551 610,122

1999 149,105 281,714 93,122 523,941

1998 155,779 197,375 61,361 414,515

1997 160,102 130,444 26,132 316,678

1996 167,891 102,607 16,554 287,052

1995 171,481 69,729 12,301 253,511

1994 173,909 43,998 7,150 225,057

1993 163,149 24,219 3,493 190,861

1992 134,597 20,535 2,987 158,119

1991 109,251 16,700 3,032 128,983

1990 101,797 11,758 3,073 116,628

1989 95,729 11,720 3,272 110,721

1988 92,220 8,153 2,640 103,013

1987 89,618 4,226 2,902 96,746

1986 94,167 1,606 2,060 97,833

1985 97,421 435 793 98,649

1984 87,205 477 427 88,109

1983 77,983 273 78,256

1982 71,777 37 71,814

1981 61,411 1 61,412

1980 57,326 1 57,327

1979 51,096 1 51,097

1978 43,315 43,315

1977 34,377 34,377

1976 32,937 32,937

1975 31,916 31,916

1974 29,708 29,708

1973 24,459 24,459

1972 20,326 20,326

1971 18,515 18,515

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

60

Table 6. Fannie Mae Financial Derivatives

Financial Derivatives ($ in Millions)

Period

Interest

Rate

Swaps

($)

Interest Rate

Caps, Floors,

and Corridors

($)

 Foreign

Currency

($)

Futures &

Options and

Forward Rate

Agreements

($)

Short Sales

 and Other

($)

 Total

($)

4Q00 227,651 33,663 9,511 48,865 0 319,690

3Q00 211,302 27,800 9,544 49,665 4,355 302,676

2Q00 208,583 27,550 11,335 45,210 2,385 295,063

1Q00 200,285 28,950 11,460 32,569 1,925 275,189

Annual Data

2000 227,651 33,663 9,511 48,865 0 319,690

1999 192,032 28,950 11,507 41,081 1,400 274,970

1998 142,846 14,500 12,995 13,481 3,735 187,557

1997 149,673 100 9,968 0 1,660 161,401

1996 158,140 300 2,429 0 350 161,219

1995 125,679 300 1,224 29 975 128,207

1994 87,470 360 1,023 0 1,465 90,317

1993 49,458 360 1,023 0 1,425 52,265

1992 24,130 0 1,177 0 1,350 26,658

1991 9,100 0 Not

Available

Before

1992

50 1,050 10,200

1990 4,800 0 25 1,700 6,525

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

61

Table 7. Fannie Mae Non-Mortgage Investments

 Non-Mortgage Investments ($ in Millions)

Period

 Federal Funds

and Eurodollars

($)

Asset-Backed

Securities

($)

Repurchase

Agreements

($)

Commercial

Paper and

Corporate Debt

($)

Other

($)

 Total1

($)

1 Prior to 1982, the majority of non-mortgage investments were comprised of U.S. government securities and agency securities.

4Q00 7,539 17,512 2,722 8,893 18,316 54,982

3Q00 6,431 17,253 4,503 10,177 16,599 54,963

2Q00 4,129 18,801 2,285 8,158 14,025 47,398

1Q00 3,276 18,102 1,596 4,217 11,135 38,326

Annual Data

2000 7,539 17,512 2,722 8,893 18,316 54,982

1999 4,837 19,207 2,574 1,723 11,410 39,751

1998 7,926 20,993 7,556 5,155 16,885 58,515

1997 19,212 16,639 6,715 11,745 10,285 64,596

1996 21,734 14,635 4,667 6,191 9,379 56,606

1995 19,775 9,905 10,175 8,629 8,789 57,273

1994 17,593 3,796 9,006 7,719 8,221 46,335

1993 4,496 3,557 4,684 0 8,659 21,396

1992 6,587 4,124 3,189 0 5,674 19,574

1991 2,954 2,416 2,195 0 2,271 9,836

1990 5,329 1,780 951 0 1,808 9,868

1989 5,158 1,107 0 0 2,073 8,338

1988 4,125 481 0 0 683 5,289

1987 2,559 25 0 0 884 3,468

1986 1,530 0 0 0 245 1,775

1985 1,391 0 0 0 75 1,466

1984 1,575 0 0 0 265 1,840

1983 1,462 0 0 0 227 1,689

1982 1,799 0 0 0 631 2,430

1981 Not

Available

 Before

1982

 Not

Available

 Before

1982

 Not

Available

 Before

1982

 Not

Available

 Before

1982

 Not

Available

 Before

1982

1,047

1980 1,556

1979 843

1978 834

1977 318

1976 245

1975 239

1974 466

1973 227

1972 268

1971 349

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

62

Table 8. Fannie Mae Asset - Liability Mix

Asset - Liability Ratios 

Asset Mix Liability Mix

Period

Retained Portfolio /

Total Assets

(%)

Non-Mortgage

Investments /

Total Assets

(%)

Callable Debt / Total

Effective Long-Term

Debt1,2

(%)

1 Callable debt includes derivative financial instruments that provide interest-rate protection similar to callable debt.

2 Total effective long-term debt represents debt with an effective repricing date greater than one year.

Total Effective LongTerm Debt / Total Debt3

 (%)

3 Total effective long-term debt represents debt with an effective repricing date greater than one year.

4Q00 90.0 8.1 42.9 84.6

3Q00 89.6 8.6 44.5 87.2

2Q00 90.4 7.8 45.1 87.8

1Q00 91.6 6.5 43.9 88.3

Annual Data

2000 90.0 8.1 42.9 84.6

1999 90.9 6.9 43.4 87.1

1998 85.7 12.1 42.9 76.4

1997 80.8 16.5 46.4 79.4

1996 81.6 16.1 47.5 80.5

1995 79.9 18.1 48.0 73.9

1994 81.0 17.0 54.6 72.6

1993 87.6 9.9 58.1 80.0

1992 86.3 10.8 48.8 77.9

1991 86.1 6.7 36.0 85.5

1990 85.7 7.4 21.9 82.6

1989 86.9 6.9 10.1 80.1

1988 89.2 4.7 3.6 78.7

1987 90.5 3.4 Not

Available

Before

1988

 Not

Available

Before

1988

1986 94.5 1.8

1985 95.5 1.5

1984 95.8 2.1

1983 96.0 2.2

1982 95.0 3.3

1981 96.8 1.7

1980 96.0 2.7

1979 97.0 1.6

1978 96.8 1.9

1977 97.9 0.9

1976 98.1 0.8

1975 97.5 0.8

1974 96.6 1.6

1973 97.0 1.0

1972 96.6 1.3

1971 96.2 1.8

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

63

Table 9. Fannie Mae Mortgage Asset Quality

Mortgage Asset Quality 

Period

Single-Family

Delinquency

Rate1

(%)

1 Includes conventional loans for which Fannie Mae has primary risk of loss that are 90 or more days delinquent or are in the process of foreclosure. 

Data prior to 1992 includes loans in relief or bankruptcy, even if they are less than 90 days delinquent.

Multifamily

Delinquency

Rate2

(%)

2 Includes loans that are two or more months delinquent based on the dollar amount of such loans in the portfolio and underlying MBS.

Credit Losses /

Total MBS

Outstanding

plus Retained

Portfolio3

(%)

3 Credit losses are charge-offs plus real estate owned expense; average balances used to calculate ratios subsequent to 1994; quarterly data are 

annualized.

REO /Total MBS

Outstanding

plus Retained

Portfolio4

(%)

4 Real Estate Owned balances reflect end-of-period amounts. Beginning with 1995, data reflect adoption of SFAS 114.

Credit-Enhanced

Outstanding /Total

MBS Outstanding

plus Retained

Portfolio5

(%)

5 The proportion of loans that have additional recourse from a third party to accept some or all of the expected losses on defaulted mortgages.

4Q00 0.45 0.05 0.01 0.05 20.3

3Q00 0.42 0.03 0.01 0.05 20.7

2Q00 0.41 0.05 0.01 0.06 20.8

1Q00 0.45 0.18 0.01 0.06 20.9

Annual Data

2000 0.45 0.05 0.01 0.05 20.3

1999 0.48 0.12 0.01 0.06 20.9

1998 0.58 0.29 0.03 0.08 17.5

1997 0.62 0.37 0.04 0.10 12.8

1996 0.58 0.68 0.05 0.11 10.5

1995 0.56 0.81 0.05 0.08 10.6

1994 0.47 1.21 0.06 0.10 10.2

1993 0.48 2.34 0.04 0.10 10.6

1992 0.53 2.65 0.04 0.09 15.6

1991 0.64 3.62 0.04 0.07 22.0

1990 0.58 1.70 0.06 0.09 25.9

1989 0.69 3.20 0.07 0.14 Not

Available

 Before

1990

1988 0.88 6.60 0.11 0.15

1987 1.12 Not

Available

 Before

1988

0.11 0.18

1986 1.38 0.12 0.22

1985 1.48 0.13 0.32

1984 1.65 0.09 0.33

1983 1.49 0.05 0.35

1982 1.41 0.01 0.20

1981 0.96 0.01 0.13

1980 0.90 0.01 0.09

1979 0.56 0.02 0.11

1978 0.55 0.02 0.18

1977 0.46 0.02 0.26

1976 1.58 0.03 0.27

1975 0.56 0.03 0.51

1974 0.51 0.02 0.52

1973 Not

Available

Before

1974

0.00 0.61

1972 0.02 0.98

1971 0.01 0.59

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

64

Table 10. Fannie Mae Capital

Capital ($ in Millions)

Period

Stockholders’

Equity /

Total MBS

Outstanding

plus Total

Assets

(%)

Stockholders’

Equity plus

Reserves /

Total MBS

Outstanding

plus Total

Assets1

(%)

1 Effective 1995, reserves exclude specific allowances for impaired loans pursuant to SFAS 114.

Core

Capital2

($)

2 The sum of outstanding common stock, noncumulative preferred stock, paid-in capital, and retained earnings.

Regulatory

Minimum

Capital

Requirements3

($)

3 Minimum capital requirement in accordance with the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

Regulatory

Capital

Surplus

(Deficit)4

($)

4 The difference between Core Capital and Minimum Regulatory Capital Requirement.

Market

Capitalization5

($)

5 Stock price multiplied by number of outstanding common shares.

Common

Share

Dividend

Payout

Rate6

(%)

6 Common dividends paid as a percentage of net income available to common shareholders.

4Q00 1.51 1.57 20,827 20,294 533 86,643 24.7

3Q00 1.47 1.53 19,870 19,381 489 71,234 25.6

2Q00 1.44 1.50 19,044 18,688 356 52,245 26.4

1Q00 1.44 1.51 18,637 18,080 557 56,980 27.3

Annual Data

2000 1.51 1.57 20,827 20,294 533 86,643 26.0

1999 1.41 1.47 17,876 17,770 106 63,651 28.8

1998 1.38 1.45 15,465 15,334 131 75,881 29.5

1997 1.42 1.50 13,793 12,703 1,090 59,167 29.4

1996 1.42 1.50 12,773 11,466 1,307 39,932 30.4

1995 1.32 1.41 10,959 10,451 508 33,812 34.6

1994 1.26 1.37 9,541 9,415 126 19,882 30.8

1993 1.17 1.29 8,052 7,064 988 21,387 26.8

1992 1.12 1.25 Not

Applicable

Before

1993

Not

Applicable

Before

1993

Not

Applicable

Before

1993

20,874 23.2

1991 1.10 1.24 18,836 21.3

1990 0.94 1.06 8,490 14.7

1989 0.88 1.01 8,092 12.8

1988 0.80 0.94 3,992 11.2

1987 0.76 0.90 2,401 11.7

1986 0.61 0.74 3,006 8.0

1985 0.66 0.76 1,904 30.1

1984 0.74 0.85 1,012 N/A

1983 0.97 1.10 1,514 13.9

1982 1.09 1.25 1,603 N/A

1981 1.73 1.90 502 N/A

1980 2.49 2.73 702 464.2

1979 2.93 3.17 Not

Available

Before

1980

45.7

1978 3.13 3.36 30.3

1977 3.45 3.66 31.8

1976 3.03 3.19 33.6

1975 2.73 2.84 31.8

1974 2.60 2.69 29.6

1973 2.80 2.87 18.1

1972 2.75 2.78 15.2

1971 2.47 2.49 18.7

Source: Fannie Mae
CHAPTER FOUR - HISTORICAL DATA TABLES

65

Table 11. Freddie Mac Mortgage Purchases

Business Activity ($ Millions)

Purchases

Period

 Single-Family

($)

 Multifamily

($)

Total 1

($)

1 Loans purchased from lenders; excludes non-Freddie Mac securities and repurchased Freddie Mac MBS.

 Mortgage Securities2

($)

2 Not included in total purchases.

4Q00 57,329 2,581 59,910 32,569

3Q00 47,467 1,249 48,716 19,936

2Q00 35,419 986 36,405 22,711

1Q00 27,798 1,214 29,012 16,680

Annual Data

2000 168,013 6,030 174,043 91,896

1999 232,612 7,181 239,793 101,898

1998 263,490 3,910 267,400 128,446

1997 115,160 2,241 117,401 35,385

1996 122,850 2,229 125,079 36,824

1995 89,971 1,565 91,536 39,292

1994 122,563 847 123,410 19,817

1993 229,051 191 229,242 Not

Available

Before

1994

1992 191,099 27 191,126

1991 99,729 236 99,965

1990 74,180 1,338 75,518

1989 76,765 1,824 78,589

1988 42,884 1,191 44,075

1987 74,824 2,016 76,840

1986 99,936 3,538 103,474

1985 42,110 1,902 44,012

1984 Not

Available

Before

1985

Not

Available

Before

1985

21,885

1983 22,952

1982 23,671

1981 3,744

1980 3,690

1979 5,716

1978 6,524

1977 4,124

1976 1,129

1975 1,716

1974 2,185

1973 1,334

1972 1,265

1971 778

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

66

Table 12. Freddie Mac MBS Issuances

Business Activity ($ in Millions)

MBS Issuances

Period

 Single-Family MBS

($)

 Multifamily MBS

($)

Total MBS

($)

 Multiclass MBS1

($)

1 The majority qualify as Real Estate Mortgage Investment Conduits (REMICs), and are also known as structured securitizations. 

In years 1983 - 1986, data consists of collateralized mortgage obligations (CMOs) and mortgage cash flow obligations (MCFs). 

4Q00 55,736 978 56,714 13,931

3Q00 47,085 201 47,286 14,494

2Q00 34,816 328 35,144 9,713

1Q00 27,478 279 27,757 10,064

Annual Data

2000 165,115 1,786 166,901 48,202

1999 230,986 2,045 233,031 119,565

1998 249,627 937 250,564 135,162

1997 113,758 500 114,258 84,366

1996 118,932 770 119,702 34,145

1995 85,522 355 85,877 15,372

1994 116,901 209 117,110 73,131

1993 208,724 0 208,724 143,336

1992 179,202 5 179,207 131,284

1991 92,479 0 92,479 72,032

1990 71,998 1,817 73,815 40,479

1989 72,931 587 73,518 39,754

1988 39,490 287 39,777 12,985

1987 72,866 2,152 75,018 0

1986 96,798 3,400 100,198 2,233

1985 37,583 1,245 38,828 2,625

1984 Not

Available

Before

1985

Not

Available

Before

1985

18,684 1,805

1983 19,691 1,685

1982 24,169 Not

Issued

Before

1983

1981 3,526

1980 2,526

1979 4,546

1978 6,412

1977 4,657

1976 1,360

1975 950

1974 46

1973 323

1972 494

1971 65

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

67

Table 13. Freddie Mac Earnings

Earnings ($ in Millions)

Period

Net

Interest

Income1, 2, 3

($)

1 Interest income net of interest expense, nominal basis. 

2 Effective 1/1/96, Freddie Mac reports guarantee fees on retained MBS as guarantee fee income. However, in these data, fees on retained MBS have 

been estimated and reclassified as interest income for comparability with Fannie Mae.

3 In 1993, Freddie Mac adopted a change in reporting of uncollectable interest on single-family mortgages. Pre-1993 amounts do not reflect this 

change.

Guarantee

Fee

Income 2,3

($)

Average

Guarantee

Fee 2,3

(basis points)

Administrative

Expenses

($)

CreditRelated

Expenses4

($)

4 Credit-related expenses are mortgage loan loss provision plus real estate owned expense. From 1988 to 1990, data include real estate owned 

disposition loss provisions instead of expense, and before 1988, only mortgage loan loss provision.

 Net

Income

($)

Return on

Common

Equity5

(%)

5 Average common equity used to calculate return for annual data. Quarterly data are based on averages of quarter-end equity.

4Q00 851 270 19.1 184 25 663 22.8

3Q00 846 263 19.2 180 21 645 25.2

2Q00 803 261 19.4 180 29 631 26.4

1Q00 770 263 19.4 169 31 608 26.5

Annual Data

2000 3,270 1,057 19.3 713 106 2,547 23.7

1999 2,926 1,019 19.8 655 159 2,223 25.5

1998 2,215 1,019 21.4 578 342 1,700 22.6

1997 1,847 1,082 22.9 495 529 1,395 23.1

1996 1,705 1,086 23.4 440 608 1,243 22.6

1995 1,396 1,087 23.8 395 541 1,091 22.1

1994 1,112 1,108 24.4 379 425 983 23.3

1993 772 1,009 23.8 361 524 786 22.3

1992 695 936 24.7 329 457 622 21.2

1991 683 792 23.7 287 419 555 23.6

1990 619 654 22.4 243 474 414 20.4

1989 517 572 23.4 217 278 437 25.0

1988 492 465 21.5 194 219 381 27.5

1987 319 472 24.2 150 175 301 28.2

1986 299 301 22.4 110 120 247 28.5

1985 312 188 22.1 81 79 208 30.0

1984 213 158 24.7 71 54 144 52.0

1983 125 132 26.2 53 46 86 44.5

1982 30 77 24.5 37 26 60 21.9

1981 34 36 19.5 30 16 31 13.1

1980 54 23 14.3 26 23 34 14.7

1979 55 18 13.2 19 20 36 16.2

1978 37 14 14.9 14 13 25 13.4

1977 31 9 18.9 12 8 21 12.4

1976 18 3 13.6 10 (1) 14 9.5

1975 31 3 24.8 10 11 16 11.6

1974 42 2 25.5 8 33 5 4

1973 31 2 32.4 7 15 12 9.9

1972 10 1 39.4 5 4 4 3.5

1971 10 1 Not Available

Before 1972

Not Available

Before 1972

Not Available

Before 1972

6 5.5

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

68

Table 14. Freddie Mac Balance Sheet

Balance Sheet 

($ in Millions)

Mortgage-Backed 

Securities Outstanding 

($ in Millions)

Period

 Total

Assets

 ($)

Retained

Mortgage

Portfolio1

($)

1 Gross retained portfolio net of unamortized purchases premiums, discounts, and deferred fees.

NonMortgage

Investments2

($)

2 Excludes mortgage-related securities held for trading purposes. 

Debt

Outstanding

 ($)

Stockholders’

Equity

($)

 Total MBS

Outstanding3

($)

3 Total MBS outstanding net of Freddie Mac MBS held in the retained portfolio. 

 Multiclass

MBS

Outstanding4

($)

4 The majority qualify as REMICs and are also known as structured securitizations. In years 1983 - 2000, data also includes original issue CMOs and 

MCFs, and structured securitizations and PCs with mandatory purchase obligations. 

4Q00 459,297 385,451 43,521 426,899 14,837 576,101 309,185

3Q00 433,346 359,638 45,126 406,936 13,192 559,242 306,674

2Q00 412,701 348,255 33,040 384,286 12,248 543,287 312,030

1Q00 406,068 334,009 42,477 378,074 11,892 539,830 314,456

Annual Data

2000 459,297 385,451 43,521 426,899 14,837 576,101 309,185

1999 386,684 322,914 34,152 360,711 11,525 537,883 316,168

1998 321,421 255,670 42,160 287,396 10,835 478,351 260,504

1997 194,597 164,543 16,430 172,842 7,521 475,985 233,829

1996 173,866 137,826 22,248 156,981 6,731 473,065 237,939

1995 137,181 107,706 12,711 119,961 5,863 459,045 246,366

1994 106,199 73,171 17,808 93,279 5,162 460,656 264,152

1993 83,880 55,938 18,225 49,993 4,437 439,029 265,178

1992 59,502 33,629 12,542 29,631 3,570 407,514 218,747

1991 46,860 26,667 9,956 30,262 2,566 359,163 146,978

1990 40,579 21,520 12,124 30,941 2,136 316,359 88,124

1989 35,462 21,448 11,050 26,147 1,916 272,870 52,865

1988 34,352 16,918 14,607 26,882 1,584 226,406 15,621

1987 25,674 12,354 10,467 19,547 1,182 212,635 3,652

1986 23,229 13,093 Not

Available

Before

 1987

15,375 953 169,186 5,333

1985 16,587 13,547 12,747 779 99,909 5,047

1984 13,778 10,018 10,999 606 70,026 3,214

1983 8,995 7,485 7,273 421 57,720 1,669

1982 5,999 4,679 4,991 296 42,952 Not

Issued

Before

 1983

1981 6,326 5,178 5,680 250 19,897

1980 5,478 5,006 4,886 221 16,962

1979 4,648 4,003 4,131 238 15,316

1978 3,697 3,038 3,216 202 12,017

1977 3,501 3,204 3,110 177 6,765

1976 4,832 4,175 4,523 156 2,765

1975 5,899 4,878 5,609 142 1,643

1974 4,901 4,469 4,684 126 780

1973 2,873 2,521 2,696 121 791

1972 1,772 1,726 1,639 110 444

1971 1,038 935 915 107 64

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

69

Table 15. Freddie Mac Retained Mortgage Portfolio Detail

 ($ in Millions)

Period

Whole Loans1

($)

1 Includes purchase and sale premiums, discounts, and deferred fees and unrealized gain or loss on available-for-sale securities.

Freddie Mac

Securities

($)

Other

Mortgage-Related

Securities

($)

Total Retained

Mortgage Portfolio2

($)

2 Gross retained portfolio net of amortized purchases, premiums, discounts and deferred fees. 

4Q00 58,998 246,209 80,244 385,451

3Q00 55,060 23,649 72,929 359,638

2Q00 54,391 225,354 68,510 348,255

1Q00 54,680 217,276 62,053 334,009

Annual Data

2000 58,998 246,209 80,244 385,451

1999 55,147 211,198 56,569 322,914

1998 57,745 168,108 29,817 255,670

1997 48,576 103,400 12,567 164,543

1996 46,575 81,195 10,056 137,826

1995 44,035 56,006 7,665 107,706

1994 Not

Available

Before

1995

30,670 Not

Available

Before

1995

73,171

1993 15,877 55,938

1992 6,394 33,629

1991 Not

Available

Before

1992

26,667

1990 21,520

1989 21,448

1988 16,918

1987 12,354

1986 13,093

1985 13,547

1984 10,018

1983 7,485

1982 4,679

1981 5,178

1980 5,006

1979 4,003

1978 3,038

1977 3,204

1976 4,175

1975 4,878

1974 4,469

1973 2,521

1972 1,726

1971 935

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

70

Table 16. Freddie Mac Financial Derivatives

 Financial Derivatives ($ in Millions)

Period

Interest

Rate

Swaps1

($)

1 In 1999, reclassifications were made between certain financial derivatives contracts and 1998 amounts have been restated to reflect these 

reclassifications. 

Interest Rate

Caps, Floors,

and Corridors

($)

TreasuryBased

Contracts1,2

($)

2 Excludes exchange-traded derivative financial instruments, such as U.S. Treasury-based futures contracts.

Foreign

Currency

($)

 Futures &

Options and

Forward Rate

Agreements

($)

Other

($)

Total

($)

4Q00 277,888 12,819 2,200 10,280 135,581 35,839 474,535

3Q00 266,068 12,957 11,286 5,946 161,718 0 457,975

2Q00 237,171 13,606 9,380 909 129,422 0 390,488

1Q00 172,838 18,218 11,779 1,096 166,669 0 365,600

Annual Data

2000 277,888 12,819 2,200 10,208 135,581 35,839 474,535

1999 126,580 19,936 8,894 1,097 267,737 0 424,244

1998 57,555 21,845 11,542 1,464 220,832 0 313,238

1997 54,172 21,995 12,228 1,152 6,000 0 95,547

1996 46,646 14,095 651 544 0 0 61,936

1995 45,384 13,055 24 0 0 0 58,463

1994 21,834 9,003 0 0 0 0 30,837

1993 17,888 1,500 0 0 0 0 19,388

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

71

Table 17. Freddie Mac Non-Mortgage Investments

Non-Mortgage Investments1 ($ in Millions)

1 Excludes mortgage-related securities held for trading purposes.

Period

 Federal Funds

and Eurodollars

 ($)

Asset-Backed

Securities

($)

Repurchase

Agreements

($)

Commercial

Paper and

Corporate Debt

($)

Other1

($)

Total

($)

4Q00 2,267 19,063 7,488 7,302 7,401 43,521

3Q00 8,640 17,052 4,440 10,222 4,772 45,126

2Q00 1,850 14,758 3,144 9,977 3,311 33,040

1Q00 15,673 11,164 4,848 8,035 2,757 42,477

Annual Data

2000 2,267 19,063 7,488 7,302 7,401 43,521

1999 10,545 10,305 4,961 3,916 4,425 34,152

1998 20,524 7,124 1,756 7,795 4,961 42,160

1997 2,750 2,200 6,982 3,203 1,295 16,430

1996 9,968 2,086 6,440 1,058 2,696 22,248

1995 110 499 9,217 1,201 1,684 12,711

1994 7,260 0 5,913 1,234 3,401 17,808

1993 9,267 0 4,198 1,438 3,322 18,225

1992 5,632 0 4,060 53 2,797 12,542

1991 2,949 0 4,437 0 2,570 9,956

1990 1,112 0 9,063 0 1,949 12,124

1989 3,527 0 5,765 0 1,758 11,050

1988 4,469 0 9,107 0 1,031 14,607

1987 3,177 0 5,859 0 1,431 10,467

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

72

Table 18. Freddie Mac Asset - Liability Mix

Asset-Liability Ratios 

Period

Asset Mix Liability Mix

Retained Portfolio /

Total Assets

(%)

 Non-mortgage

Investments /

Total Assets

(%)

Callable Debt / Total

Effective Long-Term

Debt1,2

(%)

1 Callable debt includes derivative financial instruments that provide interest-rate protection similar to callable debt.

 Total Effective LongTerm Debt / Total Debt 2

 (%)

2 Total effective long-term debt represents debt with an effective repricing date greater than one year.

4Q00 83.9 9.5 69.0 77.0

3Q00 83.0 10.4 63.0 86.7

2Q00 84.4 8.0 62.0 87.9

1Q00 82.3 10.5 61.0 92.6

Annual Data

2000 83.9 9.5 69.0 77.0

1999 83.5 8.8 67.2 92.0

1998 79.5 13.1 75.6 70.6

1997 84.6 8.4 83.9 70.8

1996 79.3 12.8 73.8 72.4

1995 78.5 9.3 72.5 70.2

1994 68.9 16.8 81.0 59.8

1993 66.7 21.7 86.1 63.9

1992 56.5 21.1 Not

Available

Before

1993

Not

Available

Before

1993

1991 56.9 21.2

1990 53.0 29.9

1989 60.5 31.2

1988 49.2 42.5

1987 48.1 40.8

1986 56.4 Not

Available

Before

1987

1985 81.7

1984 72.7

1983 83.2

1982 78.0

1981 81.9

1980 91.4

1979 86.1

1978 82.2

1977 91.4

1976 86.1

1975 82.2

1974 91.5

1973 87.7

1972 97.4

1971 90.1

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

73

Table 19. Freddie Mac Mortgage Asset Quality

Mortgage Asset Quality 

Period

Single-Family

Delinquency Rate1

(%)

1 1994 - 2000 data include only loans for which Freddie Mac has assumed primary default risk (“at-risk”); includes foreclosures and in process. Pre1994 calculations include both at-risk and non-at-risk loans.

Multifamily

Delinquency

Rate2,3

(%)

2 1982 - 1987 data based on the number of loans delinquent 60 days or more; calculations subsequent to 1987 based on unpaid principal balance of 

loans 60 days or more. 

3 Pre-1991 amounts do not reflect change in reporting of multifamily in-substance foreclosures pursuant to adoption of SFAS 114.

Credit Losses /

Total MBS

Outstanding plus

Retained Portfolio4

(%)

4 Credit losses are defined as charge-offs plus real estate owned expense; average balances used to calculate ratios subsequent to 1994; quarterly 

data are annualized.

REO/Total MBS

Outstanding plus

Retained Portfolio5

(%)

5 Real Estate Owned balances reflect end-of-period balances; beginning in 1992, data reflects adoption of SFAS 114.

Credit-Enhanced /

Total MBS

Outstanding plus

Retained Portfolio6

(%)

6 Includes loans for which the lender or third-party has agreed to retain primary default risk. Also includes securities guaranteed by agencies such as 

the Government National Mortgage Association, as well as asset-backed securities and commercial mortgage-backed securities.

4Q00 0.36 0.05 0.01 0.04 31.8

3Q00 0.35 0.09 0.01 0.04 31.8

2Q00 0.34 0.06 0.01 0.04 31.2

1Q00 0.36 0.08 0.01 0.05 30.5

Annual Data

2000 0.36 0.05 0.01 0.04 31.8

1999 0.39 0.14 0.02 0.05 29.9

1998 0.50 0.37 0.04 0.08 27.3

1997 0.55 0.96 0.08 0.11 15.9

1996 0.58 1.96 0.10 0.13 10.0

1995 0.60 2.88 0.11 0.14 9.7

1994 0.55 3.79 0.08 0.18 7.2

1993 0.61 5.92 0.11 0.16 5.3

1992 0.64 6.81 0.09 0.12 Not

Available

Before

1993

1991 0.61 5.42 0.08 0.14

1990 0.45 2.63 0.08 0.12

1989 0.38 2.53 0.08 0.09

1988 0.36 2.24 0.07 0.09

1987 0.36 1.49 0.07 0.08

1986 0.42 1.07 Not

Available

Before

1987

0.07

1985 0.42 0.63 0.10

1984 0.46 0.42 0.15

1983 0.47 0.58 0.15

1982 0.54 1.04 0.12

1981 0.61 Not

Available

Before

1982

0.07

1980 0.44 0.04

1979 0.31 0.02

1978 0.21 0.02

1977 Not

Available

Before

1978

0.03

1976 0.04

1975 0.03

1974 0.02

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

74

Table 20. Freddie Mac Capital

Capital ($ in Millions)

Period

Stockholders'

Equity /

Total MBS

Outstanding

plus Total

Assets

(%)

Stockholders'

Equity plus

Reserves /

Total MBS

Outstanding

plus Total

Assets1

(%)

1 Effective 1995, reserves exclude specific allowances for impaired loans pursuant to SFAS 114. 

Core

Capital 2

($)

2 The sum of outstanding common stock, noncumulative preferred stock, paid-in capital, and retained earnings.

Regulatory

Minimum

Capital

Requirements3

($)

3 Minimum capital requirement in accordance with the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

Regulatory

Capital

Surplus

(Deficit)4

($)

4 The difference between Core Capital and Minimum Regulatory Capital Requirement.

Market

Capitalization5

($)

5 Stock price multiplied by number of outstanding common shares.

Common

Share

Dividend

Payout

Rate6

(%)

6 Paid common dividends as a percentage of earnings available to common shareholders.

4Q00 1.43 1.51 14,380 14,178 202 47,702 19.3

3Q00 1.33 1.41 13,865 13,525 340 37,401 19.8

2Q00 1.28 1.36 13,368 12,936 432 27,997 20.1

1Q00 1.26 1.34 13,139 12,756 383 30,739 21.0

Annual Data

2000 1.43 1.51 14,380 14,178 202 47,702 20.0

1999 1.25 1.33 12,692 12,287 405 32,713 20.1

1998 1.35 1.45 10,715 10,333 382 44,797 20.7

1997 1.12 1.22 7,376 7,082 294 28,461 21.1

1996 1.04 1.04 6,743 6,517 226 19,161 21.3

1995 0.98 1.09 5,829 5,584 245 14,932 21.1

1994 0.91 1.14 5,169 4,884 285 9,132 20.5

1993 0.85 0.99 4,437 3,782 655 9,005 21.6

1992 0.76 0.93 Not

Applicable

Before

1993

Not

Applicable

Before

1993

Not

Applicable

Before

1993

8,721 23.1

1991 0.63 0.81 8,247 21.6

1990 0.60 0.77 2,925 23.2

1989 0.62 0.77 4,024 24.3

1988 0.61 0.76 Not

Applicable

Before

1989

Not

Applicable

Before

1989

1987 0.50 0.64

1986 0.50 0.64

1985 0.67 0.85

1984 0.73 0.93

1983 0.63 0.83

1982 0.60 0.82

1981 0.95 1.25

1980 0.98 1.27

1979 1.19 1.44

1978 1.29 1.50

1977 1.72 1.93

1976 2.05 2.22

1975 1.88 2.03

1974 2.22 2.34

1973 3.30 3.47

1972 4.95 4.96

1971 9.71 9.80

Source: Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

75

Table 21. Aggregate Purchases

Business Activity ($ in Millions)

Purchases

Period

 Single-Family

($)

 Multifamily

($)

Total

($) Mortgage Securities1

($)

1 Not included in total purchases.

4Q00 129,088 6,011 135,099 77,138

3Q00 107,045 3,911 110,956 53,785

2Q00 90,534 3,295 93,829 45,126

1Q00 68,415 3,190 71,605 41,881

Annual Data

2000 395,082 16,407 411,489 217,930

1999 548,748 17,193 565,941 268,329

1998 618,410 15,338 633,748 272,907

1997 275,081 8,775 283,856 84,233

1996 287,306 8,680 295,986 81,840

1995 215,974 6,531 222,505 73,328

1994 280,792 4,786 285,478 44,369

1993 518,877 4,326 523,203 Not

Available

Before

1994

1992 439,309 2,879 442,188

1991 233,280 3,440 236,720

1990 185,187 4,518 189,705

1989 157,275 6,149 163,424

1988 107,497 5,361 112,858

1987 148,766 3,749 152,515

1986 177,159 5,415 182,574

1985 84,653 3,102 87,755

1984 Not

Available

Before

1985

Not

Available

Before

1985

50,704

1983 49,431

1982 49,610

1981 10,573

1980 11,791

1979 16,523

1978 18,829

1977 8,908

1976 4,761

1975 6,036

1974 9,204

1973 7,586

1972 5,129

1971 4,818

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

76

Table 22. Aggregate MBS Issuances

Business Activity ($ in Millions)

MBS Issuances

Period

Single-Family MBS

($)

Multifamily MBS

($)

Total MBS

($)

Multiclass MBS

($)

4Q00 120,816 3,318 124,134 26,839

3Q00 101,983 1,992 103,975 23,976

2Q00 81,594 2,136 83,730 18,906

1Q00 64,788 1,936 66,724 18,025

Annual Data

2000 369,181 9,382 378,563 87,746

1999 523,178 10,542 533,720 174,725

1998 564,747 11,965 576,712 219,309

1997 257,373 6,314 263,687 169,781

1996 263,133 6,438 269,571 64,925

1995 191,791 4,542 196,333 25,053

1994 245,286 2,446 247,732 146,496

1993 429,209 959 430,168 353,966

1992 372,389 855 373,244 301,489

1991 203,967 1,415 205,382 184,840

1990 168,004 2,506 170,510 108,770

1989 139,420 3,862 143,282 81,469

1988 90,610 4,045 94,655 29,990

1987 134,933 3,314 138,247 9,917

1986 156,815 3,949 160,764 4,633

1985 60,725 1,752 62,477 2,625

1984 Not

Available

Before

1985

Not

Available

Before

1985

32,230 1,805

1983 33,031 1,685

1982 38,139 Not

Issued

Before

1983

1981 4,243

1980 2,526

1979 4,546

1978 6,412

1977 4,657

1976 1,360

1975 950

1974 46

1973 323

1972 494

1971 65

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

77

Table 23. Aggregate Earnings

Earnings ($ in Millions)

Period

Net Income

($)

Net Interest

Income

($)

Guarantee Fee

Income

($)

Administrative

Expenses

($)

Credit-Related

Expenses

($)

4Q00 1,828 2,336 609 416 46

3Q00 1,769 2,274 604 412 43

2Q00 1,728 2,202 600 404 50

1Q00 1,670 2,132 595 386 61

Annual Data

2000 6,995 8,944 2,408 1,618 200

1999 6,135 7,820 2,301 1,455 286

1998 5,118 6,325 2,248 1,286 603

1997 4,451 5,796 2,356 1,131 904

1996 3,968 5,297 2,282 1,000 1,017

1995 3,235 4,443 2,173 941 876

1994 3,115 3,935 2,191 904 803

1993 2,659 3,305 1,970 804 829

1992 2,245 2,753 1,770 710 777

1991 1,918 2,461 1,467 606 789

1990 1,587 2,212 1,190 529 784

1989 1,244 1,708 980 471 588

1988 888 1,329 793 412 584

1987 677 1,209 735 347 535

1986 352 683 476 285 426

1985 201 451 300 223 285

1984 73 123 236 183 140

1983 135 116 186 134 94

1982 (132) (434) 93 97 62

1981 (175) (395) 36 79 (12)

1980 48 75 23 70 42

1979 198 377 18 65 55

1978 234 331 14 53 49

1977 186 282 9 44 36

1976 141 221 3 40 24

1975 131 205 3 37 27

1974 112 184 2 31 50

1973 138 211 2 25 27

1972 100 148 1 18 9

1971 67 59 1 Not

Available

Before

1972

Not

 Available

Before

 1972

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

78

Table 24. Aggregate Balance Sheet

Balance Sheet 

($ in Millions)

Mortgage-Backed 

Securities Outstanding

($ in Millions)

Period

Total

Assets

($)

Retained

Mortgage

Portfolio

($)

NonMortgage

Investments

($)

Debt

Outstanding

($)

Stockholders'

Equity

($)

Total MBS

Outstanding1

($)

1 Total MBS Outstanding net of each Enterprise’s MBS in its retained portfolio.

Multiclass

MBS

Outstanding2

($)

2 The majority qualify as REMICS and may also be known as structured securitizations.

4Q00 1,134,369 993,053 98,489 1,069,581 35,675 1,282,785 643,693

3Q00 1,071,493 931,242 100,098 1,013,975 32,879 1,260,266 638,166

2Q00 1,021,476 898,434 80,435 962,813 31,039 1,239,860 645,322

1Q00 992,766 871,192 80,802 935,617 30,263 1,224,514 648,842

Annual Data

2000 1,134,369 993,053 98,489 1,069,581 35,675 1,282,785 643,693

1999 961,851 845,891 73,903 908,330 29,154 1,217,052 651,682

1998 806,435 671,104 100,675 747,687 26,288 1,115,494 622,117

1997 586,270 481,135 81,026 542,616 21,314 1,055,123 621,951

1996 524,907 424,353 78,854 488,251 19,504 1,021,238 577,737

1995 453,731 360,574 69,984 419,135 16,822 972,275 599,894

1994 378,707 293,986 64,143 350,509 14,703 947,001 642,885

1993 300,859 246,107 39,621 251,105 12,489 910,335 647,043

1992 240,480 189,889 32,116 195,931 10,344 831,958 531,116

1991 193,932 153,346 19,792 164,199 8,113 714,447 371,784

1990 173,692 135,586 21,992 154,344 6,077 604,434 215,402

1989 159,777 129,429 19,388 142,211 4,907 489,382 120,691

1988 146,610 117,017 19,896 132,341 3,844 396,503 42,281

1987 129,133 106,019 13,935 116,604 2,993 348,369 15,011

1986 122,850 107,216 Not

Applicable

 Before

1987

108,938 2,135 264,754 Not

Available

 Before

1987

1985 115,663 108,156 106,732 1,788 154,461

1984 101,576 94,153 94,718 1,524 105,764

1983 87,378 82,732 81,867 1,421 82,841

1982 78,980 74,035 74,605 1,249 57,402

1981 67,904 64,807 64,231 1,330 20,614

1980 63,357 60,595 59,766 1,678 16,962

1979 55,948 53,780 52,555 1,739 15,316

1978 47,203 45,141 44,201 1,564 12,017

1977 37,481 36,456 35,000 1,350 6,765

1976 37,225 35,950 35,088 1,139 2,765

1975 37,495 35,698 35,572 1,003 1,643

1974 34,572 33,135 32,852 898 780

1973 27,191 26,110 25,699 801 791

1972 22,118 21,378 20,878 669 444

1971 19,629 18,821 18,587 567 64

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

79

Table 25. Aggregate Retained Mortgage Portfolio Detail

($ in Millions)

Period

Aggregate

Whole

Loans

($)

 Aggregate

 Enterprise

Securities1

($)

1 Mortgage-backed securities issued by each Enterprise and held in its retained portfolio. 

Aggregate Other

Mortgage-Related

Securities

($)

Aggregate Total

Retained Mortgage

Portfolio

($)

4Q00 211,503 597,275 186,795 995,573

3Q00 204,778 551,453 177,494 933,725

2Q00 204,868 524,596 170,957 900,421

1Q00 202,559 508,407 161,794 872,760

Annual Data

2000 211,503 597,275 186,795 995,573

1999 204,252 492,912 149,691 846,855

1998 213,524 365,483 91,178 670,185

1997 208,678 233,844 38,699 481,221

1996 214,466 183,802 26,610 424,878

1995 215,516 125,735 19,966 361,217

1994 Not

Available

Before

1995

74,668 Not

Available

Before

1995

298,228

1993 40,096 246,799

1992 26,929 191,748

1991 Not

Available

Before

1992

155,650

1990 138,148

1989 132,169

1988 119,931

1987 109,100

1986 110,926

1985 112,196

1984 98,127

1983 85,741

1982 76,493

1981 66,590

1980 62,333

1979 55,100

1978 46,353

1977 37,581

1976 37,112

1975 36,794

1974 34,177

1973 26,980

1972 22,052

1971 19,450

Sources: Fannie Mae and Freddie Mac 
CHAPTER FOUR - HISTORICAL DATA TABLES

80

Table 26. Aggregate Financial Derivatives

Financial Derivatives ($ in Millions)

Period

Interest Rate

Swaps

($)

Interest Rate

Caps, Floors,

and Corridors

($)

Foreign

Currency

($)

Futures &

Options and

Forward Rate

Agreements

($)

Other

($)

 Total

($)

4Q00 505,539 46,482 19,719 184,446 38,039 794,225

3Q00 477,370 40,757 15,500 211,383 15,641 760,651

2Q00 445,754 41,156 12,244 174,632 11,765 685,551

1Q00 373,123 47,168 12,556 194,238 13,704 640,789

Annual Data 

2000 505,539 46,482 19,719 184,446 38,039 794,225

1999 318,612 48,886 12,604 308,818 10,294 699,214

1998 200,401 36,345 14,459 234,313 15,277 500,795

1997 203,845 22,095 11,120 6,000 13,888 256,948

1996 204,786 14,395 2,973 0 1,001 223,155

1995 171,063 13,355 1,224 29 999 186,670

1994 109,304 9,363 1,023 0 1,465 121,154

1993 67,346 1,860 1,023 0 1,425 71,653

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

81

Table 27. Aggregate Non-Mortgage Investments

Non-Mortgage Investments ($ in Millions)

Period

Federal Funds

and Eurodollars

($)

Asset-Backed

Securities

($)

Repurchase

Agreements

($)

 Commercial

Paper and

Corporate Debt

($)

Other

($)

Total

($)

4Q00 9,806 36,575 10,210 16,195 25,717 98,503

3Q00 15,071 34,605 8,943 20,399 21,371 100,089

2Q00 5,979 33,559 5,429 18,135 17,336 80,438

1Q00 18,949 29,266 6,444 12,252 13,892 80,803

Annual Data

2000 9,806 36,575 10,210 16,195 25,717 98,503

1999 15,382 29,512 7,535 5,639 15,835 73,903

1998 28,450 28,117 9,312 12,950 21,846 100,675

1997 21,962 18,839 13,697 14,948 11,580 81,026

1996 31,702 16,721 11,107 7,249 12,075 78,854

1995 19,885 10,404 19,392 9,830 10,473 69,984

1994 24,853 3,796 14,919 8,953 11,622 64,143

1993 13,763 3,557 8,882 1,438 11,981 39,621

1992 12,219 4,124 7,249 53 8,471 32,116

1991 5,903 2,416 6,632 0 4,841 19,792

1990 6,441 1,780 10,014 0 3,757 21,992

1989 8,685 1,107 5,765 0 3,831 19,388

1988 8,594 481 9,107 0 1,714 19,896

1987 5,736 25 5,859 0 2,315 13,935

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

82

Table 28. Aggregate Capital

Capital ($ in Millions)

Period

Core

Capital

($)

Minimum Regulatory

Capital Requirements

($)

Capital Surplus

(Deficit)

($)

Market

Capitalization

($)

4Q00 35,207 34,472 735 134,345

3Q00 33,735 32,906 829 108,635

2Q00 32,412 31,624 788 80,242

1Q00 31,776 30,836 940 87,719

Annual Data

2000 35,207 34,472 735 134,345

1999 30,568 30,057 511 96,364

1998 26,180 25,667 513 120,678

1997 21,169 19,785 1,384 87,628

1996 19,516 17,983 1,533 59,093

1995 16,788 16,035 753 48,744

1994 14,710 14,299 411 29,014

1993 12,489 10,846 1,643 30,392

1992 Not

Applicable

Before

1993

Not

Applicable

Before

1993

Not

Applicable

 Before

1993

29,595

1991 27,083

1990 11,415

1989 12,116

1988 3,992

1987 2,401

1986 3,006

1985 1,904

1984 1,012

1983 1,514

1982 1,603

1981 502

1980 702

Sources: Fannie Mae and Freddie Mac
CHAPTER FOUR - HISTORICAL DATA TABLES

83

Table 29. Loan Limits

Single-Family Conforming Loan Limits1

($)

1 Conforming Loan Limits are 50% higher in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.

Year 1-unit 2-units 3-units 4-units

1970 - 1976 33,000 Not Available Not Available Not Available

1977 - 1978 60,000 Not Available Not Available Not Available

1979 67,500 Not Available Not Available Not Available

1980 93,750 120,000 145,000 180,000

1981 98,500 126,000 152,000 189,000

1982 107,000 136,800 165,100 205,300

1983 108,300 138,500 167,200 207,900

1984 114,000 145,800 176,100 218,900

1985 115,300 147,500 178,200 221,500

1986 133,250 170,450 205,950 256,000

1987 153,100 195,850 236,650 294,150

1988 168,700 215,800 260,800 324,150

1989 187,600 239,950 290,000 360,450

1990 187,450 239,750 289,750 360,150

1991 191,250 244,650 295,650 367,500

1992 202,300 258,800 312,800 388,800

1993 203,150 259,850 314,100 390,400

1994 203,150 259,850 314,100 390,400

1995 203,150 259,850 314,100 390,400

1996 207,000 264,750 320,050 397,800

1997 214,600 274,550 331,850 412,450

1998 227,150 290,650 351,300 436,000

1999 240,000 307,100 371,200 461,350

2000 252,700 323,400 390,900 485,800

2001 275,000 351,950 425,400 528,700

Sources: Department of Housing and Urban Development (HUD), Federal Housing Finance Board, Freddie Mac

FHA Single-Family Insurable Limits

($)

1-unit 2-units 3-units 4-units

Low Cost High Cost Low Cost High Cost Low Cost High Cost Low Cost High Cost

Year Area Max Area Max Area Max Area Max Area Max Area Max Area Max Area Max

1997 81,546 170,362 104,310 205,875 126,103 248,888 156,731 309,338

1998 109,032 197,621 139,512 252,866 168,624 305,631 209,568 379,842

1999 115,200 208,800 147,408 267,177 178,176 322,944 221,448 401,375

2000 121,296 219,849 155,232 281,358 187,632 340,083 233,184 422,646

2001 132,000 239,250 168,936 306,196 204,192 370,098 253,766 459,969
CHAPTER FOUR - HISTORICAL DATA TABLES

84

Table 30. Mortgage Interest Rates

Period

Average Commitment Rates 

on Conventional Loans1

1 Commitment rates do not reflect points.

Effective Rates on 

Closed Conventional Loans2

2 Effective rates reflect points.

30-Year Fixed Rate

(%)

One-Year ARMs

(%)

Fixed Rate

(%)

Adjustable Rate

(%)

4Q00 7.6 7.2 8.0 6.7

3Q00 8.0 7.3 8.3 7.0

2Q00 8.3 7.0 8.5 7.2

1Q00 8.3 6.6 8.3 7.1

Annual Data

2000 8.1 7.0 8.3 7.1

1999 7.4 6.0 7.4 6.5

1998 6.9 5.6 7.2 6.5

1997 7.6 5.6 7.9 7.0

1996 7.8 5.7 8.0 7.2

1995 7.9 6.1 8.2 7.4

1994 8.4 5.3 8.1 6.6

1993 7.3 4.6 7.5 5.9

1992 8.4 5.6 8.5 6.9

1991 9.2 7.1 9.7 8.4

1990 10.1 8.4 10.4 9.2

1989 10.3 8.8 10.5 9.3

1988 10.3 7.9 10.4 8.5

1987 10.2 7.8 9.9 8.5

1986 10.2 8.4 10.5 9.4

1985 12.4 10.0 12.4 10.8

1984 13.9 11.5 13.2 12.1

1983 13.2 Not

Available

Before

1984

13.0 12.3

1982 16.1 15.2 15.4

1981 16.6 Not

Available

Before

 1982

Not

Available

Before

1982

1980 13.8

1979 11.2

1978 9.6

1977 8.8

1976 8.9

1975 9.0

1974 9.2

1973 8.0

1972 7.4

1971 Not

 Available

Before

1972

Average Commitment Rates Source: Freddie Mac

Effective Rates Source: Federal Housing Finance Board
CHAPTER FOUR - HISTORICAL DATA TABLES

85

Table 31. Housing Market Activity

Period

Housing Starts

(units in thousands)

Home Sales

(units in thousands)

Single-Family

Housing

Starts

Multifamily

Housing

Starts

Total

Housing

Starts

New

Single-Family

Home Sales

Existing

Single-Family

Home Sales

4Q00* 1,295 259 1,554 935 5,117

3Q00* 1,260 267 1,528 874 5,073

2Q00* 1,297 308 1,605 830 5,103

1Q00* 1,367 365 1,732 884 5,197

Annual Data

2000 1,298 295 1,593 877 5,113

1999 1,367 300 1,667 880 5,205

1998 1,314 303 1,617 886 4,970

1997 1,179 296 1,474 804 4,382

1996 1,206 271 1,477 757 4,196

1995 1,110 244 1,354 667 3,888

1994 1,233 224 1,457 670 3,916

1993 1,155 133 1,288 666 3,786

1992 1,061 139 1,200 610 3,479

1991 876 138 1,014 509 3,186

1990 932 260 1,193 534 3,219

1989 1,059 318 1,376 650 3,325

1988 1,140 348 1,488 676 3,513

1987 1,212 409 1,621 671 3,436

1986 1,263 542 1,805 750 3,474

1985 1,166 576 1,742 688 3,134

1984 1,206 544 1,750 639 2,829

1983 1,181 522 1,703 623 2,697

1982 743 320 1,062 412 1,991

1981 796 288 1,084 436 2,419

1980 962 331 1,292 545 2,973

1979 1,316 429 1,745 709 3,827

1978 1,558 462 2,020 817 3,986

1977 1,573 414 1,987 819 3,650

1976 1,248 289 1,538 646 3,064

1975 956 204 1,160 549 2,476

1974 956 382 1,338 519 2,272

1973 1,250 795 2,045 634 2,334

1972 1,451 906 2,357 718 2,252

1971 1,271 781 2,052 656 2,019

Components may not add to totals due to rounding.

*Seasonally Adjusted Annual Rates

Housing Starts and New Single-Family Home Sales Source: Bureau of the Census 

Existing Single-Family Home Sales Source: National Association of Realtors
CHAPTER FOUR - HISTORICAL DATA TABLES

86

Table 32. Weighted Repeat Sales House Price Index 

Weighted Repeat Sales House Price Index (Annual Data)1

% Change

USA New

England

MidAtlanticSouth

Atlantic

East

North

Central

West

North

Central

East

South

Central

West

South

Central

Mountain Pacific

1Q01 8.8 12.4 9.2 8.5 6.1 7.9 6.5 7.1 8.8 12.3

4Q00 8.9 14.0 9.1 8.1 6.9 8.3 5.1 6.8 8.8 12.6

3Q00 8.4 13.6 8.7 7.3 6.7 8.2 4.5 6.7 7.6 12.0

2Q00 7.9 12.9 7.9 6.7 6.6 8.5 4.3 6.8 7.0 10.4

1Q00 6.9 11.5 6.6 5.8 6.4 8.5 3.6 6.1 6.2 8.3

Annual Data

2000 8.9 14.0 9.1 8.1 6.9 8.3 5.1 6.8 8.8 12.6

1999 6.3 9.9 6.2 5.2 6.6 8.4 3.9 5.6 5.4 6.5

1998 5.4 6.9 4.6 4.8 4.3 4.9 5.1 5.4 4.6 8.0

1997 4.8 4.9 3.5 4.8 5.3 5.1 5.1 4.0 5.1 5.5

1996 2.6 1.8 0.2 2.2 5.1 4.1 4.0 2.2 4.5 1.0

1995 4.5 4.2 3.2 4.4 6.0 5.3 5.5 4.1 7.4 2.9

1994 0.9 -2.8 -3.2 0.1 5.2 5.6 4.9 1.6 9.4 -3.4

1993 2.1 0.5 1.4 2.0 3.5 3.8 4.0 4.0 7.9 -1.9

1992 1.9 -1.0 1.7 2.1 3.9 3.0 3.3 3.4 5.3 -1.4

1991 2.6 -2.2 1.5 3.1 4.6 3.8 4.1 3.7 4.8 1.4

1990 0.2 -7.6 -2.8 0.2 3.7 0.5 0.7 0.4 1.8 2.8

1989 6.1 0.7 2.4 5.0 6.0 3.2 3.1 2.9 2.8 19.5

1988 6.2 3.8 6.1 6.8 6.7 2.5 2.6 -2.2 0.3 17.4

1987 6.8 13.2 16.0 6.8 8.1 2.4 4.0 -8.7 -2.9 9.5

1986 8.2 20.9 17.9 6.0 7.3 4.3 5.8 -0.6 3.1 7.3

1985 6.7 24.9 14.3 5.6 4.9 4.3 4.5 -1.2 2.4 4.9

1984 5.5 17.4 13.5 4.2 2.7 4.9 4.4 0.0 2.0 5.2

1983 4.1 16.4 10.0 3.2 4.3 4.3 4.4 0.5 -2.5 1.1

1982 2.3 4.2 4.7 4.8 -4.8 0.0 4.3 5.9 7.1 0.7

1981 4.3 5.6 0.2 5.3 2.3 0.5 -0.8 11.9 6.4 6.1

1980 6.9 5.9 9.0 8.6 1.5 3.6 7.3 7.8 6.9 11.4

1979 11.8 11.3 15.1 11.1 9.3 9.4 5.2 13.1 15.8 16.3

1978 13.0 17.9 6.5 10.6 13.7 12.3 11.7 16.5 17.5 15.6

1977 13.0 8.4 10.6 7.0 13.2 14.5 11.5 12.0 17.9 25.7

1976 7.9 3.2 3.6 5.3 8.2 6.3 4.9 9.6 10.5 20.2

Regional Divisions:

New England: CT, MA, ME, NH, RI, VT

Mid-Atlantic: NJ, NY, PA

South Atlantic: DC, DE, FL, GA, MD, NC, SC, VA, WV

East North Central: IL, IN, MI, OH, WI, ND, SD, NE

East South Central: AL, KY, MS, TN

West South Central: AR, LA, OK, TX

Mountain: AZ, CO, ID, MT, NM, NV, UT, WY

Pacific: AK, CA, HI, OR, WA

1 All data is measured based on percentage change over the previous four quarters. Data from 1976 - 2000 is measured based on fourth quarter to 

fourth quarter percentage change.