UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 For the fiscal year ended December 31, 2023

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to 

Commission File Number: 001-34139

Federal Home Loan Mortgage Corporation

(Exact name of registrant as specified in its charter)

Federally chartered

52-0904874

8200 Jones Branch Drive

22102-3110 (703) 903-2000 corporation McLean, Virginia

(State or other jurisdiction of 

incorporation or organization)

(I.R.S. Employer

Identification No.) (Address of principal executive offices) (Zip Code) (Registrant's telephone number,including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

None N/A N/A

Securities registered pursuant to Section 12(g) of the Act:

Voting Common Stock, no par value per share (OTCQB: FMCC)

Variable Rate, Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCI)

5% Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCKK)

Variable Rate, Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCG)

5.1% Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCH)

5.79% Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCK)

Variable Rate, Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCL)

Variable Rate, Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCM)

Variable Rate, Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCN)

5.81% Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCO)

6% Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCP)

Variable Rate, Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCCJ)

5.7% Non-Cumulative Preferred Stock, par value $1.00 per share (OTCQB: FMCKP)

Variable Rate, Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCCS)

6.42% Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCCT)

5.9% Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCKO)

5.57% Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCKM)

5.66% Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCKN)

6.02% Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCKL)

6.55% Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCKI)

Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (OTCQB: FMCKJ)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 

preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the 

past 90 days. ☒  Yes  ☐ No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of 

Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒  Yes

☐ No   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging 

growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of 

the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Emerging growth company ☐

Non-accelerated filer ☐ Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of internal control over 

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit 

report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect 

the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any 

of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐ No  ☒

The aggregate market value of the common stock held by non-affiliates computed by reference to the price at which the common stock was last sold on June 30, 

2023 (the last business day of the registrant's most recently completed second fiscal quarter) was $0.3 billion.

As of January 31, 2024, there were 650,059,553 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None
Table of Contents

INTRODUCTION 1

n About Freddie Mac 1

n Our Business 6

n Forward-Looking Statements 11

MANAGEMENT'S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13

n Housing and Mortgage Market Conditions 13

n Consolidated Results of Operations 15

n Consolidated Balance Sheets Analysis 21

n Our Portfolios 22

n Our Business Segments 24

n Risk Management 49

l	Credit Risk 52

l	Market Risk 79

l	Operational Risk 84

n Liquidity and Capital Resources 89

n Conservatorship and Related Matters 101

n Regulation and Supervision 104

n Critical Accounting Estimates 111

RISK FACTORS 112

LEGAL PROCEEDINGS 131

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER 

MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES 132

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 133

n Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 134

n Consolidated Financial Statements 136

CONTROLS AND PROCEDURES 217

OTHER INFORMATION 219

DIRECTORS, CORPORATE GOVERNANCE, AND EXECUTIVE OFFICERS 220

n Directors 220

n Corporate Governance 228

n Executive Officers 239

EXECUTIVE COMPENSATION 242

n Compensation Discussion and Analysis 242

n Compensation and Risk 257

n CEO Pay Ratio 258

n 2023 Compensation Information for NEOs 259

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 

MANAGEMENT AND RELATED STOCKHOLDER MATTERS 265

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 267

PRINCIPAL ACCOUNTING FEES AND SERVICES 269

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 271

GLOSSARY 272

EXHIBIT INDEX 280

SIGNATURES 286

FORM 10-K INDEX 288

Table of Contents

FREDDIE MAC | 2023 Form 10-K i
MD&A TABLE INDEX

1 Summary of Consolidated Statements of Income and Comprehensive Income 15

2 Components of Net Interest Income 15

3 Analysis of Net Interest Yield 17

4 Net Interest Income Rate / Volume Analysis 18

5 Components of Non-Interest Income 19

6 (Provision) Benefit for Credit Losses 19

7 Components of Non-Interest Expense 20

8 Summarized Consolidated Balance Sheets 21

9 Mortgage Portfolio 22

10 Mortgage-Related Investments Portfolio 23

11 Other Investments Portfolio 23

12 Single-Family Segment Financial Results 39

13 Multifamily Segment Financial Results 48

14 Allowance for Credit Losses Activity 53

15 Allowance for Credit Losses Ratios 53

16 Principal Amounts Due for Held-for-Investment Loans 54

17 Single-Family New Business Activity 57

18 Single-Family Mortgage Portfolio Newly Acquired Credit Enhancements 58

19 Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding 59

20 Serious Delinquency Rates for Credit-Enhanced and Non-Credit-Enhanced Loans in Our Single-Family Mortgage 

Portfolio 59

21 Credit Enhancement Coverage by Year of Origination 60

22 Single-Family Mortgage Portfolio Without Credit Enhancement 60

23 Credit Quality Characteristics of Our Single-Family Mortgage Portfolio 62

24 Characteristics of the Loans in Our Single-Family Mortgage Portfolio 63

25 Single-Family Mortgage Portfolio Attribute Combinations 64

26 Seriously Delinquent Single-Family Loans 65

27 Single-Family Relief Refinance Loans 66

28 Single-Family Completed Loan Workout Activity 66

29 Credit Characteristics of Single-Family Modified Loans 66

30 Payment Performance of Single-Family Modified Loans 66

31 Single-Family REO Activity 67

32 Single-Family Collateral Deficiency Ratios 67

33 Percentage of Multifamily New Business Activity With Higher Risk Characteristics 69

34 Multifamily Mortgage Portfolio CRT Issuance 70

35 Credit-Enhanced and Non-Credit-Enhanced Loans Underlying Our Multifamily Mortgage Portfolio 70

36 Level of Subordination Outstanding 71

37 Credit Quality of Our Multifamily Mortgage Portfolio Without Credit Enhancement 71

38 Single-Family Mortgage Purchases from Non-Depository Sellers 74

39 Single-Family Mortgage Portfolio Non-Depository Servicers 74

40 Single-Family Primary Mortgage Insurers 76

41 Single-Family ACIS Counterparties 76

42 Derivative Counterparty Credit Exposure 77

43 PVS-YC and PVS-L Results Assuming Shifts of the Yield Curve 81

44 Duration Gap and PVS Results 81

Table Description Page

Table of Contents MD&A Table Index

FREDDIE MAC | 2023 Form 10-K ii
45 PVS-L Results Before Derivatives and After Derivatives 81

46 Earnings Sensitivity to Changes in Interest Rates 83

47 Liquidity Sources 90

48 Funding Sources 91

49 Debt of Freddie Mac Activity 92

50 Maturity and Redemption Dates 93

51 Debt of Consolidated Trusts Activity 93

52 Freddie Mac Credit Ratings 94 

53 Net Worth Activity 96

54 Regulatory Capital Components 98

55 Statutory Capital Components 98

56 Capital Metrics Under ERCF 99

57 2022 and 2021 Affordable Housing Goals Results 107

58 2022-2024 Single-Family Affordable Housing Goal Benchmark Levels 108

59 2023-2024 Multifamily Affordable Housing Goal Benchmark Levels 108

60 Forecasted House Price Growth Rates 111

61 Board Compensation Levels 237

62 Director Compensation 238

63 2023 Target TDC 245

64 2023 Deferred Salary 250

65 CEO Pay Ratio 258

66 Compensation Summary 259

67 Grants of Plan-Based Awards 260

68 SERP Benefit 261

69 Compensation and Benefits if NEO Terminated Employment as of December 31, 2023 263

70 Stock Ownership by Directors and Executive Officers 265

71 Stock Ownership by Greater-Than 5% Holders 266

72 Auditor Fees 269

Table Description Page

Table of Contents MD&A Table Index

FREDDIE MAC | 2023 Form 10-K iii
Introduction

This Annual Report on Form 10-K includes forward-looking statements that are based on current expectations and that are 

subject to significant risks and uncertainties. These forward-looking statements are made as of the date of this Form 10-K. We 

undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 

10-K. Actual results might differ significantly from those described in or implied by such statements due to various factors and 

uncertainties, including those described in the Forward-Looking Statements and Risk Factors sections of this Form 10-K.

Throughout this Form 10-K, we use certain acronyms and terms that are defined in the Glossary.

ABOUT FREDDIE MAC

Freddie Mac is a GSE chartered by Congress in 1970, with a mission to provide liquidity, stability, and affordability to the U.S. 

housing market. We do this primarily by purchasing single-family and multifamily residential mortgage loans originated by 

lenders. In most instances, we package these loans into guaranteed mortgage-related securities, which are sold in the global 

capital markets, and transfer interest-rate and liquidity risks to third-party investors. In addition, we transfer a portion of our 

mortgage credit risk exposure to third-party investors through our credit risk transfer programs, which include securities- and 

insurance-based offerings. We also invest in mortgage loans and mortgage-related securities. We do not originate mortgage 

loans or lend money directly to mortgage borrowers.

We support the U.S. housing market and the overall economy by enabling America's families to access mortgage loan funding 

with better terms and by providing consistent liquidity to the single-family and multifamily mortgage markets. We have helped 

many distressed borrowers keep their homes or avoid foreclosure and have helped many distressed renters avoid eviction.

Business Results

Consolidated Financial Results

Net Revenues and Net Income

(In billions)

$22.0 $21.3 $21.2

$12.1

$9.3 $10.5

Net Revenues Net Income

2021 2022 2023

Net Worth as of December 31,

(In billions)

$28.0

$37.0

$47.7

2021 2022 2023

Key Drivers:

n	 2023 vs. 2022 

l Net income was $10.5 billion, an increase of 13% year-over-year, primarily driven by a credit reserve release in SingleFamily in 2023 compared to a credit reserve build in Single-Family in 2022, partially offset by higher non-interest 

expense.

l	 Net revenues were $21.2 billion, down slightly year-over-year, as higher net interest income was offset by lower noninterest income. 

Introduction About Freddie Mac

FREDDIE MAC | 2023 Form 10-K 1
l Net worth was $47.7 billion as of December 31, 2023, up from $37.0 billion as of December 31, 2022. 

n	 2022 vs. 2021

l Net income was $9.3 billion, a decrease of 23% year-over-year, primarily driven by a credit reserve build in SingleFamily.

l	 Net revenues were $21.3 billion, down 3% year-over-year, as higher net interest income in Single-Family was offset by 

a decline in non-interest income in Multifamily.

l Net worth was $37.0 billion as of December 31, 2022, up from $28.0 billion as of December 31, 2021.

Market Liquidity

Market Liquidity

(In thousands)

4,891

2,496

1,402

1,378 1,039 806

2,858

764

149

655

693

447

Single-Family purchase borrowers Single-Family refinance borrowers Multifamily rental units

2021 2022 2023

We support the U.S. housing market by executing our mission to provide liquidity and help maintain credit availability for new 

and refinanced single-family mortgages as well as for rental housing. We provided $348 billion in liquidity to the mortgage 

market in 2023, which enabled the financing of 1.4 million home purchases, refinancings, and rental units.

Introduction About Freddie Mac

FREDDIE MAC | 2023 Form 10-K 2
Portfolio Balances

Mortgage Portfolio as of December 31,

(UPB in billions)

$3,207

$3,415 $3,480

$2,792 $2,986 $3,039

$415

$429 $441

Single-Family mortgage portfolio Multifamily mortgage portfolio

2021 2022 2023

Key Drivers:

n	 2023 vs. 2022

l	 Our mortgage portfolio increased 2% year-over-year to $3.5 trillion at December 31, 2023.

– Our Single-Family mortgage portfolio was $3.0 trillion at December 31, 2023, up 2% year-over-year, as portfolio 

growth moderated in 2023 due to the slowdown in new business activity as both home purchase and refinance 

activity were adversely affected by higher mortgage interest rates.

– Our Multifamily mortgage portfolio was $441 billion at December 31, 2023, up 3% year-over-year, as portfolio 

growth moderated in 2023 due to the slowdown in new business activity driven by higher mortgage interest rates.

n	 2022 vs. 2021

l Our mortgage portfolio increased 6% year-over-year to $3.4 trillion at December 31, 2022. 

– Our Single-Family mortgage portfolio was $3.0 trillion at December 31, 2022, up 7% year-over-year, primarily 

driven by an increase in average portfolio loan size and a higher share of single-family mortgage debt outstanding. 

The increase in the average portfolio loan size was driven by house price appreciation in 2022, which contributed 

to new business acquisitions having a larger loan size compared to older vintages that continued to run off.

– Our Multifamily mortgage portfolio was $429 billion at December 31, 2022, up 3% year-over-year, primarily driven 

by new business activity, partially offset by increased borrower payoff activity driven by market conditions.

Introduction About Freddie Mac

FREDDIE MAC | 2023 Form 10-K 3
Credit Enhancement Coverage

Single-Family Mortgage Portfolio with Credit Enhancement as of 

December 31,

(UPB in billions)

$1,491

$1,832 $1,860

53%

61% 61%

UPB Percentage

2021 2022 2023

Multifamily Mortgage Portfolio with Credit Enhancement 

as of December 31,

(UPB in billions)

$389 $398 $415

94% 93% 94%

UPB Percentage

2021 2022 2023

In addition to transferring interest-rate and liquidity risk to third-party investors through our securitization activities, we engage 

in various types of credit enhancements, such as primary mortgage insurance and CRT transactions, to reduce our credit risk 

exposure and transfer a portion of the credit risk on certain loans in our mortgage portfolio to third parties. At December 31, 

2023, we had credit enhancement coverage of 61% on our Single-Family mortgage portfolio and 94% on our Multifamily 

mortgage portfolio. See MD&A - Our Business Segments and MD&A - Risk Management - Credit Risk for additional 

information on our credit enhancements.

Conservatorship and Government Support for Our Business

Since September 2008, we have been operating in conservatorship, with FHFA as our Conservator. The conservatorship and 

related matters significantly affect our management, business activities, financial condition, and results of operations. Our future 

is uncertain, and the conservatorship has no specified termination date. We do not know what changes may occur to our 

business model during or following conservatorship, including whether we will continue to exist. 

In connection with our entry into conservatorship, we entered into the Purchase Agreement with Treasury under which we 

issued Treasury both senior preferred stock and a warrant to purchase common stock in consideration for Treasury's 

commitment to provide funding to us. The Purchase Agreement with Treasury is critical to keeping us solvent and avoiding the 

appointment of a receiver by FHFA under statutory mandatory receivership provisions. We believe that the support provided by 

Treasury pursuant to the Purchase Agreement currently enables us to have adequate liquidity to conduct normal business 

activities.

The Purchase Agreement with Treasury significantly affects our business activities, including by limiting: our secondary market 

activities; our single-family and multifamily loan acquisitions; the amount of indebtedness we can incur; the size of our 

mortgage-related investments portfolio; and our ability to pay dividends, transfer certain assets, raise capital, pay down the 

liquidation preference of the senior preferred stock, and exit conservatorship.

Treasury, as the holder of the senior preferred stock, is entitled to receive cumulative quarterly cash dividends, when, as, and if 

declared by the Board of Directors. The dividends we have paid to Treasury on the senior preferred stock have been declared 

by, and paid at the direction of, the Conservator, acting as successor to the rights, titles, powers, and privileges of the Board of 

Directors. 

Pursuant to the Purchase Agreement, Freddie Mac will not be required to pay a dividend to Treasury on the senior preferred 

stock until it has built sufficient net worth to meet the capital requirements and buffers set forth in the ERCF. As the company 

Introduction About Freddie Mac

FREDDIE MAC | 2023 Form 10-K 4
builds capital during this period, increases in our Net Worth Amount have been, or will be, added to the aggregate liquidation 

preference of the senior preferred stock. After we have maintained the level of capital prescribed in the Purchase Agreement for 

the requisite time, we will be subject to a new periodic cash dividend requirement, as well as a periodic commitment fee to be 

agreed upon with Treasury in consultation with the Chairman of the Federal Reserve.

See MD&A - Regulation and Supervision and Note 2 for additional information on the Purchase Agreement, senior 

preferred stock, and warrant and Risk Factors - Conservatorship and Related Matters for related risks.

The graphs below show our net worth, the liquidation preference of the senior preferred stock, the remaining amount of 

Treasury's funding commitment to us, the cumulative senior preferred stock dividends we have paid to Treasury, and the 

cumulative funds we have drawn from Treasury pursuant to its funding commitment.

Net Worth, Liquidation Preference, and Treasury Funding 

Commitment

(In billions)

$47.7

$117.3

$140.2

Net worth

Senior preferred stock liquidation 

preference

Remaining Treasury funding commitment

As of December 31, 2023

Draws and Dividend Payments

(In billions)

$71.6

$119.7

Cumulative draws from Treasury

Cumulative dividend payments to Treasury

As of December 31, 2023

Introduction About Freddie Mac

FREDDIE MAC | 2023 Form 10-K 5
OUR BUSINESS

Primary Business Strategies

Freddie Mac's overall strategic direction is established by management and affirmed by the Board of Directors and FHFA 

through the approval of our Strategic Framework, which sets forth our strategic priorities and generally covers a three-year 

timeframe. FHFA, the Administration, or Congress could take actions that cause us to alter our Strategic Framework. FHFA, as 

Conservator, has influenced, and may in the future influence, our strategic direction, such as through our new initiatives, credit 

and pricing policies, and capital, liquidity, and risk appetite constraints.

Our Charter and Mission

We are a GSE with a specific and limited corporate purpose to support the liquidity, stability, and affordability of the U.S. 

housing market as a participant in the secondary mortgage market, while operating as a commercial enterprise earning an 

appropriate return. All actions we take must be conducted within the constraints of our Charter. 

As a result, our Charter forms the framework for our business activities. Pursuant to our Charter, our role in the secondary 

mortgage market is to:

n	 Provide stability in the secondary mortgage market for residential loans;

n	 Respond appropriately to the private capital market;

n	 Provide ongoing assistance to the secondary mortgage market for residential loans (including activities relating to loans for 

low- and moderate-income families involving a reasonable economic return that may be less than the return earned on 

other activities) by increasing the liquidity of mortgage investments and improving the distribution of investment capital 

available for residential mortgage financing; and

n	 Promote access to mortgage loan credit throughout the United States (including central cities, rural areas, and other 

underserved areas) by increasing the liquidity of mortgage investments and improving the distribution of investment capital 

available for residential mortgage financing.

Our Charter requires certain specified credit protections, which include mortgage insurance from a qualified insurer on the 

portion of the UPB of the loan that exceeds an 80% LTV ratio, a seller's agreement to repurchase or replace a defaulted loan, 

or the retention by the seller of at least a 10% participation interest in the loan for the purchase of first-lien single-family loans 

with LTV ratios at the time of purchase of greater than 80%. This Charter requirement does not apply to multifamily loans or to 

loans that have the benefit of any guarantee, insurance, or other obligation by the U.S. or any of its agencies or instrumentalities 

(e.g., the FHA, VA, or USDA Rural Development).

Our Charter does not permit us to originate mortgage loans or lend money directly to mortgage borrowers in the primary 

mortgage market. Our Charter limits our purchase of single-family loans to the conforming loan market, which consists of loans 

originated with UPBs at or below limits determined annually based on changes in FHFA's housing price index. In most of the 

U.S., the maximum conforming loan limit for a one-family residence has been set at $766,550 for 2024, an increase from 

$726,200 for 2023, $647,200 in 2022, and $548,250 for 2021. Higher limits have been established in certain "high-cost" areas 

(for 2024, up to $1,149,825 for a one-family residence). Higher limits also apply to two- to four-family residences and to one- to 

four-family residences in Alaska, Guam, Hawaii, and the U.S. Virgin Islands.

Introduction Our Business

FREDDIE MAC | 2023 Form 10-K 6
Our Strategic Priorities

We have four strategic priorities, each of which was created to ensure we fully serve our mission:

n	 Deliver on affordable housing;

n	 Identify, assess, and manage our risks;

n	 Grow, develop, and empower talent for today and tomorrow; and

n	 Build financial strength to serve our mission.

These strategic priorities help us create a more liquid, stable, affordable, and equitable housing finance system that serves 

lenders, families, and the housing market as a whole. And, as with any mission-driven company, our people are at the center of 

all we do.

Introduction Our Business

FREDDIE MAC | 2023 Form 10-K 7
Human Capital Management

Attracting, Developing, and Retaining Talent

Our employees are integral to our company’s success. Our goal is to sustain an inclusive and equitable culture with a highly 

engaged, diverse workforce so that we can support the U.S. housing industry and make home possible. We strive to be an 

employer of choice that attracts and retains top talent through our commitment to DEI, employee well-being and engagement, 

training, and other professional development opportunities. 

We are committed to promoting DEI in our organization and business practices. We strive to create a culture where people feel 

comfortable being their authentic selves in the workplace. We do this through various programs, such as our 10 Business 

Resource Groups, which provide all employees a place to find community and targeted professional development 

opportunities.

We encourage employees to volunteer and engage in community outreach in the neighborhoods where they work and live 

through our Community Crew program, which focuses on mission-related activities and our SERVE program which provides 

our employees with additional volunteer opportunities with local organizations. 

We aim to support our employees’ overall well-being and enable them to perform at their best. Our wide variety of benefits 

provide employees with flexibility to manage their lives at home and work. We also offer a variety of ways to help our 

employees plan for their financial well-being. In 2023, we enhanced our vacation and first-time homebuyer benefits, introduced 

caregiver leave, added more flexibility for hybrid employees, and enhanced our benefits for LGBTQ+ employees. In 2024, we 

are expanding our caregiving and bereavement leave and introducing new bereavement support services. 

We encourage and support professional development to help our employees stay engaged, confident, and credible. Our 

professional development opportunities include in-person and virtual courses on various topics, such as leadership, business, 

communications, and technology skill development; our educational assistance program; our student debt repayment program; 

and our rewards programs for employees to recognize and celebrate their colleagues’ achievements.

We also strive to implement competitive compensation programs and practices within the constraints of the conservatorship. 

We evaluate the success of our human capital management by measuring and monitoring the performance, development, and 

retention of our employees.

Employees

At January 31, 2024, we had 8,004 full-time and 31 part-time employees. Our employee population increased in 2023 and our 

voluntary turnover rate decreased and returned to pre-COVID-19 levels, which is below financial industry benchmarks for 

voluntary turnover and is more consistent with historical experience. Our headquarters are in McLean, Virginia, and the majority 

of our employees reside in the Washington, D.C. metropolitan area.

Board and FHFA Oversight

We engage with the CHC Committee by providing workforce insights that support their oversight of compensation and benefits, 

DEI, talent development and strategies to strengthen our culture. Although the CHC Committee plays a significant role in these 

matters, FHFA is actively involved in its role as both our conservator and regulator. For additional information, see Directors, 

Corporate Governance, and Executive Officers - Corporate Governance - Board of Directors and Board Committee 

Information - Authority of the Board of Directors and Board Committees.

DEI

We believe a strong commitment to DEI creates a stronger Freddie Mac that is better positioned to serve our mission effectively 

and advance equity in the housing industry. The DEI Division promotes DEI in all aspects of our business and at every level of 

the organization. 

Freddie Mac has a three-year Board-approved DEI strategic plan that establishes our efforts into focus areas that are organized 

into four components: workforce diversity, supplier diversity, financial transactions, and engagement and outreach. Each focus 

area has associated goals that are tracked and shared with FHFA, our Board of Directors, our senior operating committee, and 

our people.

For workforce diversity, we attract a pipeline of diverse candidates by partnering with Hispanic Serving Institutions, Historically 

Black Colleges and Universities, and other talent organizations. We also provide access to professional development and 

learning opportunities, formal training programs, mentoring initiatives, and other DEI-related programming.

Our DEI efforts are reflected in the composition of our workforce, leadership, and Board of Directors. For example, we are a 

majority-minority company, which means more than 50% of our workforce identifies as racially or ethnically diverse, and 40% 

of our senior operating committee identifies as racially or ethnically diverse. For information on the composition of our Board of 

Directors, see Directors, Corporate Governance, and Executive Officers – Directors – Director Criteria, Diversity, 

Qualifications, Experience, and Tenure.

Introduction Our Business

FREDDIE MAC | 2023 Form 10-K 8
Our efforts for supplier diversity include:

n Involving diverse suppliers in our competitive bidding process and

n Establishing a program to understand how our primary suppliers use diverse suppliers.

Our efforts for financial transactions involve:

n Engaging minority-, women-, and disabled-owned businesses (MWDOBs) in our capital market transactions and

n Providing training, access, and opportunities to better position MWDOBs for future opportunities with our company, 

including our Single-Family and Multifamily businesses.

Our efforts for engagement and outreach include:

n Creating sustainable impact within the Freddie Mac community through our 10 Business Resource Groups and in local 

communities through Community Crew, our employee volunteerism and matching gifts program.

Business Segments

We have two reportable segments: Single-Family and Multifamily. For additional information on our segments, see MD&A - 

Our Business Segments and Note 14.

Properties

Our principal offices consist of four office buildings we own in McLean, Virginia, comprising approximately 1.3 million square 

feet. We operate our business in the United States and its territories, and accordingly, we generate no revenue from and have 

no long-lived assets, other than financial instruments, in geographic locations other than the United States and its territories.

Government Regulation and Supervision

Our business is subject to extensive laws, regulations, and supervision. The laws and regulations to which we are subject cover 

all key aspects of our business, and directly and indirectly impact the key drivers of our results including, for example, our 

product offerings, guarantee fees, pricing, competitive position and strategic priorities, relationship with sellers and servicers, 

capital structure, cash needs and uses, liquidity, privacy for borrowers and others, risk management, cybersecurity, and costs 

of compliance. Failure to comply with our legal and regulatory requirements could result in litigation, investigations, 

enforcement actions, fines, monetary and other penalties, and harm to our reputation. Our business and results of operations 

may also be directly and adversely affected by future legislative, regulatory, or judicial actions. Such actions could affect us in a 

number of ways, including by imposing significant additional legal, compliance, and other costs on us and limiting our business 

activities. For example, changes to our capital requirements have affected our business and risk management strategies, 

including our risk appetite, our risk-adjusted returns, and the impact of our CRT transactions on our capital needs, and have 

increased the amount of capital we will be required to retain or raise to exit from conservatorship. 

In addition, our conservatorship and related matters significantly affect our management, business activities, financial condition, 

and results of operations. We are under the control of FHFA, as our Conservator, and are not managed to maximize 

stockholder returns. FHFA determines our strategic direction. We face a variety of different, and sometimes competing, 

business objectives and FHFA-mandated activities. FHFA has required us to make changes to our business that have adversely 

affected our financial results and could require us to make additional changes at any time. FHFA may require us to undertake 

activities that reduce our profitability, expose us to additional credit, market, funding, operational, legal, and other risks, or 

provide additional support for the mortgage market that serves our mission but adversely affects our financial results. Further, 

we can be put into receivership at the discretion of the Director of FHFA at any time for a number of reasons set forth in the 

GSE Act.

FHFA is also Conservator of Fannie Mae, our primary competitor. FHFA’s actions, as Conservator of both companies, could 

affect competition between us. It is also possible that FHFA could require us and Fannie Mae to take a uniform approach to 

certain activities, limiting innovation and competition, and possibly putting us at a competitive disadvantage because of 

differences in our respective businesses. FHFA also could limit our ability to compete with new entrants and other institutions. 

For additional information on conservatorship and related risks, see Introduction – About Freddie Mac – Conservatorship 

and Government Support for Our Business and Risk Factors – Conservatorship and Related Matters.

For additional information on government regulation and supervision and related risks, see MD&A - Regulation and 

Supervision and Risk Factors - Legal and Compliance Risks.

Introduction Our Business

FREDDIE MAC | 2023 Form 10-K 9
Available Information

We file reports and other information with the SEC. In view of the Conservator's succession to all of the voting power of our 

stockholders, we have not prepared or provided proxy statements for the solicitation of proxies from stockholders since we 

entered into conservatorship, and do not expect to do so while we remain in conservatorship. Pursuant to SEC rules, our 

annual reports on Form 10-K contain certain information typically provided in an annual proxy statement.

We make available, free of charge through our website at www.freddiemac.com/investors, our annual reports on Form 10-K, 

quarterly reports on Form 10-Q, current reports on Form 8-K, and all other SEC reports and amendments to those reports as 

soon as reasonably practicable after we electronically file the material with the SEC. The SEC also maintains a website 

(www.sec.gov) that contains reports, proxy and information statements, and other information regarding companies that file 

electronically with the SEC. 

We are providing our website addresses and the website address of the SEC here and elsewhere in this Form 10-K solely for 

your information. Information appearing on our website or on the SEC's website is not incorporated into this Form 10-K.

We provide information on the ERCF on our website at www.freddiemac.com/investors.

We provide disclosure about our debt securities on our website at www.freddiemac.com/debt. From this address, investors 

can access the offering circular and related supplements for debt securities offerings under Freddie Mac's global debt facility, 

including pricing supplements for individual issuances of debt securities. Similar information about our STACR® transactions 

and SCR transactions is available at crt.freddiemac.com and mf.freddiemac.com/investors, respectively.

We provide disclosure about our mortgage-related securities, some of which are off-balance sheet obligations (e.g., K 

Certificates), on our website at www.freddiemac.com/mbs and mf.freddiemac.com/investors. From these addresses, 

investors can access information and documents, including offering circulars and offering circular supplements, for mortgagerelated securities offerings.

We provide additional information, including product descriptions, investor presentations, securities issuance calendars, 

transaction volumes and details, redemption notices, Freddie Mac research, and material developments or other events that 

may be important to investors, in each case as applicable, on the websites for our business divisions, which can be found at 

sf.freddiemac.com, mf.freddiemac.com, and capitalmarkets.freddiemac.com/capital-markets. 

We provide information on our sustainability efforts on our website at freddiemac.com/about/sustainability.

Introduction Our Business

FREDDIE MAC | 2023 Form 10-K 10
FORWARD-LOOKING STATEMENTS

We regularly communicate information concerning our business activities to investors, the news media, securities analysts, and 

others as part of our normal operations. Some of these communications, including this Form 10-K, contain "forward-looking 

statements." Examples of forward-looking statements include, but are not limited to, statements pertaining to the 

conservatorship, our current expectations and objectives for the Single-Family and Multifamily segments of our business, our 

efforts to assist the housing market, our liquidity and capital management, economic and market conditions and trends 

including, but not limited to, changes in house prices and house price forecasts, our market share, the effect of legislative and 

regulatory developments and new accounting guidance, the credit quality of loans we own or guarantee, the costs and benefits 

of our CRT transactions, the impact of banking crises or failures, the effects of catastrophic events or significant climate change 

effects and actions taken in response thereto on our business, and our results of operations and financial condition. Forwardlooking statements involve known and unknown risks and uncertainties, some of which are beyond our control. Forwardlooking statements are often accompanied by, and identified with, terms such as "could," "may," "will," "believe," "expect," 

"anticipate," "forecast," and similar phrases. These statements are not historical facts, but rather represent our expectations 

based on current information, plans, judgments, assumptions, estimates, and projections. Actual results may differ significantly 

from those described in or implied by such forward-looking statements due to various factors and uncertainties, including those 

described in the Risk Factors section of this Form 10-K and:

n	 The actions the federal government (including FHFA, Treasury, and Congress) and state governments may take, require us 

to take, or restrict us from taking, including actions to promote equitable access to affordable and sustainable housing, 

such as programs to implement the expectations in FHFA's Conservatorship Scorecards, recent requirements and 

guidance related to equitable housing, and other objectives for us;

n	 Changes in the fiscal and monetary policies of the Federal Reserve, including changes in target interest rates and in the 

amount of agency MBS and agency CMBS held by the Federal Reserve;

n	 The effect of the restrictions on our business due to the conservatorship and the Purchase Agreement;

n	 The impact of any changes in our credit ratings or those of the U.S. government;

n	 Changes in our Charter, applicable legislative or regulatory requirements (including any legislation affecting the future 

status of our company), or the Purchase Agreement;

n	 Changes to our capital requirements and potential effects of such changes on our business strategies;

n	 Changes in tax laws;

n	 Changes in privacy and cybersecurity laws and regulations;

n	 Changes in accounting policies, practices, standards, or guidance;

n	 Changes in economic and market conditions, including volatility in the financial services industry, changes in employment 

rates, inflation, interest rates, spreads, and house prices;

n	 Changes in the U.S. mortgage market, including changes in the supply and type of loan products;

n	 The success of our efforts to mitigate our losses;

n	 The success of our strategy to transfer mortgage credit risk;

n	 Our ability to maintain adequate liquidity to fund our operations;

n	 Our ability to maintain the security and resiliency of our operational systems and infrastructure, including against 

cybersecurity incidents or other security incidents, whether due to insider error or malfeasance or system errors or 

vulnerabilities in our or our third parties' systems;

n	 Our ability to effectively execute our business strategies, implement significant changes, and improve efficiency;

n	 The adequacy of our risk management framework, including the adequacy of our regulatory capital framework prescribed 

by FHFA and internal models for measuring risk;

n	 Our ability to manage mortgage credit risk, including the effect of changes in underwriting and servicing practices;

n	 Our ability to limit or manage our economic exposure and GAAP earnings exposure to interest-rate volatility and spread 

volatility, including the availability of derivative financial instruments needed for interest-rate risk management purposes 

and our ability to apply hedge accounting;

n	 Our operational ability to issue new securities, make timely and correct payments on securities, and provide initial and 

ongoing disclosures;

n	 Our reliance on CSS and the CSP for the operation of the majority of our Single-Family securitization activities, limits on our 

influence over CSS Board decisions, and any additional changes FHFA may require in our relationship with, or support of, 

CSS;

n	 Performance of and changes in the methodologies, models, assumptions, and estimates we use to prepare our financial 

statements, make business decisions, and manage risks;

n	 Changes in investor demand for our debt or mortgage-related securities;

n	 Our ability to maintain market acceptance of the UMBS, including our ability to maintain alignment of the prepayment 

speeds and pricing performance of our and Fannie Mae's respective UMBS;

Introduction Forward-Looking Statements

FREDDIE MAC | 2023 Form 10-K 11
n	 Changes in the practices of loan originators, servicers, investors, and other participants in the secondary mortgage market; 

n	 Competition from other market participants, which could affect the pricing we offer for our products, the credit 

characteristics of the loans we purchase, and our ability to meet our affordable housing goals and other mandated 

activities; 

n	 The adverse consequences on our business and operations that may occur from the discontinuance of LIBOR and the 

transition to SOFR as the replacement;

n	 The availability of critical third parties, or their vendors and other business partners, to deliver products or services, or to 

manage risks, including cybersecurity risk, effectively;

n	 The occurrence of a catastrophic event or significant climate change effects in areas in which our offices, significant 

portions of our total mortgage portfolio, or the offices of critical third parties are located, and for which we may be 

uninsured or significantly underinsured; and

n	Other factors and assumptions described in this Form 10-K, including in the MD&A section.

Forward-looking statements are made only as of the date of this Form 10-K, and we undertake no obligation to update any 

forward-looking statements we make to reflect events or circumstances occurring after the date of this Form 10-K.

Introduction Forward-Looking Statements

FREDDIE MAC | 2023 Form 10-K 12
Management's Discussion and Analysis of 

Financial Condition and Results of Operations

HOUSING AND MORTGAGE MARKET CONDITIONS

The following charts present certain housing and mortgage market indicators that can significantly affect our business and 

financial results. Certain market and macroeconomic prior period data have been updated to reflect revised historical data. For 

additional information on the effect of these indicators on our business and financial results, see MD&A – Consolidated 

Results of Operations and MD&A – Our Business Segments.

Single-Family

 U.S. Single-Family Home Sales and House Prices 

___ 

6,023 6,462 6,891

5,671

4,758

5,340 5,640 6,120 5,030 4,090

683 822 771

641

668

4.4%

11.5%

18.1%

4.9% 6.6%

Sales of existing homes (units in thousands)

Sales of new homes (units in thousands)

Single-family house price growth rate

2019 2020 2021 2022 2023

Sources: National Association of Realtors, U.S. Census Bureau, and Freddie Mac 

House Price Index (seasonally adjusted annual rate).

U.S. Single-Family Mortgage Originations 

___(UPB in billions)

$2,325

$4,100 $4,440

$2,325

$1,380

3.74%

2.67% 3.11%

6.42% 6.61%

U.S. single-family originations

30-year PMMS rate

2019 2020 2021 2022 2023

Source: Inside Mortgage Finance.

Single-Family Serious Delinquency Rates

 as of December 31,

1.81%

5.16%

2.83%

1.89%

1.52%

0.63%

2.64%

1.12%

0.66% 0.55%

Total mortgage market

Freddie Mac

2019 2020 2021 2022 2023

Source: National Delinquency Survey from the Mortgage Bankers Association. 

For 2023, the total mortgage market rate is as of September 30, 2023 (latest 

available information). 

Single-Family Mortgage Debt Outstanding 

(UPB in trillions)

$2.0 $2.3 $2.8 $3.0 $3.0

$11.2 $11.7

$12.8 $13.6 $13.9

Freddie Mac Single-Family mortgage portfolio

U.S. single-family mortgage debt outstanding

2019 2020 2021 2022 2023

Source: Freddie Mac and Federal Reserve Financial Accounts of the United 

States of America. For 2023, the U.S. single-family mortgage debt outstanding 

balance is as of September 30, 2023 (latest available information).

Management's Discussion and Analysis Housing and Mortgage Market Conditions 

FREDDIE MAC | 2023 Form 10-K 13
Multifamily

Apartment Vacancy Rates and Change in Effective Rents 

4.7% 5.4% 4.9% 4.9% 5.4%

3.5%

(2.7)%

12.9% 10.1%

(1.7)%

3.1%

Apartment vacancy rates (as of December 31)

Change in effective rents (for the year 

ended December 31)

Annual long-term effective rent growth 

(2000-2023)

2019 2020 2021 2022 2023

Source: Reis.

Multifamily Property Price Growth Rate

8.8%

7.0%

22.0%

0.4%

(8.4)%

2019 2020 2021 2022 2023

Source: Real Capital Analytics Commercial Property Price Index (RCA CPPI).

Multifamily Delinquency Rates as of December 31,

0.08% 0.16% 0.08% 0.12%

0.28%

0.91%

1.95%

1.41%

0.84%

0.57%

0.11%

0.27% 0.25% 0.17%

0.29%

Freddie Mac (60+ day)

Multifamily CMBS market (60+ day)

FDIC insured institutions (90+ day)

2019 2020 2021 2022 2023

Source: Freddie Mac, FDIC Quarterly Banking Profile, Intex Solutions, Inc., and 

Wells Fargo Securities (Multifamily CMBS conduit market, excluding REOs). For 

2023, the delinquency rate for FDIC insured institutions is as of September 30, 

2023 (latest available information).

Multifamily Mortgage Debt Outstanding

(UPB in billions)

$341 $388 $415 $429 $441

$1,622 $1,755

$1,910

$2,075 $2,164

Freddie Mac Multifamily mortgage portfolio

U.S. multifamily mortgage debt outstanding

2019 2020 2021 2022 2023

Source: Freddie Mac and Federal Reserve Financial Accounts of the United States 

of America. For 2023, the U.S. multifamily mortgage debt outstanding balance is 

as of September 30, 2023 (latest available information).

Management's Discussion and Analysis Housing and Mortgage Market Conditions

FREDDIE MAC | 2023 Form 10-K 14
CONSOLIDATED RESULTS OF OPERATIONS

This discussion of our consolidated results of operations should be read in conjunction with our consolidated financial 

statements and accompanying notes. Our financial results and business volumes could be negatively affected by adverse 

changes in the housing market or economic conditions, including volatility and stress within the banking sector and the 

measures governments and financial services companies take in response. Stress in U.S. regional banks and non-depository 

institutions could drive elevated counterparty credit risk and indirect risk due to financing or banking relationships that our 

counterparties have with the affected banking organizations. We could also experience declines in liquidity in the markets for 

our securities as a result of any such adverse changes or regulatory responses to adverse changes. See Risk Factors for 

additional information.

The table below compares our consolidated results of operations for the past three years. 

Table 1 - Summary of Consolidated Statements of Income and Comprehensive Income

Year Over Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Net interest income $18,542 $18,005 $17,580 $537 3 % $425 2 %

Non-interest income 2,687 3,259 4,371 (572) (18) (1,112) (25) 

Net revenues 21,229 21,264 21,951 (35) — (687) (3) 

(Provision) benefit for credit losses 872 (1,841) 1,041 2,713 147 (2,882) (277) 

Non-interest expense (8,902) (7,819) (7,793) (1,083) (14) (26) — 

Income before income tax expense 13,199 11,604 15,199 1,595 14 (3,595) (24) 

Income tax expense (2,661) (2,277) (3,090) (384) (17) 813 26 

Net income 10,538 9,327 12,109 1,211 13 (2,782) (23) 

Other comprehensive income (loss), 

net of taxes and reclassification adjustments 166 (342) (489) 508 149 147 30 

Comprehensive income $10,704 $8,985 $11,620 $1,719 19 % ($2,635) (23) %

See MD&A - Critical Accounting Estimates for information concerning certain significant accounting policies and 

estimates applied in determining our reported results of operations and Note 1 for a summary of our accounting policies and 

the related notes in which information about them can be found.

Net Revenues

Net Interest Income

Net interest income primarily consists of guarantee net interest income in Single-Family. We consolidate most of our SingleFamily securitization trusts and, therefore, we recognize the loans held by the trust and the debt securities issued by the trust 

on our consolidated balance sheets. The difference between the interest income on these loans and the interest expense on the 

related debt securities primarily represents the guarantee fees we receive as compensation for our guarantee of the principal 

and interest payments of the issued debt securities. Guarantee net interest income includes two components: 

n	 Contractual net interest income, which represents the ongoing monthly guarantee fee we receive for managing the credit 

risk associated with mortgage loans held by consolidated trusts, including the legislated guarantee fees that we are 

required to remit to Treasury and

n	 Deferred fee income, which primarily consists of recognition of premiums and discounts on mortgage loans and debt of 

consolidated trusts and the fees that we receive or pay when we acquire single-family loans. These amounts are 

recognized in net interest income based on the effective yield over the contractual life of the associated financial 

instrument and may vary significantly from period to period, primarily based on changes in actual prepayments on the 

underlying loans. 

Net interest income also includes investments net interest income, which primarily consists of the difference between the 

interest income earned on the assets in our investments portfolio and the interest expense incurred on the liabilities used to 

fund those assets, and the impact on net interest income from hedge accounting, which primarily consists of amortization of 

previously deferred hedge accounting basis adjustments and the earnings mismatch on qualifying fair value hedge 

relationships. See Note 9 for additional information on hedge accounting. 

Management's Discussion and Analysis Consolidated Results of Operations 

FREDDIE MAC | 2023 Form 10-K 15
The table below presents the components of net interest income.

Table 2 - Components of Net Interest Income

Year Over Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Guarantee net interest income:

Contractual net interest income $14,753 $14,020 $11,038 $733 5% $2,982 27%

Deferred fee income 1,012 2,984 4,969 (1,972) (66) (1,985) (40)

Total guarantee net interest income 15,765 17,004 16,007 (1,239) (7) 997 6

Investments net interest income 6,280 3,417 3,068 2,863 84 349 11

Impact on net interest income from hedge 

accounting (3,503) (2,416) (1,495) (1,087) (45) (921) (62)

Net interest income $18,542 $18,005 $17,580 $537 3% $425 2%

Key Drivers:

n Guarantee net interest income

l	 2023 vs. 2022 - Decreased primarily due to a decline in deferred fee income due to slower prepayments as a result of 

higher mortgage interest rates, partially offset by continued mortgage portfolio growth.

l	 2022 vs. 2021 - Increased primarily due to continued mortgage portfolio growth and higher average portfolio 

guarantee fee rates, partially offset by lower deferred fee income due to slower prepayments as a result of higher 

mortgage interest rates.

n Investments net interest income

l	 2023 vs. 2022 and 2022 vs. 2021 - Increased primarily due to higher returns on securities purchased under 

agreements to resell as a result of higher short-term interest rates.

n Impact on net interest income from hedge accounting

l	 2023 vs. 2022 - Expense increased primarily due to higher interest expense on derivatives in hedge relationships as a 

result of higher interest rates, partially offset by a favorable change in the earnings mismatch on qualifying fair value 

hedge relationships.

l	 2022 vs. 2021 - Expense increased primarily due to higher interest expense on derivatives in hedging relationships as 

a result of higher interest rates. This increase was partially offset by lower amortization of hedge accounting-related 

basis adjustments driven by a lower unamortized balance.

Management's Discussion and Analysis Consolidated Results of Operations 

FREDDIE MAC | 2023 Form 10-K 16
Net Interest Yield Analysis

The table below presents an analysis of interest-earning assets and interest-bearing liabilities. To calculate the average 

balances, we generally use a daily weighted average of amortized cost. When daily average balance information is not 

available, such as for mortgage loans, we use monthly averages. Mortgage loans on non-accrual status, where interest income 

is generally recognized when collected, are included in the average balances. 

Table 3 - Analysis of Net Interest Yield

Year Ended December 31,

2023 2022 2021

(Dollars in millions)

Average

Balance

Interest

Income

(Expense)

Average

Rate

Average

Balance

Interest

Income

(Expense)

Average

Rate

Average

Balance

Interest

Income

(Expense)

Average

Rate

Interest-earning assets:

Cash and cash equivalents $13,466 $532 3.95 % $14,705 $179 1.22 % $62,042 $8 0.01 %

Securities purchased under 

agreements to resell 118,579 6,135 5.17 97,260 1,718 1.77 75,425 48 0.06 

Investment securities 40,481 1,571 3.88 47,612 1,640 3.44 56,211 2,261 4.02 

Mortgage loans(1) 3,061,638 96,985 3.17 2,967,147 79,826 2.69 2,622,952 59,130 2.25 

Other assets 2,479 140 5.65 4,104 95 2.31 6,049 80 1.32 

Total interest-earning assets 3,236,643 105,363 3.25 3,130,828 83,458 2.67 2,822,679 61,527 2.18 

Interest-bearing liabilities:

Debt of consolidated trusts 2,997,841 (76,703) (2.56) 2,911,235 (61,404) (2.11) 2,538,757 (42,209) (1.66) 

Debt of Freddie Mac 192,510 (10,118) (5.26) 178,757 (4,049) (2.27) 237,572 (1,738) (0.73) 

Total interest-bearing liabilities 3,190,351 (86,821) (2.72) 3,089,992 (65,453) (2.12) 2,776,329 (43,947) (1.58) 

Impact of net non-interest-bearing 

funding 46,292 — 0.04 40,836 — 0.03 46,350 — 0.02 

Total funding of interestearning assets 3,236,643 (86,821) (2.68) 3,130,828 (65,453) (2.09) 2,822,679 (43,947) (1.56) 

Net interest income/yield $18,542 0.57 % $18,005 0.58 % $17,580 0.62 %

(1) Loan fees included in interest income were $1.1 billion, $1.5 billion, and $3.1 billion during 2023, 2022, and 2021, respectively.

Management's Discussion and Analysis Consolidated Results of Operations 

FREDDIE MAC | 2023 Form 10-K 17
Net Interest Income Rate / Volume Analysis

The table below presents a rate and volume analysis of our net interest income. Our net interest income reflects the reversal of 

interest income accrued, net of interest received on a cash basis, related to mortgage loans that are on non-accrual status.

Table 4 - Net Interest Income Rate / Volume Analysis

Variance Analysis

2023 vs. 2022 2022 vs. 2021

(In millions) Rate(1) Volume(1)

Total 

Change Rate(1) Volume(1)

Total 

Change

Interest-earning assets:

Cash and cash equivalents $361 ($8) $353 $180 ($8) $172 

Securities purchased under agreements to resell 3,775 642 4,417 1,649 21 1,670 

Investment securities 127 (196) (69) 292 (913) (621) 

Mortgage loans 14,505 2,654 17,159 12,572 8,124 20,696 

Other assets 98 (53) 45 45 (31) 14 

Total interest-earning assets 18,866 3,039 21,905 14,738 7,193 21,931 

Interest-bearing liabilities:

Debt of consolidated trusts (13,058) (2,241) (15,299) (11,448) (7,747) (19,195) 

Debt of Freddie Mac (5,726) (343) (6,069) (2,925) 614 (2,311) 

Total interest-bearing liabilities (18,784) (2,584) (21,368) (14,373) (7,133) (21,506) 

Net interest income $82 $455 $537 $365 $60 $425 

(1) The total change variances are allocated between rate and volume based on the relative size of each variance.

Non-Interest Income

Non-interest income primarily consists of guarantee income and investment gains, net.

Guarantee income relates primarily to our Multifamily senior subordinate securitizations. We do not consolidate the trusts used 

in these transactions and therefore do not recognize the loans held by the trust or the debt securities issued by the trust on our 

consolidated balance sheets. Rather, we separately account for our guarantee to the trust and recognize the revenue from our 

guarantee as guarantee income. Guarantee income includes the amortization of our guarantee obligation as we are released 

from risk under our guarantee and changes in fair value of our guarantee assets, net of contractual guarantee fees received.

Net investment gains primarily consist of the gains on sale of mortgage loans from our multifamily loan purchase and 

securitization activities. Because we do not consolidate our Multifamily senior subordinate securitization trusts, we account for 

these transactions as sales of the underlying loans. Net investment gains also include revenues from sales of single-family 

delinquent and reperforming loans and gains and losses on investment securities. These amounts are shown net of gains and 

losses from the related debt funding and interest-rate risk management activities, as applicable. Net investment gains can vary 

significantly from period-to-period based on the pricing of our new multifamily loan purchases, the volume and nature of our 

investment, funding, and hedging activities, and changes in market conditions, such as interest rates and market spreads.

Derivative instruments are a key component of our interest-rate risk management strategy. We use derivatives to economically 

hedge the interest-rate risk of our financial assets and liabilities and manage our exposure to interest-rate risk on an economic 

basis to a low level as measured by our models. We align our derivative portfolio to economically hedge the changing duration 

of our assets and liabilities and apply fair value hedge accounting to certain single-family mortgage loans and debt to reduce 

our GAAP earnings variability. As a result, interest-rate-related fair value gains and losses that we recognize on financial 

instruments that we measure at fair value generally have offsetting impacts from the derivative instruments that we use to 

economically hedge interest-rate risk. For additional information about our interest-rate risk management activities and the 

sensitivity of reported GAAP earnings to those activities, see MD&A - Risk Management - Market Risk. For additional 

information on derivative instruments, see Note 9.

Management's Discussion and Analysis Consolidated Results of Operations 

FREDDIE MAC | 2023 Form 10-K 18
The table below presents the components of non-interest income.

Table 5 - Components of Non-Interest Income

Year Over Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Guarantee income $1,615 $783 $1,032 $832 106 % ($249) (24) %

Investment gains, net 707 1,969 2,746 (1,262) (64) (777) (28) 

Other income 365 507 593 (142) (28) (86) (15) 

Non-interest income $2,687 $3,259 $4,371 ($572) (18) % ($1,112) (25) %

Key Drivers: 

n	 Guarantee income

l	 2023 vs. 2022 - Increased primarily due to lower fair value losses on guarantee assets as a result of lower mediumterm interest rates.

l	 2022 vs. 2021 - Decreased primarily due to higher fair value losses on guarantee assets as a result of higher interest 

rates.

n	 Investment gains, net

l	 2023 vs. 2022 - Net investment gains declined, as the prior year period included spread-related gains on 

commitments to hedge the Single-Family securitization pipeline that did not recur in 2023.

l 2022 vs. 2021 - Decreased primarily due to lower gains in Multifamily driven by spread widening as well as a decline in 

revenue from held-for-sale loan purchase and securitization activity as a result of lower volumes and lower margins. 

This decrease was partially offset by spread-related gains on commitments to hedge the Single-Family securitization 

pipeline in 2022.

(Provision) Benefit for Credit Losses

Our provision for credit losses relates primarily to single-family loans held-for-investment and can vary substantially from period 

to period based on a number of factors, such as changes in house prices and house price forecasts, changes in interest rates, 

borrower prepayments and delinquency rates, events such as pandemics, the type and volume of our loss mitigation and 

foreclosure activity, and government assistance provided to borrowers. See MD&A - Critical Accounting Estimates for 

additional information.

The table below presents the components of provision for credit losses.

Table 6 - (Provision) Benefit for Credit Losses

Year Over Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Single-Family $1,172 ($1,772) $919 $2,944 166 % ($2,691) (293) %

Multifamily (300) (69) 122 (231) (335) (191) (157) 

(Provision) benefit for credit losses $872 ($1,841) $1,041 $2,713 147 % ($2,882) (277) %

Key Drivers:

n	 2023 vs. 2022 - The benefit for credit losses for 2023 was primarily driven by a credit reserve release in Single-Family due 

to improvements in house prices. 

n	 2022 vs. 2021 - The provision for credit losses for 2022 was primarily driven by a credit reserve build in Single-Family due 

to deterioration in house prices. 

Management's Discussion and Analysis Consolidated Results of Operations 

FREDDIE MAC | 2023 Form 10-K 19
Non-Interest Expense 

Non-interest expense consists of salaries and employee benefits, credit enhancement expense and benefit for credit 

enhancement recoveries, legislative assessments expense, and other expenses we incur to run our business. 

Credit enhancement expense includes the premiums and other costs related to certain CRT transactions that are accounted for 

as freestanding contracts, primarily STACR and ACIS transactions in Single-Family. Benefit for credit enhancement recoveries 

primarily represents changes in expected recoveries from those transactions. We recognize expected recoveries from 

freestanding credit enhancements at the same time that we recognize an allowance for credit losses on the covered loans, 

measured on the same basis as the allowance for credit losses on the covered loans.

Legislative assessments expense relates to two fees: (1) the legislated guarantee fees on single-family loans that we are 

required to remit to Treasury and (2) the fee imposed on Freddie Mac's total new business purchases that is allocated to certain 

affordable housing funds and remitted to Treasury and HUD. The legislated guarantee fees relate to the 10 bps increase in 

guarantee fees implemented at the direction of FHFA pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011 as 

extended by the Infrastructure Investment and Jobs Act of 2021. The affordable housing funds allocation relates to the GSE Act 

requirement to set aside in each fiscal year an amount equal to 4.2 bps of each dollar of total new business purchases, and pay 

such amount to certain housing funds. We are prohibited from passing through the costs of the affordable housing funds 

allocation to the originators of the loans that we purchase.

The table below presents the components of non-interest expense.

Table 7 - Components of Non-Interest Expense

Year Over Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Salaries and employee benefits ($1,606) ($1,509) ($1,398) ($97) (6) % ($111) (8) %

Credit enhancement expense (2,339) (2,118) (1,518) (221) (10) (600) (40) 

Benefit for (decrease in) credit enhancement 

recoveries (189) 236 (542) (425) (180) 778 144 

Legislative assessments expense:

Legislated guarantee fees expense (2,856) (2,751) (2,343) (105) (4) (408) (17) 

Affordable housing funds allocation (146) (258) (539) 112 43 281 52 

Total legislative assessments expense (3,002) (3,009) (2,882) 7 — (127) (4) 

Other expense (1,766) (1,419) (1,453) (347) (24) 34 2 

Non-interest expense ($8,902) ($7,819) ($7,793) ($1,083) (14) % ($26) — %

Key Drivers:

n	 Credit enhancement expense 

l	 2023 vs. 2022 - Increased primarily due to a higher volume of outstanding cumulative CRT transactions and higher 

losses on STACR Trust note repurchases.

l 2022 vs. 2021 - Increased primarily due to a higher volume of outstanding cumulative CRT transactions and higher 

spreads on transactions executed during 2022.

n	 Benefit for (decrease in) credit enhancement recoveries

l	 2023 vs. 2022 - Decreased primarily due to a decrease in expected credit losses on covered loans.

l	 2022 vs 2021 - Increased primarily due to an increase in expected credit losses on covered loans.

n	 Other expense

l	 2023 vs. 2022 - Increased primarily due to an accrual of $0.3 billion for an adverse judgment at trial. See Note 17 for 

additional information regarding our legal proceedings.

Management's Discussion and Analysis Consolidated Results of Operations 

FREDDIE MAC | 2023 Form 10-K 20
CONSOLIDATED BALANCE SHEETS ANALYSIS

The table below compares our summarized consolidated balance sheets.

Table 8 - Summarized Consolidated Balance Sheets

December 31, Year Over Year Change

(Dollars in millions) 2023 2022 $ % 

Assets:

Cash and cash equivalents $6,019 $6,360 ($341) (5) %

Securities purchased under agreements to resell 95,148 87,295 7,853 9 

Investment securities, at fair value 43,275 38,701 4,574 12 

Mortgage loans held-for-sale 12,941 12,197 744 6 

Mortgage loans held-for-investment 3,083,665 3,022,318 61,347 2 

Accrued interest receivable, net 9,925 8,529 1,396 16 

Deferred tax assets, net 4,076 5,777 (1,701) (29) 

Other assets 25,927 27,156 (1,229) (5) 

Total assets $3,280,976 $3,208,333 $72,643 2 %

Liabilities and Equity:

Liabilities:

Accrued interest payable $8,812 $7,309 $1,503 21 %

Debt 3,208,346 3,145,832 62,514 2 

Other liabilities 16,096 18,174 (2,078) (11) 

Total liabilities 3,233,254 3,171,315 61,939 2 

Total equity 47,722 37,018 10,704 29 

Total liabilities and equity $3,280,976 $3,208,333 $72,643 2 %

Key Drivers:

As of December 31, 2023 compared to December 31, 2022:

n	 Securities purchased under agreements to resell increased primarily due to investment of retained earnings.

n	 Investment securities increased primarily due to an increase in purchases of U.S. Treasury securities.

n	 Mortgage loans held-for-investment increased primarily due to growth in our Single-Family mortgage portfolio.

n	 Debt increased primarily due to an increase in debt of consolidated trusts driven by growth in our Single-Family mortgage 

portfolio.

Management's Discussion and Analysis Consolidated Balance Sheets Analysis

FREDDIE MAC | 2023 Form 10-K 21
OUR PORTFOLIOS

Mortgage Portfolio

Our mortgage portfolio includes assets held by both business segments and consists of mortgage loans held-for-investment, 

mortgage loans held-for-sale, and mortgage loans underlying our mortgage-related guarantees. See Note 4 for additional 

information on our mortgage loans and Note 5 for additional information on our mortgage-related guarantees.

The table below presents the UPB of our mortgage portfolio by segment.

Table 9 - Mortgage Portfolio

December 31, 2023 December 31, 2022

(In millions) Single-Family Multifamily Total Single-Family Multifamily Total

Mortgage loans held-for-investment:

By consolidated trusts $2,963,296 $47,433 $3,010,729 $2,907,999 $30,574 $2,938,573

By Freddie Mac 33,213 11,770 44,983 33,506 17,805 51,311

Total mortgage loans held-for-investment 2,996,509 59,203 3,055,712 2,941,505 48,379 2,989,884 

Mortgage loans held-for-sale 3,527 9,905 13,432 3,564 9,544 13,108 

Total mortgage loans 3,000,036 69,108 3,069,144 2,945,069 57,923 3,002,992 

Mortgage-related guarantees:

Mortgage loans held by nonconsolidated trusts 30,182 360,928 391,110 31,500 360,869 392,369 

Other mortgage-related guarantees 8,692 10,761 19,453 9,476 10,510 19,986 

Total mortgage-related guarantees 38,874 371,689 410,563 40,976 371,379 412,355 

Total mortgage portfolio $3,038,910 $440,797 $3,479,707 $2,986,045 $429,302 $3,415,347 

Guaranteed mortgage-related securities:

Issued by consolidated trusts $2,970,707 $47,436 $3,018,143 $2,916,038 $30,813 $2,946,851

Issued by non-consolidated trusts 24,600 321,262 345,862 25,772 319,117 344,889

Total guaranteed mortgage-related securities $2,995,307 $368,698 $3,364,005 $2,941,810 $349,930 $3,291,740 

Investments Portfolio

Our investments portfolio consists of our mortgage-related investments portfolio and other investments portfolio.

Mortgage-Related Investments Portfolio

We primarily use our mortgage-related investments portfolio to provide liquidity to the mortgage market and support our loss 

mitigation activities. Our mortgage-related investments portfolio includes assets held by both business segments and consists 

of unsecuritized mortgage loans and mortgage-related securities. We primarily invest in mortgage-related securities that we 

issue or guarantee, although we may also invest in other agency mortgage-related securities.

The Purchase Agreement limits the size of our mortgage-related investments portfolio to a maximum amount of $225 billion 

effective December 31, 2022. The calculation of mortgage assets subject to the Purchase Agreement cap includes the UPB of 

mortgage assets and 10% of the notional value of interest-only securities. We are also subject to additional limitations on the 

size and composition of our mortgage-related investments portfolio pursuant to FHFA guidance. For additional information on 

the restrictions on our mortgage-related investments portfolio, see MD&A - Conservatorship and Related Matters.

Management's Discussion and Analysis Our Portfolios

FREDDIE MAC | 2023 Form 10-K 22
The table below presents the details of our mortgage-related investments portfolio.

Table 10 - Mortgage-Related Investments Portfolio

December 31, 2023 December 31, 2022

(In millions) Single-Family Multifamily Total Single-Family Multifamily Total

Unsecuritized mortgage loans:

Securitization pipeline loans $8,225 $15,197 $23,422 $10,093 $22,546 $32,639 

Other loans(1) 28,515 6,478 34,993 26,977 4,803 31,780

Total unsecuritized mortgage loans 36,740 21,675 58,415 37,070 27,349 64,419

Mortgage-related securities:

Investment securities 2,667 4,613 7,280 3,440 6,396 9,836

Debt of consolidated trusts 18,639 660 19,299 17,939 536 18,475

Total mortgage-related securities 21,306 5,273 26,579 21,379 6,932 28,311

Mortgage-related investments portfolio $58,046 $26,948 $84,994 $58,449 $34,281 $92,730 

10% of notional amount of interest-only 

securities $22,186 $21,758

Mortgage-related investments portfolio for 

purposes of Purchase Agreement cap 107,180 114,488

(1) Primarily includes delinquent and modified single-family loans that we have purchased from securitization trusts.

Other Investments Portfolio

Our other investments portfolio, which includes the liquidity and contingency operating portfolio, is primarily used for short-term 

liquidity management, collateral management, and asset and liability management. The assets in the other investments portfolio 

are primarily allocated to the Single-Family segment. 

The table below presents the details of our other investments portfolio.

Table 11 - Other Investments Portfolio

December 31, 2023 December 31, 2022

(In millions)

Liquidity and 

Contingency 

Operating 

Portfolio

Custodial 

Account Other

Total Other 

Investments 

Portfolio(1)

Liquidity and 

Contingency 

Operating 

Portfolio

Custodial 

Account Other

Total Other 

Investments 

Portfolio(1)

Cash and cash equivalents $5,041 $890 $88 $6,019 $5,652 $611 $97 $6,360 

Securities purchased under 

agreements to resell 94,904 9,396 1,093 105,393 88,499 9,703 1,084 99,286 

Non-mortgage related securities(2) 24,153 — 6,119 30,272 20,188 — 3,645 23,833 

Other assets — — 5,555 5,555 — — 4,565 4,565 

Other investments portfolio $124,098 $10,286 $12,855 $147,239 $114,339 $10,314 $9,391 $134,044 

(1) Represents carrying value.

(2) Primarily consists of U.S. Treasury securities.

Management's Discussion and Analysis Our Portfolios

FREDDIE MAC | 2023 Form 10-K 23
OUR BUSINESS SEGMENTS

As shown in the table below, we have two reportable segments, which are based on the way we manage our business. See 

Note 14 for additional financial information for our reportable segments.

Segment Description

Single-Family

Reflects results from our purchase, securitization, and guarantee of single-family loans, our investments in 

single-family loans and mortgage-related securities, the management of Single-Family mortgage credit risk and 

market risk, and any results of our treasury function that are not allocated to each segment.

Multifamily

Reflects results from our purchase, securitization, and guarantee of multifamily loans, our investments in 

multifamily loans and mortgage-related securities, and the management of Multifamily mortgage credit risk and 

market risk.

Segment Net Revenues and Net Income

The graphs below show our net revenues and net income by segment.

Segment Net Revenues

(In billions)

$22.0 $21.3 $21.2

$17.2 $18.8 $18.3

$4.8 $2.5 $3.0

Single-Family Multifamily

2021 2022 2023

Segment Net Income

(In billions) 

$12.1

$9.3

$10.5

$8.8 $7.9 $9.0

$3.3

$1.4

$1.5

Single-Family Multifamily

2021 2022 2023

 

Management's Discussion and Analysis Our Business Segments

FREDDIE MAC | 2023 Form 10-K 24
Single-Family

Business Overview 

Our Single-Family segment provides liquidity and support to the single-family mortgage market through a variety of activities 

that include the purchase, securitization, and guarantee of single-family loans originated by lenders. Central to our mission is 

our commitment to helping families attain affordable and sustainable housing and to increasing equitable access to housing 

finance.

The U.S. residential mortgage market consists of a primary mortgage market that links homebuyers and lenders, and a 

secondary mortgage market that links lenders and investors. The size of the U.S. residential mortgage market is affected by 

many factors, including changes in interest rates, unemployment rates, homeownership rates, house prices, the supply of 

housing, lender preferences regarding credit risk, and borrower preferences regarding mortgage debt.

In accordance with our Charter, we participate in the secondary mortgage market. The mix of loan products we purchase is 

affected by several factors, including the volume of loans meeting the requirements of our Charter, the volume meeting our risk 

appetite and originated according to our purchase standards, and the loan purchase and securitization activity of other financial 

institutions.

Our primary business model is to acquire loans that lenders originate and then pool those loans into guaranteed mortgagerelated securities that transfer interest-rate, prepayment, and liquidity risk to investors and can be sold in the capital markets. 

We consolidate most of our Single-Family securitization trusts and, therefore, we recognize the loans held by such trusts and 

the debt securities issued by such trusts on our balance sheet and recognize the guarantee fees we receive as net interest 

income. To reduce our exposure under our guarantees, we transfer credit risk on a portion of our Single-Family mortgage 

portfolio to the private market in certain instances. The returns we generate from our business activities are primarily derived 

from the guarantee fees we receive in exchange for providing our guarantee of the principal and interest payments of the issued 

mortgage-related securities.

The diagram below illustrates our primary business model.

Products and Activities

Our Single-Family business primarily consists of activities related to providing market liquidity by purchasing and securitizing 

mortgage loans and issuing guaranteed mortgage-related securities, transferring credit risk, performing loss mitigation 

activities, and investing in mortgage-related and other investments. Certain of our loan products and programs have been 

designed to address affordability challenges, particularly in underserved markets, while others aim to support housing supply 

and sustainability efforts.

Loan Purchase, Securitization, and Guarantee Activities

Guarantor Swap Transactions

One of the primary ways we acquire mortgage loans and provide liquidity to our Single-Family lender customers is by 

securitizing loans into guaranteed mortgage-related securities in guarantor swap transactions. Our largest guarantor swap 

customers are primarily large mortgage banking companies and commercial banks. In these transactions, we purchase 

mortgage loans from our customers in exchange for a security backed by those same loans, as shown in the diagram below:

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 25
Cash Window Transactions

In addition to guarantor swap transactions, another primary way we acquire loans and provide liquidity to our Single-Family 

lender customers is by purchasing loans for aggregation in our securitization pipeline through our cash window. In these 

transactions, we purchase mortgage loans from our customers in exchange for cash consideration. We enter into forward 

commitments with lenders in advance of the loan purchase date to purchase loans through our cash window at a fixed price for 

our securitization pipeline, allowing lenders to offer borrowers the opportunity to lock in the interest rate on the mortgage prior 

to loan origination. We refer to the loan as being in our securitization pipeline for the period of time between loan purchase and 

securitization.

We typically economically hedge the market risk exposure of our securitization pipeline by entering into forward sale 

commitments and obtain permanent financing for the loans in our securitization pipeline after a short aggregation period by 

securitizing the loans into guaranteed mortgage-related securities and selling the resulting securities to third-party investors, 

typically through cash auctions. We may also retain certain of these securities in our mortgage-related investments portfolio 

prior to selling them to third parties.

The Purchase Agreement requires us to purchase loans for cash consideration; operate the cash window with nondiscriminatory pricing; and comply with directives, regulations, restrictions, and other requirements prescribed by FHFA related 

to equitable secondary market access by community lenders. The Purchase Agreement also includes restrictions on the volume 

of our cash window activities, but these requirements have been suspended until six months after Treasury notifies us that such 

suspension has been terminated. We manage cash window activities in accordance with our risk limits and limitations imposed 

by FHFA. For additional information about the Purchase Agreement, see MD&A - Conservatorship and Related Matters.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 26
The diagram below shows the process for acquiring and securitizing loans in our cash window transactions.

Advances to Lenders

We also provide liquidity to certain lenders through our early funding programs, where we advance funds to lenders for 

mortgage loans prior to the loans being pooled and securitized generally through our guarantor swap transactions. In some 

cases, the early funded mortgages are ultimately delivered through cash window purchase transactions. We account for these 

transactions as advances that are fully collateralized by the mortgage loans and recognize the associated fees as interest 

income on the advances from the early funding date to the final settlement date.

Securitization Products

We offer the following types of securitization products to our customers.

Level 1 Securitization Products

We refer to the securities we issue in guarantor swap transactions and cash window securitizations as Level 1 Securitization 

Products, which are pass-through securities that represent undivided beneficial interests in trusts that hold pools of loans. 

We issue the following types of Level 1 Securitization Products:

n UMBS - Single-class pass-through securities issued through the CSP with a 55-day payment delay for TBA-eligible fixedrate mortgage loans. The UMBS is a single (common) security that is issued by either Fannie Mae or us. The UMBS market 

is designed to enhance the overall liquidity of TBA-eligible Freddie Mac and Fannie Mae securities by supporting their 

fungibility without regard to which company is the issuer. SIFMA permits UMBS TBA contracts to be settled by delivery of 

UMBS issued by either Freddie Mac or Fannie Mae under its good-delivery guidelines.

n 55-day MBS - Single-class pass-through securities issued through the CSP with a 55-day payment delay for non-TBAeligible fixed-rate mortgage loans.

n ARM PCs - Single-class pass-through securities with a 75-day payment delay for ARM products. We do not use the CSP 

to issue ARM PCs.

In prior years, we also issued Gold PCs, which were single-class pass-through securities with a 45-day payment delay for 

fixed-rate mortgage loans. We discontinued the issuance of Gold PCs in 2019. Existing Gold PCs that are not entirely 

resecuritized are eligible for exchange into UMBS (for TBA-eligible securities) or 55-day MBS (for non-TBA-eligible securities). 

All Level 1 Securitization Products we issue are backed only by mortgage loans that we have acquired. We offer (or previously 

offered) all of the above products through both guarantor swap and cash window programs. 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 27
We also periodically use Level 1 Securitization Products to securitize certain reperforming loans subsequent to purchasing 

them from the original securities pool, depending on market conditions, business strategy, credit risk considerations, and 

operational efficiency.

When we issue a Level 1 Securitization Product, we retain the credit risk of the underlying mortgage loans by guaranteeing the 

principal and interest payments of the issued securities and transfer the interest-rate, prepayment, and liquidity risks of those 

loans to the investors in the securities. For our fixed-rate Level 1 Securitization Products, we guarantee the timely payment of 

principal and interest. For our ARM PCs, we guarantee the timely payment of the weighted average coupon interest rate for the 

underlying loans, and we also guarantee the full and final payment of principal, but not the timely payment of principal. In 

exchange for our guarantee of Level 1 Securitization Products, we receive guarantee fees that are designed to be 

commensurate with the risks assumed and that we expect will, over the long-term, provide income that exceeds the creditrelated and administrative expenses on the underlying loans and also provide a return on the capital that would be needed to 

support the related credit risk. The guarantee fees charged on new acquisitions generally consist of:

n A contractual monthly fee paid as a percentage of the UPB of the underlying loan, including the legislated guarantee fees 

and

n Fees we receive or pay when we acquire a loan, which include credit fees and buy-up and buy-down fees. Credit fees are 

calculated based on credit risk factors such as the loan product type, loan purpose, LTV ratio, and credit score, and are 

charged to compensate us for higher levels of risk in some loan products. Buy-up and buy-down fees are payments made 

or received to buy up or buy down, respectively, the monthly contractual guarantee fee and are paid in conjunction with the 

formation of a security to provide for a uniform net coupon rate for the mortgage pool underlying the security.

In general, we must obtain FHFA's approval to implement significant across-the-board changes to our credit fees. In addition, 

from time to time, FHFA issues directives or guidance to us affecting the levels of guarantee fees that we may charge. For 

additional information on recent changes to pricing, see MD&A - Regulation and Supervision - Targeted Pricing 

Changes to Enterprise Pricing Framework.

In order to issue mortgage-related securities, we establish trusts pursuant to our Master Trust Agreements and place the 

mortgage loans in the trust, which issues securities backed by those mortgage loans. The servicer administers the collection of 

borrowers' payments on their loans and remits the collected funds to us. We administer the distribution of payments to the 

investors in the mortgage-related securities, net of any applicable guarantee fees. When we securitize mortgage loans using 

trusts, Freddie Mac typically functions in its capacity as depositor, guarantor, administrator, and trustee of the trusts. We 

consolidate our Single-Family Level 1 Securitization Product trusts and recognize the mortgage loans held and debt issued by 

those trusts on our consolidated balance sheets. The difference between the interest income on the loans and the interest 

expense on the debt primarily represents the guarantee fees we receive as compensation for our guarantee. This amount is 

referred to as guarantee net interest income.

When a borrower prepays a loan that we have securitized, the outstanding balance of the security owned by investors is 

reduced by the amount of the prepayment. If the borrower becomes delinquent, we continue to make the applicable payments 

to the investors in the mortgage-related securities pursuant to our guarantee until we purchase the loan out of the securitization 

trust. We have the option to purchase loans from the trust under certain circumstances (including certain levels of delinquency) 

at a purchase price equal to the current UPB of the loan, less any outstanding advances of principal that have been previously 

distributed. At the instruction of FHFA, we purchase loans from trusts when they reach 24 months of delinquency, except for 

loans that meet certain criteria (e.g., permanently modified or foreclosure referral), which may be purchased sooner. Many 

delinquent loans are purchased from trusts before they reach 24 months of delinquency under one of the exceptions provided. 

We must obtain FHFA’s approval to implement changes to our policy to purchase loans from trusts.

Other Securitization Products

We securitize certain seasoned loans in transactions where we issue guaranteed senior securities and unguaranteed 

subordinated securities. The collateral for these structures primarily consists of reperforming loans. The unguaranteed 

subordinated securities absorb first losses on the related loans. After securitization, we do not control the servicing, and the 

loans are not serviced in accordance with our Guide.

In prior years, we offered additional types of securitization products to our customers, including senior subordinate 

securitizations backed by recently originated loans and other securitization products collateralized by non-Freddie Mac 

mortgage-related securities. We no longer offer these products on a regular basis and have not entered into these types of 

transactions recently. 

Resecuritization Products

Resecuritization products represent beneficial interests in pools of Level 1 Securitization Products and certain other types of 

mortgage assets. We generally create these securities by using Level 1 Securitization Products or our previously issued 

resecuritization products as the underlying collateral. We leverage the issuance of these securities to expand the range of 

investors in our mortgage-related securities to include those seeking specific security attributes. Similar to our Level 1 

Securitization Products, we guarantee the payment of principal and interest to the investors in our resecuritization products. We 

do not charge a guarantee fee for these securities if the underlying collateral is already guaranteed by us since no additional 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 28
credit risk is introduced, although we typically receive a transaction fee as compensation for creating the security and future 

administrative responsibilities. We use the CSP for many of the securities administration activities for our resecuritization 

products.

We have the ability to commingle TBA-eligible Fannie Mae collateral in certain of our resecuritization products. When we 

resecuritize Fannie Mae securities, which are separately guaranteed by Fannie Mae, in our commingled resecuritization 

products, our guarantee covers timely payment of principal and interest on such products from the underlying Fannie Mae 

securities. If Fannie Mae were to fail to make a payment on a Fannie Mae security that we resecuritized, we would be 

responsible for making the payment. We are required to hold incremental capital for our guarantees of Fannie Mae securities 

under the ERCF. We also began to charge a fee for any commingled security issued on or after July 1, 2022. For additional 

information on the fees we charge for guaranteeing Fannie Mae securities, see MD&A – Regulation and Supervision -

Resecuritization Fee for New Issuances of Commingled Securities.

All of the cash flows from the collateral underlying our resecuritization products are generally passed through to investors in 

these securities. We do not issue resecuritization products that have concentrations of credit risk beyond those embedded in 

the underlying assets. In many of our resecuritization transactions, securities dealers or investors deliver mortgage assets in 

exchange for the resecuritization product. In certain cases, we may also transfer our own mortgage assets in exchange for the 

resecuritization product. The diagram below provides a general example of how we create resecuritization products.

We offer the following types of resecuritization products:

n Single-class resecuritization products - Involve the direct pass through of all cash flows of the underlying collateral to 

the beneficial interest holders and include:

l Supers - Resecuritizations of UMBS and certain other TBA-eligible mortgage securities. This structure allows 

commingling of Freddie Mac and Fannie Mae collateral, where newly issued or exchanged UMBS and Supers issued 

by us or Fannie Mae may be commingled to back Supers issued by us. Fannie Mae also issues Supers. Supers can be 

backed by:

– UMBS and/or other Supers issued by us or Fannie Mae; 

– Existing TBA-eligible Fannie Mae "MBS" and/or "Megas"; and/or 

– UMBS and Supers that we have issued in exchange for TBA-eligible PCs and Giant PCs that have been delivered 

to us in response to our offer to exchange 45-day payment delay securities for corresponding 55-day payment 

delay securities.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 29
l Giant MBS - Resecuritizations of:

– Newly issued 55-day MBS and/or Giant MBS and/or

– 55-day MBS and/or Giant MBS that we have issued in exchange for non-TBA-eligible PCs and non-TBA-eligible 

Giant PCs that have been delivered to us in response to our offer to exchange 45-day payment delay securities for 

corresponding 55-day payment delay securities.

l Giant PCs - Resecuritizations of previously issued PCs or Giant PCs. Although we no longer issue Gold PCs, existing 

Gold PCs may continue to be resecuritized into Giant PCs. In addition, ARM PCs may continue to be resecuritized into 

ARM Giant PCs. Fixed-rate Giant PCs are eligible for exchange into Supers (for TBA-eligible securities) or Giant MBS 

(for non-TBA-eligible securities). 

n Multiclass resecuritization products 

l REMICs - Resecuritizations of previously issued mortgage securities that divide all cash flows of the underlying 

collateral into two or more classes of varying maturities, payment priorities, and coupons. This structure allows 

commingling of TBA-eligible Freddie Mac and Fannie Mae collateral.

l Strips - Resecuritizations of previously issued Level 1 Securitization Products or single-class resecuritization products 

and issuance of stripped securities, including principal-only and interest-only securities or floating rate and inverse 

floating rate securities, backed by the cash flows from the underlying collateral. This structure allows commingling of 

TBA-eligible Freddie Mac and Fannie Mae collateral.

Other Mortgage-Related Guarantees

We previously offered a guarantee on mortgage assets held by third parties, in exchange for guarantee fees, without 

securitizing those assets. These arrangements, referred to as long-term standby commitments, have obligated us to purchase 

seriously delinquent loans that are covered by those commitments. From time to time, we have consented to the termination of 

our long-term standby commitments and simultaneously entered into guarantor swap transactions with the same counterparty, 

issuing securities backed by many of the same loans.

Credit Enhancement Activities

To reduce our credit risk exposure, we engage in various types of credit enhancements, including primary mortgage insurance 

and CRT transactions. Our Charter requires coverage by specified credit enhancements or participation interests on singlefamily loans with LTV ratios above 80% at the time of purchase. Most of our loans with LTV ratios above 80% are protected by 

primary mortgage insurance, which provides loan-level protection against loss up to a specified amount, the premium for which 

is typically paid by the borrower. Generally, an insured loan must be in default and the borrower's interest in the underlying 

property must have been extinguished, such as through a short sale or foreclosure sale, before a claim can be filed under a 

primary mortgage insurance policy. The mortgage insurer has a prescribed period of time within which to process a claim and 

make a determination as to its validity and amount. 

We define CRT transactions as those arrangements where we actively transfer the credit risk exposure on mortgages that we 

own or guarantee. Our CRT transactions are designed to reduce the amount of required capital related to credit risk, to transfer 

portions of credit losses on groups of previously acquired loans to third-party investors, and to reduce the risk of future losses 

to us when borrowers default. The costs we incur in exchange for this credit protection effectively reduce our guarantee income 

from the associated mortgages. We evaluate and update our CRT activities as needed depending on our business strategy, 

market conditions, and regulatory requirements.

Each CRT transaction is designed to transfer a certain portion of the credit risk that we assume for loans with certain targeted 

characteristics. Risk positions may be transferred to third-party investors through one or more CRT transactions. The risk 

transfer could occur prior to, or simultaneously with, our purchase of the loan (i.e., front-end coverage) or after the purchase of 

the loan (i.e., back-end coverage). 

STACR and ACIS Offerings

Our two primary CRT programs are STACR and ACIS.

n STACR - Our primary Single-Family securities-based credit risk sharing transaction. STACR Trust note transactions 

transfer risk to the private capital markets through the issuance of unguaranteed notes using a third-party trust. In a 

STACR transaction, we create a reference pool of loans from our Single-Family mortgage portfolio, and a third-party trust 

issues credit notes linked to the reference pool. The trust makes periodic payments of principal and interest on the notes to 

noteholders, but is not required to repay principal to the extent that the note balance is reduced as a result of specified 

credit events on the mortgage loans in the related reference pool. We make payments to the trust to support payment of 

the interest due on the notes. The amount of risk transferred in each transaction affects the amounts we are required to 

pay. We receive payments from the trust that otherwise would have been made to the noteholders to the extent there are 

certain defined credit events on the mortgage loans in the related reference pool. The note balance is reduced by the 

amount of the payments to us, thereby transferring the related credit risk of the loans in the reference pool to the note 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 30
investors. Generally, the note balance is also reduced based on principal payments that occur on the loans in the reference 

pool. The diagram below illustrates a typical STACR transaction.

n ACIS - Our primary insurance-based credit risk sharing transaction. ACIS transactions are insurance policies we enter into 

with global insurance and reinsurance companies to cover a portion of credit risk on the mortgage loans in the related 

reference pools. We pay monthly premiums to the insurers or reinsurers in exchange for claim coverage on specified credit 

events on the mortgage loans in the related reference pool. We require our ACIS counterparties to partially collateralize 

their exposure to reduce the risk that we will not be reimbursed for our claims under the policies.

We primarily use STACR and ACIS transactions to transfer credit risk on certain recently acquired fixed rate mortgage loans 

with maturity terms greater than 20 years and original LTV ratios between 60% and 97%. In a typical STACR or ACIS 

transaction, we transfer to third-party investors a portion of the credit risk between a specified attachment point and a 

detachment point which may vary based on numerous factors, such as the type of collateral and market conditions. We 

generally retain the initial loss position and at least 5% of the credit risk of all the positions sold to align our interests with those 

of the investors. The diagram below illustrates a typical STACR and ACIS structure.

We monitor the costs and benefits provided by the CRT coverage we have obtained on a regular basis, including the impact of 

CRT on our capital requirements under the ERCF. We may periodically terminate certain CRT transactions, through the exercise 

of contractual call options, repurchases of outstanding securities, or other means, if we determine prior to contractual maturity 

that they are no longer economically sensible.

Additional Offerings

We also transfer credit risk through issuance of senior subordinate securitizations, additional types of insurance and 

reinsurance transactions, and risk-sharing arrangements with certain single-family lenders. For additional information on SingleFamily mortgage loan credit enhancements, see MD&A - Risk Management - Credit Risk - Single-Family Mortgage 

Credit Risk - Transferring Credit Risk to Third-Party Investors. 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 31
We also periodically sell certain delinquent loans that we have previously repurchased from securitization trusts. See Note 4

for additional information on sales of mortgage loans.

Loss Mitigation Activities

Servicers perform loss mitigation activities as well as foreclosures on loans that they service for us. Our loss mitigation strategy 

emphasizes early intervention by servicers in delinquent loans and offers alternatives to foreclosure by providing servicers with 

default management programs designed to manage delinquent loans and to assist borrowers in maintaining homeownership or 

facilitate foreclosure alternatives.

We offer (or previously offered) a variety of borrower assistance programs, including refinance programs for certain eligible 

loans and loan workout activities for struggling borrowers. Our loan workouts include both home retention options and 

foreclosure alternatives. 

Relief Refinance Program 

Our relief refinance program allowed eligible homeowners whose loans we already owned or guaranteed to refinance with more 

favorable terms (such as reduction in payment, reduction in interest rate, or movement to a more stable loan product) and 

without the need to obtain additional mortgage insurance. The relief refinance program also provided liquidity for borrowers 

who were current on their mortgages but were unable to refinance because their LTV ratios exceeded our standard refinance 

limits. Our current relief refinance offering, the Enhanced Relief RefinanceSM program, has been suspended until further notice.

Loan Workout Activities

Home Retention Options 

When refinancing is not practicable, we require our servicers to attempt to establish contact with the borrowers to discuss the 

most appropriate options for delinquency resolution. When the contact is established, we require our servicers first to evaluate 

the loan for a forbearance plan, repayment plan, payment deferral plan, or loan modification, because our level of recovery on a 

loan that reperforms is often higher than for a loan that proceeds to a foreclosure alternative or foreclosure. Although workout 

options are often less costly than a foreclosure, we incur costs as a result of our loss mitigation activities. Specifically, payment 

deferral plans result in non-interest-bearing balances we have to finance for the life of the mortgage, resulting in economic 

costs as a result of this program. Additionally, we incur economic losses on loan modifications that involve an interest rate 

reduction or principal forbearance, and we incur expenses related to incentive fees we pay to servicers for certain successfully 

completed loan workouts. 

We offer the following types of home retention options:

n	 Forbearance plans - Arrangements that require reduced or no payments during a defined period that provides borrowers 

additional time to return to compliance with the original mortgage terms or to implement another type of loan workout 

option. Borrowers may exit forbearance by repaying all past due amounts thus fully reinstating the loan, paying off the loan 

in full, or entering into a repayment plan, a payment deferral plan, or a trial period plan pursuant to a loan modification. We 

offer forbearance of up to 12 months to single-family borrowers experiencing financial difficulty. Borrowers may receive an 

initial forbearance term of one to six months and, if necessary, one or more forbearance term extensions of one to six 

months, as long as the delinquency of the mortgage does not exceed 12 months.

n	 Repayment plans - Contractual plans that allow borrowers a specific period of time to return to current status by paying the 

normal monthly payment plus additional agreed upon delinquent amounts. Repayment plans must have a term greater 

than one month and less than or equal to 12 months and the monthly repayment plan payment amount must not exceed 

150% of the contractual mortgage payment.

n	 Payment deferral plans - Arrangements that allow borrowers to return to current status by deferring delinquent principal 

and interest into a non-interest-bearing principal balance that is due at the earlier of the payoff date, maturity date, or sale 

of the property. The remaining mortgage term, interest rate, payment schedule, and maturity date remain unchanged and 

no trial period plan is required. The number of months of payments deferred varies based upon the type of hardship the 

borrower is experiencing.

n	 Loan modifications - Contractual plans that may involve changing the terms of the loan such as payment delays, interest 

rate reductions, term extensions, or a combination of these items. Payment delays in our loan modification programs most 

commonly consist of adding outstanding indebtedness, such as delinquent interest, to the UPB of the loan, and may also 

include principal forbearance, in which a portion of the principal balance becomes non-interest-bearing and is due at the 

earlier of the payoff date, maturity date, or sale of the property. Our modification programs generally require completion of 

a trial period of at least three months prior to receiving the modification. If a borrower fails to complete the trial period, the 

loan is considered for our other workout activities. These modification programs offer eligible borrowers extension of the 

loan's term up to 480 months and a fixed interest rate. Servicers are paid incentive fees for each completed modification, 

and there are limits on the number of times a loan may be modified. Our primary loan modification program is the Freddie 

Mac Flex Modification® program, which intends to create a suitable payment reduction through payment delays, interest 

rate reduction, and term extension. Under the Freddie Mac Flex Modification program, borrowers must complete a 90-day 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 32
trial period plan prior to permanent modification.

Foreclosure Alternatives

When a seriously delinquent single-family loan cannot be resolved through an economically sensible home retention option, we 

typically seek to pursue a foreclosure alternative before we pursue a foreclosure sale. We pay servicers incentive fees for each 

completed foreclosure alternative. In some cases, we provide cash relocation assistance to the borrower, while allowing the 

borrower to exit the home in an orderly manner. We offer the following types of foreclosure alternatives:

n	 Short sale - The borrower sells the property for less than the total amount owed under the terms of the loan. A short sale is 

preferable for a borrower because we provide limited relief to the borrower from repaying the entire amount owed on the 

loan. A short sale allows us to avoid the costs we would otherwise incur to complete the foreclosure and subsequently sell 

the property. 

n	 Deed in lieu of foreclosure - The borrower voluntarily agrees to transfer title of the property to us without going through 

formal foreclosure proceedings.

When we are unable to successfully execute a loan workout and the loan remains delinquent, we may ultimately pursue 

foreclosure. In a foreclosure, we may acquire the underlying property and later sell it, using the proceeds of the sale to reduce 

our losses. For additional information on our loss mitigation and foreclosure activities, see MD&A - Risk Management - 

Credit Risk - Single-Family Mortgage Credit Risk and Note 4.

Investing Activities

We primarily use our Single-Family mortgage-related investments portfolio to provide liquidity to the mortgage market by 

purchasing loans for our securitization pipeline and by purchasing delinquent and modified loans from securitization trusts. We 

also invest in agency mortgage-related securities. We manage the portfolio's risk-versus-return profile using our internal 

economic framework and make risk and capital management decisions intended to execute our business strategy and be 

responsive to market conditions. For additional information on our mortgage-related investments portfolio, see MD&A - Our 

Portfolios - Investments Portfolio - Mortgage-Related Investments Portfolio.

We may use our Single-Family mortgage-related investments portfolio to undertake various activities to support our presence in 

the agency securities market or to support the liquidity of our securities, including their price performance relative to 

comparable Fannie Mae securities. Depending upon market conditions, there may be substantial variability in any period in the 

total amount of securities we purchase or sell. The purchase or sale of agency securities could, at times, adversely affect the 

price performance of our securities relative to comparable Fannie Mae securities. We may incur costs to support our presence 

in the agency securities market and to support the liquidity and price performance of our securities. For additional information, 

see Risk Factors - Market Risks - A significant decline in the price performance of, or demand for, our UMBS could 

have an adverse effect on the volume and/or profitability of our Single-Family business activity. For additional 

information on the limits on the mortgage-related investments portfolio established by the Purchase Agreement and by FHFA, 

see MD&A - Conservatorship and Related Matters - Limits on Our Mortgage-Related Investments Portfolio and 

Indebtedness. In addition, we may forgo investment opportunities for a variety of reasons, including the limit on the size of our 

mortgage-related investments portfolio or the risk that an accounting treatment may create earnings variability.

Our company-wide Treasury function primarily includes issuing, calling, and repurchasing debt of Freddie Mac, managing our 

other investments portfolio, and managing interest-rate risk, which includes monitoring and economically hedging interest-rate 

risk for the entire company, primarily through the use of derivative instruments. We allocate debt funding costs and interest-rate 

risk management gains and losses to specific assets and liabilities included in each segment. The residual financial impact of 

our company-wide Treasury function and interest-rate risk management function is primarily allocated to the Single-Family 

segment. For additional information on the company-wide Treasury function, see MD&A - Liquidity and Capital 

Resources. For additional information on interest-rate risk management, see MD&A - Risk Management - Market Risk.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 33
Customers

Our Single-Family customers are investors in our mortgage-related securities, CRT offerings, and other debt securities, 

including banks and other depository institutions, insurance companies, money managers, central banks, pension funds, state 

and local governments, REITs, non-depository institutions, and brokers and dealers. We also maintain relationships with 

dealers in our guaranteed mortgage-related securities and other debt securities. Our unsecured other debt securities and 

structured mortgage-related securities are initially purchased by dealers and redistributed to their customers. Our Single-Family 

customers also include institutions that originate, sell, and perform the ongoing servicing of loans for new or existing 

homeowners. These companies include mortgage banking companies, commercial banks, regional banks, community banks, 

credit unions, HFAs, savings institutions, and non-depository institutions. Many of these companies are both sellers and 

servicers for us.

We enter into loan purchase agreements with many of our Single-Family customers that outline the terms under which we 

agree to purchase loans from them over a period of time. For most of the loans we purchase, the guarantee fees are not 

specified contractually. Instead, we bid for some or all of the lender's loan volume on a monthly basis at a guarantee fee that 

we specify. As a result, our loan purchase volumes from individual customers can fluctuate significantly.

We acquire a significant portion of our loans from several lenders that are among the largest originators in the U.S. In addition, 

a significant portion of our single-family loans is serviced by several large servicers. The following charts show the 

concentration of our 2023 Single-Family purchase volume by our largest sellers and our Single-Family loan servicing by our 

largest servicers as of December 31, 2023. Any seller or servicer with a 10% or greater share is listed separately.

Percentage of Single-Family Purchase Volume

(Based on UPB of $300 billion)

14%

10%

31%

45%

United Wholesale Mortgage, LLC

PennyMac Corp.

Other top 10 sellers

All other sellers

 Percentage of Single-Family Servicing Volume(1) 

(Based on UPB of $3,039 billion)

11%

42%

47%

JPMorgan Chase Bank, N.A.

Other top 10 servicers

All other servicers

 

(1) Percentage of servicing volume is based on the total Single-Family mortgage 

portfolio, which includes loans for which we do not exercise servicing control. 

However, loans for which we do not exercise servicing control are not included 

for purposes of determining the concentration of servicers who serviced more 

than 10% of our Single-Family mortgage portfolio.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 34
For additional information about seller and servicer concentration risk and our relationships with our seller and servicer 

customers, see MD&A - Risk Management - Counterparty Credit Risk - Sellers and Servicers and Note 15.

Competition 

Our principal competitors in Single-Family business are Fannie Mae and FHA/VA (with Ginnie Mae securitization). Other 

institutions, such as commercial and investment banks, dealers, savings institutions, REITs, supranationals (international 

institutions that provide development financing for member countries), insurance companies, the Federal Farm Credit Banks, 

the FHLBs, and independent mortgage companies, also compete with us by retaining or securitizing loans that would otherwise 

be eligible for purchase by us. 

We operate in a competitive market by varying our pricing for different customers, loan products, and underwriting 

characteristics. We seek to maintain a broad mix of loan quality for the loans we purchase. However, sellers may elect to retain 

loans with better credit characteristics. A seller's decision to retain these loans, or its decision concerning the loans it sells to 

Freddie Mac based on the credit standards and pricing policies of other secondary market participants, could result in Freddie 

Mac purchasing loans with a more adverse credit profile. 

The conservatorship, including direction provided to us by our Conservator, may affect our ability to compete. The areas in 

which we and Fannie Mae compete have been limited as we have been required by FHFA to align certain of our Single-Family 

mortgage purchase offerings, servicing, and securitization practices with Fannie Mae to achieve and maintain market 

acceptance of the UMBS. FHFA has also placed limits on our and Fannie Mae's ability to compete with each other on pricing. 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 35
Business Results

The charts, tables, and related discussion below present the business results of our Single-Family segment.

New Business Activity

UPB of Single-Family Loan Purchases and Guarantees by Loan 

Purpose and Average Estimated Guarantee Fee Rate(1) on New 

Acquisitions

(UPB in billions)

$1,220

$541

$300

$430 $340 $265

$790

$201

$35

49

51

56

Home purchase

Refinance

Average estimated guarantee fee rate

on new acquisitions (bps)

2021 2022 2023

(1) Estimated guarantee fee rate calculation excludes the legislated guarantee 

fees and includes deferred fees recognized over the estimated life of the 

related loans. 

 

Number of Families Helped to Own a Home and Average Loan UPB 

of New Acquisitions

(Loan count in thousands)

4,236

1,803

955

1,378

1,039 806

2,858

764

149

$288,000

$300,000

$314,000

Home purchase borrowers

Refinance borrowers

Average loan UPB of new acquisitions

2021 2022 2023

n	 As a key player in the secondary mortgage market, we maintain a consistent market presence by providing lenders with a 

constant source of liquidity for conforming loan products. Our loan purchase and guarantee activity slowed in 2023 

compared to 2022 due to higher mortgage interest rates.

n	 The average loan size of new acquisitions increased in 2023 compared to 2022 due to a higher conforming loan limit and 

house price appreciation in recent periods.

n	 The average estimated guarantee fee rate on new acquisitions consists of the contractual guarantee fee rate and deferred 

fee income, including the expected gains (losses) from buy-up and buy-down fees, recognized over the estimated life of 

the related loans using our expectations of prepayments and other liquidations. The average estimated guarantee fee rate 

on new acquisitions increased in 2023 compared to 2022 primarily due to higher contractual guarantee fees.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 36
n	 We continued working to improve equitable access to affordable and sustainable housing. For example, our Home 

Possible® and Home One® initiatives offer down payment options as low as 3% and are designed to help qualified 

borrowers with limited savings buy a home. We purchased approximately 132,000 loans under these initiatives in 2023. 

Our Refi Possible® initiative provides more flexibility to help low- and moderate-income borrowers refinance their existing 

mortgages and lower their monthly payments. We also continue to implement programs that support responsibly 

broadening access to affordable housing by:

l	 Improving the effectiveness of pre-purchase and early delinquency counseling for borrowers; 

l	 Implementing the Duty to Serve Underserved Markets plan; 

l	 Implementing the Equitable Housing Finance plan; 

l	 Developing and implementing a plan to increase and preserve sustainable mortgage purchase and refinance credit for 

all qualified borrowers; and

l	 Increasing support for first-time home buyers.

While we are responsibly expanding our programs and outreach capabilities to better serve low- and moderate-income 

borrowers and underserved markets, these loans may result in increased credit risk. Expanding access to affordable housing 

will continue to be a top priority in 2024. See MD&A - Regulation and Supervision - Federal Housing Finance Agency - 

Duty to Serve Underserved Markets Plan for additional information. 

Single-Family Mortgage Portfolio

 Single-Family Mortgage Portfolio and Average Estimated 

Guarantee Fee Rate(1) on Mortgage Portfolio as of December 31,

(UPB in billions)

$2,792 $2,986 $3,039

46

48 48

Single-Family mortgage portfolio 

Average estimated guarantee fee rate

 on mortgage portfolio (bps)

2021 2022 2023

(1) Estimated guarantee fee rate is calculated as of acquisition and includes 

deferred fees recognized over the estimated life of the related loans. 

Estimated guarantee fee rate calculation excludes the legislated guarantee 

fees and certain loans, the majority of which are held by VIEs that we do 

not consolidate. The UPB of these excluded loans was $41 billion as of 

December 31,2023. 

Single-Family Mortgage Loans as of December 31,

(Loan count in millions)

13.1 13.6 13.7

$213,000 $219,000 $221,000

Single-Family mortgage portfolio

Average loan UPB

2021 2022 2023

n	 The Single-Family mortgage portfolio was $3.0 trillion at December 31, 2023, up 2%, year-over-year, as portfolio growth 

has moderated in recent periods due to the slowdown in new business activity as both home purchase and refinance 

activity slowed due to higher mortgage interest rates.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 37
Credit Enhancements

We obtain credit enhancements on a portion of our Single-Family mortgage portfolio to reduce the risk of future losses to us 

when borrowers default. The charts below provide the UPB of the mortgage loans acquired during the periods presented that 

were covered by primary mortgage insurance, the UPB of the mortgage loans covered by CRT transactions issued during the 

periods presented, and maximum coverage related to these credit enhancements. The primary mortgage insurance and CRT 

activities presented in these charts are not mutually exclusive as a single loan may be covered by both primary mortgage 

insurance and CRT transactions. 

New Acquisitions Covered by Primary Mortgage Insurance

(In billions) 

$222

$164

$125

$56

$43

$33

UPB Maximum Coverage

2021 2022 2023

New CRT Issuance

(In billions)

$828

$553

$115

$20

$21

$4

UPB Maximum coverage

2021 2022 2023

n	 The UPB of mortgage loans acquired in 2023 that were covered by primary mortgage insurance decreased compared to 

2022 due to a decrease in loan acquisition activity.

n The UPB of mortgage loans covered by CRT transactions and related maximum coverage issued in 2023 decreased 

compared to 2022 due to a decrease in loan acquisition activity in recent periods and changes in business strategy and 

market conditions. Our CRT issuance activity can be affected by a number of factors, including current market conditions, 

the volume and characteristics of newly acquired loans, our risk appetite, the cost of CRT transactions, and FHFA 

guidance.

See MD&A – Risk Management - Single-Family Mortgage Credit Risk - Transferring Credit Risk to Third-Party 

Investors for additional information on our credit enhancements.

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 38
Financial Results

The table below presents the results of operations for our Single-Family segment. See Note 14 for additional information about 

segment financial results.

Table 12 - Single-Family Segment Financial Results

Year Over Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Net interest income $17,657 $17,067 $16,273 $590 3 % $794 5 %

Non-interest income 610 1,684 954 (1,074) (64) 730 77 

Net revenues 18,267 18,751 17,227 (484) (3) 1,524 9 

(Provision) benefit for credit losses 1,172 (1,772) 919 2,944 166 (2,691) (293) 

Non-interest expense (8,118) (7,148) (7,075) (970) (14) (73) (1) 

Income before income tax expense 11,321 9,831 11,071 1,490 15 (1,240) (11) 

Income tax expense (2,282) (1,929) (2,251) (353) (18) 322 14 

Net income 9,039 7,902 8,820 1,137 14 (918) (10) 

Other comprehensive income (loss), net of taxes and 

reclassification adjustments 10 (24) (379) 34 142 355 94 

Comprehensive income $9,049 $7,878 $8,441 $1,171 15 % ($563) (7) %

Key Drivers:

n	 2023 vs. 2022

l Net income of $9.0 billion, up 14% year-over-year.

– Net revenues were $18.3 billion, down 3% year-over-year. 

◦ Net interest income was $17.7 billion, up 3% year-over-year, primarily driven by higher investments net 

interest income as a result of higher short-term interest rates, partially offset by lower deferred fee 

income due to slower mortgage prepayment activity. 

◦ Non-interest income was $0.6 billion, down 64% year-over-year, as the prior year period included 

spread-related gains on commitments to hedge the securitization pipeline that did not recur in 2023.

– Benefit for credit losses was $1.2 billion for 2023, primarily driven by a credit reserve release due to improvements 

in house prices. The provision for credit losses was $1.8 billion for 2022, primarily driven by a credit reserve build 

due to deterioration in house prices.

– Non-interest expense was $8.1 billion for 2023, up 14% year-over-year, primarily driven by higher credit 

enhancement expense due to a higher volume of outstanding cumulative CRT transactions and higher losses on 

STACR Trust note repurchases, a decrease in credit enhancement recoveries due to a decline in expected credit 

losses on covered loans, and an allocation of $250 million for the accrual of an adverse judgment at trial.

n	 2022 vs. 2021 

l Net income of $7.9 billion, down 10% year-over-year.

– Net revenues were $18.8 billion, up 9% year-over-year. Net interest income was $17.1 billion, up 5% year-overyear, as continued mortgage portfolio growth and higher average portfolio guarantee fee rates were partially offset 

by lower deferred fee income due to slower prepayments as a result of higher mortgage interest rates. Noninterest income was $1.7 billion, up 77% year-over-year, primarily driven by spread-related gains on commitments 

to hedge the securitization pipeline in 2022. 

– Provision for credit losses was $1.8 billion for 2022, compared to a benefit for credit losses of $0.9 billion for 

2021. The increase in provision for credit losses was primarily driven by a credit reserve build due to deterioration 

in house prices. 

Management's Discussion and Analysis Our Business Segments | Single-Family

FREDDIE MAC | 2023 Form 10-K 39
Multifamily

Business Overview

Our Multifamily segment provides liquidity and support to the multifamily mortgage market through a variety of activities that 

include the purchase, securitization, and guarantee of multifamily loans originated by our Optigo® network of approved lenders. 

Our support of the multifamily mortgage market occurs through all economic cycles and is especially important during periods 

of economic stress. During these periods, we serve a critical countercyclical role by providing liquidity when many other capital 

providers exit the market. Central to our mission is our commitment to support greater access to quality, affordable, and 

sustainable rental housing, particularly in underserved markets.

Multifamily loans are typically originated by our Optigo lenders without recourse to the borrower, making repayment dependent 

on the cash flows generated by the underlying property. Cash flows generated by a property are significantly influenced by 

vacancy and rental rates, as well as conditions in the local rental market, the physical condition of the property, the quality of 

property management, and the level of operating expenses. The overall market demand for multifamily loans is generally 

affected by local and regional economic factors, such as unemployment rates, construction cycles, property prices, 

preferences for homeownership versus renting, and the relative affordability of single-family homes, as well as certain 

macroeconomic factors, such as interest rates. 

Our primary business model is to acquire loans that lenders originate and then securitize those loans into mortgage-related 

securities that transfer interest-rate and liquidity risk to investors and can be sold in the capital markets. We guarantee some or 

all of the issued mortgage-related securities in exchange for guarantee fees. In transactions where we guarantee all issued 

securities, we typically consolidate the securitization trusts. Therefore, we recognize the loans held by the trusts and the debt 

securities that the trusts issue on our balance sheet. We also recognize the guarantee fees we receive as net interest income. In 

senior subordinate securitization transactions, we typically do not consolidate the securitization trusts. Therefore, we account 

for these securitizations as sales of the underlying loans and recognize the guarantee fees we receive as guarantee income. To 

reduce our exposure under our guarantees, we transfer mortgage credit risk to third-party investors, either through the issuance 

of subordinate securities as part of the securitization transaction or by entering into a freestanding CRT transaction. The returns 

we generate from our business activities are primarily derived from (1) the net interest income we earn on the loans held on our 

balance sheet, (2) the ongoing guarantee fees we receive in exchange for providing our guarantee on the issued mortgagerelated securities, and (3) the gains on sale of mortgage loans, net of interest-rate risk management activities, from our senior 

subordinate securitization transactions. We evaluate these factors collectively to assess the profitability of any given 

transaction.

Products and Activities

Our Multifamily business primarily consists of activities related to providing market liquidity by purchasing and securitizing 

mortgage loans and issuing guaranteed mortgage-related securities, transferring credit risk, and investing in mortgage-related 

and other investments. Certain of our products have been designed to support increased access to and preservation of 

affordable housing, particularly in underserved markets.

Loan Purchase, Securitization, and Guarantee Activities

Loan Purchase

Our Optigo network allows lenders to offer borrowers a variety of loan products for the acquisition, refinance, and/or 

rehabilitation of multifamily properties. While our Optigo lenders originate the loans that we purchase, we use a prior-approval 

underwriting approach. Under this approach, we maintain credit discipline by completing our own underwriting, credit review, 

and legal review for each loan prior to issuing a loan purchase commitment, including reviewing third-party appraisals, 

performing cash flow analysis, and evaluating a borrower's ability to exit at maturity. This helps us maintain credit discipline 

throughout the process. Additionally, to protect against prepayments, most multifamily mortgage loans impose prepayment 

charges, such as a yield maintenance fee.

Our primary multifamily loan products include the following:

n	 Conventional loans - Financing that includes fixed-rate and floating-rate loans, loans in lease-up and with moderate 

property upgrades, manufactured housing community loans, senior housing loans, student housing loans, supplemental 

loans, and certain Green Advantage loans.

n	 Targeted affordable housing loans - Financing provided to borrowers in underserved areas that have restricted units 

affordable to households with low income (earning 80% or less of AMI) and very-low income (earning 50% or less of AMI) 

and that typically receive government subsidies.

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 40
n	 Small balance loans - Financing provided to small rental property borrowers for the acquisition or refinance of multifamily 

properties. Financing ranges from $1 million to $7.5 million and is focused on affordable or workforce housing properties 

from 5 to 50 units. 

The amount and type of multifamily loans that we purchase are influenced by the Multifamily loan purchase cap and the 

Multifamily Affordable Housing goals established by FHFA. In November 2023, FHFA announced that the 2024 Multifamily loan 

purchase cap will be $70 billion, down from $75 billion in 2023. The purchase cap is subject to reassessment throughout the 

year by FHFA to determine whether an increase in the cap is appropriate based on a stronger than expected overall market. For 

additional information on Multifamily's loan purchase cap, see MD&A - Conservatorship and Related Matters and for 

information on the Multifamily Affordable Housing goals, see MD&A - Regulation and Supervision.

Our process for purchasing multifamily loans generally begins with a loan purchase commitment. Prior to issuing a commitment 

to purchase a multifamily loan, we negotiate with the lender and quote the specific economic terms and conditions of our 

commitment, including the loan's purchase price, index, and mortgage spread. Decisions related to the commitment price and/

or mortgage spread are generally influenced by our current business strategy, the type of loan that we acquire (i.e., the loan 

product and whether it qualifies as mission-driven), the amount available under the loan purchase cap, current securitization 

spreads, and changing market conditions. We may offer pricing for a loan that furthers certain elements of our mission and/or 

supports our affordable housing goals that results in lower profitability as compared to the pricing we offer generally. We also 

offer borrowers an option to lock the Treasury index component of their fixed rate loans anytime during the quote or 

underwriting process. This option enables borrowers, through our lenders, to lock the most volatile part of their coupon, thereby 

providing an enhanced level of risk mitigation against their interest-rate volatility. The index lock period offered for most loans is 

60 days and is generally followed by a loan purchase commitment.

At the time we commit to purchase a multifamily loan, we preliminarily determine our intent with respect to that loan. For 

commitments to purchase fixed-rate loans that we intend to sell (i.e., held-for-sale commitments), we generally elect the fair 

value option and therefore recognize and measure these commitments at fair value in our consolidated financial statements. We 

do not elect the fair value option for held-for-sale commitments to purchase floating-rate loans or loans that we intend to hold 

for the foreseeable future, including loans that we intend to securitize using trusts that we consolidate. As a result, we 

recognize a fair value gain based on the price we would receive to sell the mortgage loans in a typical securitization transaction 

at the commitment date for commitments we measure at fair value and generally at the time of securitization for held-for-sale 

loans where we do not elect the fair value option. Similarly, we recognize changes in fair value subsequent to the commitment 

date in earnings as they occur for commitments and loans we measure at fair value and at the time of securitization for held-forsale loans where we do not elect the fair value option. We do not recognize gains or losses at the time of securitization for loans 

or commitments that we classify as held-for-investment, including loans that we intend to securitize using trusts that we 

consolidate.

Our multifamily commitments and loans are subject to changes in fair value due to changes in interest-rates and changes in 

spreads. We enter into interest-rate risk management derivatives to manage our interest-rate exposures from multifamily 

commitments and loans prior to securitization, including index lock agreements. As a result of our interest-rate risk 

management activities, we have minimal exposure to earnings variability from changes in interest rates. However, index lock 

agreements create interest-rate-related earnings variability as we economically hedge the interest-rate risk created by the index 

lock agreement prior to entering into an offsetting loan purchase commitment. This exposure is typically fully offset when we 

enter into the associated loan purchase commitment and elect to measure the commitment at fair value, as the fair value of the 

commitment reflects changes in the index rate that have occurred since we entered into the index lock agreement. As our 

ability to manage spread risk is more limited than our ability to manage interest rate risk, we have exposure to earnings 

variability due to changes in spreads. We enter into certain transactions to manage this exposure, including the following:

n	 WI K-Deal Certificates - We forward sell a K Certificate that will be issued in the future to a WI K-Deal trust at a fixed 

price, thereby reducing our exposure to future changes in interest rates and K Certificate spreads.

n	 Spread-related derivatives - We purchase or enter into certain spread-related derivatives including the purchase of 

swaptions on credit indices providing some protection against significant adverse movements in spreads. 

Securitization Products

We securitize substantially all of the loans we purchase after a short holding period as we aggregate sufficient loans with similar 

terms and risk characteristics. Loans awaiting securitization are generally referred to as being in our securitization pipeline. We 

offer two main types of securitization products: K Certificates, which typically involve the issuance of subordinate securities that 

transfer credit risk to third-party investors, and Multifamily PCs, which are fully guaranteed securities where we retain the credit 

risk of the underlying mortgage loans. The securitization structure selected is generally designed to achieve an appropriate 

economic return, which may vary based on the characteristics of the underlying loans, the type of securitization product, and 

the level of subordination. We have increased the issuance of securitization products focused on addressing affordable housing 

challenges and supporting broader environmental, social, and sustainability goals. We may accept lower economic returns for 

securitizations that further certain elements of our mission and/or support our affordable housing goals while operating in a safe 

and sound manner.

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 41
K Certificates 

In a typical K Certificate securitization, we transfer the interest-rate risk, liquidity risk, and a portion of the credit risk of the 

underlying collateral to third-party investors. The structures of these transactions typically involve the issuance of senior and 

subordinate securities that represent undivided beneficial interests in trusts that hold pools of multifamily loans that we 

previously purchased. In a typical K Certificate, we sell multifamily loans to a non-Freddie Mac securitization trust that issues 

senior and subordinate securities and simultaneously purchase and place the senior securities into a Freddie Mac securitization 

trust that issues guaranteed K Certificates. We do not issue or guarantee the subordinate securities.

For guarantees to nonconsolidated entities or other third parties, we generally recognize a guarantee asset at inception. This 

asset, which represents the right to collect contractual guarantee fees, is recorded at fair value with subsequent changes in fair 

value recognized in earnings. The fair value of our guarantee assets may vary significantly from period-to-period based on 

changes in market conditions, including interest rates and credit spreads. Because our multifamily loans contain prepayment 

protection, decreasing interest rates generally result in higher guarantee asset fair values, with the opposite effect occurring 

when interest rates increase. In 2022, we updated our funds transfer pricing methodologies to allocate gains and losses on 

derivative instruments to Multifamily to offset interest rate-related changes in fair value on guarantee assets. See Note 5 for 

additional information on our accounting for guarantees.

Our K Certificate product offers investors a variety of structural and collateral options that provide for stable cash flows and a 

structured credit enhancement. The volume and type of our K Certificate securitizations are generally influenced by the product 

mix and size of our held-for-sale securitization pipeline, along with market demand for multifamily securities. While the amount 

of guarantee fees we receive may vary by collateral type and deal structure, it is generally fixed for those K Certificate series 

that we issue with regular frequency (e.g., 5-, 7- and 10-year fixed-rate K Certificates and floating rate K Certificates). 

The diagram below shows a typical K Certificate transaction.

Beginning in 2023, we expanded our K Certificate product offerings to include a fully-guaranteed K Certificate transaction. This 

product retains most of the same collateral and bond features that are present in K Certificates with subordination. While we 

initially retain the credit risk of the mortgage pool, we expect to subsequently transfer a portion using other CRT products such 

as MCIP and SCR Trust notes.

We consolidate the securitization trusts used in our fully-guaranteed K Certificate transactions and therefore do not account for 

these securitizations as sales of the underlying loans. 

Multifamily PCs

Multifamily PCs are our primary fully guaranteed securitization product. In a Multifamily PC securitization, we retain the credit 

risk of the underlying mortgage loans by guaranteeing the principal and interest payments of the issued securities while 

transferring the interest-rate and liquidity risks of those loans to the PC investors. Multifamily PCs are fully guaranteed passManagement's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 42
through securities with a 55-day payment delay that are collateralized by a single underlying mortgage loan. In exchange for 

providing our guarantee, we receive an ongoing guarantee fee that is designed to be commensurate with the risks assumed 

and that will, over the long-term, provide us with guarantee net interest income that is expected to exceed the credit, 

administrative, and implied capital costs of the underlying loans. We consolidate the securitization trusts used in these 

transactions and therefore do not account for Multifamily PC securitizations as sales of the underlying loans. As a result, we 

classify loans that we intend to securitize in Multifamily PC transactions as held-for-investment. We often enter into CRT 

transactions to reduce our credit risk exposure to Multifamily PCs.

Other Securitization Products

Our other securitization products involve the issuance of mortgage-related securities that represent beneficial interests in trusts 

that hold pools of multifamily loans. The collateral for these securitizations may include loans underwritten and purchased by us 

at loan origination and loans we do not own prior to securitization and that we underwrite after (rather than at) origination. These 

transactions involve a variety of structures and the mortgage-related securities issued in these transactions may include 

guaranteed senior and unguaranteed subordinate securities or fully guaranteed pass-through securities. We generally do not 

consolidate the securitization trusts used in these transactions as we do not direct loss mitigation activities. 

Other Mortgage-Related Guarantees

We also guarantee mortgage-related assets held by third parties in exchange for guarantee fees, without securitizing those 

assets. For example, we provide guarantees on certain tax-exempt multifamily housing revenue bonds issued by state and local 

housing finance authorities that are secured by low- and moderate-income multifamily loans.

Credit Enhancement Activities

We primarily transfer credit risk to third parties through subordination, which is created through our securitization products 

described above. In addition to subordination, we enter into other types of CRT transactions to transfer to third parties a portion 

of the credit risk of certain loans that are not covered by subordination. In determining the nature and extent of our credit 

enhancement activities, we consider a number of factors, including the degree of regulatory capital relief provided by a 

transaction, our risk appetite, the cost of CRT transactions, and our internal view of future multifamily market conditions.

Other CRT Products

For multifamily assets for which we have not transferred credit risk through securitization, we may pursue other strategies to 

reduce our credit risk exposure. Our other CRT products include the following:

n	 MCIP - Insurance coverage underwritten by a group of insurers and/or reinsurers that generally provides mezzanine loss 

credit protection. These transactions are similar in structure to ACIS contracts purchased in Single-Family, except the 

reference pool may include bonds, in addition to loans, underlying our other mortgage-related guarantees. When specific 

credit events occur, we receive compensation from the insurance policy up to an aggregate limit based on actual losses. 

We require our counterparties to partially collateralize their exposure to reduce the risk that we will not be reimbursed for 

our claims under the policies.

n	 SCR Trust notes - A securities-based credit risk sharing vehicle similar to STACR Trust notes in Single-Family. In a SCR 

Trust notes transaction, we create a reference pool of loans from our Multifamily mortgage portfolio and a trust issues 

notes linked to the reference pool. The trust makes periodic payments of principal and interest on the notes to noteholders, 

but is not required to repay principal to the extent the note balance is reduced as a result of specified credit events on the 

mortgage loans in the reference pool. We make payments to the trust to support the interest due on the notes. The amount 

of risk transferred in each transaction affects the amounts we are required to pay. We receive payments from the trust that 

otherwise would have been made to the noteholders to the extent that a defined credit event occurs on the mortgage loans 

in the reference pool. The note balance is reduced by any payments made to us, thereby transferring the related credit risk 

of the loans in the reference pool to the noteholders. Generally, the note balance is also reduced based on principal 

payments that occur on the loans in the reference pool.

In addition to our other CRT products, we may engage in whole loan sales, including sales of loans to funds to which we may 

also provide secured financing, to eliminate our interest-rate risk, liquidity risk, and credit risk exposure to certain loans.

For additional information on multifamily credit enhancements, see MD&A - Risk Management - Multifamily Mortgage 

Credit Risk - Transferring Credit Risk to Third-Party Investors.

Investing Activities

We primarily use our Multifamily mortgage-related investments portfolio to provide liquidity to the multifamily mortgage market 

by purchasing loans for our securitization pipeline. We may also hold certain multifamily mortgage loans or agency mortgagerelated securities as investments. Depending on market conditions and our business strategy, we may purchase or sell 

guaranteed K Certificates or other securitization products at issuance or in the secondary market, including interest-only 

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 43
securities. Through our ownership of the securities, we are exposed to the market risk on the loans underlying our 

securitizations. We also invest in certain non-mortgage investments, including LIHTC partnerships and other secured lending 

activities. Our current investment in the LIHTC market is limited to $850 million annually, which FHFA has increased to $1 billion 

annually in 2024. Our ongoing investment in LIHTC partnerships helps to support and preserve the supply of affordable 

housing.

For additional information, see Risk Factors - Market Risks - The profitability of our Multifamily business could be 

adversely affected by market competition and/or decreased investor demand for our K Certificates, Multifamily PCs, 

and other securities.

Customers

Our Multifamily customers include both investors in our securitization products and other CRT products, as well as financial 

institutions that originate and sell multifamily mortgage loans to us. Investors include banks and other financial institutions, 

insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Our 

multifamily loan purchases are generally sourced through our Optigo network of approved lenders, which are primarily nonbank real estate finance companies and banks. Many of these lenders are both sellers and servicers to us. 

The following charts show the concentration of our 2023 Multifamily new business activity by our largest sellers and loan 

servicing by our largest servicers as of December 31, 2023. Any seller or servicer with a 10% or greater share is listed 

separately.

Percentage of New Business Activity

(Based on UPB of $48 billion)

14%

10%

10%

40%

26%

Berkadia Commercial Mortgage LLC

CBRE Capital Markets, Inc.

Walker & Dunlop, LLC

Other top 10 sellers

All other sellers

Percentage of Servicing Volume(1)

(Based on UPB of $441 billion)

15%

14%

11%

38%

22%

Berkadia Commercial Mortgage LLC

CBRE Capital Markets, Inc.

JLL Real Estate Capital, LLC

Other top 10 servicers

All other servicers

(1) Percentage of servicing volume is based on the total multifamily mortgage 

portfolio.

Competition

We compete on the basis of price, service, and products, including our use of certain securitization structures. When evaluating 

new business and/or CRT opportunities, we consider a number of factors, including expected profitability, our risk limits, the 

Multifamily loan purchase cap, and the affordable housing goals established by FHFA. Our principal competitors in the 

multifamily mortgage market are Fannie Mae, FHA, commercial and investment banks, CMBS conduits, savings institutions, 

debt funds, and life insurance companies.

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 44
Business Results

The graphs, tables, and related discussion below present the business results of our Multifamily segment.

New Business Activity

 New Business Activity 

 (In billions)

Total Number of Units Financed (1) 

(In thousands)

 

$70 $73

$48

2021 2022 2023

655 693

447

2021 2022 2023

(1) Includes rental units financed by supplemental loans.

n	 Our new business activity was $48.3 billion in 2023, down 34% compared to 2022, as higher mortgage interest rates have 

reduced demand for multifamily financing. Approximately 66% of this activity in 2023, based on UPB, was mission-driven, 

affordable housing, exceeding FHFA's minimum requirement of 50%.

n	 Our index lock agreements and outstanding commitments to purchase or guarantee multifamily assets were $16.3 billion

and $14.8 billion as of December 31, 2023 and December 31, 2022, respectively.

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 45
Multifamily Mortgage Portfolio and Guarantee Exposure

 

 Mortgage Portfolio as of December 31, 

 (In billions) 

$415 $429 $441

2021 2022 2023

 

Guarantee Exposure as of December 31, 

 (In billions) 

$348

$360

$379

$338 $350 $369

$10

$10

$10

42 43

46

Guaranteed mortgage-related securities

Other mortgage-related guarantees

Average guarantee fee rate charged (bps)

2021 2022 2023

 

n	 Our Multifamily mortgage portfolio was $441 billion as of December 31, 2023, up 3% compared to December 31, 2022, as 

portfolio growth moderated in 2023 due to the slowdown in new business activity.

n	 As of December 31, 2023, 80% of the loan UPB in our Multifamily mortgage portfolio was fixed-rate, while the remaining 

20% was floating rate.

n	 The UPB of our guarantee exposure was $379 billion as of December 31, 2023, up 5% compared to December 31, 2022, 

as new mortgage-related security guarantees outpaced paydowns. Our guarantee exposure includes guaranteed mortgage 

related securities that are consolidated on our balance sheet where income from guarantee fees is recognized in net 

interest income.

n	 The average guarantee fee rate on our guarantee exposures increased as of December 31, 2023 compared to December 

31, 2022, primarily due to the issuance of more fully-guaranteed securitization transactions with higher guarantee fee rates. 

The average remaining guarantee term was seven years and eight years as of December 31, 2023 and December 31, 2022, 

respectively. The profitability of our guarantee activities may vary and will depend on the actual performance of the 

underlying collateral that we have guaranteed.

n	 In addition to our Multifamily mortgage portfolio, we have investments in LIHTC fund partnerships with carrying values 

totaling $3.5 billion and $2.8 billion as of December 31, 2023 and December 31, 2022, respectively. 

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 46
Credit Enhancement Activities

UPB Covered by New CRT Issuance New CRT Issuance Maximum Coverage 

 (In billions) (In billions)

$84

$62

$52

2021 2022 2023

$6.0

$4.1

$3.1

2021 2022 2023

n	 We have cumulatively transferred a substantial amount of the expected and stressed credit risk on the Multifamily 

mortgage portfolio, primarily through subordination in our securitizations, as of December 31, 2023. In addition, our 

securitization activities shifted interest-rate and liquidity risk associated with the underlying collateral away from Freddie 

Mac to third-party investors.

n	 The UPB and the maximum coverage amount of CRT transactions decreased in 2023 compared to 2022 due to lower new 

business activity. 

We evaluate and update our risk transfer strategy as needed depending on our business strategy, market conditions, and 

regulatory requirements. See MD&A - Risk Management - Multifamily Mortgage Credit Risk - Transferring Credit Risk 

to Third-Party Investors for additional information on risk transfer transactions and credit enhancements on our Multifamily 

mortgage portfolio.

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 47
Financial Results

The table below presents the results of operations for our Multifamily segment. See Note 14 for additional information about 

segment financial results.

Table 13 - Multifamily Segment Financial Results

Year-Over-Year Change

Year Ended December 31, 2023 vs. 2022 2022 vs. 2021

(Dollars in millions) 2023 2022 2021 $ % $ %

Net interest income $885 $938 $1,307 ($53) (6) % ($369) (28) %

Non-interest income 2,077 1,575 3,417 502 32 (1,842) (54) 

Net revenues 2,962 2,513 4,724 449 18 (2,211) (47) 

(Provision) benefit for credit losses (300) (69) 122 (231) (335) (191) (157) 

Non-interest expense (784) (671) (718) (113) (17) 47 7 

Income before income tax expense 1,878 1,773 4,128 105 6 (2,355) (57) 

Income tax expense (379) (348) (839) (31) (9) 491 59 

Net income 1,499 1,425 3,289 74 5 (1,864) (57) 

Other comprehensive income (loss), net of taxes and 

reclassification adjustments 156 (318) (110) 474 149 (208) (189) 

Comprehensive income $1,655 $1,107 $3,179 $548 50 % ($2,072) (65) %

Key Drivers: 

n	 2023 vs. 2022

l Net income of $1.5 billion, up 5% year-over-year.

– Net revenues were $3.0 billion, up 18% year-over-year. 

◦ Net interest income was $0.9 billion, down 6% year-over-year, primarily due to lower prepayment income 

driven by higher mortgage interest rates, partially offset by higher net interest income from mortgage 

loans. 

◦ Non-interest income was $2.1 billion, up 32% year-over-year, primarily driven by lower fair value losses 

on our guarantee assets, net of the related interest-rate risk management activities. During 2Q 2022, we 

updated our funds transfer pricing methodologies to allocate gains and losses on derivative instruments 

to Multifamily to offset interest rate-related changes in fair value on our guarantee assets.

– Provision for credit losses was $0.3 billion, driven by a credit reserve build due to increased uncertainty in 

forecasted economic and multifamily market conditions as well as deterioration in overall loan performance.

– Non-interest expense was $0.8 billion, up 17% year-over-year, primarily driven by an allocation of $63 million for 

the accrual for an adverse judgment at trial.

n	 2022 vs. 2021

l Net income of $1.4 billion, down 57% year-over-year.

– Net revenues were $2.5 billion, down 47% year-over-year. Net interest income was $0.9 billion, down 28% yearover-year, partially driven by higher costs on an increased volume of WI K-Deals. Non-interest income was 

$1.6 billion, down 54% year-over-year, primarily due to lower net investment gains, driven by spread widening as 

well as a decline in revenue from held-for-sale loan purchase and securitization activity as a result of lower 

volumes and lower margins.

Management's Discussion and Analysis Our Business Segments | Multifamily

FREDDIE MAC | 2023 Form 10-K 48
RISK MANAGEMENT

Overview 

To achieve our mission of providing liquidity, stability, and affordability to the U.S. housing market, we take risks as an integral 

part of our business activities. Risk is the possibility that events will occur that adversely impact our financial strength, safe and 

sound operations, and ability to achieve our mission, strategic, and business objectives. Risk can manifest itself in many ways 

and the responsibility for risk management resides at all levels of the company. We seek to take risks in a safe and sound, wellcontrolled manner to earn acceptable risk-adjusted returns on a corporate-wide, divisional, and, where applicable, transaction 

basis. Our goal is to maintain an effective risk culture where employees are risk aware, collaborative, transparent, and 

individually accountable for their decisions, and to conduct business in an effective, legal, and ethical manner. 

We utilize a risk taxonomy to define, classify, and report risks that we face in operating our business. These risks have the 

potential to adversely affect our current or projected financial and operational resilience. Risks are classified into the following 

categories:

n	 Credit Risk; 

n	 Market Risk;

n	 Liquidity Risk;

n	 Operational Risk;

n	 Compliance Risk;

n	 Legal Risk; 

n	 Strategic Risk; and

n	 Reputation Risk.

These risks are factored into our business decisions, as appropriate. For additional discussion of these and other risks facing 

our business, see Risk Factors. See MD&A - Liquidity and Capital Resources for a discussion of liquidity risk. 

Enterprise Risk Framework

The Risk Framework defines how we manage risk to achieve our mission, strategic, and business objectives. By serving as the 

basis for managing risk in a consistent, effective, and efficient manner, the Risk Framework supports our financial strength and 

safe and sound operations through a range of stressful conditions. The Risk Framework is implemented through the ERM 

Program, which consists of our enterprise-wide risk management practices and processes.

The Risk Framework includes the following components: 

n	 Risk Culture - Risk culture is the set of corporate values, competencies, and behaviors related to risk taking and risk 

management at Freddie Mac. Management supports an effective risk culture by establishing clear risk objectives, assigning 

accountability, and setting a tone at the top so that employees feel empowered to challenge business decisions without 

fear of negative consequences. An effective risk culture promotes an environment where employees who take, accept, and 

manage risks for the company are risk aware, collaborative, and transparent.

n	 Risk Governance - Risk governance is the set of corporate requirements and processes that must be followed to make 

and implement risk decisions across the company. Effective risk governance establishes a reporting and escalation path 

for risks and issues across the company. Freddie Mac’s risk governance structure provides forums for transparent 

communication of risks and issues, as well as risk management and control activities. Risk governance is established 

through:

l Risk Authority - Authority to take or accept risk is vested in an individual employee. Individual business or functional 

risk officers may be assigned risk authority for specific risk areas and functions, as appropriate.

l Corporate Risk Policies and Standards - Corporate risk policies and standards define roles and responsibilities with 

respect to risk management, establish limits to risk taking authority, and set forth escalation and reporting 

requirements.

l Risk Governance Structure - The risk governance structure consists of management- and Board-level committees 

with roles and responsibilities formalized in their charters.

n	 Risk Appetite - Risk appetite is the level of risk, both in aggregate and by risk type, within the company's risk capacity (the 

maximum amount of risk the enterprise can absorb before breaching capital, liquidity, and other constraints) that the Board 

of Directors and management are willing to assume to achieve the company's strategic goals. The risk appetite is 

integrated and aligned with the company's strategic plan, consolidated business plan, and divisional business plans. The 

risk appetite consists of qualitative risk appetite statements and quantitative metrics with limits, and it is approved by the 

Board of Directors. FHFA as Conservator then approves the quantitative metrics with limits.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 49
n	 Risk Identification, Assessment, Control, and Monitoring Processes - Our ERM Program supports risk management 

through enterprise-wide practices and processes designed to identify, assess, control, monitor, and report on all risks, 

including material and emerging risks. 

n	 Risk Profile - Risk profile is a point-in-time assessment of risks aggregated within and across each risk category using 

methodologies consistent with the company's risk appetite. The Risk Framework requires accurate and timely reporting 

needed to manage risks. Regular reporting is provided to senior management and to the Board of Directors, or appropriate 

Board committees, at an aggregate level to provide a comprehensive view of the company's risk position. Risk profile 

reporting includes adherence to management thresholds and established Board limits and potential or actual breaches; 

material and emerging risks; significant issues and their remediation status; and stress testing and scenario analysis. 

FHFA continues to increase supervisory expectations related to how risk is managed and overseen by management and the 

Board of Directors, and specifically the role of ERM to provide independent risk oversight and effective challenge. As a result, 

we must continue to invest in our risk management practices to meet these expectations.

Enterprise Risk Governance Structure

We manage risk using a three lines model and our risk governance structure includes enterprise-wide oversight by the Board of 

Directors and its committees, the CRO, and senior management. Only legal risk is managed outside of the three lines model.

The information and diagram below present the responsibilities associated with the three lines model and risk governance 

structure. The risk governance structure also includes division risk committees to actively discuss and monitor division-specific 

risk profiles, risk decisions, and risk appetite metrics, limits and thresholds, and risk type committees to oversee certain 

enterprise-wide risks.

For additional information on the role of the Board of Directors and its committees, see Directors, Corporate Governance, 

and Executive Officers - Corporate Governance - Board of Directors and Board Committee Information. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 50
Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 51
Credit Risk

Overview

Credit risk is the risk associated with the inability or failure of a borrower, issuer, or counterparty to meet its financial and/or 

contractual obligations. We are exposed to both mortgage credit risk and counterparty credit risk.

Mortgage credit risk is the risk associated with the inability or failure of a borrower to meet its financial and/or contractual 

obligations. We are exposed to two types of mortgage credit risk:

n	 Single-Family mortgage credit risk, through our ownership or guarantee of loans in our Single-Family mortgage portfolio 

and

n	 Multifamily mortgage credit risk, through our ownership or guarantee of loans in our Multifamily mortgage portfolio.

Counterparty credit risk is the risk associated with the inability or failure of a counterparty to meet its contractual obligations. 

In the sections below, we provide a general discussion of our enterprise risk framework and current risk environment for 

mortgage credit risk, including natural disaster and climate risk, and for counterparty credit risk.

Allowance for Credit Losses

For financial assets measured at amortized cost, we recognize an allowance for credit losses that is deducted from or added to 

the amortized cost basis of the financial asset to present the net amount expected to be collected on the financial asset on the 

balance sheet. For Single-Family credit exposures, we estimate the allowance for credit losses for loans on a pooled basis 

using a discounted cash flow model that evaluates a variety of factors to estimate the cash flows we expect to collect. The 

discounted cash flow model forecasts cash flows over the loan’s remaining contractual life, adjusted for expectations of 

prepayments, and using our historical experience, adjusted for current and forecasted economic conditions. These projections 

require significant management judgment, and we face uncertainties and risks related to the models we use for financial 

accounting and reporting purposes. For further information on our accounting policies and methods for estimating our 

allowance for credit losses and related management judgments, see MD&A - Critical Accounting Estimates. 

For Multifamily credit exposures, we estimate the allowance for credit losses using a loss-rate method to estimate the net 

amount of cash flows we expect to collect. The loss rate method is based on a probability of default and loss given default 

framework that estimates credit losses by considering a loan’s underlying characteristics and current and forecasted economic 

conditions. Loan characteristics considered by our model include vintage, loan term, current DSCR, current LTV ratio, 

occupancy rate, and interest rate hedges. We generally forecast economic conditions over a reasonable and supportable twoyear period prior to reverting to historical averages at the model input level over a five-year period, using a linear reversion 

method. We also consider as model inputs expected prepayments, contractually specified extensions, expected recoveries 

from collateral posting requirements, and expected recoveries from credit enhancements that are not freestanding contracts. 

Management adjustments to our model output may be necessary to take into consideration current economic events and other 

external factors. 

In 1Q 2022, we adopted accounting guidance that eliminates the recognition and measurement of TDRs. Upon adoption of this 

guidance, we no longer measure an allowance for credit losses for TDRs we reasonably expect will occur, and we no longer 

recognize an incremental allowance for credit losses for the economic concession granted to a borrower experiencing financial 

difficulty for changes in the timing and amount of contractual cash flows when a loan is restructured. See Note 4 for additional 

information on the adoption of this accounting guidance.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 52
The tables below present a summary of the changes in our allowance for credit losses and key allowance for credit losses 

ratios. 

Table 14 - Allowance for Credit Losses Activity

December 31, 2023 December 31, 2022 December 31, 2021

(Dollars in millions) 

SingleFamily Multifamily TotalSingleFamily Multifamily TotalSingleFamily Multifamily Total

Allowance for credit losses:

Beginning balance $7,746 $147 $7,893 $5,440 $78 $5,518 $6,353 $200 $6,553 

Provision (benefit) for credit 

losses (1,172) 300 (872) 1,772 69 1,841 (919) (122) (1,041) 

 Charge-offs (643) — (643) (505) — (505) (1,107) — (1,107) 

 Recoveries collected 144 — 144 148 — 148 197 — 197 

Net charge-offs (499) — (499) (357) — (357) (910) — (910) 

Other(1) 327 — 327 891 — 891 916 — 916 

Ending balance $6,402 $447 $6,849 $7,746 $147 $7,893 $5,440 $78 $5,518 

Average loans outstanding 

during the year(2) $3,002,523 $50,602 $3,053,125 $2,929,728 $33,054 $2,962,782 $2,597,016 $23,736 $2,620,752 

Net charge-offs to average 

loans outstanding 0.02 % — % 0.02 % 0.01 % — % 0.01 % 0.04 % — % 0.03 %

Components of ending balance of allowance for credit losses:

Mortgage loans held-forinvestment $6,057 $326 $6,383 $7,314 $77 $7,391 $4,913 $34 $4,947 

Other(3) 345 121 466 432 70 502 527 44 571 

Total ending balance $6,402 $447 $6,849 $7,746 $147 $7,893 $5,440 $78 $5,518 

(1) Primarily includes capitalization of past due interest related to non-accrual loans that received payment deferral plans and loan modifications.

(2) Based on amortized cost basis of mortgage loans held-for-investment for which we have not elected the fair value option.

(3) Primarily includes allowance for credit losses related to advances of pre-foreclosure costs and off-balance sheet credit exposures.

Table 15 - Allowance for Credit Losses Ratios 

December 31, 2023 December 31, 2022

(Dollars in millions) Single-Family Multifamily Total Single-Family Multifamily Total

Allowance for credit losses ratios:

Allowance for credit losses(1) to total loans outstanding 0.20 % 0.57 % 0.21 % 0.25 % 0.16 % 0.24 %

Non-accrual loans to total loans outstanding 0.44 0.11 0.44 0.34 0.09 0.33 

Allowance for credit losses to non-accrual loans 45.01 509.38 47.20 72.45 183.33 72.91 

Balances:

Allowance for credit losses on mortgage loans heldfor-investment $6,057 $326 $6,383 $7,314 $77 $7,391 

Total loans outstanding(2) 3,031,136 57,107 3,088,243 2,981,401 47,094 3,028,495 

Non-accrual loans(2) 13,458 64 13,522 10,095 42 10,137 

(1) Represents allowance for credit losses on mortgage loans held-for-investment.

(2) Based on amortized cost basis of mortgage loans held-for-investment for which we have not elected the fair value option.

The ratio of allowance for credit losses to non-accrual loans decreased as of December 31, 2023 compared to December 31, 

2022, primarily driven by a credit reserve release in Single-Family due to improvements in house prices.

See Note 6 for additional information on our allowance for credit losses and Note 4 for additional information on our nonaccrual policy. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 53
The table below shows the contractual principal payments due by specified timeframe for held-for-investment loans 

outstanding as of the period end.

Table 16 - Principal Amounts Due for Held-for-Investment Loans 

December 31, 2023

(In millions)

Due in One Year 

or Less

Due after One Year 

through Five Years

Due after Five Years 

through 15 Years

Due after 15 

Years Total

Single-Family:

 Fixed-rate $92,716 $396,459 $1,073,882 $1,409,478 $2,972,535

 Adjustable-rate 694 3,099 9,131 11,050 23,974

Total Single-Family 93,410 399,558 1,083,013 1,420,528 2,996,509 

Multifamily:

 Fixed-rate 361 12,682 37,170 3,610 53,823 

 Adjustable-rate 611 2,194 2,575 — 5,380 

Total Multifamily 972 14,876 39,745 3,610 59,203 

Cost basis and fair value adjustments, net 34,336 

Total(1) $3,090,048 

(1) Includes $1.8 billion multifamily held-for-investment loans for which we have elected the fair value option as of December 31, 2023.

Single-Family Mortgage Credit Risk

We manage our exposure to Single-Family mortgage credit risk, which is a type of consumer credit risk, using the following 

principal strategies:

n	 Maintaining prudent eligibility standards and quality control practices and managing seller/servicer performance;

n	 Transferring credit risk to third-party investors;

n	 Monitoring loan performance and characteristics;

n	 Engaging in loss mitigation activities; and

n	 Managing foreclosure and REO activities.

Maintaining Prudent Eligibility Standards and Quality Control Practices and Managing 

Seller/Servicer Performance 

We employ multiple strategies to maintain loan quality:

n	 Our eligibility requirements are set forth in our underwriting standards, which are published in our Guide and incorporated 

in Freddie Mac Loan Advisor®. These underwriting standards establish the requirements our sellers apply when originating 

loans in compliance with representations and warranties to us;

n	 Loan quality control practices, including post-closing credit review and the remedy management repurchase process, help 

to validate that the loan origination process is acceptable to us; and

n	 Seller/servicer management, including review of their in-house quality control as well as our loan performance monitoring, 

helps to maintain quality control for loans sold and/or serviced by third parties.

Underwriting Standards 

We use a delegated underwriting process in connection with our acquisition of single-family loans whereby we set eligibility and 

underwriting standards, and sellers represent and warrant to us that loans they sell to us meet these standards. Our eligibility 

and underwriting standards are used to assess loans based on a number of characteristics. 

We establish limits on the purchase of loans with certain higher risk characteristics. These limits are designed to balance our 

credit risk exposure while supporting affordable housing in a responsible manner. Our purchase guidelines generally provide 

for:

n	 A maximum original LTV ratio of 97% for creditworthy first-time homebuyers and for a targeted segment of creditworthy 

borrowers meeting certain AMI requirements under our affordable housing initiatives;

n	 A maximum original LTV ratio of 95% for all other home purchase and no cash-out refinance loans; and

n	 A maximum original LTV ratio of 80% for cash-out refinance loans.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 54
We implemented certain changes to our underwriting standards during the COVID-19 pandemic, and some of these changes 

may negatively affect the expected performance of loans purchased during the affected periods. The pandemic may also have 

strained sellers' ability to handle the historically high volume of refinance mortgages in recent years while maintaining proper 

quality control, which may further impact the credit quality of the loans we purchased during the affected periods. In addition, 

the CARES Act required creditors to report to credit bureaus that loans in relief programs, such as forbearance plans, 

repayment plans, and loan modification programs, are current as long as the loans were current prior to entering into the relief 

programs and the borrowers remain in compliance with the programs. As a result, our ability to assess credit quality of SingleFamily mortgage portfolio and loan acquisitions could be adversely affected as credit scores may not fully reflect the impact of 

relief programs, offered by us or other creditors, into which borrowers may have entered during the affected periods. 

Loan Advisor is our main tool for assessing loan eligibility and documentation. Loan Advisor is a set of software applications 

and services designed to give lenders access to our view of risk, loan quality, and eligibility during the origination process. As a 

component of Loan Advisor, Loan Product Advisor® (LPA) helps lenders validate that submitted loans meet our underwriting 

standards. 

Substantially all of the loans we purchase are assessed by Freddie Mac's proprietary underwriting software tools, LPA or Loan 

Quality Advisor®, prior to purchase, helping validate their compatibility with our risk appetite. Any loans that are not assessed 

by Freddie Mac’s proprietary underwriting software are manually underwritten by the seller in accordance with Guide 

requirements.

We offer limited representation and warranty relief for certain loan components that satisfy automated data analytics related to 

appraisal quality, valuation, borrower assets, borrower income, and certain condominium project requirements. In general, 

limited representation and warranty relief is offered when information is validated through the use of independent data sources 

and/or Freddie Mac analytics and risk assessments.

If we discover that the representations or warranties related to a loan were breached (i.e., that contractual standards were not 

followed), we can exercise certain contractual remedies to mitigate our actual or potential credit losses. These contractual 

remedies may include, but are not limited to, the ability to require the seller or servicer to repurchase the loan at its current 

UPB, reimburse us for losses realized with respect to the loan after consideration of any other recoveries, and/or indemnify us. 

Our current remedies framework provides for the categorization of loan origination defects for loans with settlement dates on or 

after January 1, 2016. Among other items, the framework provides that "significant defects" may result in a repurchase request 

or a repurchase alternative, such as recourse or indemnification.

Under our current selling and servicing representation and warranty framework for our mortgage loans, we relieve sellers of 

repurchase obligations for breaches of certain selling representations and warranties for certain types of loans, including:

n	 Loans that have established an acceptable payment history for 36 months (12 months for relief refinance loans) of 

consecutive, on-time payments after purchase, subject to certain exclusions and

n	 Loans that have satisfactorily completed a quality control review.

Solely for the purpose of determining whether the acceptable payment history requirements are met, payments due during the 

COVID-19-related forbearance period are considered to have been made on time, provided that the mortgage was reported by 

the servicer as having entered into a COVID-19-related forbearance plan between March 13, 2020 and October 31, 2023 and 

met certain other criteria as described in our Guide.

An independent dispute resolution process for alleged breaches of selling or servicing representations and warranties on our 

loans allows for a neutral third party to render a decision on demands that remain unresolved after the existing appeal and 

escalation processes have been exhausted.

Quality Control Practices

We employ a quality control process to review underwriting documentation and decision-making for compliance with our 

standards using both statistical random and targeted sampling. Pursuant to Guide requirements, we initiate these sampling 

reviews to timely identify breaches of representations and warranties. Sellers may appeal our ineligible loan determination.

We also perform quality control reviews on loans that have defaulted and have not obtained representation and warranty relief 

under the representation and warranty relief framework. These loans are subject to repurchase if a significant breach of our 

Guide is identified.

Managing Seller/Servicer Performance

We actively monitor seller and servicer performance, including compliance with our standards. We maintain approval standards 

for our seller/servicers, which include requiring our sellers to maintain an in-house quality control program with written 

procedures that operates independently of the seller’s underwriting and origination functions. We monitor servicer performance 

using our Servicer Success Scorecard. In addition, we perform servicing and loan modification quality control reviews on 

selected servicers through random sampling of delinquent loans and loan modifications.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 55
Underwriting Restrictions Related to Purchase Agreement

The Purchase Agreement requires us to limit our acquisition of certain single-family mortgage loans as follows:

n	 A maximum of 6% of purchase money mortgages and 3% of refinance mortgages over the preceding 52-week period can 

have two or more of the following characteristics at origination: combined LTV ratio greater than 90%; debt-to-income ratio 

greater than 45%; and FICO or equivalent credit score less than 680.

n	 Acquisitions of single-family mortgage loans secured by either second homes or investment properties are limited to 7% of 

the single-family mortgage loan acquisitions over the preceding 52-week period.

n	 Subject to such exceptions as FHFA may prescribe to permit us to acquire single-family mortgage loans that are currently 

eligible for acquisition, we were required to implement a program reasonably designed to ensure that each single-family 

mortgage loan acquired is: (1) a qualified mortgage; (2) exempt from the CFPB’s ability-to-repay requirements; (3) secured 

by an investment property, subject to the restrictions above; (4) a refinancing with streamlined underwriting for high LTV 

ratios; (5) a loan with temporary underwriting flexibilities due to exigent circumstances, as determined in consultation with 

FHFA; or (6) secured by manufactured housing.

Limits imposed by the Purchase Agreement on our acquisitions of single-family loans with certain LTV, DTI, and credit score 

characteristics at origination and on our acquisitions of single-family loans secured by second homes or investment properties 

have been suspended, and will remain suspended until six months after Treasury notifies Freddie Mac that such suspension 

has been terminated. As of February 14, 2024, we have not received such notification. For additional information, see MD&A - 

Conservatorship and Related Matters - Limits on our Secondary Market Activities and Single-Family Loan 

Acquisitions.

Loan Purchase Credit Characteristics

We monitor and evaluate market conditions that could affect the credit quality of our single-family loan purchases. Additionally, 

when managing our new acquisitions, we consider our risk limits and guidance from FHFA and capital requirements under the 

ERCF. This may affect the volume and characteristics of our loan acquisitions.

The charts below show the credit profile of the single-family loans we purchased or guaranteed. The average original LTV 

increased in 2023 compared to 2022 due to the increase in the percentage of loan acquisitions related to home purchases as 

home purchase loans typically have higher LTV ratios than refinance loans. The percentage of loans with a DTI ratio greater 

than 45% also increased in 2023 compared to 2022 due to changes in market conditions, such as increasing house prices and 

higher mortgage interest rates in recent periods, and continued modifications to our underwriting standards.

Weighted Average Original LTV Ratio

71% 75% 78%

2021 2022 2023

Weighted Average Original Credit Score(1)

753 746 752

2021 2022 2023

(1) Weighted average original credit score is generally based on three credit 

bureaus (Equifax, Experian, and TransUnion). 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 56
The table below contains additional information about the single-family loans we purchased or guaranteed.

Table 17 - Single-Family New Business Activity 

Year Ended December 31,

2023 2022 2021

(Dollars in millions) Amount % of Total Amount % of Total Amount % of Total

20- and 30-year, amortizing fixed-rate $285,854 95 % $489,698 91 % $1,041,281 86 %

15-year or less, amortizing fixed-rate 10,769 4 44,424 8 173,069 14 

Adjustable-rate 3,263 1 6,503 1 5,229 — 

Total $299,886 100 % $540,625 100 % $1,219,579 100 %

Percentage of purchases

DTI ratio > 45% 27 % 17 % 11 %

Original LTV ratio > 90% 26 19 11 

Transaction type:

 Guarantor swap 72 74 57 

 Cash window 28 26 43 

Property type:

Detached single-family houses and townhouses 91 92 93 

Condominium or co-op 9 8 7 

Occupancy type:

Primary residence 92 90 93 

Second home 2 3 3 

Investment property 6 7 4 

Loan purpose:

Purchase 88 63 35 

Cash-out refinance 8 25 25 

Other refinance 4 12 40 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 57
Transferring Credit Risk to Third-Party Investors 

Types of Credit Enhancements

The table below contains a summary of the types of credit enhancements we use to transfer credit risk on our single-family 

loans. See MD&A - Our Business Segments - Single-Family - Products and Activities for additional information on our 

credit enhancement activities.

Category Products CRT Coverage type Accounting treatment

Primary mortgage insurance Primary mortgage insurance No Front-end Not Freestanding

STACR 

STACR Trust notes Yes Back-end Freestanding

STACR debt notes Yes Back-end Debt

ACIS ACIS Yes Front-end/Back-end Freestanding

Other

Senior subordinate securitizations Yes Back-end Debt/Guarantee

Lender risk-sharing Yes Front-end Freestanding

Other insurance/reinsurance products Yes Front-end Freestanding

 Single-Family Mortgage Portfolio Newly Acquired Credit Enhancements 

The table below provides the UPB of the mortgage loans acquired during the periods presented that were covered by primary 

mortgage insurance, the UPB of the mortgage loans covered by CRT transactions issued during the periods presented, and 

maximum coverage related to these newly acquired credit enhancements.

Table 18 - Single-Family Mortgage Portfolio Newly Acquired Credit Enhancements

Year Ended December 31,

2023 2022 2021

(In millions) UPB(1)(2)

Maximum 

Coverage(3) UPB(1)(2)

Maximum 

Coverage(3) UPB(1)(2)

Maximum 

Coverage(3)

Primary mortgage insurance $125,352 $33,032 $163,648 $42,571 $221,502 $56,008 

CRT transactions:

 STACR 85,693 2,838 325,721 12,720 574,705 11,024 

 ACIS 28,080 999 225,070 7,611 464,158 7,689 

 Other 1,046 317 2,617 622 5,979 1,258 

 Less: UPB with more than one type of CRT — — — — (216,386) — 

Total CRT issuance $114,819 $4,154 $553,408 $20,953 $828,456 $19,971 

(1) Represents the UPB of the mortgage assets, reference pool, or securitization trust, as applicable. 

(2) The primary mortgage insurance and CRT transactions presented in this table are not mutually exclusive as a single loan may be covered by both primary mortgage 

insurance and CRT transactions.

(3) For primary mortgage insurance, represents the coverage as of the related loan acquisition. For STACR transactions, represents the balance held by third parties at 

issuance. For ACIS transactions, represents the aggregate limit of insurance purchased from third parties at issuance. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 58
Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding

The table below provides information on the UPB and maximum coverage associated with credit-enhanced loans in our SingleFamily mortgage portfolio.

Table 19 - Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding

December 31, 2023

(Dollars in millions) UPB(1) % of Portfolio Maximum Coverage(2)

Primary mortgage insurance(3) $637,037 21% $165,738 

STACR 1,175,837 39 31,222 

ACIS 821,048 27 17,647 

Other 39,901 1 11,027 

Less: UPB with multiple credit enhancements and other reconciling items(4) (813,966) (27) — 

Single-Family mortgage portfolio - credit-enhanced 1,859,857 61 225,634 

Single-Family mortgage portfolio - non-credit-enhanced 1,179,053 39 N/A

Total $3,038,910 100% $225,634 

December 31, 2022

(Dollars in millions) UPB(1) % of Portfolio Maximum Coverage(2)

Primary mortgage insurance(3) $609,123 21% $155,022 

STACR 1,188,017 40 35,111 

ACIS 938,409 31 19,774 

Other 41,572 1 11,105 

Less: UPB with multiple credit enhancements and other reconciling items(4) (945,062) (32) — 

Single-Family mortgage portfolio - credit-enhanced 1,832,059 61 221,012 

Single-Family mortgage portfolio - non-credit-enhanced 1,153,986 39 N/A

Total $2,986,045 100% $221,012 

(1) Represents the current UPB of the mortgage assets, reference pool, or securitization trust, as applicable. 

(2) For STACR transactions, represents the outstanding balance held by third parties. For ACIS transactions, represents the remaining aggregate limit of insurance 

purchased from third parties.

(3) Amounts exclude certain loans for which we do not control servicing, as the coverage information for these loans is not readily available to us.

(4) Other reconciling items primarily include timing differences in reporting cycles between the UPB of certain CRT transactions and the UPB of the underlying loans.

Credit Enhancement Coverage Characteristics

The table below provides the serious delinquency rates for the credit-enhanced and non-credit-enhanced loans in our SingleFamily mortgage portfolio. The credit-enhanced categories are not mutually exclusive as a single loan may be covered by both 

primary mortgage insurance and other credit enhancements.

Table 20 - Serious Delinquency Rates for Credit-Enhanced and Non-Credit-Enhanced Loans in Our Single-Family 

Mortgage Portfolio

December 31, 2023 December 31, 2022

(% of portfolio based on UPB)(1) % of Portfolio(2) SDQ Rate % of Portfolio(2) SDQ Rate

Credit-enhanced:

 Primary mortgage insurance 21 % 0.95 % 21 % 1.05 %

 CRT and other 55 0.60 56 0.68 

Non-credit-enhanced 39 0.42 39 0.57 

Total N/A 0.55 N/A 0.66 

(1) Excludes loans underlying certain securitization products for which loan-level data is not available.

(2) Percentages do not total to 100% as a single loan may be included in multiple line items.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 59
The table below provides information on the amount of credit enhancement coverage by year of origination associated with 

loans in our Single-Family mortgage portfolio.

Table 21 - Credit Enhancement Coverage by Year of Origination

December 31, 2023 December 31, 2022

(Dollars in millions) UPB

% of UPB with 

Credit 

Enhancement UPB

% of UPB with 

Credit 

Enhancement

Year of Loan Origination

 2023 $265,072 42 % N/A N/A

 2022 433,252 67 $438,339 55 %

 2021 984,004 64 1,054,844 64 

 2020 719,822 68 776,425 67 

 2019 119,557 70 131,637 71 

 2018 and prior 517,203 50 584,800 51 

Total $3,038,910 61 $2,986,045 61 

The following table provides information on the characteristics of the loans in our Single-Family mortgage portfolio without 

credit enhancement. 

Table 22 - Single-Family Mortgage Portfolio Without Credit Enhancement(1) 

December 31, 2023 December 31, 2022

(Dollars in millions) UPB % of Portfolio UPB % of Portfolio

Low original LTV ratio(1)(2) $687,185 23 % $704,432 24 %

Short-term(1)(3) 196,608 6 214,256 7 

Recently acquired(1)(4) 163,789 5 102,829 3 

Other(1)(5) 131,471 5 132,469 5 

Single-Family mortgage portfolio - non-credit-enhanced $1,179,053 39 % $1,153,986 39 %

(1) Loans with multiple characteristics are assigned to categories in this table based on the following order: low original LTV ratio, short-term, and recently acquired. 

(2) Represents loans with an original LTV ratio less than or equal to 60%. 

(3) Represents loans with an original maturity of 20 years or less. 

(4) Represents loans that were recently acquired and have not been included in a reference pool.

(5) Primarily includes ARM loans, loans with an original LTV ratio greater than 97%, loans that fail the delinquency requirements for CRT transactions, and relief 

refinance loans and loans that were acquired before the inception of our CRT programs in 2013.

Credit Enhancement Recoveries

Our expected recovery receivable from freestanding credit enhancements, net of allowance, was $0.1 billion and $0.4 billion as 

of December 31, 2023 and December 31, 2022, respectively. These amounts are included in other assets on our consolidated 

balance sheets. See Note 3 and Note 6 for additional information on accounting for credit enhancements.

Monitoring Loan Performance and Characteristics

We review loan performance, including delinquency statistics and related loan characteristics, in conjunction with housing 

market and economic conditions, to assess credit risk when estimating our allowance for credit losses. We also use this 

information to determine if our pricing and eligibility standards reflect the risk associated with the loans we purchase and 

guarantee. We review the payment performance of our loans to facilitate early identification of potential problem loans, which 

could inform our loss mitigation strategies. We also review performance metrics for additional loan characteristics that may 

expose us to concentrations of credit risk. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 60
Loan Characteristics 

The table below contains a description of some of the credit characteristics that we monitor for loans in our Single-Family 

mortgage portfolio.

Credit Characteristic Description Impact on Credit Quality

LTV ratio

Ratio of the UPB of the loan to the value of the underlying 

property collateralizing the loan. Original LTV ratio is 

measured at loan origination, while CLTV ratio is defined 

as the ratio of the current loan UPB to the estimated 

current property value

• Measures ability of the underlying property to cover our 

exposure on the loan

• Higher LTV ratios indicate higher risk, as proceeds from sale of 

the property may not cover our exposure on the loan

• Lower LTV ratios indicate borrowers are more likely to repay

Credit score

Statistically-derived number that may indicate a 

borrower's likelihood to repay debt. Original credit score 

represents each borrower's FICO score at the time of 

origination or our purchase, while current credit score 

represents each borrower's most recent FICO score, 

which is obtained by Freddie Mac as of the first month of 

the most recent quarter

• Borrowers with higher credit scores are generally more likely to 

repay or have the ability to refinance their loans than those with 

lower scores

Loan purpose

Indicates how the borrower intends to use the proceeds 

from a loan (i.e., purchase, cash-out refinance, or other 

refinance)

• Cash-out refinancings, which increase the LTV ratios, generally 

have a higher risk of default than loans originated in purchase 

or other refinance transactions

Property type Indicates whether the property is a detached single-family 

house, townhouse, condominium, or co-op

• Detached single-family houses and townhouses are the 

predominant type of single-family property

• Condominiums historically have experienced greater volatility in 

house prices than detached single-family houses, which may 

expose us to more risk

Occupancy type

Indicates whether the borrower intends to use the 

property as a primary residence, second home, or 

investment property

• Loans on primary residence properties tend to have lower credit 

risk than loans on second homes or investment properties

Product type

Indicates the type of loan based on key loan terms, such 

as the contractual maturity, type of interest rate, and 

payment characteristics of the loan

• Loan products that contain terms which result in scheduled 

changes in monthly payments may result in higher risk

• Shorter loan terms result in faster repayment of principal and 

may indicate lower risk

DTI ratio

Ratio of the borrowers' total monthly debt payments to 

gross monthly income. DTI ratio is an indicator of the 

creditworthiness of the borrowers, as it measures 

borrowers' ability to manage monthly payments and repay 

debts

• Borrowers with lower DTI ratios are generally more likely to 

repay their loans than those with higher DTI ratios, holding all 

other factors equal

• DTI ratios are at the time of origination and may not be 

indicative of the borrowers' current creditworthiness

Geographic 

concentration

Indicates whether our mortgage portfolio is diversified 

geographically

• Geographic concentrations may increase the exposure of our 

mortgage portfolio to credit risk, as regional economic 

conditions may affect a borrower's ability to repay and the 

underlying property value

• Geographic diversification reduces the credit risk impact of an 

economic downturn in or a catastrophic event that 

disproportionately affects a particular geographic area

Loan age Number of years since loan origination

• Credit losses on mortgage loans typically are low during the 

first few years after origination and may increase subsequently 

depending on macroeconomic conditions and other factors as 

the effect of underwriting wanes

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 61
The tables below contain details of the characteristics of the loans in our Single-Family mortgage portfolio.

Table 23 - Credit Quality Characteristics of Our Single-Family Mortgage Portfolio

December 31, 2023

(Dollars in millions) UPB

Original 

Credit

Score (1)

Current 

Credit

Score (1)(2)

Original

LTV Ratio

Current

LTV

Ratio

Single-Family mortgage portfolio year of origination: 

2023 $265,072 751 745 79 % 75 %

2022 433,252 745 746 76 68 

2021 984,004 752 756 71 54 

2020 719,822 761 768 71 46 

2019 119,557 746 753 76 46 

2018 and prior 517,203 736 751 75 32 

Total $3,038,910 750 755 73 52 

December 31, 2022

(Dollars in millions) UPB

Original 

Credit

Score (1)

Current 

Credit

Score (1)(2)

Original

LTV Ratio

Current

LTV

Ratio

Single-Family mortgage portfolio year of origination:

2022 $438,339 745 742 76 % 74 %

2021 1,054,844 752 758 71 59 

2020 776,425 761 766 71 51 

2019 131,637 746 752 76 50 

2018 52,921 736 736 76 47 

2017 and prior 531,879 737 752 75 34 

Total $2,986,045 750 756 73 54 

(1) Original credit score is generally based on three credit bureaus (Equifax, Experian, and TransUnion). Current credit score is based on Experian only. 

(2) Credit scores for certain recently acquired loans may not have been updated by the credit bureau since the loan acquisition and therefore the original credit scores 

also represent the current credit scores.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 62
Table 24 - Characteristics of the Loans in Our Single-Family Mortgage Portfolio 

December 31, 2023 December 31, 2022

(Dollars in millions) Amount % of Total Amount % of Total

20- and 30-year or more, amortizing fixed-rate $2,671,735 88 % $2,575,810 87 %

15-year or less, amortizing fixed-rate 329,489 11 371,017 12 

Adjustable-rate and other 37,686 1 39,218 1 

Total $3,038,910 100 % $2,986,045 100 %

Percentage of portfolio based on UPB

Original LTV ratio range:

60% and below 23 % 24 %

Above 60% to 80% 49 51 

Above 80% to 90% 12 11 

Above 90% to 100% 15 13 

Above 100% 1 1 

Portfolio weighted average original LTV ratio 73 73 

Current LTV ratio range:

60% and below 68 63 

Above 60% to 80% 24 28 

Above 80% to 90% 6 6 

Above 90% to 100% 2 3 

Above 100% — — 

Portfolio weighted average current LTV ratio 52 54 

Original credit score(1)

:

740 and above 64 64 

700 to 739 21 21 

680 to 699 7 7 

660 to 679 4 4 

620 to 659 3 3 

Less than 620 1 1 

Portfolio weighted average original credit score 750 750 

Current credit score(1)(2)

:

740 and above 71 70 

700 to 739 14 15 

680 to 699 4 5 

660 to 679 3 3 

620 to 659 4 4 

Less than 620 4 3 

Portfolio weighted average current credit score 755 756 

DTI ratio:

Above 45% 16 15 

Portfolio weighted average DTI ratio 35 35 

Property type:

Detached single-family houses and townhouse 92 93 

Condominium or co-op 8 7 

Occupancy type at origination:

Primary residence 92 91 

Second home 3 4 

Investment property 5 5 

Loan purpose:

Purchase 46 41 

Cash-out refinance 21 22 

Other refinance 33 37 

(1) Original credit score is generally based on three credit bureaus (Equifax, Experian, and TransUnion). Current credit score is based on Experian only.

(2) Credit scores for certain recently acquired loans may not have been updated by the credit bureau since the loan acquisition and therefore the original credit scores 

also represent the current credit scores. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 63
The following table presents the combination of credit score and CLTV ratio attributes of loans in our Single-Family mortgage 

portfolio. 

Table 25 - Single-Family Mortgage Portfolio Attribute Combinations(1)

December 31, 2023

CLTV ≤ 60 CLTV > 60 to 80 CLTV > 80 to 90 CLTV > 90 to 100 CLTV > 100 All Loans

Original credit 

score

% of 

Portfolio SDQ Rate

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate

740 and above 45 % 0.16 % 15 % 0.24 % 4 % 0.32 % 1 % 0.27 % — % NM 65 % 0.18 %

700 to 739 13 0.53 5 0.82 2 0.93 1 0.59 — NM 21 0.61 

680 to 699 4 0.90 2 1.50 — NM — NM — NM 6 1.05 

660 to 679 3 1.28 1 2.18 — NM — NM — NM 4 1.45 

620 to 659 2 2.00 1 3.37 — NM — NM — NM 3 2.21 

Less than 620 1 4.41 — NM — NM — NM — NM 1 4.74 

Total 68 % 0.49 24 % 0.70 6 % 0.72 2 % 0.52 — % NM 100 % 0.55 

December 31, 2022

CLTV ≤ 60 CLTV > 60 to 80 CLTV > 80 to 90 CLTV > 90 to 100 CLTV > 100 All Loans

Original credit 

score

% of 

Portfolio SDQ Rate

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate(2)

% of 

Portfolio SDQ Rate

740 and above 40 % 0.22 % 18 % 0.25 % 4 % 0.23 % 2 % 0.16 % — % NM 64 % 0.23 %

700 to 739 12 0.70 6 0.75 2 0.72 1 0.38 — NM 21 0.71 

680 to 699 5 1.16 2 1.28 — NM — NM — NM 7 1.18 

660 to 679 3 1.65 1 1.77 — NM — NM — NM 4 1.68 

620 to 659 2 2.46 1 2.78 — NM — NM — NM 3 2.54 

Less than 620 1 5.97 — NM — NM — NM — NM 1 6.52 

Total 63 % 0.66 28 % 0.67 6 % 0.60 3 % 0.37 — % NM 100 % 0.66 

(1) Excludes loans underlying certain securitization products for which original credit score is not available.

(2) NM - not meaningful due to the percentage of the portfolio rounding to zero.

Certain of the loan attributes shown above may indicate a higher risk of default. For example, loans with LTV ratios over 90% or 

credit scores below 620 may be higher risk. A single loan may fall within more than one risk category. Certain combinations of 

loan attributes can indicate an even higher degree of credit risk, such as loans with both higher LTV ratios and lower credit 

scores.

Geographic Concentrations

We purchase mortgage loans from across the U.S. However, local economic conditions can affect the borrower's ability to 

repay and the value of the underlying collateral, leading to concentrations of credit risk in certain geographic areas. In addition, 

certain states and municipalities have passed or may pass laws that limit our ability to foreclose or evict and make it more 

difficult and costly to manage our risk. 

See Note 15 for additional information about the geographic distribution of our Single-Family mortgage portfolio.

Delinquency Rates 

We report Single-Family delinquency rates based on the number of loans in our Single-Family mortgage portfolio that are past 

due as reported to us by our servicers as a percentage of the total number of loans in our Single-Family mortgage portfolio. 

The chart below shows the delinquency rates of mortgage loans in our Single-Family mortgage portfolio.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 64
Single-Family Delinquency Rates

0.81%

0.94%

1.10%

0.20% 0.24% 0.27%

1.12%

0.66%

0.55%

One month past due Two months past due Seriously delinquent

4Q21 4Q22 4Q23

The percentages of loans that were one month past due and two months past due increased as of December 31, 2023 

compared to December 31, 2022. The percentage of loans one month past due can be volatile due to seasonality and other 

factors that may not be indicative of default. As a result, the percentage of loans two months past due tends to be a better early 

performance indicator than the percentage of loans one month past due. 

Our Single-Family serious delinquency rate has declined to 0.55% as of December 31, 2023, compared to 0.66% as of 

December 31, 2022. See Note 4 for additional information on the payment status of our single-family mortgage loans.

The longer a loan remains delinquent, the greater the associated costs we incur. Loans that remain delinquent for more than 

one year, and are not in active forbearance plans, are more challenging to resolve as many of these borrowers may not be in 

contact with the servicer, may not be eligible for loan modifications, or may determine that it is not economically beneficial for 

them to enter into a loan modification due to the amount of costs incurred on their behalf while the loan was delinquent. The 

table below presents the length of time loans in our Single-Family mortgage portfolio have been seriously delinquent. 

Table 26 - Seriously Delinquent Single-Family Loans 

December 31, 2023 December 31, 2022

(Dollars in millions) UPB Loan Count % of Total(1) UPB Loan Count % of Total(1)

<= 1 year $12,318 57,939 77 % $11,660 59,889 66 %

> 1 year and <= 2 years 1,805 9,548 13 2,628 14,877 17 

> 2 years and <= 4 years 952 5,178 7 2,263 13,025 14 

> 4 years 441 2,088 3 531 2,491 3 

Total $15,516 74,753 100 % $17,082 90,282 100 %

(1) Based on loan count.

See Note 4 for additional information on the payment status of our single-family mortgage loans. 

Engaging in Loss Mitigation Activities 

We offer a variety of borrower assistance programs, including refinance programs for certain eligible loans and loan workout 

activities for struggling borrowers. For purposes of the disclosure below related to loss mitigation activities, we generally 

exclude loans for which we do not control servicing. See MD&A - Our Business Segments - Single-Family and Note 4

for additional information on our loss mitigation activities. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 65
Relief Refinance Program

The following table includes information about the performance of our relief refinance mortgage portfolio.

Table 27 - Single-Family Relief Refinance Loans

December 31, 2023 December 31, 2022

(Dollars in millions) UPB Loan Count SDQ Rate UPB Loan Count SDQ Rate

Above 125% original LTV $5,779 47,799 0.97 % $6,554 51,953 1.46 %

Above 100% to 125% original LTV 11,160 92,162 0.94 12,678 100,262 1.39 

Above 80% to 100% original LTV 19,416 177,148 0.70 22,172 192,937 1.08 

80% and below original LTV 28,352 355,829 0.51 33,093 398,119 0.73 

Total $64,707 672,938 0.65 $74,497 743,271 0.96 

Loan Workout Activities

The table below provides details about the single-family loan workout activities that were completed during the periods 

presented.

Table 28 - Single-Family Completed Loan Workout Activity

Year Ended December 31,

2023 2022 2021

(UPB in billions, loan count in thousands) UPB Loan Count UPB Loan Count UPB Loan Count

Payment deferral plans $9 35 $14 61 $43 189 

Loan modifications 5 22 11 45 5 22 

Forbearance plans and other(1) 5 24 6 30 21 106 

Total $19 81 $31 136 $69 317 

(1) The forbearance data is limited to loans in forbearance that are past due based on the loans' original contractual terms and excludes loans included in certain legacy 

transactions, as the forbearance data for such loans is either not reported to us by the servicers or is otherwise not readily available to us. Other includes repayment 

plans and foreclosure alternatives.

Completed loan workout activity includes forbearance plans where borrowers fully reinstated the loan to current status during 

or at the end of the forbearance period, payment deferral plans, loan modifications, successfully completed repayment plans, 

short sales, and deeds in lieu of foreclosure. Completed loan workout activity excludes active loss mitigation activity that was 

ongoing and had not been completed as of the end of the year, such as forbearance plans that had been initiated but not 

completed and trial period modifications. There were approximately 18,000 loans in active forbearance plans and 

approximately 12,000 loans in other active loss mitigation activity as of December 31, 2023.

We continue to help struggling families retain their homes or otherwise avoid foreclosure through loan workouts. Our loan 

workout activity decreased in 2023 compared to 2022 as the seriously delinquent loan population continued to decline.

The table below contains credit characteristic data on our single-family modified loans. 

Table 29 - Credit Characteristics of Single-Family Modified Loans(1)

December 31, 2023 December 31, 2022

(Dollars in millions) UPB

% of 

Portfolio CLTV Ratio SDQ Rate UPB

% of 

Portfolio CLTV Ratio SDQ Rate

Loan modifications $27,465 1 % 47 % 6.30 % $26,794 1 % 49 % 8.62 %

(1) Primarily includes loans modified through the Freddie Mac Flex Modification program.

The table below contains information about the payment performance of modified loans in our Single-Family mortgage 

portfolio, based on the number of loans that were current or paid off one year and, if applicable, two years after modification.

Table 30 - Payment Performance of Single-Family Modified Loans(1)

Quarter of Loan Modification Completion

4Q 2022 3Q 2022 2Q 2022 1Q 2022 4Q 2021 3Q 2021 2Q 2021 1Q 2021

Current or paid off

one year after modification: 78 % 82 % 86 % 89 % 86 % 86 % 87 % 85 %

Current or paid off

two years after modification: N/A N/A N/A N/A 87 88 88 87 

(1) Primarily includes loans modified through the Freddie Mac Flex Modification program.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 66
Managing Foreclosure and REO Activities

In a foreclosure, we may acquire the underlying property and later sell it, using the proceeds of the sale to reduce our losses. 

We typically acquire properties as a result of borrower defaults and subsequent foreclosures or deeds in lieu of foreclosure on 

loans that we own or guarantee. We evaluate the condition of, and market for, newly acquired REO properties, determine if 

repairs will be performed and manage such repairs, determine occupancy status and whether there are legal or other issues to 

be addressed, and determine our sale or disposition strategy. We have revised our REO repair program to increase the number 

of homes we refurbish to attract more owner-occupant buyers. When we sell REO properties, we typically provide an initial 

period where we consider offers by owner occupants and entities engaged in community stabilization activities before offers by 

investors. We also consider disposition strategies, such as auctions, as appropriate to improve collateral recoveries and/or 

when traditional sales strategies (i.e., marketing via Multiple Listing Service and a real estate agent) may not be as effective. Our 

management of REO properties is also governed by federal fair housing/fair lending requirements. 

We are subject to various state and local laws that affect the foreclosure process. The pace and volume of REO acquisitions are 

affected not only by the delinquent loan population but also by when we can initiate the foreclosure process and the length of 

the process. These factors extend the time it takes for loans to be foreclosed upon and for the underlying properties to 

transition to REO.

The volume of our foreclosure sales was approximately 5,000, 4,000, and 3,000 in 2023, 2022, and 2021, respectively. The 

increase in 2023 compared to 2022 was primarily driven by the expiration of the COVID-19-related foreclosure moratorium, 

resulting in an increase in the number of loans going through the foreclosure process. 

The table below shows our Single-Family REO activity.

Table 31 - Single-Family REO Activity

Year Ended December 31,

2023 2022 2021

(Dollars in millions)

Number of 

Properties Amount

Number of 

Properties Amount

Number of 

Properties Amount

Beginning balance - REO 2,218 $280 1,615 $179 1,766 $199 

Additions 2,600 363 2,137 266 1,693 159 

Dispositions (2,319) (289) (1,534) (165) (1,844) (179) 

Ending balance - REO 2,499 354 2,218 280 1,615 179 

Beginning balance, valuation allowance (2) (3) (1) 

Change in valuation allowance (1) 1 (2) 

Ending balance, valuation allowance (3) (2) (3) 

Ending balance - REO, net $351 $278 $176 

Collateral Deficiency Ratios

Collateral deficiency ratios are the percentages of our realized losses when loans are resolved by the completion of REO 

dispositions and third-party foreclosure sales or short sales. Collateral deficiency ratios are calculated as the amount of our 

recognized losses divided by the aggregate UPB of the related loans. The amount of recognized losses is equal to the amount 

by which the UPB of the loans exceeds the amount of sales proceeds from disposition of the properties, net of capitalized 

repair and selling expenses, if applicable. Collateral deficiency excludes recoveries from credit enhancements and certain 

expenses and costs related to the foreclosure process that are recognized on our consolidated financial statements, such as 

property taxes, homeowner's insurance premiums, property maintenance costs, and the cost of funding the loans after they are 

repurchased from the associated security pool. Our overall loss severity is typically higher than the collateral deficiency when 

these items are included.

The table below presents Single-Family collateral deficiency ratios for REO dispositions and third-party foreclosure sales. We 

did not have a significant number of short sales in 2023.

Table 32 - Single-Family Collateral Deficiency Ratios

Year Ended December 31,

2023 2022 2021

REO dispositions and third-party foreclosure sales(1) (5.2) % (5.5) % 6.8 %

(1) Negative ratios indicate that the amount of sales proceeds from disposition of the properties, net of capitalized repair and selling expenses, exceeded the UPB of the 

related loan.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 67
REO Property Status

A significant portion of our REO portfolio is unable to be marketed at any given time because the properties are occupied, 

involved in legal matters (e.g., bankruptcy or other litigation), or subject to a redemption period, which is a post-foreclosure 

period during which borrowers may reclaim a foreclosed property. Redemption periods increase the average holding period of 

our inventory by 10% or more. As of December 31, 2023, approximately 29% of our REO properties were unable to be 

marketed because the properties were occupied, located in states with a redemption period, or subject to other legal matters. 

Another 36% of the properties were being prepared for sale (i.e., valued, marketing strategies determined, and repaired). As of 

December 31, 2023, approximately 25% of our REO properties were listed and available for sale, and 10% of our inventory was 

pending the settlement of sales. Though it varied significantly by state, the average holding period of our single-family REO 

properties, excluding any redemption period, was 328 days and 343 days for our REO dispositions during 2023 and 2022, 

respectively.

Multifamily Mortgage Credit Risk

We manage our exposure to multifamily mortgage credit risk, which is a type of commercial real estate credit risk, using the 

following principal strategies:

n	 Completing our own underwriting, credit and legal review for new business activity;

n	 Transferring credit risk to third-party investors; and

n	 Managing our portfolio, including loss mitigation activities.

Completing our own Underwriting, Credit and Legal Review for New Business Activity

We use a prior approval underwriting approach for multifamily loans, completing our own underwriting, credit review, and legal 

review for each new loan prior to issuing a loan purchase commitment. This helps us to maintain credit discipline throughout 

the process. Occasionally, we securitize loans or bonds contributed by third parties that are underwritten by us after origination. 

As multifamily loans are generally nonrecourse to the borrower, our underwriting standards focus on the LTV ratio and DSCR, 

which estimates a borrower's ability to repay the loan using the secured property's cash flows, after expenses. A higher DSCR 

and/or a lower LTV indicates lower credit risk. Our standards define maximum LTV ratios and minimum DSCRs that vary based 

on the characteristics and features of the loan. Loans are generally underwritten with a maximum original LTV ratio of 80% and 

a DSCR of greater than 1.25, assuming monthly payments that reflect amortization of principal. However, certain loans may 

have a higher LTV ratio and/or a lower DSCR, typically where this will serve our mission and contribute to achieving our 

affordable housing goals. 

Underwriting consideration is also given to other qualitative factors, such as borrower experience and financial strength, the 

type and location of the property, and the strength of the local market. These and other factors, including the LTV ratio and 

DSCR, ultimately affect the amount of expected credit loss on a given loan. Sellers provide certain representations and 

warranties regarding the loans they sell to us and are required to repurchase loans for which there has been a breach of 

representation or warranty. These representations and warranties are made as of the date the loan is sold to Freddie Mac, and 

unless Freddie Mac agrees to an exception to the representation and warranty at purchase, the repurchase remedy may be 

claimed upon proof of the breach. However, repurchases of multifamily loans have been limited due to our underwriting 

approach, which is completed prior to issuance of a loan purchase commitment.

Multifamily loans may be amortizing or interest-only (for the full term or a portion thereof) and have a fixed or variable rate of 

interest. Multifamily loans generally amortize over a thirty-year period, but have shorter contractual maturity terms than singlefamily loans, typically ranging from five to ten years. As a result, most multifamily loans require a balloon payment at maturity, 

making a borrower's ability to refinance or pay off the loan at maturity a key attribute. Some borrowers may be unable to 

refinance during periods of high interest rates or adverse market conditions, increasing the likelihood of borrower default.

To reduce credit risk exposure to floating rate loans, we generally require borrowers to purchase interest rate caps to protect 

against large movements in interest rates. This underwriting requirement protects both the borrower and Freddie Mac as rising 

interest rates generally result in higher debt service payments and financing costs, thereby reducing net property cash flows. 

We generally require a minimum term three-year interest rate cap to be in place at origination with an escrow established for 

the cost to purchase replacement caps through the maturity of the loan. Replacing a required interest rate cap, especially one 

with a longer term and/or lower strike rate, becomes more expensive in volatile and rising interest rate environments. As a 

result, the cost of interest rate caps has risen significantly over the past two years and there is no guarantee that this escrow 

will be sufficient to purchase the required replacement cap.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 68
The charts below provide the weighted average original LTV ratio and original DSCR for our new business activity. 

 Weighted Average Original LTV Ratio 

68%

61% 59%

2021 2022 2023

 Weighted Average Original DSCR 

1.35 1.30 1.27

2021 2022 2023

The table below presents the percentage of our Multifamily new business activity that had certain characteristics that may be 

considered higher risk.

Table 33 - Percentage of Multifamily New Business Activity With Higher Risk Characteristics 

Year Ended December 31,

2023 2022 2021

Original LTV ratio greater than 80% 1 % 1 % 1 %

Original DSCR less than or equal to 1.10 5 2 1 

Transferring Credit Risk to Third-Party Investors 

Types of Credit Enhancements

In connection with the acquisition, guarantee, and/or securitization of a loan or group of loans, we may obtain various forms of 

credit protection that reduce our credit risk exposure to the underlying mortgage borrower and reduce our required capital. For 

example, at the time of loan acquisition or guarantee, we may obtain recourse and/or indemnification protection from our 

lenders or sellers. After acquisition, we reduce our credit risk exposure to the underlying borrower primarily through our senior 

subordinate securitizations and our other CRT products including MCIP and SCR Trust notes. 

The following table summarizes our principal types of credit enhancements. See MD&A - Our Business Segments - 

Multifamily - Products and Activities for additional information on our securitization and CRT products. 

Category Products CRT Coverage Type Accounting 

Treatment

Subordination

K Certificates Yes Back-end Guarantee

Other securitization products:

• Securitizations of purchased collateral Yes Back-end Guarantee

• Securitizations of collateral contributed by third parties No Front-end Guarantee

SCR SCR Trust notes Yes Back-end Freestanding

SCR debt notes Yes Back-end Debt

MCIP MCIP Yes Back-end Freestanding

Lender risk-sharing Loss sharing Yes Front-end Freestanding

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 69
Multifamily Mortgage Portfolio CRT Issuance 

The table below provides the UPB of the multifamily mortgage loans covered by CRT transactions issued during the periods 

presented as well as the maximum coverage provided by those transactions.

Table 34 - Multifamily Mortgage Portfolio CRT Issuance

Year Ended December 31,

2023 2022 2021

(In millions) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2)

Subordination $34,034 $2,250 $49,799 $3,334 $68,836 $5,079 

SCR 17,026 407 11,487 193 14,502 827 

MCIP 15,860 340 11,487 399 — — 

Lender risk-sharing 808 104 1,072 159 1,015 110 

Less: UPB with more than 

one type of CRT (15,860) — (11,487) — — — 

Total CRT Issuance $51,868 $3,101 $62,358 $4,085 $84,353 $6,016 

(1) Represents the UPB of the assets included in the associated reference pool or securitization trust, as applicable.

(2) For subordination, represents the UPB of the securities that are held by third parties at issuance and are subordinate to the securities we guarantee. For SCR 

transactions, represents the UPB of securities held by third parties at issuance. For MCIP transactions, represents the aggregate limit of insurance purchased from 

third parties at issuance. For lender risk-sharing, represents the maximum amount of loss recovery that is available subject to the terms of counterparty agreements 

at issuance.

Multifamily Mortgage Portfolio Credit Enhancement Coverage Outstanding

While we obtain various forms of credit protection in connection with the acquisition, guarantee, and/or securitization of a loan 

or group of loans, our principal credit enhancement type is subordination, which is created through our senior subordinate 

securitization transactions. Through senior subordinate securitizations, we have transferred a substantial amount of the 

expected and stressed credit risk on the Multifamily mortgage portfolio, thereby reducing our overall credit risk exposure and 

required capital. As of December 31, 2023 and December 31, 2022, our maximum coverage outstanding provided by 

subordination in nonconsolidated VIEs was $39.5 billion and $41.7 billion, respectively. 

The table below presents the UPB and delinquency rates for both credit-enhanced and non-credit-enhanced loans underlying 

our Multifamily mortgage portfolio.

Table 35 - Credit-Enhanced and Non-Credit-Enhanced Loans Underlying Our Multifamily Mortgage Portfolio

December 31,

2023 2022

(Dollars in millions) UPB Delinquency Rate UPB Delinquency Rate

Credit-enhanced:

Subordination $358,944 0.26 % $358,813 0.12 %

SCR/MCIP 47,011 0.23 30,364 0.14 

Other 8,844 0.89 8,506 0.04 

Total credit-enhanced 414,799 0.27 397,683 0.12 

Non-credit-enhanced 25,998 0.51 31,619 0.08 

Total $440,797 0.28 $429,302 0.12 

The Multifamily delinquency rate increased to 0.28% at December 31, 2023, primarily driven by an increase in delinquent loans 

in our senior housing and small balance loan portfolios. As of December 31, 2023, 89% of the delinquent loans in the 

Multifamily mortgage portfolio have credit enhancement coverage.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 70
The table below provides information on the level of subordination outstanding on our securitizations with subordination.

Table 36 - Level of Subordination Outstanding

December 31,

2023 2022

(Dollars in millions) UPB Delinquency Rate UPB Delinquency Rate

Less than 10% $161,024 0.13 % $140,722 0.02 %

10% or greater 197,920 0.36 218,091 0.19 

Total $358,944 0.26 $358,813 0.12 

Weighted average subordination level 11% 12% 

The increase in the "Less than 10%" level of subordination outstanding in 2023 was driven by ongoing issuances of K 

Certificate securitizations with lower subordination levels. The lower subordination levels are still expected to absorb a 

substantial amount of expected and stressed credit losses. We have not experienced significant credit losses associated with 

our guarantees on our senior subordinate securitizations.

In addition to the credit enhancements listed above, we have various other credit enhancements related to our multifamily 

unsecuritized loans, securitizations, and other mortgage-related guarantees, in the form of collateral posting requirements, pool 

insurance, bond insurance, loss sharing agreements, and other similar arrangements. These credit enhancements, along with 

the proceeds received from the sale of the underlying mortgage collateral, are designed to enable us to recover all or a portion 

of our losses on our mortgage loans or the amounts paid under our financial guarantee contracts. Our historical losses paid 

under our guarantee contracts and related recoveries pursuant to these agreements have not been significant. 

The table below contains details on the loans underlying our Multifamily mortgage portfolio that are not credit-enhanced.

Table 37 - Credit Quality of Our Multifamily Mortgage Portfolio Without Credit Enhancement

December 31,

2023 2022

(Dollars in millions) UPB Delinquency Rate UPB Delinquency Rate

Mortgage loans held-for-sale $8,823 — % $9,138 0.29 %

Mortgage loans held-for-investment:

 Held by Freddie Mac 9,941 1.21 15,468 — 

 Held by consolidated trusts 4,851 0.27 4,665 — 

Other mortgage-related guarantees 2,383 — 2,348 — 

Total $25,998 0.51 $31,619 0.08 

Managing Our Portfolio, Including Loss Mitigation Activities

To help mitigate our potential losses, we generally require sellers to act as the primary servicer for loans they have sold to us, 

including property monitoring tasks beyond those typically performed by single-family servicers. We typically transfer the role of 

master servicer in our K Certificate transactions to third parties. Servicers for unsecuritized loans over $1 million must generally 

provide us with an assessment of the mortgaged property's financial condition at least annually. We use this assessment and 

other information to evaluate the credit quality of our mortgage portfolio and to identify potential problem loans. In situations 

where a borrower or property is in distress, the frequency of communications with the borrower may be increased. We rate 

servicing performance on a regular basis, and we may conduct on-site reviews to confirm compliance with our standards.

The majority of our guarantees have first loss credit protection provided by subordination. As a result, our primary credit risk 

exposure stems from unsecuritized loans and consolidated loans underlying our fully guaranteed securitizations (e.g., 

Multifamily PCs). Our credit exposure to held-for-sale mortgage loans is short-term and transitory in nature, as this portfolio will 

generally be used as collateral in future senior subordinate securitizations.

Our unsecuritized held-for-investment mortgage loans will generally be used as collateral in a future fully guaranteed 

securitization. Although we initially retain the credit risk exposure to the mortgage loans underlying these transactions, we 

expect to transfer a portion of the credit risk using our back-end MCIP and SCR products where economically sensible.

For loans that remain unsecuritized or underlie our consolidated fully guaranteed securitizations, if they were to become 

delinquent, we may offer a workout option to give the borrower an opportunity to bring the loan current and retain ownership of 

the property, such as providing a forbearance plan or a short-term extension of up to 12 months. These arrangements are 

entered into with the expectation that we will recover our initial investment or minimize our losses. We do not enter into these 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 71
arrangements in situations where we believe we would experience a loss in the future that is greater than or equal to the loss 

we would experience if we foreclosed on the property at the time of the agreement. While our multifamily loan modification and 

other loan workout activities have been minimal during the last three years, we have identified an increased number of loans 

that may require loss mitigation and the amount of modification and other loan workout activities may increase in 2024. 

Various federal, state, and local laws may affect our business processes and financial results. Future changes in these laws 

may adversely impact our borrowers or make it more difficult and costly for us to manage our credit risk. Rent restrictions and 

eviction moratoriums may adversely impact the cash flows generated by the underlying properties, while foreclosure 

moratoriums may limit our ability to pursue certain loss mitigation actions (e.g., foreclosure) upon a borrower default. 

See Note 15 for additional information about the geographic distribution of our Multifamily mortgage portfolio.

REO Activity

We had no REO properties as of December 31, 2023 and December 31, 2022. 

Natural Disaster and Climate Risk Management

Natural disasters in areas where we own or guarantee mortgage loans expose us to credit risk by damaging properties that 

secure loans in our mortgage portfolio and by negatively impacting the ability of borrowers to make payments on mortgage 

loans. Climate change is increasing the frequency and severity of natural disasters, and as development continues in hazardprone areas, the risk of adverse impacts to property values and housing affordability grows. Furthermore, the impacts of 

climate change are expected to be greater for low-income and minority households who may face greater exposure to certain 

hazards, may be more vulnerable to natural disaster events, or may not have the resources to mitigate and adapt to the 

growing risks of climate change.

This negative impact from natural disasters associated with climate change constitutes our physical climate risk. Acute physical 

risks arise from the increased frequency and severity of extreme weather events. These include flood, hurricane, wildfire, and 

drought. Chronic physical risks build gradually and include shifting temperature and precipitation patterns, sea level rise, and 

water stress. We also face climate transition risk, which is the negative financial and economic impact from the transition to a 

low-carbon economy. Changing policies, like the introduction of carbon taxes or new energy efficiency requirements, coupled 

with changing market preferences, could affect housing in the form of increased energy costs, substantial retrofits, and impacts 

to property values. The extent of our transition risk exposure depends on the timing and nature of the policies; a disorderly 

transition could result in a significant financial burden to our borrowers. 

Historically, our losses from natural disasters have not been significant due to the role of property insurance. We require all 

homes underlying single-family mortgages in our portfolio to have homeowner's insurance coverage throughout the life of the 

loan; however, we do not require earthquake insurance. For homes located in SFHAs, we also require flood insurance 

coverage. Sellers are required to determine whether homes underlying single-family mortgages are located in an SFHA and, if 

so, to confirm that flood insurance coverage exists at the time the loan is sold to Freddie Mac. Servicers are also required to 

confirm and provide evidence that flood insurance on these homes is maintained throughout the life of the loan and is in 

amounts needed to comply with federal government and Freddie Mac requirements. If a borrower fails to obtain and maintain 

required flood insurance coverage, servicers must directly place such coverage.

For multifamily mortgages, we also have insurance requirements to address catastrophic risks for properties. Seller/servicers 

are required to determine whether any buildings at multifamily properties are located in SFHAs and to confirm flood insurance is 

in place and complies with federal government and Freddie Mac requirements throughout the life of the mortgage. In addition, 

we require property insurance to cover earthquake damage if required by a seismic risk assessment. Insurance for all relevant 

perils is required to cover building replacement cost as well as to cover business income rental value. If a multifamily borrower 

fails to maintain required insurance, servicers must directly place required coverage. We confirm insurance compliance prior to 

loan purchase during the underwriting process. We also review insurance compliance post-purchase and prior to securitization 

and require our seller/servicers to report details of insurance compliance annually. Our Multifamily segment uses property 

surveys, virtual maps, and environmental and property condition reports to identify properties that are potentially at higher risk 

for natural disasters related to flooding and earthquakes. 

For both single-family and multifamily loans, all insurers must be licensed, or otherwise authorized by law, to conduct business 

in the jurisdictions where the properties underlying the loans are located. We set insurer minimum financial strength standards, 

or require coverage to be guaranteed or provided by state insurance pools. 

Freddie Mac’s loss exposure is further limited by the geographic diversity of our mortgage portfolio, borrower equity in the 

properties underlying mortgage loans, disaster relief options for borrowers, our credit risk transfer products, and support from 

federal and local government for individuals and communities impacted by natural disasters. Physical resiliency and energy 

efficiency can also reduce physical and transition climate risks. For additional information on the geographic diversity of our 

mortgage portfolio and our management of Single-Family and Multifamily mortgage credit risk, see Note 15 and MD&A - 

Risk Management - Credit Risk, respectively.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 72
Climate change could impact the effectiveness of our current risk mitigations. As hazard events grow more frequent and 

severe, there is increasing likelihood that property insurers will have to raise premiums or limit the level of coverage offered, 

which could result in higher uninsured losses for borrowers. Changes in the insurance market are already observable in certain 

locations that experience the highest risk of hazard events, and inflation and increased exposure to more frequent severe 

events have led insurers to raise rates and limit coverage options in certain high-risk markets. While we have not observed 

credit losses attributable to recent changes in insurance, we are actively engaged with the insurance industry to identify highrisk areas and explore options to mitigate the risk. 

While our geographic diversification will continue to be a significant mitigant of loss at the portfolio level, climate change 

increases the likelihood of experiencing extreme events across the country that could, in aggregate, amount to more substantial 

losses than have been historically observed. There may also be more limited geographic diversification for transition risk as 

policies at the federal or state level may simultaneously impact a large portion of our portfolio. 

In 2023, our cross-divisional Climate Risk Steering Committee met regularly to discuss climate risk-related topics and identify 

climate risks and issues for escalation to senior management and the Board Risk Committee. The Board of Directors and its 

committees continued its oversight of climate risks. The company also continued to build our climate risk management 

framework, address data gaps, advance research initiatives, and develop methodologies to quantify our exposure to physical 

and transition climate risks.

FHFA has instructed us to designate climate change as a priority concern and actively consider its effects in our decision 

making; this was reflected in the requirements of our 2023 Conservatorship Scorecard and remains the case in 2024. 

For additional information, see Risk Factors - Credit Risks - We are exposed to increased credit losses and creditrelated expenses in the event of a catastrophic event or significant climate change effects and Operational Risks - 

Climate change concerns could adversely affect our business, affect customer activity levels, and damage our 

reputation.

Counterparty Credit Risk

We are exposed to counterparty credit risk as a result of our contracts with sellers and servicers, credit enhancement providers, 

financial intermediaries, clearinghouses, and other counterparties, as well as through our guarantees of Fannie Mae securities 

underlying commingled resecuritization transactions. We primarily manage our exposure to counterparty credit risk by 

maintaining eligibility standards, evaluating creditworthiness and monitoring performance, and working with underperforming 

counterparties and limiting our losses from their nonperformance of obligations, when possible.

In the sections below, we discuss our management of counterparty credit risk for each type of counterparty to which we have 

significant exposure.

Single-Family Sellers and Servicers

In our Single-Family business, we do not originate mortgage loans or have our own loan servicing operation. Instead, we 

purchase loans from sellers and engage servicers, which perform loan servicing functions on our behalf. We establish 

underwriting and servicing standards for our sellers and servicers to follow and have contractual arrangements with them under 

which they represent and warrant that the loans they sell to us meet our standards and that they will service loans in 

accordance with our standards. We acquire a significant portion of our single-family loan purchase volume from several large 

lenders, and a large percentage of our loans are also serviced by several large servicers. If our sellers or servicers lack 

appropriate controls, experience a failure in their controls, or experience an operational disruption, including as a result of 

cybersecurity incidents, legal or regulatory actions, or financial difficulties, we could experience a decline in mortgage servicing 

quality and/or be less likely to recover losses through lender repurchases, recourse agreements, or other credit enhancements, 

where applicable. We are also exposed to the settlement risk from the non-performance of single-family sellers as a result of 

our forward settlement loan purchase programs, as discussed in the Financial Intermediaries, Clearinghouses, and Other 

Counterparties - Forward Settlement Counterparties section below.

For our mortgage-related securities, we guarantee the payment of principal and interest, and when the underlying borrowers do 

not make their mortgage payments, our Guide generally requires Single-Family servicers to advance the missed mortgage 

interest payments for up to 120 days. After this time, Freddie Mac will make the missed mortgage principal and interest 

payments until the mortgages are no longer held by the securitization trust. 

In addition, when borrowers do not pay certain other expenses, such as property taxes and homeowner's insurance premiums, 

our Guide generally requires single-family servicers to advance the funds for these expenses in order to protect or preserve our 

interest in or legal right to the properties. These advances are ultimately collectible from the borrowers. If the borrowers 

reperform through loan workout activities, the missed payments and incurred expenses will be collected from the borrowers. 

Should the borrower not reinstate the loan, we will reimburse the servicer for the advanced amounts at completion of 

foreclosures or loan workout activities.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 73
Our eligibility standards for sellers and servicers require the following: a demonstrated operating history in residential mortgage 

origination and servicing, or an eligible agent acceptable to us; a quality control program that meets our standards; and 

sufficient net worth, capital, liquidity, and funding sources, as well as adequate insurance coverage. We perform ongoing 

monitoring and review of our exposure to individual sellers or servicers in accordance with our counterparty credit risk 

management practices, including requiring our counterparties to provide regular financial reporting to us. We also monitor and 

rate our sellers and servicers' compliance with our standards and periodically review their operational processes.

We actively manage the current quality of loan originations of our largest single-family sellers by performing loan quality control 

sampling reviews and communicating loan defect rates and the causes of those defects to such sellers on a monthly basis. If 

we discover that the representations or warranties related to a loan were breached (i.e., that contractual standards were not 

followed), we can exercise certain contractual remedies to mitigate our actual or potential credit losses. If necessary, we work 

with these sellers to develop an appropriate plan of corrective action.

We use a variety of tools and techniques to engage our single-family sellers and servicers and limit our losses, including the 

following:

n	 Repurchases and other remedies - For certain violations of our single-family selling or servicing policies, we may require 

the counterparty to repurchase loans or provide alternative remedies, such as reimbursement of realized losses or 

indemnification, and/or suspend or terminate the selling and servicing relationship, in addition to pursuing other remedies 

as may be appropriate. As of December 31, 2023 and December 31, 2022, the UPB of loans subject to repurchase 

requests issued to our single-family sellers and servicers was approximately $0.5 billion and $1.3 billion, respectively. See 

Note 15 for additional information about loans subject to repurchase requests.

n	 Incentives and compensatory fees - We pay various incentives to single-family servicers for completing workouts of 

problem loans. We also assess compensatory fees if single-family servicers do not achieve certain benchmarks with 

respect to servicing delinquent loans. 

n	 Servicing transfers - From time to time, we may facilitate the transfer of servicing as a result of poor servicer performance, 

or for certain groups of single-family loans that are delinquent or are deemed at risk of default, to servicers that we believe 

have the capabilities and resources necessary to improve the loss mitigation associated with the loans. We may also 

facilitate the transfer of servicing on loans at the request of the servicer.

We may disqualify or suspend a seller or servicer with or without cause at any time. Once a seller or servicer is disqualified or 

suspended, we no longer purchase loans from that counterparty and generally no longer allow that counterparty to service 

loans for us, while seeking to transfer servicing of existing portfolios.

Non-depository Sellers and Servicers

We have significant exposure to non-depository institutions in our Single-Family business. We acquire a large portion of our 

business from non-depository institutions, and some of these non-depository institutions service a large share of our loans. 

These institutions may not have the same financial strength or operational capacity, or be subject to the same level of 

regulatory oversight, as large depository institutions. We monitor and review the financial stability of our non-depository 

counterparties. However, if these counterparties experience financial difficulty, we could see a decline in mortgage servicing 

quality and/or be less likely to recover losses. In 2024, we expect the risk from non-depository counterparties to remain 

elevated, and possibly increase, due to continuing difficult operating conditions. 

The table below summarizes the concentration of our Single-Family mortgage purchases acquired from non-depository sellers.

Table 38 - Single-Family Mortgage Purchases from Non-Depository Sellers

2023 2022

% of Purchases % of Purchases

Top five non-depository sellers 41 % 31 %

Other non-depository sellers 32 39 

Total 73 % 70 %

The table below summarizes the concentration of non-depository servicers of our Single-Family mortgage portfolio.

Table 39 - Single-Family Mortgage Portfolio Non-Depository Servicers

December 31, 2023 December 31, 2022

% of Portfolio(1)

% of Seriously Delinquent 

Single-Family Loans % of Portfolio(1)

% of Seriously Delinquent 

Single-Family Loans

Top five non-depository servicers 25 % 22 % 20 % 22 %

Other non-depository servicers 32 45 34 32 

Total 57 % 67 % 54 % 54 %

(1) Excludes loans for which we do not exercise control over the associated servicing.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 74
Multifamily Sellers and Servicers

We acquire a significant portion of our multifamily loan purchase volume from several large lenders, and a large percentage of 

our loans are also serviced by several large servicers. We are exposed to the risk that multifamily sellers and servicers could 

come under financial stress, which could potentially cause degradation in the quality of the servicing they provide us, including 

their monitoring of each property's financial performance and physical condition. This could also, in certain cases, reduce the 

likelihood that we could recover losses through lender repurchases, recourse agreements, or other credit enhancements, where 

applicable. This risk primarily relates to multifamily loans that we hold on our consolidated balance sheets where we retain all of 

the related credit risk.

The majority of our multifamily loans are securitized using trusts that are administered by master servicers who bear 

responsibility to advance funds in the event of payment shortfalls, including principal and interest payments related to loans in 

forbearance. For the majority of our K Certificate transactions, we utilize one of three large depository institutions as master 

servicer. For our other securitization products and a smaller number of K Certificate securitizations, we serve as master 

servicer. In instances where payment shortfalls occur, the master servicer is required to make advances as long as such 

advances have not been deemed non-recoverable. For multifamily loans purchased and held in our mortgage-related 

investments portfolio, the primary servicers are not required to advance funds in the event of payment shortfalls and therefore 

do not present significant counterparty credit risk from this source.

Credit Enhancement Providers 

We have exposure to credit enhancement providers through certain credit enhancements we obtain. If any of our credit 

enhancement providers fail to fulfill their obligations, we may not receive reimbursement for credit losses to which we are 

contractually entitled pursuant to our credit enhancements. 

We maintain eligibility standards for mortgage insurers and other insurers and reinsurers. For mortgage insurers, our eligibility 

requirements include financial requirements determined using a risk-based framework and are designed to promote their ability 

to provide consistent liquidity throughout the mortgage cycle. Our mortgage insurers are required to submit audited financial 

information and certify compliance with the Private Mortgage Insurer Eligibility Requirements on an annual basis. Our eligibility 

requirements also include operational requirements.

We monitor our exposure to individual insurers by performing periodic analysis of the ability of each insurer to remain solvent 

under various adverse economic conditions. Monitoring performance and potentially identifying underperformance allows us to 

plan for loss mitigation. If our credit enhancement providers fail to meet their obligations to reimburse us for claims, we could 

experience an increase in credit losses.

Primary Mortgage Insurers

We currently cannot differentiate pricing for primary mortgage insurers based on counterparty strength or revoke a primary 

mortgage insurer's status as an eligible insurer without FHFA approval. Further, we generally do not select the insurance 

provider on a specific loan, because the selection is made by the lender at the time the loan is originated. Accordingly, we are 

limited in our ability to manage our concentration risk with respect to primary mortgage insurers. Although the financial 

condition of our mortgage insurers improved in recent years, there is still a risk that some of these counterparties may fail to 

fully meet their obligations under a stress economic scenario because they are monoline entities primarily exposed to mortgage 

credit risk. We continue to acquire new loans with mortgage insurance from the mortgage insurers shown in the table below. 

For additional information about counterparty credit risk associated with mortgage insurers, see Note 15.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 75
The table below summarizes our exposure to single-family mortgage insurers as of December 31, 2023. In the event a 

mortgage insurer fails to perform, the coverage amounts represent our maximum exposure to credit losses resulting from such 

a failure.

Table 40 - Single-Family Primary Mortgage Insurers

December 31, 2023 December 31, 2022

(In millions) UPB Coverage(1) UPB Coverage(1)

Radian Guaranty Inc. (Radian) $112,487 $28,728 $106,612 $26,552 

Mortgage Guaranty Insurance Corporation (MGIC) 112,184 29,495 113,045 29,127 

Arch Mortgage Insurance Company 111,412 29,061 112,946 28,924 

Essent Guaranty, Inc. 104,847 27,880 95,423 24,628 

Enact 103,495 26,400 95,703 23,884 

National Mortgage Insurance (NMI) 90,176 23,603 82,713 21,266 

Others 2,436 571 2,681 641 

Total $637,037 $165,738 $609,123 $155,022 

(1) Coverage amounts exclude coverage primarily related to certain loans for which we do not control servicing, and may include coverage provided by consolidated 

affiliates and subsidiaries of the counterparty.

ACIS Counterparties

As part of our ACIS transactions, we regularly obtain insurance coverage from global insurers and reinsurers. These 

transactions incorporate features designed to increase the likelihood that we will recover on the claims we file with the insurers 

and reinsurers. In each transaction, we require the individual insurers and reinsurers to post collateral to cover portions of their 

exposure, which helps to promote certainty and timeliness of claim payment. In addition, while private mortgage insurance 

companies are required to be monoline (i.e., to participate solely in the mortgage insurance business, although the holding 

company may be a diversified insurer), our insurers and reinsurers generally participate in multiple types of insurance 

businesses, which helps to diversify their risk exposure.

The table below displays the concentration of our single-family credit risk exposure to our ACIS counterparties.

Table 41 - Single-Family ACIS Counterparties

December 31, 2023 December 31, 2022

(In millions) Maximum Coverage(1) % of Total Maximum Coverage(1) % of Total

Top five ACIS counterparties $8,311 47 % $9,093 46 %

All other ACIS counterparties 9,336 53 10,682 54 

Total $17,647 100 % $19,775 100 %

(1) Represents maximum coverage exclusive of the collateral posted to secure the counterparties' obligations.

As of December 31, 2023 and December 31, 2022, our ACIS counterparties posted collateral, which may include cash, U.S. 

Treasury securities, and agency securities, of $4.3 billion and $4.6 billion, respectively. There is a possibility that, if our ACIS 

counterparties become insolvent, a third-party involved in the restructure process could cancel a contract or contracts and 

prevent us from accessing collateral for future claims despite current collateral provisions.

Financial Intermediaries, Clearinghouses, and Other Counterparties

Derivative Counterparties

We use cleared derivatives, exchange-traded derivatives, OTC derivatives, and forward sales and purchase commitments to 

mitigate risk, and are exposed to the non-performance of each of the related financial intermediaries and clearinghouses. Our 

financial intermediaries and clearinghouse credit exposure relates principally to interest-rate derivative contracts. We maintain 

internal standards for approving new derivative counterparties, clearinghouses, and clearing members. 

Cleared and exchange-traded derivatives expose us to counterparty credit risk of central clearinghouses and our clearing 

members. The use of cleared and exchange-traded derivatives mitigates our counterparty credit risk exposure to individual 

counterparties because a central counterparty is substituted for individual counterparties, and changes in the value of open 

contracts are settled daily via payments made through the clearinghouse. We are required to post initial and variation margin to 

the clearinghouses. The amount of initial margin we must post for cleared and exchange-traded derivatives may be based, in 

part, on S&P or Moody's credit rating of our long-term senior unsecured debt securities. Our obligation to post margin may 

increase as a result of the lowering or withdrawal of our credit rating by S&P or Moody's.

OTC derivatives expose us to counterparty credit risk of individual counterparties because these transactions are executed and 

settled directly between us and each counterparty, exposing us to potential losses if a counterparty fails to meet its contractual 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 76
obligations. When a counterparty in OTC derivatives that is subject to a master netting agreement has a net obligation to us, 

generally, the counterparty is obligated to deliver collateral in the form of cash, securities, or a combination of both, to satisfy its 

obligation to us under the master netting agreement. Our OTC derivatives also require us to post collateral to counterparties 

when we are in a derivative liability position. See Note 9 for additional information on our collateral posting for our OTC 

derivatives.

We also execute forward purchase and sale commitments of mortgage-related securities, that are treated as derivatives for 

accounting purposes and utilize the MBSD/FICC as a clearinghouse. As a clearing member of the clearinghouse, we post 

margin to the MBSD/FICC and are exposed to the counterparty credit risk of the organization. In the event a clearing member 

fails and causes losses to the MBSD/FICC, we could be subject to the loss of the margin that we have posted to the MBSD/

FICC. Moreover, our exposure could exceed the amount of margin we have posted to the MBSD/FICC, as clearing members 

are generally required to cover losses caused by defaulting members on a pro rata basis. As of December 31, 2023, the gross 

fair value of such forward purchase and sale commitments that were in derivative asset positions was $31 million.

Over time, our exposure to derivative counterparties varies depending on changes in fair values, which are affected by changes 

in interest rates and other factors. Due to risk limits with certain counterparties, we may be forced to execute transactions with 

lower returns with other counterparties when managing our interest-rate risk. We manage our exposure through master netting 

and collateral agreements and stress-testing to evaluate potential exposure under possible adverse market scenarios. 

Collateral is typically transferred within one business day based on the values of the related derivatives. We regularly review the 

market values of the securities pledged to us, primarily agency and U.S. Treasury securities, to manage our exposure to loss. 

We conduct additional reviews of our exposure when market conditions dictate or certain events affecting an individual 

counterparty occur. When non-cash collateral is posted to us, we require collateral in excess of our exposure to satisfy the net 

obligation to us in accordance with the counterparty agreement. 

In the event a counterparty defaults, our economic loss may be higher than the uncollateralized exposure of our derivatives if 

we are not able to replace the defaulted derivatives in a timely and cost-effective fashion (e.g., due to a significant interest rate 

movement during the period or other factors). We could also incur economic losses if non-cash collateral posted to us by the 

defaulting counterparty cannot be liquidated at prices that are sufficient to recover the amount of such exposure. 

The table below compares the gross fair value of our derivative asset positions after counterparty netting with our net exposure 

to these positions after considering cash and non-cash collateral held.

Table 42 - Derivative Counterparty Credit Exposure

December 31, 2023

(Dollars in millions)

Number of 

Counterparties

Fair Value - 

Gain Positions

 Fair Value - 

 Gain Positions, 

 Net of Collateral 

OTC interest-rate swap and swaption counterparties (by rating):

AA- or above 1 $143 $11 

A+, A, or A- 11 1,812 26 

Cleared and exchange-traded derivatives 1 13 45 

Total 13 $1,968 $82 

Approximately 98% of our exposure at fair value for OTC interest-rate swap and option-based derivatives, excluding amounts 

related to our posting of cash collateral in excess of our derivative liability determined at the counterparty level, was 

collateralized at December 31, 2023. The remaining exposure was generally due to market movements between the 

measurement of a derivative at fair value and our receipt of the related collateral. The concentration of our derivative exposure 

among our primary OTC derivative counterparties remains high and could further increase. 

Other Investments Counterparties

We are exposed to the non-performance of institutions relating to other investments (including non-mortgage-related securities 

and cash and cash equivalents) transactions, including those entered into on behalf of our securitization trusts. Our policies 

require that the institution be evaluated using our internal rating model prior to our entering into such transactions. We monitor 

the financial strength of these institutions and may use collateral maintenance requirements to manage our exposure to 

individual counterparties.

The major financial institutions with which we transact regarding our other investments (including non-mortgage-related 

securities and cash and cash equivalents) include other GSEs, Treasury, the Federal Reserve Bank of New York, GSD/FICC, 

highly-rated supranational institutions, depository and non-depository institutions, brokers and dealers, and government money 

market funds. For additional information on our other investments portfolio, see MD&A - Liquidity and Capital Resources. 

We utilize the GSD/FICC as a clearinghouse to transact many of our trades involving securities purchased under agreements to 

resell, securities sold under agreements to repurchase, and other non-mortgage related securities. As a clearing member of 

GSD/FICC, we are required to post initial and variation margin payments and are exposed to the counterparty credit risk of 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 77
GSD/FICC (including its clearing members). In the event a clearing member fails and causes losses to the GSD/FICC clearing 

system, we could be subject to the loss of the margin that we have posted to the GSD/FICC. Moreover, our exposure could 

exceed that amount, as members are generally required to cover losses caused by defaulting members on a pro rata basis.

As part of our other investments portfolio, we enter into secured lending arrangements to provide financing for certain Freddie 

Mac securities and other assets related to our guarantee businesses. These transactions differ from those we use for liquidity 

purposes, as the borrowers may not be major financial institutions, potentially exposing us to the institutional credit risk of 

these institutions. We also provide liquidity to certain lenders through our early funding programs, where we advance funds to 

lenders for mortgage loans prior to the loans being pooled and securitized. In some cases, the early funded mortgages are 

ultimately delivered through cash window purchase transactions. 

Forward Settlement Counterparties

We are exposed to the non-performance (settlement risk) of counterparties relating to the forward settlement of loans and 

securities (including agency debt, agency residential mortgage-backed securities, and cash window loans). Our policies require 

that the counterparty be evaluated using our internal counterparty rating model prior to our entering into such transactions. We 

monitor the financial strength of these counterparties and may use collateral maintenance requirements or offsetting 

transactions to manage our exposure to individual counterparties.

Fannie Mae

We have counterparty credit risk exposure to Fannie Mae through our ability to commingle TBA-eligible Fannie Mae collateral in 

certain of our resecuritization products. When we resecuritize Fannie Mae securities in our commingled resecuritization 

products, our guarantee covers timely payments of principal and interest on such securities. If Fannie Mae were to fail to make 

a payment on a Fannie Mae security that we resecuritized, we would be responsible for making the payment to the securities 

holders. We will be dependent on FHFA, Fannie Mae, and Treasury (pursuant to Fannie Mae's and our respective Purchase 

Agreements with Treasury) to avoid a liquidity event or default in the event of a payment failure by Fannie Mae. For additional 

information on commingled resecuritizations and the associated risks, see MD&A - Our Business Segments - SingleFamily, MD&A - Regulation and Supervision - Resecuritization Fee for New Issuances of Commingled Securities

and Risk Factors.

Document Custodians

We use third-party document custodians to provide loan document certification and custody services for the loans that we 

purchase and securitize. In many cases, our sellers and servicers or their affiliates also serve as document custodians for us. 

Our ownership rights to the loans that we own or that back our securitization products could be challenged if a seller or servicer 

intentionally or negligently pledges, sells, or fails to obtain a release of prior liens on the loans that we purchased, which could 

result in financial losses to us. When a seller or servicer, or one of its affiliates, acts as a document custodian for us, the risk 

that our ownership interest in the loans may be adversely affected is increased, particularly in the event the seller or servicer 

were to become insolvent. To manage these risks, we establish qualifying standards for our document custodians and maintain 

legal and contractual arrangements that identify our ownership interest in the loans. We also monitor the financial strength of 

our document custodians on an ongoing basis in accordance with our counterparty credit risk management framework, and we 

require transfer of documents to a different third-party document custodian if we have concerns about the solvency or 

competency of the document custodian.

Custodial Depository Institutions

We require our mortgage servicers to open and use custodial accounts at an FDIC- or NCUSIF-insured depository institution to 

hold, on our behalf, custodial funds, including principal and interest payments, received for Freddie Mac-owned and Freddie 

Mac guaranteed mortgages. As a result, the failure of a custodial depository institution holding such funds may expose Freddie 

Mac to financial losses if the account balances are in excess of applicable deposit insurance protection and impacted servicers 

are unable or unwilling to cover the shortfall. To manage this risk, the Guide requires Freddie Mac servicers to utilize depository 

institutions that are rated as "well capitalized" by their regulator and in compliance with minimum financial ratings criteria. We 

also monitor the financial strength of the depository institutions on an ongoing basis in accordance with our counterparty credit 

risk management framework and may require the replacement of a depository institution if we have concerns about its solvency 

or competency.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 78
Market Risk

Overview

Our business segments have embedded exposure to market risk, which is the economic risk associated with adverse changes 

in interest rates, volatility, and spreads. Market risk can adversely affect future cash flows, or economic value, as well as 

earnings and net worth. The primary sources of interest-rate risk are from our investments in mortgage-related assets, the debt 

we issue to fund these assets, and our Single-Family guarantees. 

Our mortgage-related assets are held in both business segments and consist of unsecuritized mortgage loans and mortgagerelated securities. Typically, an existing loan or bond investment in our investments portfolio is worth less to an investor when 

interest rates (yields) rise and worth more when they decline. For a majority of our single-family mortgage-related assets, the 

borrower has the option to make unscheduled principal payments at any time before maturity without incurring a prepayment 

penalty. Thus, our mortgage-related asset portfolio is also exposed to uncertainty as to when borrowers will exercise their 

option and pay the outstanding principal balance of their loans. We face similar (and in most cases directionally opposite) 

exposure related to unsecured debt. Unsecured debt is typically worth less to an investor when interest rates (yields) rise and 

worth more when they decline. In addition, we issue debt with embedded options, such as an option to call, which provides us 

flexibility concerning the timing of our debt maturities. 

Our Single-Family guarantee market risk exposure results from upfront fees (including buy-downs), buy-ups, and float. Upfront 

fees are cash we receive at loan acquisition as compensation for our guarantee. From an interest-rate risk standpoint, receiving 

upfront fees increases risk as the actual prepayment rate of the loans we purchase may be different than our original estimates 

and may vary based on changes in interest rates. As interest rates decrease, loans typically prepay more quickly, resulting in 

accelerated recognition of upfront fees in earnings and a higher annualized rate of income. The opposite occurs as interest 

rates increase, resulting in slower recognition of upfront fees in earnings and a lower annualized rate of income. We incorporate 

upfront fees in our interest-rate risk metrics by assuming upfront fees are equivalent to the sale of an interest-only asset, 

allowing for modeling and aggregation of the interest-rate exposure of upfront fees with the rest of our interest-rate exposures. 

Conversely, buy-ups are treated as the purchase of an interest-only asset as they represent the excess borrower interest 

payments remaining from the securitization process that we effectively purchase from the seller.

Interest-rate risk related to float arises from the timing differences between the borrowers' principal payments on the loans and 

the reduction of the security balance. This can lead to significant interest expense if the interest amount paid to a security 

investor is higher than the reinvestment amount earned by the securitization trust on payments received from borrowers and 

paid to us as trust management income. In general, as interest rates decrease and prepayments increase, this expense to 

Freddie Mac increases. Conversely, as interest rates increase and prepayments decrease, this expense to Freddie Mac 

decreases.

We actively manage our economic exposure to interest rate fluctuations. Our primary goal in managing interest-rate risk is to 

reduce the amount of change in the value of our future cash flows due to future changes in interest rates. We use models to 

analyze possible future interest-rate scenarios, along with the cash flows of our assets and liabilities over those scenarios.

Management of Market Risk

We employ risk management practices that seek to maintain certain interest-rate characteristics of our assets and liabilities 

within our risk limits through a number of different strategies, including:

n	 Asset selection and structuring, such as acquiring or structuring mortgage-related securities with certain expected 

prepayment and other characteristics;

n	 Issuance of both callable and non-callable unsecured debt; and

n	 Use of interest-rate derivatives, including swaps, swaptions, and futures.

Our use of derivatives is an important part of our strategy to manage interest-rate risk. When deciding to use derivatives to 

mitigate our exposures, we consider a number of factors, including cost, exposure to counterparty credit risks, and our overall 

risk management strategy. See MD&A - Risk Management - Counterparty Credit Risk and Risk Factors for additional 

discussion of our market risk exposures, including those related to derivatives, institutional counterparties, and other market 

risks.

Although we have limited ability to manage spread risk, we employ the following strategies:

n	 Limiting the size of our assets that are exposed to spread risk;

n	 Using short-TBA positions to hedge certain assets, primarily loans acquired through our cash window that are awaiting 

securitization and portions of our agency mortgage-related securities portfolio; and 

n	 Entering into certain transactions and spread-related derivatives to offset our spread exposures.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 79
Interest-Rate Risk

Interest-rate risk is the economic risk related to adverse changes in the level or volatility of interest rates. A change in the level 

of interest rates (represented by a parallel shift of the yield curve, all else constant) exposes our assets and liabilities to risk, 

potentially affecting expected future cash flows and their present values. This is reflected in our PVS-L and duration gap 

disclosures. Similarly, changes in the shape or slope of the yield curve (often reflecting changes in the market's expectation of 

future interest rates) expose our assets and liabilities to risk, potentially affecting expected future cash flows and their present 

values. This is reflected in our PVS-YC disclosure. Volatility risk is the risk that changes in the market's expectation of the 

magnitude of future variations in interest rates will adversely affect our economic value. We are exposed to volatility risk in both 

our mortgage-related assets and liabilities, especially in instruments with embedded options.

Measurement of Interest-Rate Risk

We calculate our exposure to changes in interest rates for our interest-rate sensitive assets and liabilities using effective 

duration and effective convexity, based on our models. 

n	 Effective duration measures the percentage change in the price of financial instruments from a 100 bps change in interest 

rates. Financial instruments with positive duration increase in value as interest rates decline. Conversely, financial 

instruments with negative duration increase in value as interest rates rise. 

n	 Effective convexity measures the change in effective duration for a 100 bps change in interest rates. Effective duration is 

not constant over the entire yield curve and effective convexity measures how effective duration changes over large 

changes in interest rates.

Together, effective duration and effective convexity provide a measure of an instrument's overall price sensitivity to changes in 

interest rates. We utilize the concepts of effective duration and effective convexity in calculating our primary interest-rate risk 

measures: duration gap and PVS. 

n	 Duration gap - The net effective duration of our overall portfolio of interest-rate sensitive assets and liabilities is expressed 

in months as our duration gap. Duration gap measures the difference in price sensitivity to interest rate changes between 

our financial assets and liabilities and is expressed in months relative to the value of assets. For example, assets with a sixmonth duration and liabilities with a five-month duration would result in a positive duration gap of one month.

The table below shows various duration gap measurements and the effects that changes in interest rates would generally have 

on portfolio value.

Negative Duration Gap Zero Duration Gap Positive Duration Gap

Asset Duration < Liability Duration Asset Duration = Liability Duration Asset Duration > Liability Duration

Net portfolio will increase in value when interest 

rates rise and decrease in value when interest 

rates fall.

Net portfolio economic value will be unchanged. 

The change in the value of assets from an 

instantaneous move in interest rates, either up or 

down, would be expected to be accompanied by 

an equal and offsetting change in the value of 

liabilities.

Net portfolio will increase in value when interest 

rates fall and decrease in value when interest 

rates rise.

We actively measure and manage our duration gap exposure. In addition to duration gap management, we also measure and 

manage the price sensitivity of our portfolio to a number of different specific interest rate changes along the yield curve. The 

price sensitivity of an instrument to specific changes in interest rates is known as the instrument's key rate duration risk. By 

managing our duration exposure both in aggregate through duration gap and to specific changes in interest rates through key 

rate duration, we expect to limit our exposure to interest rate changes for a wide range of interest rate yield curve scenarios. 

n	 PVS - PVS is an estimate of the change in the present value of the cash flows of our financial assets and liabilities from an 

instantaneous shock to interest rates, assuming spreads are held constant and no rebalancing actions are undertaken. 

PVS is measured in two ways, one measuring the estimated sensitivity of our portfolio's value to a 50 bps parallel 

movement in interest rates (PVS-L) and the other to a nonparallel movement (PVS-YC), resulting from a 25 bps change in 

slope of the yield curve. The 50 bps shift and 25 bps change in slope of the yield curve used for our PVS measures reflect 

reasonably possible near-term changes that we believe provide a meaningful measure of our interest-rate risk sensitivity.

To calculate PVS, the interest rate shock is applied to the duration (and convexity for PVS-L) of all interest-rate sensitive 

financial instruments. The resulting change in value for the aggregate portfolio is computed for both the up-rate and downrate shock, and whichever produces the more adverse outcome is the PVS. In cases where both the up-rate and down-rate 

shocks result in a positive effect, the PVS is zero. PVS results are shown on a pre-tax basis.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 80
Interest-Rate Risk Results

The following tables provide our duration gap, estimated point-in-time, and minimum and maximum PVS-L and PVS-YC results, 

and an average of the daily values and standard deviation. The table below also provides PVS-L estimates assuming an 

immediate 100 bps shift in the yield curve. The interest-rate sensitivity of a mortgage portfolio varies across a wide range of 

interest rates. 

Table 43 - PVS-YC and PVS-L Results Assuming Shifts of the Yield Curve

December 31, 2023 December 31, 2022

PVS-YC PVS-L PVS-YC PVS-L

(In millions) 25 bps 50 bps 100 bps 25 bps 50 bps 100 bps

Assuming shifts of the yield curve, (gains) 

losses on:(1)

Assets:

Investments ($301) $3,150 $6,229 $362 ($3,131) ($6,340) 

Guarantees(2) 34 (369) (678) (93) 512 1,090 

Total assets (267) 2,781 5,551 269 (2,619) (5,250) 

Liabilities (52) (1,519) (3,073) 68 1,958 3,912 

Derivatives 322 (1,274) (2,547) (336) 648 1,278 

Total $3 ($12) ($69) $1 ($13) ($60) 

PVS $3 $— $— $1 $— $— 

(1) The categorization of the PVS impact between assets, liabilities, and derivatives on this table is based upon the economic characteristics of those assets and 

liabilities, not their accounting classification. For example, purchase and sale commitments of mortgage-related securities and debt of consolidated trusts held by 

the mortgage-related investments portfolio are both categorized as assets on this table.

(2) Represents the interest-rate risk from our guarantees, which include buy-ups, float, and upfront fees (including buy-downs). 

Table 44 - Duration Gap and PVS Results

Year Ended December 31,

2023 2022

(Duration gap in months, dollars in millions)

Duration

Gap

PVS-YC

25 bps

PVS-L

50 bps

Duration

Gap

PVS-YC

25 bps

PVS-L

50 bps

Average — $3 $2 — $5 $5 

Minimum (0.2) — — (0.4) — — 

Maximum 0.3 9 31 0.4 18 77 

Standard deviation 0.1 2 6 0.1 4 11 

The disclosure in our Monthly Volume Summary reports, which are available on our website www.freddiemac.com/investors/

financials/monthly-volume-summaries.html, reflects the average of the daily PVS-L, PVS-YC, and duration gap estimates for 

a given reporting period (a month, a quarter, or a year). 

Derivatives enable us to reduce our economic interest-rate risk exposure as we continue to align our derivative portfolio with 

the changing duration of our economically hedged assets and liabilities. The table below shows that the PVS-L risk levels, 

assuming a 50 bps shift in the yield curve for the periods presented, would have been higher if we had not used derivatives.

Table 45 - PVS-L Results Before Derivatives and After Derivatives

PVS-L (50 bps)

(In millions)

Before

Derivatives

After

Derivatives

Effect of

Derivatives

December 31, 2023 $1,261 $— ($1,261) 

December 31, 2022 645 — (645) 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 81
Spread Risk

Spread risk is the risk that yields in different asset classes may not move together and may adversely affect our economic 

value. This risk arises principally because interest rates on our mortgage-related investments may not move in tandem with 

interest rates on our financial liabilities and derivatives, potentially affecting the effectiveness of our hedges. We are exposed to 

the following types of market spread risk:

n	 Market spread risk arising from mortgage-related investments, including loans and securities, and certain non-mortgage 

investments;

n	 Market spread risk arising from our use of LIBOR-, SOFR-, and Treasury-based instruments in our risk management 

activities; and 

n	 Market spread risk arising from the difference in time between when we commit to purchase a mortgage loan through our 

pipeline path and when we either securitize or hedge the loan. During this time, market spreads can widen, causing losses 

due to changes in fair value.

Spread duration measures the percentage change in the price of financial instruments from a change in spread over the 

benchmark interest rates. Unlike effective duration, spread duration typically only impacts the discounting of an instrument’s 

cash flows, and not the underlying cash flows themselves. This discounting impact creates a measure that is typically positive, 

where the instrument increases in value as spreads decline and decreases in value as spreads widen.

Limitations of Interest-Rate Risk Measures

While we believe that PVS and duration gap are useful risk management tools, they should be understood as estimates rather 

than as precise measurements. Mis-estimation of economic market risk could result in over or under hedging of interest-rate 

risk, significant economic losses, and an adverse impact on earnings. The limitations of our economic market risk measures 

include the following:

n	 Our PVS and duration gap estimates are determined using models that involve our judgment of interest-rate and 

prepayment assumptions. 

n	 There could be times when we hedge differently than our model estimates during the period, such as when we are making 

changes or market updates to these models. 

n	 PVS and duration gap do not capture the potential effect of certain other market risks, such as changes in volatility and 

market spread risk. The effect of these other market risks can be significant.

n	 Our sensitivity analyses for PVS and duration gap contemplate only certain movements in interest rates and are performed 

at a particular point in time based on the estimated fair value of our existing portfolio.

n	 Although the mortgage-related investments portfolio and Single-Family guarantees are the primary sources of interest-rate 

risk to the company, other core businesses also contribute to our interest-rate risk and may be managed differently. We 

have certain assets that have a relatively short holding period. As a result, we may manage the risk of these assets based 

on their disposition, while our risk measures use long-term cash flows. Hedging these businesses at times requires 

additional assumptions concerning risk metrics to accommodate changes in pricing that may not be related to the future 

cash flow of the assets. This could create a perceived risk exposure as the hedged risk may differ from the modeled risk.

n	 The choice of the benchmark rate used to model and hedge our positions is a significant assumption. The effectiveness of 

our hedges ultimately depends on how closely the different instruments (assets, liabilities, and derivatives) react to the 

underlying chosen benchmark. In the simplest example, all instruments would have interest-rate risk based on the same 

underlying benchmark, in our case, the swap rate. In practice, however, different instruments react differently versus the 

benchmark rate, which creates a market spread between the benchmark rate and the instrument. As the market spreads of 

these instruments move differently, our ability to predict the behavior of each instrument relative to the others is reduced, 

potentially affecting the effectiveness of our hedges.

n	 Our reported measurements do not include the sensitivity to interest-rate changes of net worth and the following assets 

and liabilities:

l	 Credit guarantee activities - We currently do not hedge the interest-rate exposure of our credit guarantees except for 

the interest-rate exposure related to upfront fees (including buy-downs), buy-ups, float, and STACR debt notes.

l	 Other assets and other liabilities - We do not include other miscellaneous assets and liabilities, primarily deferred tax 

assets, accounts payable and receivable, and non-cash basis adjustments.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 82
Earnings Sensitivity to Market Risk

The GAAP accounting treatment for our financial assets and liabilities (i.e., some are measured at amortized cost, while others 

are measured at fair value) creates variability in our GAAP earnings when interest rates and spreads change. We manage this 

variability of GAAP earnings, which may not reflect the economics of our business, using fair value hedge accounting. 

Interest Rate Related Earnings Sensitivity

While we manage our interest-rate risk exposure on an economic basis to a low level as measured by our models, our GAAP 

financial results are subject to significant earnings variability from period to period based on changes in market conditions.

In an effort to reduce our GAAP earnings variability and better align our GAAP results with the economics of our business, we 

elect hedge accounting for certain single-family mortgage loans and certain debt instruments. See Note 9 for additional 

information on hedge accounting.

Earnings Sensitivity to Changes in Interest Rates

We evaluate a range of interest rate scenarios to determine the sensitivity of our earnings due to changes in interest rates and 

to determine our fair value hedge accounting strategies. The interest rate scenarios evaluated include parallel shifts in the yield 

curve in which interest rates increase or decrease by 100 bps, non-parallel shifts in the yield curve in which long-term interest 

rates increase or decrease by 100 bps, and non-parallel shifts in the yield curve in which short-term and medium-term interest 

rates increase or decrease by 100 bps. This evaluation identifies the net effect on comprehensive income from changes in fair 

value attributable to changes in interest rates for financial instruments measured at fair value, including the effects of fair value 

hedge accounting, for each of the identified scenarios. This evaluation does not include the net effect on comprehensive 

income from interest-rate sensitive items that are not measured at fair value (e.g., amortization of mortgage loan premiums and 

discounts, changes in fair value of held-for-sale mortgage loans for which we have not elected the fair value option, etc.) or 

from changes in our future contractual net interest income due to repricing of our interest-bearing assets and liabilities. The 

before-tax results of this evaluation are shown in the table below.

Table 46 - Earnings Sensitivity to Changes in Interest Rates

(In millions) December 31, 2023 December 31, 2022

Interest Rate Scenarios(1)

Parallel yield curve shifts: 

 +100 bps ($2) $31 

 -100 bps 2 (31) 

Non-parallel yield curve shifts - long-term interest rates:

 +100 bps 177 79 

 -100 bps (177) (79) 

Non-parallel yield curve shifts - short-term and medium-term interest rates:

 +100 bps (179) (49) 

 -100 bps 179 49 

(1) The earnings sensitivity presented is calculated using the change in interest rates and net effective duration exposure.

The actual effect of changes in interest rates on our comprehensive income in any given period may vary based on a number of 

factors, including, but not limited to, the composition of our assets and liabilities, the actual changes in interest rates that are 

realized at different terms along the yield curve, and the effectiveness of our hedge accounting strategies. Even if implemented 

properly, our hedge accounting programs may not be effective in reducing earnings volatility, and our hedges may fail in any 

given future period, which could expose us to significant earnings variability in that period. In addition, after dedesignation of a 

fair value hedging relationship, the amount of amortization of the fair value hedging basis adjustment associated with the 

previously designated hedged item that we recognize in a period may differ from the change in fair value of the previously 

designated hedging instrument during that period, which may create variability in our earnings. See Risk Factors - Market 

Risks - Changes in interest rates could negatively affect the fair value of our financial assets and liabilities, results of 

operations, and net worth for additional information.

Spread-Related Earnings Sensitivity

We have limited ability to manage our spread risk exposure and, therefore, the volatility of market spreads may contribute to 

significant GAAP earnings variability. For financial assets measured at fair value, we generally recognize fair value losses when 

market spreads widen. Conversely, for financial liabilities measured at fair value, we generally recognize fair value gains when 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 83
market spreads widen. Certain accounting elections we make, such as election of the fair value option, may affect the amount 

of spread volatility recognized in our results of operations.

Transition from LIBOR 

ICE Benchmark Administration Limited, the administrator of LIBOR, ceased publishing the 1-week and 2-month U.S. Dollar 

LIBOR settings at the end of 2021 and ceased publishing the other, most widely used, tenors of U.S. Dollar LIBOR on a 

representative basis at the end of June 2023. Freddie Mac has exposure to LIBOR, including financial instruments that mature 

after or extend beyond June 2023. Our exposure arises from floating rate securities that we historically issued, loans and 

securities we acquired (including loans we subsequently resecuritized), and derivatives we entered into that reference LIBOR.

Our LIBOR transition committees (across businesses, functions, and products), working with senior management and FHFA, 

have enabled our transition away from reliance on LIBOR. We provided public communications, updates, and education about 

the status of this transition. We continue to work with our customers, investors, and servicers to implement the transition of 

historical LIBOR-based ARM products containing ARRC-recommended fallback language to SOFR-based ARM products. 

For a discussion of the risks related to the LIBOR transition, see Risk Factors - Market Risks - The transition to SOFR as 

the replacement index for LIBOR and as the floating rate index for new issuance of loans, securities, and derivative 

transactions could negatively affect the fair value of our financial assets and liabilities, results of operations, and net 

worth.

Operational Risk

Operational risk is the risk of direct or indirect loss resulting from inadequate or failed internal processes, people, or systems or 

from external events. Operational risk is inherent in all of our activities. Operational risk events include breakdowns related to 

people, process, and/or technology that could result in financial loss, legal actions, regulatory fines and restrictions, and 

reputational harm.

Operational Risk Management and Risk Profile

Our operational risk management methodology includes risk identification, measurement, monitoring, control, and reporting. 

When operational risk events are identified, our policies require that the events be documented and analyzed to determine 

whether changes are required in our systems, people, and/or processes to mitigate the risk of future events. 

In order to evaluate and monitor the risks associated with business processes, each business line periodically completes an 

assessment using the risk assessment methodology. The methodology is designed to identify and assess the business line's 

exposure to operational risk and determine if action is required to manage the risk to an acceptable level.

In addition to the risk and control self-assessment process, we employ several tools to identify, measure, and monitor 

operational risks, including loss event data, key risk indicators, root cause analysis, and testing. Our operational risk 

methodology requires that the primary responsibility for managing both the day-to-day risk and longer-term or emerging risks 

lies with the business divisions, with independent oversight performed by the second line.

We continue to face heightened operational risk and expect the risk to remain elevated for the near term. This elevated risk 

profile is due to the layering impact of several factors including: legacy systems requiring upgrade for operational resiliency; 

reliance on manual processes and models; volume and complexity of business initiatives, including new initiatives we are 

pursuing as required by the Conservatorship Scorecard; external events such as cybersecurity incidents, other security 

incidents, and third-party failures; and issues requiring remediation. Other factors contributing to our heightened operational 

risk are discussed in Risk Factors - Operational Risks.

While our operational risk profile remains elevated, we are continuing to strengthen our control environment by further 

developing metrics to monitor and report on our risk and control environment.

Operational Resiliency Risk

Operational resiliency risk refers to the potential threats and vulnerabilities that an organization faces in maintaining continuous 

and reliable operations. It involves the ability to anticipate, prepare for, and operate through disruptions, including technological 

failures, cybersecurity incidents, natural disasters, supply chain disruptions, and human error. The inability to manage resiliency 

risk to our critical business processes can impact the achievement of business objectives. To reduce operational resiliency risk, 

Freddie Mac has implemented strategies, continuity plans, dual-site technology operations, and other risk mitigation measures 

designed to meet desired recovery time objectives and minimize the impact of a disruption.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 84
CSP

We continue to make investments to support the ongoing development and maintenance of the CSP. The CSP is owned and 

operated by CSS, which is jointly owned by Freddie Mac and Fannie Mae. While we exercise influence over CSS through our 

representation on the CSS Board of Managers, we do not control its day-to-day operations. Freddie Mac, Fannie Mae, FHFA, 

and CSS continue to work together to monitor the operational effectiveness of the platform.

We rely on CSS and the CSP for the operation of many of our single-family securitization activities. Our business activities 

would be adversely affected and the market for Freddie Mac securities would be disrupted if the CSP were to fail or otherwise 

become unavailable to us or if CSS were unable to perform its obligations to us. As the CSP has an operational dependency on 

Fannie Mae to administer Freddie Mac issued commingled securities, an operational failure at Fannie Mae could also adversely 

impact the ability of CSS to perform its obligations to Freddie Mac. In the event of a CSS operational failure, we may be unable 

to issue certain new single-family mortgage-related securities, and investors in mortgage-related securities hosted on the CSS 

platform may experience payment delays or errors. 

For additional information, see Risk Factors - Operational Risks - A failure in our operational systems or infrastructure, or 

those of third parties, could impair our ability to provide market liquidity, disrupt our business operations, damage our 

reputation, expose us to legal risk, and cause financial losses.

Cybersecurity Risk

Cybersecurity Risk Management and Strategy

We manage cybersecurity risk using a three lines risk management model and governance structure that is integrated into our 

enterprise-wide risk framework with oversight by the Board of Directors and its committees and senior management positions, 

including our EVP – EO&T and Chief Information Security Officer (who reports to our EVP – EO&T). For additional information on 

our enterprise risk framework, see Risk Management – Overview, Risk Management – Enterprise Risk Framework, and 

Risk Management – Enterprise Risk Governance Structure. Our cybersecurity program also aligns with the National 

Institute of Standards and Technology 800-53 control framework. 

We continue to invest in cybersecurity to strengthen our capabilities to identify, prevent, detect, respond to, recover, and 

mitigate risk, and protect our systems, networks, and other technology assets against unauthorized attempts to access 

confidential or other information (including personal information) or other incidents that may disrupt or degrade our business 

operations. We require annual training regarding the use of information for new and existing employees as well as contractors 

and consultants who have access to Freddie Mac technology assets. Our training covers protecting Freddie Mac information, 

privacy, policy and standards, security best practices, and identifying and reporting potential cyber threats. We use third-party 

vendors and service providers to help enhance our cybersecurity capabilities and to assist us with cybersecurity program 

assessments and penetration testing.

We have strengthened our diligence, onboarding, and monitoring capabilities over our third parties. However, our control over 

the security posture of our third-party vendors and service providers and their supply chain connections remains limited. There 

can be no assurance that we can prevent, mitigate, or remediate the risk of any compromise or failure in the systems, networks, 

and other technology assets owned or controlled by our third-party vendors and service providers. 

Material Effects from Cybersecurity Incidents

Our operations rely on the secure, accurate and timely receipt, storage, transmission, use, disclosure, and other processing of 

confidential and other information (including personal information) in our systems and networks. We also rely on the secure, 

accurate and timely receipt, storage, transmission, use, disclosure, and other processing of confidential and other information 

in the systems and networks of our customers and third parties, including suppliers, sellers and servicers, financial market 

utilities, and other third parties. Cybersecurity risks for companies like ours continue to increase. Like many companies and 

government entities, from time to time we have been, and expect to continue to be, the target of attempted cybersecurity 

incidents and other information security threats, including those from nation-state and nation-state supported actors.

Although to date we have not experienced any cybersecurity incidents resulting, or reasonably likely to result in, a material 

impact to our company, including to our business, financial condition, and results of operations, there is no assurance that our 

cybersecurity risk management program will prevent cybersecurity incidents from having such impacts in the future.

Additionally, insider threats also remain a risk given our workforce diversification to include contractors, remote workers, parttime employees, and full-time employees. As referenced above, our third-party vendors and service providers and their supply 

chain connections remain a potential source of risk. 

For additional information, see Risk Factors - Operational Risks - Potential cybersecurity threats are changing rapidly 

and advancing in sophistication. We may not be able to protect our systems and networks, or the confidentiality of our 

confidential or other information (including personal information), from cybersecurity incidents and other unauthorized 

access, disclosure, and disruption. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 85
Cybersecurity Governance

The Board of Directors and two of its committees, the Operations and Technology and Risk Committees, oversee the 

company's information and cybersecurity operations by receiving periodic reports from our EVP – EO&T, the Chief Information 

Security Officer, and other members of management. 

Management

Our management is responsible for assessing and managing cybersecurity risks by establishing and maintaining processes and 

programs designed to prevent, detect, respond to, and mitigate potential cybersecurity risks. Senior management is regularly 

informed by our cybersecurity personnel on cybersecurity matters. Our management also engages in periodic cybersecurity 

exercises and internal cybersecurity incident simulations, including tabletop exercises relating to cyberattacks, ransomware, 

and other security events. Escalation of specific incidents from our cybersecurity personnel to senior management follow 

written, risk-based procedures. Our management periodically reports to the Board of Directors, and its committees. These 

reports include information regarding management's ongoing efforts to manage cybersecurity risk and the steps management 

has taken towards addressing and mitigating the evolving cybersecurity threat environment. Management discusses 

cybersecurity developments with the Chairs of the Operations and Technology Committee and the Risk Committee and other 

Board members between Board and committee meetings, as necessary. Our cybersecurity personnel, and those senior 

managers who oversee them, including our EVP – EO&T and Chief Information Security Officer, possess demonstrated 

expertise with cybersecurity matters. For example, our Chief Information Security Officer and members of the Chief Information 

Security Officer’s leadership team have, on average, over 19 years of work experience in information security or cybersecurity 

fields and achieved such professional certifications as Certified Information Systems Security Professional (CISSP), Certified 

Information Security Manager (CISM), and Factor Analysis of Information Risk (FAIR). For additional information on the 

background of our EVP - EO&T, see Directors, Corporate Governance, and Executive Officers - Executive Officers. 

Board of Directors

Members of the Board of Directors also receive reports from management regarding certain internal and industry-wide trends 

and exercises relating to these matters to assist with their oversight responsibilities. The company has written, risk-based 

procedures to escalate information regarding certain cybersecurity incidents to the appropriate Board members in a timely 

fashion. Additionally, certain Board members are informed of, and have an opportunity to provide feedback on management's 

internal cybersecurity incident simulations referenced above. 

The Board of Directors and its committees also have authority, as they deem appropriate, to fulfill Board or committee 

responsibilities, to engage outside consultants or advisors, including technology and cybersecurity experts, and oversee the 

company's information security program. See MD&A - Risk Management - Overview for additional information on the 

Board of Directors' role in risk oversight.

Operations and Technology Committee

The Operations and Technology Committee consists entirely of independent directors, has responsibility for overseeing the 

development and execution of our enterprise information, operations, and technology strategies and the information, 

operational resiliency and enterprise third-party governance programs. Specifically, the Operations and Technology Committee: 

(1) oversees our information, operations, and technology strategies and planning, and the implementation of technology 

initiatives critical to the achievement of our mission, strategy, and business objectives; (2) oversees, in conjunction with the Risk 

Committee, our management of information (including cybersecurity), technology, operational resiliency, and enterprise thirdparty governance risk, including the possibility that these risks will adversely affect the achievement of our mission and 

business objectives; (3) oversees our information (including cybersecurity and information security), operational resiliency and 

enterprise third-party governance programs, including risk and controls; (4) receives reports related to our technology strategy, 

practices, and management and potential for innovation from both EO&T and the business areas, as appropriate; and (5) 

reviews and recommends to the Board for approval the annual EO&T business plan, including relevant performance indicators, 

and evaluating EO&T against the plan. The Operations and Technology Committee also reviews capabilities for and adequacy 

of resources allocated to operations and technology enterprise-wide and monitors and evaluates trends in technology that may 

affect our strategy and business objectives. 

Risk Committee

The Risk Committee, which consists entirely of independent directors, oversees on an enterprise-wide basis the company's risk 

management framework, including credit risk, market risk, liquidity risk, operational risk (including cybersecurity), compliance 

risk, climate risk, and strategic risk. The Risk Committee reviews and recommends the company's enterprise risk policy and 

Board-level risk-appetite to the Board of Directors for approval, oversees management’s adherence to Board risk limits and 

approves any exceptions thereto with notice to the Board, and, among other responsibilities, reviews significant: (1) enterprise 

risk exposures; (2) risk management strategies; (3) results of risk management reviews and assessments; and (4) emerging 

risks. The Risk Committee also approves all decisions regarding the appointment or removal of the CRO, and the CRO reports 

independently to the Risk Committee. 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 86
For additional information on the Risk Committee, see Directors, Corporate Governance, and Executive Officers - 

Board of Directors and Board Committee Information - Board Committees - Risk Committee.

Third-Party Risk

Third-party risk is the risk of failure of an individual or entity engaged to deliver a product, service, or process to, or on behalf 

of, Freddie Mac. We rely on third parties, and their supply chains, to support critical processes and core functions, and are 

exposed to operational risks as a result of this reliance. These third parties could experience, directly or through their supply 

chains, failures due to process breakdowns, technology outages, cybersecurity incidents and other security incidents, adverse 

financial conditions, or other disruptions. We continue to enhance our enterprise capabilities to manage third-party operational 

risks. While we continue to mature our program, we may be exposed to associated elevated risks. Our use of third parties 

increases exposure to cybersecurity incidents through third parties that access, store, and otherwise process our data 

(including personal information) and their supply chains. Efforts are underway to improve our controls and procedures related to 

third-party data sharing. We also continue to strengthen our processes related to identifying material subcontractors and 

service providers of the third parties with which we do business and managing the associated operational risk. We have 

increased our monitoring of third parties with which we do business that we deem to be critical to our operations; however, our 

control over their security posture remains limited, and there can be no assurance that we can prevent, mitigate, or remediate 

the operational risk profile associated with such third parties. 

In addition to credit risk exposure, sellers and servicers expose us to operational risk, including operational resilience, 

information, and reporting risks. Sellers and servicers also expose us to compliance risk resulting from non-compliance with 

applicable laws, regulations, and FHFA supervisory or conservator requirements. For additional information on our monitoring 

of our sellers and servicers and related risks, see MD&A - Risk Management - Counterparty Credit Risk and Risk 

Factors - Operational Risks - We rely on third parties, including our sellers and servicers, or their vendors and other 

business partners, for certain important functions. Any failures by those third parties to deliver products or services, or 

to manage risks effectively, could disrupt our business operations or servicing of our portfolio, or expose us to other 

operational risks.

Model Risk

Model risk is the potential for adverse consequences from model errors or decisions based on the incorrect use or application 

of model outputs. Models, in general, face significant challenges in accurately forecasting key inputs into our financial 

projections. These can include, but are not limited to, projections of mortgage rates, house prices, credit defaults, yields, and 

prepayments. In response, we are managing this risk by closely monitoring model performance and applying model overlays 

and adjustments when deemed appropriate. These model overlays and adjustments will be driven by the latest developments 

and emerging trends in the economy, as well as any additional government interventions and internal policy changes. However, 

these adjustments incorporate subjectivity and may be based upon judgment. Actual results could differ from our estimates, 

and the use of different judgments and assumptions related to these estimates could have a material impact on our 

consolidated financial statements.

Model development, changes to existing models, and model risks are managed in each business line according to our three 

lines framework. New model development and changes to existing models undergo a review process. Each business 

periodically reviews model performance, embedded assumptions, limitations, and modeling techniques, and updates its 

models as it deems appropriate. ERM independently validates the work done by the business lines (e.g., conducting 

independent assessments of ongoing monitoring results, model risk ratings, performance monitoring, and reporting against 

thresholds and alerts).

Given the importance and complexity of models in our business, model development may take significant time to complete. 

Delays in our model development process could affect our ability to make sound business and risk management decisions, and 

increase our exposure to risk. We have procedures designed to manage this risk.

Model risk also exists due to incorrect or insufficient data inputs into models and/or incorrect use of model outputs.

For additional information, see Risk Factors - Operational Risks - We face risks and uncertainties associated with the 

models that we use to inform business and risk management decisions and for financial accounting and reporting 

purposes.

Compliance Risk

Compliance risk is the risk of non-compliance with applicable laws, regulations, FHFA supervisory or conservator requirements, 

trustee agreement requirements, or ethical standards (collectively, regulatory obligations). We have established a compliance 

program, leveraging the three lines enterprise risk framework, to oversee and manage compliance risk, including effective 

challenge of our business areas’ compliance with such obligations, as appropriate. We maintain policies and procedures that 

provide the governance framework for the identification, measurement, monitoring, testing, reporting, and remediation of 

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 87
compliance issues. We have continued to enhance our overall compliance program, including risk assessments, monitoring, 

testing, and reporting. To the extent that regulatory concerns are identified, we coordinate with FHFA and our internal auditors 

to assess the impact and remediate the concerns, as appropriate. For additional information relating to our compliance 

program, see Risk Factors - Legal and Compliance Risks.

Effectiveness of Our Disclosure Controls and Procedures

Management, including our CEO and CFO, conducted an evaluation of the effectiveness of our disclosure controls and 

procedures as of December 31, 2023. As of that date, we had one material weakness related to conservatorship, which 

remained unremediated, causing us to conclude that our disclosure controls and procedures were not effective at a reasonable 

level of assurance. For additional information, see Controls and Procedures.

Management's Discussion and Analysis Risk Management

FREDDIE MAC | 2023 Form 10-K 88
LIQUIDITY AND CAPITAL RESOURCES

Overview

Our business activities require that we maintain adequate liquidity to meet our financial obligations as they come due and meet 

the needs of customers in a timely and cost-efficient manner. We also must maintain adequate capital resources to avoid being 

placed into receivership by FHFA.

Sources and Uses of Funds

Our primary source of funding for the assets on our balance sheet is the issuance of debt. In addition to the funding provided 

by issuing debt, our other sources of funds include:

n	 Principal payments on and sales of securities and loans that we own;

n	 Repurchase transactions;

n	 Interest income on securities and loans that we own; and

n	 Guarantee fees (inclusive of fees that we receive at the time we purchase a loan).

We use these sources to fund the assets on our balance sheet. Our primary uses of funds include:

n	 Principal payments upon the maturity, redemption, or repurchase of our debt;

n	 Payments of interest on our debt and non-interest expenses, including costs related to CRT transactions; 

n	 Purchases of mortgage loans, including purchases of seriously delinquent or modified loans underlying our securities, 

mortgage-related securities, and other investments; and

n	 Payments related to derivative contracts and posting or pledging of collateral to third parties in connection with secured 

financing and daily trade activities.

In addition to the sources and uses of cash described above, we are involved in various legal proceedings, including those 

discussed in Legal Proceedings, which may result in a need to use cash to settle claims or pay certain costs or receipt of 

cash from settlements.

Our securities and other obligations are not guaranteed by the U.S. government and do not constitute a debt or obligation of 

the U.S. government or any agency or instrumentality thereof, other than Freddie Mac. We continue to manage our debt 

issuances to remain in compliance with the aggregate indebtedness limits set forth in the Purchase Agreement.

Liquidity

Liquidity Management Framework

The support provided by Treasury pursuant to the Purchase Agreement enables us to have adequate liquidity to conduct our 

normal business activities. However, the costs and availability of our debt funding could vary for a number of reasons, including 

the uncertainty about the future of the GSEs and any future downgrades in our credit ratings or the credit ratings of the U.S. 

government. 

We are required to comply with minimum short-, medium-, and long-term liquidity requirements established by FHFA. These 

requirements are based on cash flows needed under a stressed scenario that assumes, among other things, that for short- and 

medium-term debt, we may not have access to funding from the market for an extended period of time and therefore must fund 

our cash needs utilizing certain liquid assets in our portfolio.

The minimum liquidity requirements have four components:

n	 A 30-day cash flow stress test that assumes we continue to provide liquidity to the market while holding a $10 billion buffer 

above outflows;

n	 A 365-day metric that requires us to hold liquidity to meet our expected cash outflows over 365 days and to continue to 

provide liquidity to the market under certain stress conditions;

n	 A specified minimum long-term debt to less-liquid asset ratio. Less-liquid assets are those that are not eligible to be 

pledged as collateral to the FICC; and

n	 A requirement that we fund our assets with liabilities that have a specified minimum term relative to the term of the assets.

We make extensive use of the Federal Reserve's payment system in our business activities. The Federal Reserve requires that 

we fully fund our accounts at the Federal Reserve Bank of New York to the extent necessary to cover cash payments on our 

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 89
debt and mortgage-related securities each day, before the Federal Reserve Bank of New York, acting as our fiscal agent, will 

initiate such payments. Although we seek to maintain sufficient intraday liquidity to fund our activities through the Federal 

Reserve's payment system, we have limited access to cash once the debt markets are closed for the day. Insufficient cash may 

cause our account to be overdrawn, potentially resulting in penalties and reputational harm.

Maintaining sufficient liquidity is of primary importance to, and a cost of, our business. Under our liquidity management 

practices and policies, we:

n	 Manage intraday cash needs and provide for the contingency of an unexpected cash demand;

n	 Maintain cash and non-mortgage investments to enable us to meet ongoing cash obligations for a limited period of time, 

assuming no access to unsecured debt markets;

n	 Maintain unencumbered securities with a value greater than or equal to the largest projected daily cash shortfall for an 

extended period of time, assuming no access to unsecured debt markets; and

n	 Manage the maturity of our unsecured debt based on our asset profile.

To facilitate cash management, we forecast cash outflows and inflows using assumptions and models. These forecasts help us 

to manage our liabilities with respect to the timing of our cash flows. Differences between actual and forecasted cash flows 

have resulted in higher costs from issuing a higher amount of debt than needed or unexpectedly needing to issue debt, and 

may do so in the future. Differences between actual and forecasted cash flows also could result in our account at the Federal 

Reserve Bank of New York being overdrawn. We maintain daily cash reserves to manage this risk.

Primary Sources of Liquidity

The following table lists the sources of our liquidity, the balances as of the dates shown, and a brief description of their 

importance to Freddie Mac.

Table 47 - Liquidity Sources

(In millions) December 31, 2023(1) December 31, 2022(1) Description

Other Investments Portfolio - 

Liquidity and Contingency 

Operating Portfolio

 $124,098 $114,339 The liquidity and contingency operating portfolio, included 

within our other investments portfolio, is primarily used for 

short-term liquidity management.

Mortgage-Related Investments 

Portfolio

 24,469 25,853 The liquid portion of our mortgage-related investments portfolio 

can be pledged or sold for liquidity purposes. The amount of 

cash we may be able to successfully raise may be substantially 

less than the balance.

(1) Represents carrying value for the liquidity and contingency operating portfolio, included within our other investments portfolio, and UPB for the liquid portion of the 

mortgage-related investments portfolio.

Other Investments Portfolio

Our other investments portfolio is important to our cash flow, collateral management, asset and liability management, and 

ability to provide liquidity and stability to the mortgage market. 

Our liquidity and contingency operating portfolio primarily includes securities purchased under agreements to resell and nonmortgage-related securities. Our non-mortgage-related securities consist of U.S. Treasury securities and other investments that 

we could sell to provide us with an additional source of liquidity to fund our business operations. We also maintain non-interestbearing deposits at the Federal Reserve Bank of New York and interest-bearing deposits at commercial banks. Our interestbearing deposits at commercial banks totaled $5.1 billion and $5.0 billion as of December 31, 2023 and December 31, 2022, 

respectively. See MD&A - Our Portfolios - Investments Portfolio - Other Investments Portfolio for additional information 

about our other investments portfolio. 

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 90
Mortgage-Related Investments Portfolio

We invest principally in mortgage-related investments, certain categories of which are largely unencumbered and liquid. Our 

primary source of liquidity among these mortgage assets is our holdings of agency securities. See MD&A - Our Portfolios - 

Investments Portfolio - Mortgage-Related Investments Portfolio for additional information about our mortgage loans and 

mortgage-related securities.

In addition, we hold certain single-family loans and multifamily loans that could be securitized and would then be available for 

sale or for use as collateral for repurchase agreements. Due to the large size of our portfolio of liquid assets, the amount of 

mortgage-related assets that we may successfully sell or borrow against in the event of a liquidity crisis or significant market 

disruption may be substantially less than the amount of mortgage-related assets we hold. There would likely be insufficient 

market demand for large amounts of these assets over a prolonged period of time, which would limit our ability to sell or borrow 

against these assets.

We hold other mortgage assets, but given their characteristics, they may not be available for immediate sale or for use as 

collateral for repurchase agreements. These assets principally consist of single-family delinquent and modified loans.

We are subject to limits on the amount of mortgage assets we can sell in any calendar month without review and approval by 

FHFA and, if FHFA so determines, Treasury. See Conservatorship and Related Matters - Limits on Our MortgageRelated Investments Portfolio and Indebtedness for additional details.

Primary Sources of Funding

The following table lists the sources of our funding, the balances as of the dates shown, and a brief description of their 

importance to Freddie Mac.

Table 48 - Funding Sources

(In millions) December 31, 2023(1) December 31, 2022(1) Description

Debt of Freddie Mac $166,419 $166,762 Debt of Freddie Mac is used to fund our business activities.

Debt of Consolidated Trusts 3,041,927 2,979,070 Debt of consolidated trusts is used primarily to fund our SingleFamily guarantee activities. This type of debt is principally repaid 

by the cash flows of the associated mortgage loans. As a result, 

our repayment obligation is limited to amounts paid pursuant to our 

guarantee of principal and interest and to purchase modified or 

seriously delinquent loans from the trusts.

(1) Represents the carrying value of debt balances after consideration of offsetting arrangements.

Debt of Freddie Mac

We issue debt of Freddie Mac to fund our operations. Competition for funding can vary with economic, financial market, and 

regulatory environments. The amount, type, and term of debt issued is based on a variety of factors and is designed to meet 

our ongoing cash needs and to comply with our Liquidity Management Framework. 

We may use the following types of products as part of our funding and liquidity management activities:

n	 Securities sold under agreements to repurchase - Collateralized short-term borrowings where we sell securities to 

a counterparty with an agreement to repurchase those securities at a future date.

n	 Discount notes and Reference Bills® - Short-term instruments with maturities of one year or less. These products are 

generally sold on a discounted basis, paying principal only at maturity. Reference Bills are auctioned to dealers on a regular 

schedule, while discount notes are issued in response to investor demand and our cash needs.

n	 Medium-term notes - A variety of fixed-rate and variable-rate medium-term notes, including callable and noncallable 

securities, and zero-coupon securities, with various maturities.

n	 Reference Notes® securities - Reference Notes securities are non-callable fixed-rate securities, which we generally 

issue with original maturities greater than or equal to two years.

As of December 31, 2023, our aggregate indebtedness, calculated as the par value of debt of Freddie Mac, was $174.0 billion, 

which was below the $270.0 billion debt cap limit imposed by the Purchase Agreement. Our aggregate indebtedness to meet 

our funding needs is constrained by the debt cap limit. We disclose the amount of our indebtedness on this basis monthly 

under the caption "Indebtedness Pursuant to the Purchase Agreement - Total Debt Outstanding" in our Monthly Volume 

Summary reports, which are available on our website at www.freddiemac.com/investors/financials/monthly-volumesummaries.html.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 91
To fund our business activities, we depend on the continuing willingness of investors to purchase our debt securities. Changes 

or perceived changes in the government's support of us could have a severe negative effect on our access to the debt markets 

and on our debt funding costs. 

In addition, any change in applicable legislative or regulatory exemptions, including those described in Regulation and 

Supervision, could adversely affect our access to some debt investors, thereby potentially increasing our debt funding costs.

The table below summarizes the par value and the average rate of debt of Freddie Mac securities we issued or paid off, 

including regularly scheduled principal payments, payments resulting from calls, and payments for repurchases. We call, 

exchange, or repurchase our outstanding debt securities from time to time for a variety of reasons, including managing our 

funding composition and supporting the liquidity of our debt securities.

Table 49 - Debt of Freddie Mac Activity

Year Ended December 31,

2023 2022

(Dollars in millions) Par Value Average Rate(1) Par Value Average Rate(1)

Short-term:

Beginning balance $7,716 3.49 % $— — %

Issuances 93,794 4.50 95,098 2.61 

Repayments — — — — 

Maturities (95,478) 4.33 (87,382) 2.52 

Total short-term debt 6,032 5.39 7,716 3.49 

Long-term:

Beginning balance 170,363 2.22 181,613 1.11 

Issuances 53,078 5.52 42,292 4.00 

Repayments (13,743) 5.57 (3,450) 4.22 

Maturities (41,690) 2.52 (50,092) 0.39 

Total long-term debt 168,008 3.31 170,363 2.22 

Total debt of Freddie Mac, net $174,040 3.38 % $178,079 2.28 %

(1) Average rate is weighted based on par value.

Our callable debt provides us with the option to repay the outstanding principal balance of the debt prior to its contractual 

maturity date. As of December 31, 2023, $97.0 billion of the outstanding $141.2 billion of callable debt may be called within one 

year, not including callable debt due to contractually mature within one year.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 92
Maturity and Redemption Dates

The following table presents the par value of debt of Freddie Mac by contractual maturity date and earliest redemption date. 

The earliest redemption date refers to the earliest call date for callable debt and the contractual maturity date for all other debt 

of Freddie Mac.

Table 50 - Maturity and Redemption Dates

As of December 31, 2023 As of December 31, 2022

(In millions) Contractual Maturity Date Earliest Redemption Date Contractual Maturity Date Earliest Redemption Date

Debt of Freddie Mac(1):

1 year or less $47,276 $144,232 $48,543 $144,524 

1 year through 2 years 61,187 15,249 32,261 3,820 

2 years through 3 years 15,645 447 51,658 13,071 

3 years through 4 years 12,530 305 5,739 212 

4 years through 5 years 10,947 345 7,603 170 

Thereafter 24,278 11,285 27,623 11,630 

STACR and SCR debt(2) 2,177 2,177 4,652 4,652 

Total debt of Freddie Mac $174,040 $174,040 $178,079 $178,079 

(1) As of December 31, 2023 and December 31, 2022, excludes $10.2 billion and $12.0 billion, respectively, of payables related to securities sold under agreements to 

repurchase that we offset against receivables related to securities purchased under agreements to resell on our consolidated balance sheets. 

(2) STACR debt notes and SCR debt notes are subject to prepayment risk as their payments are based upon the performance of a reference pool of mortgage assets that 

may be prepaid by the related mortgage borrowers at any time generally without penalty and are, therefore, included as a separate category in the table.

Debt of Consolidated Trusts

The largest component of debt on our consolidated balance sheets is debt of consolidated trusts, which relates to 

securitization transactions that we consolidate for accounting purposes. We primarily issue this type of debt by securitizing 

mortgage loans to finance our guarantee activities. When we consolidate securitization trusts, we recognize on our 

consolidated balance sheets the assets held by the trusts, the majority of which are mortgage loans, and the debt issued by the 

trusts, the majority of which are Level 1 Securitization Products.

Debt of consolidated trusts represents our liability to third parties that hold beneficial interests in our consolidated securitization 

trusts. Debt of consolidated trusts is principally repaid from the cash flows of the mortgage loans held by the securitization 

trusts that issued the debt. In circumstances when the cash flows of the mortgage loans are not sufficient to repay the debt, we 

make up the shortfall because we have guaranteed the payment of principal and interest on the debt. In certain circumstances, 

we have the right and/or obligation to purchase the loan from the trust prior to its contractual maturity. For additional 

information on our purchases of loans from trusts, see Our Business Segments - Single-Family - Business Overview.

At December 31, 2023, our estimated net exposure to this type of debt (including the amounts that are due to Freddie Mac for 

debt of consolidated trusts that we purchased) is recognized as the allowance for credit losses on mortgage loans held by 

consolidated trusts. See Note 6 for details on our allowance for credit losses.

The table below shows the issuance and extinguishment activity for the debt of our consolidated trusts.

Table 51 - Debt of Consolidated Trusts Activity

Year Ended December 31,

(In millions) 2023 2022

Beginning balance $2,929,567 $2,732,056 

Issuances 423,303 776,015 

Repayments and extinguishments (352,977) (578,504) 

Ending balance 2,999,893 2,929,567 

Unamortized premiums and discounts 42,034 49,503 

Debt of consolidated trusts $3,041,927 $2,979,070 

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 93
Credit Ratings

Our ability to access the capital markets and other sources of funding, as well as our cost of funds, may be affected by our 

credit ratings. The table below indicates our credit ratings as of January 31, 2024.

Table 52 - Freddie Mac Credit Ratings

Nationally Recognized Statistical Rating Organization

S&P Moody's Fitch

Senior long-term debt AA+ Aaa AA+

Short-term debt A-1+ P-1 F-1+

Preferred stock(1) D Ca C

Outlook Stable Negative Stable

(1) Does not include senior preferred stock issued to Treasury.

Our credit ratings and outlooks are primarily based on the support we receive from Treasury and, therefore, are affected by 

changes in the credit ratings and outlooks of the U.S. government.

On August 2, 2023, Fitch lowered our Long-Term Issuer Default Rating (IDR) and senior unsecured debt rating to AA+ from AAA 

and revised the credit rating Outlook to Stable from Negative Watch. This action followed Fitch's downgrade of U.S. 

government debt ratings on August 1, 2023. On November 11, 2023, Moody's affirmed our long-term senior unsecured debt 

ratings at Aaa and revised the credit rating Outlook to Negative from Stable. This action followed Moody's change of the 

Outlook on the U.S. government to Negative from Stable on November 10, 2023. 

A security rating is not a recommendation to buy, sell, or hold securities. It may be subject to revision or withdrawal at any time 

by the assigning rating organization. Each rating should be evaluated independently of any other rating.

Contractual Obligations

Our contractual obligations affect our liquidity and capital resource needs and primarily include the debt (and associated 

interest payments) and derivative liabilities recognized on our consolidated balance sheets. We also have contractual 

obligations recognized in other liabilities on our consolidated balance sheets, including payments to our qualified and nonqualified defined contribution plans and other benefit plans, and future cash payments due under our obligations to make 

delayed equity contributions to LIHTC partnerships. 

We also have contractual obligations associated with our commitments to purchase loans and mortgage-related securities from 

third parties, most of which are accounted for as derivatives, as well as certain off-balance sheet obligations that are legally 

binding and enforceable, including guarantees, unfunded lending arrangements, and obligations to advance funds upon the 

occurrence of certain events. See Off-Balance Sheet Arrangements for additional information on the potential effects of our 

off-balance sheet obligations on our liquidity and capital resources.

The amount and timing of payments due related to debt of Freddie Mac are discussed in Primary Sources of Funding. Most of 

our purchase commitments are scheduled to occur within the next 12 months. The amount and timing of certain other of our 

contractual obligations are uncertain, including future payments of principal and interest related to debt of consolidated trusts 

held by third parties, STACR and SCR transactions, cash settlements on derivative agreements not yet accrued, guarantee 

payments, and commitments to advance funds under certain off-balance sheet arrangements.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 94
Off-Balance Sheet Arrangements

We enter into certain business arrangements that are not recorded on our consolidated balance sheets or that may be recorded 

in amounts that differ from the full contractual or notional amount of the transaction that affect our short- and long-term liquidity 

needs. These off-balance sheet arrangements primarily consist of guarantees and commitments. Certain of these arrangements 

present credit risk exposure. See MD&A - Risk Management - Credit Risk for additional information on our credit risk 

exposure on off-balance sheet arrangements. 

Guarantees

We have certain off-balance sheet arrangements related to our mortgage-related guarantee activities. Our off-balance sheet 

arrangements related to mortgage-related guarantees primarily consist of guaranteed K Certificates. Our guarantee of these 

securities and other mortgage-related guarantees may result in liquidity needs to cover potential cash flow shortfalls from 

borrower defaults. 

We have the ability to commingle TBA-eligible Fannie Mae collateral in certain of our resecuritization products. When we 

resecuritize Fannie Mae securities in our commingled resecuritization products, our guarantee covers timely payments of 

principal and interest on such securities. Accordingly, commingling Fannie Mae collateral in our resecuritization transactions 

increases our off-balance sheet liquidity exposure as we do not have control over the Fannie Mae collateral. See Note 3 and 

Note 5 for additional information on our mortgage-related guarantees and guarantees of Fannie Mae securities.

Commitments

We enter into certain commitments, including commitments to purchase securities under agreements to resell, commitments to 

purchase multifamily loans, and unfunded multifamily lending arrangements, that are not recorded on our consolidated balance 

sheets. We have elected the fair value option for certain of our commitments to purchase multifamily loans. We also have 

entered into other commitments to purchase or sell mortgage loans or mortgage-related securities that are accounted for as 

derivative instruments. These commitments are recognized on our consolidated balance sheets at fair value. 

In addition, in connection with certain of our multifamily other mortgage-related guarantee arrangements and other 

securitization products, we have provided commitments to advance funds, commonly referred to as "liquidity guarantees." 

These guarantees require us to advance funds to third parties that enable them to repurchase tendered bonds or securities that 

are unable to be remarketed. At both December 31, 2023 and December 31, 2022, there were no liquidity guarantee advances 

outstanding. See Note 5 and Note 9 for additional information on our commitments.

Cash Flows

n		2023 vs. 2022 - Cash and cash equivalents (including restricted cash and cash equivalents) decreased slightly from $6.4 

billion as of December 31, 2022 to $6.0 billion as of December 31, 2023.

n		2022 vs. 2021 - Cash and cash equivalents (including restricted cash and cash equivalents) decreased by $3.8 billion from 

$10.2 billion as of December 31, 2021 to $6.4 billion as of December 31, 2022, primarily due to a decrease in trust cash 

driven by lower loan prepayments. We also used available cash flows to increase our investments in securities purchased 

under agreements to resell.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 95
Capital Resources

The GSE Act specifies certain capital requirements for us and authorizes FHFA to establish other capital requirements as well 

as to increase our minimum capital levels or establish additional capital and reserve requirements for particular purposes. In 

October 2008, FHFA suspended capital classification of us during conservatorship, in light of the Purchase Agreement. 

Our entry into conservatorship resulted in significant changes to the assessment of our capital adequacy and our management 

of capital. We entered into the Purchase Agreement with Treasury, pursuant to which we issued to Treasury both senior 

preferred stock and a warrant to purchase 79.9% of our common stock outstanding on a fully diluted basis on the date of 

exercise. Under the Purchase Agreement, Treasury made a commitment to provide us with equity funding in certain conditions 

to eliminate deficits in our net worth. Our ability to obtain equity funding from Treasury pursuant to its commitment under the 

Purchase Agreement has enabled us to avoid being placed into receivership by FHFA and maintain the confidence of the debt 

markets as having very high-quality credit, upon which our business model is dependent. The amount of available funding 

remaining under the Purchase Agreement was $140.2 billion as of December 31, 2023, which will be reduced by any future 

draws. 

Pursuant to the Purchase Agreement, we will not have a dividend requirement to Treasury on the senior preferred stock until 

our Net Worth Amount exceeds the amount of adjusted total capital necessary to meet capital requirements and buffers set 

forth in the ERCF. Based on our Net Worth Amount of $47.7 billion as of December 31, 2023, no dividend is payable to 

Treasury for the quarter ended December 31, 2023. Under the Purchase Agreement, the payment of dividends does not reduce 

the outstanding liquidation preference on the senior preferred stock. Our cumulative senior preferred stock dividend payments 

totaled $119.7 billion as of December 31, 2023.

The aggregate liquidation preference of the senior preferred stock owned by Treasury was $117.3 billion as of December 31, 

2023. The aggregate liquidation preference of the senior preferred stock will be increased, at the end of each fiscal quarter 

through the Capital Reserve End Date, by an amount equal to the increase in the Net Worth Amount, if any, during the 

immediately prior fiscal quarter. In addition, to the extent that we draw additional funds in the future, the aggregate liquidation 

preference will increase by the amount of those draws. For additional information on the Purchase Agreement, warrant and 

senior preferred stock, including our dividend requirement on the senior preferred stock and the commitment fee to be paid to 

Treasury after the Capital Reserve End Date, see MD&A - Conservatorship and Related Matters, Note 2, and Note 11.

The table below presents activity related to our net worth.

Table 53 - Net Worth Activity

Year Ended December 31,

(In millions) 2023 2022 2021

Beginning balance, January 1 $37,018 $28,033 $16,413 

Comprehensive income 10,704 8,985 11,620 

Capital draws from Treasury — — — 

Senior preferred stock dividends declared — — — 

Total equity / net worth $47,722 $37,018 $28,033 

Remaining Treasury funding commitment $140,162 $140,162 $140,162 

Aggregate draws under Purchase Agreement 71,648 71,648 71,648 

Aggregate cash dividends paid to Treasury 119,680 119,680 119,680 

Liquidation preference of the senior preferred stock 117,309 107,878 97,959 

ERCF

FHFA established the ERCF as a new enterprise regulatory capital framework for Freddie Mac and Fannie Mae in December 

2020. Our current capital levels are significantly below the levels that would be required under the ERCF. The ERCF has a 

transition period for compliance, and we are not required to comply with the regulatory capital requirements or the buffer 

requirements while in conservatorship. In general, the compliance date for the regulatory capital requirements will be the later of 

the date of termination of our conservatorship and any later compliance date provided in a transition order, and the compliance 

date for buffer requirements in the ERCF will be the date of termination of our conservatorship. With respect to the ERCF’s 

advanced approaches requirements, the compliance date is January 1, 2028 or any later compliance date specified by FHFA.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 96
The charts below present the ERCF capital adequacy requirements under the risk-based capital requirement (CET1 capital ratio 

relative to RWA) and leverage capital requirement (Tier 1 capital ratio relative to ATA). Our required CET1 capital ratio declined 

to 9.5% as of December 31, 2023 from 10.1% as of December 31, 2022, as risk-weighted assets increased primarily due to 

Single-Family mortgage portfolio growth, while the stress and stability capital buffers remained relatively flat. The stress and 

stability capital buffers do not change in proportion to the change in RWA as they are calculated from ATA, which increased this 

year at a smaller rate than RWA.

Risk-Based Capital Requirement: CET1 Capital Ratio 

10.1%

9.5%

4.5% 4.5%

3.0% 2.7%

2.6% 2.3%

Minimum requirement

Stress capital buffer

Stability capital buffer

2022 2023

Leverage Capital Requirement: Tier 1 Capital Ratio 

2.8% 2.8%

2.5% 2.5%

0.3% 0.3%

Minimum requirement

PLBA

2022 2023

The ERCF establishes risk-based and leverage capital requirements and includes capital requirements relating to the amount 

and form of the capital we hold, based largely on definitions of capital used in U.S. banking regulators' regulatory capital 

framework. The ERCF capital requirements contain both statutory capital elements (total capital and core capital) and 

regulatory capital elements (CET1 capital, Tier 1 capital, and adjusted total capital). The ERCF also includes a requirement that 

we hold prescribed capital buffers that can be drawn down in periods of financial stress and then rebuilt over time as economic 

conditions improve. If we fall below the prescribed buffer amounts, we must restrict capital distributions such as stock 

repurchases and dividends, as well as discretionary bonus payments to executives, until the buffer amounts are restored.

Risk-Based Capital Requirements

Under the ERCF risk-based capital requirements, we must maintain our CET1 capital, Tier 1 capital, and adjusted total capital 

ratios equal to at least 4.5%, 6.0%, and 8.0%, respectively, of RWA. We must also maintain statutory total capital equivalent to 

at least 8.0% of the total RWA. To avoid limitations on capital distributions and discretionary bonus payments tied to executive 

compensation, we also must maintain CET1 capital that exceeds the risk-based capital requirements by at least the amount of 

the PCCBA. The PCCBA consists of three separate component buffers—a stress capital buffer, a stability capital buffer, and a 

countercyclical capital buffer.

n	The stress capital buffer must be at least 0.75% of our ATA as of the last day of the previous calendar quarter. FHFA will 

periodically re-size the stress capital buffer to the extent that FHFA’s eventual program for supervisory stress tests 

determines that our peak capital exhaustion under a severely adverse stress scenario would exceed 0.75% of ATA.

n	The stability capital buffer is tailored to the risk that our default or other financial distress could pose to the liquidity, 

efficiency, competitiveness, or resiliency of national housing finance markets. The stability capital buffer is based on our 

share of residential mortgage debt outstanding. As of December 31, 2023, our stability capital buffer was 0.60% of ATA.

n	The countercyclical capital buffer is currently set at 0.0% of our ATA. FHFA has indicated that it will adjust the 

countercyclical capital buffer taking into account the macro-financial environment in which we operate, such that the buffer 

would be deployed only when excess aggregate credit growth is judged to be associated with a build-up of system-wide 

risk. 

Leverage Capital Requirements

Under the ERCF leverage capital requirements, we must maintain our Tier 1 capital ratio equal to at least 2.5% of ATA. We 

must also maintain our statutory core capital ratio equal to at least 2.5% of ATA. To avoid limitations on capital distributions 

and discretionary bonus payments tied to executive compensation, we also must maintain Tier 1 capital that exceeds the 

leverage capital requirements by at least the amount of the PLBA. The PLBA is equal to 50% of our stability capital buffer. 

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 97
Oversight, Governance, and Reporting

Our capital management is governed by policies, standards, and procedures overseen by key governing bodies. The CMC is 

responsible for the oversight of compliance with the ERCF capital framework, including reporting, model changes, and stress 

testing activities, as well as any other related policy initiatives. The CMC helps to ensure that we maintain an integrated and 

coherent capital monitoring and adequacy assessment process and meet both internal and regulatory capital reporting, 

monitoring, forecasting, and stress testing requirements. The CMC is overseen by the Head of Capital and Resolution Planning 

and the CFO, and reports directly to the Capital Committee, which is overseen by the CEO and our President. 

The Capital Committee, composed primarily of executive officers across the various divisions (including the CFO, CRO, and 

heads of business), oversees the CMC and provides governance across overall capital management. In addition, ERM and 

Internal Audit conduct independent assessments of capital management and implementation. These assessments are intended 

to help ensure that our capital execution, assessment, and monitoring are consistent and in compliance with the ERCF. 

Under the ERCF, we are required to submit quarterly ERCF capital reports to FHFA. These requirements include quarterly 

quantitative information to support the ERCF capital amount and ratio calculations and the underlying enterprise risk weighting 

calculations. We are also required to publish quarterly ERCF public disclosures and submit an annual capital plan to FHFA. 

Pursuant to an FHFA rule on stress testing of regulated entities, we are required to conduct annual stress tests using scenarios 

specified by FHFA to determine whether we have sufficient capital to absorb losses as a result of adverse economic conditions. 

Under the rule, we must publicly disclose the results of the stress test under the "severely adverse" scenario. See MD&A - 

Regulation and Supervision - Capital Standards and Public Disclosures for additional information on the ERCF including 

our reporting requirements.

Capital Metrics

The table below presents the components of our regulatory capital.

Table 54 - Regulatory Capital Components 

(In billions) December 31, 2023 December 31, 2022

Total equity $48 $37 

Less:

Senior preferred stock 73 73 

Preferred stock 14 14 

Common equity (39) (50) 

Less: deferred tax assets arising from temporary differences that exceed 10% of CET1 capital 

and other regulatory adjustments 4 5 

Common equity Tier 1 capital (43) (55) 

Add: Preferred stock 14 14 

Tier 1 capital (29) (41) 

Tier 2 capital adjustments — — 

Adjusted total capital ($29) ($41) 

The table below presents the components of our statutory capital.

Table 55 - Statutory Capital Components 

(In billions) December 31, 2023 December 31, 2022

Total equity $48 $37 

Less:

Senior preferred stock 73 73 

AOCI, net of taxes — (1) 

Core capital (25) (35) 

General allowance for foreclosure losses(1) 7 8 

Total statutory capital ($18) ($27) 

(1) Represents our allowance for credit losses.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 98
The table below presents our capital metrics under the ERCF. 

Table 56 - Capital Metrics Under ERCF 

(In billions) December 31, 2023 December 31, 2022

Adjusted total assets $3,775 $3,710 

Risk-weighted assets (standardized approach):

Credit risk 884 778 

Market risk 54 51 

Operational risk 71 70 

Total risk-weighted assets $1,009 $899 

(In billions) December 31, 2023 December 31, 2022

Stress capital buffer $28 $27 

Stability capital buffer 23 23 

Countercyclical capital buffer amount — — 

PCCBA $51 $50 

PLBA $11 $11 

December 31, 2023

(Dollars in billions)

Minimum 

Capital 

Requirement

Applicable 

Buffer

Capital 

Requirement 

(Including Buffer(1))

Available 

Capital (Deficit)

Capital 

Shortfall

Risk-based capital amounts:

Total capital (statutory) $81 N/A $81 ($18) ($99) 

CET1 capital 45 $51 96 (43) (139) 

Tier 1 capital 60 51 111 (29) (140) 

Adjusted total capital 81 51 132 (29) (161) 

Risk-based capital ratios(2):

Total capital (statutory) 8.0 % N/A 8.0 % (1.8) % (9.8) %

CET1 capital 4.5 5.0 % 9.5 (4.3) (13.8) 

Tier 1 capital 6.0 5.0 11.0 (2.9) (13.9) 

Adjusted total capital 8.0 5.0 13.0 (2.9) (15.9) 

Leverage capital amounts:

Core capital (statutory) $95 N/A $95 ($25) ($120) 

Tier 1 capital 95 $11 106 (29) (135) 

Leverage capital ratios(3):

Core capital (statutory) 2.5 % N/A 2.5 % (0.7) % (3.2) %

Tier 1 capital 2.5 0.3 % 2.8 (0.8) (3.6) 

Referenced footnotes are included after the prior period table.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 99
December 31, 2022

(Dollars in billions)

Minimum 

Capital 

Requirement

Applicable 

Buffer(1)

Capital 

Requirement 

(Including Buffer)

Available 

Capital (Deficit)

Capital 

Shortfall

Risk-based capital amounts:

Total capital $72 N/A $72 ($27) ($99) 

CET1 capital 40 $50 90 (55) (145) 

Tier 1 capital 54 50 104 (41) (145) 

Adjusted total capital 72 50 122 (41) (163) 

Risk-based capital ratios(2):

Total capital 8.0 % N/A 8.0 % (3.1) % (11.1) %

CET1 capital 4.5 5.6 % 10.1 (6.2) (16.3) 

Tier 1 capital 6.0 5.6 11.6 (4.6) (16.2) 

Adjusted total capital 8.0 5.6 13.6 (4.6) (18.2) 

Leverage capital amounts:

Core capital $93 N/A $93 ($35) ($128) 

Tier 1 capital 93 $11 104 (41) (145) 

Leverage capital ratios(3):

Core capital 2.5 % N/A 2.5 % (1.0) % (3.5) %

Tier 1 capital 2.5 0.3 % 2.8 (1.1) (3.9) 

(1) PCCBA for risk-based capital and PLBA for leverage capital.

(2) As a percentage of RWA.

(3) As a percentage of ATA.

At December 31, 2023, our maximum payout ratio under the ERCF was 0.0%, which applies to limit our capital distributions 

and discretionary bonus payments discussed under the risk-based and leverage capital requirements.

Management's Discussion and Analysis Liquidity and Capital Resources 

FREDDIE MAC | 2023 Form 10-K 100
CONSERVATORSHIP AND RELATED MATTERS 

Conservator Powers Over Our Company

FHFA has broad powers when acting as our Conservator. Upon its appointment, the Conservator immediately succeeded to all 

rights, titles, powers, and privileges of Freddie Mac and of any stockholder, officer, or director of Freddie Mac with respect to 

Freddie Mac and its assets. The Conservator also succeeded to the title to all books, records, and assets of Freddie Mac held 

by any other legal custodian or third party. 

Under the GSE Act, the Conservator may take any actions it determines are necessary to put us in a safe and solvent condition 

and appropriate to carry on our business and preserve and conserve our assets and property. The Conservator's powers 

include the ability to transfer or sell any of our assets or liabilities, subject to certain limitations and post-transfer notice 

provisions, without any approval, assignment of rights or consent of any party. However, the GSE Act provides that loans and 

mortgage-related assets that have been transferred to a Freddie Mac securitization trust must be held by the Conservator for 

the beneficial owners of the trust and cannot be used to satisfy our general creditors.

We conduct our business subject to the direction of FHFA as our Conservator. The Conservator has authorized the Board of 

Directors to oversee management's conduct of our business operations so we can operate in the ordinary course. The directors 

serve on behalf of, exercise authority as provided by, and owe their fiduciary duties of care and loyalty to the Conservator. The 

Conservator retains the authority to withdraw or revise the authority it has provided at any time. The Conservator also retains 

certain significant authorities for itself and has not provided them to the Board of Directors. The Conservator continues to 

provide strategic direction for the company and directs the efforts of the Board of Directors and management to implement its 

strategy. Many management decisions are subject to review and/or approval by FHFA and management frequently receives 

direction from FHFA on various matters involving day-to-day operations. 

Our current business objectives reflect direction we have received from the Conservator, including in the Conservatorship 

Scorecards. Certain actions that we have taken pursuant to such direction are intended to help homeowners, renters, and the 

mortgage market and could have a negative impact on our business, operating results, or financial condition. For additional 

information on our business objectives, see Note 2. 

Purchase Agreement, Warrant, and Senior Preferred Stock

In connection with our entry into conservatorship, we entered into the Purchase Agreement with Treasury. Under the Purchase 

Agreement, we issued to Treasury both senior preferred stock and a warrant to purchase common stock. The Purchase 

Agreement, warrant, and senior preferred stock do not contain any provisions causing them to terminate or cease to exist upon 

the termination of conservatorship. The conservatorship, Purchase Agreement, warrant, and senior preferred stock materially 

limit the rights of our common and preferred stockholders (other than Treasury). 

Pursuant to the Purchase Agreement we issued to Treasury one million shares of Variable Liquidation Preference Senior 

Preferred Stock with an initial liquidation preference of $1 billion and a warrant to purchase, for a nominal price, shares of our 

common stock equal to 79.9% of the total number of shares outstanding. The senior preferred stock and warrant were issued 

to Treasury as an initial commitment fee in consideration of Treasury's commitment to provide funding to us under the 

Purchase Agreement. We did not receive any cash proceeds from Treasury as a result of issuing the senior preferred stock or 

the warrant. Under the Purchase Agreement, our ability to repay the liquidation preference of the senior preferred stock is 

limited, and we will not be able to do so for the foreseeable future, if at all. 

The Purchase Agreement provides that, on a quarterly basis, we generally may draw funds up to the amount, if any, by which 

our total liabilities exceed our total assets, as reflected on our GAAP consolidated balance sheets for the applicable fiscal 

quarter, provided that the aggregate amount funded under the Purchase Agreement may not exceed Treasury's commitment. 

The amount of any draw will be added to the aggregate liquidation preference of the senior preferred stock and will reduce the 

amount of available funding remaining. Deficits in our net worth have made it necessary for us to make substantial draws on 

Treasury's funding commitment under the Purchase Agreement, with the majority of these draws occurring from 2008 to 2011. 

In addition, increases in our Net Worth Amount since December 2017 have been, and will be, added to the aggregate 

liquidation preference of the senior preferred stock. The liquidation preference of the senior preferred stock will continue to be 

increased at the end of each fiscal quarter through the Capital Reserve End Date, by an amount equal to the increase in the Net 

Worth Amount, if any, during the immediately prior fiscal quarter. As of December 31, 2023, the aggregate liquidation 

preference of the senior preferred stock was $117.3 billion, and the amount of available funding remaining under the Purchase 

Agreement was $140.2 billion, which will be reduced by any future draws. 

For additional information on the Purchase Agreement, warrant, and senior preferred stock, see Note 2.

The Purchase Agreement and warrant contain covenants that significantly restrict our business and capital activities. For 

example, the Purchase Agreement provides that, until the senior preferred stock is repaid or redeemed in full, we may not, 

without the prior written consent of Treasury: 

Management's Discussion and Analysis Conservatorship and Related Matters

FREDDIE MAC | 2023 Form 10-K 101
n	 Pay dividends on our equity securities, other than the senior preferred stock or warrant, or repurchase our equity securities;

n	 Issue any additional equity securities, except in limited instances;

n	 Exit from conservatorship, except in limited circumstances;

n	 Sell, transfer, lease, or otherwise dispose of any assets, other than dispositions for fair market value in the ordinary course 

of business, consistent with past practices, and in other limited circumstances; and

n	 Issue any subordinated debt.

In addition, the Purchase Agreement requires us to comply with the ERCF as published in December 2020, disregarding any 

subsequent amendment or other modification to that rule. The Purchase Agreement also places limits on our mortgage-related 

investments portfolio, indebtedness, secondary market activities, single-family loan acquisitions, and multifamily loan purchase 

activity, as described below. For additional information on the Purchase Agreement covenants, see Note 2, and for related 

risks, see Risk Factors - Conservatorship and Related Matters.

Limits on Our Mortgage-Related Investments Portfolio and 

Indebtedness 

Our ability to acquire and sell mortgage assets is significantly constrained by limitations under the Purchase Agreement and 

other limitations imposed by FHFA:

n	 The Purchase Agreement limits the size of our mortgage-related investments portfolio to a maximum of $225 billion 

effective December 31, 2022. The calculation of mortgage assets subject to the Purchase Agreement cap includes the 

UPB of mortgage assets and 10% of the notional value of interest-only securities. Our mortgage-related investments 

portfolio was $107.2 billion as of December 31, 2023, including $22.2 billion representing 10% of the notional amount of 

the interest-only securities we held as of December 31, 2023. 

n	 With respect to the composition of our mortgage-related investments portfolio, FHFA instructed us to (1) hold no more than 

$20 billion in Single-Family agency MBS with all dollar caps to be based on UPB and (2) hold no collateralized mortgage 

obligations (CMOs), which are also sometimes referred to as REMICs. We have a holding period limit to sell any new CMO 

tranches created but not sold at issuance. CMOs do not include tranches initially retained from reperforming loans senior 

subordinate securitizations.

n	 Under the Purchase Agreement, we may not incur indebtedness that would result in the par value of our aggregate 

indebtedness exceeding 120% of the amount of mortgage assets we are permitted to own on December 31 of the 

immediately preceding calendar year. Our debt cap under the Purchase Agreement decreased to $270 billion on January 1, 

2023 as a result of the decrease in the mortgage assets limit under the Purchase Agreement to $225 billion on December 

31, 2022. As of December 31, 2023, our aggregate indebtedness for purposes of the debt cap was $174.0 billion.

n	 FHFA has indicated that any portfolio sales should be commercially reasonable transactions that consider impacts to the 

market, borrowers, and neighborhood stability. 

Our decisions with respect to managing the mortgage-related investments portfolio affect our business segments. In order to 

achieve all of our portfolio goals, it is possible that we may forgo economic opportunities in one business segment in order to 

pursue opportunities in the other business segment.

Limits on Our Secondary Market Activities and Single-Family Loan 

Acquisitions 

The Purchase Agreement restricts our secondary market activities and single-family loan acquisitions:

n	 Secondary Market Activities - We cannot vary the pricing or any other term of the acquisition of a single-family loan based 

on the size, charter type, or volume of business of the seller of the loan and are required to: 

l	 Offer to purchase loans for cash consideration and operate this cash window with non-discriminatory pricing and

l	 Comply with directives, regulations, restrictions, or other requirements prescribed by FHFA related to equitable 

secondary market access by community lenders.

n	 Single-Family Loan Acquisitions - We are required to limit our acquisition of certain single-family mortgage loans.

l Subject to such exceptions as FHFA may prescribe to permit us to acquire single-family mortgage loans that are 

currently eligible for acquisition, we were required to implement a program reasonably designed to ensure that each 

single-family mortgage is: 

– A qualified mortgage; 

– Expressly exempt from the CFPB’s ability-to-repay requirements; 

– If secured by an investment property, subject to the related Purchase Agreement restriction described below, 

which has been suspended; 

Management's Discussion and Analysis Conservatorship and Related Matters

FREDDIE MAC | 2023 Form 10-K 102
– A refinancing with streamlined underwriting for high LTV ratios; 

– A loan with temporary underwriting flexibilities due to exigent circumstances, as determined in consultation with 

FHFA; or 

– Secured by manufactured housing.

The Purchase Agreement also includes restrictions on the volume of our cash window activities, acquisitions of single-family 

loans with certain LTV, DTI, and credit score characteristics at origination, and acquisitions of single-family loans secured by 

second homes or investment properties, but these requirements have been suspended until six months after Treasury notifies 

Freddie Mac that such suspension has been terminated. 

We will continue to manage these activities in accordance with our risk limits and limitations imposed by FHFA.

Limits on Our Multifamily Loan Purchase Activity

The amount and type of multifamily loans that we purchase are influenced by the loan purchase cap established by FHFA for 

our multifamily business. In November 2023, FHFA announced that the 2024 loan purchase cap for the multifamily business will 

be $70 billion, down from $75 billion in 2023. FHFA will continue to require at least 50% of the Multifamily new business activity 

to be mission-driven, affordable housing. For 2024, loans classified as supporting workforce housing properties will be exempt 

from the volume caps. FHFA will monitor the multifamily mortgage market and will update the multifamily cap and missiondriven minimum requirements if the data shows changes in the market that warrant adjustments. However, if FHFA determines 

the actual size of the market is smaller than was initially projected, FHFA will not reduce the cap.

The Purchase Agreement also includes restrictions on our multifamily loan purchase activity, but these Purchase Agreement 

restrictions have been suspended until six months after Treasury notifies Freddie Mac that such suspension has been 

terminated.

FHFA's Strategic Plan: Fiscal Years 2022-2026 and 

Conservatorship Scorecard

In April 2022, FHFA released its Strategic Plan for fiscal years 2022-2026. This Strategic Plan provides a framework that 

outlines FHFA's priorities for these years as regulator of the Federal Home Loan Bank System and as regulator and conservator 

of Freddie Mac and Fannie Mae. The Strategic Plan continues the existing priorities and formalizes areas of focus for FHFA and 

its regulated entities by establishing three goals:

n Secure the regulated entities' safety and soundness;

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

n Reasonably steward FHFA's infrastructure.

In January 2023, FHFA released the 2023 Conservatorship Scorecard. The purpose of this Scorecard is to hold the Enterprises 

and CSS accountable for fulfilling their core mission requirements by promoting sustainable and equitable access to affordable 

housing and operating in a safe and sound manner. For additional information on the 2023 Conservatorship Scorecard, see 

Executive Compensation - CD&A - Determination of 2023 At-Risk Deferred Salary - At-Risk Deferred Salary Based 

on Conservatorship Scorecard Performance.

On January 30, 2024, FHFA released the 2024 Conservatorship Scorecard. Each year, FHFA releases an annual Scorecard to 

communicate and provide public awareness of its priorities and expectations for the Enterprises and CSS. For additional 

information on the 2024 Conservatorship Scorecard, see our Current Report on Form 8-K filed on February 1, 2024.

For additional information on the conservatorship and related matters, see MD&A - Regulation and Supervision, Risk 

Factors - Conservatorship and Related Matters, Note 2, Note 11, and Directors, Corporate Governance, and 

Executive Officers - Corporate Governance - Board of Directors and Board Committee Information - Authority of 

the Board of Directors and Board Committees.

Equitable Housing Finance Plan 

On June 8, 2022, FHFA announced the public release of the Enterprises’ Equitable Housing Finance Plans for 2022-2024. The 

2022-2024 plan activities are intended to identify and address barriers experienced by renters, aspiring homeowners, and 

current homeowners – particularly in traditionally underserved minority communities, including using SPCPs to originate loans. 

The plan activities are updated annually.

Additionally, FHFA has created a pilot transparency framework for the Enterprises to accompany these plans. This framework 

requires Freddie Mac and Fannie Mae to publish and maintain a list of pilots and test-and-learn activities on their public 

websites.

Management's Discussion and Analysis Conservatorship and Related Matters

FREDDIE MAC | 2023 Form 10-K 103
REGULATION AND SUPERVISION

In addition to our oversight by FHFA as our Conservator, we are subject to regulation and oversight by FHFA under our Charter 

and the GSE Act and to certain regulation by other government agencies. Furthermore, regulatory activities by other 

government agencies can affect us indirectly, even if we are not directly subject to such agencies' regulation or oversight, such 

as regulations that modify requirements applicable to the purchase or servicing of mortgages.

Federal Housing Finance Agency

FHFA is an independent agency of the federal government responsible for oversight of the operations of Freddie Mac, Fannie 

Mae, and the FHLBs.

Under the GSE Act, FHFA has safety and soundness authority that is comparable to, and in some respects broader than, that 

of the federal banking agencies. FHFA is responsible for implementing the various provisions of the GSE Act that were added 

by the Reform Act.

Receivership and Resolution Planning

Under the GSE Act, FHFA must place us into receivership if FHFA determines in writing that our assets are less than our 

obligations or we have not been paying our debts as they become due, in each case for a period of 60 days. FHFA has notified 

us that the measurement period for any mandatory receivership determination with respect to our assets and obligations would 

commence no earlier than the SEC public filing deadline for our quarterly or annual financial statements and would continue for 

60 calendar days after that date. FHFA has also advised us that, if, during such a 60-day period, we receive funds from 

Treasury in an amount at least equal to the deficiency amount under the Purchase Agreement, the Director of FHFA will not 

make a mandatory receivership determination. 

In addition, we could be put into receivership at the discretion of the Director of FHFA at any time for other reasons set forth in 

the GSE Act. The statutory grounds for discretionary appointment of a receiver include: a substantial dissipation of assets or 

earnings due to unsafe or unsound practices; the existence of an unsafe or unsound condition to transact business; an inability 

to meet our obligations in the ordinary course of business; a weakening of our condition due to unsafe or unsound practices or 

conditions; critical undercapitalization; undercapitalization and no reasonable prospect of becoming adequately capitalized; the 

likelihood of losses that will deplete substantially all of our capital; or by consent. 

Certain aspects of conservatorship and receivership operations of Freddie Mac, Fannie Mae, and the FHLBs are addressed in 

an FHFA rule on conservatorship and receivership. Among other provisions, FHFA generally will not permit payment of 

securities litigation claims during conservatorship, and claims by current or former shareholders arising as a result of their 

status as shareholders would receive the lowest priority of claim in receivership. In addition, administrative expenses of the 

conservatorship will be deemed to be administrative expenses of receivership and capital distributions may not be made during 

conservatorship, except as specified in the rule.

In May 2021, FHFA published a final rule that requires Freddie Mac and Fannie Mae to develop credible resolution plans, also 

known as living wills. The purpose of the rule is to require each Enterprise to develop a resolution plan to facilitate its rapid and 

orderly resolution under FHFA’s receivership authority in a manner that: (1) minimizes disruption in the national housing finance 

markets by providing for the continued operation of the core business lines of the Enterprise in receivership by a newly 

constituted LLRE; (2) preserves the value of the Enterprise's franchise and assets; (3) facilitates the division of assets and 

liabilities between the LLRE and the receivership estate; (4) ensures that investors in mortgage-backed securities guaranteed by 

the Enterprises and in Enterprise unsecured debt bear losses in accordance with the priority of payments established in the 

GSE Act, while minimizing unnecessary losses and costs to these investors; and (5) fosters market discipline by making clear 

that no extraordinary government support will be available to indemnify investors against losses or fund the resolution of an 

Enterprise. The rule also addresses procedural requirements related to the frequency and timing for submission of resolution 

plans to FHFA. The rule provides a set of required and prohibited assumptions when developing the resolution plans, including 

assuming that receivership may occur under the severely adverse economic conditions provided by FHFA in conjunction with 

any stress testing required or another scenario provided by FHFA, not assuming the provision or continuation of extraordinary 

government support (including support under the Purchase Agreement), and reflecting statutory provisions that obligations and 

securities of the Enterprises are not guaranteed by the United States and do not constitute a debt or obligation of the United 

States. Freddie Mac submitted its first resolution plan on April 5, 2023.

The appointment of FHFA as receiver would immediately terminate the conservatorship. In the event of receivership, the GSE 

Act requires FHFA, as the receiver, to organize a LLRE with respect to Freddie Mac. Among other requirements, the GSE Act 

provides that this LLRE:

n Would succeed to Freddie Mac's Charter and thereafter operate in accordance with and subject to such Charter;

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 104
n Would assume, acquire, or succeed to our assets and liabilities to the extent that such assets and liabilities are transferred 

by FHFA to the LLRE; and

n Would not be permitted to assume, acquire, or succeed to any of our obligations to shareholders.

Placement into receivership would likely have a material adverse effect on holders of our common stock and preferred stock, 

and could have a material adverse effect on holders of our debt securities and Freddie Mac mortgage-related securities. Should 

we be placed into receivership, different assumptions would be required to determine the carrying value of our assets, which 

could lead to substantially different financial results. For additional information on the risks to our business relating to 

receivership and uncertainties regarding the future of our business, see Risk Factors - Conservatorship and Related 

Matters.

Capital Standards and Public Disclosures

The GSE Act specifies certain capital requirements for us and authorizes FHFA to establish other capital requirements as well 

as to increase our minimum capital requirements or to establish additional capital and reserve requirements for particular 

purposes. In 2008, FHFA suspended capital classification of us during conservatorship, in light of the Purchase Agreement. 

Originally published in December 2020, the ERCF rule was amended by FHFA three times in 2022 and once in 2023.

The ERCF establishes risk-based and leverage capital requirements for the Enterprises, and includes the following: 

n	 Capital requirements relating to the amount and form of the capital we hold, based largely on definitions of capital used in 

U.S. banking regulators' regulatory capital framework. The final rule includes leverage-based and risk-based requirements, 

which together determine the requirements for each tier of capital;

n	 A requirement that we hold prescribed capital buffers that can be drawn down in periods of financial stress and then rebuilt 

over time as economic conditions improve. If we fall below the prescribed buffer amounts, we must restrict capital 

distributions such as stock repurchases and dividends, as well as discretionary bonus payments to executives, until the 

buffer amounts are restored;

n	 A requirement to publish quarterly public capital reports, regardless of our status in conservatorship; 

n	 A requirement to maintain capital for operational and market risk, in addition to our credit risk;

n	 Specific minimum percentages, or "floors," on the risk-weights applicable to single-family and multifamily exposures, 

which have the effect of increasing the capital required to be held for loans otherwise subject to lower risk weights;

n	 Specific floors on the risk-weights applicable to retained portions of credit risk transfer transactions, which have the effect 

of decreasing the capital relief obtained from these transactions; and 

n	 Additional elements based on U.S. banking regulators' regulatory capital framework, including the phased implementation 

of advanced approaches as an alternative to the standardized approach for measuring risk weighted assets.

Our current capital levels are significantly below the levels that would be required under the ERCF. The ERCF has a transition 

period for compliance. In general, the compliance date for the regulatory capital requirements in the ERCF will be the later of 

the date of termination of our conservatorship and any compliance date provided in a consent order or other transition order. 

The compliance date for buffer requirements in the ERCF will be the date of termination of our conservatorship. With respect to 

the ERCF’s advanced approaches requirements, the compliance date is January 1, 2028, or any later compliance date 

specified by FHFA. Further, the Purchase Agreement includes a covenant requiring us to comply with the ERCF disregarding 

any subsequent amendment or other modifications to the final rule as published in December 2020. Consistent with FHFA 

instruction, we are reporting our regulatory capital requirements under the ERCF as subsequently amended by FHFA. 

Therefore, we are not in compliance with this Purchase Agreement covenant. FHFA has acknowledged this noncompliance. 

In February 2022, FHFA issued a final rule that amended the ERCF by refining the PLBA and risk-based capital treatment of 

retained CRT exposure for the Enterprises. Specifically, the final rule replaced the fixed PLBA equal to 1.5% of an Enterprise's 

ATA with a dynamic PLBA equal to 50% of the Enterprise's stability capital buffer (which is related to the Enterprise's relative 

share of total residential mortgage debt outstanding that exceeds 5%); replaced the prudential floor of 10% on the risk weight 

assigned to any retained CRT exposure with a prudential floor of 5% on the risk weight assigned to any retained CRT exposure; 

and removed the requirement that an Enterprise must apply an overall effectiveness adjustment to its retained CRT exposures. 

The final rule also made technical corrections to various provisions of the ERCF. For additional information on these capital 

standards, see Note 18. For additional information on risks related to non-compliance with the Purchase Agreement, see Risk 

Factors – Conservatorship and Related Matters - The Purchase Agreement and the terms of the senior preferred stock 

significantly limit our business activities. In the event of non-compliance with any Purchase Agreement covenants, 

Treasury may be entitled to specific performance, damages, and other remedies, and if the corrective actions we were 

to take were determined by FHFA to be insufficient, FHFA could impose penalties on us or take other remedial actions.

In 2022, FHFA also amended the ERCF to introduce new public disclosure requirements for the Enterprises. The requirements 

include quarterly quantitative and annual qualitative disclosures related to risk management, corporate governance, capital 

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 105
structure, and capital requirements and buffers under the standardized approach. The required public disclosures cover 11 

categories, with each category containing certain qualitative and quantitative disclosures, many of which are identical or similar 

to the disclosures applicable to U.S. banking organizations subject to the standardized approach. These public disclosures 

must be made no later than 10 business days after we file the corresponding Annual Report on SEC Form 10-K or Quarterly 

Report on Form 10-Q. We made our first public disclosure in March 2023.

The third amendment to the ERCF rule in 2022 requires the Enterprises to submit annual capital plans to FHFA and provide 

prior notice for certain capital actions. The amendment also incorporates the determination of the stress capital buffer, an 

element of the ERCF, into the capital planning process. We submitted our first capital plan to FHFA in May 2023.

In November 2023, FHFA issued a final rule that amends several provisions of the ERCF. The final rule includes modifications of 

certain provisions of the ERCF related to guarantees on commingled securities, multifamily mortgage exposures secured by 

properties with government subsidies, and derivatives and cleared transactions, among other modifications. These 

amendments clarify certain aspects of the ERCF and help to further align the ERCF with the risks faced by the Enterprises. In 

general, these amendments are effective April 1, 2024, with the exception of the provisions related to derivatives and cleared 

transactions, which are effective January 1, 2026. In addition, the amendments also extended the compliance date for the 

advanced approaches from January 1, 2025 to January 1, 2028.

Pursuant to an FHFA rule on stress testing of regulated entities, Freddie Mac and Fannie Mae are required to conduct annual 

stress tests using scenarios specified by FHFA to determine whether each Enterprise has sufficient capital to absorb losses as 

a result of adverse economic conditions. Under the rule, the Enterprises must publicly disclose the results of the stress test 

under the "severely adverse" scenario. In accordance with FHFA guidance, in August 2023, we disclosed the results of our 

2023 "severely adverse" scenario stress test. 

New Products

The GSE Act requires Freddie Mac and Fannie Mae to obtain the prior approval of FHFA before offering a new product to the 

market, subject to certain exclusions. The GSE Act also requires us to provide FHFA with written notice of any new activity that 

we consider not to be a product. While FHFA published an interim final rule on prior approval of new products to implement 

these statutory requirements in July 2009, it also stated that permitting us to engage in new products is inconsistent with the 

goals of conservatorship and instructed us not to submit such requests under the interim final rule. In December 2022, FHFA 

published a final rule that outlines the process for FHFA review and timelines for approving a new product, which is defined as 

any new activity that FHFA determines merits public notice and comment about whether it is in the public interest. The rule 

states that FHFA may approve a new product if the Director of FHFA determines that it is authorized under specific provisions 

of the Enterprise’s Charter, is in the public interest, and is consistent with the safety and soundness of the Enterprise or the 

mortgage finance system. The rule also establishes objective criteria for determining what constitutes new activity, and clarifies 

certain exclusions.

Enterprise Fair Lending and Fair Housing Compliance

In December 2021, FHFA released an advisory bulletin to provide FHFA's supervisory expectations and guidance to Freddie 

Mac and Fannie Mae on fair lending and fair housing compliance. FHFA considers ensuring Enterprise compliance with fair 

lending laws part of FHFA's obligation to further the purposes of the Fair Housing Act in its program of regulatory and 

supervisory oversight of the Enterprises and its responsibility to ensure that the Enterprises comply with applicable laws.

FHFA's fair lending policy statement generally articulates its policy on fair lending and how FHFA uses its authorities to ensure 

compliance with fair lending laws. The Enterprises are subject to several associated fair lending requirements, such as 

requirements to obtain and maintain data relevant to ensuring compliance with fair lending laws, report certain information to 

FHFA pursuant to FHFA's reporting order on fair lending, include certain information related to fair lending in their annual 

housing reports, and comply with fair lending requirements associated with other FHFA processes and requirements. The 

Enterprises are also subject to HUD oversight related to fair housing. FHFA and HUD have signed a memorandum of 

understanding regarding cooperation and coordination with respect to fair housing and fair lending. In certain circumstances, 

FHFA will provide notification to HUD and the U.S. Department of Justice of information that suggests a violation of the Fair 

Housing Act or that indicates a possible pattern or practice of discrimination in violation of the Fair Housing Act.

Affordable Housing Goals

We are subject to annual affordable housing goals. We view the purchase of loans that are eligible to count toward our 

affordable housing goals to be a principal part of our mission and business, and we are committed to facilitating the financing 

of affordable housing for very low-, low-, and moderate-income families. In light of the affordable housing goals, we may make 

adjustments to our strategies for purchasing loans, which could potentially increase our credit losses. These strategies could 

include entering into purchase and securitization transactions with lower expected economic returns than our typical 

transactions.

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 106
FHFA housing goals applicable to our 2023 purchases consist of four goals and two subgoals for single-family owner-occupied 

housing, one multifamily affordable housing goal, and two multifamily affordable housing subgoals. The single-family goals are 

expressed as a percentage of the total number of eligible loans underlying our total single-family loan purchases, and the 

multifamily goals are expressed as a percentage of units financed.

We may achieve a single-family or multifamily housing goal by meeting or exceeding the FHFA benchmark level for that goal 

(Benchmark Level). We also may achieve a single-family goal by meeting or exceeding the actual share of the market that 

meets the criteria for that goal (Market Level). 

If the Director of FHFA finds that we failed (or there is a substantial probability that we will fail) to meet a housing goal and that 

achievement of the housing goal was or is feasible, the Director may require the submission of a housing plan that describes 

the actions we will take to achieve the unmet goal. FHFA has the authority to take actions against us if we fail to submit a 

required housing plan, submit an unacceptable plan, fail to comply with a plan approved by FHFA, or fail to submit certain 

mortgage purchase data, information or reports as required by law. See Risk Factors - Legal and Compliance Risks - We 

may not achieve our housing goals, duty to serve, and equitable housing finance requirements, and we also may make 

certain changes to our business in an attempt to meet these goals and requirements, both of which may expose us to 

additional legal and compliance risk and adversely affect our business, financial condition, and results of operations.

Affordable Housing Goals Results

In October 2023, FHFA informed us that, for 2022, we achieved all six of our single-family housing goals and subgoals, and all 

three of our multifamily goals and subgoals. Our performance on the goals, as determined by FHFA, is set forth in the table 

below.

Table 57 - 2022 and 2021 Affordable Housing Goals Results

2022 2021

Affordable Housing Goals

Benchmark 

Level

Market 

Level Results 

Benchmark 

Level

Market 

Level Results

Single-Family:

Low-income home purchase goal 28 % 26.8 % 29.0 % 24 % 26.7 % 27.4 %

Very low-income home purchase goal 7 6.8 7.1 6 6.8 6.3 

Low-income areas home purchase goal 20 28.0 28.7 18 22.9 21.8 

Minority census tracts home purchase subgoal 10 12.1 12.8 N/A N/A N/A

Low-income census tracts home purchase subgoal 4 9.7 9.1 14 19.1 18.0 

Low-income refinance goal 26 37.3 37.1 21 26.1 24.8 

Multifamily:

Low-income goal (units) 415,000 N/A 420,107 315,000 N/A 373,225 

Very low-income subgoal (units) 88,000 N/A 127,733 60,000 N/A 87,854 

Small multifamily (5-50 units) low-income subgoal 23,000 N/A 27,103 10,000 N/A 31,913 

2022-2024 Single-Family Affordable Housing Goals

In December 2021, FHFA announced its higher benchmark levels for the single-family affordable housing goals for Freddie Mac 

for 2022 through 2024. These goals include two new single-family home purchase subgoals: a minority census tracts home 

purchase subgoal and a low-income census tracts home purchase subgoal. These two new goals replace the previous lowincome areas subgoal. Our single-family affordable housing goal benchmark levels for 2022-2024 are set forth below.

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 107
Table 58 - 2022-2024 Single-Family Affordable Housing Goal Benchmark Levels

Affordable Housing Goals

Benchmark

Levels for 

2022-2024

Single-Family: 

Low-income home purchase goal 28 %

Very low-income home purchase goal 7 

Low-income areas home purchase goal(1) 20 

Minority census tracts home purchase subgoal 10 

Low-income census tracts home purchase subgoal 4 

Low-income refinance goal 26 

(1) The low-income areas home purchase goal benchmark level is the sum of (1) the minority census tracts home purchase subgoal, (2) the low-income census tracts 

home purchase subgoal, and (3) a disaster areas increment set in accordance with existing practice. Each year, FHFA notifies Freddie Mac by letter of the disaster 

areas increment for that year only. The disaster areas increment for 2023 was set at 6%, the same level as 2022, and it has not yet been set for 2024. Therefore, 

the low-income areas home purchase goal benchmark level of 20% applies only to 2022 and 2023.

2023-2024 Multifamily Affordable Housing Goals

In December 2022, FHFA published a final rule specifying its multifamily affordable housing goals for Freddie Mac for 

2023-2024. Under FHFA’s previous housing goals regulation, the multifamily housing goals for the Enterprises included 

benchmark levels based on the total number of affordable units in multifamily properties financed by mortgage loans purchased 

by the Enterprise each year. This new rule amended the regulation to establish benchmark levels for the multifamily housing 

goals for 2023 and 2024 based on a new methodology – the percentage of affordable units in multifamily properties financed by 

mortgages purchased by the Enterprise each year.

Our 2023-2024 affordable housing goal benchmark levels are set forth below.

Table 59 - 2023-2024 Multifamily Affordable Housing Goal Benchmark Levels

Affordable Housing Goals

Benchmark

Levels for 

2023-2024

(% of units)

Multifamily: 

Low-income goal 61 %

Very low-income subgoal 12 

Small multifamily (5-50 units) low-income subgoal 2.5 

Duty to Serve Underserved Markets Plan

The GSE Act establishes a duty for Freddie Mac and Fannie Mae to serve three underserved markets (manufactured housing, 

affordable housing preservation, and rural areas) by providing leadership in developing loan products and flexible underwriting 

guidelines to facilitate a secondary market for mortgages for very low-, low-, and moderate-income families in those markets. 

Under a final rule issued by FHFA to implement our duty to serve these underserved markets, we are required to establish 

three-year plans that describe the activities and objectives we will undertake to serve each underserved market. 

Freddie Mac is currently operating under an underserved markets plan for 2022-2024. In 2023, FHFA evaluated Freddie Mac 

and Fannie Mae’s 2022 Duty to Serve performance under their respective Plans and determined that each Enterprise complied 

with its Duty to Serve requirements in all three underserved markets. For 2022, FHFA assigned Freddie Mac a rating of Low 

Satisfactory for its activities in the affordable housing preservation market, a rating of High Satisfactory for its activities in the 

manufactured housing market, and a rating of High Satisfactory for its activities in the rural housing market.

In April 2023, FHFA released a final rule amending the Enterprise Duty to Serve Underserved Markets regulation. The final rule 

allows Freddie Mac’s activities in all colonia census tracts to be eligible for Duty to Serve credit. The final rule: (1) adds a new 

definition for “colonia census tract” to mean that a census tract containing a colonia will serve as a census tract-based proxy 

for a colonia; (2) amends the definition of “high-needs rural region” by substituting “colonia census tract” for “colonia”; and (3) 

amends the definition of “rural area” to include all colonia census tracts, regardless of their location. The final rule went into 

effect on July 1, 2023.

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 108
Affordable Housing Fund Allocations

The GSE Act requires us to set aside in each fiscal year an amount equal to 4.2 basis points of each dollar of total new 

business purchases and pay such amount to certain housing funds. FHFA suspended this requirement when we were placed 

into conservatorship. However, in December 2014, FHFA terminated the suspension and instructed us to begin setting aside 

and paying amounts into those funds, subject to any subsequent guidance or instruction from FHFA.

During 2023, we completed $0.3 trillion of new business purchases subject to this requirement and accrued $146 million of 

related expense, of which $95 million is related to the Housing Trust Fund administered by HUD and $51 million is related to the 

Capital Magnet Fund administered by Treasury. We are prohibited from passing through the costs of these allocations to the 

originators of the loans that we purchase.

Portfolio Activities

The GSE Act provides FHFA with the power to regulate the size and composition of our mortgage-related investments portfolio. 

The GSE Act requires FHFA to establish, by regulation, criteria governing portfolio holdings to ensure the holdings are backed 

by sufficient capital and consistent with our mission and safe and sound operations. FHFA adopted the portfolio holdings 

criteria established in the Purchase Agreement, as it may be amended from time to time, for so long as we remain subject to 

the Purchase Agreement. See MD&A - Conservatorship and Related Matters - Limits on Our Mortgage-Related 

Investments Portfolio and Indebtedness for additional information.

Resecuritization Fee for New Issuances of Commingled Securities

Effective July 1, 2022, as a result of the ERCF, Freddie Mac began charging a 50 bps fee for any newly-issued commingled 

security. This fee applied to collateral issued by Fannie Mae based on the UPB of the collateral when it is used for a new 

commingled security. Freddie Mac has not been applying the fee to any Freddie Mac-issued collateral used for a new 

commingled security. Effective April 1, 2023, we reduced the fee from 50 bps to 9.375 bps per FHFA's guidance.

Targeted Pricing Changes to Enterprise Pricing Framework

In October 2022, FHFA announced targeted changes to the Enterprises’ guarantee fee pricing by eliminating upfront fees for 

certain borrowers and affordable mortgage products, while implementing targeted increases to the upfront fees for most cashout refinance loans. As part of the pricing changes stemming from FHFA’s ongoing review of the Enterprises’ pricing 

framework, FHFA has eliminated upfront fees for:

n	 First-time homebuyers at or below 100 percent of AMI in most of the United States and below 120 percent of AMI in highcost areas; 

n	 Home Possible and HomeReady loans (Freddie Mac and Fannie Mae’s flagship affordable mortgage programs); 

n	 HFA Advantage and HFA Preferred loans; and 

n	 Certain single-family Duty to Serve mortgages.

Freddie Mac announced the updated changes on October 31, 2022. The implementation of new fees for cash-out refinance 

loans began on February 1, 2023. All other announced fee changes went into effect on December 1, 2022.

In January 2023, FHFA announced further changes to Freddie Mac and Fannie Mae’s single-family pricing framework by 

introducing redesigned and recalibrated upfront fee matrices for purchase, rate-term refinance, and cash-out refinance loans. 

These pricing changes broadly impact purchase and rate-term refinance loans and build on upfront fee changes previously 

announced by FHFA, which have been integrated into our pricing grids. The new fee matrices consist of three base grids by 

loan purpose for purchase, rate-term refinance, and cash-out refinance loans—recalibrated to new credit score and loan-tovalue ratio categories—along with associated loan attributes for each.

To minimize the potential for market or pipeline disruption, the updated fees took effect for deliveries and acquisitions on May 

1, 2023.

Department of Housing and Urban Development

HUD has regulatory authority over Freddie Mac with respect to fair lending. All aspects of the credit or housing-related business 

practices of Freddie Mac are potentially subject to federal anti-discrimination laws, as well as state and local fair housing and 

fair lending statutes. In addition, the GSE Act prohibits discriminatory practices in our loan purchase activities, requires us to 

submit data to HUD to assist in its fair lending investigations of primary market lenders with which we do business, and requires 

us to undertake remedial actions against such lenders found to have engaged in discriminatory lending practices. HUD 

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 109
periodically reviews and comments on our underwriting and appraisal guidelines for consistency with the Fair Housing Act and 

the anti-discrimination provisions of the GSE Act.

Department of the Treasury

Treasury has significant rights and powers as a result of the Purchase Agreement. In addition, under our Charter, the Secretary 

of the Treasury has approval authority over our issuances of notes, debentures, and substantially identical types of unsecured 

debt obligations (including the interest rates and maturities of these securities), as well as new types of mortgage-related 

securities issued subsequent to the enactment of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. The 

Secretary of the Treasury has performed this debt securities approval function by coordinating GSE debt offerings with 

Treasury funding activities. Our Charter also authorizes Treasury to purchase Freddie Mac debt obligations not exceeding 

$2.25 billion in aggregate principal amount at any time.

Consumer Financial Protection Bureau

The CFPB regulates consumer financial products and services. The CFPB has adopted a number of final rules relating to loan 

origination, finance, and servicing practices. These rules include an ability-to-repay rule, which requires loan originators to make 

a reasonable and good faith determination that a borrower has a reasonable ability to repay the loan according to its terms. 

This rule provides certain protection from liability for originators making loans that satisfy the definition of a qualified mortgage. 

The ability-to-repay rule applies to most loans acquired by Freddie Mac, and for loans covered by the rule, FHFA has directed 

us to limit our single-family acquisitions to those that generally would constitute qualified mortgages under that rule. The 

directive generally restricts us from acquiring loans that are not fully amortizing, have a term greater than 30 years, or have 

points and fees in excess of 3% of the total loan amount (or other higher threshold amounts that vary by year of origination for 

loans with certain low UPBs). 

Under the current ability-to-repay rule, qualified mortgages include loans for which lenders consider and verify the borrower’s 

income, assets, debts, and DTI or residual income, meet certain pricing thresholds, and satisfy the product features, pricing, 

points, and fee requirements.

Securities and Exchange Commission

We are subject to the reporting requirements applicable to registrants under the Exchange Act, including the requirement to file 

with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Although our 

common stock is required to be registered under the Exchange Act, we continue to be exempt from certain federal securities 

law requirements, including the following:

n	 Securities we issue or guarantee are "exempted securities" and may be sold without registration under the Securities Act 

of 1933;

n	 We are excluded from the definitions of "government securities broker" and "government securities dealer" under the 

Exchange Act;

n	 The Trust Indenture Act of 1939 does not apply to securities issued by us; and

n	 We are exempt from the Investment Company Act of 1940 and the Investment Advisers Act of 1940, as we are an "agency, 

authority, or instrumentality" of the U.S. for purposes of such Acts.

Final Rule Regarding Conflicts of Interest in Securitizations

In November 2023, the SEC adopted a final rule that generally would prohibit “securitization participants” (e.g., underwriters or 

sponsors) from, directly or indirectly, engaging in any transaction that would involve or result in any material conflict of interest 

between the securitization participant and an investor in the asset-backed security (ABS) during a specified period of time. The 

rule provides exceptions for certain: (1) risk-mitigating hedging activities; (2) bona fide market-making activities; and (3) liquidity 

commitments. We believe that the risk-mitigating hedging exception will enable us to continue to conduct our credit risk 

transfer transactions. Securitization participants must comply with the rule with respect to any ABS the first closing of the sale 

of which occurs on or after June 9, 2025. 

Management's Discussion and Analysis Regulation and Supervision

FREDDIE MAC | 2023 Form 10-K 110
CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with GAAP requires us to make a number of judgments and assumptions 

that affect estimates of the reported amounts within our consolidated financial statements. Critical accounting estimates are 

important to the presentation of our financial condition and results of operations and require management to make difficult, 

complex, or subjective judgments and estimates, often regarding matters that are inherently uncertain. Actual results could 

differ from our estimates, and the use of different judgments and assumptions related to these estimates could have a material 

impact on our consolidated financial statements.

Our critical accounting estimates and policies relate to the Single-Family allowance for credit losses. For additional information 

about our critical accounting estimates and significant accounting policies, see the notes accompanying our consolidated 

financial statements.

Single-Family Allowance for Credit Losses

The Single-Family allowance for credit losses represents our estimate of expected credit losses over the contractual term of the 

mortgage loans. The Single-Family allowance for credit losses pertains to all single-family loans classified as held-forinvestment on our consolidated balance sheets.

Determining the appropriateness of the Single-Family allowance for credit losses is a complex process that is subject to 

numerous estimates and assumptions requiring significant management judgment about matters that involve a high degree of 

subjectivity. This process involves the use of models that require us to make judgments about matters that are difficult to 

predict. Our estimate of expected credit losses incorporates these judgments into an internally-based model that uses a Monte 

Carlo simulation which generates many possible house price scenarios for up to 40 years for each MSA. These scenarios are 

used to estimate loan-level expected future cash flows and credit losses based on each loan's individual characteristics.

Changes in forecasted house price growth rates can have a significant effect on our allowance for credit losses estimates. 

These growth rates are used to develop the detailed forecasted life-of-loan house price growth rates for each MSA. The table 

below shows our nationwide forecasted house price growth rates that were used in determining our allowance for credit losses. 

See Note 6 for additional information regarding our current period provision for credit losses and estimation process.

Table 60 - Forecasted House Price Growth Rates 

12-Month Forward 13- to 24- Month Forward

December 31, 2023 2.8 % 2.0 %

December 31, 2022 (3.0) (1.8) 

The sensitivity of our allowance for credit losses to house price growth rates changes over time depending on current and 

forecasted economic conditions and the current characteristics of our portfolio. To assess the sensitivity of our allowance for 

credit loss estimates to forecasted house price growth rates for the current period end, we compared the estimates under the 

above December 31, 2023 forecast to model estimates using a decrease of 300 bps to the forecasted house price growth rate 

12 months from the current period end, including generating an updated Monte Carlo simulation of house price scenarios, with 

all other factors held constant. The comparison did not result in a material increase in our allowance for credit losses. 

This sensitivity analysis assesses hypothetical changes to our forecasted house price growth rates which are calculated 

separately from our allowance for credit losses process. The sensitivity analysis is not reflected in management's forecast of 

house price growth rates nor in our allowance for credit losses for the current period end. Further, it is not intended to imply 

management’s expectation of future changes in our forecasts or any other variables that may change as a result. It is difficult to 

estimate how potential changes in any one factor or input might affect the allowance for credit losses because management 

considers a wide variety of factors and inputs in estimating expected credit losses, and changes in one factor or input may 

offset changes in other factors or inputs. In addition, changes in forecasted house price growth rates result in non-linear 

impacts to the measurement of the allowance for credit losses and are therefore not incrementally proportional.

We regularly evaluate the underlying estimates and models we use when determining the Single-Family allowance for credit 

losses and update our assumptions to reflect our historical experience and current view of economic factors. For additional 

information on uncertainty and risks related to models, see Risk Factors - Operational Risks - We face risks and 

uncertainties associated with the models that we use to inform business and risk management decisions and for 

financial accounting and reporting purposes. Changes in our forecasts or the occurrence of actual economic conditions that 

differ significantly from our forecasts may significantly affect the measurement of our Single-Family allowance for credit losses. 

We believe the level of our Single-Family allowance for credit losses is appropriate based on internal reviews of the factors and 

methodologies used. No single statistic or measurement determines the appropriateness of the allowance for credit losses. 

Changes in one or more of the estimates or assumptions used to calculate the Single-Family allowance for credit losses could 

have a material impact on the allowance for credit losses and provision for credit losses.

Management's Discussion and Analysis Critical Accounting Estimates

FREDDIE MAC | 2023 Form 10-K 111
Risk Factors

RISK FACTORS SUMMARY

The summary of risks below provides an overview of the principal risks that could affect our business, financial condition, 

results of operations, cash flows, reputation, strategies, and/or prospects. This summary does not contain all of the information 

that may be important to you, and you should read the more detailed discussion of risks that follows this summary.

Conservatorship and Related Matters

n	 Freddie Mac's future is uncertain.

n	 FHFA, as our Conservator, controls our business activities. We may be required to take actions that reduce our profitability, 

are difficult to implement, or expose us to additional risk.

n	 The Purchase Agreement and the terms of the senior preferred stock significantly limit our business activities. In the event 

of non-compliance with any Purchase Agreement covenants, Treasury may be entitled to specific performance, damages, 

and other remedies, and if the corrective actions we were to take were determined by FHFA to be insufficient, FHFA could 

impose penalties on us or take other remedial actions.

n	 If FHFA placed us into receivership, our assets would be liquidated. The liquidation proceeds might not be sufficient to pay 

claims outstanding against Freddie Mac, repay the liquidation preference of our preferred stock, or make any distribution to 

our common stockholders.

n	 Our business and results of operations may be materially adversely affected if we are unable to attract and retain wellqualified and diverse employees across the company. The conservatorship, uncertainty of our future, and limitations on our 

executive and employee compensation put us at a disadvantage compared to other companies in attracting and retaining 

employees. In addition, we face increased competition for talented executives and other employees as a result of the 

increased availability of external job opportunities.

Credit Risks

n	 We are subject to mortgage credit risk. Credit losses and costs related to this risk could adversely affect our financial 

results.

n	 We face significant risks related to our delegated underwriting process for single-family loans, including risks related to 

sellers' origination operations, data accuracy, and mortgage fraud. Our delegated process relies on sellers' ability to 

originate and deliver loans that consistently meet our underwriting standards, and their failure to do so may impact the 

credit quality of the loans we purchase.

n	 Mortgage fraud from third parties and borrowers could result in significant financial losses and harm to our reputation.

n	 Declines in national or regional house prices, other adverse changes in the housing market, declines in the value of 

Multifamily properties, or adverse macroeconomic conditions, could negatively affect our Single-Family and Multifamily 

businesses.

n	 We are exposed to counterparty credit risk with respect to our business counterparties. Our financial results may be 

adversely affected if one or more of our counterparties fail to meet their contractual obligations to us.

n	 Our loss mitigation activities may be unsuccessful or costly and may adversely affect our financial results.

n	 We have been, and will continue to be, adversely affected by delays and deficiencies in the single-family foreclosure 

process.

n	 We are exposed to increased credit losses and credit-related expenses in the event of a catastrophic event or significant 

climate change effects.

n	 Our CRT transactions may not be available to us in adverse economic conditions. These transactions also increase our 

expenses.

Market Risks

n	 Changes in interest rates could negatively affect the fair value of our financial assets and liabilities, results of operations, 

and net worth.

n	 Changes in market spreads could negatively affect the fair value of our financial assets and liabilities, results of operations, 

and net worth.

n	 A significant decline in the price performance of, or demand for, our UMBS could have an adverse effect on the volume 

and/or profitability of our Single-Family business activity.

n	 If the UMBS does not continue to receive widespread market acceptance, the liquidity and price performance of our 

Single-Family mortgage-related securities and our market share and profitability could be adversely affected. 

n	 Commingling certain Fannie Mae securities in resecuritizations has increased our counterparty risk.

n	 The profitability of our Multifamily business could be adversely affected by market competition and/or decreased investor 

Risk Factors

FREDDIE MAC | 2023 Form 10-K 112
demand for our K Certificates, Multifamily PCs, and other securities.

n	 The transition to SOFR as the replacement index for LIBOR and as the floating rate index for new issuances of loans, 

securities, and derivative transactions could negatively affect the fair value of our financial assets and liabilities, results of 

operations, and net worth.

Liquidity Risks

n	 Our activities may be adversely affected if funding is limited or unavailable, or if the cost is increased.

n	 Any downgrade in the credit ratings of the U.S. government would likely be followed by a downgrade in our credit ratings. 

A downgrade in the credit ratings of our debt could adversely affect our liquidity and other aspects of our business.

Operational Risks

n	 A failure in our operational systems or infrastructure, or those of third parties, could impair our ability to provide market 

liquidity, disrupt our business operations, damage our reputation, expose us to legal risk, and cause financial losses.

n	 Potential cybersecurity threats are changing rapidly and advancing in sophistication. We may not be able to protect our 

systems and networks, or the confidentiality of our confidential or other information (including personal information), from 

cybersecurity incidents and other unauthorized access, disclosure, and disruption.

n	 We rely on third parties, including our sellers and servicers, or their vendors and other business partners, for certain 

important functions. Any failures by those third parties to deliver products or services, or to manage risks effectively, could 

disrupt our business operations or servicing of our portfolio, or expose us to other operational risks.

n	 We face risks and uncertainties associated with the models that we use to inform business and risk management decisions 

and for financial accounting and reporting purposes.

n	 The use of AI/ML methods contain inherent risks that may expose us to unexpected losses, damage our reputation, have 

an adverse impact on our business operations, and violate our legal and regulatory obligations.

n	 Climate change concerns could adversely affect our business, affect customer activity levels, and damage our reputation.

n	 Legislative or regulatory changes or actions could require operational changes that could adversely affect our business 

activities and financial results.

Legal and Compliance Risks

n	 We face risk of non-compliance with our legal and regulatory obligations.

n	 We may not achieve our housing goals, duty to serve, and equitable housing finance requirements, and we also may make 

certain changes to our business in an attempt to meet these goals and requirements, both of which may expose us to 

additional legal and compliance risk and adversely affect our business, financial condition, and results of operations.

General Risks

n	 Changes in global or domestic economic and political conditions may have an adverse effect on our business. 

Conservatorship and Related Matters

Freddie Mac's future is uncertain.

Our future structure and role in the mortgage industry will be determined by the Administration, Congress, and FHFA. It is 

possible, and perhaps likely, that there will be significant changes that will materially affect our business model and results of 

operations. Some or all of our functions could be transferred to other institutions, and we could cease to exist as a stockholderowned company. If any of these events occur, our shares could diminish in value, or cease to have any value. Our stockholders 

may not receive any compensation for such loss in value.

Bills have been and may continue to be introduced in Congress concerning the future status of Freddie Mac, Fannie Mae, and 

the mortgage finance system, including bills that provide for the wind down of Freddie Mac and Fannie Mae and modification of 

the terms of the Purchase Agreement.

The conservatorship is indefinite in duration. The likelihood, timing, and circumstances under which we might emerge from 

conservatorship are uncertain. Our current capital levels are significantly below the levels that would be required under the 

ERCF. Under the Purchase Agreement, we cannot exit from conservatorship, other than in connection with receivership, unless 

(1) all currently pending material litigation relating to the conservatorship and/or the Purchase Agreement has been resolved or 

settled and (2) for two or more consecutive periods we have CET1 capital (which does not include our senior preferred stock) of 

at least 3% of our ATA under the ERCF. However, it will likely be very difficult for us to build the requisite amount of CET1 

capital under the ERCF, as we may be required to start paying dividends to Treasury on the senior preferred stock under the 

net worth sweep dividend requirement before we reach such amount of CET1 capital. Once we start paying such dividends to 

Treasury, we will generally not be able to increase our capital through retained earnings. While we are currently increasing our 

net worth as a result of changes to our senior preferred stock dividend requirement, the increases in our net worth since 

September 30, 2019 have been or will be added to the aggregate liquidation preference of the senior preferred stock. In 

addition, our ability to increase our capital, other than through retained earnings, is limited, and it may not be possible for us to 

Risk Factors

FREDDIE MAC | 2023 Form 10-K 113
raise private capital on acceptable terms, if at all. Under the Purchase Agreement, we can raise up to $70.0 billion of capital 

through the issuance of common stock only after Treasury has exercised in full its warrant to purchase 79.9% of our common 

stock and pending material conservatorship-related litigation has been resolved or settled. Treasury’s potential substantial 

equity ownership in our company, along with restrictions imposed on our business and post-recapitalization dividends and fees 

we will be required to pay to Treasury, will reduce our attractiveness as an investment opportunity for third-party investors. It is 

uncertain whether or when we will be able to retain or raise sufficient capital to permit an end to our conservatorship, and this 

may not happen for several years or at all. For additional information on the conservatorship, Purchase Agreement, and terms 

of the senior preferred stock, see Note 2. 

Treasury would be required to consent to the termination of our conservatorship other than as discussed above or in 

connection with receivership, and there can be no assurance Treasury would do so. Even if the conservatorship is terminated, 

we would remain subject to the Purchase Agreement and the terms of the senior preferred stock unless they are terminated or 

amended.

Even if the conservatorship ends and the voting rights of common stockholders are restored, we could effectively remain under 

the control of the U.S. government because of the Purchase Agreement, Treasury's warrant to acquire nearly 80% of our 

common stock for nominal consideration, or Treasury’s ownership of our common stock after it exercises its warrant. If 

Treasury exercises the warrant, the ownership interest of our existing common stockholders will be substantially diluted.

FHFA, as our Conservator, controls our business activities. We may be required to take actions that reduce our 

profitability, are difficult to implement, or expose us to additional risk.

We are under the control of FHFA, as our Conservator, and are not managed to maximize stockholder returns. FHFA 

determines our strategic direction. We face a variety of different, and sometimes competing, business objectives and FHFAmandated activities, such as the initiatives we are pursuing under the Conservatorship Scorecards. Some of the activities FHFA 

has required us to undertake have been costly and/or difficult to implement, such as development and support of the CSP. The 

current Administration has not articulated a formal position on housing finance reform or the future of Freddie Mac and Fannie 

Mae. Nonetheless, the Administration and FHFA have indicated that their current areas of focus in the housing market include 

issues related to affordability, equity, sustainability, and climate change. For example, our 2023 Conservatorship Scorecard 

included several objectives related to promoting sustainable and equitable housing finance markets, affordable housing 

opportunities, and consideration of climate change risks. In addition to oversight by FHFA as our Conservator, we are subject 

to regulation and oversight by FHFA under our Charter and the GSE Act and to certain regulation by other government 

agencies. FHFA has the power to require us to change our processes, take action, and/or stop taking action that could impact 

our business; FHFA exercises this power from time to time.

FHFA has required and may again in the future require us to make changes to our business that have adversely affected our 

business or financial results and could require us to make additional changes at any time. FHFA may require us to undertake 

activities that (1) reduce our profitability; (2) expose us to additional credit, market, funding, operational, legal, and other risks; 

or (3) provide additional support for the mortgage market that serves our mission, but adversely affects our business or financial 

results. The implementation of newer credit score models may introduce complexities to our business and economic model, the 

timing and impact of which are uncertain at this time.

FHFA also has required us to take other actions that may adversely affect our business or financial results, such as requiring us 

to maintain increased liquidity and directing us to amend the CSS LLC agreement in a manner that limits our influence over 

CSS Board decisions. During conservatorship, the CSS Board Chair must be designated by FHFA, and all CSS Board decisions 

require the affirmative vote of the Board Chair. FHFA also has the right to appoint up to three additional CSS Board members. 

Two of these seats have not been filled, and if FHFA appoints two additional independent members, the CSS Board members 

we and Fannie Mae appoint could be outvoted by FHFA-designated Board members on any matter during conservatorship and 

on a number of significant matters after conservatorship. It is possible that FHFA may require us to make additional changes to 

the CSS LLC agreement, or may otherwise impose restrictions or provisions relating to CSS or the UMBS, that may adversely 

affect us.

From time to time, FHFA has prevented us from engaging in business activities or transactions that we believe would be 

profitable or otherwise beneficial to our business, and it may do so again in the future. For example, FHFA has limited the size 

and composition of our mortgage-related investments portfolio and the amount and type of new single-family and multifamily 

loans we may acquire. We may be required to adopt business practices that help serve our mission and other non-financial 

objectives, but that may negatively affect our future financial results. Congress or FHFA may require us to set aside or 

otherwise pay monies to fund third-party initiatives, such as the existing requirement under the GSE Act that we allocate 

amounts for certain housing funds. FHFA also could require us to take actions that would adversely affect our ability to 

compete and innovate, such as through its rule for new GSE products and activities; changing our risk appetite (including risk 

limits); and limiting our control over pricing. FHFA is also Conservator of Fannie Mae, our primary competitor. FHFA’s actions, 

as Conservator of both companies, has required, and could in the future require, us and Fannie Mae to take a uniform approach 

to certain activities, limiting innovation and competition and possibly putting us at a competitive disadvantage because of 

differences in our respective businesses. FHFA also could limit our ability to compete with new entrants and other institutions. 

The combination of the restrictions on our business activities and our potential inability to generate sufficient revenue through 

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our guarantee activities to offset the effects of those restrictions may have an adverse effect on our results of operations and 

financial condition.

Furthermore, the conservatorship has resulted in one material weakness in our internal control over financial reporting that 

could result in errors in our reported results, which could have a material adverse effect on our business and operations. Our 

material weakness relates specifically to the impact of the conservatorship on our disclosure controls and procedures. Because 

we are under the control of FHFA, some of the information that we may need to meet our disclosure obligations may be solely 

within the knowledge of FHFA. As our Conservator, FHFA has the power to take actions without our knowledge that could be 

material to our shareholders and other stakeholders, and could significantly affect our financial performance or our continued 

existence as an ongoing business. Because FHFA currently functions as both our regulator and our Conservator, there are 

inherent structural limitations on our ability to design, implement, test or operate effective disclosure controls and procedures 

relating to information known only to FHFA. As a result, we have not been able to update our disclosure controls and 

procedures in a manner that adequately ensures the accumulation and communication to management of information known 

only to FHFA that is needed to meet our disclosure obligations under the federal securities laws, including disclosures affecting 

our financial statements. Given the structural nature of this material weakness, we do not expect to remediate this weakness 

while we are under conservatorship. See Controls and Procedures for further discussion of management’s conclusions on 

our disclosure controls and procedures and internal control over financial reporting.

The Purchase Agreement and the terms of the senior preferred stock significantly limit our business activities. In 

the event of non-compliance with any Purchase Agreement covenants, Treasury may be entitled to specific 

performance, damages, and other remedies, and if the corrective actions we were to take were determined by 

FHFA to be insufficient, FHFA could impose penalties on us or take other remedial actions.

The Purchase Agreement and the terms of the senior preferred stock place significant restrictions on our ability to manage our 

business, including limiting (1) our secondary market activities; (2) our single-family and multifamily loan acquisitions; (3) the 

amount of indebtedness we may incur; (4) the size of our mortgage-related investments portfolio; and (5) our ability to pay 

dividends, transfer certain assets, raise capital, pay down the liquidation preference of the senior preferred stock, and exit 

conservatorship. The Purchase Agreement also requires us to comply with the ERCF as published in December 2020, 

disregarding any subsequent amendment or other modification to that rule. 

The Purchase Agreement prohibits us from taking a variety of actions without Treasury's consent. Treasury has the right to 

withhold its consent for any reason. The restrictions on our business under the Purchase Agreement, senior priority position 

and net worth sweep dividend provisions of the senior preferred stock, and warrant held by Treasury could adversely affect our 

ability to attract capital from the private sector in the future, should we be in a position to do so. For additional information, see

Conservatorship and Related Matters - Freddie Mac's Future is Uncertain.

In the event of non-compliance with any Purchase Agreement covenants, Treasury may be entitled to specific performance, 

damages, and other such remedies as may be available at law or in equity.

If FHFA placed us into receivership, our assets would be liquidated. The liquidation proceeds might not be 

sufficient to pay claims outstanding against Freddie Mac, repay the liquidation preference of our preferred stock, 

or make any distribution to our common stockholders.

We can be put into receivership at the discretion of the Director of FHFA at any time for a number of reasons set forth in the 

GSE Act. Bills have been and may continue to be introduced in Congress that provide for Freddie Mac to be placed into 

receivership. In addition, FHFA could be required to place us into receivership if Treasury were unable to provide us with 

funding requested under the Purchase Agreement to address a deficit in our net worth. Treasury might not be able to provide 

the requested funding if, for example, the U.S. government were not fully operational because Congress had failed to approve 

funding or the government had reached its borrowing limit. For additional information, see MD&A - Regulation and 

Supervision.

Being placed into receivership would terminate our conservatorship. The purpose of receivership is to liquidate our assets and 

resolve claims against us. The appointment of FHFA as our receiver would terminate all rights and claims that our stockholders 

and creditors might have against our assets or under our Charter as a result of their status as stockholders or creditors, other 

than possible payment upon our liquidation. 

The GSE Act provides that, if we were placed into receivership, the mortgages underlying our mortgage-related securities (and 

the payments thereon) would be held for the benefit of the holders of those securities and not for the benefit of any receivership 

estate or LLRE. However, payments on the mortgages underlying our mortgage-related securities might not be sufficient to 

make full payments of principal and interest on the securities. If we were unable to fulfill our guarantee, the holders of our 

mortgage-related securities would experience delays in receiving payments because the relevant systems are not designed to 

make partial payments, and they could ultimately suffer losses on their investments to the extent the payments on the 

mortgages underlying our mortgage-related securities were not sufficient to make full payments of principal and interest on the 

securities. In addition, when administering the receivership claims process, FHFA could treat similarly situated creditors 

unequally, including treating creditors with claims related to senior unsecured debt securities and creditors with claims related 

to guarantee obligations on mortgage-related securities unequally, if FHFA determines such treatment is necessary to maximize 

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the value of the assets of Freddie Mac, to maximize the present value return from the sale or other disposition of the assets of 

Freddie Mac, or to minimize the amount of any loss realized upon the sale or other disposition of the assets of Freddie Mac, as 

long as all creditors would receive at least as much as they would in a liquidation. During receivership or conservatorship, FHFA 

may take any authorized action that FHFA determines is in the best interest of Freddie Mac or FHFA, including the public that 

FHFA serves.

If our assets were liquidated, the liquidation proceeds might not be sufficient to pay the secured and unsecured claims against 

us (including claims on our guarantees), repay the liquidation preference on any series of our preferred stock, or make any 

distribution to our common stockholders. Proceeds would first be applied to the secured and unsecured claims against us, the 

administrative expenses of the receiver, and the liquidation preference of the senior preferred stock. Any remaining proceeds 

would then be available to repay the liquidation preference of other series of preferred stock. Only after the liquidation 

preference of all series of preferred stock is repaid would any proceeds be available for distribution to the holders of our 

common stock.

Our business and results of operations may be materially adversely affected if we are unable to attract and retain 

well-qualified and diverse employees across the company. The conservatorship, uncertainty of our future, and 

limitations on our executive and employee compensation put us at a disadvantage compared to other companies 

in attracting and retaining employees. In addition, we face increased competition for talented executives and 

other employees as a result of the increased availability of external job opportunities.

Our business is highly dependent on the talents and efforts of our employees. While voluntary employee turnover increased in 

2022, it decreased significantly in 2023 to a level more consistent with historical experience. 

The conservatorship, uncertainty of our future, and limitations on executive and employee compensation have had, and are 

likely to continue to have, an adverse effect on our ability to retain and recruit talent. The restrictions on the type of 

compensation we may pay while under conservatorship include:

n The Equity in Government Compensation Act of 2015 limits the compensation and benefits for our Chief Executive Officer 

to the level that was in place as of January 1, 2015 while we are in conservatorship or receivership. Accordingly, annual 

direct compensation for our CEO is limited to base salary at an annual rate of $600,000. 

n The Stop Trading on Congressional Knowledge Act of 2012, known as the STOCK Act, and related FHFA regulations 

prohibit our senior executives from receiving bonuses during conservatorship.

n FHFA, as our Conservator, has the authority to approve the terms and amount of our executive compensation and may 

require us to make changes to our EMCP. For additional information on restrictions on executive compensation, see 

Executive Compensation – CD&A – Other Executive Compensation Considerations – Legal, Regulatory, and 

Conservator Restrictions on Executive Compensation. 

n The terms of the Purchase Agreement with Treasury contain specified restrictions relating to compensation, including a 

prohibition on selling or issuing equity securities without Treasury’s prior written consent except under limited 

circumstances, which effectively eliminates our ability to offer equity-based compensation to our employees.

These restrictions may reduce our flexibility to offer compensation deemed competitive, which may adversely affect our ability 

to attract and retain executives and other employees. These restrictions also prohibit our ability to motivate and reward high 

performance with compensation structures that provide upside potential to our executives, putting us at a disadvantage to 

other companies in attracting and retaining executives. In addition, the uncertainty of potential action by Congress or the 

Administration with respect to our future – including whether we will exit conservatorship, how long it may take before we exit 

conservatorship, or whether housing finance reform will result in a significant restructuring of the company or the company no 

longer continuing to exist – also negatively affects our ability to recruit and retain executives and other employees. 

The cap on our CEO compensation historically has made retention and succession planning for this position difficult, and it may 

make it difficult to attract qualified candidates for this critical role in the future.

We face competition from the financial services and technology industries, and from businesses outside of these industries, for 

well-qualified and diverse talent. This competition has made the attraction and retention of executive and employee talent more 

challenging. If this increased competition persists and if we are unable to attract and retain executives and other employees 

with the necessary skills and talent, or the market for talent further intensifies, we may face increased operational risk, and our 

business or financial results could be materially adversely affected. Leadership departures, especially multiple departures at 

approximately the same time, could also materially adversely affect our business, results of operations, and financial condition. 

Credit Risks

We are subject to mortgage credit risk. Credit losses and costs related to this risk could adversely affect our 

financial results.

Mortgage credit risk is the risk that a borrower will fail to make timely payments on a loan we own or guarantee. This exposes 

us to the risk of credit losses and credit-related expenses, which could adversely affect our financial results. We are primarily 

exposed to mortgage credit risk with respect to the single-family and multifamily loans and securities reflected as assets on our 

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consolidated balance sheets. We are also exposed to mortgage credit risk with respect to guaranteed securities and guarantee 

arrangements that are not reflected as assets on our consolidated balance sheets, including K Certificates and certain other 

senior subordinate securitizations. 

We have loans in our Single-Family mortgage portfolio with certain characteristics that are typically associated with higher 

levels of credit risk. See MD&A - Risk Management - Single-Family Mortgage Credit Risk - Monitoring Loan 

Performance and Characteristics for additional information on the characteristics of the loans in our Single-Family mortgage 

portfolio. We also expect to continue acquiring loans with higher LTV ratios, as well as loans with higher DTI ratios, generally up 

to 50%, which will increase our exposure to credit risk. Our current and/or future efforts to increase eligible borrowers' access 

to single-family mortgage credit, including our affordable housing program, changes in loan products, and our plan for fulfilling 

our duty to serve underserved markets and FHFA requirements and guidance related to equitable housing, may expose us to 

increased mortgage credit risk.

We face significant risks related to our delegated underwriting process for single-family loans, including risks 

related to sellers' origination operations, data accuracy, and mortgage fraud. Our delegated process relies on 

sellers' ability to originate and deliver loans that consistently meet our underwriting standards, and their failure 

to do so may impact the credit quality of the loans we purchase.

We delegate to our sellers the underwriting for the single-family loans we purchase or securitize. Our contracts with sellers 

describe mortgage eligibility and underwriting standards, and the sellers represent and warrant to us that the loans they deliver 

to us meet these standards. 

We rely on the strength of our sellers' origination processes and controls. We perform operational risk evaluations to test our 

counterparties' control environments. However, our review may not detect weak operations that could lead to errors in seller 

decisions concerning, for example, loan underwriting, correspondent approvals, property valuations, and insurance coverage.

We do not independently verify most of the information provided to us before we purchase or securitize a loan. This exposes us 

to the risk that one or more of the parties involved in a transaction (such as the borrower, property seller, broker, appraiser, title 

agent, loan officer, or lender) misrepresented facts about the borrower, property, or loan, or otherwise engaged in fraud. 

We review a sample of loans after we purchase them to determine if they comply with our contractual standards. However, our 

review may not detect any misrepresentations by the parties involved in the transaction, detect loan fraud, or reduce our 

exposure to these risks. 

We can exercise certain contractual remedies for loans that do not meet our standards. Our representation and warranty 

framework relieves sellers of certain repurchase obligations with respect to single- family loans. We may face greater exposure 

to credit and other losses because our ability to enforce repurchases from sellers may be limited. In addition, to the extent that 

we accept alternatives to repurchase, we may ultimately recover less than if we had enforced repurchase rights. 

Our suite of tools, collectively referred to as Loan Advisor, offers limited representation and warranty relief for certain loan 

components that satisfy automated data analytics related to appraisal quality, collateral valuation, certain condominium project 

requirements, borrower assets, and borrower income. In general, limited representation and warranty relief is offered when 

information is validated against independent data sources and/or Freddie Mac analytics and risk assessments. However, there 

is a risk that the enhanced tools and processes provided by Loan Advisor will not enable us to identify all breaches in a timely 

manner. In addition, there is a risk that data provided by the independent data sources is not accurate, impacting the 

representation and warranty relief decision. In turn, this could increase our exposure to credit and other losses. For additional 

information, see MD&A - Risk Management - Single-Family Mortgage Credit Risk and MD&A - Risk Management - 

Operational Risk - Third-Party Risk. 

Mortgage fraud from third parties and borrowers could result in significant financial losses and harm to our 

reputation.

In the process of purchasing, securitizing, and servicing mortgage loans, we rely on information provided to us by third parties. 

We also rely on the representation of such third parties as to the accuracy and completeness of the information. This exposes 

us to the risk that one or more of the third parties involved in a transaction (for example, the borrower, seller, broker, appraiser, 

title agent, loan officer, or servicer) will intentionally or negligently engage in fraud by misrepresenting facts about a mortgage 

loan. While we have certain measures to protect against mortgage fraud, there is no guarantee our measures will reduce our 

exposure to this risk. We have experienced financial losses resulting from mortgage fraud, including institutional fraud 

perpetrated by counterparties. In the future, we may experience additional financial losses or reputational damage as a result of 

mortgage fraud.

Declines in national or regional house prices, other adverse changes in the housing market, declines in the value 

of Multifamily properties, or adverse macroeconomic conditions, could negatively affect both our Single-Family 

and Multifamily businesses.

Our financial results and business volumes can be negatively affected by declines in house prices, other adverse changes in the 

housing market, declines in the value of Multifamily properties, or adverse macroeconomic conditions. This could (1) 

significantly increase our expected credit losses; (2) result in higher stress losses for both the Single-Family and Multifamily 

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portfolios; (3) increase our losses on foreclosure alternatives, third-party sales, and dispositions of REO properties; (4) reduce 

our returns or result in losses on our Single-Family and Multifamily guarantee business, as default rates could be higher than we 

expected when we issued the guarantees; (5) negatively affect the value of our unsecuritized loans, which could cause us to 

change our disposition strategies for our Single-Family delinquent and modified loans; or (6) adversely impact our ability to 

transfer credit risk. For additional information regarding these risks, see MD&A - Risk Management - Credit Risk.

The proportion of our refinance loan purchases to total loan purchases has decreased as mortgage interest rates have 

increased. This could increase our exposure to mortgage credit risk, as refinance loans (particularly those that do not involve 

"cash-out") generally present less credit risk than purchase loans. Cash-out refinance loans acquired in a higher interest-rate 

environment similarly expose us to greater mortgage credit risk. Some of our seller/servicer counterparties are highly 

dependent on refinance loan volumes. A decrease in such volumes could adversely affect these counterparties, which could 

increase our exposure to counterparty credit risk.

We are exposed to counterparty credit risk with respect to our business counterparties. Our financial results may 

be adversely affected if one or more of our counterparties fail to meet their contractual obligations to us. 

We depend on our institutional counterparties to provide services that are critical to our business. We face the risk that one or 

more of our counterparties may fail to meet their contractual obligations to us. Our major counterparties include sellers, 

servicers, credit enhancement providers, and counterparties to derivatives, short-term lending, and other funding transactions 

(e.g., cash and other investments transactions). For additional information, see MD&A - Risk Management - Counterparty 

Credit Risk.

Many of our major counterparties provide several types of services to us. The concentration of our exposure to our 

counterparties remains high. Efforts we take to reduce exposure to financially weak counterparties could increase the relative 

concentration of our exposure to other counterparties, increase our costs, and reduce our revenue. It is possible that our 

counterparties could experience challenging market conditions or other events that could adversely affect their liquidity and 

financial condition and cause some of them to become insolvent or otherwise fail to perform their obligations to us. Many of our 

counterparties are subject to increasingly complex regulatory requirements and oversight, which place additional stress on their 

resources and may affect their ability or willingness to do business with us.

Credit risk related to Single-Family seller/servicers 

We are exposed to credit risk from the seller/servicers of our Single-Family loans, as described below. 

n A decline in servicing performance - A decline in a servicer's performance, such as delayed foreclosures or missed 

opportunities for foreclosure alternatives, could significantly affect our ability to mitigate credit losses and could affect the 

overall credit performance of our Single-Family mortgage portfolio. A large volume of seriously delinquent loans, the 

complexity of the servicing function, and heightened liquidity requirements are significant factors contributing to the risk of 

a decline in performance by servicers. Servicers may experience financial and other difficulties due to the advances they 

are required to make to us on delinquent single-family mortgages, including mortgages subject to forbearance plans. We 

could be adversely affected if our servicers lack appropriate controls, experience a failure in their controls, or experience a 

disruption in their ability to service loans, including as a result of a cybersecurity incident, legal or regulatory actions, or 

financial difficulties. We also are exposed to fraud by third parties in the loan servicing function, particularly with respect to 

short sales and other dispositions of non-performing assets. Additionally, we rely on the accuracy of information provided 

by servicers, which exposes us to the risk that the data provided to us may be inaccurate.

 We could attempt to mitigate our exposure to a poorly performing servicer by terminating its right to service our loans; 

however, in a highly adverse economic environment, there could be scarce capacity in the marketplace and we may not be 

able to find successor servicers who have the capacity to service the affected loans and who are also willing to assume the 

representations and warranties of the terminated servicer. In addition, terminating a large servicer may not be feasible 

because of the operational and capacity challenges related to transferring large servicing portfolios. There is also a 

possibility that the performance of some loans may degrade during the transition to new servicers. During a period of 

heightened delinquencies, we may incur costs and potential increases in servicing fees if we replace a servicer with a high 

concentration of loans in default, which are more costly to service. We may also be exposed to concentrations of credit 

risk among certain servicers.

n A failure by seller/servicers to fulfill their obligations to repurchase loans or indemnify us as a result of breaches of 

representations and warranties - While we may have the contractual right to require a seller or servicer to repurchase 

loans from us, it may be difficult, expensive, and time-consuming to enforce such repurchase obligations. We could enter 

into settlements to resolve repurchase obligations; however, the amounts we receive under any such settlements may be 

less than the losses we ultimately incur on the underlying loans.

 Under our representation and warranty framework, as may be revised from time to time in response to FHFA instruction, 

we are required in some cases to utilize an alternative remedy, such as indemnification, in lieu of repurchase. The amount 

we recover under an alternative remedy may be less than the amount we could have recovered in a repurchase.

n Significant exposure to non-depository institutions - A large volume of our single-family loans is acquired from and 

serviced by non-depository institutions. Some of these institutions may not have the same financial strength or operational 

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capacity, or be subject to the same level of regulatory oversight, as large depository institutions. As a result, we face 

increased risk that these counterparties could fail or otherwise be unable to perform their obligations to us. In particular, 

non-depository servicers grew their servicing portfolios in the last several years as a result of higher originations. This 

appears to have resulted in operational strains that have subjected some of these servicers to regulatory scrutiny. This 

rapid growth could expose us to increased risks if any operational strain adversely affects these servicers' servicing 

performance or their financial strength. These institutions also service portfolios for other investors and guarantors (i.e., 

Fannie Mae and Ginnie Mae) and operational issues related to those portfolios could affect the performance of our 

portfolio. In addition, these servicers may not always have ready access to appropriate sources of liquidity to finance their 

operations, particularly during periods when the mortgage market is experiencing a downturn. If these servicers reduce 

their servicing portfolios, overall servicing capacity may be constrained. 

Credit risk related to Multifamily seller/servicers 

Our seller/servicers also have a significant role in servicing loans in our Multifamily mortgage portfolio. We are exposed to the 

risk that multifamily seller/servicers could come under financial pressure. The financial pressure could potentially cause a 

decline in their servicing performance and cause us to take remedial action against them including terminating their right to 

service our loans, potentially resulting in further concentration of exposure to other seller/servicers.

We are also exposed to settlement risk from the non-performance of sellers and servicers as a result of our forward settlement 

loan purchase programs in our Single-Family and Multifamily businesses.

Credit risk related to counterparties to derivatives, funding, short-term lending, securities, and other transactions 

We have significant exposure to institutions in the financial services industry relating to derivatives, funding, short-term lending, 

securities, securities purchased under agreements to resell, secured lending, forward settlement of loans and securities, and 

other transactions (e.g., cash and other investments transactions). These transactions are critical to our business, including our 

ability to: 

n Manage interest-rate risk and other risks related to our investments in mortgage-related assets;

n Fund our business operations; and

n Service our customers. 

We face the risk of failure of the clearing members, exchanges, clearinghouses, or other financial intermediaries we use to 

facilitate derivatives, short-term lending, securities, and other transactions. We also clear trades at clearinghouses through 

clearing members. We would be subject to losses on certain trades if a clearing member fails to comply with the requirement to 

segregate customer funds or if a clearing member's customer causes a clearing member to default.

We are a clearing member of the clearinghouses through which we execute mortgage-related and Treasury securities 

transactions. As a result, we could be subject to losses because we are required to participate in the coverage of losses 

incurred by other clearing members if they fail to meet their obligations to the clearinghouse.

If our counterparties to short-term lending transactions fail, we are exposed to losses to the extent the transaction is unsecured 

or the collateral posted to us is insufficient.

Credit risk related to mortgage insurers and other credit enhancement providers

If a mortgage insurer fails to meet its obligations to reimburse us for claims, our credit losses could increase. In addition, if a 

regulator determines that a mortgage insurer lacks sufficient capital to pay all claims when due, the regulator could take action 

that might affect the timing and amount of claim payments made to us. We face similar risks with respect to our counterparties 

on ACIS and comparable transactions. 

We cannot differentiate pricing based on the strength of a mortgage insurer or revoke a mortgage insurer's status as an eligible 

insurer without FHFA approval. In addition, we generally do not select the mortgage insurance provider on a specific loan 

because the selection is usually made by the lender at the time the loan is originated. As a result, we could acquire a 

concentration of risk to certain insurance providers. 

Our loss mitigation activities may be unsuccessful or costly and may adversely affect our financial results. 

Our loss mitigation activities may not be successful. The costs we incur related to loan modifications and other loss mitigation 

activities have been, and could continue to be, significant. For example, we generally bear the full cost of the monthly payment 

reductions related to modifications of loans we own or guarantee, as well as all applicable servicer incentive fees for our singlefamily mortgage modifications. 

We could be required to make changes to our loss mitigation activities that could make these activities more costly to us. 

FHFA, as Conservator and regulator, may continue to issue directives and Advisory Bulletins to assist borrowers and align 

servicing practices for the GSEs. These directives and Advisory Bulletins could make these activities more costly to us, 

especially with regard to loan modification initiatives. FHFA may continue to issue these directives and Advisory Bulletins for a 

variety of reasons, including consumer relief and alignment of the prepayment behavior of our and Fannie Mae's respective 

UMBS.

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We have loans on trial period plans as required under certain loan modification programs. Some of these loans may fail to 

complete the trial period or fail to qualify for our other borrower assistance programs. For these loans, the trial period will have 

effectively delayed the foreclosure process and could increase our costs.

The type of loss mitigation activities we pursue could affect prepayments on our Single-Family securities (e.g., UMBS, 55-day 

MBS, PCs, and REMICs), which could affect the value of these securities or the earnings from the assets in our mortgagerelated investments portfolio. In addition, loss mitigation activities may adversely affect our ability to securitize, resecuritize, and 

sell the loans subject to those activities.

We devote significant resources to our borrower assistance initiatives. The size and scope of these efforts may compete with 

other business opportunities or corporate initiatives.

For additional information on our loss mitigation activities, see MD&A - Our Business Segments - Single-Family -

Products and Activities - Loss Mitigation Activities and MD&A - Risk Management - Single-Family Mortgage Credit 

Risk - Engaging in Loss Mitigation Activities.

We have been, and will continue to be, adversely affected by delays and deficiencies in the single-family 

foreclosure process.

Delays in the foreclosure process could cause our expenses to increase. For example, properties awaiting foreclosure could 

deteriorate until we acquire them, resulting in increased expenses to repair and maintain the properties. Foreclosure process 

delays could also adversely affect trends in house prices regionally or nationally, which could adversely affect our financial 

results. 

We are exposed to increased credit losses and credit-related expenses in the event of a catastrophic event or 

significant climate change effects.

The occurrence, severity, and duration of a catastrophic event, such as major natural or environmental disaster including a 

hurricane, earthquake, tsunami, power shortage or outage, or flood; a public health crisis, such as a pandemic; a political crisis 

such as terrorism, war, political instability, or other conflict, in an area where we own or guarantee mortgage loans could 

increase our credit losses and credit-related expenses. A catastrophic event that either damages or destroys single-family or 

multifamily real estate underlying mortgage loans that we own or guarantee, or negatively affects the ability of borrowers to 

continue to make payments on mortgage loans that we own or guarantee, could increase our serious delinquency rates and 

average loan loss severity in the affected areas. Such catastrophic events could generate credit losses and credit-related 

expenses and have a material adverse effect on our business and financial results. While homeowner's and flood insurance 

may offset some of the risk of natural disasters, insurance coverage may not be adequate or always available and borrowers 

may not be required to purchase certain types of insurance, such as earthquake insurance or flood insurance for properties 

located outside SFHAs. Rising costs or limited availability of insurance could also lead borrowers to underinsure, which could 

result in higher uninsured costs and unrepaired properties. Additionally, rising insurance costs could impact consumers' ability 

to make mortgage payments, and higher insurance costs could decrease the availability of affordable housing for buyers.

An increased frequency and intensity of major natural disasters may be indicative of the impact of climate change and are 

expected to persist for the foreseeable future. Although historically our losses from these events have not been significant, we 

remain exposed to risk, particularly in connection with geographically widespread weather events, changes in weather patterns, 

and significant climate change effects, such as rising sea levels, increased wildfires, and increased storms and flooding. 

Population growth in high-risk areas could increase the impacts of natural disasters and may impact our exposure.

Significant long-term climate change effects could increase the vulnerability of an area to natural disasters, which could 

discourage housing activity, decrease mortgage originations, and negatively impact property values in affected areas. Investors 

may place greater weight on these risks when making asset pricing decisions, which could increase our cost or affect our ability 

to transfer risk. Increases in the intensity and frequency of natural disasters, particularly with respect to flooding in areas not 

designated as SFHAs (i.e., in areas where we do not require flood insurance), as well as any decrease in the willingness of 

insurers to provide coverage in certain areas for certain perils, will increase the foregoing risks. In addition, the unpredictability 

of natural disasters and the complexity of forecasting long-term climate change effects negatively affect our ability to forecast 

losses from such events.

Further, actions taken by Congress, the Administration, state and municipal governments, and FHFA in response to climate 

change concerns may create transition risks that impact the housing market and our business. For example, policy actions to 

address climate change could result in a potentially disruptive transition away from carbon-intense industries. Such a transition 

could impact certain industries and regional economies, affecting property values and the ability of borrowers in those 

industries or regions to pay their mortgage loans. We also have transition risk from policies that target energy efficiency of the 

housing sector, or which increase energy prices, and could lead to costly retrofits or high utility bills, either of which could 

increase the costs of homeownership and impact property values. 

Risk Factors

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Our CRT transactions may not be available to us in adverse economic conditions. These transactions also 

increase our expenses.

Our ability to transfer credit risk (and the cost to us of doing so) could change rapidly depending on market conditions. Adverse 

market conditions may result in insufficient investor demand for CRT transactions at acceptable prices. For example, high 

interest rates, elevated inflation, and other market uncertainty could delay or otherwise impact our planned CRT transactions. It 

is possible that our CRT strategies and structuring decisions may not prevent us from incurring substantial losses. For instance, 

it takes time to transfer risk and we are exposed to credit losses during this pipeline period. Additionally, some of our CRT 

transactions have early termination clauses or maturity dates that are earlier than the maturities of the reference mortgage 

loans, and we may also seek to terminate certain CRT transactions by repurchasing the related securities. We will be exposed 

to increased credit risk on the reference mortgage loans after termination of such transactions. Additionally, we retain a portion 

of the risk of future losses on loans covered by CRT transactions, including all or a portion of the first loss risk in Single-Family 

STACR and ACIS transactions and Multifamily MCIP and SCR transactions. The costs associated with CRT transactions are 

significant and may increase. For some CRT transactions, there may be a significant difference in time between when we 

recognize a credit loss in earnings and when we recognize the related recovery in earnings, and this lag could adversely affect 

our financial results in the earlier period. Changes in regulatory guidance, such as capital requirements under the ERCF, may 

cause us to modify our CRT activities.

Market Risks

Changes in interest rates could negatively affect the fair value of our financial assets and liabilities, results of 

operations, and net worth.

Our financial results, including the amount of interest income we receive and interest expense we pay, can be significantly 

affected by changes in interest rates.

Interest rates can fluctuate for many reasons, including changes in the fiscal and monetary policies of the federal government 

and its agencies as well as geopolitical events or changes in general economic conditions, such as increased inflation. The 

amount and timing of the impact of changes in interest rates depends on the magnitude, speed, and duration of the changes in 

interest rates. 

Changes in interest rates could adversely affect the cash flows and prepayment rates on assets that we own and related debt 

and derivatives. In addition, changes in interest rates could adversely affect the prepayment rate or default rate on the loans 

that we guarantee. For example, when interest rates decrease, borrowers are more likely to prepay their loans by refinancing 

them at a lower rate. An increased likelihood of prepayment on the loans underlying our mortgage-related securities may 

adversely affect the value of these securities.

The Federal Reserve increased its interest rates and reduced the size of its balance sheet, including Treasuries and MBS during 

2023. This has increased volatility in the interest rates markets and MBS spreads. We could be adversely impacted by this 

volatility. The future direction and levels of interest rates remain uncertain.

Additionally, we may issue callable debt instruments to manage the duration and prepayment risk of expected cash flows of the 

mortgage assets we own. We may exercise the option to repay the outstanding principal balance when interest rates decrease. 

However, we may replace the called debt at a higher spread due to the market conditions at that time. In the event we decide 

not to call our debt, we may incur higher hedging costs.

We incur costs as a result of our risk management activities, which may not be successful. Our interest-rate risk management 

activities are designed to reduce our economic exposure to changes in interest rates to a low level as measured by our models. 

However, the accounting treatment for certain of our assets and liabilities, including derivatives, creates variability in our 

earnings when interest rates fluctuate, as some assets and liabilities are measured at amortized cost and some are measured at 

fair value, while all derivatives are measured at fair value. While we use hedge accounting to attempt to reduce interest-raterelated earnings volatility, our hedge accounting programs may not be effective in reducing this variability. In addition, 

differences in amortization between our assets and the liabilities we use to fund them, including amortization of fair value 

hedging basis adjustments, may also be affected by changes in interest rates and prepayment rates and may contribute to 

earnings variability.

Changes in market spreads could negatively affect the fair value of our financial assets and liabilities, results of 

operations, and net worth.

Changes in market conditions, including changes in interest rates, liquidity, prepayment, and/or default expectations and the 

level of uncertainty in the market for a particular asset class, may cause fluctuations in market spreads. Our financial results and 

net worth can be significantly affected by changes in market spreads, especially results driven by financial instruments that are 

measured at fair value. These instruments include trading securities, available-for-sale securities, derivatives, loans held-forsale, and loans and debt with the fair value option elected. 

A narrowing or tightening of the market spreads on a given asset is typically associated with an increase in the fair value of that 

asset. Narrowing market spreads may reduce the number of attractive investment opportunities and could increase the cost of 

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activities we may undertake to support the liquidity and price performance of our UMBS and other securities. Consequently, a 

tightening of the market spreads on our assets may adversely affect our future financial results and net worth. A widening of the 

market spreads on a given asset is typically associated with a decline in the fair value of that asset or tightening of the market 

spread on a given liability is typically associated with an increase in the fair value of that liability, which may adversely affect our 

near-term financial results and net worth. While wider market spreads may create favorable investment opportunities, our ability 

to take advantage of any such opportunities is limited due to various restrictions on the size and composition of our mortgagerelated investments portfolio. See MD&A - Conservatorship and Related Matters for additional information on these 

restrictions.

Changes in market spreads also affect the fair value of our debt with the fair value option elected. A narrowing or tightening of 

the market spreads on a given liability is typically associated with an increase in the fair value of that liability, which is 

recognized as a loss by us.

A significant decline in the price performance of, or demand for, our UMBS could have an adverse effect on the 

volume and/or profitability of our Single-Family business activity. 

Our UMBS are an integral part of our loan purchase program. Our competitiveness in purchasing single-family loans from our 

sellers and the volume and profitability of our Single-Family business activity are directly affected by the price performance of 

UMBS issued by us relative to comparable Fannie Mae-issued UMBS. If our UMBS were to trade at a discount relative to 

comparable Fannie Mae securities due to prepayment performance or other factors, such a difference in relative pricing may 

create an incentive for sellers to conduct a disproportionate share of their single-family business with Fannie Mae.

It is possible that a liquid market for our UMBS may not be sustained, which could adversely affect their price performance and 

our single-family market share. A significant reduction in our market share, and thus in the volume of loans that we securitize, or 

a reduction in the trading volume of our UMBS could reduce the liquidity of our UMBS. While we may decide to employ various 

strategies to support the liquidity and price performance of our UMBS, any such strategies may fail or adversely affect our 

business and financial results. We may cease any such activities at any time, or FHFA could require us to do so, which could 

adversely affect the liquidity and price performance of our UMBS. We may incur costs to support our presence in the agency 

securities market and to support the liquidity and price performance of our securities.

Liquidity-related price differences could occur between UMBS issued by us and comparable Fannie Mae-issued UMBS due to 

factors that are largely outside of our control. For example, the level of the Federal Reserve's purchases and sales of agency 

mortgage-related securities, including the reduction in the Federal Reserve's purchases of mortgage-related securities, could 

affect the demand for and values of our UMBS. Therefore, any strategies we employ to reduce any liquidity-related price 

differences may not reduce or eliminate any such price differences over the long term.

We may experience price differences with Fannie Mae on individual new production pools of TBA-eligible mortgages, 

particularly with respect to specified pools and our multilender securities. From time to time, we may need to adjust our pricing 

for a particular new production pool category or introduce new initiatives to maintain alignment and competitiveness with 

Fannie Mae with respect to the acquisition of such pools. Depending on the amount of pricing adjustments in any period, it is 

possible that they could adversely affect the profitability of our Single-Family business for that period. We manage our cash 

window activities in accordance with our risk limits and limitations imposed by FHFA; this may limit our ability to manage 

alignment. The Purchase Agreement also includes restrictions on the volume of our cash window activities. For additional 

information, see MD&A - Our Business Segments - Single-Family - Business Overview - Products and Activities.

If the UMBS does not continue to receive widespread market acceptance, the liquidity and price performance of 

our Single-Family mortgage-related securities and our market share and profitability could be adversely affected. 

As part of the combined UMBS market, we have been required by FHFA to align certain of our Single-Family mortgage 

purchase offerings, servicing, and securitization programs, policies and practices with Fannie Mae to achieve and maintain 

market acceptance of the UMBS. We cannot provide any assurance that these efforts will prevent the occurrence of the types 

of pricing disparities discussed above over the long-term. A number of factors may make it difficult for us to maintain alignment 

with Fannie Mae, including increased refinances, the introduction or expansion of automation and other innovations, and 

changes in the industry. These alignment activities may adversely affect our business and our ability to compete with Fannie 

Mae. We may be required to further align our business processes with those of Fannie Mae. Uncertainty concerning the extent 

of the alignment between Freddie Mac's and Fannie Mae's mortgage purchase, servicing, and securitization programs, policies, 

and practices may affect the degree to which the UMBS maintains market acceptance.

If investors do not continue to accept the fungibility of Freddie Mac and Fannie Mae UMBS and instead prefer Fannie Mae 

UMBS over Freddie Mac UMBS, this could affect the liquidity or market value of our Single-Family mortgage-related securities 

and have a significant adverse impact on our business, liquidity, financial condition, net worth, and results of operations, and 

could affect the liquidity or market value of our Single-Family mortgage-related securities. Investor preferences could also result 

in the emergence of enterprise-specific markets for these securities.

The ERCF requires us to hold capital to account for the counterparty credit risk of Fannie Mae. Given the resulting risk weights 

for commingled securities or crossholding of Enterprise UMBS, it is possible that the fungibility of UMBS will be reduced and 

that enterprise-specific markets will re-emerge. The ERCF risk weighting may cause each Enterprise to choose whether to 

Risk Factors

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stipulate delivery of its own UMBS or to provision excess capital to account for the risk of receiving the other Enterprise’s 

UMBS. Further, the ERCF requirements and the resulting 50 bps fee we and Fannie Mae implemented for newly-issued 

commingled securities caused such issuances effectively to cease after July 1, 2022, undermining the goal of fungibility of 

Freddie Mac and Fannie Mae UMBS. Although the fee was reduced to 9.375 bps effective April 1, 2023 resulting in an increase 

in these issuances, there is no assurance that this reduction will result in the resumption of commingled security issuance at 

previous levels.

Commingling certain Fannie Mae securities in resecuritizations has increased our counterparty risk. 

We have counterparty credit exposure to Fannie Mae due to investors' ability to commingle certain Freddie Mac and Fannie 

Mae securities in resecuritizations. When we resecuritize Fannie Mae securities, our guarantee of timely principal and interest 

extends to the underlying Fannie Mae securities. In the event that Fannie Mae were to fail to make a payment on a Fannie Mae 

security that we resecuritized, Freddie Mac would be responsible for making the payment. We do not control or limit the 

amount of resecuritized Fannie Mae securities that we could be required to guarantee. We will be dependent on FHFA, Fannie 

Mae, and Treasury (pursuant to Fannie Mae's and our respective Purchase Agreements with Treasury) to avoid a liquidity event 

or default in the event of a payment default by Fannie Mae. We have not modified our liquidity strategies to address the 

possibility of non-timely payment by Fannie Mae, but we may do so in the future.

We and Fannie Mae both rely on the Federal Reserve Banks to make payments on our respective mortgage-related securities. 

As noted above, in the event that Fannie Mae were to fail to make a payment on a Fannie Mae security that we resecuritized, 

Freddie Mac would be responsible for providing the Federal Reserve Banks with the funds to make the payment. If we failed to 

provide the Federal Reserve Banks with all funds to make such payment on such resecuritized Fannie Mae securities, the 

Federal Reserve Banks would not make any payment on any of our outstanding Freddie Mac-issued UMBS, Supers, SingleFamily REMICs, or other Single-Family mortgage-related securities to be paid on that payment date, regardless of whether 

such Freddie Mac-issued securities were backed by Fannie Mae-issued securities.

The profitability of our Multifamily business could be adversely affected by market competition and/or decreased 

investor demand for our K Certificates and other securities.

Our current Multifamily business model is highly dependent on our ability to purchase and securitize loans at terms that provide 

us with an appropriate economic return. The actions of our competitors, including their pricing, credit standards, and loan 

structures, along with the actions we and our competitors take to support affordable multifamily housing could reduce the 

volume and profitability of our multifamily business. A significant decrease in demand for K Certificates, Multifamily PCs, and/or 

other securities could have an adverse impact on our profitability to the extent that our holding period for the loans increases 

and we are exposed to credit, spread, and other market risks for a longer period of time or receive reduced proceeds from 

securitization. We employ various strategies to support the liquidity of our K Certificates, but those strategies could fail or 

adversely affect our business. We may cease such activities at any time, or FHFA could require us to do so, which could 

adversely affect the liquidity and price performance of our K Certificates, Multifamily PCs, and/or other securities.

The transition to SOFR as the replacement index for LIBOR and as the floating rate index for new issuance of 

loans, securities, and derivative transactions could negatively affect the fair value of our financial assets and 

liabilities, results of operations, and net worth.

ICE Benchmark Administration Limited, the administrator of LIBOR, ceased publishing the 1-week and 2-month U.S. Dollar 

LIBOR settings at the end of 2021, and ceased publishing the other, most widely used, tenors of U.S. Dollar LIBOR on a 

representative basis at the end of June 2023. In December 2022, Freddie Mac, under the guidance of FHFA, announced our 

planned use of LIBOR replacement rates based on the SOFR for our legacy mortgage loans and securities. The 30-day Average 

SOFR rate administered and published by the Federal Reserve Bank of New York was selected to serve as the replacement 

floating rate index for certain of our legacy LIBOR-indexed contracts and as the floating rate index for our new-issue SOFRindexed contracts. 

Although the transition away from reliance on LIBOR has occurred, impacts from the transition could affect the financial 

performance of instruments we hold, require changes to hedging strategies, and adversely affect our financial performance. 

The impacts from the transition could adversely affect the pricing, liquidity, value of, return on, and trading for a broad array of 

financial products that are included in our financial assets and liabilities. We have various outstanding financial products, 

including mortgage loans, mortgage-related securities, and derivatives, that were previously indexed to LIBOR. 

The use of SOFR as the alternative reference rate for our products that were previously indexed to LIBOR and as the floating 

rate index for new issuances of our products may present certain market concerns. Among the concerns, SOFR is a relatively 

new interest rate index and therefore has a limited history. In addition, the composition and characteristics of SOFR are not the 

same as those of LIBOR. Compounded averages of overnight SOFR represent backward-looking risk-free rates, whereas U.S. 

Dollar LIBOR had various forward-looking tenors and reflected a credit risk component. Any failure of SOFR to maintain 

acceptance and widespread market adoption could adversely affect products indexed to SOFR, and it is still uncertain whether 

the use of overnight SOFR and 30-day Average SOFR will predominate over the use of forward-looking SOFR term rates that 

may be preferred by the market, whether SOFR will be more or less volatile than LIBOR, including during times of economic 

stress, and whether sufficient liquidity of SOFR-based products will develop.

Risk Factors

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As described above, we have identified material exposures to SOFR as the replacement index for our products that were 

previously indexed to LIBOR but cannot reasonably estimate the expected impact or other consequences of such exposure. 

For additional information regarding the actions we took in connection with the orderly transition from LIBOR to SOFR, see 

MD&A - Risk Management - Market Risk - Transition from LIBOR.

Liquidity Risks

Our activities may be adversely affected if funding is limited or unavailable, or if the cost is increased.

The amount, type, and cost of our unsecured funding directly affects our interest expense and results of operations. A number 

of factors could make such financing more difficult to obtain; more expensive; or unavailable on any terms, including market 

and other factors, monetary policy, changes in U.S. government support for us, and reduced demand for our debt securities.

Market and Other Factors

Our ability to obtain funding in the public unsecured debt markets or by selling or pledging mortgage-related and other 

securities as collateral to other institutions could change rapidly or cease. The cost of available funding could increase 

significantly due to changes in monetary policy, interest rates, market confidence, operational risks, regulatory requirements, or 

other factors such as competing supply. 

Prolonged wide market spreads on long-term debt could cause us to reduce our long-term debt issuances and increase our 

reliance on short-term and callable debt issuances. Such increased reliance on short-term and callable debt could increase the 

risk that we may be unable to refinance our debt when it becomes due and result in a greater use of derivatives. Greater 

derivatives use could increase the variability of our comprehensive income or increase our credit exposure to our 

counterparties. Additionally, we may incur higher hedging costs in the event that we decide not to call our debt.

We may incur higher funding costs due to our liquidity management requirements, practices, and procedures, including FHFA 

minimum liquidity requirements that limit the size and the allowable investments in our other investments portfolio. Our 

practices and procedures may not provide us with sufficient liquidity to meet our ongoing cash obligations under all 

circumstances. In particular, we believe that our liquidity contingency plans may be inadequate or difficult to execute during a 

liquidity crisis or period of significant market turmoil. If we cannot access the unsecured debt markets, our ability to repay 

maturing indebtedness, make payments on our mortgage-related securities, and fund our operations could be significantly 

impaired or eliminated, as our alternative sources of liquidity (e.g., cash and other investments) may not be sufficient to meet 

our liquidity needs. We have limited ability to use the less liquid assets in our mortgage-related investments portfolio as a 

significant source of liquidity (e.g., through sales or as collateral in secured borrowing transactions).

We make extensive use of the Federal Reserve's payment system in our business activities. The Federal Reserve requires that 

we fully fund accounts at the Federal Reserve Bank of New York to the extent necessary to cover cash payments on our debt 

and mortgage-related securities each day, before the Federal Reserve Bank of New York, acting as our fiscal agent, will initiate 

such payments. Although we seek to maintain sufficient intraday liquidity to fund our activities through the Federal Reserve's 

payment system, we have limited access to cash once the debt markets are closed for the day. Insufficient cash may cause our 

account to be overdrawn, potentially resulting in penalties, delays in payments on our securities, and reputational harm. Unlike 

certain of our competitors, we do not have access to the Federal Reserve's discount window.

Changes in U.S. Government Support

Treasury supports us through the Purchase Agreement and Treasury's ability to purchase up to $2.25 billion of our obligations 

under its permanent statutory authority. Changes or perceived changes in the U.S. government's support for us could have a 

severe negative effect on our access to the unsecured debt markets and our debt funding costs. Our access to the unsecured 

debt markets and the costs of our debt funding could be adversely affected by several factors relating to U.S. government 

support, including uncertainty about the future of the GSEs; any concerns by debt investors that we face increasing risk of 

being placed in receivership; future draws that significantly reduce the amount of available funding remaining under the 

Purchase Agreement; uncertainty regarding a breach of the U.S. debt ceiling; and the risk of a U.S. government shutdown. 

Pursuant to the Purchase Agreement, it is possible that we may be required to pay a dividend to Treasury in the future that 

would cause us to fall below our capital requirements under the ERCF. In addition, we and Treasury are required to agree to a 

periodic commitment fee that we will pay to Treasury for a five-year period (after we have reached prescribed capital levels) in 

return for Treasury's remaining funding commitment.

Reduced Demand for Debt Securities

If investor demand for our debt securities were to decrease, our liquidity, business, and results of operations could be materially 

adversely affected. The willingness of investors to purchase and hold our debt securities can be influenced by many factors, 

including changes in the world economy, changes in inflation and exchange rates, and regulatory and political factors, as well 

as the availability of and investor preferences for other investments. We compete for debt funding with Fannie Mae, the FHLBs, 

and other institutions. Our funding costs and liquidity contingency plans may also be affected by changes in the amount of, and 

demand for, debt issued by Treasury. Our debt is considered a high quality liquid asset (HQLA) because it can be easily and 

Risk Factors

FREDDIE MAC | 2023 Form 10-K 124
immediately converted into cash at little or no loss of value. Any changes by investors in how they view our debt or regulatory 

changes causing our debt to no longer be considered an HQLA could significantly increase our debt funding costs or reduce 

our ability to issue debt.

If investors were to reduce their purchases of our debt securities or divest their holdings, our funding costs could increase and 

our business activities could be curtailed. The market for our debt securities may become less liquid as a result of our having 

reached the Purchase Agreement limits on the size of our mortgage-related investments portfolio and the amount of our 

unsecured debt, or future reductions in those limits. This could lead to a decrease in demand for our debt securities and an 

increase in our funding costs.

Any downgrade in the credit ratings of the U.S. government would likely be followed by a downgrade in our credit 

ratings. A downgrade in the credit ratings of our debt could adversely affect our liquidity and other aspects of 

our business.

Any downgrade in the credit ratings of the U.S. government would be expected to be accompanied by a downgrade in our 

credit ratings. In addition to a downgrade in the credit ratings of or outlook on the U.S. government, several other events could 

adversely affect our credit ratings, including actions by governmental entities, changes in government support for us, changes 

in regulatory designations of our debt, future GAAP losses, and additional draws under the Purchase Agreement. Any such 

downgrades could lead to major disruptions in the mortgage and financial markets and to our business due to lower liquidity 

and prices for our securities, higher borrowing costs, lower asset values, and higher credit losses, and could cause us to 

experience net losses and net worth deficits.

For additional information, see MD&A - Liquidity and Capital Resources.

Operational Risks

A failure in our operational systems or infrastructure, or those of third parties, could impair our ability to provide 

market liquidity, disrupt our business operations, damage our reputation, expose us to legal risk, and cause 

financial losses.

Operational risk continues to be elevated due to the volume, complexity, and pace of change across the company. We face 

significant levels of operational risk due to a variety of factors, including the size and complexity of our business operations, the 

amount of change to our core systems required to keep pace with market demands, regulatory requirements, and business 

initiatives, and the ever-changing cybersecurity landscape. Shortcomings or failures in our internal processes, people, or 

systems, or those of third parties with which we interact, could lead to a variety of adverse events, including impairment of our 

liquidity, disruption of our business (e.g., purchasing mortgages, issuing debt securities, or entering into CRT transactions), 

incorrect or late payments on our securities and other obligations, including CRT transactions, errors in our financial 

statements, liability to customers or investors, further legislative or regulatory intervention, fines, or penalties, reputational 

damage, and financial and economic loss. 

Our business is highly dependent on our ability to process a large number of transactions on a daily basis and collect, manage 

and analyze significant amounts of information, much of which is provided by third parties. This information may be incorrect, 

our receipt of information may be delayed, or we may fail to properly manage or analyze it. The inability to correctly process 

transactions and information could lead to the execution of business transactions, including CRT transactions, that fail to meet 

our economic return thresholds, cause financial and economic loss, cause reputational damage, and cause other disruptions to 

our business operations.

The transactions we process are complex and are subject to various legal, accounting, tax, and regulatory standards, which 

can change rapidly. Our financial, accounting, payment, data processing, or other operating systems and facilities may contain 

design flaws or may fail to operate properly, adversely affecting our ability to process transactions, including our ability to 

compile and process legally required information. We have certain systems that require manual support and intervention, which 

may lead to heightened risk of system failures. The inability of our systems to accommodate a high volume of transactions or 

new types of transactions or offerings could constrain our ability to pursue new business initiatives or improve existing business 

activities. 

Our technological connections with our customers and third parties, including suppliers, sellers and servicers, financial market 

utilities, and other third parties, are substantial and exposes us to risk, which increases our risk exposure with respect to an 

operational failure of their infrastructure or systems. We have developed, and expect to continue to develop, software tools for 

use by our customers in the customers' loan production, loan servicing, and other processes. These tools may fail to operate 

properly, which could disrupt our, or our customers', business and adversely affect our relationships with our customers.

We continue to leverage third-party cloud infrastructure for both customer-facing applications and internal use applications. If 

we do not implement changes in a well-managed, secure, and effective manner, we may experience unplanned service 

disruptions or unplanned costs which may harm our business and operating results. In addition, our cloud infrastructure 

providers, or other service providers, could experience system breakdowns or failures, outages, downtime, cybersecurity 

incidents and other security incidents, adverse changes to financial condition, bankruptcy, or other adverse conditions, which 

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FREDDIE MAC | 2023 Form 10-K 125
could have a material adverse effect on our business and reputation. Thus, our plans to increase the amount of our 

infrastructure that we outsource to the cloud or to other third parties may increase our risk exposure.

From time to time, we evaluate new technologies, including AI/ML technologies, for our internal use or our customer’s use. 

Utilizing such rapidly evolving technologies may increase our operational and regulatory risks. If we choose not to utilize such 

technologies, we could be at a competitive disadvantage. For additional information see Risk Factors - Operational Risks - 

The use of AI/ML methods contain inherent risks that may expose us to unexpected losses, damage our reputation, 

have an adverse impact on our business operations, and violate our legal and regulatory obligations.

We also face significant organizational risks related to CSS and the operation and continued development of the CSP. We rely 

on CSS and the CSP (which is owned and operated by CSS) for the operation of many of our Single-Family securitization 

activities. Our business operations would be adversely affected and the market for Freddie Mac securities would be disrupted if 

the CSP were to fail or otherwise become unavailable to us or if CSS were unable to perform its obligations to us. As the CSP 

has an operational dependency on Fannie Mae to administer Freddie Mac-issued commingled securities, an operational failure 

at Fannie Mae could also adversely impact the ability of CSS to perform its obligations to Freddie Mac. In the event of a CSS 

operational failure, we may be unable to issue certain new single-family mortgage-related securities, and investors in mortgagerelated securities hosted on the CSS platform may experience payment delays or errors. Any measures we could take to 

mitigate these risks might not be sufficient to prevent our business from being harmed. We update our internal systems and 

processes on a regular basis, including to improve existing processes and respond to market and regulatory developments. We 

could be adversely affected if CSS and/or the CSP are unable to make any necessary corresponding changes to their systems 

and processes in a timely manner. CSS could adopt or prioritize strategies that could adversely affect its ability to perform its 

obligations to us.

We face an operational resiliency risk that can result from the inability to quickly adapt and respond to disruptions while 

maintaining continuous business operations and safeguarding our people, assets, and overall reputation.

Most of our key business activities are conducted in the Washington D.C. metropolitan area and represent a concentrated risk 

of people, technology, and facilities. As a result, an infrastructure disruption in or around our offices or affecting the power grid, 

such as from a terrorist event, active shooter, or natural disaster, could significantly adversely affect our ability to conduct 

normal business operations. Any measures we take to mitigate this risk may not be sufficient to respond to the full range of 

events that may occur or allow us to resume normal business operations in a timely manner.

Potential cybersecurity threats are changing rapidly and advancing in sophistication. We may not be able to 

protect our systems and networks, or the confidentiality of our confidential or other information (including 

personal information), from cybersecurity incidents and other unauthorized access, disclosure, and disruption.

Our operations rely on the secure, accurate, and timely receipt, storage, transmission, and other processing of confidential and 

other information (including personal information) in our systems and networks and with counterparties (e.g., seller/servicers), 

vendors, service providers, and financial institutions. 

Cybersecurity risks for companies like ours continue to increase, in part because of the proliferation of new technologies, such 

as AI/ML, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased 

sophistication and activities of organized crime, hackers, "hacktivists," terrorists, and other external parties, including nationstates and foreign state-sponsored actors. There have been several highly publicized cases involving financial services 

companies, consumer-based companies, and other organizations, including some of our counterparties, reporting the 

unauthorized disclosure, dissemination, theft, or destruction of client, customer, or other confidential information (including 

personal information), corporate information, intellectual property, cash, or other valuable assets. There have also been several 

highly publicized cases where hackers have requested "ransom" payments in exchange for not disclosing customer information 

(including personal information) or for not making the targets' computer systems unavailable. In addition, there have been cases 

where hackers have misled company personnel into making unauthorized transfers of funds to the hackers' accounts.

Like many companies and government entities, from time to time we have experienced, and expect to continue to experience 

attempted cybersecurity incidents and other security incidents. Such incidents may include software bugs, server malfunctions, 

software or hardware failure, malware, ransomware, denial-of-service attacks, social engineering, unauthorized access, human 

error, theft or misconduct, fraud, and phishing, any of which may be part of an effort to disrupt operations, potentially test 

cybersecurity capabilities, or obtain confidential, proprietary, or other information (including personal information). We could 

also be adversely affected by cybersecurity incidents or other security incidents that target the infrastructure of the internet, as 

such incidents could cause widespread unavailability of websites and degrade website performance. Our risk and exposure to 

these matters remain heightened because of, among other things, the evolving nature and increasing frequency, levels of 

persistence, sophistication, and intensity of these threats, our role in the financial services industry, the outsourcing of some of 

our business operations, and the current global economic and political environment. Remote work environments may increase 

the risk that we may experience cybersecurity incidents as a result of our employees, vendors, counterparties, service 

providers, and other third parties with which we interact working remotely on less secure systems and environments.

Because we are interconnected with and dependent on third-party vendors, counterparties (e.g., seller/servicers), exchanges, 

clearinghouses, fiscal and paying agents, and other financial institutions, we could be adversely affected if any of them are 

subject to a successful cybersecurity incident or other security incident. Third parties with which we do business have been, 

Risk Factors

FREDDIE MAC | 2023 Form 10-K 126
and may continue to be, sources of cybersecurity or other technology risks. We routinely transmit and receive confidential, 

proprietary, and other information (including personal information) by electronic means. This information could be subject to 

interception, misuse, or mishandling. Our exposure to these risks could increase as a result of our migration of core systems 

and applications to a third-party cloud environment. While we generally perform cybersecurity diligence on our key vendors, 

because we do not control third parties with whom we do business and our ability to monitor their cybersecurity posture is 

limited, we cannot ensure that the cybersecurity measures they take will be sufficient to protect any information we share with 

them. Due to applicable laws and regulations or contractual obligations, we may be held responsible for data breaches 

resulting from cybersecurity incidents or other security incidents attributed to third parties with whom we do business in relation 

to the information we share with them.

Although we devote significant resources to protecting our critical assets and provide employee awareness training about 

phishing, malware, and other cybersecurity risks, these measures may not provide effective security. Our computer systems, 

software, end point devices, and networks may be vulnerable to cybersecurity incidents and other security incidents, supply 

chain disruptions, or other attempts to harm them or misuse or steal information (including personal information). The scale and 

effectiveness of such attempts may be further enhanced by the use of AI/ML. We routinely identify cybersecurity threats as well 

as vulnerabilities in our systems and work to address them, but these efforts may be insufficient. Outside parties may attempt 

to induce employees, customers, third parties, including suppliers, sellers and servicers, financial market utilities, and other 

third parties, or other users of our systems or networks to disclose confidential, proprietary, or other information (including 

personal information) in order to gain access to our systems and networks and the information they contain. Unauthorized 

access or disclosure, or breaches of our security, also may result from human error. Insider threats remain a risk given our 

workforce diversification to include contractors, remote workers, part-time employees, and full-time employees. We may not be 

able to anticipate, prevent, detect, recognize, or react to threats to our systems, networks, and assets, or implement effective 

preventative or remedial measures against cybersecurity incidents or other security incidents, especially because the 

techniques used change frequently or are not recognized until launched. 

A cybersecurity incident or other security incident could occur and persist for an extended period of time without detection. We 

expect that any investigation of such an incident would take time, during which we would not necessarily know the extent of the 

harm or how best to remediate it. Although to date we have not experienced any such incident resulting in material impact to 

the company, our cybersecurity risk management program may not prevent such an incident from having a material impact in 

the future. We have obtained insurance coverage relating to cybersecurity risks, but this insurance may not be sufficient to 

provide adequate loss coverage (including if the insurer denies future claims) and may not continue to be available to us on 

economically reasonable terms, or at all. Further, we cannot ensure that any limitations of liability provisions in our agreements 

with vendors, counterparties, customers, and other third parties with which we do business would be enforceable or adequate 

or would otherwise protect us from any liabilities or damages with respect to any particular claim in connection with a 

cybersecurity incident or other security incident.

The occurrence of one or more cybersecurity incidents could result in thefts of important assets (such as cash or source code) 

or the unauthorized loss, disclosure, misuse, or corruption of confidential, proprietary, and other information (including personal 

and other information about our borrowers, our customers, or our counterparties) or could otherwise cause interruptions, 

malfunctions, or other failures in our systems, networks, or operations or those of our customers or counterparties. This could 

result in significant losses or reputational damage, adversely affect our relationships with our customers and counterparties, 

negatively affect our competitive position, or otherwise harm our business or investors in our securities. We could also face 

regulatory and other legal action, including for any failure to provide timely disclosure concerning, or to appropriately limit 

trading in our securities following, an incident. We might be required to expend significant additional resources to modify or add 

to our internal controls and other protective measures or to investigate and remediate vulnerabilities or other exposures, and we 

might be subject to litigation and financial losses that are not fully insured, if at all. In addition, customers, third parties, 

including suppliers, sellers and servicers, financial market utilities, and other third parties, and governmental organizations may 

not be adequately protecting the information that we share with them. As a result, a cybersecurity incident or other security 

incident on their systems and networks, or a breach of their cybersecurity measures, may result in harm to our business and 

business relationships and expose us to operational, legal, and reputational risk.

We rely on third parties, including our sellers and servicers, or their vendors and other business partners, for 

certain important functions. Any failures by those third parties to deliver products or services, or to manage risks 

effectively, could disrupt our business operations or servicing of our portfolio, or expose us to other operational 

risks.

Our use of third parties, including suppliers, sellers and servicers, financial market utilities, and other third parties, exposes us 

to the risk of failures in their risk and control environments. We outsource certain key functions to these external parties, 

including some that are critical to financial reporting, our mortgage-related investment activity, loan underwriting, loan servicing, 

UMBS issuance and administration (i.e., CSS), and data storage and processing. We may enter into other key outsourcing 

relationships in the future and continue to expand our existing reliance on public cloud services. Additionally, we may be fully 

reliant on a third party to complete certain business operations (e.g., financial market utilities that provide the infrastructure for 

transferring, clearing, and settling payments on securities and other financial transactions). If one or more of these key external 

parties were not able to perform their functions for a period of time, perform them at an acceptable service level or handle 

changing volumes, or if one or more of them experiences a disruption in its own business or technology from any cause, our 

Risk Factors

FREDDIE MAC | 2023 Form 10-K 127
business operations could be constrained, disrupted, or otherwise negatively affected. Our use of third parties also exposes us 

to other harm, such as in the event of a cybersecurity incident or other security incident impacting our data (including personal 

information), fraud, or damage to our reputation if one or more of these third parties fails to maintain adequate risk and control 

environments. Our ability to monitor the activities or performance of certain third parties may be limited based on restricted 

access to and availability of risk management information for the third party, which may make it difficult for us to assess and 

manage the risks associated with these relationships.

We face risks and uncertainties associated with the models that we use to inform business and risk management 

decisions and for financial accounting and reporting purposes.

We use models to project significant factors in our businesses under a variety of scenarios. We use models to project borrower 

prepayment and default behavior and loss severity over long periods of time. Models are inherently imperfect predictors of 

actual results. There is inherent uncertainty associated with model projections of economic variables and the downstream 

projections of prepayment and default behavior dependent on these variables. 

Uncertainty and risks related to models may arise from a number of sources, including the following:

n	 We could fail to design, implement, operate, adjust, or use our models as intended. We may fail to code a model correctly, 

we could use incorrect or insufficient data inputs or fail to fully understand the data inputs, or model implementation 

software could malfunction. We may not have performed user acceptance testing appropriately or correctly, including 

allowing sufficient testing time and resources and using the right subject matter experts before deploying the model. The 

complexity and interconnectivity of our models create additional risk regarding the accuracy of model output. We may not 

be able to deploy or update models in a timely manner.

n When market conditions change in unforeseen ways, our model projections may not accurately reflect these conditions, or 

we may not fully understand the model outputs. For example, models may not fully reflect the effect of certain government 

policy changes or new industry trends. In such cases, it is often necessary to make assumptions and judgments to 

accommodate the effect of scenarios that are not sufficiently well represented in the historical data. While we may adjust 

our models in response to new events, considerable residual uncertainty remains. As a result of uncertainty within the 

current economic environment, we expect our models to face significant challenges in accurately forecasting key inputs 

into our financial projections. These can include, but are not limited to, projections of mortgage and other interest rates, 

house prices, credit defaults, yields, and prepayments.

n We also use selected third-party models. While the use of such models may reduce our risk where no internal model is 

available, it exposes us to additional risk, as third parties typically do not provide us with proprietary information regarding 

their models. We have little control over the processes by which these models are adjusted or changed. As a result, we 

may be unable to fully evaluate the risks associated with the use of such models.

Our use of models could affect decisions concerning the purchase, sale, securitization, and CRT activities of loans; the 

purchase and sale of securities; funding; the setting of guarantee fee prices; and the management of interest-rate, market, 

liquidity, and credit risk. Our use of models also affects our quality-control sampling strategies for loans in our Single-Family 

mortgage portfolio and potential settlements with our counterparties. Models are part of the process used to grant 

representation and warranty relief, which may be granted inappropriately if the models are incorrect. We also use models in our 

financial reporting process, including when measuring our allowance for credit losses and applying hedge accounting. See

MD&A - Risk Management - Market Risk and Critical Accounting Estimates for additional information on our use of 

models.

The use of AI/ML methods contain inherent risks that may expose us to unexpected losses, damage our 

reputation, have an adverse impact on our business operations, and violate our legal and regulatory obligations.

AI/ML methods are rapidly evolving technologies that are being adopted by us, third parties with whom we do business and 

other market participants and such adoption may become more significant over time. AI/ML methods contain inherent risks, 

such as: the increased chance of identifying patterns in training data that are not representative of real effects and which could 

negatively impact AI/ML predictions when using new data; production of false or "hallucinatory" inferences or outputs; holding 

of certain biases; and predictions that are not easily interpretable which make testing the model and its predictions to make 

sure it meets human intuition difficult; and generation of otherwise inaccurate, incomplete, misleading, or unexpected results, 

errors, or inadequacies, any of which may not be easily detectable. AI/ML methods can present ethical issues and may subject 

us to new or heightened legal, regulatory, ethical, or other challenges, and inappropriate or controversial data practices by 

developers and end-users or other factors adversely affecting public opinion of AI/ML methods could impair the acceptance of 

AI/ML methods, including those incorporated in our business and operations. If the AI/ML methods that we use are deficient, 

inaccurate, or controversial, we could incur operational inefficiencies, competitive harm, legal and regulatory liability, brand or 

reputational harm, or other adverse impacts on our business and financial results. If we do not have sufficient rights to use the 

data or other material or content on which our AI/ML methods or other AI/ML tools we use rely, we also may incur liability 

through the violation of applicable laws and regulations, such as fair lending laws and regulations, third-party intellectual 

property, privacy or other rights, or contracts to which we are a party. We may not be able to sufficiently mitigate or detect any 

of the foregoing limitations or risks given the lack of experience with using AI/ML methods in our business, the pace of 

Risk Factors

FREDDIE MAC | 2023 Form 10-K 128
technological change, and rapid adoption of AI/ML by our business partners and competitors. This exposes us to potential 

damage to our reputation, adverse impacts on our business operations, and violation of legal and regulatory obligations.

Climate change concerns could adversely affect our business, affect customer activity levels, and damage our 

reputation.

Climate change represents a risk driver that may have significant impacts on the economy, the finance sector, and the housing 

market over the short-, medium-, and long-term. The increasing risk from physical hazards, like floods, hurricanes, heatwaves, 

and wildfire; chronic longer-term shifts in climate patterns (such as higher global average temperatures, rising sea levels, and 

droughts); and the financial impacts of low-carbon policies may affect housing affordability, property values, and the terms and 

conditions of mortgages available for purchase. In connection with the transition to a low-carbon economy, legislative or public 

policy changes and changes in consumer sentiment could negatively impact the businesses and financial condition of both our 

customers and seller/servicers, which may decrease revenues from those counterparties and increase credit risk associated 

with loans and other credit exposures to those counterparties. Additionally, the governmental and supervisory focus on climate 

change could result in our becoming subject to new, heightened, and potentially inconsistent regulatory requirements related to 

operational resiliency, climate risk disclosure, or stress testing for various climate stress scenarios. Any such requirements 

could result in increased regulatory, compliance, or other costs or higher capital requirements. Further, our business, 

reputation, and ability to attract and retain employees may also be harmed if our response to climate change is perceived to be 

ineffective or insufficient.

Legislative or regulatory changes or actions could require operational changes that could adversely affect our 

business activities and financial results.

Our business or operations may be directly adversely affected by future legislative, regulatory, or judicial actions at the federal, 

state, and local levels. Such actions could affect us in a number of ways, including by imposing significant additional legal, 

compliance, and other costs on us, limiting our business activities, and diverting management attention or other resources. 

Such actions, and any required changes to our business or operations or those of third parties upon whom we rely in response 

thereto (e.g., seller/servicers), could have an adverse effect on our business activities and financial results.

Legal and Compliance Risks

We face risk of non-compliance with our legal and regulatory obligations.

We operate in a highly regulated industry and are subject to heightened supervision from FHFA, as both our regulator and our 

Conservator. Our compliance systems and programs may not be adequate to confirm that we are in compliance with all legal, 

regulatory, and other requirements as they continue to evolve. We also rely upon third parties and their respective compliance 

risk management programs. The failure or limits of any such third-party compliance programs may expose us to legal and 

compliance risk. Our reliance on and interdependence with third parties is further illustrated by the number and complexity of 

our contracts. These contracts expose us to the risk that we could fail to perform our obligations in a satisfactory manner and 

that a contractual counterparty could commence legal proceedings against us for deficiencies related to our performance. 

Additionally, an investor in any of our securities could claim the disclosures in our securitization offering documents to be 

insufficient, or contain materially false or misleading statements. For additional information on our litigation, see Note 17. If we 

were not to comply with our legal and regulatory obligations, this could result in enforcement actions, investigations, fines, 

monetary and other penalties, additional restrictions on our business activities imposed by FHFA, and harm to our reputation 

that may adversely affect our results of operations and financial condition. 

We are, or may in the future become, subject to a variety of complex and evolving laws, regulations, rules, and standards in the 

United States (at the federal, state, and local levels), as well as contractual obligations. We expect the Administration will 

continue to focus on fair lending, affordability, equity, and sustainability as well as climate change.

Privacy and cybersecurity are currently areas of considerable legislative and regulatory attention, with new or modified laws, 

regulations, rules, and standards being frequently adopted and potentially subject to divergent interpretation or application from 

jurisdiction to jurisdiction in a manner that may create inconsistent or conflicting requirements for businesses. The uncertainty 

and compliance risk created by these legislative and regulatory developments are compounded by the rapid pace of 

technology development in disciplines that may impact the use or security of data, and in particular the use or security of 

personal information, such as AI/ML and advancements in the field of data science. Privacy and cybersecurity laws and 

regulations often impose strict requirements regarding the collection, storage, handling use, disclosure, transfer, security, and 

other processing of personal information, which may have adverse consequences on our business, including incurring 

significant compliance costs, requiring changes to our business or operations, and imposing severe penalties for noncompliance. Further, any failure or perceived failure to comply with our public privacy policies and other public statements 

about privacy and cybersecurity could potentially subject us to regulatory investigations, enforcement, or legal actions, and 

harm to our reputation and, if such policies or statements are found to be deceptive, unfair, or misrepresentative of our actual 

practices, fines, monetary or other penalties, and other damage to our business and results.

Risk Factors

FREDDIE MAC | 2023 Form 10-K 129
We may not achieve our housing goals, duty to serve, and equitable housing finance requirements, and we also 

may make certain changes to our business in an attempt to meet these goals and requirements, both of which 

may expose us to additional legal and compliance risk and adversely affect our business, financial condition, and 

results of operations.

If we do not meet our housing goals, duty to serve, or equitable housing finance requirements, and FHFA finds that the goals or 

requirements were feasible, we may become subject to a housing plan that could require us to take additional steps that could 

potentially adversely affect our profitability. While we may achieve these housing goals by meeting or exceeding either the 

FHFA benchmark level or the market level, these increases to the benchmark levels may require additional changes to our 

business, and we may not meet these heightened housing goals. Further, any changes we make to how we conduct our 

business in order to achieve our housing goals could create incremental legal and compliance risk. In addition, because we did 

not meet one of our housing goals for 2020 and FHFA determined that achievement of that goal was feasible, FHFA required us 

to submit a housing plan that indicates (1) how we plan to meet the missed goal during 2022 to 2024, (2) how we will monitor to 

ensure that low- and moderate-income borrowers are better served in future refinance markets, and (3) what we can do to help 

low- and moderate-income borrowers who did not refinance in the 2020-2021 refinance market. If we fail to comply with a 

housing plan that is approved by FHFA, FHFA could take additional action against us.

We may make adjustments to our loan sourcing and purchase strategies in an effort to meet our housing goals and subgoals 

set by FHFA, including modifying some of our underwriting standards and expanding the use of targeted initiatives to reach 

underserved populations. For example, we may purchase loans that offer lower expected returns on our investment and 

potentially increase our exposure to credit losses. We may also make changes to our business in response to our duty to serve 

underserved markets or equitable housing finance requirements that could adversely affect our profitability.

General Risks

Changes in global or domestic economic and political conditions may have an adverse effect on our business. 

Our business, financial condition, and results of operations could be adversely affected, directly and indirectly, by changes in 

global or domestic economic and political conditions, including, acts of terrorism, civil unrest, geopolitical instability or conflict, 

public health events, epidemics or pandemics such as COVID-19, uncertainty regarding a breach of the U.S. debt ceiling, 

government shutdowns, or default by the U.S. government on its obligations, and actual or perceived instability in the U.S. 

banking system. Although our business is limited to the United States housing market, we may still be affected by such events 

because volatility or uncertainty in global or domestic sociopolitical conditions can affect the macroeconomic environment and 

financial markets, inflationary pressures, monetary policy or potential for an economic recession, as well as the housing market 

itself and industries that support it.

Risk Factors

FREDDIE MAC | 2023 Form 10-K 130
Legal Proceedings 

We are involved, directly or indirectly, in a variety of legal proceedings arising from time to time in the ordinary course of 

business and in connection with the conservatorship and Purchase Agreement. See Note 17 for additional information 

regarding our involvement as a party to various legal proceedings, including those in connection with the conservatorship and 

Purchase Agreement. 

Over the last several years, numerous lawsuits have been filed against the U.S. government and, in some cases, the Secretary 

of the Treasury and the Director of FHFA, challenging certain government actions related to the conservatorship (including 

actions taken in connection with the imposition of conservatorship) and the Purchase Agreement. Freddie Mac is not a party to 

all of these lawsuits. Several of the lawsuits seek to invalidate the net worth sweep dividend provisions of the senior preferred 

stock, which were implemented pursuant to the August 2012 amendment to the Purchase Agreement. Some of these cases 

also have challenged the constitutionality of the structure of FHFA. A number of cases have been dismissed (some of which 

have been appealed), and others remain pending. 

These cases include one that was filed in the U.S. Court of Federal Claims as a derivative lawsuit, purportedly on behalf of 

Freddie Mac as a “nominal” defendant: Reid and Fisher vs. the United States of America and Federal Home Loan Mortgage 

Corporation. This case was filed on February 26, 2014. The complaint alleges, among other items, that the net worth sweep 

dividend provisions of the senior preferred stock constitute an unlawful taking of private property for public use without just 

compensation. The plaintiffs ask that Freddie Mac be awarded just compensation for the U.S. government's alleged taking of 

its property, attorneys' fees, costs, and other expenses. The Court dismissed the case with prejudice on September 1, 2023 

and entered judgment for the defendants. On October 31, 2023, the plaintiffs filed a notice of appeal to the Federal Circuit.

Pursuant to the Purchase Agreement, in addition to satisfying other conditions, all currently pending material litigation related to 

our conservatorship and/or the Purchase Agreement must be resolved or settled and we must indemnify Treasury and the 

United States from and against any loss, cost, or damage of any kind arising out of our placement into conservatorship or the 

August 2012 amendment to the Purchase Agreement in order to exit from conservatorship. 

Legal Proceedings

FREDDIE MAC | 2023 Form 10-K 131
Market for Registrant's Common Equity, Related 

Stockholder Matters, and Issuer Purchases of 

Equity Securities

MARKET INFORMATION

Common Stock

Our common stock is traded in the over-the-counter market and quoted on the OTCQB, operated by OTC Markets Group Inc., 

under the ticker symbol "FMCC." Over-the-counter market quotations for our common stock reflect inter-dealer prices, without 

retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.

Holders 

As of January 31, 2024, we had 1,458 common stockholders of record. 

Recent Sales of Unregistered Securities

The securities we issue are "exempted securities" under the Securities Act of 1933. As a result, we do not file registration 

statements with the SEC with respect to offerings of our securities.

Following our entry into conservatorship, we suspended the operation of, and ceased making grants under, equity 

compensation plans. Previously, we had provided equity compensation under these plans to employees and members of our 

Board of Directors. Under the Purchase Agreement, we cannot issue any new options, rights to purchase, participations, or 

other equity interests without Treasury's prior approval. However, grants outstanding as of the date of the Purchase Agreement 

remain in effect in accordance with their terms. As of December 31, 2023, no RSUs and no stock options were outstanding. 

See Note 11 for additional information.

ISSUER PURCHASES OF EQUITY SECURITIES

We did not repurchase any of our common or preferred stock during 2023. Additionally, we do not currently have any 

outstanding authorizations to repurchase common or preferred stock. Under the Purchase Agreement, we cannot repurchase 

our common or preferred stock without Treasury's prior consent, and we may only purchase or redeem the senior preferred 

stock in certain limited circumstances set forth in the certificate of designation of the senior preferred stock.

TRANSFER AGENT AND REGISTRAR

Computershare Trust Company, N.A.

P.O. Box 43006

Providence, RI 02940-3006

Telephone: 877-373-6374

https://www-us.computershare.com/investor

Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

FREDDIE MAC | 2023 Form 10-K 132
Financial Statements and Supplementary Data

Financial Statements

FREDDIE MAC | 2023 Form 10-K 133
Report of Independent Registered Public 

Accounting Firm

To the Board of Directors and Stockholders of Federal Home Loan Mortgage Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Federal Home Loan Mortgage Corporation and its 

subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income and 

comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2023, 

including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the 

Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - 

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial 

position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the 

three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United 

States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over 

financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) 

issued by the COSO because a material weakness in internal control over financial reporting existed as of that date related to 

disclosure controls and procedures that did not adequately ensure the accumulation and communication to management of 

information known to the Federal Housing Finance Agency (FHFA) that is needed to meet their disclosure obligations under the 

federal securities laws, including disclosures affecting their consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there 

is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or 

detected on a timely basis. The material weakness referred to above is described in Management’s Report on Internal Control 

over Financial Reporting appearing under Item 9A. We considered this material weakness in determining the nature, timing, and 

extent of audit tests applied in our audit of the 2023 consolidated financial statements, and our opinion regarding the 

effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated 

financial statements.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal 

control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included 

in management's report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial 

statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm 

registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent 

with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the 

Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform 

the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material 

misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all 

material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material 

misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond 

to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the 

consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates 

made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of 

internal control over financial reporting included obtaining an understanding of internal control over financial reporting, 

assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal 

control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in 

the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Financial Statements Report of Independent Registered Public Accounting Firm

FREDDIE MAC | 2023 Form 10-K 134
Emphasis of Matter – Conservatorship

As discussed in Note 2, in September 2008, the Company was placed into conservatorship by FHFA. The U.S. Department of 

the Treasury ("Treasury") has committed financial support to the Company, and FHFA, as Conservator, provided for the Board 

of Directors to perform certain functions and to oversee management and the Board delegated to management authority to 

conduct business operations during conservatorship. The Company is dependent upon the continued support of the Treasury 

and FHFA. 

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 

accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures 

that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and 

dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to 

permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and 

expenditures of the company are being made only in accordance with authorizations of management and directors of the 

company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or 

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters 

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial 

statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or 

disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or 

complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated 

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate 

opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses for Single-Family Mortgage Loans Held-for-Investment - Probability of Default

As described in Note 6 to the consolidated financial statements, the Company’s allowance for credit losses for single-family 

mortgage loans held-for-investment was $6.1 billion as of December 31, 2023. Management estimates the allowance for credit 

losses for single-family loans on a pooled basis using a discounted cash flow model. Management projects cash flows they 

expect to collect using historical experience, such as historical default rates and severity of loss based on loan characteristics, 

adjusted for current and forecasted economic conditions. As disclosed by management, the process involves the use of 

models that require management to make judgments about matters that are difficult to predict. Management's estimate of 

expected credit losses is sensitive to changes in forecasted house price growth rates, which affect both the probability of 

default and severity of expected credit losses. Management’s forecast of house price growth rates leverages an internally 

based model that uses a Monte Carlo simulation which generates many possible house price scenarios for each metropolitan 

statistical area.

The principal considerations for our determination that performing procedures relating to the allowance for credit losses for 

single-family mortgage loans held-for-investment specific to the probability of default is a critical audit matter are (i) the 

significant judgment by management when determining the probability of default which is affected by the forecasted house 

price growth rates determined by management, (ii) a high degree of auditor judgment, subjectivity, and effort in performing 

procedures and evaluating audit evidence related to management’s determination of the probability of default and forecasted 

house price growth rates, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall 

opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the 

determination of the allowance for credit losses for single-family mortgage loans held-for-investment, including controls over 

the probability of default. These procedures also included, among others (i) testing management’s process for determining the 

probability of default and forecasted house price growth rates used in estimating the allowance for credit losses for singlefamily mortgage loans held-for-investment, and (ii) testing the completeness, accuracy, reliability and relevance of the data 

used by management. These procedures also included the use of professionals with specialized skill and knowledge to assist in 

evaluating the appropriateness of management’s models used in determining the probability of default and forecasted house 

price growth rates and evaluating the reasonableness of the outputs of the models.

/s/ PricewaterhouseCoopers LLP

Washington, District of Columbia

February 14, 2024

We have served as the Company's auditor since 2002.

Financial Statements Report of Independent Registered Public Accounting Firm

FREDDIE MAC | 2023 Form 10-K 135
FREDDIE MAC

Consolidated Statements of Income and Comprehensive Income

Year Ended December 31,

(In millions, except share-related amounts) 2023 2022 2021

Net interest income

Interest income $105,363 $83,458 $61,527

Interest expense (86,821) (65,453) (43,947) 

Net interest income 18,542 18,005 17,580 

Non-interest income

Guarantee income 1,615 783 1,032 

Investment gains, net 707 1,969 2,746 

Other income 365 507 593 

Non-interest income 2,687 3,259 4,371 

Net revenues 21,229 21,264 21,951 

(Provision) benefit for credit losses 872 (1,841) 1,041 

Non-interest expense

Salaries and employee benefits (1,606) (1,509) (1,398) 

Credit enhancement expense (2,339) (2,118) (1,518) 

Benefit for (decrease in) credit enhancement recoveries (189) 236 (542) 

Legislative assessments expense (3,002) (3,009) (2,882) 

Other expense (1,766) (1,419) (1,453) 

Non-interest expense (8,902) (7,819) (7,793) 

Income before income tax expense 13,199 11,604 15,199 

Income tax expense (2,661) (2,277) (3,090) 

Net income 10,538 9,327 12,109 

Other comprehensive income (loss), net of taxes and reclassification adjustments 166 (342) (489) 

Comprehensive income $10,704 $8,985 $11,620 

Net income $10,538 $9,327 $12,109 

Amounts attributable to senior preferred stock (10,704) (8,985) (11,620) 

Net income attributable to common stockholders ($166) $342 $489 

Net income per common share ($0.05) $0.11 $0.15 

Weighted average common shares (in millions) 3,234 3,234 3,234 

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

Financial Statements Consolidated Statements of Income and Comprehensive Income

FREDDIE MAC | 2023 Form 10-K 136
FREDDIE MAC

Consolidated Balance Sheets 

December 31,

(In millions, except share-related amounts) 2023 2022

Assets

Cash and cash equivalents (includes $978 and $707 of restricted cash and cash equivalents) $6,019 $6,360 

Securities purchased under agreements to resell 95,148 87,295 

Investment securities, at fair value 43,275 38,701 

Mortgage loans held-for-sale (includes $7,356 and $3,218 at fair value) 12,941 12,197 

Mortgage loans held-for-investment (net of allowance for credit losses of $6,383 and $7,391 and includes 

$1,806 and $1,214 at fair value) 3,083,665 3,022,318 

Accrued interest receivable, net 9,925 8,529 

Deferred tax assets, net 4,076 5,777 

Other assets (includes $6,095 and $5,890 at fair value) 25,927 27,156 

Total assets $3,280,976 $3,208,333 

Liabilities and equity

Liabilities

Accrued interest payable $8,812 $7,309 

Debt (includes $2,476 and $3,047 at fair value) 3,208,346 3,145,832 

Other liabilities (includes $873 and $759 at fair value) 16,096 18,174 

Total liabilities 3,233,254 3,171,315 

Commitments and contingencies

Equity

Senior preferred stock (liquidation preference of $117,309 and $107,878) 72,648 72,648 

Preferred stock, at redemption value 14,109 14,109 

Common stock, $0.00 par value, 4,000,000,000 shares authorized, 725,863,886 shares issued and 

650,059,553 shares outstanding — — 

Retained earnings (35,128) (45,666) 

AOCI, net of taxes, related to:

Available-for-sale securities 72 (84) 

Other (94) (104) 

AOCI, net of taxes (22) (188) 

Treasury stock, at cost, 75,804,333 shares (3,885) (3,885) 

Total equity 47,722 37,018 

Total liabilities and equity $3,280,976 $3,208,333 

The table below presents the carrying value and classification of the assets and liabilities of consolidated VIEs on our consolidated balance sheets.

December 31,

(In millions) 2023 2022

Assets:

Cash and cash equivalents (includes $890 and $610 of restricted cash and cash equivalents) $891 $611 

Securities purchased under agreements to resell 9,396 9,703 

Investment securities, at fair value 65 126 

Mortgage loans held-for-investment 3,039,461 2,971,601 

Accrued interest receivable, net 8,885 7,944 

Other assets 4,858 5,019 

Total assets of consolidated VIEs $3,063,556 $2,995,004 

Liabilities:

Accrued interest payable $7,527 $6,619 

Debt 3,041,927 2,979,070 

Total liabilities of consolidated VIEs $3,049,454 $2,985,689 

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

Financial Statements Consolidated Balance Sheets

FREDDIE MAC | 2023 Form 10-K 137
FREDDIE MAC

Consolidated Statements of Equity

Shares Outstanding

Senior

Preferred

Stock

Preferred

Stock, at

Redemption

Value

Common

Stock, at

Par Value

Retained

Earnings

AOCI,

Net of

Tax

Treasury

Stock, 

at Cost

Total

(In millions) Equity 

Senior

Preferred

Stock

Preferred

Stock

Common

Stock

Balance at December 31, 2020 1 464 650 $72,648 $14,109 $— ($67,102) $643 ($3,885) $16,413 

Comprehensive income:

Net income — — — — — — 12,109 — — 12,109 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) on 

available-for-sale securities (net of taxes of 

$36 million) — — — — — — — (134) — (134) 

Reclassification adjustment for (gains) 

losses on available-for-sale securities 

included in net income (net of taxes of 

$101 million) — — — — — — — (379) — (379) 

Other (net of taxes of $4 million) — — — — — — — 24 — 24 

Comprehensive income — — — — — — 12,109 (489) — 11,620 

Ending balance at December 31, 2021 1 464 650 $72,648 $14,109 $— ($54,993) $154 ($3,885) $28,033 

Comprehensive income:

Net income — — — — — — 9,327 — — 9,327 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) 

on available-for-sale securities (net of 

taxes of $96 million) — — — — — — — (362) — (362) 

Reclassification adjustment for (gains) 

losses on available-for-sale securities 

included in net income (net of taxes of $5 

million) — — — — — — — (19) — (19) 

Other (net of taxes of $10 million) — — — — — — — 39 — 39 

Comprehensive income — — — — — — 9,327 (342) — 8,985 

Ending balance at December 31, 2022 1 464 650 $72,648 $14,109 $— ($45,666) ($188) ($3,885) $37,018 

Comprehensive income:

Net income — — — — — — 10,538 — — 10,538 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) on 

available-for-sale securities (net of taxes of 

$5 million) — — — — — — — 18 — 18 

Reclassification adjustment for (gains) 

losses on available-for-sale securities 

included in net income (net of taxes of $36 

million) — — — — — — — 138 — 138 

Other (net of taxes of $2 million) — — — — — — — 10 — 10 

Comprehensive income — — — — — — 10,538 166 — 10,704 

Ending balance at December 31, 2023 1 464 650 $72,648 $14,109 $— ($35,128) ($22) ($3,885) $47,722

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

Financial Statements Consolidated Statements of Equity

FREDDIE MAC | 2023 Form 10-K 138
FREDDIE MAC

Consolidated Statements of Cash Flows

 

Year Ended December 31,

(In millions) 2023 2022 2021

Cash flows from operating activities

Net income $10,538 $9,327 $12,109 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Amortization of cost basis adjustments 827 (1,264) (1,922) 

Provision (benefit) for credit losses (872) 1,841 (1,041) 

Investment gains, net (1,853) (2,763) (4,312) 

Deferred income tax expense and changes in income taxes receivable 1,762 (223) (113) 

Mortgage loans acquired as held-for-sale:

Purchases (29,339) (45,093) (59,270) 

Proceeds from sales and repayments 27,347 49,389 70,281 

Net change in:

Accrued interest receivable (1,389) (1,038) 396 

Accrued interest payable 1,507 1,041 57 

Other, net (913) 708 168 

Net cash provided by (used in) operating activities 7,615 11,925 16,353 

Cash flows from investing activities

Investment securities:

Purchases (101,238) (132,913) (124,710) 

Proceeds from sales 78,799 122,442 154,352 

Proceeds from maturities and repayments 14,247 13,821 7,701 

Mortgage loans acquired held-for-investment:

Purchases (101,262) (160,884) (542,222) 

Proceeds from sales 7,581 3,438 9,255 

Proceeds from repayments 245,037 352,204 757,186 

Advances under secured lending arrangements (96,666) (170,456) (264,790) 

Net (increase) decrease in securities purchased under agreements to resell (6,107) (20,750) 26,467 

Cash flows related to derivatives 4,326 4,769 1,070 

Other, net (464) (273) (59) 

Net cash provided by (used in) investing activities 44,253 11,398 24,250 

Cash flows from financing activities

Debt of consolidated trusts:

Proceeds from issuance 205,523 359,806 825,632 

Repayments and redemptions (251,762) (388,033) (782,545) 

Debt of Freddie Mac:

Proceeds from issuance 146,506 137,339 23,153 

Repayments (150,585) (140,970) (127,911) 

Net increase (decrease) in securities sold under agreements to repurchase (1,746) 4,658 7,333 

Other, net (145) 87 (4) 

Net cash provided by (used in) financing activities (52,209) (27,113) (54,342) 

Net increase (decrease) in cash and cash equivalents (includes restricted cash and cash equivalents) (341) (3,790) (13,739) 

Cash and cash equivalents (includes restricted cash and cash equivalents) at the beginning of year 6,360 10,150 23,889 

Cash and cash equivalents (includes restricted cash and cash equivalents) at end of period $6,019 $6,360 $10,150 

Supplemental cash flow information

Cash paid for:

Debt interest $87,610 $75,441 $69,093 

Income taxes 900 2,500 3,204 

Non-cash investing and financing activities (Notes 4 and 7)

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

Financial Statements Consolidated Statements of Cash Flows

FREDDIE MAC | 2023 Form 10-K 139
Notes to Consolidated Financial Statements

NOTE 1 

Summary of Significant Accounting Policies

Freddie Mac is a GSE chartered by Congress in 1970, with a mission to provide liquidity, stability, and affordability to the U.S. 

housing market. We are regulated by FHFA, the SEC, HUD, and Treasury, and are currently operating under the 

conservatorship of FHFA. For additional information on the roles of FHFA and Treasury, see Note 2. Throughout our 

consolidated financial statements and related notes, we use certain acronyms and terms which are defined in the Glossary.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with GAAP and include our accounts 

as well as the accounts of other entities in which we have a controlling financial interest. All intercompany balances and 

transactions have been eliminated.

We are operating under the basis that we will realize assets and satisfy liabilities in the normal course of business as a going 

concern and in accordance with the authority provided by FHFA to our Board of Directors to oversee management's conduct of 

our business operations. 

Use of Estimates

The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect 

the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. 

Management has made significant estimates to report the allowance for credit losses on single-family mortgage loans. Actual 

results could be different from these estimates.

Consolidation and Equity Method Accounting

For each entity with which we are involved, we determine whether the entity should be consolidated in our financial statements. 

We consolidate entities in which we have a controlling financial interest. The method for determining whether a controlling 

financial interest exists varies depending on whether the entity is a VIE. For entities that are not VIEs, we hold a controlling 

financial interest in entities where we hold a majority of the voting rights or a majority of a limited partnership's kick-out rights 

through voting interests. We do not currently consolidate any entities which are not VIEs. We use the equity method to account 

for our interests in entities in which we do not have a controlling financial interest, but over which we have significant influence.

Cash and Cash Equivalents

Highly liquid investment securities that have an original maturity of three months or less are accounted for as cash equivalents.

Original maturity means the original maturity to us when we acquire the investment, not the original maturity of the instrument 

itself. Cash collateral accepted from counterparties that we do not have the right to use for general corporate purposes is 

classified as restricted cash and cash equivalents on our consolidated balance sheets. Restricted cash and cash equivalents 

includes cash remittances received from servicers of the underlying assets of our consolidated trusts which are deposited into 

a separate custodial account. We invest the cash held in the custodial account in short-term investments; and we are entitled to 

the interest income earned on these short-term investments, which is recorded as interest income on our consolidated 

statements of income.

Comprehensive Income

Comprehensive income includes all changes in equity during a period, except those resulting from investments by, or 

distributions to, stockholders. Comprehensive income consists of net income plus other comprehensive income, including 

unrealized gains and losses on available-for-sale securities. 

Financial Statements Notes to Consolidated Financial Statements | Note 1

FREDDIE MAC | 2023 Form 10-K 140
Other Significant Accounting Policies

The table below identifies our other significant accounting policies and the related note in which information about each policy 

can be found. 

Note Accounting Policy

Note 3 Securitizations and Variable Interest Entities

Note 4 Mortgage Loans

Note 5 Guarantees and Other Off-Balance Sheet Credit Exposures

Note 6 Allowance for Credit Losses

Note 7 Investment Securities

Note 8 Debt

Note 9 Derivatives

Note 10 Collateralized Agreements

Note 11 Stockholders' Equity 

Note 11 Earnings Per Share

Note 13 Income Taxes

Note 14 Segment Reporting

Note 16 Fair Value Disclosures

ASU 2022-01, Derivatives 

and Hedging (Topic 815): 

Fair Value Hedging - 

Portfolio Layer Method

The amendments in this Update provide clarifications of 

the guidance in ASC Topic 815 on fair value hedge 

accounting of interest rate risk for portfolios of financial 

assets. The Update amends the guidance in ASU 

2017-12 that, among other things, establishes the "lastof-layer" method for making the fair value hedge 

accounting for these portfolios more accessible by 

allowing the entities to apply the portfolio layer method 

to portfolios of all financial assets, including both 

prepayable and nonprepayable financial assets. The 

Update provides additional guidance on the accounting 

for and disclosure of hedge basis adjustments that are 

applicable to the portfolio layer method.

January 1, 2023 The adoption of these amendments did not 

have a material effect on our consolidated 

financial statements. 

We adopted the guidance in this Update 

related to disclosures on a prospective 

basis.

ASU 2022-02, Financial 

Instruments—Credit 

Losses (Topic 326): 

Troubled Debt 

Restructurings and 

Vintage Disclosures

The amendments in this Update require disclosure of 

current period gross write-offs by year of origination for 

financing receivables within the scope of ASC Subtopic 

326-20.

January 1, 2023 for 

the amendments 

related to disclosure 

of gross write-offs 

by year of 

origination.

The adoption of these amendments did not 

have a material effect on our consolidated 

financial statements. See Note 4 for 

additional disclosure of gross write-offs by 

year of origination.

Recently Adopted Accounting Guidance

Standard Description Date of Adoption Effect on Consolidated Financial 

Statements

Financial Statements Notes to Consolidated Financial Statements | Note 1

FREDDIE MAC | 2023 Form 10-K 141
Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard Description

Date of 

Planned 

Adoption

Effect on Consolidated Financial 

Statements

ASU 2023-02, Investments - 

Equity Method and Joint 

Ventures (Topic 323): 

Accounting for Investments in 

Tax Credit Structures Using the 

Proportional Amortization 

Method

The amendments in this Update expand the use of the 

proportional amortization method of accounting to equity 

investments in other tax credit structures that meet 

certain conditions. This Update also amends those 

conditions primarily to assess projected benefits on a 

discounted basis and expands the disclosure 

requirements of those investments.

January 1, 

2024

We do not expect the adoption of

these amendments to have a

material effect on our consolidated

financial statements.

ASU 2023-07, Segment 

Reporting (Topic 280): 

Improvements to Reportable 

Segment Disclosures

The amendments in this Update require the disclosure of 

more detailed quantitative and qualitative information 

about significant segment expenses that are regularly 

provided to the CODM and included in each reported 

measure of segment profit or loss. 

December 31, 

2024

We do not expect the adoption of

these amendments to have a

material effect on our consolidated

financial statements.

ASU 2023-09, Income Taxes 

(Topic 740): Improvements to 

Income Tax Disclosures

The amendments in this Update require annual 

disclosure of more detailed tax rate reconciliation 

categories and income taxes paid by geography and 

jurisdiction.

January 1, 

2025

We do not expect the adoption of

these amendments to have a

material effect on our consolidated

financial statements.

Financial Statements Notes to Consolidated Financial Statements | Note 1

FREDDIE MAC | 2023 Form 10-K 142
NOTE 2

Conservatorship and Related Matters

Business Objectives

We operate under the conservatorship that commenced on September 6, 2008, conducting our business under the direction of 

FHFA, as our Conservator. The conservatorship and related matters significantly affect our management, business activities, 

financial condition, and results of operations. Upon its appointment, FHFA, as Conservator, immediately succeeded to all 

rights, titles, powers, and privileges of Freddie Mac, and of any stockholder, officer, or director thereof, with respect to the 

company and its assets. The Conservator also succeeded to the title to all books, records, and assets of Freddie Mac held by 

any other legal custodian or third party. The Conservator provided for the Board of Directors to perform certain functions and to 

oversee management, and the Board of Directors delegated to management authority to conduct business operations so that 

the company can continue to operate in the ordinary course. The directors serve on behalf of, and perform such functions as 

provided by, the Conservator.

We are subject to certain constraints on our business activities under the Purchase Agreement. However, the support provided 

by Treasury pursuant to the Purchase Agreement currently enables us to maintain our access to the debt markets and to have 

adequate liquidity to conduct our normal business activities, although the costs of our debt funding could vary. Our ability to 

access funds from Treasury under the Purchase Agreement is critical to keeping us solvent.

Our current business objectives reflect direction we have received from the Conservator (including the Conservatorship 

Scorecards). At the direction of the Conservator, we have made changes to certain business practices that are designed to 

provide support for the mortgage market in a manner that serves our mission and other non-financial objectives but may not 

contribute to our profitability. Certain of these objectives are intended to help homeowners and the mortgage market and may 

help to mitigate future credit losses. Some of these initiatives affect our near- and long-term financial results. Given our mission 

and the important role the Administration and our Conservator have placed on Freddie Mac in addressing housing and 

mortgage market conditions, we may be required to take actions that could have a negative impact on our business, operating 

results, or financial condition. 

Under the Purchase Agreement, we cannot return capital to stockholders other than Treasury, the holder of our senior preferred 

stock. Our future is uncertain, and the conservatorship has no specified termination date. We do not know what changes may 

occur to our business model during or following conservatorship, including whether we will continue to exist. Our Conservator 

has not made us aware of any plans to make any significant changes that would affect our ability to continue as a going 

concern. Our future structure and role will be determined by the Administration, Congress, and FHFA. It is possible, and 

perhaps likely, that there will be significant changes to our business beyond the near term.

Purchase Agreement and Warrant

Overview

On September 7, 2008, we, through FHFA, in its capacity as Conservator, entered into the Purchase Agreement with Treasury. 

The Purchase Agreement was subsequently amended and restated on September 26, 2008, and further amended on May 6, 

2009, December 24, 2009, August 17, 2012, December 21, 2017, September 27, 2019, January 14, 2021, and September 14, 

2021. The amount of available funding remaining under the Purchase Agreement was $140.2 billion as of December 31, 2023. 

This amount will be reduced by any future draws. 

The Purchase Agreement requires Treasury, upon the request of the Conservator, to provide funds to us after any quarter in 

which we have a negative net worth (that is, our total liabilities exceed our total assets, as reflected on our consolidated balance 

sheets). In addition, the Purchase Agreement requires Treasury, upon the request of the Conservator, to provide funds to us if 

the Conservator determines, at any time, that it will be mandated by law to appoint a receiver for us unless we receive these 

funds from Treasury. In exchange for Treasury's funding commitment, we issued to Treasury, as an aggregate initial 

commitment fee, one million shares of Variable Liquidation Preference Senior Preferred Stock with an initial liquidation 

preference of $1 billion, which we refer to as the senior preferred stock, and a warrant to purchase, for a nominal price, shares 

of our common stock equal to 79.9% of the total number of shares of our common stock outstanding on a fully diluted basis at 

the time the warrant is exercised, which we refer to as the warrant. We received no cash proceeds or other consideration from 

Treasury for issuing the senior preferred stock or the warrant. The amount of any draw will be added to the aggregate 

liquidation preference of the senior preferred stock. Deficits in our net worth have made it necessary for us to make substantial 

draws on Treasury's funding commitment under the Purchase Agreement. Pursuant to the December 2017 Letter Agreement, 

the liquidation preference of the senior preferred stock increased by $3.0 billion on December 31, 2017. Pursuant to the 

September 2019 Letter Agreement and January 2021 Letter Agreement, increases in the Net Worth Amount, if any, during the 

immediately prior fiscal quarter have been, or will be, added to the liquidation preference of the senior preferred stock at the 

Financial Statements Notes to Consolidated Financial Statements | Note 2

FREDDIE MAC | 2023 Form 10-K 143
end of each fiscal quarter, from September 30, 2019 through the Capital Reserve End Date. The liquidation preference of the 

senior preferred stock was $117.3 billion on December 31, 2023 and will increase to $120.4 billion on March 31, 2024 based on 

the increase in our Net Worth Amount during 4Q 2023. Under the Purchase Agreement, our ability to repay the liquidation 

preference of the senior preferred stock is limited, and we will not be able to do so for the foreseeable future, if at all. In addition 

to increases based on quarterly increases in our Net Worth Amount, as discussed above, the liquidation preference will 

increase if we receive additional draws under the Purchase Agreement or if any dividends or quarterly commitment fees 

payable under the Purchase Agreement are not paid in cash. 

Treasury, as the holder of the senior preferred stock, is entitled to receive quarterly cash dividends, when, as, and if declared by 

our Board of Directors. The dividends we have paid to Treasury on the senior preferred stock have been declared by, and paid 

at the direction of, the Conservator, acting as successor to the rights, titles, powers, and privileges of the Board of Directors. 

Through December 31, 2012, the senior preferred stock accrued quarterly cumulative dividends at a rate of 10% per year. 

Under the August 2012 amendment to the Purchase Agreement, the fixed dividend rate was replaced with a net worth sweep 

dividend beginning in the first quarter of 2013. 

Accordingly, our cash dividend requirement for each quarter from January 1, 2013 until the Capital Reserve End Date is the 

amount, if any, by which our Net Worth Amount at the end of the immediately preceding fiscal quarter, less the applicable 

Capital Reserve Amount, exceeds zero. The term Net Worth Amount is defined as the total assets of Freddie Mac (excluding 

Treasury's commitment and any unfunded amounts thereof), less our total liabilities (excluding any obligation in respect of 

capital stock), in each case as reflected on our consolidated balance sheets prepared in accordance with GAAP. If the 

calculation of the dividend payment for a quarter does not exceed zero, then no dividend will accrue or be payable for that 

quarter. The applicable Capital Reserve Amount is currently the amount of adjusted total capital necessary to meet capital 

requirements and buffers set forth in the ERCF. This Capital Reserve Amount will remain in effect until the last day of the 

second consecutive fiscal quarter during which we have reached and maintained such level of capital (the Capital Reserve End 

Date). As a result, we will not be required to pay a dividend on the senior preferred stock to Treasury until we have built 

sufficient net worth to meet the capital requirements and buffers set forth in the ERCF. If for any reason we were not to pay our 

dividend requirement on the senior preferred stock in full in any future period until the Capital Reserve End Date, the unpaid 

amount would be added to the liquidation preference and the applicable Capital Reserve Amount would thereafter be zero. 

Based on our Net Worth Amount at December 31, 2023 and the applicable Capital Reserve Amount, we will not have a dividend 

requirement to Treasury in March 2024. Since the beginning of the conservatorship through December 31, 2023, we have paid 

cash dividends of $119.7 billion to Treasury at the direction of the Conservator.

After the Capital Reserve End Date, we will be subject to a new periodic cash dividend requirement. Our quarterly senior 

preferred stock dividend requirement will be an amount equal to the lesser of (1) 10% per annum on the then-current liquidation 

preference of the senior preferred stock and (2) a quarterly amount equal to the increase in the Net Worth Amount, if any, during 

the immediately prior fiscal quarter. If for any reason we were not to pay our dividend requirement on the senior preferred stock 

in full in any future period after the Capital Reserve End Date, the unpaid amount would be added to the liquidation preference 

and immediately following such failure and for all dividend periods thereafter until the dividend period following the date on 

which we shall have paid in cash full cumulative dividends, the dividend amount will be 12% per annum on the then-current 

liquidation preference of the senior preferred stock. The amounts payable for dividends on the senior preferred stock could be 

substantial and will have an adverse impact on our financial position and net worth. The senior preferred stock is senior in 

liquidation preference to our common stock and all other series of preferred stock.

In addition to the issuance of the senior preferred stock and warrant, we are required under the Purchase Agreement to pay a 

quarterly commitment fee to Treasury. Under the Purchase Agreement, the fee was to be determined in an amount mutually 

agreed to by us and Treasury with reference to the market value of Treasury's funding commitment as then in effect. However, 

pursuant to the August 2012 amendment to the Purchase Agreement, as further amended by the January 2021 Letter 

Agreement, for each quarter commencing January 1, 2013, no periodic commitment fee under the Purchase Agreement will be 

set, accrue, or be payable. Pursuant to the January 2021 Letter Agreement, by the Capital Reserve End Date, we and Treasury, 

in consultation with the Chairman of the Federal Reserve, will mutually agree on a periodic commitment fee that we will pay for 

Treasury's remaining funding commitment with respect to the five-year period commencing on the first January 1 after the 

Capital Reserve End Date. 

The Purchase Agreement includes significant restrictions on our ability to manage our business, including limits on the amount 

of indebtedness we can incur, the size of our mortgage-related investments portfolio, our secondary market activities, and our 

single-family and multifamily loan acquisitions. 

The Purchase Agreement has an indefinite term and can terminate only in limited circumstances, which do not include the end 

of the conservatorship. The Purchase Agreement therefore could continue after the conservatorship ends. However, Treasury's 

consent is required for a termination of conservatorship other than in connection with receivership or under the limited 

circumstances specified in the Purchase Agreement involving maintenance of certain capital and resolution of currently pending 

material litigation related to our conservatorship and the Purchase Agreement. Treasury has the right to exercise the warrant, in 

whole or in part, at any time on or before September 7, 2028.

Financial Statements Notes to Consolidated Financial Statements | Note 2

FREDDIE MAC | 2023 Form 10-K 144
Purchase Agreement Covenants

The Purchase Agreement provides that, until the senior preferred stock is repaid or redeemed in full, we may not, without the 

prior written consent of Treasury:

n	 Declare or pay any dividend (preferred or otherwise) or make any other distribution with respect to any Freddie Mac equity 

securities (other than with respect to the senior preferred stock or warrant);

n	 Redeem, purchase, retire, or otherwise acquire any Freddie Mac equity securities (other than the senior preferred stock or 

warrant);

n	 Sell or issue any Freddie Mac equity securities (other than the senior preferred stock, warrant, and common stock issuable 

upon exercise of the warrant and certain issuance(s) of common stock after the occurrence of both Treasury's exercise in 

full of its warrant to acquire 79.9% of our common stock and resolution of currently pending material litigation relating to 

our conservatorship and the Purchase Agreement);

n	 Terminate the conservatorship (other than in connection with a receivership or under limited circumstances involving 

maintenance of certain capital levels and resolution of currently pending material litigation related to our conservatorship 

and the Purchase Agreement);

n	 Sell, transfer, lease, or otherwise dispose of any assets, other than dispositions for fair market value:

l	 To a limited life regulated entity (in the context of a receivership);

l	 Of assets and properties in the ordinary course of business, consistent with past practice;

l	 Of assets and properties having fair market value individually or in aggregate less than $250 million in one transaction 

or a series of related transactions;

l	 In connection with our liquidation by a receiver; 

l	 Of cash or cash equivalents for cash or cash equivalents; or

l	 To the extent necessary to comply with the covenant described below relating to the reduction of our mortgagerelated investments portfolio.

n	 Issue any subordinated debt;

n	 Enter into a corporate reorganization, recapitalization, merger, acquisition, or similar event; or

n	 Engage in transactions with affiliates unless the transaction is: 

l	 Pursuant to the Purchase Agreement, the senior preferred stock, or the warrant; 

l	 Upon arm's length terms; or 

l	 A transaction undertaken in the ordinary course or pursuant to a contractual obligation or customary employment 

arrangement in existence on the date of the Purchase Agreement.

In addition, the Purchase Agreement requires us to comply with the ERCF as published in December 2020, disregarding any 

subsequent amendment or other modification to that rule. Consistent with FHFA instruction, we are reporting our regulatory 

capital requirements under the ERCF as subsequently amended by FHFA. Therefore, we are not in compliance with this 

Purchase Agreement covenant. FHFA has acknowledged this noncompliance. For additional information on the ERCF, see 

Note 18.

The Purchase Agreement limits the size of our mortgage-related investments portfolio to a maximum amount of $225 billion

effective December 31, 2022. The calculation of mortgage assets subject to the Purchase Agreement cap includes the UPB of 

mortgage assets and 10% of the notional value of interest-only securities. Our mortgage-related investments portfolio for 

purposes of the FHFA and Purchase Agreement caps was $107.2 billion at December 31, 2023, including $22.2 billion

representing 10% of the notional amount of the interest-only securities we held as of December 31, 2023. Our ability to acquire 

and sell mortgage assets continues to be significantly constrained by limitations imposed by the Purchase Agreement and 

FHFA.

With respect to the composition of our mortgage-related investments portfolio, FHFA has instructed us to (1) hold no more than 

$20 billion in Single-Family agency MBS with all dollar caps to be based on UPB and (2) hold no CMOs, which are also 

sometimes referred to as REMICs. We will have a holding period limit to sell any new CMO tranches created but not sold at 

issuance. CMOs do not include tranches initially retained from reperforming loans senior subordinate securitizations.

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FREDDIE MAC | 2023 Form 10-K 145
Under the Purchase Agreement, we also may not, without the prior written consent of Treasury, incur indebtedness that would 

result in the par value of our aggregate indebtedness exceeding 120% of the amount of mortgage assets we are permitted to 

own on December 31 of the immediately preceding calendar year. Our debt cap under the Purchase Agreement was 

$270 billion on January 1, 2023 as a result of the decrease in the mortgage assets limit under the Purchase Agreement to 

$225 billion on December 31, 2022. The mortgage asset and indebtedness limitations are determined without giving effect to 

the changes to the accounting guidance for transfers of financial assets and consolidation of VIEs, under which we 

consolidated certain VIEs in our consolidated financial statements as of January 1, 2010. As of December 31, 2023, our 

aggregate indebtedness for purposes of the debt cap was $174.0 billion. Our aggregate indebtedness calculation primarily 

includes the par value of short- and long-term debt. 

In addition, the Purchase Agreement provides that we may not enter into any new compensation arrangements or increase 

amounts or benefits payable under existing compensation arrangements of any named executive officer or other executive 

officer (as such terms are defined by SEC rules) without the consent of the Director of FHFA, in consultation with the Secretary 

of the Treasury.

The Purchase Agreement also provides that, on an annual basis, we are required to deliver a risk management plan to Treasury 

setting out our strategy for reducing our enterprise-wide risk profile and the actions we will take to reduce the financial and 

operational risk associated with each of our reportable business segments.

The Purchase Agreement also restricts our secondary market activities and single-family and multifamily loan acquisitions:

n	 Secondary Market Activities - We cannot vary the pricing or any other term of the acquisition of a single-family loan based 

on the size, charter type, or volume of business of the seller of the loan and are required to: 

l	 Offer to purchase loans for cash consideration and operate this cash window with non-discriminatory pricing; 

l	 Beginning on January 1, 2022, limit the volume purchased through the cash window to $1.5 billion per lender during 

any period comprising four calendar quarters; and

l	 Comply with directives, regulations, restrictions, or other requirements prescribed by FHFA related to equitable 

secondary market access by community lenders.

n	 Multifamily New Business Activity - We are required to cap multifamily loan purchases at $80 billion in any 52-week period, 

subject to annual adjustment by FHFA based on changes in the Consumer Price Index. At least 50% of our multifamily loan 

purchases in any calendar year must be, at the time of acquisition, classified as mission-driven pursuant to FHFA 

guidelines.

n	 Single-Family Loan Acquisitions - We are required to limit our acquisition of certain single-family mortgage loans.

l A maximum of 6% of purchase money mortgages and 3% of refinance mortgages over the preceding 52-week period 

can have two or more of the following characteristics at origination: combined LTV ratio greater than 90%; DTI ratio 

greater than 45%; and FICO or equivalent credit score less than 680.

l We are required to limit acquisitions of single-family mortgage loans secured by either second homes or investment 

properties to 7% of the single-family mortgage loan acquisitions over the preceding 52-week period.

l Subject to such exceptions as FHFA may prescribe to permit us to acquire single-family mortgage loans that are 

currently eligible for acquisition, we are required to implement a program reasonably designed to ensure that each 

single-family mortgage is: 

– A qualified mortgage; 

– Expressly exempt from the CFPB’s ability-to-repay requirements; 

– If secured by an investment property, subject to the related Purchase Agreement restriction described below, 

which has been suspended; 

– A refinancing with streamlined underwriting for high LTV ratios; 

– A loan with temporary underwriting flexibilities due to exigent circumstances, as determined in consultation with 

FHFA; or 

– Secured by manufactured housing.

In September 2021, the Purchase Agreement requirements related to the $1.5 billion limit on our cash window volumes and 

requirements related to our multifamily loan purchase activity, acquisitions of single-family loans with certain LTV, DTI, and 

credit score characteristics at origination, and acquisitions of single-family loans secured by second homes or investment 

properties were suspended. Each such suspension shall terminate six months after Treasury notifies us that such suspension 

has been terminated.

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FREDDIE MAC | 2023 Form 10-K 146
Warrant Covenants

The warrant we issued to Treasury includes, among others, the following covenants: 

n	 Our SEC filings under the Exchange Act will comply in all material respects as to form with the Exchange Act and the rules 

and regulations thereunder; 

n	 Without the prior written consent of Treasury, we may not permit any of our significant subsidiaries to issue capital stock or 

equity securities, or securities convertible into or exchangeable for such securities, or any stock appreciation rights or other 

profit participation rights to any person other than Freddie Mac or its wholly-owned subsidiaries; 

n	 We may not take any action that will result in an increase in the par value of our common stock; 

n	 Unless waived or consented to in writing by Treasury, we may not take any action to avoid the observance or performance 

of the terms of the warrant and we must take all actions necessary or appropriate to protect Treasury's rights against 

impairment or dilution; and 

n	 We must provide Treasury with prior notice of specified actions relating to our common stock, such as setting a record 

date for a dividend payment, granting subscription or purchase rights, authorizing a recapitalization, reclassification, 

merger or similar transaction, commencing a liquidation of the company, or any other action that would trigger an 

adjustment in the exercise price or number or amount of shares subject to the warrant.

Termination Provisions

The Purchase Agreement provides that the Treasury's funding commitment will terminate under any of the following 

circumstances:

n	 The completion of our liquidation and fulfillment of Treasury's obligations under its funding commitment at that time;

n	 The payment in full of, or reasonable provision for, all of our liabilities (whether or not contingent, including mortgage 

guarantee obligations); and 

n	 The funding by Treasury of the maximum amount of the commitment under the Purchase Agreement. 

In addition, Treasury may terminate its funding commitment and declare the Purchase Agreement null and void if a court 

vacates, modifies, amends, conditions, enjoins, stays, or otherwise affects the appointment of the Conservator or otherwise 

curtails the Conservator's powers. Treasury may not terminate its funding commitment under the Purchase Agreement solely by 

reason of our being in conservatorship, receivership or other insolvency proceeding, or due to our financial condition or any 

adverse change in our financial condition.

Waivers and Amendments

The Purchase Agreement provides that most provisions of the agreement may be waived or amended by mutual written 

agreement of the parties; however, no waiver or amendment of the agreement is permitted that would decrease Treasury's 

aggregate funding commitment or add conditions to Treasury's funding commitment if the waiver or amendment would 

adversely affect in any material respect the holders of our debt securities or mortgage guarantee obligations.

Third-Party Enforcement Rights

In the event of our default on payments with respect to our debt securities or mortgage guarantee obligations, if Treasury fails 

to perform its obligations under its funding commitment and if we and/or the Conservator are not diligently pursuing remedies 

in respect of that failure, the holders of these debt securities or mortgage guarantee obligations may file a claim in the United 

States Court of Federal Claims for relief requiring Treasury to fund to us the lesser of:

n	 The amount necessary to cure the payment defaults on our debt securities and mortgage guarantee obligations and

n	 The lesser of:

l	 The deficiency amount and

l	 The maximum amount of the commitment less the aggregate amount of funding previously provided under the 

commitment. 

Any payment that Treasury makes under those circumstances will be treated for all purposes as a draw under the Purchase 

Agreement that will increase the liquidation preference of the senior preferred stock.

See Note 11 for additional information on the conservatorship and the Purchase Agreement.

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FREDDIE MAC | 2023 Form 10-K 147
Related Parties as a Result of Conservatorship

As a result of our issuance to Treasury of the warrant to purchase shares of our common stock equal to 79.9% of the total 

number of shares of our common stock outstanding, on a fully diluted basis, we are deemed a related party to the U.S. 

government. During the years ended December 31, 2023, 2022, and 2021, no transactions outside of normal business activities 

have occurred between us and the U.S. government (or any of its related parties), except for the following:

n	 The transactions with Treasury discussed above in Purchase Agreement and Warrant; 

n	 The transactions entered into whereby we and Fannie Mae, in conjunction with Treasury, provided assistance to state and 

local HFAs. Treasury will reimburse Freddie Mac for initial guarantee losses on these transactions;

n	 The allocation or transfer of 4.2 bps of each dollar of new business purchases to certain housing funds as required under 

the GSE Act. During the years ended December 31, 2023, 2022, and 2021, we recognized $0.1 billion, $0.3 billion, and 

$0.5 billion, respectively, of expense related to the affordable housing funds. These amounts are included in legislative 

assessments expense on our consolidated statements of income; and

n	 The legislated guarantee fees on single-family loans that are remitted to Treasury as required by law. During the years 

ended December 31, 2023, 2022, and 2021, we recognized $2.9 billion, $2.8 billion, and $2.3 billion, respectively, of 

expense related to the legislated guarantee fees. These amounts are included in legislative assessments expense on our 

consolidated statements of income.

In addition, we are deemed a related party with Fannie Mae as both we and Fannie Mae have the same relationships with FHFA 

and Treasury. All transactions between us and Fannie Mae have occurred in the normal course of business in conservatorship 

other than our relationship with CSS discussed below.

In October 2013, FHFA announced the formation of CSS. CSS is a limited liability company equally-owned by Freddie Mac and 

Fannie Mae, and CSS is also deemed a related party. In connection with the formation of CSS, we entered into a limited liability 

company (LLC) agreement with Fannie Mae. Additionally, we and Fannie Mae each appointed two executives to the CSS Board 

of Managers and signed governance and operating agreements for CSS, including an updated customer services agreement 

with Fannie Mae and CSS in May 2019. In June 2019, we entered into an agreement with Fannie Mae regarding the 

commingling of certain of our mortgage securities and related indemnification obligations. During the year ended December 31, 

2023, we contributed $72 million of capital to CSS, and we have contributed $871 million since the fourth quarter of 2014. The 

carrying value of our investment in CSS was ($1) million and ($2) million as of December 31, 2023 and December 31, 2022. 

respectively. 

In January 2020, FHFA directed Freddie Mac and Fannie Mae to amend the LLC agreement for CSS to change the structure of 

the Board of Managers (CSS Board). The revised LLC agreement also removed the requirement that any CSS Board decision 

must be approved by at least one of the CSS Board members appointed by Freddie Mac and one appointed by Fannie Mae. 

These amendments reduce Freddie Mac’s and Fannie Mae’s ability to control CSS Board decisions, even after conservatorship, 

including decisions about strategy, business operations, and funding. 

Under the revised CSS LLC agreement, the CSS Board includes two Freddie Mac and two Fannie Mae representatives and 

additional members: the Chief Executive Officer of CSS and an independent, non-Executive Chair. During conservatorship, the 

CSS Board Chair shall be designated by FHFA, and all CSS Board decisions will require the affirmative vote of the Board Chair. 

During conservatorship, FHFA also may appoint up to three additional independent members to the CSS Board, who along with 

the CSS Board Chair and the Chief Executive Officer of CSS may continue to serve on the CSS Board after conservatorship. As 

of December 31, 2023, FHFA appointed the current CSS Board Chair and an additional independent director to the CSS Board. 

Financial Statements Notes to Consolidated Financial Statements | Note 2

FREDDIE MAC | 2023 Form 10-K 148
NOTE 3 

Securitizations and Variable Interest Entities

Our primary business activities in the Single-Family and Multifamily segments involve the securitization of loans or other 

mortgage-related assets using trusts that are VIEs. These trusts issue beneficial interests in the loans or other mortgage-related 

assets that they own. We guarantee the principal and interest payments on some or all of the issued beneficial interests in 

substantially all of our securitization transactions. We also use trusts that are VIEs in certain CRT products.

Consolidated VIEs

We consolidate VIEs when we have a controlling financial interest in the VIE and are therefore considered the primary 

beneficiary of the VIE. We are the primary beneficiary of a VIE when we have both the power to direct the activities of the VIE 

that most significantly impact its economic performance and exposure to losses or benefits of the VIE that could potentially be 

significant to the VIE. We evaluate whether we are the primary beneficiary of VIEs in which we have interests at both inception 

and on an ongoing basis, and the primary beneficiary determination may change over time as our interest in the VIE changes. 

Generally, the assets of our consolidated VIEs can be used only to settle obligations of the VIE, and the creditors of our 

consolidated VIEs have recourse to the general credit of Freddie Mac only to the extent that we have provided a guarantee to 

the VIE.

When we consolidate a VIE, we recognize the assets and liabilities of the VIE on our consolidated balance sheets and account 

for those assets and liabilities based on the applicable GAAP for each specific type of asset or liability. Assets and liabilities that 

we transfer to a VIE at, after, or shortly before the date we become the primary beneficiary of the VIE are initially measured at 

the same amounts that they would have been measured if they had not been transferred, and no gain or loss is recognized on 

these transfers. For all other VIEs that we consolidate, we recognize the assets and liabilities of the VIE at fair value, and we 

recognize a gain or loss for the difference between:

n The sum of the fair value of the consideration paid, the fair value of any noncontrolling interests, and the reported amount 

of any previously held interests and

n The fair value of the net identifiable assets recognized. 

Single-Family

Securitization Products

Level 1 Securitization Products

Level 1 Securitization Products consist of UMBS, 55-day MBS, ARM and Gold PCs, which are all pass-through debt securities 

that represent undivided beneficial interests in a pool of loans held by a securitization trust. All Level 1 Securitization Products 

are backed only by mortgage loans we have acquired. We serve as both administrator and guarantor for these trusts. As 

administrator, we have the right to establish servicing terms and direct loss mitigation activities for the loans held by these 

trusts. As guarantor, we guarantee the payment of principal and interest on these securities in exchange for a guarantee fee, 

and we have the right to purchase delinquent loans from the trust to help improve the economic performance of the trust. We 

absorb all credit losses of these trusts through our guarantee of the principal and interest payments. 

The economic performance of these trusts is most significantly affected by the performance of the underlying loans. Our rights 

as administrator and guarantor provide us with the power to direct the activities that most significantly affect the performance 

of the underlying loans. We also have the obligation to absorb losses of these trusts that could potentially be significant through 

our guarantee of principal and interest payments. Accordingly, we concluded that we are the primary beneficiary of and, 

therefore, consolidate these trusts.

Loans held by these trusts are recognized on our consolidated balance sheets as mortgage loans held-for-investment. The 

corresponding securities held by third parties are recognized on our consolidated balance sheets as debt. We extinguish the 

outstanding debt of the related consolidated trust and recognize gains or losses on debt extinguishment for the difference 

between the consideration paid and the debt carrying value when we purchase these securities as investments in our 

mortgage-related investments portfolio. Sales of these securities that were previously held as investments in our mortgagerelated investments portfolio are accounted for as debt issuances. 

We were the primary beneficiary of, and therefore consolidated, Level 1 securitization trusts with assets totaling $3.0 trillion and 

$2.9 trillion at December 31, 2023 and December 31, 2022, respectively. Our exposure for guarantees to consolidated 

securitization trusts is generally equal to the UPB of the loans recorded on our consolidated balance sheets. 

Financial Statements Notes to Consolidated Financial Statements | Note 3

FREDDIE MAC | 2023 Form 10-K 149
Other Securitization Products

We are the primary beneficiary of and, therefore, consolidate the trusts used to issue certain of our Single-Family other 

securitization products when we have the ability to direct the activities that most significantly affect the economic performance 

of the trusts and we have the obligation to absorb credit losses through our guarantee of some or all of the issued securities. As 

a result, we consolidated trusts used to issue these products with underlying assets totaling $4.5 billion and $5.0 billion at 

December 31, 2023 and December 31, 2022, respectively. 

Multifamily

Securitization Products 

Multifamily PCs

Multifamily PCs are fully guaranteed pass-through securities with a 55-day payment delay that are collateralized by a single 

underlying mortgage loan held by a securitization trust. We serve as both administrator and guarantor for these trusts. As 

administrator, we have the right to establish servicing terms and direct loss mitigation activities for the loans held by these 

trusts. As guarantor, we guarantee the payment of principal and interest on these securities in exchange for a guarantee fee, 

and we have the right to purchase a delinquent loan from the trust. We absorb all credit losses of these trusts through our 

guarantee of the principal and interest payments. 

The economic performance of these trusts is most significantly affected by the performance of the underlying loans. Our rights 

as administrator and guarantor provide us with the power to direct the activities that most significantly affect the performance 

of the underlying loans. We also have the obligation to absorb losses of these trusts that could potentially be significant through 

our guarantee of principal and interest payments. Accordingly, we concluded that we are the primary beneficiary of and, 

therefore, consolidate these trusts. 

We consolidated VIEs used in these securitizations with underlying assets totaling $44.1 billion and $29.3 billion at 

December 31, 2023 and December 31, 2022, respectively.

K Certificates and Other Securitization Products

We are the primary beneficiary of and, therefore, consolidate the trusts used to issue fully-guaranteed K Certificates and certain 

of our Multifamily other securitization products when we have the ability to direct the activities that most significantly affect the 

economic performance of the VIEs and we have the obligation to absorb credit losses through our guarantee of the issued 

securities. 

We consolidated VIEs used in these securitizations with underlying assets totaling $3.2 billion and $1.1 billion at December 31, 

2023 and December 31, 2022, respectively. 

WI K-Deal Certificates

In a WI K-Deal Certificate transaction, we forward sell a K Certificate that will be issued in the future to a WI K-Deal trust at a 

fixed price, thereby reducing our exposure to future changes in interest rates and K Certificate spreads. The WI K-Deal trust 

simultaneously issues guaranteed securities (WI Certificates). 

The economic performance of our WI K-Deal trusts is most significantly affected by the performance of the underlying assets. 

We manage the underlying assets of the trust prior to the delivery of the K Certificate and determine which K Certificate will be 

delivered into the trust. Therefore, we have the power to direct the activities that are most significant to the WI K-Deal trust. We 

also initially have economic exposure to the variability of the trust through our guarantee of the issued WI Certificates. As a 

result, we are the primary beneficiary of and, therefore, initially consolidate the trusts used to issue WI Certificates. Upon 

delivering the K Certificate into the trust, we no longer have a variable interest and therefore deconsolidate the WI K-Deal trust.

During 2023 and 2022, we issued $4.9 billion and $14.7 billion, respectively, of WI Certificates, and initially consolidated the 

trusts. We consolidated WI K-Deal trusts with underlying assets totaling $0.5 billion and $0.8 billion at December 31, 2023 and 

December 31, 2022, respectively.

Nonconsolidated VIEs

Single-Family

Securitization Products

We do not consolidate certain of our Single-Family other securitization products, including senior subordinate securitizations 

backed by seasoned loans, because we do not have the ability to direct the loss mitigation activities of the underlying loans, 

which is the most significant activity affecting the economic performance of the VIE. When we sell loans in this type of 

transaction, we derecognize the transferred loans and account for our guarantee to the nonconsolidated VIE. We account for 

Financial Statements Notes to Consolidated Financial Statements | Note 3

FREDDIE MAC | 2023 Form 10-K 150
our investments in the beneficial interests issued by the nonconsolidated VIE, if any, as investments in debt securities. We also 

do not consolidate the trusts used to issue certain other types of our Single-Family other securitization products when we do 

not have the ability to direct the activities that most significantly affect the economic performance of the VIE.

Resecuritization Products

We create resecuritization products primarily by using Level 1 Securitization Products, our previously issued resecuritization 

products, or similar TBA-eligible products issued and guaranteed by Fannie Mae as the underlying collateral. In a typical 

resecuritization transaction, previously issued Level 1 Securitization Products or resecuritization products are transferred to a 

resecuritization trust that issues beneficial interests in the underlying collateral. We establish parameters that define eligibility 

standards for assets that may be used as collateral for each of our resecuritization programs. Resecuritization products can 

then be created based on the parameters that we have established. Similar to our Level 1 Securitization Products, we 

guarantee the full payment of principal and interest to the investors in our resecuritization products. 

The main types of resecuritization products we create are single-class resecuritization products (Supers, Giant MBS, and Giant 

PCs) and multiclass resecuritization products (REMICs and Strips).

n	 Single-class resecuritization products - These securities are direct pass-throughs of the cash flows of the underlying 

collateral, which may be previously issued Level 1 Securitization Products, single-class resecuritization products, or similar 

TBA-eligible products issued and guaranteed by Fannie Mae. We do not consolidate the trusts used in these transactions 

unless we have the unilateral ability to liquidate the trust (for example if we own all of the trust's issued beneficial interests), 

as these transactions do not result in any new or incremental risk to the holders of the securities issued by the 

resecuritization trust and because we are not exposed to any incremental rights to receive benefits or obligations to absorb 

losses that could be significant to the resecuritization trust.

We account for purchases of single-class resecuritization products that we issue that are substantially the same as the 

underlying collateral as debt extinguishment of a pro-rata portion of the underlying Level 1 Securitization Product. We 

account for purchases of single-class resecuritization products that we issue that are not considered substantially the 

same as the underlying collateral as investments in debt securities. Single-class resecuritization products that we issue 

that are backed entirely by Freddie Mac collateral are considered substantially the same as the underlying collateral, while 

commingled single-class resecuritization products that we issue are not considered substantially the same as the 

underlying collateral.

n	 Multiclass resecuritization products - These securities are multiclass resecuritizations of the cash flows of the underlying 

collateral, which may be previously issued Level 1 Securitization Products, single-class resecuritization products, 

multiclass resecuritization products, or similar TBA-eligible products issued and guaranteed by Fannie Mae. The activity 

that most significantly impacts the economic performance of our multiclass resecuritization trusts is typically the initial 

design and structuring of the trust. Substantially all multiclass resecuritization trusts are created as part of transactions in 

which an investor or dealer participates in the decisions made during the design and establishment of the trust. As a result, 

we do not have the unilateral ability to direct the activities of our multiclass resecuritization trusts that most significantly 

impact the economic performance of those trusts. In addition, unless we retain a portion of the issued multiclass 

resecuritization products, we do not have the right to receive benefits or the obligation to absorb losses that could 

potentially be significant to the trusts because we have already provided a guarantee on the underlying assets. As a result, 

we have concluded that we are not the primary beneficiary of our multiclass resecuritization trusts and, therefore, do not 

consolidate those trusts unless we have the unilateral ability to liquidate the trust. 

When we purchase a multiclass resecuritization product as an investment in our mortgage-related investments portfolio, 

we record the security as an investment in debt securities rather than extinguishment of debt since we are investing in the 

debt securities of a nonconsolidated entity. Similarly, sales of multiclass resecuritization products previously held as 

investments in our mortgage-related investments portfolio are accounted for as sales of investments in debt securities. See 

Note 7 for additional information on accounting for investments in debt securities.

With the exception of commingled securities, our investments in, and guarantees of, securities issued by resecuritization trusts 

do not create any incremental exposure to loss because we already guarantee the underlying collateral. As a result, we do not 

receive any incremental guarantee fees in exchange for our guarantee, and, accordingly, we do not recognize any additional 

guarantee assets, guarantee obligations, or reserves for guarantee losses related to resecuritization trusts. In a typical 

multiclass resecuritization, we receive a one-time transaction fee which represents compensation for both the structuring and 

creation of the securities and for our ongoing administrative responsibilities to service the securities. We recognize the portion 

of the transaction fee related to creation of the securities immediately in earnings. We defer the portion of the fee related to 

ongoing administrative responsibilities and amortize it over the life of the associated trust. 

When we issue commingled resecuritization products, our guarantee of the Fannie Mae securities used as collateral creates 

incremental exposure to loss because our guarantee covers timely payment of principal and interest on such products from 

underlying Fannie Mae securities. If Fannie Mae were to fail to make a payment on a Fannie Mae security that we resecuritized, 

we would be responsible for making the payment. However, we view the likelihood of being required to perform on our 

guarantee of Fannie Mae securities as remote due to Fannie Mae’s status as a GSE and the funding commitment available to it 

through its senior preferred stock purchase agreement with Treasury. We did not charge an incremental fee for commingled 

Financial Statements Notes to Consolidated Financial Statements | Note 3

FREDDIE MAC | 2023 Form 10-K 151
securities issued prior to July 1, 2022; however, effective July 1, 2022, we began to charge a fee for any commingled security 

issued after that date.

CRT Products

We transfer credit risk exposure on certain mortgage loans that we own or guarantee using CRT products, including STACR 

Trust notes. In STACR Trust notes transactions, a trust issues credit-linked notes whose repayments are based on the credit 

performance of a reference pool of mortgage loans. The trust uses the proceeds from the issuance of the notes to purchase 

short-term eligible investments and makes periodic payments of principal and interest on the notes to investors. We make 

payments to the trust to support payment of the interest due on the notes, and we receive payments from the trust that 

otherwise would have been made to the noteholders to the extent there are credit events on the mortgages in the reference 

pool. The note balances are reduced by the amount of the payments to us. The trust was designed to create and pass along to 

its interest holders the variability related to the credit risk of the mortgages in the reference pool. We do not have a variable 

interest in the risk that the trust was designed to create and pass along to its interest holders or the power to direct the 

activities that most significantly affect the economic performance of the VIE. As a result, we do not consolidate the trusts used 

in the STACR Trust note transactions. 

We account for our obligations to make certain payments to the STACR Trust note VIEs to support payment of the interest due 

on the notes as derivative instruments. We account for our rights to receive payments from the STACR Trust note VIEs to the 

extent there are credit events on the mortgages in the reference pool as freestanding credit enhancement contracts. 

Freestanding contracts are entered into separately and apart from any other financial instrument or in conjunction with some 

other transaction and are legally detachable and separately exercisable. We recognize the payments we make to transfer credit 

risk under freestanding credit enhancements, which primarily consist of STACR Trust notes and ACIS transactions in SingleFamily, in credit enhancement expense in our consolidated statements of income when they are incurred. We recognize 

expected recoveries from such transactions in other assets with an offsetting reduction to non-interest expense, at the same 

time that we recognize an allowance for credit losses on the covered loans, measured on the same basis as the allowance for 

credit losses on the covered loans. Credit enhancements that are not freestanding contracts are considered when measuring 

our allowance for credit losses. See Note 6 for additional information on credit enhancements that are not freestanding 

contracts.

Multifamily

Securitization Products

K Certificates

In a typical K Certificate transaction, we sell multifamily loans to a non-Freddie Mac trust that issues senior and subordinate 

securities, and simultaneously purchase and place the senior securities into a Freddie Mac trust that issues guaranteed K 

Certificates. In these transactions, we guarantee the senior securities issued by the non-Freddie Mac trust but do not issue or 

guarantee the subordinate securities. We receive a guarantee fee in exchange for our guarantee. In certain of our K Certificate 

securitizations, we may also serve as master servicer. However, in contrast to most single-family transactions, the rights to 

direct loss mitigation activities of the underlying loans and to purchase delinquent loans from the securitization trust are 

generally held by the investor in the most subordinate remaining securities issued by the non-Freddie Mac trust, and therefore 

we do not have the power to direct those activities unless we are the investor in the most subordinate remaining securities. We 

do not typically invest in the subordinate securities issued in our K Certificate transactions.

The economic performance of our K Certificate trusts is most significantly affected by the performance of the underlying loans. 

We do not consolidate our K Certificate securitization trusts that have subordination because we do not have the ability to 

direct the loss mitigation activities of the underlying loans, which is the most significant activity affecting the economic 

performance of the VIE. 

When we sell loans in a K Certificate transaction, we derecognize the transferred loans and account for our guarantee to the 

nonconsolidated VIE. We account for our investments in the beneficial interests issued by the trusts used in our K Certificate 

transactions as investments in debt securities.

Other Securitization Products 

We do not consolidate the trusts used to issue our other securitization products when we do not have the ability to direct the 

activities that most significantly affect the economic performance of the VIE. For those products, we account for our guarantee 

to the nonconsolidated VIE. We account for our investments in the beneficial interests issued by the trusts used in our other 

securitization products as investments in debt securities.

CRT Products

In Multifamily, we may transfer credit risk on certain mortgage loans that we own or guarantee by entering into SCR Trust note 

transactions, which are similar to STACR Trust note transactions in Single-Family. We do not consolidate the trusts used in 

Financial Statements Notes to Consolidated Financial Statements | Note 3

FREDDIE MAC | 2023 Form 10-K 152
SCR Trust note transactions and account for SCR Trust note transactions in the same manner as we account for STACR Trust 

note transactions.

Assets and Liabilities of Nonconsolidated VIEs

The following table presents the carrying amounts and classification of the assets and liabilities recorded on our consolidated 

balance sheets that relate to our variable interests in VIEs for which we are not the primary beneficiary and with which we were 

involved in the design and creation and have a significant continuing involvement, our maximum exposure to loss as a result of 

our involvement with such VIEs, and the total assets of the VIEs. Our involvement with such VIEs primarily consists of 

guarantees that we have issued to the VIE, some of which are accounted for as derivative instruments, and investments in debt 

securities issued by the VIE. See Note 5 for additional information on our guarantees to nonconsolidated VIEs.

Total assets shown in the table below represents the remaining UPB of the mortgage loans or other noncash financial assets 

held by the VIE and excludes cash and nonfinancial assets held by the VIE. Maximum exposure to loss shown in the table 

below is primarily based on the remaining UPB of the guaranteed securities issued by the VIE and represents the contractual 

amounts that could be lost if the assets of the VIE (including the assets in the related reference pool for CRT products) became 

worthless at the balance sheet date, without consideration of proceeds from related collateral liquidation and possible 

recoveries under credit enhancements. We do not believe the maximum exposure to loss from our involvement with 

nonconsolidated VIEs is representative of the actual loss we are likely to incur based on our historical loss experience and after 

consideration of proceeds from related collateral liquidation and available credit enhancements.

Financial Statements Notes to Consolidated Financial Statements | Note 3

FREDDIE MAC | 2023 Form 10-K 153
Table 3.1 - Nonconsolidated VIEs

December 31, 2023

Carrying Amounts of the Assets and Liabilities On the 

Consolidated Balance Sheets

Total Assets

Maximum Exposure 

(In millions) to Loss

Investment 

securities

Accrued Interest 

Receivable and 

Other Assets(1) Liabilities(1)

Single-Family:

 Securitization products $1,272 $172 $427 $30,298 $24,600 

Resecuritization products(2) 4,952 67 626 110,320 110,320 

CRT products(3) — 92 220 29,126 14 

Total Single-Family 6,224 331 1,273 169,744 134,934 

Multifamily:

Securitization products(4) 5,985 5,082 4,652 360,928 321,262 

CRT products(3) — 11 7 1,359 8 

Total Multifamily 5,985 5,093 4,659 362,287 321,270 

Other — 7 5 117 468 

Total $12,209 $5,431 $5,937 $532,148 $456,672 

December 31, 2022

Carrying Amounts of the Assets and Liabilities On the 

Consolidated Balance Sheets

Total Assets

Maximum Exposure 

(In millions) to Loss

Investment 

securities

Accrued Interest 

Receivable and 

Other Assets(1) Liabilities(1)

Single-Family:

Securitization products $965 $175 $436 $31,614 $25,772 

Resecuritization products(2) 5,092 61 659 119,267 119,267 

CRT products(3) — 197 52 30,549 105 

Total Single-Family 6,057 433 1,147 181,430 145,144 

Multifamily:

Securitization products(4) 7,808 4,931 4,920 360,869 319,117 

CRT products(3)

 — 2 2 972 — 

Total Multifamily 7,808 4,933 4,922 361,841 319,117 

Other — 8 5 185 435 

Total $13,865 $5,374 $6,074 $543,456 $464,696 

(1) Other assets primarily include our guarantee assets. Liabilities primarily include our guarantee obligations.

(2) Total assets and maximum exposure to loss are based on the UPB of Fannie Mae securities underlying commingled Freddie Mac resecuritization trusts. We exclude 

noncommingled resecuritization trusts from these amounts as we have already guaranteed the underlying collateral and therefore noncommingled resecuritizations 

do not involve any incremental assets or create any incremental exposure to credit risk. Total assets exclude $0.1 billion as of both December 31, 2023 and 

December 31, 2022, of Fannie Mae securities that we have guaranteed that are included in resecuritization trusts that we have consolidated as we own all of the 

outstanding securities issued by the VIE.

(3) Maximum exposure to loss is based on our expected recovery receivables and excludes our obligations to make certain payments to the VIE to support payment of 

the interest due on the notes issued by the VIE, which we account for as derivative instruments. The notional value of these derivative instruments is equal to the 

total assets of the VIE.

(4) Includes total assets of $0.3 billion and $0.4 billion as of December 31, 2023 and December 31, 2022, respectively, related to VIEs in which our interest would no 

longer absorb significant variability as the guaranteed securities have completely paid off. 

We also obtain interests in various other entities created by third parties through the normal course of business that may be 

VIEs, such as through purchases of multifamily loans, guarantees of multifamily housing revenue bonds, as a derivative 

counterparty, or through other activities. To the extent that we were not involved in the design or creation of these VIEs, they 

are excluded from the table above. Our interests in these VIEs are generally passive in nature and are not expected to result in 

us obtaining a controlling financial interest in these VIEs in the future. As a result, we do not consolidate these VIEs and we 

account for our interests in these VIEs in the same manner that we account for our interests in other third-party transactions. 

Financial Statements Notes to Consolidated Financial Statements | Note 3

FREDDIE MAC | 2023 Form 10-K 154
NOTE 4

Mortgage Loans

The table below provides details of the loans on our consolidated balance sheets.

Table 4.1 - Mortgage Loans

December 31, 2023 December 31, 2022

(In millions) Single-Family Multifamily Total Single-Family Multifamily Total

Held-for-sale UPB $3,527 $9,905 $13,432 $3,564 $9,544 $13,108 

Cost basis and fair value adjustments, net (712) 221 (491) (696) (215) (911) 

 Total held-for-sale loans, net 2,815 10,126 12,941 2,868 9,329 12,197 

Held-for-investment UPB 2,996,509 59,203 3,055,712 2,941,505 48,379 2,989,884 

Cost basis and fair value adjustments, net(1) 34,627 (291) 34,336 39,896 (71) 39,825 

Allowance for credit losses (6,057) (326) (6,383) (7,314) (77) (7,391) 

 Total held-for-investment loans, net(2) 3,025,079 58,586 3,083,665 2,974,087 48,231 3,022,318 

Total mortgage loans, net $3,027,894 $68,712 $3,096,606 $2,976,955 $57,560 $3,034,515 

(1) Includes ($0.2) billion of basis adjustments maintained on a closed portfolio basis related to existing portfolio layer method hedge relationships as of December 31, 

2023. 

(2) Includes $1.8 billion and $1.2 billion of multifamily held-for-investment loans for which we have elected the fair value option as of December 31, 2023 and 

December 31, 2022, respectively.

We own both single-family loans, which are secured by one- to four-unit residential properties, and multifamily loans, which are 

secured by properties with five or more residential rental units. Our single-family loans are predominantly first lien, fixed-rate 

loans secured by the borrower's primary residence. We do not typically acquire loans that have experienced more-thaninsignificant deterioration in credit quality since origination as of our acquisition date, although we may acquire such loans in 

connection with certain of our securitization activities or other mortgage-related guarantees. 

Upon acquisition, we classify a loan as either held-for-investment or held-for-sale. Loans that we have the ability and intent to 

hold for the foreseeable future, including loans held by consolidated trusts and loans we intend to securitize using an entity we 

will consolidate, are classified as held-for-investment. Loans that we intend to sell are classified as held-for-sale.

Held-for-investment loans for which we have not elected the fair value option are reported on our consolidated balance sheets 

at their amortized cost basis, net of the allowance for credit losses. The amortized cost basis is based on a loan's outstanding 

UPB, net of deferred fees and other cost basis adjustments (including unamortized premiums and discounts, fees we receive or 

pay when we acquire loans, commitment-related derivative basis adjustments, hedge accounting-related basis adjustments, 

and other pricing adjustments), excluding accrued interest receivable. Accrued interest receivable for both held-for-investment 

and held-for-sale loans is separately presented on our consolidated balance sheets and excluded for the purposes of 

disclosure of the amortized cost basis of mortgage loans held-for-investment.

Held-for-sale loans for which we have not elected the fair value option are reported at lower-of-cost-or-fair-value determined on 

an individual loan basis on our consolidated balance sheets. Any excess of a held-for-sale loan's cost over its fair value is 

recognized as a valuation allowance in investment gains, net on our consolidated statements of income, with subsequent 

changes in this valuation allowance also being recorded in investment gains, net. Premiums, discounts, and other cost basis 

adjustments (including lower-of-cost-or-fair-value adjustments) are deferred and not amortized. 

We elect the fair value option for certain multifamily loans. Loans for which we have elected the fair value option are measured 

at fair value on a recurring basis, with subsequent gains or losses related to changes in fair value reported in investment gains, 

net on our consolidated statements of income. All fees, upfront costs, and other cost basis adjustments are recognized in 

earnings as incurred.

Cash flows related to loans originally classified as held-for-investment are classified as either investing activities (e.g., principal 

repayments) or operating activities (e.g., interest payments received from borrowers included within net income) on our 

consolidated statements of cash flows. Cash flows related to loans originally classified as held-for-sale are classified as 

operating activities on our consolidated statements of cash flows.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 155
The table below provides details of the UPB of loans we purchased and sold during the periods presented.

Table 4.2 - Loans Purchased and Sold

Year Ended December 31,

(In millions) 2023 2022 2021

Single-Family:

Purchases:

 Held-for-investment loans $299,886 $540,472 $1,215,276 

Sales of held-for-sale loans(1) 1,253 2,211 5,514 

Multifamily:

Purchases:

 Held-for-investment loans 16,814 25,052 9,363 

 Held-for-sale loans 29,415 44,997 59,093 

Sales of held-for-sale loans(2) 34,034 50,280 70,355 

(1) Our sales of single-family loans reflect the sale of single-family seasoned loans. 

(2) Our sales of multifamily loans occur primarily through the issuance of Multifamily K Certificates. 

Reclassifications

We reclassify loans from held-for-investment to held-for-sale depending on our intent and ability to hold the loan for the 

foreseeable future. Upon reclassification from held-for-investment to held-for-sale, we perform a collectability assessment. 

When we determine that a loan to be reclassified has experienced more-than-insignificant deterioration in credit quality since 

origination, the excess of the loan’s amortized cost basis over its fair value is written off against the allowance for credit losses 

prior to the reclassification. If the charge-off amount exceeds the existing allowance for credit losses amount, an additional 

provision for credit losses is recognized. Any remaining allowance for credit losses after the charge-off is reversed through 

provision for credit losses.

We reclassify loans from held-for-sale to held-for-investment when we have both the intent and ability to hold the loan for the 

foreseeable future. Upon reclassification from held-for-sale to held-for-investment, we reverse the loan’s held-for-sale valuation 

allowance, if any, and establish an allowance for credit losses as needed. 

The table below presents the allowance for credit losses or valuation allowance that was reversed or established due to loan 

reclassifications between held-for-investment and held-for-sale during the periods presented.

Table 4.3 - Loan Reclassifications(1)

2023 2022

(In millions) UPB

Allowance for 

Credit Losses 

Reversed or 

(Established)

Valuation 

Allowance 

(Established) 

or Reversed UPB

Allowance for 

Credit Losses 

Reversed or 

(Established)

Valuation 

Allowance 

(Established) 

or Reversed

Single-Family reclassifications from:

Held-for-investment to held-for-sale $1,968 $37 $— $1,231 $30 $— 

Held-for-sale to held-for-investment(2) 191 16 20 249 15 16 

Multifamily reclassifications from:

Held-for-investment to held-for-sale 6,760 4 (58) 1,394 2 (4) 

 Held-for-sale to held-for-investment 861 (1) 19 39 — — 

(1) Amounts exclude reclassifications related to loans for which we have elected the fair value option.

(2) Allowance for credit losses established upon loan reclassifications from held-for-sale to held-for-investment to reflect the net amount we expect to collect on the 

loan. Loans with prior charge-offs may have a negative allowance for credit losses established upon reclassification. 

Interest Income

We recognize interest income on an accrual basis except when we believe the collection of principal and interest in full is not 

reasonably assured, which generally occurs when a loan is three monthly payments or more past due, at which point we place 

the loan on non-accrual status unless the loan is well secured and in the process of collection based upon an individual loan 

assessment. A loan is considered past due if a full payment of principal and interest is not received within one month of its due 

date. We charge off outstanding accrued interest receivable through interest income when loans are placed on non-accrual 

status and recognize interest income on a cash basis while a loan is on non-accrual status.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 156
Cost basis adjustments on held-for-investment loans are amortized into interest income over the contractual life of the loan 

using the effective interest method. No amortization is recognized during periods in which a loan is on non-accrual status.

A non-accrual loan is returned to accrual status when the collectability of principal and interest in full is reasonably assured. For 

single-family loans, we generally determine that collectability is reasonably assured when the loan returns to current payment 

status. For multifamily loans, the collectability of principal and interest is considered reasonably assured based on an analysis 

of the factors specific to the loan being assessed. Upon a loan's return to accrual status, all previously reversed interest income 

is recognized and amortization of any basis adjustments into interest income is resumed.

The table below presents the amortized cost basis of non-accrual loans as of the beginning and the end of the periods 

presented, including the interest income recognized for the period that is related to the loans on non-accrual status as of the 

period end. 

Table 4.4 - Amortized Cost Basis of Held-for-Investment Loans on Non-Accrual(1)

Non-Accrual Amortized Cost Basis Interest Income Recognized(2)

(In millions) December 31, 2023 December 31, 2022 Year Ended December 31, 2023

Single-Family:

20- and 30-year or more, amortizing fixed-rate $12,682 $9,307 $256 

15-year or less, amortizing fixed-rate 519 427 7 

Adjustable-rate and other 257 361 5 

Total Single-Family 13,458 10,095 268 

Total Multifamily 64 42 3 

Total Single-Family and Multifamily $13,522 $10,137 $271 

Non-Accrual Amortized Cost Basis Interest Income Recognized(2)

(In millions) December 31, 2022 December 31, 2021 Year Ended December 31, 2022

Single-Family:

20- and 30-year or more, amortizing fixed-rate $9,307 $17,013 $172 

15-year or less, amortizing fixed-rate 427 844 5 

Adjustable-rate and other 361 793 6 

Total Single-Family 10,095 18,650 183 

Total Multifamily 42 — 2 

Total Single-Family and Multifamily $10,137 $18,650 $185 

(1) Excludes amounts related to loans for which we have elected the fair value option.

(2) Represents the amount of payments received during the period, including those received while the loans were on accrual status, for the held-for-investment loans on 

non-accrual status as of period end.

The table below provides the amount of accrued interest receivable, net presented on our consolidated balance sheets and the 

amount of accrued interest receivable related to loans on non-accrual status at the end of the periods that was charged off.

Table 4.5 - Accrued Interest Receivable, Net and Related Charge-offs 

Accrued Interest Receivable, Net Accrued Interest Receivable Related Charge-offs

(In millions) December 31, 2023 December 31, 2022 Year Ended December 31, 2023 Year Ended December 31, 2022

Single-Family loans $8,833 $7,967 ($232) ($236) 

Multifamily loans 287 220 (2) — 

Credit Quality

Single-Family 

The current LTV ratio is one key factor we consider when estimating our allowance for credit losses for single-family loans. As 

current LTV ratios increase, the borrower's equity in the home decreases, which may negatively affect the borrower's ability to 

refinance (outside of our relief refinance programs) or to sell the property for an amount at or above the balance of the 

outstanding loan. 

The tables below present the amortized cost basis of single-family held-for-investment loans by current LTV ratio. Our current 

LTV ratios are estimates based on available data through the end of each period presented. 

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 157
Table 4.6 - Amortized Cost Basis of Single-Family Held-for-Investment Loans by Current LTV Ratio and Vintage

December 31, 2023

Year of Origination 

Total

(In millions) 2023 2022 2021 2020 2019 Prior

Current LTV Ratio:

 20- and 30-year or more, amortizing fixed-rate

 ≤ 60 $39,500 $93,279 $513,267 $542,449 $94,348 $411,663 $1,694,506 

 > 60 to 80 105,384 183,251 318,965 95,102 12,402 7,296 722,400 

 > 80 to 90 55,973 90,785 27,750 1,272 213 262 176,255 

 > 90 to 100 51,994 23,460 1,542 71 16 77 77,160 

 > 100 28 912 24 9 5 88 1,066 

 Total 20- and 30-year or more, amortizing fixed-rate 252,879 391,687 861,548 638,903 106,984 419,386 2,671,387 

 Current period gross charge-offs(1)

 — 12 37 43 45 243 380 

 15-year or less, amortizing fixed-rate

 ≤ 60 4,221 20,246 121,709 98,338 12,488 56,493 313,495 

 > 60 to 80 3,973 8,314 4,491 278 19 5 17,080 

 > 80 to 90 623 509 25 — — — 1,157 

 > 90 to 100 198 33 1 — — — 232 

 > 100 1 1 — — — 1 3 

 Total 15-year or less, amortizing fixed-rate 9,016 29,103 126,226 98,616 12,507 56,499 331,967 

 Current period gross charge-offs(1)

 — 1 2 1 — 2 6 

 Adjustable-rate and other

 ≤ 60 356 1,650 3,325 1,465 586 12,950 20,332 

 > 60 to 80 1,153 2,651 1,105 89 25 227 5,250 

 > 80 to 90 689 1,040 48 3 — 18 1,798 

 > 90 to 100 317 276 2 — — 8 603 

 > 100 — 16 — — — 4 20 

 Total Adjustable-rate and other 2,515 5,633 4,480 1,557 611 13,207 28,003 

 Current period gross charge-offs(1)

 — — — — — 1 1 

Total for all loan product types by current LTV ratio:

 ≤ 60 44,077 115,175 638,301 642,252 107,422 481,106 2,028,333 

 > 60 to 80 110,510 194,216 324,561 95,469 12,446 7,528 744,730 

 > 80 to 90 57,285 92,334 27,823 1,275 213 280 179,210 

 > 90 to 100 52,509 23,769 1,545 71 16 85 77,995 

 > 100 29 929 24 9 5 93 1,089 

Total Single-Family loans $264,410 $426,423 $992,254 $739,076 $120,102 $489,092 $3,031,357 

Total current period gross charge-offs(1) $— $13 $39 $44 $45 $246 $387 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 158
December 31, 2022

Year of Origination

Total

(In millions) 2022 2021 2020 2019 2018 Prior

Current LTV Ratio:

 20- and 30-year or more, amortizing fixed-rate

 ≤ 60 $66,153 $394,498 $489,315 $87,188 $38,955 $407,819 $1,483,928 

 > 60 to 80 158,421 424,141 190,167 28,991 7,870 10,426 820,016 

 > 80 to 90 79,901 90,006 4,405 569 164 419 175,464 

 > 90 to 100 86,109 8,911 397 56 24 143 95,640 

 > 100 2,568 49 6 6 5 156 2,790 

 Total 20- and 30-year or more, amortizing fixed-rate 393,152 917,605 684,290 116,810 47,018 418,963 2,577,838 

 15-year or less, amortizing fixed-rate

 ≤ 60 16,752 119,379 109,685 14,606 5,578 68,240 334,240 

 > 60 to 80 13,042 22,007 2,503 132 16 16 37,716 

 > 80 to 90 1,601 368 7 — — 1 1,977 

 > 90 to 100 570 5 — — — 1 576 

 > 100 3 — — — — 1 4 

 Total 15-year or less, amortizing fixed-rate 31,968 141,759 112,195 14,738 5,594 68,259 374,513 

 Adjustable-rate and other

 ≤ 60 1,255 2,779 1,524 634 428 15,139 21,759 

 > 60 to 80 2,322 1,956 214 76 28 445 5,041 

 > 80 to 90 1,127 186 5 1 1 34 1,354 

 > 90 to 100 836 11 — — — 14 861 

 > 100 26 — — — — 9 35 

 Total Adjustable-rate and other 5,566 4,932 1,743 711 457 15,641 29,050 

Total for all loan product types by current LTV ratio:

 ≤ 60 84,160 516,656 600,524 102,428 44,961 491,198 1,839,927 

 > 60 to 80 173,785 448,104 192,884 29,199 7,914 10,887 862,773 

 > 80 to 90 82,629 90,560 4,417 570 165 454 178,795 

 > 90 to 100 87,515 8,927 397 56 24 158 97,077 

 > 100 2,597 49 6 6 5 166 2,829 

Total Single-Family loans $430,686 $1,064,296 $798,228 $132,259 $53,069 $502,863 $2,981,401 

(1) Excludes charge-offs related to accrued interest receivable and advances of pre-foreclosure costs.

Multifamily

The table below presents the amortized cost basis of our multifamily held-for-investment loans, for which we have not elected 

the fair value option, by credit quality indicator, based on available data through the end of each period presented. These 

indicators involve significant management judgment and are defined as follows:

n	 "Pass" is current and adequately protected by the borrower's current financial strength and debt service capacity; 

n	 "Special mention" has administrative issues that may affect future repayment prospects but does not have current credit 

weaknesses. In addition, this category generally includes loans in forbearance; 

n	 "Substandard" has a weakness that jeopardizes the timely full repayment; and 

n	 "Doubtful" has a weakness that makes collection or liquidation in full highly questionable and improbable based on existing 

conditions.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 159
Table 4.7 - Amortized Cost Basis of Multifamily Held-for-Investment Loans by Credit Quality Indicator and Vintage

December 31, 2023

Year of Origination

(In millions) 2023 2022 2021 2020 2019 Prior Total

Revolving 

Loans

Category:

Pass $13,804 $17,845 $7,430 $6,345 $4,420 $3,254 $2,266 $55,364 

Special mention 20 85 28 43 294 106 — 576 

Substandard — 33 188 259 223 464 — 1,167 

Doubtful — — — — — — — — 

Total $13,824 $17,963 $7,646 $6,647 $4,937 $3,824 $2,266 $57,107 

December 31, 2022

Year of Origination

(In millions) 2022 2021 2020 2019 2018 Prior Total

Revolving 

Loans

Category:

Pass $21,854 $7,638 $6,546 $4,784 $1,077 $2,646 $1,924 $46,469 

Special mention — 39 65 232 7 113 — 456 

Substandard — 1 3 27 7 131 — 169 

Doubtful — — — — — — — — 

Total $21,854 $7,678 $6,614 $5,043 $1,091 $2,890 $1,924 $47,094 

Past Due Status

The table below presents the amortized cost basis of our single-family and multifamily held-for-investment loans, for which we 

have not elected the fair value option, by payment status. We report single-family loans in forbearance as past due during the 

forbearance period to the extent that payments are past due based on the loan's original contractual terms, irrespective of the 

forbearance plan, based on the information reported to us by our servicers. We report multifamily loans in forbearance as 

current as long as the borrower is in compliance with the forbearance agreement, including the agreed upon repayment plan, 

even if payments are past due based on the loan's original contractual terms.

Table 4.8 - Amortized Cost Basis of Held-for-Investment Loans by Payment Status

December 31, 2023

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or 

More Past Due, 

or in Foreclosure(1) Total

Three Months or 

More Past Due, 

and Accruing 

Interest

Non-Accrual 

With No 

Allowance(2)

Single-Family:

20- and 30-year or more, amortizing 

fixed-rate $2,627,763 $25,528 $5,787 $12,309 $2,671,387 $— $406 

15-year or less, amortizing fixed-rate 329,601 1,589 270 507 331,967 — 4 

Adjustable-rate and other 27,317 342 95 249 28,003 — 49 

 Total Single-Family 2,984,681 27,459 6,152 13,065 3,031,357 — 459 

 Total Multifamily 57,031 12 — 64 57,107 — 23 

Total Single-Family and Multifamily $3,041,712 $27,471 $6,152 $13,129 $3,088,464 $— $482 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 160
December 31, 2022

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or

More Past Due,

or in Foreclosure(1) Total

Three Months or 

More Past Due, 

and Accruing 

Interest

Non-Accrual 

With No 

Allowance(2)

Single-Family:

20- and 30-year or more, amortizing 

fixed-rate $2,541,057 $19,820 $4,603 $12,358 $2,577,838 $3,432 $522 

15-year or less, amortizing fixed-rate 372,065 1,590 250 608 374,513 191 9 

Adjustable-rate and other 28,262 325 88 375 29,050 30 67 

 Total Single-Family 2,941,384 21,735 4,941 13,341 2,981,401 3,653 598 

 Total Multifamily 47,039 13 — 42 47,094 — 42 

Total Single-Family and Multifamily $2,988,423 $21,748 $4,941 $13,383 $3,028,495 $3,653 $640 

(1) Includes $2.0 billion and $1.6 billion of single-family loans that were in the process of foreclosure as of December 31, 2023 and December 31, 2022, respectively.

(2) Loans with no allowance for loan losses primarily represent loans that were previously charged off and for which the amount we expect to collect is sufficiently in 

excess of the amortized cost to result in recovery of the entire amortized cost basis if the property were foreclosed upon or otherwise subject to disposition. We 

exclude the amounts of allowance for credit losses on accrued interest receivable and advances of pre-foreclosure costs when determining whether a loan has an 

allowance for credit losses.

At the instruction of FHFA, we purchase single-family loans from trusts when they reach 24 months of delinquency, except for 

loans that meet certain criteria (e.g., permanently modified or foreclosure referral), which may be purchased sooner. Many 

delinquent single-family loans are purchased from trusts before they reach 24 months of delinquency under one of the 

exceptions provided. We must obtain FHFA’s approval to implement changes to our policy to purchase loans from trusts.

When we purchase single-family or multifamily loans from the trust, we record an extinguishment of the corresponding portion 

of debt of consolidated trusts and we reclassify the loans from mortgage loans held-for-investment by consolidated trusts to 

mortgage loans held-for-investment by Freddie Mac. We purchased $5.7 billion and $11.4 billion in UPB of such loans from 

consolidated trusts during the years ended December 31, 2023 and December 31, 2022, respectively.

Loan Restructurings

In 1Q 2022, we adopted accounting guidance in ASU 2022-02 that eliminates the recognition and measurement of TDRs. Upon 

adoption of this guidance, we no longer measure an allowance for credit losses for TDRs we reasonably expect will occur, and 

we evaluate all loan restructurings according to the accounting guidance for loan refinancing and restructuring to determine 

whether the restructuring should be accounted for as a new loan or a continuation of the existing loan. We derecognize the 

existing loan and account for the restructured loan as a new loan if the effective yield on the restructured loan is at least equal 

to the effective yield for comparable loans with similar collection risks and the modifications to the original loan are more than 

minor. If a loan restructuring does not meet these conditions, we carryforward the existing loan’s amortized cost basis and 

account for the restructured loan as a continuation of the existing loan. Substantially all of our loan restructurings involving 

borrowers experiencing financial difficulty are accounted for as a continuation of the existing loan.

The discounted cash flow model we use in measuring our Single-Family allowance for credit losses forecasts cash flows we 

expect to collect using our historical experience, including the effects of our loss mitigation activities involving borrowers 

experiencing financial difficulty. When we account for a loan restructuring as a continuation of the existing loan, we update the 

loan’s effective interest rate based on the restructured terms and recognize interest income prospectively using the new 

effective rate. We also update the prepayment-adjusted effective interest rate used to discount cash flows in measuring our 

allowance for credit losses to reflect the loan’s restructured terms. As a result, subsequent to our adoption of the accounting 

guidance that eliminates the recognition and measurement of TDRs, we no longer recognize an allowance for credit losses for 

the economic concession granted to a borrower for changes in the timing and amount of contractual cash flows when a loan is 

restructured. However, because we adopted such guidance prospectively, we continue to use the loan's prepayment-adjusted 

effective interest rate just prior to the restructuring, with no adjustments made to the effective interest rate for changes in the 

timing of expected cash flows subsequent to the restructuring, for loans that were restructured and accounted for as TDRs 

prior to our adoption of the guidance and that have not been subsequently modified after our adoption of the guidance. As a 

result, we continue to measure an allowance for credit losses for the economic concession granted to a borrower for changes 

in the timing and amount of contractual cash flows for such loans.

Single-Family Loan Restructurings

We offer several types of restructurings to single-family borrowers that may result in a payment delay, interest rate reduction, 

term extension, or combination thereof. We do not offer principal forgiveness. 

We offer the following types of restructurings to single-family borrowers that result in only a payment delay:

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 161
n	 Forbearance plans - Arrangements that require reduced or no payments during a defined period that provides borrowers 

additional time to return to compliance with the original mortgage terms or to implement another type of loan workout 

option. Borrowers may exit forbearance by repaying all past due amounts thus fully reinstating the loan, paying off the loan 

in full, or entering into a repayment plan, a payment deferral plan, or a trial period plan pursuant to a loan modification. We 

offer forbearance of up to 12 months to single-family borrowers experiencing financial difficulty. Borrowers may receive an 

initial forbearance term of one to six months and, if necessary, one or more forbearance term extensions of one to six 

months, as long as the delinquency of the mortgage does not exceed 12 months. 

n	 Repayment plans - Contractual plans that allow borrowers a specific period of time to return to current status by paying 

the normal monthly payment plus additional agreed upon delinquent amounts. Repayment plans must have a term greater 

than one month and less than or equal to 12 months and the monthly repayment plan payment amount must not exceed 

150% of the contractual mortgage payment amount.

n	 Payment deferral plans - Arrangements that allow borrowers to return to current status by deferring delinquent principal 

and interest into a non-interest-bearing principal balance that is due at the earlier of the payoff date, maturity date, or sale 

of the property. The remaining mortgage term, interest rate, payment schedule, and maturity date remain unchanged, and 

no trial period plan is required. The number of months of payments deferred varies based upon the type of hardship the 

borrower is experiencing.

In addition, we also offer single-family borrowers loan modifications, which are contractual plans that may involve changing the 

terms of the loan such as payment delays, interest rate reductions, term extensions, or a combination of these items. Payment 

delays in our loan modification programs most commonly consist of adding outstanding indebtedness, such as delinquent 

interest, to the UPB of the loan, and may also include principal forbearance, in which a portion of the principal balance 

becomes non-interest-bearing and is due at the earlier of the payoff date, maturity date, or sale of the property. Our 

modification programs generally require completion of a trial period of at least three months prior to receiving the modification. 

During the loan modification trial period, borrowers make payments that are an estimate of the anticipated modified payment 

amount, which is generally lower than the amount required by the loan's original contractual terms. As a result, loans in these 

modifications are granted a delay in the payment due under the original contractual terms during the trial period. We continue 

to report single-family loans in loan modification trial period plans as delinquent to the extent that payments are past due based 

on the loan’s original contractual terms. The amortized cost basis of loans in trial period modification plans was $1.7 billion and 

$1.3 billion as of December 31, 2023 and December 31, 2022, respectively. Most of these loans are 20- and 30-year or more, 

amortizing fixed-rate loans. 

Most of our modifications involve a combination of: (1) a payment delay in the form of adding outstanding indebtedness to the 

UPB of the loan and (2) an interest rate reduction, a term extension, or both.

For purposes of the disclosure related to single-family loan restructurings involving borrowers experiencing financial difficulty, 

we exclude loans that were held-for-sale either at the time of restructuring or at the period end. The table below presents the 

amortized cost basis of single-family held-for-investment loan restructurings involving borrowers experiencing financial difficulty 

that we entered into during the periods presented. 

Table 4.9 - Single-Family Loan Restructurings Involving Borrowers Experiencing Financial Difficulty(1)

2023

(Dollars in millions)

Payment 

Delay(2)

Payment Delay 

and Term 

Extension

Payment Delay, 

Term Extension, 

and Interest Rate 

Reduction Total

Total as % of 

Class of 

Financing 

Receivable(3)

Single-Family:

20- and 30-year or more, amortizing fixed-rate $16,774 $4,051 $128 $20,953 0.8 %

15-year or less, amortizing fixed-rate 798 — — 798 0.2 

Adjustable-rate and other 179 19 5 203 0.7 

Total Single-Family loan restructurings $17,751 $4,070 $133 $21,954 0.7 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 162
2022

(Dollars in millions)

Payment 

Delay(2)

Payment Delay 

and Term 

Extension

Payment Delay, 

Term Extension, 

and Interest Rate 

Reduction Total

Total as % of 

Class of 

Financing 

Receivable(3)

Single-Family:

20- and 30-year or more, amortizing fixed-rate $21,968 $2,810 $6,699 $31,477 1.2 %

15-year or less, amortizing fixed-rate 1,318 16 1 1,335 0.4 

Adjustable-rate and other 386 38 104 528 1.8 

Total Single-Family loan restructurings $23,672 $2,864 $6,804 $33,340 1.1 

(1) Type of loan restructurings reflects the cumulative effects of the loan restructurings received during the period. Includes loan modifications in the period in which 

the borrower completes the trial period and the loan is permanently modified.

(2) Includes $8.3 billion and $12.5 billion related to payment deferral plans for 2023 and 2022, respectively. Also includes forbearance plans, repayment plans, and 

loan modifications that only involve payment delays.

(3) Based on the amortized cost basis as of period end, divided by the total period-end amortized cost basis of the corresponding financing receivable class of singlefamily held-for-investment loans.

The table below shows the financial effect of single-family held-for-investment loan restructurings involving borrowers 

experiencing financial difficulty that we entered into during the periods presented.

Table 4.10 – Financial Effects of Single-Family Loan Restructurings Involving Borrowers Experiencing Financial 

Difficulty(1)

2023

(Dollars in thousands)

Weighted-Average 

Interest Rate 

Reduction

Weighted-Average 

Months of Term 

Extension

Weighted-Average 

Payment Deferral or 

Principal 

Forbearance(2)

Single-Family:

20- and 30-year or more, amortizing fixed-rate 1.0 % 175 $16 

15-year or less, amortizing fixed-rate — 0 15 

Adjustable-rate and other 1.6 202 17 

2022

(Dollars in thousands)

Weighted-Average 

Interest Rate 

Reduction

Weighted-Average 

Months of Term 

Extension

Weighted-Average 

Payment Deferral or 

Principal 

Forbearance(2)

Single-Family:

20- and 30-year or more, amortizing fixed-rate 1.4 % 187 $21 

15-year or less, amortizing fixed-rate 0.6 356 23 

Adjustable-rate and other 2.3 223 26 

(1) Averages are based on payment deferral plans and loan modifications completed during the periods presented. The financial effects of forbearance plans and 

repayment plans consist of a payment delay of between one and twelve months. In addition, the financial effect of a forbearance plan is included at the time the 

forbearance plan is completed if the borrower exits forbearance by entering into a payment deferral plan or loan modification.

(2) Primarily related to payment deferral plans. Amounts are based on non-interest-bearing principal balances on the restructured loans.

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 163
The following table provides the amortized cost basis of single-family held-for-investment loans that had a payment default (i.e.,

loans that became two months delinquent) during the periods presented and had been restructured within the previous 12 

months preceding the payment default, when the borrower was experiencing financial difficulty at the time of the restructuring. 

Since we adopted ASU 2022-02 prospectively, single-family held-for-investment loans that were restructured prior to January 

1, 2022, the date we adopted such guidance, have been excluded from the disclosures related to loan restructurings.

Table 4.11 - Subsequent Defaults of Single-Family Restructured Loans Involving Borrowers Experiencing Financial 

Difficulty(1)

2023

(In millions) Payment Delay

Payment Delay 

and Term 

Extension

Payment Delay, Term 

Extension, and Interest 

Rate Reduction Total

Single-Family:

20- and 30-year or more, amortizing fixed-rate $2,488 $905 $302 $3,695 

15-year or less, amortizing fixed-rate 97 — — 97 

Adjustable-rate and other 30 6 6 42 

Total Single-Family $2,615 $911 $308 $3,834 

2022

(In millions) Payment Delay

Payment Delay 

and Term 

Extension

Payment Delay, Term 

Extension, and Interest 

Rate Reduction Total

Single-Family:

20- and 30-year or more, amortizing fixed-rate $1,746 $215 $408 $2,369 

15-year or less, amortizing fixed-rate 95 — — 95 

Adjustable-rate and other 39 5 6 50 

Total Single-Family $1,880 $220 $414 $2,514 

(1) Excludes forbearance plans and repayment plans as borrowers are typically past due based on the loan's original contractual terms at the time the borrowers enter 

into these plans.

The following table provides the single-family held-for-investment loan performance in the 12 months after a restructuring

involving borrowers experiencing financial difficulty. While a single-family loan is in a forbearance plan or repayment plan, 

payments continue to be due based on the loan’s original contractual terms because the loan has not been permanently 

modified. As a result, we report single-family loans in forbearance plans and repayment plans as delinquent to the extent that 

payments are past due based on the loan’s original contractual terms. Loans that have been restructured by entering into a 

payment deferral plan or loan modification are reported as delinquent to the extent that payments are past due based on the 

loan's restructured terms.

Table 4.12 - Amortized Cost Basis of Single-Family Restructured Loans Involving Borrowers Experiencing Financial 

Difficulty by Payment Status

December 31, 2023

(In millions) Current

One Month 

Past Due

Two Months 

Past Due

Three Months 

or More Past 

Due Total

Single-Family:

20- and 30-year or more, amortizing fixed-rate $11,000 $2,619 $1,525 $5,809 $20,953 

15-year or less, amortizing fixed-rate 432 88 57 220 797 

Adjustable-rate and other 101 23 17 63 204 

Total Single-Family $11,533 $2,730 $1,599 $6,092 $21,954 

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 164
December 31, 2022

(In millions) Current

One Month 

Past Due

Two Months 

Past Due

Three Months 

or More Past 

Due Total

Single-Family:

20- and 30-year or more, amortizing fixed-rate $19,766 $2,819 $1,973 $6,919 $31,477 

15-year or less, amortizing fixed-rate 781 124 91 339 1,335 

Adjustable-rate and other 328 35 26 139 528 

Total Single-Family $20,875 $2,978 $2,090 $7,397 $33,340 

Multifamily Loan Restructurings

We offer several types of restructurings to multifamily borrowers that may result in a payment delay, interest rate reduction, 

term extension, principal forgiveness, or combination thereof. In certain cases, we offer multifamily borrowers forbearance 

plans that allow borrowers to defer monthly payments during a defined period. After the forbearance period ends, the 

borrowers are required to repay forborne loan amounts in monthly installments. In addition, in certain cases, for maturing loans 

we may provide term extensions with no changes to the effective borrowing rate. In other cases, we may make more significant 

modifications of terms for borrowers experiencing financial difficulty, such as interest rate reductions, term extensions, principal 

forbearance and/or forgiveness, or some combination of these items. There were no restructuring activities related to 

multifamily held-for-investment loans involving borrowers experiencing financial difficulty during 2023 and 2022.

Prior Period Troubled Debt Restructuring Information

Prior to the adoption of ASU 2022-02, a modification to the contractual terms of a loan that resulted in granting a concession to 

a borrower experiencing financial difficulties was considered a TDR. A concession was deemed granted when, as a result of the 

restructuring, we did not expect to collect all amounts due, including interest accrued, at the original contractual interest rate. 

As appropriate, we also considered other qualitative factors in determining whether a concession was deemed granted, 

including whether the borrower's modified interest rate was consistent with that of a non-troubled borrower. We did not 

consider restructurings that resulted in an insignificant delay in payment to be a concession. We generally considered a delay in 

monthly amortizing payments of three months or less to be insignificant. 

We elected to suspend TDR accounting for eligible modifications under Section 4013 of the CARES Act during the period 

beginning on March 1, 2020 and ending on January 1, 2022. 

Prior to the adoption of ASU 2022-02, we measured an allowance for credit losses for TDRs we reasonably expected to occur 

and recognized an allowance for credit losses for the economic concession granted to a borrower for changes in the timing and 

amount of contractual cash flows when a loan was restructured. We reported single-family loans with modifications that were 

classified as TDRs based on the original product categories of the loans before modifications. The tables below include loans 

that were reclassified from held-for-investment to held-for-sale after TDR modifications.

The table below provides details of our single-family loan modifications that were classified as TDRs during the period

presented. 

Table 4.13 - Single-Family TDR Modification Metrics 

2021

Percentage of single-family loan modifications that were classified as TDRs with:

 Interest rate reductions and related term extensions 13% 

 Principal forbearance and related interest rate reductions and term extensions 33 

Average coupon interest rate reduction 0.4 %

Average months of term extension 155

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 165
The table below presents the volume of single-family and multifamily loans that were newly classified as TDRs during the period

presented. Loans classified as a TDR in one period may be subject to further action (such as a modification or remodification) in 

a subsequent period. In such cases, the subsequent action would not be reflected in the table below since the loan would 

already have been classified as a TDR. 

Table 4.14 - TDR Activity

2021

(Dollars in millions) Number of Loans Post-TDR Amortized Cost Basis

Single-Family(1)(2):

20- and 30-year or more, amortizing fixed-rate 13,448 $2,368 

15-year or less, amortizing fixed-rate 1,620 167 

Adjustable-rate and other 680 96 

Total Single-Family 15,748 2,631 

Multifamily — — 

(1) The pre-TDR amortized cost basis for single-family loans initially classified as TDRs during the year ended December 31, 2021 was $2.6 billion.

(2) Includes certain bankruptcy events and forbearance plans, repayment plans, payment deferral plans, and modification activities that did not qualify for the temporary 

relief related to TDRs provided by the CARES Act, based on servicer reporting at the time of the TDR event.

The table below presents the volume of our TDR modifications that experienced payment defaults (i.e., loans that became two 

months delinquent or completed a loss event) during the applicable period and had completed a modification during the year 

preceding the payment default. 

Table 4.15 - Payment Defaults of Completed TDR Modifications

2021

(Dollars in millions) Number of Loans Post-TDR Amortized Cost Basis

Single-Family:

20- and 30-year or more, amortizing fixed-rate 3,044 $535 

15-year or less, amortizing fixed-rate 121 13 

Adjustable-rate and other 367 58 

Total Single-Family 3,532 606 

Multifamily — — 

Non-Cash Investing and Financing Activities 

During the years ended December 31, 2023, December 31, 2022, and December 31, 2021, we acquired $215 billion, $396.7 

billion, and $705.4 billion, respectively, of loans held-for-investment in exchange for the issuance of debt of consolidated trusts 

in guarantor swap transactions. We received approximately $96.3 billion, $174.6 billion, and $263.9 billion of loans held-forinvestment from sellers during the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively, 

to satisfy advances to lenders that were recorded in other assets on our consolidated balance sheets. 

Financial Statements Notes to Consolidated Financial Statements | Note 4

FREDDIE MAC | 2023 Form 10-K 166
NOTE 5 

Guarantees and Other Off-Balance Sheet Credit Exposures

Our guarantee activities primarily consist of mortgage-related guarantees in which we agree to absorb the credit risk of 

mortgage loans or other mortgage-related assets. In exchange for providing this guarantee, we receive an upfront or ongoing 

guarantee fee that is designed to be commensurate with the risks assumed and that will, over the long-term, provide us with 

cash flows that are expected to exceed the credit-related and administrative expenses of the underlying financial instruments. 

The profitability of our guarantee activities may vary and will depend on a number of factors, including our guarantee fee and 

the actual credit performance of the underlying financial instruments that we have guaranteed.

We do not separately recognize guarantees to consolidated VIEs as we have already recognized the assets and liabilities of 

those VIEs on our consolidated balance sheets. When we issue a guarantee to a nonconsolidated VIE or other third party that 

exposes us to incremental credit risk, we recognize both a guarantee obligation at fair value and the consideration we receive 

for providing the guarantee, which typically consists of a guarantee asset that represents the fair value of future guarantee fees. 

As a practical expedient, the measurement of the fair value of the guarantee obligation is set equal to the consideration we 

receive to provide the guarantee, and no gain or loss is recognized upon issuance of the guarantee. Subsequently, we 

recognize changes in the fair value of the guarantee asset in current period earnings and amortize the guarantee obligation into 

earnings as we are released from risk under the guarantee. We also recognize an allowance for expected credit losses over the 

contractual period in which we are exposed to credit risk. See Note 6 for additional information on our allowance for credit 

losses on financial guarantees and other off-balance sheet credit exposures.

Guarantee Activities

Mortgage-Related Guarantees

Nonconsolidated Securitization Products

The majority of our mortgage-related guarantees involve securitizations of multifamily mortgage loans where we do not 

consolidate the securitization trust. In these transactions, we guarantee the principal and interest payments on the senior 

classes of beneficial interests issued by the securitization trust(s). Our maximum exposure on these guarantees is generally 

limited to the UPB of the beneficial interests that we have guaranteed. We have credit protection in the form of subordination 

that will absorb losses prior to us having to absorb losses under our guarantee, thereby reducing our expected credit losses 

related to such guarantees. See Note 3 for additional information on nonconsolidated VIEs.

Other Mortgage-Related Guarantees

In certain circumstances, we provide a credit guarantee of mortgage-related assets held by third parties, in exchange for a 

guarantee fee, without securitizing those assets. These guarantees consist of the following:

n	 Long-term standby commitments of single-family loans which obligate us to purchase the covered loans when they 

become seriously delinquent. Periodically, certain of our customers seek to terminate long-term standby commitments and 

simultaneously enter into guarantor swap transactions to obtain our securities backed by many of the same loans. 

n	 Guarantees of the timely payment of principal and interest for certain multifamily bonds, which primarily consist of 

multifamily housing revenue bonds that were issued by HFAs. 

Our maximum exposure on these guarantees is limited to the UPB of the mortgage-related assets that we have guaranteed.

Guarantees of Fannie Mae Securities

We have the ability to commingle TBA-eligible Fannie Mae collateral in certain of our resecuritization products. We extend our 

guarantee of these products to cover principal and interest that are payable from the underlying Fannie Mae collateral. Because 

both Freddie Mac and Fannie Mae are under the common control of FHFA, and due to Fannie Mae’s status as a GSE and the 

funding commitment available to it through its senior preferred stock purchase agreement with Treasury, we view the likelihood 

of being required to perform on our guarantee of Fannie Mae collateral as remote. See Note 3 for additional information on 

guarantees of Fannie Mae securities.

The table below presents information about our mortgage-related guarantees and guarantees of Fannie Mae securities, 

including the UPB of the loans or securities underlying the guarantee, the maximum potential amount of future payments that 

we could be required to make under the guarantee, the liability we have recognized on our consolidated balance sheets for the 

guarantee, and the maximum remaining term of the guarantee. This table does not include our unrecognized guarantees, such 

as guarantees to consolidated VIEs or to resecuritization trusts that do not expose us to incremental credit risk. We do not 

Financial Statements Notes to Consolidated Financial Statements | Note 5

FREDDIE MAC | 2023 Form 10-K 167
believe the potential amount of future payments we could be required to make is representative of the actual payments we will 

be required to make or the actual loss we are likely to incur, based on our historical loss experience and after consideration of 

proceeds from related collateral liquidation, including possible recoveries under credit enhancements.

Table 5.1 - Financial Guarantees

December 31, 2023

(Dollars in millions, terms in years) UPB Maximum Exposure

Recognized 

Liability(1)

Maximum Remaining 

Term

Single-Family mortgage-related guarantees:

Nonconsolidated securitization products(2) $30,289 $24,600 $382 40

Other mortgage-related guarantees 8,692 8,692 161 28

Total Single-Family mortgage-related guarantees 38,981 33,292 543 

Multifamily mortgage-related guarantees:

Nonconsolidated securitization products(2)(3) $360,928 $321,262 $4,577 36

Other mortgage-related guarantees 10,761 10,761 383 35

Total Multifamily mortgage-related guarantees 371,689 332,023 4,960 

Guarantees of Fannie Mae securities(4) $110,320 $110,320 $— 38

Other 117 468 — 30

December 31, 2022

(Dollars in millions, terms in years) UPB Maximum Exposure

Recognized 

Liability(1)

Maximum Remaining 

Term

Single-Family mortgage-related guarantees:

Nonconsolidated securitization products(2) $31,604 $25,772 $391 40

Other mortgage-related guarantees 9,476 9,476 203 29

Total Single-Family mortgage-related guarantees 41,080 35,248 594 

Multifamily mortgage-related guarantees:

Nonconsolidated securitization products(2)(3) $360,869 $319,117 $4,889 37

Other mortgage-related guarantees 10,510 10,510 379 36

Total Multifamily mortgage-related guarantees 371,379 329,627 5,268 

Guarantees of Fannie Mae securities(4) $119,267 $119,267 $— 39

Other 185 435 — 29

(1) Excludes allowance for credit losses on off-balance sheet credit exposures. See Note 6 for additional information on our allowance for credit losses on off-balance 

sheet credit exposures.

(2) Maximum exposure is based on remaining UPB of the guaranteed securities issued by the VIE. 

(3) Includes UPB of $0.3 billion and $0.4 billion as of December 31, 2023 and December 31, 2022, respectively, related to VIEs in which our interest would no longer 

absorb significant variability as the guaranteed securities have completely paid off. In addition, includes guarantees that are accounted for as derivatives with UPB of 

$2.1 billion as of both December 31, 2023 and December 31, 2022.

(4) Excludes $0.1 billion as of both December 31, 2023 and December 31, 2022, of Fannie Mae securities that we have guaranteed that are included in resecuritization 

trusts that we have consolidated as we own all of the outstanding securities issued by the VIE.

Financial Statements Notes to Consolidated Financial Statements | Note 5

FREDDIE MAC | 2023 Form 10-K 168
The table below presents the payment status of the mortgage loans underlying our mortgage-related guarantees.

Table 5.2 – UPB of Loans Underlying Our Mortgage-Related Guarantees by Payment Status

December 31, 2023

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or

More Past Due,

or in Foreclosure Total

Single-Family $34,524 $2,172 $827 $1,458 $38,981 

Multifamily 369,785 850 98 956 371,689 

Total $404,309 $3,022 $925 $2,414 $410,670 

December 31, 2022

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or

More Past Due,

or in Foreclosure Total

Single-Family $36,241 $2,072 $748 $2,019 $41,080 

Multifamily 370,911 23 12 433 371,379 

Total $407,152 $2,095 $760 $2,452 $412,459 

Other Guarantees

We also enter into certain transactions that are accounted for as derivative instruments and are also considered guarantees 

under GAAP. These transactions include our obligation to make certain payments to VIEs to support payment of the interest 

due on the notes issued by those VIEs in certain CRT transactions, certain interest-rate guarantees related to our securitization 

and resecuritization products, certain market value guarantees, and guarantees of third-party derivative instruments. These 

transactions generally provide for no limitation on the maximum potential future payments under the guarantee, and we 

generally reduce our exposure to such guarantees through separate derivative contracts with third parties. The approximate 

remaining term of these guarantees varies and in many cases is based on the maturity of the underlying mortgage loans. See 

Note 9 for additional information on derivative instruments.

Indemnifications

In connection with certain business transactions, we may provide indemnification to counterparties for claims arising out of 

breaches of certain obligations (e.g., those arising from representations and warranties) in contracts entered into in the normal 

course of business. Our assessment is that the risk of any material loss from such a claim for indemnification is remote and 

there are no significant probable and estimable losses associated with these contracts. In addition, we provided indemnification 

for litigation defense costs to certain former officers who are subject to ongoing litigation. See Note 17 for information on 

ongoing litigation. The recognized liabilities on our consolidated balance sheets related to indemnifications were not significant 

at both December 31, 2023 and December 31, 2022.

Other Off-Balance Sheet Credit Exposures

In addition to our guarantees, we enter into other agreements that expose us to off-balance sheet credit risk. These agreements 

may require us to transfer cash before or upon settlement of our contractual obligation. We recognize an allowance for credit 

losses for those agreements not measured at fair value or otherwise recognized in the financial statements. Most of these 

commitments expire in less than one year. See Note 6 for additional discussion of our allowance for credit losses on our offbalance sheet credit exposures. 

Financial Statements Notes to Consolidated Financial Statements | Note 5

FREDDIE MAC | 2023 Form 10-K 169
The table below presents our other off-balance sheet credit exposures.

Table 5.3 - Other Off-Balance Sheet Credit Exposures

(In millions) December 31, 2023 December 31, 2022

Mortgage loan purchase commitments(1) $10,378 $9,609 

Unsettled securities purchased under agreements to resell, net(2) 22,276 15,890 

Other commitments(3) 4,701 6,403 

Total $37,355 $31,902 

(1) Includes $1.9 billion and $0.5 billion of commitments for which we have elected the fair value option as of December 31, 2023 and December 31, 2022, 

respectively. Excludes mortgage loan purchase commitments accounted for as derivative instruments. See Note 9 for additional information on commitments 

accounted for as derivative instruments.

(2) Net of $4.0 billion and $5.6 billion of unsettled securities sold under agreements to repurchase as of December 31, 2023 and December 31, 2022, respectively.

(3) Consists of unfunded portion of revolving lines of credit, liquidity guarantees, and other commitments.

Financial Statements Notes to Consolidated Financial Statements | Note 5

FREDDIE MAC | 2023 Form 10-K 170
NOTE 6

Allowance for Credit Losses

For financial assets measured at amortized cost, we recognize an allowance for credit losses that is deducted from or added to 

the amortized cost basis of the financial asset to present the net amount expected to be collected on the financial asset on the 

balance sheet. In 1Q 2022, we adopted accounting guidance that eliminates the recognition and measurement of TDRs. Upon 

adoption of this guidance, we no longer incorporate the expected credit losses for TDRs we reasonably expect will occur in our 

estimation of the allowance for credit losses. See Note 4 for additional information on the adoption of the new accounting 

guidance.

The table below summarizes changes in our allowance for credit losses. 

Table 6.1 - Details of the Allowance for Credit Losses 

December 31, 2023 December 31, 2022 December 31, 2021

(In millions) 

SingleFamily Multifamily TotalSingleFamily Multifamily TotalSingleFamily Multifamily Total

Beginning balance $7,746 $147 $7,893 $5,440 $78 $5,518 $6,353 $200 $6,553 

Provision (benefit) for 

credit losses (1,172) 300 (872) 1,772 69 1,841 (919) (122) (1,041) 

Charge-offs (643) — (643) (505) — (505) (1,107) — (1,107) 

Recoveries collected 144 — 144 148 — 148 197 — 197 

Other(1) 327 — 327 891 — 891 916 — 916 

Ending balance $6,402 $447 $6,849 $7,746 $147 $7,893 $5,440 $78 $5,518 

Components of the ending balance of the allowance for credit losses:

Mortgage loans held-forinvestment $6,057 $326 $6,383 $7,314 $77 $7,391 $4,913 $34 $4,947 

Other(2) 345 121 466 432 70 502 527 44 571 

Total ending balance $6,402 $447 $6,849 $7,746 $147 $7,893 $5,440 $78 $5,518 

(1) Primarily includes capitalization of past due interest related to non-accrual loans that received payment deferral plans and loan modifications.

(2) Primarily includes allowance for credit losses related to advances of pre-foreclosure costs and off-balance sheet credit exposures.

n 2023 vs. 2022 - The benefit for credit losses for 2023 was primarily driven by a credit reserve release in Single-Family due 

to improvements in house prices. The provision for credit losses for 2022 was primarily driven by a credit reserve build in 

Single-Family due to deterioration in house prices.

n	 2022 vs. 2021 - A provision for credit losses for 2022 compared to a benefit for credit losses for 2021 primarily driven by a 

credit reserve build in Single-Family due to deterioration in house prices. 

In addition, charge-offs increased in 2023 compared to 2022 due to a higher volume of transfers of single-family loans from 

held-for-investment to held-for-sale and the lower fair value of these loans as a result of higher mortgage interest rates. Chargeoffs decreased in 2022 compared to 2021 due to a decrease in charge-offs of accrued interest receivable during 2022. 

Allowance for Credit Losses Methodology

We recognize changes in the allowance for credit losses through provision or benefit for credit losses on our consolidated 

statements of income.

Mortgage Loans Held-for-Investment

Our allowance for credit losses on mortgage loans pertains to single-family and multifamily loans classified as held-forinvestment for which we have not elected the fair value option. We measure the allowance for credit losses on a pooled basis 

when our loans share similar risk characteristics. We record charge-offs in the period in which a loan is deemed uncollectible. 

Proceeds received in excess of amounts previously written off are recorded as a decrease to non-interest expense on our 

consolidated statements of income. 

Single-Family

We estimate the allowance for credit losses for single-family loans on a pooled basis using a discounted cash flow model that 

evaluates a variety of factors to estimate the cash flows we expect to collect. If we determine that foreclosure on the underlying 

Financial Statements Notes to Consolidated Financial Statements | Note 6

FREDDIE MAC | 2023 Form 10-K 171
collateral is probable, we measure the allowance for credit losses for single-family loans based upon the fair value of the 

collateral, less costs to sell, adjusted for estimated proceeds from credit enhancements that are not freestanding contracts. 

The discounted cash flow model we use to estimate the single-family loan allowance for credit losses forecasts cash flows over 

the loan’s remaining contractual term, adjusted for expectations of prepayments. As a result, we do not revert to historical loss 

information for single-family loans. Cash flow estimates are discounted at the loan’s prepayment-adjusted effective interest 

rate, which is adjusted for projections in the underlying benchmark interest rate for adjustable-rate loans. We project cash flows 

we expect to collect using our historical experience, such as historical default rates and severity of loss, based on loan 

characteristics, such as current LTV ratios, delinquency status, geography, and borrowers' credit scores. These cash flow 

estimates are adjusted for current and forecasted economic conditions, such as current and forecasted interest rates and 

house price growth rates, and estimated recoveries from loss mitigation activities, credit enhancements that are not 

freestanding contracts, and disposition of collateral, less estimated disposition costs. 

Our estimate of expected credit losses is sensitive to changes in forecasted house price growth rates, which affect both the 

probability of default and severity of expected credit losses, and changes in forecasted interest rates, as declining (increasing) 

interest rates typically result in higher (lower) expected prepayments and a shorter (longer) estimated loan life, and therefore 

lower (higher) expected credit losses. Our forecast of house price growth rates leverages an internally based model and uses a 

nationwide house price growth forecast for the next three years. A Monte Carlo simulation generates many possible house 

price scenarios for up to 40 years for each MSA. These scenarios are used to estimate loan-level expected future cash flows 

and credit losses based on each loan’s individual characteristics. Our forecast of interest rates incorporates various interest 

rate scenarios over the remaining contractual life of the loan based on current interest rates and implied market volatilities. 

These projections require significant management judgment. We rely on third parties to provide certain model inputs used in 

our projections. At loan delivery, the seller provides us with loan data, which includes borrower and loan characteristics and 

underwriting information. Each subsequent month, the servicers provide us with monthly loan-level servicing data, including 

delinquency and loss information.

We review the outputs of our model by considering qualitative factors such as current economic events and other external 

factors to determine whether the model outputs are consistent with our expectations. Further management adjustments may be 

necessary to take into consideration the qualitative factors that have occurred but that are not yet reflected in the factors used 

to derive the model outputs or the uncertainty inherent in our projections. Significant judgment is exercised in making these 

adjustments.

Credit enhancements that are not freestanding contracts are obtained contemporaneously with, and in contemplation of, the 

origination of a financial instrument, and effectively travel with the financial instrument upon sale. Credit enhancements that are 

not freestanding contracts include primary mortgage insurance, which provides us with loan-level protection up to a specified 

percentage.

Expected recoveries from credit enhancements that are not freestanding contracts are considered in determining the allowance 

for loan losses as discussed above, resulting in a reduction in the recognized provision for credit losses by the amount of the 

expected recoveries. Subsequent to foreclosure and charge-off of the allowance for credit losses, we reclassify expected 

recoveries from credit enhancements that were not freestanding contracts and were previously offset against the allowance for 

credit losses as separate receivables. We do not consider potential recoveries from freestanding credit enhancement contracts 

when measuring our allowance for credit losses.

Multifamily

We estimate the allowance for credit losses for multifamily loans using a loss-rate method to estimate the net amount of cash 

flows we expect to collect. The loss-rate method is based on a probability of default and loss given default framework that 

estimates credit losses by considering a loan’s underlying characteristics and current and forecasted economic conditions. 

Loan characteristics considered by our model include vintage, loan term, current DSCR, current LTV ratio, occupancy rate, and 

interest rate hedges. We generally forecast economic conditions over a reasonable and supportable two-year period prior to 

reverting to historical averages at the model input level over a five-year period, using a linear reversion method. We also 

consider as model inputs expected prepayments, contractually specified extensions, expected recoveries from collateral 

posting requirements, and the expected recoveries from credit enhancements that are not freestanding contracts.

Our loss rates incorporate published historical commercial loan performance data, which we calibrate for differences between 

that data and our portfolio experience. Except for cases of fraud and certain other types of borrower defaults, most multifamily 

loans are nonrecourse to the borrower. As a result, the cash flows of the underlying property (including any credit 

enhancements that are not freestanding contracts) serve as the primary source of funds for repayment of the loan. For loans 

where we determined that the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided 

substantially through the operation or sale of the collateral, we measure the allowance for credit losses using the fair value of 

the underlying collateral, less estimated costs to sell, adjusted for estimated proceeds from credit enhancements that are not 

freestanding contracts. Factors considered by management in determining whether a borrower is experiencing financial 

difficulty include the borrower’s current payment status and an evaluation of the underlying property's operating performance 

Financial Statements Notes to Consolidated Financial Statements | Note 6

FREDDIE MAC | 2023 Form 10-K 172
as represented by its current DSCR, its available credit enhancements, the current LTV ratio, the management of the underlying 

property, and the property's geographic location.

We review the outputs of our model considering qualitative factors such as current economic events and other external factors 

to determine whether the model outputs are consistent with our expectations. Further management adjustments may be 

necessary to take into consideration the qualitative factors that have occurred but that are not yet reflected in the factors used 

to derive the model outputs.

Advances of Pre-foreclosure Costs 

We may incur expenses related to a mortgage loan subsequent to its original acquisition but prior to foreclosure (preforeclosure costs). These expenses are incurred generally to protect or preserve our interest or legal right in or to the property 

prior to foreclosure, such as property taxes or homeowner's insurance premiums owed by the borrower. Many of these 

expenses are advanced by the servicer and are reimbursable from the borrower. If the borrower ultimately defaults, we 

reimburse the servicer for the advances it has made. Upon advance by the servicer, we recognize a receivable for the amounts 

due from the borrower and a payable for amounts due to the servicer. We recognize an allowance for credit losses for amounts 

that we do not ultimately expect to collect from the borrower. 

Off-Balance Sheet Credit Exposures 

We recognize an allowance for credit losses on off-balance sheet credit exposures for our guarantees that are not measured at 

fair value and other off-balance sheet arrangements based on expected credit losses over the contractual period in which we 

are exposed to credit risk through a present contractual obligation to extend credit, unless that obligation is unconditionally 

cancellable by us. We include this allowance for credit losses on off-balance sheet credit exposures within other liabilities on 

our consolidated balance sheets, with changes recognized through provision or benefit for credit losses on our consolidated 

statements of income.

Our methodologies for estimating the allowance for credit losses on off-balance sheet credit exposures for our Single-Family 

and Multifamily guarantees are generally consistent with our methodologies for estimating the allowance for credit losses for 

single-family mortgage loans and multifamily mortgage loans, respectively. 

We obtain credit enhancements for certain of our guarantees through the creation of unguaranteed subordinated securities 

issued by nonconsolidated securitization trusts that absorb first losses prior to us having to perform on our guarantee of the 

senior securities. We consider the effect of subordination and other credit enhancements that are not freestanding contracts 

when measuring the allowance for credit losses on off-balance sheet credit exposures and, as a result, recognize such an 

allowance only if expected credit losses exceed the remaining amount of subordination. For many of our guarantees, expected 

credit losses do not exceed the remaining amount of subordination. We have not recorded an allowance for credit losses on 

our guarantees of Fannie Mae securities due to the support provided to Fannie Mae by the U.S. government, the importance of 

Fannie Mae to the liquidity and stability of the U.S. housing market, and the long history of zero credit losses on Fannie Mae 

securities.

Financial Statements Notes to Consolidated Financial Statements | Note 6

FREDDIE MAC | 2023 Form 10-K 173
NOTE 7

Investment Securities

The table below summarizes the fair values of our investments in debt securities by classification.

Table 7.1 - Investment Securities

(In millions) December 31, 2023 December 31, 2022

Trading securities $38,385 $32,167 

Available-for-sale securities 4,890 6,534 

Total fair value of investment securities $43,275 $38,701 

We currently classify and account for our securities as either available-for-sale or trading. Securities classified as trading are 

reported at fair value with changes in fair value included in investment gains, net, in our consolidated statements of income. 

Securities classified as available-for-sale are reported at fair value with changes in fair value included in AOCI, net of taxes. See 

Note 16 for additional information on how we determine the fair value of securities.

We generally record purchases and sales of non-mortgage-related securities on the trade date. We generally record purchases 

and sales of mortgage-related securities on the expected settlement date, with a corresponding derivative recorded on the 

trade date.

We generally recognize interest income using the effective interest method, which considers the contractual terms of the 

security. Deferred items, including premiums, discounts, and other basis adjustments, are amortized into interest income over 

the contractual lives of the securities.

We recognize interest income using the prospective effective interest method for securities that can contractually be prepaid or 

otherwise settled in such a way that we may not recover substantially all of our recorded investment. Under this method, we 

recognize as interest income, over the expected life of the securities, the excess of the cash flows expected to be collected 

over the securities' carrying value. We update our estimates of expected cash flows periodically and recognize changes in the 

calculated effective interest rate on a prospective basis.

We classify the cash flows related to both available-for-sale and trading securities as investing activities because we hold these 

securities for investment purposes. In cases where the transfer of a security represents a secured borrowing, we classify the 

related cash flows as financing activities.

Trading Securities

The table below presents the fair values of our trading securities by major security type. Our non-mortgage-related securities 

primarily consist of investments in U.S. Treasury securities. 

Table 7.2 - Trading Securities

(In millions) December 31, 2023 December 31, 2022

Mortgage-related securities $8,113 $8,334 

Non-mortgage-related securities 30,272 23,833 

Total fair value of trading securities $38,385 $32,167 

The table below provides details of our net trading gains (losses).

Table 7.3 - Net Trading Gains (Losses)

Year Ended December 31,

(In millions) 2023 2022 2021

Net trading gains (losses) $440 ($3,531) ($2,394) 

Less: Net trading gains (losses) on securities sold 105 (1,685) (1,805) 

Net trading gains (losses) recognized during the period related to securities still held at period end $335 ($1,846) ($589) 

Financial Statements Notes to Consolidated Financial Statements | Note 7

FREDDIE MAC | 2023 Form 10-K 174
Available-for-Sale Securities

At both December 31, 2023 and December 31, 2022, all available-for-sale securities were mortgage-related securities.

The table below provides details of the securities classified as available-for-sale on our consolidated balance sheets.

Table 7.4 - Available-for-Sale Securities

December 31, 2023

Amortized

Cost

Basis

Gross Unrealized 

Gains in Other 

Comprehensive 

Income

Gross Unrealized

Losses in Other 

Comprehensive 

Income Fair Value

Accrued Interest 

(In millions) Receivable

Agency mortgage-related securities $4,467 $13 ($110) $4,370 $10 

Other mortgage-related securities 340 188 (8) 520 3 

Total available-for-sale securities $4,807 $201 ($118) $4,890 $13 

December 31, 2022

Amortized

Cost

Basis

Gross Unrealized 

Gains in Other 

Comprehensive 

Income

Gross Unrealized

Losses in Other 

Comprehensive 

Income Fair Value

Accrued Interest 

(In millions) Receivable

Agency mortgage-related securities $6,215 $6 ($301) $5,920 $12 

Other mortgage-related securities 429 188 (3) 614 3 

Total available-for-sale securities $6,644 $194 ($304) $6,534 $15 

The fair value of our available-for-sale securities held at December 31, 2023 scheduled to contractually mature after ten years 

was $1.4 billion, with an additional $2.4 billion scheduled to contractually mature after five years through ten years.

The table below presents available-for-sale securities in a gross unrealized loss position and whether such securities have been 

in an unrealized loss position for less than 12 months, or 12 months or greater.

Table 7.5 - Available-for-Sale Securities in a Gross Unrealized Loss Position

December 31, 2023

Less than 12 Months 12 Months or Greater

(In millions) Fair Value

Gross 

Unrealized 

Losses Fair Value

Gross 

Unrealized 

Losses

Agency mortgage-related securities $374 ($1) $3,006 ($108) 

Other mortgage-related securities 23 (4) 23 (5) 

Total available-for-sale securities in a gross unrealized loss position $397 ($5) $3,029 ($113) 

December 31, 2022

Less than 12 Months 12 Months or Greater

(In millions) Fair Value

Gross 

Unrealized 

Losses Fair Value

Gross 

Unrealized 

Losses

Agency mortgage-related securities $5,086 ($253) $325 ($48) 

Other mortgage-related securities 46 (3) 5 — 

Total available-for-sale securities in a gross unrealized loss position $5,132 ($256) $330 ($48) 

At December 31, 2023, the gross unrealized losses relate to 171 securities. 

Gains and losses on the sale of securities are included in investment gains, net, including those gains (losses) reclassified into 

earnings from AOCI. We use the specific identification method for determining the cost basis of a security in computing the 

gain or loss.

Financial Statements Notes to Consolidated Financial Statements | Note 7

FREDDIE MAC | 2023 Form 10-K 175
The table below summarizes the total proceeds, gross realized gains and gross realized losses from sales of available-for-sale 

securities. 

Table 7.6 - Total Proceeds, Gross Realized Gains and Gross Realized Losses from Sales of Available-for-Sale Securities

Year Ended December 31,

(In millions) 2023 2022 2021

Total Proceeds $3,164 $1,371 $22,907 

Gross realized gains 9 34 540 

Gross realized losses (183) (10) (60) 

Net realized gains (losses) ($174) $24 $480 

Non-Cash Investing and Financing Activities 

During the years ended December 31, 2023, December 31, 2022, and December 31, 2021, we recognized $1.7 billion, 

$9.0 billion, and $34.8 billion, respectively, of investments in securities in exchange for the issuance of debt of consolidated 

trusts through partial sales of commingled single-class resecuritization products that were previously consolidated.

During the years ended December 31, 2023, December 31, 2022, and December 31, 2021, we derecognized $4.8 billion, 

$13.3 billion, and $1.1 billion respectively, of mortgage-related securities and debt of consolidated trusts where we were no 

longer deemed the primary beneficiary.

During the year ended December 31, 2023, we purchased $4.3 billion and sold $4.4 billion of non-mortgage-related securities 

that were traded, but not settled at December 31, 2023. We settled our purchase and sale obligations during the first quarter of 

2024.

Financial Statements Notes to Consolidated Financial Statements | Note 7

FREDDIE MAC | 2023 Form 10-K 176
NOTE 8

Debt

The table below summarizes the balances of total debt on our consolidated balance sheets.

Table 8.1 - Total Debt

December 31,

(In millions) 2023 2022

Debt of consolidated trusts $3,041,927 $2,979,070 

Debt of Freddie Mac:

Short-term debt 5,976 7,712 

Long-term debt 160,443 159,050 

Total debt of Freddie Mac 166,419 166,762 

Total debt $3,208,346 $3,145,832 

Debt securities that we issue are classified as either debt of consolidated trusts held by third parties or debt of Freddie Mac. 

We issue debt of Freddie Mac to fund our operations. 

Our debt is reported at amortized cost, with the exception of certain debt for which we elected the fair value option. Deferred 

items, including premiums, discounts, issuance costs, and hedge accounting-related basis adjustments, are reported as a 

component of total debt. These items are amortized and reported through interest expense using the effective interest method 

over the contractual life of the related indebtedness. Amortization of premiums, discounts, and issuance costs begins at the 

time of debt issuance. Amortization of hedge accounting-related basis adjustments begins upon the discontinuation of the 

related hedge relationship.

We elected the fair value option on debt that contains embedded derivatives and certain other debt issuances. Changes in the 

fair value of these debt obligations are recorded in investment gains, net, with any upfront costs and fees incurred or received 

in exchange for the issuance of the debt being recognized in earnings as incurred and not deferred. Related interest expense 

continues to be reported as interest expense based on the stated terms of the debt securities. For additional information on our 

election of the fair value option, see Note 16. 

When we repurchase or call outstanding debt securities, we recognize the difference between the amount paid to redeem the 

debt security and the carrying value in earnings as a component of investment gains, net. Contemporaneous transfers of cash 

between us and a creditor in connection with the issuance of a new debt security and satisfaction of an existing debt security 

are accounted for as either an extinguishment or a modification of an existing debt security. If the debt securities have 

substantially different terms, the transaction is accounted for as an extinguishment of the existing debt security. The issuance 

of a new debt security is recorded at fair value, fees paid to the creditor are expensed as incurred, and fees paid to third parties 

are deferred and amortized into interest expense over the life of the new debt security using the effective interest method. If the 

terms of the existing debt security and the new debt security are not substantially different, the transaction is accounted for as 

a modification of the existing debt. Fees paid to the creditor are deferred and amortized into interest expense over the life of the 

modified debt security using the effective interest method and fees paid to third parties are expensed as incurred.

We also engage in transactions whereby we enter into an agreement to sell and subsequently repurchase (or purchase and 

subsequently resell) agency securities. When these transactions involve securities issued by consolidated entities, they are 

treated as issuances and extinguishments of debt.

The Purchase Agreement limits the par value of our aggregate indebtedness, which may restrict the amount of debt we are 

allowed to issue to fund our operations. See Note 2 for information regarding restrictions on the amount of our indebtedness 

under the Purchase Agreement. 

Debt of Consolidated Trusts 

Debt of consolidated trusts held by third parties represent our liability to third parties that hold beneficial interests in our 

consolidated trusts. Debt of consolidated trusts held by third parties are subject to prepayment risk as their payments are 

based upon the performance of the underlying mortgage loans that may be prepaid by the related mortgage borrower at any 

time generally without penalty.

Financial Statements Notes to Consolidated Financial Statements | Note 8

FREDDIE MAC | 2023 Form 10-K 177
The table below summarizes the debt of consolidated trusts based on underlying loan product type.

Table 8.2 - Debt of Consolidated Trusts

December 31, 2023 December 31, 2022

(Dollars in millions)

Contractual

Maturity UPB

Carrying 

Amount(1)

Weighted

Average

Coupon(2)

Contractual

Maturity UPB

Carrying 

Amount(1)

Weighted

Average

Coupon(2)

Single-Family:

20-and 30-year or more, fixed-rate 2024 - 2061 $2,603,100 $2,640,550 3.06 % 2023 - 2061 $2,507,235 $2,550,137 2.76 %

15-year or less, fixed-rate 2024 - 2039 326,242 331,291 2.20 2023 - 2038 367,844 374,339 2.14 

Adjustable-rate and other 2024 - 2054 23,251 23,749 3.93 2023 - 2053 23,561 24,153 3.04 

Total Single-Family 2,952,593 2,995,590 2,898,640 2,948,629 

Multifamily 2024 - 2053 47,300 46,337 3.35 2023 - 2052 30,927 30,441 2.66 

Total debt of consolidated trusts $2,999,893 $3,041,927 $2,929,567 $2,979,070 

(1) Includes $2.1 billion and $1.9 billion at December 31, 2023 and December 31, 2022, respectively, of debt of consolidated trusts that represents the fair value of debt 

for which the fair value option was elected.

(2) The effective interest rate for debt of consolidated trusts was 2.73% and 2.39% as of December 31, 2023 and December 31, 2022, respectively.

Short-Term Debt

Discount notes, Reference Bills securities, and medium-term notes are unsecured general corporate obligations. Discount 

notes and Reference Bills securities pay only principal at maturity. Securities sold under agreements to repurchase are 

effectively collateralized borrowings where we sell securities with an agreement to repurchase such securities at a future date. 

We offset payables related to securities sold under agreements to repurchase against receivables related to securities 

purchased under agreements to resell on our consolidated balance sheets, when such amounts meet the conditions for 

offsetting in the accounting guidance. See Note 10 for additional information on securities sold under agreements to 

repurchase. Certain medium-term notes that have original maturities of one year or less are classified as short-term debt for 

purposes of this presentation. 

The table below summarizes the balances and effective interest rates for short-term debt. 

Table 8.3 - Short-Term Debt

December 31, 2023 December 31, 2022

(Dollars in millions) Par Value

Carrying 

Amount

Weighted

Average

Effective Rate Par Value

Carrying 

Amount

Weighted

Average

Effective Rate

Short-term debt:

Discount notes and Reference Bills® $6,032 $5,976 5.39 % $6,826 $6,822 3.71 %

Medium-term notes — — — 890 890 1.81 

Total short-term debt $6,032 $5,976 5.39 % $7,716 $7,712 3.49 %

Financial Statements Notes to Consolidated Financial Statements | Note 8

FREDDIE MAC | 2023 Form 10-K 178
Long-Term Debt

The table below summarizes our long-term debt.

Table 8.4 - Long-Term Debt

December 31, 2023 December 31, 2022

(Dollars in millions)

Contractual 

Maturity Par Value

Carrying 

Amount(1)

Weighted 

Average

Effective 

Rate(2)

Contractual 

Maturity Par Value

Carrying 

Amount(1)

Weighted

 Average

Effective 

Rate(2)

Long-term debt:

Fixed-rate:

Medium-term notes — callable 2024 - 2050 $139,344 $139,257 3.13 % 2023 - 2050 $103,584 $103,528 1.96 %

Medium-term notes — non-callable 2024 - 2028 1,573 1,574 0.98 2023 - 2028 2,747 2,747 0.73 

Reference Notes securities — noncallable 2025 - 2032 18,162 18,209 3.19 2023 - 2032 49,801 49,832 1.76 

SCR debt notes 2031 - 2032 82 83 13.00 2031 - 2032 90 93 13.00 

Variable-rate:

Medium-term notes — callable 2024 - 2028 1,869 1,867 4.81 2023 - 2027 4,691 4,689 3.95 

Medium-term notes — non-callable 2026 47 47 8.10 2026 47 47 8.10 

STACR 2024 - 2042 2,095 2,006 11.45 2023 - 2042 4,562 4,448 8.79 

Zero-coupon:

Medium-term notes — non-callable 2024 - 2039 4,836 3,100 6.17 2023 - 2039 4,841 2,913 6.11 

Other 2047 - 2053 — 121 0.84 2047 - 2052 — 137 0.82 

Hedging-related basis adjustments N/A (5,821) N/A (9,384) 

Total long-term debt $168,008 $160,443 3.30 % $170,363 $159,050 2.20 %

(1) Represents par value, net of associated discounts or premiums and issuance costs. Includes $0.4 billion and $1.1 billion at December 31, 2023 and December 31, 

2022, respectively, of long-term debt that represents the fair value of debt for which the fair value option was elected. 

(2) Based on carrying amount.

A portion of our long-term debt is callable. Callable debt gives us the option to redeem the debt security at par on one or more 

specified call dates or at any time on or after a specified call date.

The table below summarizes the contractual maturities of long-term debt securities at December 31, 2023.

Table 8.5 - Contractual Maturities of Long-Term Debt and Debt Securities

(In millions) Amounts

Annual Maturities

Long-term debt (excluding STACR and SCR debt notes):

2024 $41,244 

2025 61,187 

2026 15,645 

2027 12,530 

2028 10,947 

Thereafter 24,278 

Debt of consolidated trusts, STACR, and SCR debt notes(1) 3,002,070 

Total 3,167,901 

Net discounts, premiums, debt issuance costs, hedge-related, and other basis adjustments(2) 34,469 

Total debt of consolidated trusts, STACR, SCR and long-term debt $3,202,370 

(1) Contractual maturities of these debt securities are not presented because they are subject to prepayment risk, as their payments are based upon the performance of 

a pool of mortgage assets that may be prepaid by the related mortgage borrowers at any time generally without penalty.

(2) Other basis adjustments primarily represent changes in fair value on debt where we have elected the fair value option.

Financial Statements Notes to Consolidated Financial Statements | Note 8

FREDDIE MAC | 2023 Form 10-K 179
NOTE 9

Derivatives

We analyze the interest-rate sensitivity of financial assets and liabilities across a variety of interest-rate scenarios based on 

market prices, models, and economics. We use derivatives primarily to hedge interest-rate sensitivity mismatches between our 

financial assets and liabilities. We designate certain derivatives as hedging instruments in qualifying hedge accounting 

relationships. Interest-rate risk management derivatives that are not designated in qualifying hedge accounting relationships are 

economic hedges of financial instruments measured at fair value on a recurring basis or of other transactions or instruments 

that expose us to interest-rate risk. When we use derivatives to mitigate our exposures, we consider a number of factors, 

including cost, exposure to counterparty credit risk, and our overall risk management strategy.

We principally use interest-rate swaps, purchased or written options (including swaptions), and exchange-traded futures in our 

interest-rate risk management activities. We routinely enter into commitments to purchase and sell investments in mortgagerelated securities, purchase and sell mortgage loans, and purchase and extinguish or issue debt of our consolidated trusts. 

Most of these commitments meet the definition of a derivative and, therefore, are subject to the accounting guidance for 

derivatives and hedging. We also enter into certain types of guarantees that are accounted for as derivatives. These guarantees 

primarily include our obligation to support payment of the interest due on the notes issued by VIEs used in certain CRT 

transactions.

Derivatives are reported at their fair value on our consolidated balance sheets. Changes in fair value on derivatives not in 

qualifying fair value hedge relationships are recorded as investment gains, net, on our consolidated statements of income. 

Derivatives in a net asset position, including net derivative interest receivable or payable, are reported as derivative assets, net, 

which is included in other assets on our consolidated balance sheets. Similarly, derivatives in a net liability position, including 

net derivative interest receivable or payable, are reported as derivative liabilities, net, which is included in other liabilities on our 

consolidated balance sheets. We offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to 

return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparty 

under a master netting agreement. Non-cash collateral held is not recognized on our consolidated balance sheets as we do not 

obtain effective control over the collateral, and non-cash collateral posted is not derecognized from our consolidated balance 

sheets as we do not relinquish effective control over the collateral. Therefore, non-cash collateral held or posted is not 

presented as an offset against derivative assets or derivative liabilities on our consolidated balance sheets. See Note 10 for 

additional information on our collateralized arrangements.

We evaluate whether financial instruments that we purchase or issue contain embedded derivatives. We generally elect to 

measure newly acquired or issued financial instruments that contain embedded derivatives at fair value, with changes in fair 

value recorded in earnings.

On our consolidated statements of cash flows, cash flows related to derivatives are classified as either operating activities (such 

as periodic settlements of interest payments) or investing activities (such as variation margin payments and cash flows related 

to the acquisition and termination of derivatives) depending on the nature of the activity. Cash flows related to physical 

settlement of forward commitments accounted for as derivative instruments are classified as operating, investing, or financing 

activities depending on the financial instruments to which they relate.

Hedge Accounting

We apply fair value hedge accounting to certain single-family mortgage loans where we hedge the changes in fair value of 

these loans attributable to the designated benchmark interest rate, using interest-rate swaps. We also apply fair value hedge 

accounting to certain issuances of debt where we hedge the changes in fair value of the debt attributable to the designated 

benchmark interest rate, using interest-rate swaps. Under the portfolio layer method fair value hedge accounting strategy, we 

hedge the changes in fair value of a portion of a closed pool of single-family mortgage loans that is not expected to be affected 

by prepayments, defaults, and other events affecting the timing and amount of cash flows. As part of this strategy, we have 

also elected to measure the change in fair value of the hedged item on the basis of the benchmark rate component of the 

contractual coupon cash flows determined at the hedge inception and by assuming the hedged item has a term that reflects 

only the designated cash flows being hedged.

We apply hedge accounting to qualifying hedge relationships. A qualifying hedge relationship exists when changes in the fair 

value of a derivative hedging instrument are expected to be highly effective in offsetting changes in the fair value of the hedged 

item attributable to the risk being hedged during the term of the hedge relationship. No amounts have been excluded from the 

assessment of hedge effectiveness. To assess hedge effectiveness, we use a statistical regression analysis.

At inception of the hedge relationship, we prepare formal contemporaneous documentation of our risk management objective 

and strategies for undertaking the hedge. 

Financial Statements Notes to Consolidated Financial Statements | Note 9

FREDDIE MAC | 2023 Form 10-K 180
If a hedge relationship qualifies for fair value hedge accounting, all changes in fair value of the derivative hedging instrument, 

including interest accruals, are recognized in the same consolidated statements of income line item used to present the 

earnings effect of the hedged item. Therefore, changes in the fair value of the hedged item, mortgage loans and debt, 

attributable to the risk being hedged are recognized in interest income and interest expense, respectively, along with the 

changes in the fair value of the respective derivative hedging instruments. 

Changes in the fair value of the hedged item attributable to the risk being hedged are recognized as a cumulative basis 

adjustment against the mortgage loans and debt. The cumulative basis adjustments are amortized to the same consolidated 

statements of income line item used to present the changes in fair value of the hedged item using the effective interest method 

considering the contractual terms of the hedged item, with amortization beginning no later than the period in which hedge 

accounting was discontinued.

Derivative Assets and Liabilities at Fair Value

The table below presents the notional value and fair value of derivatives reported on our consolidated balance sheets.

Table 9.1 - Derivative Assets and Liabilities at Fair Value

December 31, 2023 December 31, 2022

Notional or

Contractual

Amount

Derivative 

Assets

Derivative 

Liabilities

Notional or

Contractual

Amount

Derivative 

Assets

Derivative 

(In millions) Liabilities

Not designated as hedges

Interest-rate risk management derivatives:

Swaps $351,193 $1,638 ($462) $480,824 $1,762 ($526) 

Written options 48,227 — (1,746) 46,101 — (1,857) 

Purchased options(1) 89,790 4,251 — 92,010 4,302 — 

Futures 132,982 — — 182,330 — — 

Total interest-rate risk management derivatives 622,192 5,889 (2,208) 801,265 6,064 (2,383) 

Mortgage commitment derivatives 26,911 43 (10) 29,354 12 (11) 

CRT-related derivatives(2) 30,578 — (228) 31,647 — (55) 

Other 14,572 3 (567) 14,426 2 (624) 

Total derivatives not designated as hedges 694,253 5,935 (3,013) 876,692 6,078 (3,073) 

Designated as fair value hedges

Interest-rate risk management derivatives:

Swaps 172,202 276 (5,658) 181,298 321 (7,847) 

Total derivatives designated as fair value hedges 172,202 276 (5,658) 181,298 321 (7,847) 

Receivables (payables) 17 (36) 35 (25) 

Netting adjustments(3) (5,742) 7,834 (6,127) 10,187 

Total derivative portfolio, net $866,455 $486 ($873) $1,057,990 $307 ($758) 

(1) Includes swaptions on credit indices with a notional or contractual amount of $6.4 billion and $10.1 billion at December 31, 2023 and December 31, 2022, 

respectively, and a fair value of $1.0 million and $2.0 million at December 31, 2023 and December 31, 2022, respectively.

(2) Includes derivative instruments related to CRT transactions that are considered freestanding credit enhancements.

(3) Represents counterparty netting and cash collateral netting.

Derivative Counterparty Credit Risk

Cleared derivatives refer to interest-rate swaps that the U.S. Commodity Futures Trading Commission has determined are 

subject to the central clearing requirement of the Dodd-Frank Act. Exchange-traded derivatives refer to standardized interestrate futures contracts and options on futures contracts. OTC derivatives refer to those derivatives that are bilaterally negotiated 

with counterparties and settled with those counterparties.

Our use of cleared derivatives, exchange-traded derivatives, and OTC derivatives exposes us to counterparty credit risk in the 

event our counterparties fail to meet their contractual obligations. We are required to post margin in connection with our 

derivatives transactions. The use of cleared and exchange-traded derivatives decreases our credit risk exposure to individual 

counterparties because a central counterparty is substituted for individual counterparties. OTC derivatives expose us to the 

credit risk of individual counterparties because transactions are executed and settled between us and each counterparty, 

exposing us to potential losses if a counterparty fails to meet its obligations.

Financial Statements Notes to Consolidated Financial Statements | Note 9

FREDDIE MAC | 2023 Form 10-K 181
Our use of interest-rate swaps and option-based derivatives is subject to internal credit and legal reviews. On an ongoing basis, 

we review the credit fundamentals of all of our derivative counterparties, clearinghouses, and clearing members to confirm that 

they continue to meet our internal risk management standards.

The majority of our interest-rate swaps are subject to the central clearing requirement. Changes in the value of open exchangetraded contracts and cleared derivatives are settled daily via payments made through the clearinghouse. We net our exposure 

to cleared derivatives by clearinghouse and clearing member. A downgrade in our credit ratings could cause the clearing 

members we use for our cleared and exchange-traded derivatives to demand additional collateral.

Many of our transactions involving forward purchase and sale commitments of mortgage-related securities utilize the MBSD/ 

FICC as a clearinghouse. As a clearing member of the clearinghouse, we post margin to the MBSD/FICC and are exposed to 

the counterparty credit risk of the organization (including its clearing members). In June 2022, the FICC amended the MBSD 

clearing rules to provide that variation margin payments constitute daily settlement of exposure and not a component of the 

required fund deposit. As a result, for our forward purchase and sale commitments of mortgage-related securities transacted 

with MBSD/FICC, we changed the characterization of variation margin payments from posting of margin collateral to 

settlements. In the event a clearing member fails and causes losses to the MBSD/FICC clearing system, we could be subject to 

loss, as members are generally required to cover losses caused by defaulting members on a pro rata basis. It is difficult to 

estimate our maximum exposure under these transactions, as this would require an assessment of transactions that we and 

other members of the MBSD/FICC may execute in the future.

We use master netting and collateral agreements to reduce our credit risk exposure to our OTC derivative counterparties for 

interest-rate swap and option-based derivatives. Master netting agreements provide for the netting of amounts receivable and 

payable from an individual counterparty, as well as posting of collateral in the form of cash, Treasury securities or agency 

mortgage-related or debt securities, or a combination of both by either the counterparty or us, depending on which party is in a 

liability position. Although it is our practice not to repledge assets held as collateral, these agreements may allow us or our 

counterparties to repledge all or a portion of the collateral.

We have master netting agreements in place with all of our OTC derivative counterparties. On a daily basis, the market value of 

each counterparty's derivatives outstanding is calculated to determine the amount of our net credit exposure, which is equal to 

the market value of derivatives in a net gain position by counterparty after giving consideration to collateral posted. In the event 

a counterparty defaults on its obligations under the derivatives agreement and the default is not remedied in the manner 

prescribed in the agreement, we have the right under the agreement to sell the collateral. As a result, our use of master netting 

and collateral agreements reduces our exposure to our counterparties in the event of default.

A significant majority of our net uncollateralized exposure to OTC derivative counterparties is concentrated with four

counterparties, all of which were investment grade as of December 31, 2023. We regularly review the market value of securities 

pledged as collateral and derivative counterparty collateral posting thresholds, where applicable, in an effort to manage our 

exposure to losses.

For certain OTC derivatives, the amount of collateral we pledge to counterparties related to our derivative instruments is 

determined after giving consideration to our credit rating. The aggregate fair value of our OTC derivative instruments containing 

credit-risk related contingent features, netted by counterparty, that were in a liability position was zero on December 31, 2023

and was $27 million on December 31, 2022 for which we posted cash and non-cash collateral of $17 million in the normal 

course of business. A downgrade in our credit ratings may trigger additional collateral requirements related to these OTC 

derivative instruments. If a downgrade in our credit ratings had triggered additional collateral requirements related to these OTC 

derivative instruments on December 31, 2023 and December 31, 2022, the maximum additional collateral we would have been 

required to post to our counterparties would be zero and $10 million, respectively.

Financial Statements Notes to Consolidated Financial Statements | Note 9

FREDDIE MAC | 2023 Form 10-K 182
The table below presents offsetting and collateral information related to derivatives which are subject to enforceable master 

netting agreements or similar arrangements.

Table 9.2 - Offsetting of Derivatives

December 31, 2023 December 31, 2022

Derivative 

Assets

Derivative 

Liabilities

Derivative 

Assets

Derivative 

(In millions) Liabilities

OTC derivatives $6,165 ($7,866) $6,385 ($10,230) 

Cleared and exchange-traded derivatives 13 (36) 28 (25) 

Mortgage commitment derivatives 47 (10) 19 (11) 

Other 3 (795) 2 (679) 

Total derivatives 6,228 (8,707) 6,434 (10,945) 

Counterparty netting (4,210) 4,210 (4,468) 4,468 

Cash collateral netting(1) (1,532) 3,624 (1,659) 5,719 

Net amount presented in the consolidated balance sheets 486 (873) 307 (758) 

Gross amount not offset in the consolidated balance sheets(2) (366) 47 (218) 31 

Net amount $120 ($826) $89 ($727) 

(1) Excess cash collateral held is presented as a derivative liability, while excess cash collateral posted is presented as a derivative asset.

(2) Does not include the fair value amount of non-cash collateral posted or held that exceeds the associated net asset or liability, netted by counterparty, presented on 

the consolidated balance sheets. 

Gains and Losses on Derivatives

The table below presents the gains and losses on derivatives not designated in qualifying hedge relationships. These amounts 

are reported on our consolidated statements of income as investment gains, net. 

Table 9.3 - Gains and Losses on Derivatives

Year Ended December 31,

(In millions) 2023 2022 2021

Not designated as hedges

Interest-rate risk management derivatives:

Swaps $359 $970 $1,007 

Written options 170 (903) ($77) 

Purchased options (335) 1,794 ($716) 

Futures 197 2,249 $235 

Total interest-rate risk management derivatives fair value gains (losses) 391 4,110 449 

Mortgage commitment derivatives 17 2,743 713 

CRT-related derivatives(1) (176) (172) 9 

Other 11 (225) (20) 

Total derivatives not designated as hedges fair value gains (losses) $243 $6,456 $1,151 

(1) Includes derivative instruments related to CRT transactions that are considered freestanding credit enhancements. 

Financial Statements Notes to Consolidated Financial Statements | Note 9

FREDDIE MAC | 2023 Form 10-K 183
Fair Value Hedges 

The table below presents the effects of fair value hedge accounting by consolidated statements of income line item, including 

the gains and losses on derivatives and hedged items designated in qualifying hedge relationships and other components due 

to the application of hedge accounting.

Table 9.4 - Gains and Losses on Fair Value Hedges

Year Ended December 31,

2023 2022 2021

(In millions)

Interest 

Income

Interest 

Expense

Interest 

Income

Interest 

Expense

Interest 

Income

Interest 

Expense

Total amounts of income and expense line items 

presented in our consolidated statements of income in 

which the effects of fair value hedges are recorded:

 $105,363 ($86,821) $83,458 ($65,453) $61,527 ($43,947) 

Interest contracts on mortgage loans held-forinvestment:

Gain (loss) on fair value hedging relationships:

Hedged items 671 — (5,817) — (457) — 

Derivatives designated as hedging instruments (854) — 5,000 — 529 — 

Interest accruals on hedging instruments 948 — (294) — (433) — 

Discontinued hedge related basis adjustments 

amortization 198 — (79) — (1,884) — 

Interest contracts on debt:

Gain (loss) on fair value hedging relationships:

Hedged items — (3,080) — 7,130 — 2,698 

Derivatives designated as hedging instruments — 3,084 — (7,267) — (2,895) 

Interest accruals on hedging instruments — (4,065) — (1,053) — 931 

Discontinued hedge related basis adjustment 

amortization — (377) — (8) — 55 

The table below presents the cumulative basis adjustments and the carrying amounts of the hedged item by its respective 

balance sheet line item. 

Table 9.5 - Cumulative Basis Adjustments Due to Fair Value Hedging

December 31, 2023

Carrying 

Amount 

Assets / 

(Liabilities)

Cumulative Amount of Fair Value Hedging Basis 

Adjustment Included in the Carrying Amount

Closed Portfolio Under the 

Portfolio Layer Method

(In millions) Total

Under the 

Portfolio Layer 

Method

Discontinued - 

Hedge Related

Total Amount 

by Amortized 

Cost Basis

Designated 

Amount by 

UPB

Mortgage loans held-for-investment $1,115,454 ($2,253) ($220) ($2,033) $59,786 $11,670 

Mortgage loans held-for-sale 128 1 — 1 — — 

Debt (143,407) 5,821 — 29 — — 

December 31, 2022

Carrying 

Amount 

Assets / 

(Liabilities)

Cumulative Amount of Fair Value Hedging Basis 

Adjustment Included in the Carrying Amount

Closed Portfolio Under the 

Portfolio Layer Method

(In millions) Total

Under the 

Portfolio Layer 

Method

Discontinued - 

Hedge Related

Total Amount 

by Amortized 

Cost Basis

Designated 

Amount by 

UPB

Mortgage loans held-for-investment $1,108,098 ($3,122) ($959) ($2,163) $79,070 $11,516 

Mortgage loans held-for-sale 67 1 — 1 — — 

Debt (142,511) 9,384 — 123 — — 

Financial Statements Notes to Consolidated Financial Statements | Note 9

FREDDIE MAC | 2023 Form 10-K 184
NOTE 10

Collateralized Agreements

Securities Purchased Under Agreements to Resell and Securities Sold 

Under Agreements to Repurchase

As an investor, we enter into arrangements to purchase securities under agreements to subsequently resell the identical or 

substantially the same securities to our counterparty. Our counterparties to these transactions are required to pledge the 

purchased securities as collateral for their obligation to repurchase those securities at a later date. While such transactions 

involve the legal transfer of securities, they are accounted for as secured financings because the transferor does not relinquish 

effective control over the securities transferred. These agreements may allow us to repledge all, or a portion, of the collateral 

pledged to us, and we may repledge such collateral periodically, although it is not typically our practice to repledge collateral 

that has been pledged to us. 

We consider the types of securities being pledged to us as collateral when determining how much we lend in transactions 

involving securities purchased under agreements to resell. Additionally, we regularly review the market values of these 

securities compared to amounts loaned in an effort to manage our exposure to losses and we reasonably expect the borrower 

to continue to replenish the collateral to meet the requirements of the contract. As of December 31, 2023, all of our securities 

purchased under agreements to resell were fully collateralized.

We utilize the GSD/FICC as a clearinghouse to transact many of our trades involving securities purchased under agreements to 

resell, securities sold under agreements to repurchase, and other non-mortgage related securities. As a clearing member of 

GSD/FICC, we are required to post initial and variation margin payments and are exposed to the counterparty credit risk of 

GSD/FICC (including its clearing members). In the event a clearing member fails and causes losses to the GSD/FICC clearing 

system, we could be subject to the loss of the margin that we have posted to the GSD/FICC. Moreover, our exposure could 

exceed that amount, as members are generally required to cover losses caused by defaulting members on a pro rata basis. It is 

difficult to estimate our maximum exposure under these transactions, as this would require an assessment of transactions that 

we and other members of the GSD/FICC may execute in the future.

We provide financing to investors in Freddie Mac securities to increase liquidity and expand the investor base for those 

securities. These transactions differ from the securities purchased under agreements to resell that we use for liquidity purposes 

as the counterparties we face may not be major financial institutions and we are exposed to greater counterparty credit risk for 

these institutions. As of both December 31, 2023 and December 31, 2022, $1.1 billion of our securities purchased under 

agreements to resell were used to provide financing to investors in Freddie Mac securities.

Securities sold under agreements to repurchase are effectively collateralized borrowings where we sell securities with an 

agreement to repurchase such securities at a future date. We are required to pledge the sold securities to the counterparties to 

these transactions as collateral for our obligation to repurchase these securities at a later date. Similar to the securities 

purchased under agreements to resell transactions, these transactions involve the legal transfer of securities. However, they are 

accounted for as secured financings because the transferor does not relinquish effective control over the securities transferred. 

These agreements may allow our counterparties to repledge all or a portion of the collateral.

We offset payables related to securities sold under agreements to repurchase against receivables related to securities 

purchased under agreements to resell when such amounts meet the conditions for balance sheet offsetting. The table below 

presents offsetting and collateral information related to securities purchased under agreements to resell, and securities sold 

under agreements to repurchase which are subject to enforceable master netting agreements or similar arrangements.

Table 10.1 - Offsetting and Collateral Information of Certain Financial Assets and Liabilities

December 31, 2023

(In millions)

Gross

Amount

Recognized

Amount Offset 

in the 

Consolidated

Balance Sheets

Net Amount

Presented in

the Consolidated

Balance Sheets

Gross Amount

Not Offset in

the Consolidated

Balance Sheets(1)

Net

Amount

Assets:

Securities purchased under agreements to resell $105,393 ($10,245) $95,148 ($95,148) $— 

Liabilities:

Securities sold under agreements to repurchase (10,245) 10,245 — — — 

Referenced footnote is included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 10

FREDDIE MAC | 2023 Form 10-K 185
December 31, 2022

(In millions)

Gross

Amount

Recognized

Amount Offset 

in the 

Consolidated

Balance Sheets

Net Amount

Presented in

the Consolidated

Balance Sheets

Gross Amount

Not Offset in

the Consolidated

Balance Sheets(1)

Net

Amount

Assets:

Securities purchased under agreements to resell $99,286 ($11,991) $87,295 ($87,295) $— 

Liabilities:

Securities sold under agreements to repurchase (11,991) 11,991 — — — 

(1) For securities purchased under agreements to resell, includes $104.2 billion and $54.7 billion of collateral that we had the right to repledge as of December 31, 

2023 and December 31, 2022, respectively. We repledged $0.4 billion and less than $0.1 billion of collateral at December 31, 2023 and December 31, 2022, 

respectively.

The table below presents the remaining contractual maturity of our gross obligations for our securities sold under agreements 

to repurchase. The collateral for such obligations consisted primarily of U.S. Treasury securities.

Table 10.2 - Remaining Contractual Maturity

December 31, 2023

(In millions)

Overnight and 

Continuous 30 days or Less

After 30 days 

Through 90 days

Greater Than 

90 days Total

Securities sold under agreements to repurchase $— $10,245 $— $— $10,245 

December 31, 2022

(In millions)

Overnight and 

Continuous 30 days or Less

After 30 days 

Through 90 days

Greater Than 

90 days Total

Securities sold under agreements to repurchase $— $11,991 $— $— $11,991 

Collateral Pledged

The table below summarizes the fair value of the securities pledged as collateral by us for derivatives and collateralized 

borrowing transactions, including securities that the secured party may repledge.

Table 10.3 - Collateral in the Form of Securities Pledged

December 31, 2023

(In millions) Derivatives

Securities Sold 

Under Agreements 

to Repurchase Other(1) Total

Trading securities $1,866 $3,666 $2,370 $7,902 

Other assets — 4,555 — 4,555 

Total securities pledged $1,866 $8,221 $2,370 $12,457 

December 31, 2022

(In millions) Derivatives

Securities Sold 

Under Agreements 

to Repurchase Other(1) Total

Trading securities $1,533 $2,910 $1,347 $5,790 

Other assets — 6,543 — 6,543 

Total securities pledged $1,533 $9,453 $1,347 $12,333 

(1) Includes other collateralized borrowings and collateral related to transactions with certain clearinghouses.

Financial Statements Notes to Consolidated Financial Statements | Note 10

FREDDIE MAC | 2023 Form 10-K 186
NOTE 11

Stockholders' Equity and Earnings Per Share

Senior Preferred Stock

Pursuant to the Purchase Agreement described in Note 2, we issued one million shares of senior preferred stock to Treasury 

on September 8, 2008, in partial consideration of Treasury's commitment to provide funds to us.

Shares of the senior preferred stock have a par value of $1 and have a stated value and initial liquidation preference of 

$1 billion, or $1,000 per share. The liquidation preference of the senior preferred stock is subject to adjustment. See Note 2 for 

a detailed discussion of the liquidation preference of the senior preferred stock.

Treasury, as the holder of the senior preferred stock, is entitled to receive quarterly cash dividends, when, as, and if declared by 

our Board of Directors. The dividends we have paid to Treasury on the senior preferred stock have been declared by, and paid 

at the direction of, the Conservator, acting as successor to the rights, titles, powers, and privileges of the Board of Directors. 

See Note 2 for additional information concerning our senior preferred stock dividends.

The senior preferred stock is senior to our common stock and all other outstanding series of our preferred stock, as well as any 

capital stock we issue in the future, as to both dividends and rights upon liquidation. The senior preferred stock provides that 

we may not, at any time, declare or pay dividends on, make distributions with respect to, redeem, purchase or acquire, or make 

a liquidation payment with respect to, any common stock or other securities ranking junior to the senior preferred stock unless: 

n Full cumulative dividends on the outstanding senior preferred stock (including any unpaid dividends added to the liquidation 

preference) have been declared and paid in cash and 

n All amounts required to be paid with the net proceeds of any issuance of capital stock for cash (as described below) have 

been paid in cash. 

Shares of the senior preferred stock are not convertible. Shares of the senior preferred stock have no general or special voting 

rights, other than those set forth in the certificate of designation for the senior preferred stock or otherwise required by law. The 

consent of holders of at least two-thirds of all outstanding shares of senior preferred stock is generally required to amend the 

terms of the senior preferred stock or to create any class or series of stock that ranks prior to or on parity with the senior 

preferred stock.

We are not permitted to redeem the senior preferred stock prior to the termination of Treasury's funding commitment set forth 

in the Purchase Agreement; however, we are permitted to pay down the liquidation preference of the outstanding shares of 

senior preferred stock to the extent of accrued and unpaid dividends previously added to the liquidation preference and not 

previously paid down and quarterly commitment fees previously added to the liquidation preference and not previously paid 

down. Pursuant to the January 2021 Letter Agreement, we are permitted to issue common stock with aggregate gross 

proceeds of up to $70 billion after Treasury's exercise in full of its warrant to acquire 79.9% of our common stock and 

resolution of currently pending material litigation related to our conservatorship and the Purchase Agreement, and we are 

permitted to use the net proceeds of such issuance(s) to build capital. If we issue any other shares of capital stock for cash 

while the senior preferred stock is outstanding, the net proceeds of such issuances must be used to pay down the liquidation 

preference of the senior preferred stock; however, the liquidation preference of each share of senior preferred stock may not be 

paid down below $1,000 per share prior to the termination of Treasury's funding commitment. Following the termination of 

Treasury's funding commitment, we may pay down the liquidation preference of all outstanding shares of senior preferred stock 

at any time, in whole or in part. If, after termination of Treasury's funding commitment, we pay down the liquidation preference 

of each outstanding share of senior preferred stock in full, the shares will be deemed to have been redeemed as of the payment 

date.

Financial Statements Notes to Consolidated Financial Statements | Note 11

FREDDIE MAC | 2023 Form 10-K 187
The table below provides a summary of our senior preferred stock outstanding at December 31, 2023.

Table 11.1 - Senior Preferred Stock

(In millions, except initial liquidation 

preference price per share)

Shares

Authorized

Shares

Outstanding

Total

Par Value

Initial

Liquidation

Preference

Price per Share

Total

Liquidation

Preference

Non-draw Adjustments:

2008 1.00 1.00 $1.00 $1,000 $1,000 

2017 — — — N/A 3,000 

2019 — — — N/A 3,674 

2020 — — — N/A 7,217 

2021 — — — N/A 11,420 

2022 — — — N/A 9,919 

2023 — — — N/A 9,431 

Total non-draw adjustments 1.00 1.00 1.00 45,661 

Draw Adjustments:

2008 — — — N/A 13,800 

2009 — — — N/A 36,900 

2010 — — — N/A 12,500 

2011 — — — N/A 7,971 

2012 — — — N/A 165 

2018 — — — N/A 312 

Total draw adjustments — — — 71,648 

Total senior preferred stock 1.00 1.00 $1.00 $117,309 

No cash was received from Treasury under the Purchase Agreement in 2023 because we had positive net worth at December 

31, 2022, March 31, 2023, June 30, 2023, and September 30, 2023 and, consequently, FHFA did not request a draw on our 

behalf in 2023. At December 31, 2023, our assets exceeded our liabilities under GAAP; therefore, no draw is being requested 

from Treasury under the Purchase Agreement. 

Common Stock Warrant

Pursuant to the Purchase Agreement described in Note 2, on September 7, 2008, we issued a warrant to purchase common 

stock to Treasury, in partial consideration of Treasury's commitment to provide funds to us.

The warrant may be exercised in whole or in part at any time on or before September 7, 2028, by delivery to us of a notice of 

exercise, payment of the exercise price of $0.00001 per share, and the warrant. If the market price of one share of our common 

stock is greater than the exercise price, then, instead of paying the exercise price, Treasury may elect to receive shares equal to 

the value of the warrant (or portion thereof being canceled) pursuant to the formula specified in the warrant. Upon exercise of 

the warrant, Treasury may assign the right to receive the shares of common stock issuable upon exercise to any other person.

We account for the warrant in permanent equity. At issuance on September 7, 2008, we recognized the warrant at fair value, 

and we do not recognize subsequent changes in fair value while the warrant remains classified in equity. We recorded an 

aggregate fair value of $2.3 billion for the warrant as a component of additional paid-in-capital. We derived the fair value of the 

warrant using a modified Black-Scholes model. If the warrant is exercised, the stated value of the common stock issued will be 

reclassified to common stock on our consolidated balance sheets. The warrant was determined to be in-substance non-voting 

common stock, because the warrant's exercise price of $0.00001 per share is considered non-substantive (compared to the 

market price of our common stock). As a result, the shares associated with the warrant are included in the computation of basic 

and diluted earnings per share. The weighted average shares of common stock for the years ended December 31, 2023, 2022, 

and 2021 included shares of common stock that would be issuable upon full exercise of the warrant issued to Treasury.

Preferred Stock

We have the option to redeem our preferred stock on specified dates, at their redemption price plus dividends accrued through 

the redemption date. However, without the consent of Treasury, we are restricted from making payments to purchase or 

redeem preferred stock as well as paying any preferred dividends, other than dividends on the senior preferred stock. All 24

classes of preferred stock are perpetual and non-cumulative, and carry no significant voting rights or rights to purchase 

additional Freddie Mac stock or securities. Costs incurred in connection with the issuance of preferred stock are charged to 

additional paid-in capital.

Financial Statements Notes to Consolidated Financial Statements | Note 11

FREDDIE MAC | 2023 Form 10-K 188
The table below provides a summary of our preferred stock outstanding at their redemption values at December 31, 2023. 

Table 11.2 - Preferred Stock 

(In millions, except 

redemption price per share) Issue Date

Shares

Authorized

Shares

Outstanding

Total

Par Value

Redemption

Price per

Share

Total

Outstanding

Balance

Redeemable

On or After

OTCQB

Symbol

Preferred stock:

1996 Variable-rate(1)(2) April 26, 1996 5.00 5.00 $5.00 $50.00 $250 June 30, 2001 FMCCI

5.81% October 27, 1997 3.00 3.00 3.00 50.00 150 October 27, 1998 (3)

5% March 23, 1998 8.00 8.00 8.00 50.00 400 March 31, 2003 FMCKK

1998 Variable-rate(1)(4) September 23 and 29, 1998 4.40 4.40 4.40 50.00 220 September 30, 2003 FMCCG

5.10% September 23, 1998 8.00 8.00 8.00 50.00 400 September 30, 2003 FMCCH

5.30% October 28, 1998 4.00 4.00 4.00 50.00 200 October 30, 2000 (3)

5.10% March 19, 1999 3.00 3.00 3.00 50.00 150 March 31, 2004 (3)

5.79% July 21, 1999 5.00 5.00 5.00 50.00 250 June 30, 2009 FMCCK

1999 Variable-rate(5) November 5, 1999 5.75 5.75 5.75 50.00 287 December 31, 2004 FMCCL

2001 Variable-rate(6) January 26, 2001 6.50 6.50 6.50 50.00 325 March 31, 2003 FMCCM

2001 Variable-rate(1)(7) March 23, 2001 4.60 4.60 4.60 50.00 230 March 31, 2003 FMCCN

5.81% March 23, 2001 3.45 3.45 3.45 50.00 173 March 31, 2011 FMCCO

6% May 30, 2001 3.45 3.45 3.45 50.00 173 June 30, 2006 FMCCP

2001 Variable-rate(8) May 30, 2001 4.02 4.02 4.02 50.00 201 June 30, 2003 FMCCJ

5.70% October 30, 2001 6.00 6.00 6.00 50.00 300 December 31, 2006 FMCKP

5.81% January 29, 2002 6.00 6.00 6.00 50.00 300 March 31, 2007 (3)

2006 Variable-rate(1)(9) July 17, 2006 15.00 15.00 15.00 50.00 750 June 30, 2011 FMCCS

6.42% July 17, 2006 5.00 5.00 5.00 50.00 250 June 30, 2011 FMCCT

5.90% October 16, 2006 20.00 20.00 20.00 25.00 500 September 30, 2011 FMCKO

5.57% January 16, 2007 44.00 44.00 44.00 25.00 1,100 December 31, 2011 FMCKM

5.66% April 16, 2007 20.00 20.00 20.00 25.00 500 March 31, 2012 FMCKN

6.02% July 24, 2007 20.00 20.00 20.00 25.00 500 June 30, 2012 FMCKL

6.55% September 28, 2007 20.00 20.00 20.00 25.00 500 September 30, 2017 FMCKI

2007 Fixed-to-floating 

rate(1)(10) December 4, 2007 240.00 240.00 240.00 25.00 6,000 December 31, 2012 FMCKJ

Total, preferred stock 464.17 464.17 $464.17 $14,109 

(1) On May 11, 2023, we posted fallback information on our legacy LIBOR-indexed securities, including the classes of our Preferred Stock that used either three-month 

LIBOR or 12-month LIBOR as their reference rates. Beginning on July 1, 2023, those classes transitioned from three-month LIBOR and 12-month LIBOR to spreadadjusted three-month CME Term SOFR and spread-adjusted 12-month CME Term SOFR, respectively.

(2) Dividend rate resets quarterly and is equal to the sum of spread-adjusted three-month CME Term SOFR plus 1% divided by 1.377, and is capped at 9.00%.

(3) Issued through private placement.

(4) Dividend rate resets quarterly and is equal to the sum of spread-adjusted three-month CME Term SOFR plus 1% divided by 1.377, and is capped at 7.50%.

(5) Dividend rate resets on January 1 every five years after January 1, 2005 based on a five-year Constant Maturity Treasury rate, and is capped at 11.00%. Optional 

redemption on December 31, 2004 and on December 31 every five years thereafter.

(6) Dividend rate resets on April 1 every two years after April 1, 2003 based on the two-year Constant Maturity Treasury rate plus 0.10%, and is capped at 11.00%.

Optional redemption on March 31, 2003 and on March 31 every two years thereafter.

(7) Dividend rate resets on April 1 every year based on spread-adjusted 12-month CME Term SOFR minus 0.20%, and is capped at 11.00%. Optional redemption on 

March 31, 2003 and on March 31 every year thereafter. 

(8) Dividend rate resets on July 1 every two years after July 1, 2003 based on the two-year Constant Maturity Treasury rate plus 0.20%, and is capped at 11.00%.

Optional redemption on June 30, 2003 and on June 30 every two years thereafter. 

(9) Dividend rate resets quarterly and is equal to the sum of spread-adjusted three-month CME Term SOFR plus 0.50% but not less than 4.00%.

(10) Dividend rate is set at an annual fixed rate of 8.375% from December 4, 2007 through December 31, 2012. For the period beginning on or after January 1, 2013, 

dividend rate resets quarterly and is equal to the higher of: (a) the sum of spread-adjusted three-month CME Term SOFR plus 4.16% per annum; or (b) 7.875% per 

annum. Optional redemption on December 31, 2012 and on December 31 every five years thereafter.

Financial Statements Notes to Consolidated Financial Statements | Note 11

FREDDIE MAC | 2023 Form 10-K 189
Stock-Based Compensation

Following the implementation of the conservatorship in September 2008, we suspended the operation of and/or ceased making 

grants under our stock-based compensation plans. Under the Purchase Agreement, we cannot issue any new options, rights to 

purchase, participations or other equity interests without Treasury's prior approval. 

We did not repurchase or issue any of our common shares or non-cumulative preferred stock during 2023 and 2022. At both 

December 31, 2023 and December 31, 2022, no RSUs or stock options were outstanding. There were 41,160 shares of 

restricted stock outstanding at both December 31, 2023 and December 31, 2022. 

Earnings Per Share

Basic earnings per common share is computed as net income attributable to common stockholders divided by the weighted 

average common shares for the period. The weighted average common shares for the period includes the weighted average 

number of shares that are associated with the warrant for our common stock issued to Treasury pursuant to the Purchase 

Agreement. These shares are included since the warrant is unconditionally exercisable by the holder at a minimal cost. We 

deduct dividends or increases in liquidation preference attributable to the senior preferred stock from net income attributable to 

common stockholders in the period in which such amounts are determinable.

Our diluted earnings per common share is the same as our basic earnings per common share because we had no common 

equivalent shares outstanding during the periods presented which could have had a dilutive or antidilutive effect.

Dividends and Dividend Restrictions

We did not declare or pay any dividends in 2023, 2022, and 2021 on our common stock, senior preferred stock, or any other 

outstanding series of Freddie Mac preferred stock.

Our payment of dividends is subject to the following restrictions:

n	 Restrictions Relating to the Conservatorship - The Conservator has prohibited us from paying any dividends on our 

common stock or on any series of our preferred stock (other than the senior preferred stock). FHFA has instructed our 

Board of Directors that it should consult with and obtain the approval of FHFA before taking actions involving dividends. In 

addition, FHFA has adopted a regulation prohibiting us from making capital distributions during conservatorship, except as 

authorized by the Director of FHFA.

n	 Restrictions Under the Purchase Agreement - The Purchase Agreement prohibits us and any of our subsidiaries from 

declaring or paying any dividends on Freddie Mac equity securities (other than with respect to the senior preferred stock or 

warrant) without the prior written consent of Treasury.

n	 Restrictions Under the GSE Act - Under the GSE Act, FHFA has authority to prohibit capital distributions, including 

payment of dividends, if we fail to meet applicable capital requirements. However, our capital requirements have been 

suspended during conservatorship.

n Restrictions Under our Charter - Without regard to our capital classification, we must obtain prior written approval of 

FHFA to make any capital distribution that would decrease total capital to an amount less than the risk-based capital level 

or that would decrease core capital to an amount less than the minimum capital level. As noted above, our capital 

requirements have been suspended during conservatorship.

n	 Restrictions Relating to Preferred Stock - Payment of dividends on our common stock is also subject to the prior 

payment of dividends on our 24 series of preferred stock and one series of senior preferred stock, representing an 

aggregate of 464,170,000 shares and 1,000,000 shares outstanding, respectively, as of December 31, 2023. Payment of 

dividends on all outstanding preferred stock, other than the senior preferred stock, is subject to the prior payment of 

dividends on the senior preferred stock. 

Delisting of Common Stock and Preferred Stock from NYSE

On July 8, 2010, we delisted our common stock and 20 previously listed classes of preferred stock from the NYSE as directed 

by our Conservator.

Our common stock and the classes of preferred stock that were previously listed on the NYSE are traded exclusively in the 

OTCQB Marketplace. Shares of our common stock trade under the ticker symbol FMCC. We expect that our common stock 

and the previously listed classes of preferred stock will continue to trade in the OTCQB Marketplace so long as market makers 

demonstrate an interest in trading the common and preferred stock.

Financial Statements Notes to Consolidated Financial Statements | Note 11

FREDDIE MAC | 2023 Form 10-K 190
NOTE 12

Net Interest Income

The table below presents the components of net interest income per our consolidated statements of income.

Table 12.1 - Components of Net Interest Income

Year Ended December 31,

(In millions) 2023 2022 2021

Interest income

Mortgage loans $96,985 $79,826 $59,130 

Investment securities 1,571 1,640 2,261 

Securities purchased under agreements to resell 6,135 1,718 48 

Other 672 274 88 

Total interest income 105,363 83,458 61,527 

Interest expense

Debt of consolidated trusts (76,703) (61,404) (42,209) 

Debt of Freddie Mac:

Short-term debt (789) (238) — 

Long-term debt (9,329) (3,811) (1,738) 

Total interest expense (86,821) (65,453) (43,947) 

Net interest income 18,542 18,005 17,580 

(Provision) benefit for credit losses 872 (1,841) 1,041 

Net interest income after benefit (provision) for credit losses $19,414 $16,164 $18,621 

Financial Statements Notes to Consolidated Financial Statements | Note 12

FREDDIE MAC | 2023 Form 10-K 191
NOTE 13

Income Taxes

Income Tax Expense

Total income tax expense includes: 

n	 Current income tax expense, which represents the amount of federal tax paid or payable to (or refundable from) the Internal 

Revenue Service, including interest and penalties and amounts accrued for unrecognized tax benefits, if any, and

n	 Deferred income tax expense, which represents the net change in the deferred tax asset or liability balance during the year, 

including any change in the valuation allowance.

The table below presents the components of our federal income tax expense for the past three years. We are exempt from 

state and local income taxes.

Table 13.1 - Federal Income Tax Expense

Year Ended December 31,

(In millions) 2023 2022 2021

Current income tax expense ($1,003) ($1,749) ($2,617) 

Deferred income tax expense (1,658) (528) (473) 

Total income tax expense ($2,661) ($2,277) ($3,090) 

Income tax expense increased from 2022 to 2023 primarily due to an increase in pre-tax book income, and decreased from 

2021 to 2022 primarily due to a decrease in pre-tax book income.

The table below presents the reconciliation between our federal statutory income tax rate and our effective tax rate for the past 

three years.

Table 13.2 - Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate 

Year Ended December 31,

2023 2022 2021

(Dollars in millions) Amount Percent Amount Percent Amount Percent

Statutory corporate tax rate ($2,772) 21.0 % ($2,437) 21.0 % ($3,192) 21.0 %

Tax-exempt interest 10 (0.1) 7 (0.1) 20 (0.2) 

Tax credits 242 (1.8) 190 (1.6) 133 (0.9) 

Valuation allowance 16 (0.1) 18 (0.2) (11) 0.1 

Other (157) 1.2 (55) 0.5 (40) 0.3 

Effective tax rate ($2,661) 20.2 % ($2,277) 19.6 % ($3,090) 20.3 %

Deferred Tax Assets, Net

We use the asset and liability method of accounting for income taxes for financial reporting purposes. Under this method, 

deferred tax assets and liabilities are recognized based upon the expected future tax consequences of existing temporary 

differences between the financial reporting and the tax reporting basis of assets and liabilities using enacted statutory tax rates 

as well as tax net operating loss and tax credit carryforwards, if any. To the extent tax laws change, deferred tax assets and 

liabilities are adjusted in the period that the tax change is enacted. The realization of our net deferred tax assets is dependent 

upon the generation of sufficient taxable income.

Financial Statements Notes to Consolidated Financial Statements | Note 13

FREDDIE MAC | 2023 Form 10-K 192
The table below presents the balance of significant deferred tax assets and liabilities at December 31, 2023 and December 31, 

2022. The valuation allowance relates to capital loss carryforwards included in Other items, net that we expect to expire 

unused.

Table 13.3 - Deferred Tax Assets and Liabilities

(In millions) December 31, 2023 December 31, 2022

Deferred tax assets:

Deferred fees $1,821 $2,197 

Basis differences related to derivative instruments 1,042 1,745 

Credit related items and allowance for loan losses 863 1,457 

Basis differences related to assets held-for-investment and held-for-sale 696 1,549 

Other items, net 439 178 

Total deferred tax assets 4,861 7,126 

Deferred tax liabilities:

Basis differences related to fair value hedge accounting (749) (1,315) 

Other items, net (18) — 

Total deferred tax liabilities (767) (1,315) 

Valuation allowance (18) (34) 

Deferred tax assets, net $4,076 $5,777 

Valuation Allowance

A valuation allowance is recorded to reduce the net deferred tax asset when it is more likely than not that all or part of our tax 

benefits will not be realized. On a quarterly basis, we determine whether a valuation allowance is necessary. In doing so, we 

consider all evidence available, both positive and negative, in determining whether, based on the weight of the evidence, it is 

more likely than not that the net deferred tax asset will be realized.

We are not permitted to consider in our analysis the impacts proposed legislation may have on our business because the timing 

and certainty of those actions are unknown and beyond our control.

Based on all positive and negative evidence available at December 31, 2023, we determined that it is more likely than not that 

our net deferred tax assets, except for the deferred tax asset related to our capital loss carryforwards, will be realized. A 

valuation allowance of $18 million has been recorded against our capital loss carryforward deferred tax asset.

Unrecognized Tax Benefits

We recognize a tax position taken or expected to be taken (and any associated interest and penalties) if it is more likely than 

not that it will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the 

technical merits of the position. We measure the tax position at the largest amount of benefit that is greater than 50% likely of 

being realized upon ultimate settlement. We evaluated all income tax positions and determined that there were no uncertain tax 

positions that required reserves as of December 31, 2023.

Financial Statements Notes to Consolidated Financial Statements | Note 13

FREDDIE MAC | 2023 Form 10-K 193
NOTE 14

Segment Reporting

As shown in the table below, we have two reportable segments, Single-Family and Multifamily.

Segment Description

Single-Family

Reflects results from our purchase, securitization, and guarantee of single-family loans, our investments in single-family loans and 

mortgage-related securities, the management of Single-Family mortgage credit risk and market risk, and any results of our treasury 

function that are not allocated to each segment.

Multifamily

Reflects results from our purchase, securitization, and guarantee of multifamily loans, our investments in multifamily loans and 

mortgage-related securities, and the management of Multifamily mortgage credit risk and market risk.

Segment Allocations and Results

Our measure of segment profit and loss for each segment is net income and comprehensive income calculated using the same 

accounting policies we use to prepare our general purpose financial statements in conformity with GAAP. The results of each 

reportable segment include directly attributable revenues and expenses. We allocate interest expense and other funding and 

hedging-related costs and returns on certain investments to each reportable segment using a funds transfer pricing process. 

We fully allocate to each reportable segment administrative expenses and other centrally-incurred costs that are not directly 

attributable to a particular segment using various methodologies depending on the nature of the expense. As a result, the sum 

of each income statement line item for the two reportable segments is equal to that same income statement line item for the 

consolidated entity. 

The table below presents the financial results for our Single-Family and Multifamily segments.

Table 14.1 - Segment Financial Results 

Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021

SingleFamily Multifamily Total SingleFamily Multifamily TotalSingle-

(In millions) Family Multifamily Total

Net interest income $17,657 $885 $18,542 $17,067 $938 $18,005 $16,273 $1,307 $17,580 

Non-interest income 

Guarantee income 103 1,512 1,615 109 674 783 114 918 1,032 

Investment gains, net 296 411 707 1,280 689 1,969 361 2,385 2,746 

Other income 211 154 365 295 212 507 479 114 593 

Non-interest income 610 2,077 2,687 1,684 1,575 3,259 954 3,417 4,371 

Net revenues 18,267 2,962 21,229 18,751 2,513 21,264 17,227 4,724 21,951 

(Provision) benefit for credit 

losses 1,172 (300) 872 (1,772) (69) (1,841) 919 122 1,041 

Non-interest expense (8,118) (784) (8,902) (7,148) (671) (7,819) (7,075) (718) (7,793) 

Income before income tax 

expense 11,321 1,878 13,199 9,831 1,773 11,604 11,071 4,128 15,199 

Income tax expense (2,282) (379) (2,661) (1,929) (348) (2,277) (2,251) (839) (3,090) 

Net income 9,039 1,499 10,538 7,902 1,425 9,327 8,820 3,289 12,109 

Other comprehensive income 

(loss), net of taxes and 

reclassification adjustments 10 156 166 (24) (318) (342) (379) (110) (489) 

Comprehensive income $9,049 $1,655 $10,704 $7,878 $1,107 $8,985 $8,441 $3,179 $11,620 

Financial Statements Notes to Consolidated Financial Statements | Note 14

FREDDIE MAC | 2023 Form 10-K 194
We measure total assets for our reportable segments based on the mortgage portfolio for each segment. We operate our 

business in the U.S. and its territories, and accordingly, we generate no revenue from and have no long-lived assets, other than 

financial instruments, in geographic locations other than the U.S. and its territories.

The table below presents total assets for our Single-Family and Multifamily segments.

Table 14.2 - Segment Assets

(In millions) December 31, 2023 December 31, 2022

Single-Family $3,038,910 $2,986,045 

Multifamily 440,797 429,302 

Total segment assets 3,479,707 3,415,347 

Reconciling items(1) (198,731) (207,014) 

Total assets per consolidated balance sheets $3,280,976 $3,208,333 

(1) Reconciling items include assets in our mortgage portfolio that are not recognized on our consolidated balance sheets and assets recognized on our consolidated 

balance sheets that are not allocated to the reportable segments. 

Financial Statements Notes to Consolidated Financial Statements | Note 14

FREDDIE MAC | 2023 Form 10-K 195
NOTE 15

Concentration of Credit and Other Risks

Concentrations of credit risk may arise when we do business with a number of customers or counterparties that engage in 

similar activities or have similar economic characteristics that make them vulnerable in similar ways to changes in industry 

conditions, which could affect their ability to meet their contractual obligations. Concentrations of credit risk may also arise 

when there are a limited number of counterparties in a certain industry. Based on our assessment of business conditions that 

could affect our financial results, we have determined that concentrations of credit risk exist among certain borrowers (including 

geographic concentrations), loan sellers and servicers, credit enhancement providers, and other investment counterparties. In 

the sections below, we discuss our concentration of credit risk for each of the groups to which we are exposed. For a 

discussion of our derivative counterparties, as well as related master netting and collateral agreements, see Note 9. For a 

discussion of securities purchased under agreements to resell and other collateralized arrangements, see Note 10. 

Single-Family Mortgage Portfolio

Single-family borrowers are primarily affected by house prices and interest rates, which are influenced by economic factors. 

Geographic concentrations may increase the exposure of our portfolio to credit risk, as regional economic conditions may 

affect a borrower's ability to repay and the underlying property value.

The table below summarizes the concentration by geographic area of our Single-Family mortgage portfolio. See Note 3, Note 

4, Note 5, and Note 6 for additional information about credit risk associated with single-family loans that we hold or 

guarantee. 

Table 15.1 - Concentration of Credit Risk of Our Single-Family Mortgage Portfolio

December 31, 2023

(Dollars in millions) Portfolio UPB(1) % of Portfolio SDQ Rate

Region(2):

 West $910,597 30 % 0.43 %

 Northeast 703,581 23 0.64 

 Southeast 530,617 17 0.58 

 Southwest 451,271 15 0.54 

 North Central 442,593 15 0.54 

Total $3,038,659 100 % 0.55 

State:

 California $515,267 17 % 0.42 

 Texas 212,800 7 0.57 

 Florida 200,169 7 0.65 

 New York 132,432 4 0.93 

 Illinois 113,806 4 0.69 

 All other 1,864,185 61 0.52 

Total $3,038,659 100 % 0.55 

(1) Excludes UPB of loans underlying certain securitization products for which data was not available. 

(2) Region designation: West (AK, AZ, CA, GU, HI, ID, MT, NV, OR, UT, WA); Northeast (CT, DE, DC, MA, ME, MD, NH, NJ, NY, PA, RI, VT, VA, WV); Southeast (AL, FL, GA, 

KY, MS, NC, PR, SC, TN, VI); Southwest (AR, CO, KS, LA, MO, NE, NM, OK, TX, WY); North Central (IL, IN, IA, MI, MN, ND, OH, SD, WI).

Multifamily Mortgage Portfolio

Numerous factors affect the credit risk related to multifamily borrowers, including effective rents paid and capitalization rates for 

the mortgaged property. Effective rents paid vary among geographic regions of the United States. Geographic concentrations 

may increase the exposure of our portfolio to credit risk, as regional economic conditions may affect a multifamily borrower's 

ability to repay and the underlying property value. The average UPB for multifamily loans is significantly larger than for singlefamily loans and, therefore, individual defaults for multifamily borrowers can result in more significant losses. 

Financial Statements Notes to Consolidated Financial Statements | Note 15

FREDDIE MAC | 2023 Form 10-K 196
The table below summarizes the concentration by geographic area of our Multifamily mortgage portfolio. 

Table 15.2 - Concentration of Credit Risk of Our Multifamily Mortgage Portfolio 

December 31, 2023

(Dollars in millions) Portfolio UPB % of Portfolio Delinquency Rate(1)

Region(2)(3):

West $109,815 25 % 0.16 %

Northeast 107,326 24 0.52 

Southwest 91,406 21 0.26 

Southeast 88,762 20 0.10 

North Central 43,488 10 0.40 

Total $440,797 100 % 0.28 

State(3):

California $58,186 13 % 0.07 

Texas 56,231 13 0.28 

Florida 38,440 9 0.03 

New York 33,815 8 1.13 

Georgia 18,178 4 0.01 

All other 235,947 53 0.27 

Total $440,797 100 % 0.28 

(1) Based on loans two monthly payments or more delinquent or in foreclosure.

(2) Region designation: West (AK, AZ, CA, GU, HI, ID, MT, NV, OR, UT, WA); Northeast (CT, DE, DC, MA, ME, MD, NH, NJ, NY, PA, RI, VT, VA, WV); Southwest (AR, CO, KS, 

LA, MO, NE, NM, OK, TX, WY); Southeast (AL, FL, GA, KY, MS, NC, PR, SC, TN, VI); North Central (IL, IN, IA, MI, MN, ND, OH, SD, WI). 

(3) The UPB of loans collateralized by properties located in multiple regions or states are reported entirely in the region or state with the largest underlying collateral UPB 

as of origination.

In the Multifamily mortgage portfolio, concentration of credit risk depends on the legal structure of the investments we hold. 

Our exposure to credit risk in our senior subordinate securitization products is minimal, as the expected credit risk is generally 

absorbed by the subordinate tranches, which are typically sold to third-party investors. As a result, our Multifamily mortgage 

credit risk is primarily related to loans that have not been securitized. See Note 3, Note 4, Note 5, and Note 6 for additional 

information about credit risk associated with multifamily loans that we hold or guarantee. 

Single-Family Sellers and Servicers

We acquire a significant portion of our Single-Family loan purchase volume from several large sellers. Our top 10 sellers 

provided approximately 55% of our Single-Family purchase volume, including two sellers that each provided 10% or more of 

our Single-Family purchase volume during 2023.

We purchase single-family loans from both depository and non-depository sellers. Non-depository institutions may not have the 

same financial strength or operational capacity, or be subject to the same level of regulatory oversight, as large depository 

institutions. Our top five non-depository sellers provided approximately 41% of our Single-Family purchase volume during 

2023.

If we discover that the representations or warranties related to a loan were breached (i.e., that contractual standards were not 

followed), we can exercise certain contractual remedies to mitigate our actual or potential credit losses. These contractual 

remedies may include, but are not limited to, the ability to require the seller or servicer to repurchase the loan at its current 

UPB, reimburse us for losses realized with respect to the loan after consideration of any other recoveries, and/or indemnify us. 

Our current remedies framework provides for the categorization of loan origination defects for loans with settlement dates on or 

after January 1, 2016. Among other items, the framework provides that "significant defects" may result in a repurchase request 

or a repurchase alternative, such as recourse or indemnification.

Under our current selling and servicing representation and warranty framework for our mortgage loans, we relieve sellers of 

repurchase obligations for breaches of certain selling representations and warranties for certain types of loans, including:

n	 Loans that have established an acceptable payment history for 36 months (12 months for relief refinance loans) of 

consecutive, on-time payments after purchase, subject to certain exclusions and

n	 Loans that have satisfactorily completed a quality control review.

Solely for the purpose of determining whether the acceptable payment history requirements are met, payments due during the 

Financial Statements Notes to Consolidated Financial Statements | Note 15

FREDDIE MAC | 2023 Form 10-K 197
COVID-19-related forbearance period are considered to have been made on time, provided that the mortgage was reported by 

the servicer as having entered into a COVID-19-related forbearance plan between March 13, 2020 and October 31, 2023 and 

met certain other criteria as described in our Guide.

An independent dispute resolution process for alleged breaches of selling or servicing representations and warranties on our 

loans allows for a neutral third party to render a decision on demands that remain unresolved after the existing appeal and 

escalation processes have been exhausted.

As of December 31, 2023, the UPB of loans subject to our repurchase requests issued to our Single-Family sellers and 

servicers was approximately $0.5 billion (this figure includes repurchase requests for which appeals were pending). During 

2023, we recovered amounts with respect to $1.5 billion in UPB of loans subject to our repurchase requests. 

The ultimate amounts of recovery payments we receive from seller/servicers related to their repurchase obligations may be 

significantly less than the amount of our estimates of potential exposure to losses. Our expected credit losses for exposure to 

seller/servicers for their repurchase obligations are considered in our allowance for credit losses. See Note 6 for further 

information. 

We are also exposed to the risk that servicers might fail to service loans in accordance with the contractual requirements, 

resulting in increased credit losses. For example, our servicers have an active role in our loss mitigation efforts, and we, 

therefore, have exposure to them to the extent a decline in their performance results in a failure to realize the anticipated 

benefits of the loss mitigation plans. Since we do not have our own servicing operation, if our servicers lack appropriate 

controls, experience a failure in their controls, or experience an operating disruption in their ability to service loans, our business 

and financial results could be adversely affected.

Significant portions of our single-family loans are serviced by several large servicers. Our top 10 servicers serviced 

approximately 53% of our Single-Family mortgage portfolio, including one servicer that serviced 10% or more of our SingleFamily mortgage portfolio as of December 31, 2023.

We utilize both depository and non-depository servicers for single-family loans. Some of these non-depository servicers service 

a large share of our loans. As of December 31, 2023, approximately 25% of our Single-Family mortgage portfolio, excluding 

loans for which we do not exercise control over the associated servicing, was serviced by our five largest non-depository 

servicers, on a combined basis. We routinely monitor the performance of our largest non-depository servicers. 

For our mortgage-related securities, we guarantee the payment of principal and interest, and when the underlying borrowers do 

not make their mortgage payments, our Guide generally requires Single-Family servicers to advance the missed mortgage 

interest payments for up to 120 days. After this time, Freddie Mac will make the missed mortgage principal and interest 

payments until the mortgages are no longer held by the securitization trust. 

In addition to principal and interest payments, borrowers are also responsible for other expenses such as property taxes and 

homeowner's insurance premiums. When borrowers do not pay these expenses, our Guide generally requires Single-Family 

servicers to advance the funds for these expenses in order to protect or preserve our interest in or legal right to the properties. 

These advances are ultimately collectible from the borrowers. If the borrowers reperform through loan workout activities, the 

missed payments and incurred expenses will be collected from them. We will reimburse the servicers for the advanced 

amounts when uncollected from the borrowers at completion of foreclosures or foreclosure alternatives.

On August 17, 2022, FHFA and Ginnie Mae issued a joint announcement of their updated minimum financial eligibility 

requirements for Enterprise seller/servicers and Ginnie Mae issuers. Freddie Mac announced the updated changes on 

September 21, 2022. The new requirements contain changes related to incorporating enhanced definitions of capital and 

liquidity, reducing the procyclicality of the current liquidity requirements, and incorporating lessons learned from the pandemic. 

They also include higher supplemental requirements applicable only to large non-depositories, defined as non-depositories 

having $50 billion or more of total single-family servicing UPB, as well as a new origination liquidity requirement for sellers that 

originate greater than $1 billion in single-family first lien mortgages in the most recent calendar year. The majority of the 

requirements became effective on September 30, 2023.

Multifamily Sellers and Servicers

We acquire a significant portion of our Multifamily loan purchase and guarantee volume from several large sellers. Our top 10 

sellers provided approximately 74% of our Multifamily purchase and guarantee volume, including three sellers that each 

provided 10% or more of our Multifamily purchase and guarantee volume during 2023.

Significant portions of our multifamily loans are serviced by several large servicers. Our top 10 servicers serviced approximately 

78% of our Multifamily mortgage portfolio, including three servicers that each serviced 10% or more of our Multifamily 

mortgage portfolio as of December 31, 2023.

Multifamily loans utilize both primary and master servicers. Primary servicers service unsecuritized mortgage loans and are also 

typically engaged by master servicers to service on their behalf the mortgage loans underlying securitizations. For a majority of 

our K Certificate securitizations, we utilize one of three large financial depository institutions as master servicer. For our other 

Financial Statements Notes to Consolidated Financial Statements | Note 15

FREDDIE MAC | 2023 Form 10-K 198
securitization products and a smaller number of K Certificate securitizations, we serve as master servicer. Multifamily primary 

servicers discussed above present potential operational risk and impact to the borrowers if the servicing needs to be 

transferred to another servicer. We also rely on master servicers of our multifamily securitization transactions to advance funds 

in the event of payment shortfalls, including principal and interest payments related to loans in forbearance. In instances where 

payment shortfalls occur, the master servicer is required to make advances as long as such advances have not been deemed 

unrecoverable. For multifamily loans purchased and held in our mortgage-related investments portfolio, the primary servicers 

are not required to advance funds in the event of payment shortfalls and, therefore, do not present significant counterparty 

credit risk from this source.

Credit Enhancement Providers 

We have counterparty credit risk relating to the potential insolvency of, or nonperformance by, mortgage insurers that insure 

single-family loans we purchase or guarantee. We also have similar exposure to insurers and reinsurers through our ACIS and 

other insurance transactions where we purchase insurance policies as part of our CRT activities.

We evaluate the recovery and collectability from mortgage insurers as part of the estimate of our allowance for credit losses. 

See Note 6 for additional information. As of December 31, 2023, mortgage insurers provided primary mortgage insurance 

coverage with maximum loss limits of $165.7 billion for $637.0 billion of UPB in connection with our Single-Family mortgage 

portfolio. These amounts are based on gross coverage without regard to netting of coverage that may exist to the extent an 

affected loan is covered under other types of insurance. Changes in our expectations related to recovery and collectability from 

our credit enhancement providers may affect our estimates of expected credit losses, perhaps significantly.

The table below summarizes the concentration of mortgage insurer counterparties who provided 10% or more of our overall 

primary mortgage insurance coverage.

Table 15.3 - Primary Mortgage Insurer Concentration

Mortgage Insurance Coverage(1)

Mortgage Insurer December 31, 2023

Mortgage Guaranty Insurance Corporation 18 %

Arch Mortgage Insurance Company 18 

Radian Guaranty Inc. 17 

Essent Guaranty, Inc. 17 

Enact 16 

National Mortgage Insurance Corporation 14 

Total 100 %

(1) Coverage amounts exclude coverage primarily related to certain loans for which we do not control servicing, and may include coverage provided by affiliates and 

subsidiaries of the counterparty. 

As part of our ACIS transactions, we regularly obtain insurance coverage from global insurers and reinsurers. These 

transactions incorporate several features designed to increase the likelihood that we will recover on the claims we file with the 

insurers and reinsurers. In each transaction, we require the individual insurers and reinsurers to post collateral to cover portions 

of their exposure, which helps to promote certainty and timeliness of claim payment. 

While private mortgage insurance companies are required to be monoline (i.e., to participate solely in the mortgage insurance 

business, although the holding company may be a diversified insurer), many of our insurers and reinsurers in these transactions 

participate in multiple types of insurance businesses, which helps diversify their risk exposure.

Other Investment Counterparties

We are exposed to the non-performance of counterparties relating to other investments (including non-mortgage-related 

securities and cash equivalents) transactions, including those entered into on behalf of our securitization trusts. Our policies 

require that the counterparty be evaluated using our internal counterparty rating model prior to our entering such transactions. 

We monitor the financial strength of our counterparties to these transactions and may use collateral maintenance requirements 

to manage our exposure to individual counterparties. The permitted term and dollar limits for each of these transactions are 

also based on the counterparty's financial strength.

Our other investments (including non-mortgage-related securities and cash equivalents) counterparties are primarily major 

institutions, including other GSEs, Treasury, the Federal Reserve Bank of New York, GSD/FICC, highly-rated supranational 

institutions, depository and non-depository institutions, brokers and dealers, and government money market funds. As of 

December 31, 2023, including amounts related to our consolidated VIEs, the balance in our other investments portfolio was 

$147.2 billion. The balance consists primarily of cash, securities purchased under agreements to resell, U.S. Treasury 

securities, cash deposited with the Federal Reserve Bank of New York, and secured lending activities.

Financial Statements Notes to Consolidated Financial Statements | Note 15

FREDDIE MAC | 2023 Form 10-K 199
NOTE 16

Fair Value Disclosures

The accounting guidance for fair value measurements and disclosures defines fair value, establishes a framework for measuring 

fair value and sets forth disclosure requirements regarding fair value measurements. This guidance applies whenever other 

accounting guidance requires or permits assets or liabilities to be measured at fair value. Fair value represents the price that 

would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the 

measurement date. Fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place 

either in the principal market for the asset or liability, or, in the absence of a principal market, in the most advantageous market 

for the asset or liability.

We use fair value measurements for the initial recording of certain assets and liabilities and periodic remeasurement of certain 

assets and liabilities on a recurring or non-recurring basis.

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy that 

prioritizes the inputs into the valuation techniques used to measure fair value. The levels of the fair value hierarchy are defined 

as follows in priority order:

n	 Level 1 - Inputs to the valuation techniques are based on quoted prices in active markets for identical assets or liabilities.

n	 Level 2 - Inputs to the valuation techniques are based on observable inputs other than quoted prices in active markets for 

identical assets or liabilities. 

n	 Level 3 - One or more inputs to the valuation technique are unobservable and significant to the fair value measurement.

We use quoted market prices and valuation techniques that seek to maximize the use of observable inputs, where available, 

and minimize the use of unobservable inputs. Our inputs are based on the assumptions a market participant would use in 

valuing the asset or liability. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the 

lowest level input that is significant to the fair value measurement.

Valuation Risk and Controls Over Fair Value Measurements

Valuation risk is the risk that fair values used for financial disclosures, risk metrics, and performance measures do not 

reasonably reflect market conditions and prices.

We designed our control processes so that our fair value measurements are appropriate and reliable, that they are based on 

observable inputs where possible, and that our valuation approaches are consistently applied and the assumptions and inputs 

are reasonable. Our control processes provide a framework for segregation of duties and oversight of our fair value 

methodologies, techniques, validation procedures, and results.

Groups within our Finance Division, independent of our business functions, execute and validate the valuation processes and 

are responsible for determining the fair values of the majority of our financial assets and liabilities. In determining fair value, we 

consider the credit risk of our counterparties in estimating the fair values of our assets and our own credit risk in estimating the 

fair values of our liabilities. The fair values determined by our Finance Division are further verified by an independent group 

within our ERM Division.

The independent validation procedures performed by the ERM Division are intended to monitor that the prices we receive from 

third parties are consistent with our observations of market activity, and that fair value measurements developed using internal 

data reflect the assumptions that a market participant would use in pricing our assets and liabilities. These validation 

procedures include performing a daily price review and a monthly independent verification of fair value measurements through 

independent modeling, analytics, and comparisons to other market source data, if available. If we are unable to validate the 

reasonableness of a given price, we ultimately do not use that price for fair value measurements on our consolidated financial 

statements. These procedures are risk-based and are executed before we finalize the prices used in preparing our fair value 

measurements for our financial statements.

In addition to performing the validation procedures noted above, the ERM Division provides independent risk governance over 

all valuation processes by establishing and maintaining a corporate-wide valuation risk policy. The ERM Division also 

independently reviews significant judgments, methodologies, and valuation techniques to monitor compliance with established 

policies.

Our Valuation Risk Committee, which includes representation from our business lines, the ERM Division, and the Finance 

Division, provides senior management's governance over valuation processes, methodologies, controls, and fair value 

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 200
measurements. Identified exceptions are reviewed and resolved through the verification process and reviewed at the Valuation 

Risk Committee.

Where models are employed to assist in the measurement and verification of fair values, changes made to those models during 

the period are reviewed and approved according to the corporate model change governance process, with material changes 

reviewed at the Valuation Risk Committee. Inputs used by models are regularly updated for changes in the underlying data, 

assumptions, valuation inputs, and market conditions and are subject to the valuation controls noted above.

Use of Third-Party Pricing Data in Fair Value Measurement

Many of our valuation techniques use, either directly or indirectly, data provided by third-party pricing services or dealers. The 

techniques used by these pricing services and dealers to develop the prices generally are either: 

n	 A comparison to recent transactions involving the instrument or transactions involving instruments with similar collateral 

and risk profiles, adjusted as necessary based on specific characteristics of the asset or liability being valued; or

n	 Industry-standard modeling, such as a discounted cash flow model.

The prices provided by the pricing services and dealers reflect their observations and assumptions related to market activity, 

including risk premiums and liquidity adjustments. The models and related assumptions used by the pricing services and 

dealers are owned and managed by them and, in many cases, the significant inputs used in the valuation techniques are not 

reasonably available to us. However, we have an understanding of the processes and assumptions used to develop the prices 

based on our ongoing due diligence, which includes discussions with our pricing services and dealers at least annually and 

often more frequently. We believe that the procedures executed by the pricing services and dealers, combined with our internal 

verification and analytical procedures, provide assurance that the prices used in our financial statements comply with the 

accounting guidance for fair value measurements and disclosures and reflect the assumptions that a market participant would 

use in pricing our assets and liabilities. The price quotes we receive are non-binding both to us and to our counterparties.

In many cases, we receive quotes from third-party pricing services or dealers and use those prices without adjustment. For a 

large majority of the assets and liabilities we value using pricing services and dealers, we obtain quotes from multiple external 

sources and use the median of the prices to measure fair value. This technique is referred to below as "median of external 

sources." The significant inputs used in the fair value measurement of assets and liabilities that are valued using the median of 

external sources pricing technique are the third-party quotes. Significant increases (decreases) in any of the third-party quotes 

in isolation may result in a significantly higher (lower) fair value measurement. In limited circumstances, we may be able to 

receive pricing information from only a single external source. This technique is referred to below as "single external source."

Valuation Techniques

The following table contains a description of the valuation techniques we use for fair value measurement and disclosure; the 

significant inputs used in those techniques (if applicable); the classification within the fair value hierarchy; and, for those 

measurements that we report on our consolidated balance sheets and are classified as Level 3 of the hierarchy, a narrative 

description of the uncertainty of the fair value measurement to changes in significant unobservable inputs. Although the 

uncertainties of the unobservable inputs are discussed below in isolation, interrelationships exist among the inputs such that a 

change in one unobservable input can result in a change to one or more of the other inputs. For example, the most common 

interrelationship that affects the majority of our fair value measurements is between future interest rates, prepayment speeds, 

and probabilities of default. Generally, a change in the assumption used for future interest rates results in a directionally 

opposite change in the assumption used for prepayment speeds and a directionally similar change in the assumption used for 

probabilities of default.

Each technique discussed below may not be used in a given reporting period, depending on the composition of our assets and 

liabilities measured at fair value and relevant market activity during that period.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 201
Investment Securities

U.S. Treasury Securities Quoted prices in active markets Level 1

Mortgage-related 

securities

Majority of agency securities Median of external sources Level 2

Certain other agency securities Single external source Level 2 or 3

Certain securities with limited 

market activity

Discounted cash flows or risk metric pricing. 

Significant inputs used in the discounted cash flow technique 

include OAS. Significant increases (decreases) in the OAS in 

isolation would result in a significantly lower (higher) fair value 

measurement.

Significant inputs used in the risk metric pricing technique 

include key risk metrics, such as key rate durations. 

Significant increases (decreases) in key rate durations in 

isolation would result in a significant increase (decrease) in 

the magnitude of change of fair value measurement in 

response to key rate movements. Under risk metric pricing, 

securities are valued by starting with a prior period price and 

adjusting that price for market changes in the key risk metric 

input used. 

Level 3

Mortgage Loans

Single-Family loans GSE securitization market Benchmark security pricing for actively traded mortgagerelated securities with similar characteristics, adjusting for the 

value of our guarantee fee and our credit obligation related to 

performing our guarantee (see Guarantee obligations). The 

credit obligation is based on compensation we charge under 

current market pricing for loans that qualify under our current 

underwriting standards (Level 2) and internal credit models for 

loans that do not qualify under our current underwriting 

standards (Level 3).

Level 2 or 3

Whole loan market Median of external sources, referencing market activity for 

deeply delinquent and modified loans, where available.

Level 3

Certain held-for-investment Internal models that estimate the fair value of the underlying 

collateral for impaired loans. Significant inputs used by our 

internal models include REO disposition, short sale, and thirdparty sale values, combined with mortgage loan level 

characteristics using the repeat housing sales index to 

estimate the current fair value of the mortgage loan. 

Significant increases (decreases) in the historical average 

sales proceeds per mortgage loan in isolation would result in 

significantly higher (lower) fair value measurements.

Level 3

Multifamily loans Held-for-sale Discounted cash flows based on observable K Certificate 

market spreads.

Level 2

Market prices from a third-party pricing service using 

discounted cash flows incorporating credit spreads for similar 

loans based on the loan's LTV ratio and DSCR.

Level 3

Held-for-investment Discounted cash flows based on observable K Certificate 

market spreads.

Level 2

Market prices from a third-party pricing service using 

discounted cash flows incorporating credit spreads for similar 

loans based on the loan's LTV ratio and DSCR.

Level 3

Debt

Debt of consolidated trusts See Mortgage-related securities Level 2 or 3

Debt of Freddie Mac Median of external sources Level 2

Single external source

Published yield matrices

Instrument Valuation Technique Classification in the 

Fair Value Hierarchy

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 202
Other Assets / Other Liabilities

Derivatives Exchange-traded futures Quoted prices in active markets Level 1

Interest-rate swaps Discounted cash flows. Significant inputs include marketbased interest rates.Level 2

Option-based derivatives Option-pricing models. Significant inputs include interest-rate 

volatility matrices.

Level 2

Purchase and sale commitments See Mortgage-related securities Level 2

Loan commitments Multifamily loan purchase 

commitments

See Multifamily loans Level 2 or 3 

Guarantee assets Single-Family Median of external sources with adjustments for specific loan 

characteristics.

Level 3

Multifamily Discounted cash flows. Significant inputs include current OASto-benchmark interest rates for new guarantees. Significant 

increases (decreases) in the OAS in isolation would result in a 

significantly lower (higher) fair value measurement.

Level 3

Guarantee obligations Single-Family Delivery and guarantee fees that we charge under our current 

market pricing.

Level 2

Internal credit models. Significant inputs include loan 

characteristics, loan performance, and status information.

Level 3

Multifamily Discounted cash flows. Significant inputs are similar to those 

used in the valuation technique for the Multifamily guarantee 

assets.

Level 3

Instrument Valuation Technique Classification in the 

Fair Value Hierarchy

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 203
Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents our assets and liabilities measured on our consolidated balance sheets at fair value on a recurring 

basis subsequent to initial recognition, including instruments where we have elected the fair value option.

Table 16.1 - Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2023

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustment(1) Total

Assets:

Investment securities:

Available-for-sale $— $4,212 $678 $— $4,890 

Trading:

Mortgage-related securities — 5,342 2,771 — 8,113 

Non-mortgage-related securities 29,854 418 — — 30,272 

Total trading securities 29,854 5,760 2,771 — 38,385 

Total investment securities 29,854 9,972 3,449 — 43,275 

Mortgage loans held-for-sale — 6,460 896 — 7,356 

Mortgage loans held-for-investment — 1,333 473 — 1,806 

Other assets:

 Guarantee assets — — 5,351 — 5,351 

 Derivative assets, net — 6,209 2 (5,725) 486 

 Other assets — 92 166 — 258 

Total other assets — 6,301 5,519 (5,725) 6,095 

Total assets carried at fair value on a recurring basis $29,854 $24,066 $10,337 ($5,725) $58,532 

Liabilities:

Debt:

Debt of consolidated trusts $— $1,707 $343 $— $2,050 

Debt of Freddie Mac — 336 90 — 426 

Total debt — 2,043 433 — 2,476 

Other liabilities:

 Derivative liabilities, net — 8,608 63 (7,798) 873 

 Other liabilities — — — — — 

Total other liabilities — 8,608 63 (7,798) 873 

Total liabilities carried at fair value on a recurring basis $— $10,651 $496 ($7,798) $3,349 

Referenced footnote is included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 204
December 31, 2022

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustment(1) Total

Assets:

Investment securities:

Available-for-sale $— $5,640 $894 $— $6,534 

Trading:

Mortgage-related securities — 5,603 2,731 — 8,334 

Non-mortgage-related securities 23,453 380 — — 23,833 

Total trading securities 23,453 5,983 2,731 — 32,167 

Total investment securities 23,453 11,623 3,625 — 38,701 

Mortgage loans held-for-sale — 2,908 310 — 3,218 

Mortgage loans held-for-investment — 1,104 110 — 1,214 

Other assets:

Guarantee assets — — 5,442 — 5,442 

Derivative assets, net — 6,397 2 (6,092) 307 

Other assets — 12 129 — 141 

Total other assets — 6,409 5,573 (6,092) 5,890 

Total assets carried at fair value on a recurring basis $23,453 $22,044 $9,618 ($6,092) $49,023 

Liabilities:

Debt:

Debt of consolidated trusts $— $1,656 $288 $— $1,944 

Debt of Freddie Mac — 1,003 100 — 1,103 

Total debt — 2,659 388 — 3,047 

Other liabilities:

 Derivative liabilities, net — 10,823 97 (10,162) 758 

 Other liabilities — 1 — — 1 

Total other liabilities — 10,824 97 (10,162) 759 

Total liabilities carried at fair value on a recurring basis $— $13,483 $485 ($10,162) $3,806 

(1) Represents counterparty netting and cash collateral netting.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 205
Level 3 Fair Value Measurements

The table below presents a reconciliation of all assets and liabilities measured on our consolidated balance sheets at fair value 

on a recurring basis using significant unobservable inputs (Level 3), including transfers into and out of Level 3. The table also 

presents gains and losses due to changes in fair value, including both realized and unrealized gains and losses, recognized on 

our consolidated statements of income for Level 3 assets and liabilities.

Table 16.2 - Fair Value Measurements of Assets and Liabilities Using Significant Unobservable Inputs

Year Ended December 31, 2023

Balance,

January 1,

2023

Total Realized/Unrealized 

Gains/Losses(1)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3

Balance,

December 

31,

2023

Change in 

Unrealized 

Gains/Losses(1)

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

2023(2)

Change in 

Unrealized 

Gains/Losses(1), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

(In millions) 2023

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $894 $2 ($5) $— $— $— ($171) $— ($42) $678 $— ($4) 

Trading 2,731 (540) — 634 — — (54) — — 2,771 112 — 

Total investment 

securities 3,625 (538) (5) 634 — — (225) — (42) 3,449 112 (4) 

Mortgage loans heldfor-sale 310 6 — 2,038 — (1,152) (24) 12 (294) 896 32 — 

Mortgage loans heldfor-investment 110 (81) — — — — (15) 530 (71) 473 (84) — 

Other assets:

Guarantee assets 5,442 71 — — 725 — (887) — — 5,351 71 — 

Other assets 131 67 — (20) 11 (3) (18) — — 168 66 — 

Total other assets 5,573 138 — (20) 736 (3) (905) — — 5,519 137 — 

Total assets 9,618 (475) (5) 2,652 736 (1,155) (1,169) 542 (407) 10,337 197 (4) 

Liabilities

Debt $388 ($41) $— ($3) $97 $— ($8) $— $— $433 ($17) $— 

Other liabilities 97 14 — — 1 — (49) — — 63 (34) — 

Total liabilities $485 ($27) $— ($3) $98 $— ($57) $— $— $496 ($51) $— 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 206
Year Ended December 31, 2022

Balance,

January 1,

2022

Total Realized/Unrealized 

Gains/Losses(1)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3

Balance,

December 

31,

2022

Change in 

Unrealized 

Gains/Losses(1)

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

2022(2)

Change in 

Unrealized 

Gains/Losses(1), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

(In millions) 2022

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $1,286 $30 ($103) $51 $— ($86) ($314) $30 $— $894 ($1) ($41) 

Trading 3,386 (1,309) — 843 — — (169) — (20) 2,731 (595) — 

Total investment 

securities 4,672 (1,279) (103) 894 — (86) (483) 30 (20) 3,625 (596) (41) 

Mortgage loans heldfor-sale — (54) — — — (94) (26) 486 (2) 310 (53) — 

Mortgage loans heldfor-investment — (27) — — — — (12) 149 — 110 (27) — 

Other assets:

Guarantee assets 5,919 (783) — — 1,216 — (910) — — 5,442 (783) — 

Other assets 101 62 — (13) 17 (10) (26) — — 131 62 — 

Total other assets 6,020 (721) — (13) 1,233 (10) (936) — — 5,573 (721) — 

Total assets 10,692 (2,081) (103) 881 1,233 (190) (1,457) 665 (22) 9,618 (1,397) (41) 

Liabilities

Debt $294 $14 $— ($21) $163 $— ($62) $— $— $388 $50 $— 

Other liabilities 24 79 — 1 — — (7) — — 97 74 — 

Total liabilities $318 $93 $— ($20) $163 $— ($69) $— $— $485 $124 $— 

Year Ended December 31, 2021

Balance,

January 1,

2021

Total Realized/Unrealized 

Gains/Losses(1)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3

Balance,

December 

31,

2021

Change in 

Unrealized 

Gains/Losses(1)

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

2021(2)

Change in 

Unrealized 

Gains/Losses(1), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

(In millions) 2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $1,588 $29 $7 $— $— ($32) ($306) $— $— $1,286 $26 $7 

Trading 3,259 (869) — 1,536 — (277) (83) — (180) 3,386 (872) — 

Total investment 

securities 4,847 (840) 7 1,536 — (309) (389) — (180) 4,672 (846) 7 

Other assets:

Guarantee assets 5,509 (378) — — 1,742 — (954) — — 5,919 (378) — 

Other assets 171 (54) — (6) 19 (9) (20) — — 101 (55) — 

Total other assets 5,680 (432) — (6) 1,761 (9) (974) — — 6,020 (433) — 

Total assets 10,527 (1,272) 7 1,530 1,761 (318) (1,363) — (180) 10,692 (1,279) 7 

Liabilities

Debt $323 ($30) $— ($8) $169 $— ($160) $— $— $294 ($19) $— 

Other liabilities 19 7 — 7 2 (1) (10) — — 24 (3) — 

Total liabilities $342 ($23) $— ($1) $171 ($1) ($170) $— $— $318 ($22) $— 

(1) For assets, increase and decrease in earnings and other comprehensive income is shown as gains and (losses), respectively. For liabilities, increase and decrease in 

earnings and comprehensive income is shown as (gains) and losses, respectively.

(2) Represents the amount of total gains or losses for the period, included in earnings, attributable to the change in unrealized gains and losses related to assets and 

liabilities classified as Level 3 that were still held at December 31, 2023, December 31, 2022 and December 31, 2021, respectively. 

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 207
The table below provides valuation techniques, the range, and the weighted average of significant unobservable inputs for Level 

3 assets and liabilities measured on our consolidated balance sheets at fair value on a recurring basis.

Table 16.3 - Quantitative Information about Recurring Level 3 Fair Value Measurements 

December 31, 2023

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except for certain unobservable 

inputs as shown) Type Range

Weighted

Average(1)

Assets

Investment securities:

Available-for-sale $489 Median of external sources External pricing sources $61.2 - $71.6 $66.7 

 189 Other

Trading 2,085 Single external source External pricing sources $0.0 - $4,471.7 $147.3 

 686 Other

Mortgage loans held-for-sale 896 Single external source External pricing sources $59.3 - $110.4 $100.3 

Mortgage loans held-for-investment 473 Single external source External pricing sources $24.7 - $99.2 $74.7 

Guarantee assets 5,014 Discounted cash flows OAS 17 - 233 bps 47 bps

 337 Other

Insignificant Level 3 assets(2) 168 

Total level 3 assets $10,337 

Liabilities

Insignificant Level 3 liabilities(2) 496 

Total level 3 liabilities $496 

December 31, 2022

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except for certain unobservable 

inputs as shown) Type Range

Weighted

Average(1)

Assets

Investment securities:

Available-for-sale $557 Median of external sources External pricing sources $66.3 - $74.6 $70.5 

 337 Other

Trading 2,080 Single external source External pricing sources $0.0 - $5,702.4 $224.8 

 651 Other

Mortgage loans held-for-sale 310 Single external source External pricing sources $39.6 - $98.1 $76.6

Mortgage loans held-for-investment 110 Single external source External pricing sources $76.9 - $87.5 $80.6

Guarantee assets 5,084 Discounted cash flows OAS 17 - 186 bps 45 bps

 358 Other

Insignificant Level 3 assets(2) 131 

Total level 3 assets $9,618 

Liabilities

Insignificant Level 3 liabilities(2) 485 

Total level 3 liabilities $485 

(1) Unobservable inputs were weighted primarily by the relative fair value of the financial instruments.

(2) Represents the aggregate amount of Level 3 assets or liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 208
Assets Measured at Fair Value on a Non-Recurring Basis

We may be required, from time to time, to measure certain assets at fair value on a non-recurring basis. These adjustments 

usually result from the application of lower-of-cost-or-fair-value accounting or an allowance for credit losses based on the fair 

value of the underlying collateral. Certain of the fair values in the tables below were not obtained as of the period end, but were 

obtained during the period.

The table below presents assets measured on our consolidated balance sheets at fair value on a non-recurring basis. 

Table 16.4 - Assets Measured at Fair Value on a Non-Recurring Basis

December 31, 2023 December 31, 2022

(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Mortgage loans(1) $— $640 $1,578 $2,218 $— $386 $1,758 $2,144 

(1) Includes loans that are classified as held-for-investment and have an allowance for credit losses based on the fair value of the underlying collateral and held-for-sale 

loans where the fair value is below cost.

The table below provides valuation techniques, the range, and the weighted average of significant unobservable inputs for Level 

3 assets measured on our consolidated balance sheets at fair value on a non-recurring basis.

Table 16.5 - Quantitative Information about Non-Recurring Level 3 Fair Value Measurements

December 31, 2023

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except 

for certain unobservable 

inputs as shown) Type Range

Weighted

Average(1)

Mortgage loans $1,394 Median of external sources External pricing sources $72.9 - $98.8 $82.4

184 Other

Total $1,578

December 31, 2022

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except 

for certain unobservable 

inputs as shown) Type Range

Weighted

Average(1)

Mortgage loans $1,657 Median of external sources External pricing sources $74.8 - $98.6 $86.3

101 Other

Total $1,758

(1) Unobservable inputs were weighted primarily by the relative fair value of the financial instruments.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 209
Fair Value of Financial Instruments

The table below presents the carrying value and estimated fair value of our financial instruments. For certain types of financial 

instruments, such as cash and cash equivalents, securities purchased under agreements to resell, secured lending, and certain 

debt, the carrying value on our GAAP balance sheets approximates fair value, as these assets and liabilities are short-term in 

nature and have limited fair value volatility. 

Table 16.6 - Fair Value of Financial Instruments

December 31, 2023

GAAP 

Measurement 

Category(1)

Carrying  

Amount

Fair Value

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustments(2) Total

Financial Assets

Cash and cash equivalents Amortized cost $6,019 $6,019 $— $— $— $6,019 

Securities purchased under agreements 

to resell Amortized cost 95,148 — 105,393 — (10,245) 95,148 

Investments securities:

Available-for-sale FV - OCI 4,890 — 4,212 678 — 4,890 

Trading FV - NI 38,385 29,854 5,760 2,771 — 38,385 

Total investments securities 43,275 29,854 9,972 3,449 — 43,275 

Mortgage loans:

Mortgage loans held-for-sale 12,941 — 9,276 3,868 — 13,144 

Mortgage loans held-for-investment, 

net of allowance for credit losses 3,083,665 — 2,466,127 254,877 — 2,721,004 

Total mortgage loans Various(3) 3,096,606 — 2,475,403 258,745 — 2,734,148 

Other assets:

Guarantee assets FV - NI 5,351 — — 5,353 — 5,353 

Derivative assets, net FV - NI 486 — 6,209 2 (5,725) 486 

Other assets(4) Various 2,107 — 946 1,165 — 2,111 

Total other assets 7,944 — 7,155 6,520 (5,725) 7,950 

Total financial assets $3,248,992 $35,873 $2,597,923 $268,714 ($15,970) $2,886,540 

Financial Liabilities

Debt:

Debt of consolidated trusts $3,041,927 $— $2,673,019 $727 $— $2,673,746 

Debt of Freddie Mac 166,419 — 173,877 3,391 (10,245) 167,023 

Total debt Various(5) 3,208,346 — 2,846,896 4,118 (10,245) 2,840,769 

Other liabilities:

Guarantee obligations Amortized cost 5,451 — 103 6,023 — 6,126 

Derivative liabilities, net FV - NI 873 — 8,608 63 (7,798) 873 

Other liabilities(4) FV - NI 14 — 465 194 — 659 

Total other liabilities 6,338 — 9,176 6,280 (7,798) 7,658 

Total financial liabilities $3,214,684 $— $2,856,072 $10,398 ($18,043) $2,848,427 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 210
December 31, 2022

GAAP 

Measurement 

Category(1)

Carrying 

Amount

Fair Value

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustments(2) Total

Financial Assets

Cash and cash equivalents Amortized cost $6,360 $6,360 $— $— $— $6,360 

Securities purchased under agreements 

to resell Amortized cost 87,295 — 99,286 — (11,991) 87,295 

Investments securities:

Available-for-sale FV - OCI 6,534 — 5,640 894 — 6,534 

Trading FV - NI 32,167 23,453 5,983 2,731 — 32,167 

Total investments securities 38,701 23,453 11,623 3,625 — 38,701 

Mortgage loans:

Mortgage loans held-for-sale 12,197 — 9,032 3,461 — 12,493 

Mortgage loans held-for-investment, 

net of allowance for credit losses 3,022,318 — 2,348,858 273,044 — 2,621,902 

Total mortgage loans Various(3) 3,034,515 — 2,357,890 276,505 — 2,634,395 

Other assets:

Guarantee assets FV - NI 5,442 — — 5,445 — 5,445 

Derivative assets, net FV - NI 307 — 6,397 2 (6,092) 307 

Other assets(4) Various 1,739 — 907 835 — 1,742 

Total other assets 7,488 — 7,304 6,282 (6,092) 7,494 

Total financial assets $3,174,359 $29,813 $2,476,103 $286,412 ($18,083) $2,774,245 

Financial Liabilities

Debt:

Debt of consolidated trusts $2,979,070 $— $2,564,323 $701 $— $2,565,024 

Debt of Freddie Mac 166,762 — 175,673 3,162 (11,991) 166,844 

Total debt Various(5) 3,145,832 — 2,739,996 3,863 (11,991) 2,731,868 

Other liabilities:

Guarantee obligations Amortized cost 5,779 — — 6,016 — 6,016 

Derivative liabilities, net FV - NI 758 — 10,823 97 (10,162) 758 

Other liabilities(4) FV - NI 20 — 1,025 211 — 1,236 

Total other liabilities 6,557 — 11,848 6,324 (10,162) 8,010 

Total financial liabilities $3,152,389 $— $2,751,844 $10,187 ($22,153) $2,739,878 

(1) FV - NI denotes fair value through net income. FV - OCI denotes fair value through other comprehensive income.

(2) Represents counterparty netting and cash collateral netting.

(3) The GAAP carrying amounts measured at amortized cost, lower-of-cost-or-fair-value, and FV - NI were $3.1 trillion, $5.6 billion and $9.2 billion as of December 31, 

2023, respectively, and $3.0 trillion, $9.0 billion and $4.4 billion as of December 31, 2022, respectively.

(4) For other assets, includes advances to lenders, secured lending, and loan commitments. For other liabilities, includes loan commitments.

(5) The GAAP carrying amounts measured at amortized cost and FV - NI were $3.2 trillion and $2.5 billion as of December 31, 2023, respectively, and $3.1 trillion and 

$3.0 billion as of December 31, 2022, respectively.

Fair Value Option

We elected the fair value option for certain mortgage loans and loan commitments and certain debt issuances. 

Mortgage Loans and Loan Commitments

We elected the fair value option for certain fixed-rate multifamily loan purchase commitments and certain multifamily loans that 

were acquired for securitization to offset the changes in fair value of the derivatives that we use to economically hedge the 

interest rate risk of the loans and commitments. The multifamily loans are classified either as held-for-investment or as held-forsale on our consolidated balance sheets based on management's intent and ability and are measured at fair value on a 

recurring basis, with subsequent gains or losses related to changes in fair value (net of accrued interest income) reported in 

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 211
investment gains, net, on our consolidated statements of income. We elected to report separately the portion of the changes in 

fair value of the loans related to accrued interest from the remaining changes in fair value. Related interest income continues to 

be reported, based on the stated terms of the loans, as interest income on our consolidated statements of income. The 

multifamily loan commitments are included in other assets or liabilities on our consolidated balance sheets and are measured at 

fair value on a recurring basis, with subsequent gains or losses related to changes in fair value included in investment gains, 

net, on our consolidated statements of income

Debt of Consolidated Trusts and Debt of Freddie Mac

We elected the fair value option on debt that contains embedded derivatives, including certain STACR and SCR debt notes, 

and certain other debt issuances. Fair value changes are recorded in investment gains, net, on our consolidated statements of 

income. For debt where we have elected the fair value option, upfront costs and fees are recognized in earnings as incurred 

and not deferred. Related interest expense continues to be reported as interest expense based on the stated terms of the debt 

securities.

The table below presents the fair value and UPB related to items for which we have elected the fair value option. 

Table 16.7 - Difference between Fair Value and UPB for Certain Financial Instruments with Fair Value Option Elected(1)

December 31, 2023 December 31, 2022

(In millions) Fair value UPB Difference Fair value UPB Difference

Mortgage loans held-for-sale $7,356 $7,080 $276 $3,218 $3,421 ($203) 

Mortgage loans held-for-investment 1,806 2,095 (289) 1,214 1,368 (154) 

Debt of Freddie Mac 240 234 6 892 881 11 

Debt of consolidated trusts 1,705 1,799 (94) 1,656 1,833 (177) 

Other assets (other liabilities) 95 N/A N/A 11 N/A N/A

 (1) Excludes interest-only securities related to debt of consolidated trusts and debt of Freddie Mac with a fair value of $0.5 billion as of both December 31, 2023 and 

December 31, 2022.

Changes in Fair Value Under the Fair Value Option Election

The table below presents the changes in fair value related to items for which we have elected the fair value option. These 

amounts are included in investment gains, net, on our consolidated statements of income.

Table 16.8 - Changes in Fair Value under the Fair Value Option Election

December 31, 2023 December 31, 2022 December 31, 2021

(In millions) Gains (Losses) 

Mortgage loans held-for-sale ($59) ($987) ($407) 

Mortgage loans held-for-investment (29) (154) — 

Debt of Freddie Mac 30 (30) 50 

Debt of consolidated trusts (6) 458 17 

Other assets/other liabilities 207 (362) 1,271 

Changes in fair value attributable to instrument-specific credit risk were not material for the periods presented for assets or 

liabilities for which we elected the fair value option.

Financial Statements Notes to Consolidated Financial Statements | Note 16

FREDDIE MAC | 2023 Form 10-K 212
NOTE 17

Legal Contingencies

We are involved, directly or indirectly, in a variety of legal and regulatory proceedings arising from time to time in the ordinary 

course of business (including, among other things, contractual disputes, personal injury claims, employment-related litigation, 

and other legal proceedings incidental to our business) and in connection with the conservatorship and Purchase Agreement. 

We are frequently involved, directly or indirectly, in litigation involving mortgage foreclosures. From time to time, we are also 

involved in proceedings arising from our termination of a seller's or servicer's eligibility to sell loans to, and/or service loans for, 

us. In these cases, the former seller or servicer sometimes seeks damages against us for wrongful termination under a variety 

of legal theories. In addition, we are sometimes sued in connection with the origination or servicing of loans. These suits 

typically involve claims alleging wrongful actions of sellers and servicers. Our contracts with our sellers and servicers generally 

provide for indemnification of Freddie Mac against liability arising from sellers' and servicers' wrongful actions with respect to 

loans sold to or serviced for Freddie Mac.

Litigation claims and proceedings of all types are subject to many uncertainties (including appeals and procedural filings), and 

there can be no assurance as to the ultimate outcome of those actions (including the matters described below). In accordance 

with the accounting guidance for contingencies, we reserve for litigation claims and assessments asserted or threatened 

against us when a loss is probable (as defined in such guidance) and the amount of the loss can be reasonably estimated. The 

actual costs of resolving legal actions may be substantially higher or lower than the amounts accrued for those actions.

It is not possible for us to predict the actions the U.S. government (including Treasury and FHFA) might take in response to any 

ruling or finding in any of these lawsuits or any future lawsuits. However, it is possible that we could be adversely affected by 

these events, including, for example, by changes to the Purchase Agreement, or any resulting actual or perceived changes in 

the level of U.S. government support for our business. 

Putative Securities Class Action Lawsuit: Ohio Public Employees 

Retirement System vs. Freddie Mac, Syron, Et Al.

This putative securities class action lawsuit was filed against Freddie Mac and certain former officers on January 18, 2008 in the 

U.S. District Court for the Northern District of Ohio purportedly on behalf of a class of purchasers of Freddie Mac stock from 

August 1, 2006 through November 20, 2007. FHFA later intervened as Conservator, and the plaintiff amended its complaint on 

several occasions. The plaintiff alleged, among other things, that the defendants violated federal securities laws by making false 

and misleading statements concerning our business, risk management, and the procedures we put into place to protect the 

company from problems in the mortgage industry. The plaintiff seeks unspecified damages and interest, and reasonable costs 

and expenses, including attorney and expert fees.

In August 2018, the District Court denied the plaintiff's motion for class certification. On April 6, 2023, the Sixth Circuit reversed 

the District Court's September 17, 2020 decision to grant the plaintiff's request for summary judgment and enter final judgment 

in favor of Freddie Mac and other defendants. The Sixth Circuit remanded the case to the District Court for further proceedings. 

The District Court scheduled the trial to begin on October 21, 2024.

Litigation Concerning the Purchase Agreement in the U.S. District Court 

for the District of Columbia

In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigations. This is a 

consolidated class action lawsuit filed by private individual and institutional investors (collectively, "Class Plaintiffs") against 

FHFA, Fannie Mae, and Freddie Mac. 

Fairholme Funds, Inc., et al. v. FHFA, et al. This is an individual plaintiffs’ lawsuit by certain institutional investors (“Individual 

Plaintiffs”) against FHFA, Fannie Mae, and Freddie Mac. 

Plaintiffs in each of the District of Columbia lawsuits filed an amended complaint on November 1, 2017 alleging claims for 

breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duties, and violation of 

Delaware and Virginia corporate law. Additionally, the Class Plaintiffs brought derivative claims against FHFA for breach of 

fiduciary duties and the Individual Plaintiffs brought claims under the Administrative Procedure Act. Both sets of claims are 

generally based on allegations that the net worth sweep dividend provisions of the senior preferred stock that were 

implemented pursuant to the August 2012 amendments nullified certain of the shareholders’ rights, including the rights to 

receive dividends and a liquidation preference. On September 28, 2018, the District Court dismissed all of the claims except 

those for breach of the implied covenant of good faith and fair dealing. The cases were consolidated for trial. 

Financial Statements Notes to Consolidated Financial Statements | Note 17 

FREDDIE MAC | 2023 Form 10-K 213
Court rulings have limited the Plaintiffs’ damages theories to those based on the decline in Freddie Mac’s and Fannie Mae’s 

share value immediately after the Third Amendment. The Plaintiffs have asserted losses based on the decline in value of 

Freddie Mac’s common and junior preferred stock from August 16 to August 17, 2012. During the trial in October and early 

November 2022, the Plaintiffs requested that the jury award $832 million plus pre-judgment interest as damages against 

Freddie Mac. The jury in that trial was not able to reach a unanimous verdict and on November 7, 2022 the judge declared a 

mistrial. The retrial started on July 24, 2023. On August 14, 2023, the jury returned a verdict against FHFA, Fannie Mae, and 

Freddie Mac awarding compensatory damages of $282 million to Freddie Mac junior preferred shareholders and $31 million to 

Freddie Mac common shareholders. The jury declined to award the Freddie Mac shareholders prejudgment interest. In 3Q 

2023, we recorded a $313 million accrual in other expense on our condensed consolidated statements of income for the 

adverse judgment. The entry of final judgment remains before the court.

Financial Statements Notes to Consolidated Financial Statements | Note 17 

FREDDIE MAC | 2023 Form 10-K 214
NOTE 18

Regulatory Capital

ERCF 

The GSE Act specifies certain capital requirements for us and authorizes FHFA to establish other capital requirements as well 

as to increase our minimum capital levels or to establish additional capital and reserve requirements for particular purposes. In 

October 2008, FHFA suspended capital classification of us during conservatorship, in light of the Purchase Agreement.

FHFA established the ERCF as a new enterprise regulatory capital framework for Freddie Mac and Fannie Mae in December 

2020. Our current capital levels are significantly below the levels that would be required under the ERCF. The ERCF has a 

transition period for compliance, and we are not required to comply with the regulatory capital requirements or the buffer 

requirements while in conservatorship. In general, the compliance date for the regulatory capital requirements will be the later of 

the date of termination of our conservatorship and any later compliance date provided in a transition order, and the compliance 

date for buffer requirements in the ERCF will be the date of termination of our conservatorship. With respect to the ERCF's 

advanced approaches requirements, the compliance date is January 1, 2028 or any later compliance date specified by FHFA.

The ERCF establishes risk-based and leverage capital requirements and includes capital requirements relating to the amount 

and form of the capital we hold, based largely on definitions of capital used in U.S. banking regulators' regulatory capital 

framework. The ERCF capital requirements contain both statutory capital elements (total capital and core capital) and 

regulatory capital elements (CET1 capital, Tier 1 capital, and adjusted total capital). The ERCF also includes a requirement that 

we hold prescribed capital buffers that can be drawn down in periods of financial stress and then rebuilt over time as economic 

conditions improve. If we fall below the prescribed buffer amounts, we must restrict capital distributions such as stock 

repurchases and dividends, as well as discretionary bonus payments to executives, until the buffer amounts are restored.

Risk-Based Capital Requirements

Under the ERCF risk-based capital requirements, we must maintain our CET1 capital, Tier 1 capital, and adjusted total capital 

ratios equal to at least 4.5%, 6.0%, and 8.0%, respectively, of RWA. We must also maintain statutory total capital equivalent to 

at least 8.0% of the total RWA. To avoid limitations on capital distributions and discretionary bonus payments tied to executive 

compensation, we also must maintain CET1 capital that exceeds the risk-based capital requirements by at least the amount of 

the PCCBA. The PCCBA consists of three separate component buffers—a stress capital buffer, a stability capital buffer, and a 

countercyclical capital buffer.

n	The stress capital buffer must be at least 0.75% of our ATA as of the last day of the previous calendar quarter. FHFA will 

periodically re-size the stress capital buffer to the extent that FHFA’s eventual program for supervisory stress tests 

determines that our peak capital exhaustion under a severely adverse stress scenario would exceed 0.75% of ATA.

n	The stability capital buffer is tailored to the risk that our default or other financial distress could pose to the liquidity, 

efficiency, competitiveness, or resiliency of national housing finance markets. The stability capital buffer is based on our 

share of residential mortgage debt outstanding. As of December 31, 2023, our stability capital buffer was 0.60% of ATA.

n	The countercyclical capital buffer is currently set at 0.0% of our ATA. FHFA has indicated that it will adjust the 

countercyclical capital buffer taking into account the macro-financial environment in which we operate, such that the buffer 

would be deployed only when excess aggregate credit growth is judged to be associated with a build-up of system-wide 

risk.

Leverage Capital Requirements

Under the ERCF leverage capital requirements, we must maintain our Tier 1 capital ratio equal to at least 2.5% of ATA. We 

must also maintain our statutory core capital ratio equal to at least 2.5% of ATA. To avoid limitations on capital distributions 

and discretionary bonus payments tied to executive compensation, we also must maintain Tier 1 capital that exceeds the 

leverage capital requirements by at least the amount of the PLBA. The PLBA is equal to 50% of our stability capital buffer. 

Financial Statements Notes to Consolidated Financial Statements | Note 18 

FREDDIE MAC | 2023 Form 10-K 215
Capital Metrics

The table below presents our capital metrics under the ERCF. 

Table 18.1 - ERCF Available Capital and Capital Requirements 

(In billions) December 31, 2023 December 31, 2022

Adjusted total assets $3,775 $3,710 

Risk-weighted assets (standardized approach) 1,009 899 

December 31, 2023

Amounts Ratios

(Dollars in billions)

Available 

Capital (Deficit)

Minimum 

Capital 

Requirement

Capital 

Requirement 

(Including Buffer(1))

Available 

Capital 

(Deficit) 

Ratio(2)

Minimum 

Capital 

Requirement 

Ratio(2)

Capital 

Requirement 

Ratio(2)

(Including 

Buffer(1))

Risk-based capital:

Total capital ($18) $81 $81 (1.8) % 8.0 % 8.0 %

CET1 capital (43) 45 96 (4.3) 4.5 9.5 

Tier 1 capital (29) 60 111 (2.9) 6.0 11.0 

Adjusted total capital (29) 81 132 (2.9) 8.0 13.0 

Leverage capital:

Core capital (statutory) ($25) $95 $95 (0.7) % 2.5 % 2.5 %

Tier 1 capital (29) 95 106 (0.8) 2.5 2.8 

December 31, 2022

Amounts Ratios

(Dollars in billions)

Available 

Capital (Deficit)

Minimum 

Capital 

Requirement

Capital 

Requirement 

(Including Buffer(1))

Available 

Capital 

(Deficit) 

Ratio(2)

Minimum 

Capital 

Requirement 

Ratio(2)

Capital 

Requirement 

Ratio(2)

(Including 

Buffer(1))

Risk-based capital:

Total capital ($27) $72 $72 (3.1) % 8.0 % 8.0 %

CET1 capital (55) 40 90 (6.2) 4.5 10.1 

Tier 1 capital (41) 54 104 (4.6) 6.0 11.6 

Adjusted total capital (41) 72 122 (4.6) 8.0 13.6 

Leverage capital:

Core capital (statutory) ($35) $93 $93 (1.0) % 2.5 % 2.5 %

Tier 1 capital (41) 93 104 (1.1) 2.5 2.8 

(1) PCCBA for risk-based capital and PLBA for leverage capital.

(2) As a percentage of RWA for risk-based capital and ATA for leverage capital.

Financial Statements Notes to Consolidated Financial Statements | Note 18 

FREDDIE MAC | 2023 Form 10-K 216
Controls and Procedures

MANAGEMENT'S REPORT ON INTERNAL CONTROL 

OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is 

defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed by, or under the 

supervision of, our CEO and CFO and effected by the Board of Directors, management, and other personnel to provide 

reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external 

purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It is a 

process that involves human diligence and compliance and is, therefore, subject to lapses in judgment and breakdowns 

resulting from human error. It also can be circumvented by collusion or improper management override. Because of its 

limitations, there is a risk that internal control over financial reporting may not prevent or detect, on a timely basis, errors that 

could cause a material misstatement of the financial statements.

We assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making our 

assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or 

COSO, in Internal Control — Integrated Framework (2013 Framework). A material weakness is a deficiency, or a combination of 

deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement 

of the company's annual or interim financial statements will not be prevented or detected on a timely basis by a company's 

internal controls. Based on our assessment, we identified a material weakness related to our inability to update our disclosure 

controls and procedures in a manner that adequately ensures the accumulation and communication to management of 

information known to FHFA that is needed to meet our disclosure obligations under the federal securities laws, including 

disclosures affecting our consolidated financial statements.

We have been under conservatorship of FHFA since September 6, 2008. FHFA is an independent agency that currently 

functions as both our Conservator and our regulator with respect to our safety, soundness, and mission. Because we are in 

conservatorship, some of the information that we may need to meet our disclosure obligations may be solely within the 

knowledge of FHFA. As our Conservator, FHFA has the power to take actions without our knowledge that could be material to 

investors and could significantly affect our financial performance. Although we and FHFA have attempted to design and 

implement disclosure policies and procedures to account for the conservatorship and accomplish the same objectives as 

disclosure controls and procedures for a typical reporting company, there are inherent structural limitations on our ability to 

design, implement, test, or operate effective disclosure controls and procedures under the circumstances of conservatorship. 

As our Conservator and regulator, FHFA is limited in its ability to design and implement a complete set of disclosure controls 

and procedures relating to us, particularly with respect to current reporting pursuant to Form 8-K. Similarly, as a regulated 

entity, we are limited in our ability to design, implement, operate, and test the controls and procedures for which FHFA is 

responsible. For example, FHFA may formulate certain intentions with respect to the conduct of our business that, if known to 

management, would require consideration for disclosure or reflection in our financial statements, but that FHFA, for regulatory 

reasons, may be constrained from communicating to management. As a result of these considerations, we have concluded that 

this control deficiency constitutes a material weakness in our internal control over financial reporting.

Because of this material weakness, we have concluded that our internal control over financial reporting was not effective as of 

December 31, 2023 based on the COSO criteria (2013 Framework). PricewaterhouseCoopers LLP, an independent registered 

public accounting firm, audited the effectiveness of our internal control over financial reporting as of December 31, 2023 and 

also determined that our internal control over financial reporting was not effective. PricewaterhouseCoopers LLP's report 

appears in Financial Statements — Report of Independent Registered Public Accounting Firm.

EVALUATION OF DISCLOSURE CONTROLS AND 

PROCEDURES 

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information 

we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and 

reported within the time periods specified by the SEC's rules and forms and that such information is accumulated and 

communicated to management of the company, including the company's CEO and CFO, as appropriate, to allow timely 

decisions regarding required disclosure. In designing our disclosure controls and procedures, we recognize that any controls 

and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired 

control objectives, and we must apply judgment in implementing possible controls and procedures.

Controls and Procedures

FREDDIE MAC | 2023 Form 10-K 217
Management, including the company's CEO and CFO, conducted an evaluation of the effectiveness of our disclosure controls 

and procedures as of December 31, 2023. As a result of management's evaluation, our CEO and CFO concluded that our 

disclosure controls and procedures were not effective as of December 31, 2023, at a reasonable level of assurance, because 

we have not been able to update our disclosure controls and procedures to provide reasonable assurance that information 

known by FHFA on an ongoing basis is communicated from FHFA to Freddie Mac's management in a manner that allows for 

timely decisions regarding our required disclosure under the federal securities laws. As discussed above, we consider this 

situation to be a material weakness in our internal control over financial reporting. Based on discussions with FHFA and the 

structural nature of this continuing weakness, we believe it is likely that we will not remediate this material weakness while we 

are under conservatorship.

MITIGATING ACTIONS RELATED TO THE MATERIAL 

WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL 

REPORTING 

As described above under Management's Report on Internal Control Over Financial Reporting, we have one material 

weakness in internal control over financial reporting as of December 31, 2023 that we have not remediated.

Given the structural nature of this material weakness, we believe it is likely that we will not remediate it while we are under 

conservatorship. However, both we and FHFA have continued to engage in activities and employ procedures and practices 

intended to permit accumulation and communication to management of information needed to meet our disclosure obligations 

under the federal securities laws. These include the following:

n	 FHFA has established the Division of Conservatorship Oversight and Readiness, which is intended to facilitate operation of 

the company with the oversight of the Conservator.

n	 We provide drafts of our SEC filings to FHFA personnel for their review and comment prior to filing. We also provide drafts 

of certain external press releases and statements to FHFA personnel for their review and comment prior to release.

n	 FHFA personnel, including senior officials, review our SEC filings prior to filing, including this Form 10-K, and engage in 

discussions with us regarding issues associated with the information contained in those filings. Prior to filing this Form 10-

K, FHFA provided us with a written acknowledgment that it had reviewed the Form 10-K, was not aware of any material 

misstatements or omissions in the Form 10-K, and had no objection to our filing the Form 10-K.

n	 Our senior management meets regularly with senior leadership at FHFA, including, but not limited to, the Director.

n	 FHFA representatives attend meetings frequently with various groups within the company to enhance the flow of 

information and to provide oversight on a variety of matters, including accounting, credit and capital markets management, 

external communications, and legal matters.

n	 Senior officials within FHFA's accounting group meet frequently with our senior financial executives regarding our 

accounting policies, practices, and procedures.

In view of our mitigating actions related to this material weakness, we believe that our consolidated financial statements for the 

year ended December 31, 2023 have been prepared in conformity with GAAP.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL 

REPORTING DURING THE QUARTER ENDED 

DECEMBER 31, 2023

We evaluated the changes in our internal control over financial reporting that occurred during the quarter ended December 31, 

2023 and concluded that there were no changes that materially affected, or are reasonably likely to materially affect, our internal 

control over financial reporting.

Controls and Procedures

FREDDIE MAC | 2023 Form 10-K 218
Other Information

OTHER INFORMATION

Insider Trading Arrangements and Policies

No executive officer or director adopted or terminated any contract, instruction, or written plan for the purchase or sale of, or 

any other such trading arrangement for, our securities during 4Q 2023. For additional information on executive officer and 

director compensation and security ownership by our executive officers and directors, see Directors, Corporate 

Governance, and Executive Officers, Executive Compensation, and Security Ownership of Certain Beneficial 

Owners and Management and Related Stockholder Matters.

Other Information

FREDDIE MAC | 2023 Form 10-K 219
Directors, Corporate Governance, and Executive 

Officers

DIRECTORS

Election of Directors

As Conservator, FHFA determines the size of the Board of Directors and the scope of its authority. At the start of the 

conservatorship, FHFA determined that the Board of Directors is to have a Non-Executive Chair and is to consist of a minimum 

of 9 and not more than 13 directors. FHFA determined that the CEO is the only executive officer permitted to serve as a 

member of the Board of Directors.

In addition, because FHFA as Conservator has succeeded to the rights of all stockholders of the company, the Conservator 

elects the directors each year by written consent in lieu of an annual meeting. Accordingly, we will not solicit proxies, distribute 

a proxy statement to stockholders, or hold an annual meeting of stockholders to elect directors during the conservatorship. 

Prior to each election by written consent, the Board of Directors identifies director nominees for the Conservator's 

consideration. When there is a vacancy, the Board of Directors may exercise the authority provided to it by the Conservator to 

fill such vacancy, subject to review by the Conservator.

On February 12, 2024, the Conservator executed a written consent, effective February 19, 2024, electing each of the 12 

directors listed below.

n Mark H. Bloom n Lance F. Drummond n Christopher E. Herbert

n Kathleen L. Casey n Aleem Gillani n Grace A. Huebscher

n Kevin G. Chavers n Mark B. Grier n Allan P. Merrill

n Michael J. DeVito n Luke S. Hayden n Roy Swan

See Directors, Corporate Governance, and Executive Officers - Directors - Director Biographical Information for 

information about each of our current directors. For biographical information about Roy Swan, see our Current Report on Form 

8-K filed on January 17, 2024. The terms of our directors end on the date the director retires or resigns, the effective date of the 

Conservator's next election of directors by written consent, or the date of the next annual meeting of our stockholders, 

whichever occurs first.

The company did not submit for re-election, and the Conservator did not re-elect, current director and Non-Executive Chair 

Sara Mathew to the Board as her term of service on the Board had reached the limit set forth in our Corporate Governance 

Guidelines, or the Guidelines. Ms. Mathew will depart the Board on February 19, 2024.

The company also did not submit for re-election, and the Conservator did not re-elect, current director Alberto G. Musalem. Mr. 

Musalem tendered his resignation and will depart the Board effective February 19, 2024. See our Current Report on Form 8-K 

filed on January 4, 2024.

Director Criteria, Diversity, Qualifications, Experience, and Tenure

Our Board of Directors seeks candidates for directorship who have achieved a high level of stature, success, and respect in 

their principal occupations and exemplify high standards of integrity. 

We selected our directors as candidates because of their character, judgment, experience, and expertise. In selecting 

candidates, we follow the requirements set forth in our Charter, the Guidelines, and the Corporate Governance Rule. When 

identifying director nominees, the Nominating and Governance Committee considers, among other factors, the talents and 

skills already represented on the Board of Directors, the continued involvement of incumbent directors in business and 

professional activities relevant to us, the skills and experience that should be represented on the Board of Directors, and the 

availability of other individuals with desirable skills to join the Board of Directors. Specifically, the Nominating and Governance 

Committee seeks candidates that would complement the knowledge of the Board of Directors collectively has in the areas of 

business, finance, accounting, risk management, technology (including cybersecurity), public policy, mortgage lending, real 

estate, low-income housing, homebuilding, regulation of financial institutions, DEI, climate risk, and any other areas that may be 

relevant to our safe and sound operation. We also consider whether a candidate's other commitments, including the number of 

other board memberships held by the candidate, would permit the candidate to devote sufficient time to the candidate's duties 

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 220
and responsibilities as a director. In addition, our Charter provides that our Board of Directors has at least one person from 

each of the homebuilding, mortgage lending, and real estate industries, and at least one person from an organization 

representing community or consumer interests or one person who has demonstrated a career commitment to the provision of 

housing for low-income households. 

At Freddie Mac, we recognize that diversity among Board members increases diversity of thought on the Board of Directors, 

which results in better business decisions that consider the perspectives of all stakeholders. As set forth in the Guidelines, the 

Board of Directors seeks to have a diversity of talent, perspectives, experience, and cultures among its members, including 

people of different racial or ethnic backgrounds, women, and people with disabilities, and these are important factors in the 

Board of Directors’ candidate solicitation and nomination processes. FHFA requires us to ensure, to the extent possible in 

balance with financially safe and sound business practices, inclusion of people with different racial or ethnic backgrounds, 

women, and people with disabilities in our process of nominating directors, as we do in all of our activities. 

Prioritizing diversity as an important part of our candidate solicitation and nomination process has resulted in a Board of 

Directors with members who have a variety of backgrounds and overall experience. More than half of our directors are women, 

people of color, or both. In 2023, our Non-Executive Chair was a woman of color, and a woman and/or person from an 

underrepresented group served in leadership positions as the Chairs of the Audit, CHC, Executive, Nominating and 

Governance, and Risk Committees. After our current Non-Executive Chair retires in February 2024, our newly appointed NonExecutive Chair will also be a person of color. Our Board of Directors also values having a balance of longer-serving directors 

with institutional knowledge and newer directors that bring fresh perspectives and ideas. 

The charts below provide information on the composition of our Board of Directors by demographic background and tenure, as 

of February 14, 2024.

Gender

10

3

Men

Women

Race/Ethnicity

2 8

2

1

White

African American

Asian

Hispanic or Latino

Tenure

2

6

5

< 2 Years

2 < 5 Years

> 5 Years

Age

5

7

1

50s

60s

70s

The charts below provide information on the composition of our Board of Directors by demographic background and tenure, as 

of February 19, 2024, the effective date of the Conservator's written consent electing directors. 

Gender

10

2

Men

Women

Race/Ethnicity

8

3

1

White

African American

Asian

Tenure

1

7

4

< 2 Years

2 < 5 Years

> 5 Years

Age

5

6

1

50s

60s

70s

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 221
Director Biographical Information

The following summarizes each director's Board service, experience, qualifications, attributes, and/or skills that led to their 

selection as a director, and provides other biographical information, as of February 14, 2024. For a summary of Roy Swan's 

biographical information, see our Current Report on Form 8-K filed on January 17, 2024.

Mark H. Bloom

Age 59

Director since November 2019

Freddie Mac Committees:

• Compensation and Human Capital

• Executive

• Operations and Technology, Chair

• Risk

Public Company Directorships:

• None

Mr. Bloom is an experienced executive who has held a variety of leadership positions at the intersection of finance, technology, 

and risk management. He brings technological expertise to drive efficiency and enhance the customer experience.

Experience and Qualifications

n Global Chief Information Officer of Arthur J. Gallagher & Co., a global insurance brokerage and risk management services 

firm (2022-present)

n Management Consultant, Operations & Technology (2021-2022)

n Global Chief Technology Officer and a member of the Management Board of Aegon N.V. (2016-2021)

n Various positions at Citigroup, Inc., including Managing Director, Head of Global Consumer Digital and Operations 

Technology (2007-2016)

n Various positions at JPMorgan Chase & Company, including SVP, Chase Home Financial Technology (2001-2007)

n SVP, eBusiness Solutions at CACI International, Inc. (1999-2001)

Kathleen L. Casey

Age 57

Director since October 2019

Freddie Mac Committees:

• Audit

• Executive

• Mission and Housing Sustainability

• Nominating and Governance, Chair

Public Company Directorships:

• None

Ms. Casey is an experienced leader with an extensive background in financial regulatory policy and oversight. She brings highlevel regulatory and financial oversight experience as well as a deep understanding of financial markets and governance, 

including key issues affecting transit and housing policy, economic and monetary policy, banking, and securities regulation.

Experience and Qualifications

n Senior Advisor with Patomak Global Partners, a financial services consulting firm (2012-present)

n Member of the Board of HSBC Holdings Plc (2014-2020), including service during her tenure on the Group Audit, Financial 

System Vulnerabilities, Nominations & Corporate Governance, and Group Risk Committees

n Commissioner of the Securities and Exchange Commission (2006-2011)

n Various roles with the U.S. Senate, including Staff Director and Counsel of the Senate Banking, Housing, and Urban Affairs 

Committee and Staff Director of the Senate Banking Committee's Subcommittee on Financial Institutions and Regulatory 

Relief (1993-2006)

n Member of the Board of Sepio Systems Inc., a cybersecurity firm focused on hardware access management (2020-present)

n Member of the Library of Congress Trust Fund Board (2011-present)

n Member of the Financial Accounting Foundation Board of Trustees (2018-2022); Chair (2020-2022)

n Member of the International Valuation Standards Council Board of Trustees (2016-2022)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 222
n Chair of the Alternative Investment Management Association Council (2012-2016)

Kevin G. Chavers

Age 60

Director since February 2022

Freddie Mac Committees:

• Audit

• Mission and Housing Sustainability

• Nominating and Governance

Public Company Directorships:

• Chimera Investment Corporation

Mr. Chavers is an experienced executive with an extensive professional background in the real estate and mortgage finance 

industry. He brings more than 30 years of experience across a variety of roles in the industry, including mortgage finance, 

capital markets, business operations and strategy, and public and private housing finance policy.

Experience and Qualifications

n Various positions at BlackRock, Inc., including Managing Director, Global Fixed Income Investment Team, Managing 

Director, Global Public Policy Group, and Managing Director, BlackRock Solutions, Financial Markets Advisory Group 

(2011-2021)

n Various positions at Morgan Stanley, including Managing Director, Senior Relationship Management and Head, Mortgage 

Strategy & Execution (2003-2011)

n VP, Principal Finance Group, Mortgage Securities Department at Goldman Sachs & Company (1998-2003)

n Various positions in the U.S. Government (1989-1998), including President of Ginnie Mae (1995-1998) 

n Associate at Milbank, Tweed, Hadley & McCloy LLP (1987-1989)

n Member of the Board and Risk Committee and Chair of the Compensation Committee of Chimera Investment Corporation, 

Inc. (2021-present)

n Member of the Board and Audit Committee of SMBC Americas Holdings, Inc. (2021-present)

n Member of the Board of Toorak Capital Partners (2021-present)

n Member of the Advisory Board of Ivory Innovations (2022-present)

n Independent Trustee of Optimum Funds (2021-present)

Michael J. DeVito

Age 59

Director since June 2021

Freddie Mac Committees:

• Executive

Public Company Directorships:

• None

Mr. DeVito brings more than 30 years of experience in the mortgage and financial services industries to Freddie Mac and its 

Board of Directors. He has extensive experience across home lending, including in loan origination, servicing, portfolio 

management, secondary marketing, credit, and risk management. Mr. DeVito has served as our CEO and a member of our 

Board of Directors since June 2021. He notified us that he intends to retire as CEO and depart the Board effective March 15,

2024.

Experience and Qualifications

n CEO of Freddie Mac (2021-present)

n Various positions with Wells Fargo & Company, including EVP - Head of Home Lending of Wells Fargo (2017-2020), Head 

of Home Lending Production (2015-2017), Head of Home Lending Servicing (2013-2015), Head of Default Servicing 

(2011-2013), Head of Loan Workout (2009-2011), Head of Education Financial Services (2007-2009), and Head of 

Mortgage Retail Underwriting and Operations (1996-2007)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 223
Lance F. Drummond 

Age 69

Director since July 2015

Freddie Mac Committees:

• Audit

• Compensation and Human Capital, Chair

• Executive

• Operations and Technology

Public Company Directorships:

• AvidXchange Holdings, Inc.

• United Community Banks, Inc.

Mr. Drummond is a senior business leader with more than 40 years of experience. He brings extensive experience across a 

variety of industries and disciplines, with a specialty in business transforming strategy development and execution, operations, 

technology, process re-engineering, and executive compensation oversight. Mr. Drummond will succeed Sara Mathew as NonExecutive Chair of the Board upon her retirement on February 19, 2024.

Experience and Qualifications

n Executive in Residence, Christopher Newport University (2015-2017)

n EVP of Operations and Technology of TD Canada Trust (2011-2014)

n EVP of Human Resources and Shared Services of Fiserv Inc. (2009-2011)

n SVP and Supply Chain Executive, Service and Fulfillment Executive for Global Technology and Operations, and 

eCommerce and ATM Executive of Bank of America (2002-2008)

n Various positions with Eastman Kodak Company, including Chief Operating Officer and Corporate VP of Kodak 

Professional Division (1976-2002)

n Member of the Board and Executive, Risk, and Talent & Compensation Committees, and Chair of the Nominating and 

Governance Committee of United Community Banks, Inc. (2018-present)

n Member of the Board and Compensation Committee and Chair of the Risk Management Committee of AvidXchange (2020-

present)

n Member of the Board and Compensation and Human Capital Committee and Chair of the Audit Committee of the Financial 

Industry Regulatory Authority (FINRA) (2018-present)

n	 Member of the Board and Audit Committee of CurAegis Technologies, Inc. (2018-2020)

Aleem Gillani

Age 61

Director since January 2019

Freddie Mac Committees:

• Audit, Chair

• Compensation and Human Capital

• Executive

Public Company Directorships:

• None

Mr. Gillani is an executive with extensive experience at sophisticated financial institutions. His blend of industry, financial, risk 

management, and executive leadership experience provides valuable contributions to the Board's oversight of internal controls 

over financial reporting and risk management matters and helps guide Freddie Mac in its mission to support the liquidity and 

stability of the housing market. 

Experience and Qualifications

n Various positions with SunTrust Banks, Inc., including CFO and Corporate EVP, EVP and Corporate Treasurer, and SVP 

and Chief Market Risk Officer (2007-2018)

n SVP and Chief Market Risk Officer of PNC Financial Services Group, Inc. (2004-2007)

n Chief Market Risk Officer of BankBoston and FleetBoston Corp. (1996-2004)

n	 Advanced Management Program, Harvard Business School (2003)

n Member of the Board of SunTrust Robinson Humphrey (2011-2018)

n Founding Chair of the Market Risk Council for the Risk Management Association (1998)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 224
Mark B. Grier

Age 71

Director since February 2020

Freddie Mac Committees:

• Nominating and Governance

• Risk

Public Company Directorships:

• None

Mr. Grier is an experienced business leader with extensive executive experience at sophisticated financial institutions. He 

brings in-depth knowledge and expertise in finance, risk management, capital markets, and capital management to the Board 

of Directors. 

Experience and Qualifications

n Interim CEO of Freddie Mac (2021)

n Various positions with Prudential Financial, Inc., including Vice Chairman, Member of the Office of the Chairman, and CFO 

(1995-2019)

n Various positions with The Chase Manhattan Corporation and its predecessors, including EVP, Co-Head, Global Markets 

and EVP, Global Risk Management (1978-1995)

n Member of the Board of Trustees of The Geraldine R. Dodge Foundation (2021-present)

n Member of the Board of Trustees of Eisenhower Fellowships (2013-present)

n Chair of the Board of the Global Impact Investing Network (2017-2022)

n Member of the Board of Achieve Inc. (2009-2020); Chair (2014-2020)

n Member of the Board of Trustees of the Tragedy Assistance Program for Survivors (2013-2019)

n Vice Chair and Member of the Board of Directors of Prudential Financial, Inc. (2008-2019)

Luke S. Hayden III

Age 67

Director since February 2022

Freddie Mac Committees:

• Operations and Technology

• Risk

Public Company Directorships:

• None

Mr. Hayden is an experienced executive with extensive professional background in the mortgage and financial services 

industries. He brings a depth experience from across home lending, including in the origination, servicing, and investment of 

mortgage products, and deep expertise in residential real estate finance, capital markets, and risk management.

Experience and Qualifications

n CEO of Hayden Consulting (2012-present) 

n Vice Chairman of Residential Mortgage Services Holdings, Inc. (2013-2021)

n President of PHH Mortgage Corporation (2010-2012)

n EVP and Senior Managing Director at GMAC Residential Capital (2007-2008)

n Various positions including EVP at JPMorgan Chase & Company and its predecessors (1992-2005)

n Various positions at Security Pacifica National Bank, including SVP, Secondary Marketing, Residential Real Estate Group 

(1989-1992)

n Various positions at First Interest Bank of California, including SVP, Mortgage Division (1980-1989)

n Loan officer and loan purchaser at Ralph C. Sutro Company (1978-1980)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 225
Christopher E. Herbert 

Age 63

Director since March 2018

Freddie Mac Committees:

• Compensation and Human Capital

• Executive

• Mission and Housing Sustainability, Chair

• Risk

Public Company Directorships:

• None

Mr. Herbert is an experienced leader in the governmental and educational sectors. He provides the Board of Directors with indepth knowledge of housing policy, including low-income housing, and urban development, including the financial and 

demographic dimensions of home ownership.

Experience and Qualifications

n Managing Director for Harvard University's Joint Center for Housing Studies and Lecturer in Urban Planning and Design at 

the Harvard Graduate School of Design (2015-present)

n Research Director for Harvard University's Joint Center for Housing Studies (2010-2014)

n Senior Associate at Abt Associates, Inc. (1997-2010)

n Member of the National Association of Realtors Strategic Think Tank (2022-present)

n Member of the Advisory Board of Ivory Innovations (2021-present)

n	 Member of the Habitat for Humanity Cost of Home Cabinet and Research Advisory Council (2019-present)

n Member of the Board of the Homeownership Preservation Foundation (2011-2019)

n Member of the Research Advisory Council for the Center for Responsible Lending (2006-2019)

n Member of the Board of GreenPath Financial Wellness (2017-2019)

n Member of the Federal Reserve Bank of Boston's Community Development Research Advisory Council (2014-2016)

Grace A. Huebscher

Age 64

Director since December 2017

Freddie Mac Committees:

• Compensation and Human Capital

• Executive

• Operations and Technology

• Risk, Chair

Public Company Directorships:

• None

Ms. Huebscher is an executive with extensive experience in capital markets and real estate. She brings deep multifamily 

industry knowledge, entrepreneurial experience, and risk oversight and executive management expertise to the Board of 

Directors.

Experience and Qualifications

n Advisor to Capital One Commercial Bank (2017)

n President of Capital One Multifamily Finance, LLC (2013-2017)

n Co-Founder and CEO of Beech Street Capital, LLC (2009-2013)

n Various positions with Fannie Mae, including VP, Capital Markets (1997-2009)

n Member of the Board of The Kenyon Review (1998-present)

n Member of the Commercial Board of Governors of the Mortgage Bankers Association (2014-2017)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 226
Sara Mathew

Age 68

Director since December 2013

Freddie Mac Committees:

• Executive, Chair

Public Company Directorships:

• Carnival Corporation & plc

• Dropbox, Inc.

• State Street Corporation

Ms. Mathew is an executive with global financial, technology, and general management experience. Ms. Mathew's extensive 

business, financial, and management experience, and her public company board and audit committee experience, positions her 

to make valuable contributions to Board oversight of our internal control over financial reporting and compliance matters. Ms. 

Mathew has served as Non-Executive Chair of our Board of Directors since February 2019. She will retire and depart the Board 

on February 19, 2024.

Experience and Qualifications

n Various positions with Dun & Bradstreet Corporation (2001-2013), including Chairman and CEO (2010-2013); President and 

Chief Operating Officer (2007-2010); and SVP and CFO (2001-2006)

n	 Various finance and management positions with The Procter & Gamble Company, including VP of Finance for Australia, 

Asia, and India (1983-2001)

n Member of the Boards and Audit Committees of Carnival Corporation and Carnival plc (2022-present) 

n Member of the Board and Audit and Compensation Committees of Dropbox, Inc. (2021-present)

n Member of the Board, member of the Executive and Examining and Audit Committees, Chair of the Human Resources 

Committee, and former member of the Nominating and Corporate Governance and Risk Committees of State Street 

Corporation (2018-present)

n Member of the Board and Audit Committee and Chair of the Compensation Committee of Xos, Inc. (formerly NextGen 

Acquisition Corporation) (2020-2022)

n Member of the Board and Audit Committee of Reckitt Benckiser Group plc (2019-2021)

n Member of the Board and Audit and Finance and Corporate Development Committees of Campbell Soup Company 

(2005-2019)

n Member of the Board; Chair of the Audit, Compliance & Risk Committee; member of the Nomination & Governance 

Committee; and former member of the Remuneration Committee of Shire plc (2015-2019)

n Member of the Board and Finance and Nominating and Corporate Governance Committees of Avon Products, Inc. 

(2014-2016)

n Member of the International Advisory Council of Zurich Financial Services Group (2012-2017)

n Member of the Board of Dun & Bradstreet Corporation (2008-2013)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 227
Allan P. Merrill

Age 57

Director since September 2020

Freddie Mac Committees:

• Audit

• Mission and Housing Sustainability

• Nominating and Governance

Public Company Directorships:

• Beazer Homes USA, Inc.

Mr. Merrill is an executive in the homebuilding industry. He brings extensive expertise and in-depth knowledge of the housing 

market as well as considerable executive leadership, financial experience, and public policy expertise to the Board of Directors.

Experience and Qualifications

n Various positions with Beazer Homes USA, Inc., including Chairman of the Board, President, and CEO, and EVP and CFO 

(2007-present)

n Various leadership positions with Move, Inc., including EVP of Corporate Development and Strategy, and President of 

Homebuilder.com, a division of Move, Inc. (2000-2007)

n Various positions with UBS Group AG and its predecessors, including Managing Director and Co-Head of the Global 

Resources Group (1987-2000)

n Member of the Board of Builder Homesite, Inc. (2011-present) 

n Member of the Board of the Leading Builders of America (2011-present) 

n Member of the Board of Harvard University's Joint Center for Housing Studies (1992-present) 

Alberto G. Musalem

Age 55

Director since June 2021

Freddie Mac Committees:

• Compensation and Human Capital

• Operations and Technology

• Risk

Public Company Directorships:

• Man Group

Mr. Musalem is a financial executive who brings proven leadership and significant investment management experience, 

economic and public policy expertise, and the broad knowledge of capital markets, bank capital and liquidity regulation, and 

financial regulatory policy. Mr. Musalem has served as a member of our Board of Directors since June 2021. He has tendered 

his resignation and will depart the Board on February 19, 2024.

Experience and Qualifications

n Adjunct Professor at Georgetown University (2022-present)

n CEO and Co-Founder of Evince Asset Management LP, a quantitative investment manager (2018-2022)

n EVP of the Federal Reserve Bank of New York (2014-2016)

n Chairman and Board Member of School the World (2012-2017)

n Managing Director and Partner of Tudor Investment Corporation (2000-2013)

n Adjunct Professor at Johns Hopkins University (2007)

n Economist at the International Monetary Fund (1996-2000)

n Analyst at Bankers Trust (1995)

n Analyst at McKinsey & Co. (1994)

n Member of the Board and the Audit and Risk and Remuneration Committees of the Man Group (2022-present)

Directors, Corporate Governance, and Executive Officers Directors

FREDDIE MAC | 2023 Form 10-K 228
CORPORATE GOVERNANCE

Our Corporate Governance Practices

We are committed to best practices in corporate governance. Our Board of Directors has adopted the Guidelines, which 

embody many of our long-standing practices, policies, and procedures and are available on our website at 

www.freddiemac.com/governance/pdf/gov_guidelines.pdf. Our Board of Directors reviews the Guidelines annually and 

regularly assesses them against the regulatory and legislative environment in which we operate as well as evolving best 

practices.

The Guidelines are designed to provide for effective collaboration between management and the Board of Directors. We have 

instituted the following specific corporate governance practices:

n Our Board of Directors has an independent Non-Executive Chair, whose responsibilities include presiding over Board 

meetings and executive sessions of the non-employee or independent directors.

n All of our directors are independent, except for the CEO.

n Each of the Audit, CHC, Nominating and Governance, Mission and Housing Sustainability, Operations and Technology, 

and Risk Committees consists entirely of independent directors. 

n Our directors are elected annually.

n Each committee operates pursuant to a written charter that has been approved by the Board of Directors. The charters are 

available at http://www.freddiemac.com/governance/board-committees.html.

n Independent directors meet regularly without management.

n The Board of Directors and each of the Audit, CHC, Nominating and Governance, Mission and Housing Sustainability, 

Operations and Technology, and Risk Committees conduct an annual self-evaluation.

n New directors receive a full orientation regarding the company and issues specific to the committees to which they have 

been appointed.

n All directors are provided with access to, and are encouraged to utilize, third-party continuing education.

n Management provides the Board of Directors and its committees with in-depth technical briefings on substantive issues 

affecting the company.

n The CHC Committee reviews management talent and succession planning at least annually.

Director Independence and Relevant Considerations 

The Nominating and Governance Committee has evaluated the independence of each of our non-employee Board members 

and has made recommendations to the Board of Directors for determination and approval with respect thereto. For purposes of 

these determinations, we use the definition of independence set forth in Sections 4 and 5 of the Guidelines and in Section 

303A.02 of the NYSE Listed Company Manual. Although our stock is no longer listed on the NYSE, certain of the corporate 

governance requirements of the NYSE Listed Company Manual, including those relating to independence, continue to apply to 

us because they are incorporated by reference in the Corporate Governance Rule. Based on the Nominating and Governance 

Committee’s evaluation and recommendation, the Board of Directors determined that all current non-employee Board members 

are independent. Mr. DeVito is not considered to be independent due to his service as our CEO. 

Our Board of Directors determined that all members of our Audit, CHC, and Nominating and Governance Committees, and the 

Chairs of the Mission and Housing Sustainability, Operations and Technology, and Risk Committees are independent within the 

meaning of Sections 4 and 5 of the Guidelines and Section 303A.02 of the NYSE Listed Company Manual. Our Board of 

Directors also determined that: (1) all members of our Audit Committee are independent within the meaning of Exchange Act 

Rule 10A-3 and Section 303A.06 of the NYSE Listed Company Manual; and (2) all members of our CHC Committee are 

independent within the meaning of Exchange Act Rule 10C-1 and Section 303A.02(a)(ii) of the NYSE Listed Company Manual.

In determining the independence of each director, the Board of Directors reviewed the following categories or types of 

relationships, in addition to those specifically addressed by the standards contained in Section 5 of the Guidelines, to 

determine whether those relationships, either individually or in aggregate, would constitute a material relationship between the 

director and us that would impair the director's judgment as a member of the Board of Directors or create the perception or 

appearance of such an impairment:

n Employment Affiliations with Business Partners. Mr. Herbert is employed by an organization that engages or has 

engaged in business with us resulting in payments between us and such organization. Under the Guidelines, no specific 

independence determination is required with respect to these payments because they do not exceed the greater of $1 

million or 2% of such organization's consolidated gross revenues for each of the last three fiscal years. After considering 

the nature and extent of our specific relationship with this organization, our Board of Directors concluded that this business 

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 229
relationship does not constitute a material relationship between Mr. Herbert and us that would impair his independence as 

our director.

Immediate family members of Messrs. Chavers and Hayden and Ms. Huebscher are employed by companies that engage 

or have engaged in business with us resulting in payments between us and such companies. After considering the nature 

and extent of the specific relationships between the companies and the immediate family members, and between the 

companies and Freddie Mac, our Board of Directors concluded that these business relationships do not constitute material 

relationships that would impair Messrs. Chavers' or Haydens' or Ms. Huebscher's independence as our directors.

n Employment Affiliations with Competitors. An immediate family member of Ms. Huebscher is employed by a company 

that is a competitor of Freddie Mac. After considering the nature and extent of the specific relationship between the 

competitor and the immediate family member and between the competitor and Freddie Mac, our Board of Directors 

concluded that this business relationship does not constitute a material relationship that would impair Ms. Huebscher's 

independence as our director.

n Board Memberships with Business Partners. Messrs. Chavers, Drummond, Herbert, and Merrill serve as directors of 

other organizations that engage in business with us resulting in payments between us and such organizations. After 

considering the nature and extent of the specific relationship between each of those organizations and us, and the fact that 

these Board members are directors of these other organizations rather than employees, our Board of Directors concluded 

that these business relationships do not constitute material relationships that would impair their independence as our 

directors.

n Financial Relationships with Business Partners. Messrs. Bloom, Gillani, Grier, and Hayden each own stock in 

companies with which we conduct significant business, and such ownership represents a material portion of their 

respective net worth. To eliminate any potential conflict of interest that might arise as a result of their respective stock 

ownership, we have established mechanisms pursuant to which they will be recused from discussing and acting upon any 

matters considered by the Board of Directors or any of the committees of which they are or were a member and that 

directly relate to the company in which they have such stock ownership. In situations where matters are frequently 

presented to the Board of Directors regarding these companies, we have established formal recusal arrangements. The 

Audit Committee Chair, in consultation with the Non-Executive Chair (or the Non-Executive Chair alone in a situation 

involving the Audit Committee Chair), addresses any questions regarding whether recusal from a particular discussion or 

action is appropriate. 

 In evaluating the independence of Messrs. Bloom, Gillani, Grier, and Hayden in light of their stock ownership of our 

business partners, our Board of Directors considered the nature and extent of our business relationships with such 

business partners and any potential impact that their respective stock ownership may have on their independent judgment 

as our directors, taking into account the relevant recusal mechanisms. Our Board of Directors concluded that these 

mechanisms addressed any actual or potential conflicts of interest with respect to the stock ownership. Accordingly, our 

Board of Directors concluded that the stock ownership of our business partners by Messrs. Bloom, Gillani, Grier, and 

Hayden do not constitute material relationships that would impair their independence as our directors. 

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 230
Board of Directors and Board Committee Information

Authority of the Board of Directors and Board Committees

The directors serve on behalf of, and exercise authority as directed by, the Conservator and owe their fiduciary duties of care 

and loyalty to the Conservator. Although the Conservator has provided authority for the Board of Directors and its committees 

to function in accordance with the duties and authorities set forth in applicable statutes, regulations, guidance, orders, and 

directives, and our Bylaws and committee charters, the Conservator has reserved certain powers of approval for itself. The 

Conservator provided instructions to the Board of Directors in 2008, 2012, and 2017 for Freddie Mac to consult with and obtain 

the Conservator's decision before taking certain actions.

The Conservator's instructions as currently revised require that we obtain the Conservator's decision before taking action on 

any matters that require the consent of or consultation with Treasury under the Purchase Agreement. See Note 2 for a list of 

matters that require the approval of Treasury under the Purchase Agreement.

The Conservator's revised instructions also require us to obtain the Conservator's decision before taking action in the areas 

identified in the table below. For some matters, the Conservator's revised instructions specify that our Board of Directors must 

review and approve the matter before we request the Conservator's decision, and for other matters the Board of Directors is 

expected to determine the appropriate level of the Board's engagement.

Matters Requiring Prior Board Review and Approval Other Matters

• Redemptions or repurchases of our subordinated debt, except as may 

be necessary to comply with Section 5.7 of the Purchase Agreement;

• Creation of any subsidiary or affiliate, or entering into a substantial 

transaction with a subsidiary or affiliate, except for routine, ongoing 

transactions with CSS or the creation of, or a transaction with, a 

subsidiary or affiliate undertaken in the ordinary course of business;

• Changes to, or removal of, Board risk limits that would result in an 

increase in the amount of risk that may be taken by us;

• Retention and termination of external auditors to perform an integrated 

audit of our financial statements and internal controls over financial 

reporting; 

• Termination of law firms serving as consultants to the Board;

• Proposed amendments to our bylaws or Board committee charters;

• Setting or increasing the compensation or benefits payable to 

members of the Board; and

• Establishing the annual operating budget.

• Material changes in accounting policy;

• Proposed changes in our business operations, activities, and transactions 

that, in the reasonable business judgment of our management, are more 

likely than not to result in a significant increase in credit, market, 

reputational, operational, or other key risks;

• Matters, including our initiation or substantive response to litigation, that 

impact or question the Conservator's powers, our status in 

conservatorship, the legal effect of the conservatorship, interpretations of 

the Purchase Agreement, or terms and conditions of the Financial Agency 

Agreement with Treasury or our performance under the Financial Agency 

Agreement;

• Agreements with respect to any securities litigation claim, and agreements 

pursuant to which we settle, resolve, or compromise demands, claims, 

litigation, lawsuits, prosecutions, regulatory proceedings, or tax matters 

when the amount in dispute is more than $50 million, including each 

separate agreement with the same counterparty involving the same 

dispute or common facts when the aggregate amount in dispute totals 

more than $50 million (this provision excludes loan workouts, which are 

conducted in the ordinary course of business);

• Mergers, acquisitions, and changes in control of a Key Counterparty where 

we have a direct contractual right to cease doing business with such Key 

Counterparty or object to the merger or acquisition of such entity;

• Changes to requirements, policies, frameworks, standards, or products 

that are aligned with Fannie Mae, pursuant to FHFA's direction;

• Credit risk transfers that are new transaction types, recurring transactions 

with any material change in terms, and transactions that involve collateral 

types not previously included in a risk transfer transaction;

• Mortgage servicing rights sales and transfers involving:

◦ 100,000 or more loans to a non-bank transferee; or

◦ 25,000 or more loans to any transferee servicer when the transfer 

would increase the number of the transferee's Freddie Mac- and 

Fannie Mae-owned seriously delinquent loans by at least 25 percent 

and the servicing transfer has a minimum of 500 seriously delinquent 

loans; and

• Changes in employee compensation that could significantly impact our 

employees, including, but not limited to, retention awards, special 

incentive plans, and merit increase pool funding.

In addition, FHFA requires us to provide it with timely notice of: (1) activities that represent a significant change in current 

business practices, operations, policies, or strategies not otherwise addressed in the Conservator decision items referenced 

above; (2) exceptions and waivers to aligned requirements, policies, frameworks, standards, or products if not otherwise 

submitted to FHFA for Conservator approval as required above; and (3) accounting error corrections to previously issued 

financial statements that are not de minimis. FHFA will then determine whether any such items require Conservator approval. 

For more information on the conservatorship, see MD&A - Conservatorship and Related Matters.

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 231
Board Committees

The Board of Directors has seven standing committees: Audit, CHC, Executive, Mission and Housing Sustainability, Nominating 

and Governance, Operations and Technology, and Risk. All standing committees, other than the Executive Committee, meet 

regularly and are chaired by, and consist entirely of, independent directors. The committees perform essential functions on 

behalf of the Board of Directors. The committee chairs review and approve agendas for all meetings of their respective 

committees. Charters for the standing committees describe each committee's responsibilities and have been adopted by the 

Board of Directors and approved by the Conservator. These charters are available on our website at http://

www.freddiemac.com/governance/board-committees.html. 

The membership of each committee as of February 14, 2024, except as otherwise noted below, and the number of meetings 

held by each committee in 2023 are set forth below, followed by descriptions of each committee's primary responsibilities.

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 232
Committee Committee Meetings 

in 2023 Chair Members

Audit Committee 9 Aleem Gillani

• Kathleen L. Casey

• Kevin G. Chavers

• Lance F. Drummond

• Allan P. Merrill

Compensation and Human 

Capital Committee 6 Lance F. Drummond

• Mark H. Bloom

• Aleem Gillani

• Christopher E. Herbert

• Grace A. Huebscher

• Alberto G. Musalem

Executive Committee 1 Sara Mathew

• Mark H. Bloom

• Kathleen L. Casey(1)

• Michael J. DeVito

• Lance F. Drummond

• Aleem Gillani

• Christopher E. Herbert

• Grace A. Huebscher

Mission and Housing 

Sustainability Committee 4 Christopher E. Herbert

• Kathleen L. Casey

• Kevin G. Chavers

• Allan P. Merrill

Nominating and Governance 

Committee 7 Kathleen L. Casey(1)

• Kevin G. Chavers

• Mark B. Grier

• Allan P. Merrill

Operations and Technology 

Committee 4 Mark H. Bloom

• Lance F. Drummond

• Luke S. Hayden

• Grace A. Huebscher

• Alberto G. Musalem

Risk Committee 6 Grace A. Huebscher

• Mark H. Bloom

• Mark B. Grier

• Luke S. Hayden

• Christopher E. Herbert

• Alberto G. Musalem

(1) Ms. Casey became Chair of the Nominating and Governance Committee and a member of the Executive Committee effective September 6, 2023. Prior to that, Mr. 

Grier served as Chair of the Nominating and Governance Committee.

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 233
Effective as of February 19, 2024, the effective date of the Conservator's written consent electing directors, the membership of 

each committee will be as follows:

Committee Chair Members

Audit Committee Aleem Gillani

• Kathleen L. Casey

• Kevin G. Chavers

• Allan P. Merrill

• Roy Swan

Compensation and Human Capital Committee Kevin G. Chavers

• Mark H. Bloom

• Christopher E. Herbert

• Grace A. Huebscher

• Roy Swan

Executive Committee Lance F. Drummond

• Mark H. Bloom

• Kathleen L. Casey

• Kevin G. Chavers

• Michael J. DeVito

• Aleem Gillani

• Christopher E. Herbert

• Grace A. Huebscher

Mission and Housing Sustainability Committee Christopher E. Herbert

• Kathleen L. Casey

• Kevin G. Chavers

• Allan P. Merrill

Nominating and Governance Committee Kathleen L. Casey

• Aleem Gillani

• Mark B. Grier

• Allan P. Merrill

Operations and Technology Committee Mark H. Bloom

• Luke S. Hayden

• Grace A. Huebscher

• Roy Swan

Risk Committee Grace A. Huebscher

• Mark H. Bloom

• Mark B. Grier

• Luke S. Hayden

• Christopher E. Herbert

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FREDDIE MAC | 2023 Form 10-K 234
Audit Committee

The Audit Committee provides oversight of the company's accounting and financial reporting and disclosure processes, the 

adequacy of the systems of disclosure and internal control established by management, and the audit of the company's 

financial statements. Among other things, the Audit Committee: (1) appoints the independent auditor and evaluates its 

independence and performance; (2) reviews the audit plans for and results of the independent audit and internal audits; and (3) 

reviews compliance with legal and regulatory requirements. The Audit Committee's activities during 2023 with respect to the 

oversight of the independent auditor are described in more detail in Principal Accounting Fees and Services - Approval 

of Independent Auditor Services and Fees. The Audit Committee also reviews Freddie Mac’s ESG reporting and disclosures 

determined by management to be significant. 

The Audit Committee periodically reviews the company's guidelines and policies governing the processes for assessing and 

managing the company's risks and periodically reviews the company's major financial risk exposures and the steps 

management has taken to monitor and control such exposures. The Audit Committee also approves all decisions regarding the 

appointment, removal, and compensation of our General Auditor, the head of our Internal Audit Division, who reports 

independently to the Audit Committee, as well as the annual incentive funding level for our Internal Audit Division. 

The Audit Committee satisfies the definition of "audit committee" in Exchange Act Section 3(a)(58)(A) and the requirements of 

Exchange Act Rule 10A-3. Although our stock is no longer listed on the NYSE, certain of the corporate governance 

requirements of the NYSE Listed Company Manual, including those relating to audit committees, continue to apply to us 

because they are incorporated by reference in the Corporate Governance Rule. The Audit Committee satisfies the "audit 

committee" requirements in Sections 303A.06 and 303A.07 of the NYSE Listed Company Manual. The Board of Directors has 

determined that all members of our Audit Committee are independent and financially literate and that Mr. Gillani, a member of 

the Audit Committee since January 2019 and its current chair, meets the definition of an "audit committee financial expert" 

under SEC regulations. 

Compensation and Human Capital Committee

The CHC Committee oversees the company's compensation and benefits policies and programs, as well as other human capital 

matters, including: (1) an annual review of succession planning and talent development programs and initiatives; (2) our DEI 

programs and policies, as well as the results of those programs and policies; and (3) the design and execution of initiatives to 

strengthen our culture and employee engagement. The company's processes for consideration and determination of executive 

compensation, and the role of the CHC Committee in those processes, are further described in Executive Compensation - 

CD&A. The CHC Committee Report is included in Executive Compensation - CD&A - Compensation and Human Capital 

Committee Report. 

Although the CHC Committee plays a significant role in considering and recommending executive compensation, FHFA is 

actively involved in determining such compensation in its role as our Conservator and as our regulator. The CHC Committee's 

authority and flexibility is, therefore, subject to certain limitations as discussed in Executive Compensation - CD&A – Other 

Executive Compensation Considerations - Legal, Regulatory, and Conservator Restrictions on Executive 

Compensation.

For a discussion of the CHC Committee's conclusion that our compensation policies and practices do not create risks that are 

reasonably likely to have a material adverse effect on us, see Executive Compensation - Compensation and Risk.

For a discussion of the CHC Committee's role with respect to human capital generally, see Introduction - Our Business - 

Primary Business Strategies - Human Capital Management.

The CHC Committee consists entirely of independent directors. None of the members of the CHC Committee during 2023 were 

officers or employees of Freddie Mac or had any relationship with us that would be required to be disclosed by us under 

Item 407(e)(4) of Regulation S-K. 

Executive Committee

The Executive Committee consists of the Non-Executive Chair, the chair of each other standing committee, and our CEO. It 

consists of independent directors, with the exception of our CEO, and is authorized to exercise the corporate powers of the 

Board of Directors between Board meetings, except for those powers reserved to the Board of Directors by our Charter and 

Bylaws or otherwise. 

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 235
Mission and Housing Sustainability Committee

The Mission and Housing Sustainability Committee, which consists entirely of independent directors, has responsibility for 

overseeing the development, planning, implementation, performance, and execution of our strategies and significant initiatives 

related to delivering on our commitment to promote affordability, equity, and sustainability in housing. The Mission and Housing 

Sustainability Committee oversees: (1) the development and execution of strategies, initiatives, and activities designed to help 

us meet our affordable housing and Duty to Serve goals, increase sustainable access to credit, and implement our housing 

sustainability and equitable housing initiatives; (2) compliance with fair lending laws and regulations, including our fair lending 

compliance program and fair lending implications of key mission and housing sustainability initiatives; (3) the review of 

management reporting relating to the execution of our mission, housing sustainability, and fair lending strategies and initiatives; 

and (4) the review of initiatives designed to promote the adaptation of housing to be more resilient in the face of climate change 

or improvements to mitigate housing's climate impacts.

Nominating and Governance Committee

The Nominating and Governance Committee, which consists entirely of independent directors, oversees the company's 

corporate governance, including reviewing the company's Bylaws and the Guidelines. The Nominating and Governance 

Committee also, among other things: (1) assists the Board of Directors and its committees in conducting annual self-evaluations 

and identifying qualified individuals to become directors; (2) reviews Board member independence and qualifications and 

recommends membership of the committees of the Board of Directors; and (3) reviews potential conflicts of interest for 

members of senior management as well as certain related person transactions. 

Operations and Technology Committee

The Operations and Technology Committee, which consists entirely of independent directors, has responsibility for overseeing 

the development and execution of our enterprise information, operations, and technology strategies and the information, 

operational resiliency, and enterprise third-party governance programs. Specifically, the Operations and Technology Committee: 

(1) oversees our information, operations, and technology strategies and planning, and the implementation of technology 

initiatives critical to the achievement of our mission, strategy, and business objectives; (2) in conjunction with the Risk 

Committee, oversees our management of information (including cybersecurity), technology, operational resiliency, and 

enterprise third-party governance risk, including the possibility that these risks will adversely affect the achievement of our 

mission and business objectives; (3) oversees our information (including cybersecurity and information security), operational 

resiliency, and enterprise third-party governance programs, including risk and controls; (4) receives reports related to our 

technology strategy, practices, and management and potential for innovation from both EO&T and the business areas, as 

appropriate; and (5) reviews and recommends to the Board for approval the annual EO&T business plan, including relevant 

performance indicators, and evaluating EO&T against the plan. The Operations and Technology Committee also reviews 

capabilities for and adequacy of resources allocated to operations and technology enterprise-wide and monitors and evaluates 

trends in technology that may affect our strategy and business objectives. See MD&A – Risk Management – Cybersecurity 

Risk – Cybersecurity Governance for additional information. 

Risk Committee

The Risk Committee, which consists entirely of independent directors, oversees on an enterprise-wide basis the company's risk 

management framework, including credit risk, market risk, liquidity risk, operational risk (including cybersecurity), compliance 

risk, climate risk, and strategic risk. The Risk Committee reviews and recommends the company's enterprise risk policy and 

Board-level risk appetite statements, metrics, and limits to the Board of Directors for approval, oversees management’s 

adherence to Board risk limits and approves any exceptions thereto with notice to the Board, and, among other responsibilities, 

reviews significant: (1) enterprise risk exposures; (2) risk management strategies; (3) results of risk management reviews and 

assessments; and (4) emerging risks. The Risk Committee also reviews our exposure to the potential negative impacts of 

climate change, oversees the development and implementation of our climate risk framework, and reviews capabilities for and 

adequacy of resources allocated to ERM. The Risk Committee also approves all decisions regarding the appointment or 

removal of the CRO, and the CRO reports independently to the Risk Committee. 

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 236
Board Leadership Structure

The leadership structure established by the Conservator requires that the positions of CEO and Chair of the Board of Directors 

be held by different individuals. In addition, FHFA's Corporate Governance Rule requires that the position of Chair of the Board 

of Directors be filled by an independent director as defined under the rules of the NYSE. 

Communications with Directors

Interested parties wishing to communicate any concerns or questions about Freddie Mac to the Board of Directors or its 

members may do so by U.S. mail, addressed to the Corporate Secretary, Freddie Mac, 8200 Jones Branch Drive, McLean, VA 

22102-3110 or by email at boardofdirectors@freddiemac.com. Communications may be directed to the Non-Executive Chair, 

to any other director or directors, or to groups of directors, such as the independent or non-employee directors.

Codes of Conduct

We have separate codes of conduct for our employees and Board members. The employee code of conduct serves as the 

code of ethics for senior executives and financial officers. All employees, including senior executives and financial officers, are 

required to sign an annual acknowledgment that they have read the employee code of conduct and agree to abide by it and will 

report suspected deviations from the employee code of conduct. When joining our Board of Directors, directors acknowledge 

that they have reviewed and understand the director code of conduct and agree to be bound by its provisions, and each 

director re-executes such confirmation annually.

Copies of our employee and director codes of conduct are available, and any amendments or waivers that would be required to 

be disclosed are posted on our website at www.freddiemac.com/governance/code-conduct.html.

Director Compensation

Non-employee Board members receive compensation in the form of cash retainers, paid on a quarterly basis. Non-employee 

directors are also reimbursed for reasonable out-of-pocket costs for attending meetings of the Board of Directors or a Board 

committee of which they are a member and for other reasonable expenses associated with carrying out their responsibilities as 

directors.

Our directors are compensated entirely in cash because the Purchase Agreement prohibits us from issuing any shares of our 

equity securities without the prior written consent of Treasury. See Executive Compensation - CD&A - Overview of 

EMCP. Unlike compensation for our executive officers, there is no provision in the director compensation program for pay that 

varies depending on business results. Although incentive compensation may give management strong incentives to develop 

and execute business plans and achieve positive financial results, we believe that such incentive compensation is inconsistent 

with the oversight role of the Board. 

2023 Non-Employee Director Compensation Levels

Board compensation levels during conservatorship are shown in the table below.

Table 61 - Board Compensation Levels

Board Service Cash Compensation

Annual Retainer for Non-Executive Chair $290,000 

Annual Retainer for Non-Employee Directors (other than the Non-Executive Chair) 160,000 

Committee Service Cash Compensation

Annual Retainer for Audit Committee Chair $25,000 

Annual Retainer for Risk Committee Chair 15,000 

Annual Retainer for Committee Chairs (other than Audit or Risk) 10,000 

Annual Retainer for Audit Committee Members 10,000 

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 237
2023 Director Compensation

The following table summarizes the 2023 compensation earned by all persons who served as a non-employee director during 

2023.

Table 62 - Director Compensation 

Non-Employee Director Fees Earned or

Paid in Cash(1) Total

Sara Mathew $290,000 $290,000

Mark H. Bloom 170,000 170,000 

Kathleen L. Casey(2) 173,179 173,179 

Kevin G. Chavers 170,000 170,000 

Lance F. Drummond 180,000 180,000 

Aleem Gillani 185,000 185,000 

Mark B. Grier(3) 166,821 166,821 

Luke S. Hayden 160,000 160,000 

Christopher E. Herbert 170,000 170,000 

Grace A. Huebscher 175,000 175,000 

Allan P. Merrill 170,000 170,000 

Alberto G. Musalem 160,000 160,000 

(1) We do not have pension or retirement plans for our non-employee directors, and all compensation is paid in cash with no other compensation paid. Therefore, we 

have omitted the "Change in Pension Value and Non-qualified Deferred Compensation Earnings" and "All Other Compensation" columns.

(2) Ms. Casey became Chair of the Nominating and Governance Committee in September 2023.

(3) Mr. Grier stepped down as Chair of the Nominating and Governance Committee in September 2023.

Indemnification

We have made arrangements to indemnify our directors against certain liabilities which are similar to the terms on which our 

executive officers are indemnified. For a description of such terms, see Executive Compensation - CD&A - Written 

Agreements Relating to NEO Employment - Indemnification Agreements.

Directors, Corporate Governance, and Executive Officers Corporate Governance

FREDDIE MAC | 2023 Form 10-K 238
EXECUTIVE OFFICERS

As of February 14, 2024, our executive officers are as follows: 

Michael J. DeVito

Age Year of Affiliation Position

59 2021 CEO

Mr. DeVito has served as our CEO and a member of our Board of Directors since June 2021. He notified us that he intends to 

retire as CEO and depart the Board effective March 15, 2024. See Directors, Corporate Governance, and Executive 

Officers - Directors - Director Biographical Information for a biography of Mr. DeVito. 

Michael T. Hutchins

Age Year of Affiliation Position

68 2013 President

Mr. Hutchins has served as our President since December 2020 after serving as our interim President beginning in November 

2020. In this role, he oversees the company's Single-Family business and the Multifamily, Investments and Capital Markets, 

and EO&T Divisions. He previously served as EVP - Investments and Capital Markets from January 2015 to November 2020 

and as SVP - Investments and Capital Markets from July 2013 to January 2015. From 2007 to 2013, prior to joining Freddie 

Mac, Mr. Hutchins was Co-Founder and CEO of PrinceRidge, a financial services firm. Prior to founding PrinceRidge, he was 

with UBS Group AG from 1996 to 2007, holding a variety of senior management positions, including the Global Head of the 

Fixed Income Rates & Currencies Group. Prior to UBS, Mr. Hutchins worked at Salomon Brothers, Inc. from 1986 to 1996, 

where he held a number of management positions, including Co-Head of Fixed Income Capital Markets.

Christian M. Lown

Age Year of Affiliation Position

54 2020 EVP & CFO

Mr. Lown has served as our EVP & CFO since June 2020. In this role, he is responsible for the company's accounting, capital 

oversight, sustainability, financial controls, financial planning and reporting, investor relations, procurement, and tax. Mr. Lown 

joined Freddie Mac from Navient Corporation where he served as EVP and CFO from March 2017 to June 2020. Prior to that, 

he served as Managing Director of the Financial Institutions Group and Co-Head of Global Financial Technology, North America 

Banks, and Diversified Finance at Morgan Stanley from 2006 to 2017; Director, Financial Institutions Group, at UBS AG from 

2003 to 2006; and Associate, Financial Institutions Group, at Credit Suisse First Boston from 2001 to 2003.

John Glessner

Age Year of Affiliation Position

51 2010 SVP - Investments and Capital Markets

Mr. Glessner has served as our SVP - Investments and Capital Markets since April 2021. In this role, he is responsible for 

managing our liquidity, financing, securitization, and derivative activities as well as our portfolio of single-family mortgage 

securities and loan investments. From March 2018 to April 2021, he served as our SVP of Asset and Liability Management and 

Treasurer where he was responsible for overseeing our corporate treasury function, liquidity management, and interest-rate 

hedging activities. He also oversaw the Investments and Capital Markets Division's counterparty credit risk activities and 

secured lending to our investors and customers. He previously worked in the Securities Sales & Trading Group and on the 

Collateralized Mortgage Obligation and Cash Window desks, among other areas. Prior to re-joining Freddie Mac in 2010, he 

held various trading positions at the Friedman, Billings, Ramsey Group and GMAC ResCap.

Anil D. Hinduja

Age Year of Affiliation Position

60 2015 EVP - CRO

Mr. Hinduja has served as our EVP - CRO and head of ERM since July 2015. In this role, he is responsible for the company's 

enterprise-wide risk framework and providing overall direction and leadership for the risk function. He joined Freddie Mac from 

Barclays PLC, where he served in increasingly broader risk management roles beginning in 2009, including CRO for Barclays 

Africa Group Limited, Group Credit Director for Retail Credit Risk, and CRO for Barclays' retail bank in the U.K. Prior to joining 

Directors, Corporate Governance, and Executive Officers Executive Officers

FREDDIE MAC | 2023 Form 10-K 239
Barclays, he spent 19 years at Citigroup in diverse roles with increasing responsibility across finance, operations, sales and 

distribution, business, and risk management in global consumer businesses. These included Director for Global Consumer 

Credit Risk, CRO for the North America Consumer Lending Group, and President and CEO of Citi Home Equity.

Heidi L. Mason

Age Year of Affiliation Position

58 2022 EVP & General Counsel

Ms. Mason has served as our EVP and General Counsel since March 2022. In this role, she oversees our legal strategies, 

services, and resources. She also manages all corporate governance matters. Ms. Mason brings over 25 years of experience 

from across the legal spectrum, including mortgage lending and servicing, fair lending, credit access, and regulatory matters, 

among others. Prior to joining Freddie Mac, Ms. Mason spent 17 years at Wells Fargo, most recently serving as EVP and Senior 

Deputy General Counsel. During her tenure at Wells Fargo, Ms. Mason led the legal support for all of its consumer businesses, 

including mortgage operations. She previously served as Head of the Wells Fargo corporate legal team, where she oversaw 

enterprise-wide legal support of corporate governance, securities, banking regulatory matters, employment law, and a host of 

other areas. From October 2020 to February 2022, Ms. Mason served as a Partner at ElevateNext Law, a majority womanowned law firm that provided legal, consulting, and regulatory compliance services to financial services companies across the 

United States.

Sonu Mittal

Age Year of Affiliation Position

41 2023 SVP - Single-Family Acquisitions

Mr. Mittal has served as our SVP and Head of Single-Family Acquisitions since March 2023. In this role, Mr. Mittal oversees 

seller engagement, credit, products, and affordable mission goals, as well as the operations and technology that support these 

activities. Mr. Mittal brings extensive experience across sales, operations, capital markets, strategy, analytics, product 

management, and technology. Prior to joining Freddie Mac, Mr. Mittal served as President of Home Mortgage, Executive Vice 

President of Home Mortgage, and Head of Retail Mortgage at Citizens Bank from March 2018 to March 2023. He served at 

Capital One from February 2009 to March 2018 as Production and Digital Transformation Head and National Direct to 

Consumer Sales Head. From 2000 to 2009, he held various home lending and sales management positions at Chevy Chase 

Bank.

Frank Nazzaro 

Age Year of Affiliation Position

62 2018 EVP - EO&T

Mr. Nazzaro has served as our EVP - EO&T since April 2021 after serving as Chief Information Officer from October 2019 to 

April 2021, and Acting Chief Information Officer from May 2019 to October 2019. He joined Freddie Mac in 2018 as SVP and 

Chief Technology Officer leading Enterprise Technology Solutions. He provides corporate-wide leadership for the company’s 

technology and cybersecurity strategy. Mr. Nazzaro is an accomplished senior technology executive with more than 20 years of 

experience in the financial services industry. With an in-depth knowledge in infrastructure, applications, and cybersecurity, he 

brings a wealth of experience in transformational technology activities and strong leadership capabilities essential to EO&T’s 

strategic initiatives, including Cloud migration, Modern Delivery, Employee Technology Experience, and Information Security 

investments. Prior to joining Freddie Mac, from 2016 to 2018, he was Group VP and Chief Technology Officer (CTO) for 

Travelport LLC, where he led Cloud Architecture, Infrastructure, Operations, and Cybersecurity globally. From 2012 to 2016, he 

was CTO at CIT Group where he was responsible for Transformation, Architecture, Technology Strategy, IT Infrastructure, and 

Cybersecurity. Prior to that, he has held several senior technology and management roles at RBC Capital Markets, Bridgewater, 

and UBS.

Kevin Palmer 

Age Year of Affiliation Position

47 2001 SVP - Multifamily

Mr. Palmer has served as our SVP and Head of Multifamily since May 2022. In this role, he oversees all aspects of the Division’s 

efforts to provide stability, liquidity, and affordability throughout the rental housing market. Previously, Mr. Palmer led Portfolio 

Management for our Single-Family Division, including supervision of the company’s nearly $3 trillion guarantee book of 

business including servicing, pricing, and analytics, and oversight of our real estate-owned portfolio, in addition to leading 

Single-Family CRT. Prior to that, he held various positions with increasing responsibility across capital markets and risk 

Directors, Corporate Governance, and Executive Officers Executive Officers

FREDDIE MAC | 2023 Form 10-K 240
management positions at Freddie Mac since joining in 2001, including Senior Director of Pricing and Analytics and Director of 

Non-Prime Portfolio Management. 

Ravi Shankar 

Age Year of Affiliation Position

60 2022 SVP - Single-Family Portfolio & Servicing

Mr. Shankar has served as our SVP and Head of Single-Family Portfolio & Servicing since rejoining in November 2022. In this 

role, Mr. Shankar oversees the Division’s portfolio management, servicing, and the operations and technology that support 

these activities. He also plays a significant role in supporting our mission to provide affordable and equitable housing. In 

addition, since November 2022, he has served as a member of the Board of Managers of CSS. Prior to that, Mr. Shankar held 

senior advisor positions at Boston Consulting Group from August 2021 to October 2022 and United Wholesale Mortgage from 

2020 to 2021. Prior to that, and before rejoining Freddie Mac in 2022, Mr. Shankar served as SVP of Portfolio Management for 

Freddie Mac’s Single-Family Division from 2013 to 2016, and deputy head of Freddie Mac’s Investments and Capital Markets 

Division from 2016 to 2019. He also spent seven years at JP Morgan Chase in a number of increasingly senior positions, 

including CFO, Head of Capital Markets, and Portfolio Manager at Chase Home Finance. Prior to that, he worked in various 

senior positions with Citigroup for 16 years.

Jerry Weiss

Age Year of Affiliation Position

65 2003 EVP - Chief Administrative Officer

Mr. Weiss has served as our EVP - Chief Administrative Officer since August 2010 and served as Interim General Counsel from 

March 2021 to March 2022. As Chief Administrative Officer, he serves as the company's senior executive liaison to FHFA and 

Treasury, and he oversees the Government & Industry Relations, Public Relations & Digital Communications, Corporate 

Communications & Marketing, Conservatorship Affairs & Initiatives, Economic & Housing Research, Regulatory Affairs, and 

Corporate Services departments. In addition, since November 2014, he has served as a member of the Board of Managers of 

CSS. Prior to August 2010, Mr. Weiss served as our Chief Compliance Officer and in various other senior management 

capacities after joining us in October 2003. Before that, Mr. Weiss worked from 1990 to 2003 at Merrill Lynch Investment 

Managers, including as First VP and Global Head of Compliance. From 1982 to 1990, Mr. Weiss was with a national law 

practice in Washington, D.C., where he specialized in securities regulation and corporate finance matters.

Directors, Corporate Governance, and Executive Officers Executive Officers

FREDDIE MAC | 2023 Form 10-K 241
Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

This section contains information regarding our compensation programs (all of which have been approved by FHFA) and the 

compensation of the following individuals who we determined to be our Named Executive Officers, or NEOs, for the year ended 

December 31, 2023. Mr. DeVito notified us that he intends to retire as CEO and depart the Board effective March 15, 2024.

Named Executive Officers

Michael J. DeVito CEO

Michael T. Hutchins President

Christian M. Lown EVP & CFO

Anil D. Hinduja EVP - CRO

Heidi L. Mason EVP & General Counsel

For information on our primary business objectives and the progress we made during 2023 toward accomplishing those 

objectives, see Introduction - About Freddie Mac and Introduction - Our Business.

Overview of Executive Management Compensation Program

Compensation in 2023 for each NEO, other than Mr. DeVito, whose compensation is discussed below, was governed by the 

EMCP. The EMCP balances our need to retain and attract executive talent with promoting the conservatorship objectives 

included in FHFA's Conservatorship Scorecard, as well as goals separately established by management related to the 

commercial aspects of our business, which are included in our Corporate Scorecard. All compensation under the EMCP is 

delivered in cash because the Purchase Agreement does not permit us to provide equity-based compensation to our 

employees unless approved by Treasury. 

FHFA has advised us that the design of the EMCP, which applies to our NEOs other than our CEO, was intended to fulfill and 

balance three primary objectives:

n Maintain Lower Pay Levels to Conserve Taxpayer Resources. Given our conservatorship status, the EMCP is designed 

generally to provide for lower pay levels relative to large financial services firms that are not in conservatorship.

n	 Attract and Retain Executive Talent. The EMCP is intended to attract and retain executive officers with the specialized skills 

and knowledge necessary to effectively manage a large financial services company. Executive officers with these 

qualifications are needed for the company to continue to fulfill its important role in providing liquidity, stability, and 

affordability to the housing market. We face competition for qualified executives from other companies. The CHC 

Committee regularly considers the level of our executive officers’ compensation and whether changes are needed to 

attract and retain executive officers. See Risk Factors for a discussion of the risks associated with executive retention 

and succession planning.

n	 Reduce Pay if Goals Are Not Achieved. To support FHFA’s goals for our conservatorship and encourage performance in 

furtherance of these goals, 30% of each NEO’s Target TDC (other than the CEO's compensation) consists of At-Risk 

Deferred Salary subject to reduction based on corporate and individual performance as reflected in the Conservatorship 

and Corporate Scorecards.

FHFA’s objectives for the EMCP and the legal and regulatory restrictions on our executive compensation described in 

Executive Compensation - CD&A - Other Executive Compensation Considerations - Legal, Regulatory, and 

Conservator Restrictions on Executive Compensation limit our ability to make changes to the EMCP and limit the amount 

and type of compensation we may pay our executive officers.

CEO Compensation

Compensation in 2023 for Mr. DeVito consisted of an annual Base Salary level of $600,000, in compliance with the Equity in 

Government Compensation Act of 2015. Due to statutory limitations on compensation for the CEO, he does not participate in 

the EMCP and, therefore, he did not receive any compensation subject to either corporate or individual performance in 2023. 

Mr. DeVito was eligible to participate in all employee benefit plans offered to Freddie Mac's other senior executives under the 

terms of those plans. See Executive Compensation - 2023 Compensation Information For NEOs - Summary 

Compensation Table for additional information.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 242
Elements of Target TDC

For all NEOs other than the CEO, compensation under the EMCP in 2023 consisted of the following elements: 

Base Salary

Deferred Salary

n The amount earned in each quarter, including interest, is paid (1) in the corresponding quarter in the first year 

following the performance year for Fixed Deferred Salary and (2) in the corresponding quarter in the second year 

following the performance year for At-Risk Deferred Salary

Fixed Deferred Salary

At-Risk Deferred Salary

n To encourage achievement of conservatorship, corporate, and individual 

performance goals

Conservatorship Scorecard and 

Assessment Criteria Corporate Scorecard / Individual

n Cannot exceed $600,000 

without approval from 

FHFA

n To encourage executive 

retention

n Subject to reduction based on 

Conservatorship Scorecard 

performance and the Assessment 

Criteria

n Subject to reduction based on 

performance against both the 

Corporate Scorecard and individual 

objectives n Equal to total Deferred Salary 

less the At-Risk portion

As in past years, 30% of Target TDC for each NEO (other than our CEO) is At-Risk Deferred Salary, half of which is subject to 

reduction based on FHFA's assessment of the company's performance against goals established by FHFA. The other half is 

subject to reduction based on a combination of the company's performance against goals established by the Board for the 

performance year and individual performance. In 2019, FHFA directed us to increase the mandatory deferral period for At-Risk 

Deferred Salary received by certain executive officers (including our NEOs) from one year to two years. For executive officers 

hired before January 1, 2020, this change became effective for At-Risk Deferred Salary earned beginning January 1, 2022. For 

executive officers hired on or after January 1, 2020, the change became effective immediately. However, pursuant to an FHFA 

directive issued in June 2022, for executive officers hired before January 1, 2020, one-half of At-Risk Deferred Salary earned in 

2022 was paid in 2023 and the remaining one-half of At-Risk Deferred Salary earned in 2022 will be paid in the corresponding 

quarter in 2024. For compensation earned in 2023 and thereafter, all At-Risk Deferred Salary will be paid in quarterly 

installments in the second year following the performance year. This mandatory deferral period for At-Risk Deferred Salary 

applies for so long as the company is in Conservatorship or until revised or revoked by FHFA. 

The objectives against which 2023 corporate performance was measured, together with the assessment of actual performance 

against those objectives and the Assessment Criteria used by FHFA, are described in Executive Compensation - CD&A -

Determination of 2023 At-Risk Deferred Salary - At-Risk Deferred Salary Based on Conservatorship Scorecard 

Performance and Executive Compensation - CD&A - Determination of 2023 At-Risk Deferred Salary - At-Risk 

Deferred Salary Based on Corporate Scorecard Goals and Individual Performance. These performance measures were 

chosen because they reflected our 2023 goals during conservatorship.

See Executive Compensation - CD&A - Other Executive Compensation Considerations - Effect of Termination of 

Employment for information on the effect of a termination of employment, including the timing and payment of any unpaid 

portion of Deferred Salary and related interest. 

Determination of 2023 Target TDC for Eligible NEOs 

Role of Compensation Consultant

As part of the annual process to determine the 2023 Target TDC for each of the eligible NEOs, the CHC Committee received 

guidance from Pay Governance LLC, or Pay Governance, its independent compensation consultant. In addition to the annual 

process to determine Target TDC, Pay Governance provides guidance to the CHC Committee throughout the year on other 

executive compensation matters.

Pay Governance has not provided the CHC Committee with any non-executive compensation services, nor has the firm 

provided any consulting or other services to our management. During 2023, the CHC Committee reviewed Pay Governance’s 

independence based on the factors outlined in Exchange Act Rule 10C-1(b)(4) and determined that Pay Governance continues 

to be independent.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 243
2023 Comparator Group Companies

The CHC Committee annually evaluates each eligible NEO's Target TDC in relation to the compensation of executive officers in 

comparable positions at companies that are either in a similar line of business or are otherwise comparable for purposes of 

recruiting and retaining individuals with the necessary skills and capabilities. We refer to this group of companies as the 

Comparator Group. Finding comparable companies for purposes of benchmarking executive compensation is challenging due 

to our unique business, structure, and mission, and the large size of our book of business compared to other financial services 

firms. We believe the only directly comparable firm to us is Fannie Mae, but we use a broader group of companies to provide 

market benchmark data.

At FHFA's request, Freddie Mac and Fannie Mae use the same Comparator Group for benchmarking executive compensation 

to provide consistency in the market data used for compensation decisions for similar positions. Factors relevant to the 

selection of companies for our Comparator Group include their status as U.S. public companies, the industry in which they 

operate, the complexity of their business, and their size (in terms of assets, revenue, and number of employees) relative to the 

size of Freddie Mac.

When there is either no reasonable match or insufficient data from the Comparator Group for a position, or if the CHC 

Committee's independent compensation consultant believes that additional data sources would strengthen the analysis of 

competitive market compensation levels, the CHC Committee may use alternative survey sources.

FHFA has instructed that we may benchmark between the 25th and 50th percentiles of the compensation reported by the 

Comparator Group.

The Comparator Group used in determining compensation for 2023 consisted of the following companies:

The Allstate Corporation    Fannie Mae    Prudential Financial, Inc.

Ally Financial Inc.    Fifth Third Bancorp    Regions Financial Corporation

American Express Company    The Hartford Financial Services Group, Inc.    State Street Corporation

American International Group, Inc. JPMorgan Chase & Co* Synchrony Financial

Bank of America Corporation*    KeyCorp    Truist Financial Corporation

The Bank of New York Mellon Corporation    Mastercard Incorporated    U.S. Bancorp

Capital One Financial Corporation    MetLife, Inc.    Visa, Inc.

Citigroup Inc.* Northern Trust Corporation Voya Financial, Inc.

Citizens Financial Group, Inc.    PNC Financial Services Group, Inc.    Wells Fargo & Company*

Discover Financial Services

* Only mortgage or real estate division-level compensation data from these diversified banking firms may be utilized where available and appropriate 

for the position being benchmarked.

Establishing Target TDC

The CHC Committee developed its 2023 Target TDC recommendations for the eligible NEOs by reviewing data from the 

Comparator Group.

2023 Target TDC

The following table sets forth the components of 2023 Target TDC for each of our eligible NEOs:

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 244
Table 63 - 2023 Target TDC

2023 Target TDC

Named Executive 

Officer(1)

Base

Salary Rate

Fixed

Deferred 

Salary

At-Risk

Deferred 

Salary

Target TDC

Michael T. Hutchins $600,000 $1,920,000 $1,080,000 $3,600,000

Christian M. Lown(2) 600,000 1,605,000 945,000 3,150,000 

Anil D. Hinduja 600,000 1,290,000 810,000 2,700,000 

Heidi L. Mason 600,000 1,150,000 750,000 2,500,000 

(1) Mr. DeVito did not participate in the EMCP in 2023 and therefore is not included in this table. For a discussion of his compensation, see Executive Compensation 

- CD&A - CEO Compensation.

(2) In connection with his appointment as our CFO in June 2020, we agreed to pay Mr. Lown a cash sign-on award of $1,275,000 in recognition of forfeited 

compensation at his previous employer payable in three installments: $475,000 was paid in February 2021; $475,000 was paid in February 2022; and $325,000 

was paid in February 2023. 

Executive Compensation Best Practices

What We Do What We Don't Do

n Clawback provisions with a significant portion of compensation 

subject to recapture and/or forfeiture

n No agreements that guarantee a specific amount of compensation for 

a specified term of employment

n Use of an independent compensation consultant by the CHC 

Committee

n No golden parachute payments or other similar change in control 

provisions

n Annual compensation risk review n No tax "gross-ups"

n Evaluation of company performance against multiple measures, 

including non-financial measures

n No hedging or pledging of company securities

n No executive perquisites other than a relocation program

Determination of 2023 At-Risk Deferred Salary

The CHC Committee and FHFA considered our achievements in pursuing our primary business objectives, as well as other 

factors, in determining the funding level for At-Risk Deferred Salary in 2023. FHFA determined the funding level for the portion 

of At-Risk Deferred Salary based on Conservatorship Scorecard performance and Assessment Criteria, and the CHC 

Committee determined, with FHFA's review and approval, the amounts payable to each eligible NEO for the portion of At-Risk 

Deferred Salary based on Corporate Scorecard goals and individual performance.

At-Risk Deferred Salary Based on Conservatorship Scorecard 

Performance

Half of each eligible NEO's 2023 At-Risk Deferred Salary, or 15% of Target TDC, was subject to reduction based on FHFA's 

assessment of (1) the company's performance against the goals in the 2023 Conservatorship Scorecard and (2) the 

Assessment Criteria as defined and described below. FHFA independently assessed our performance against the 2023 

Conservatorship Scorecard and the Assessment Criteria and determined that an 89% funding level was justified for the portion 

of the eligible NEO's At-Risk Deferred Salary. In assessing our performance against the 2023 Conservatorship Scorecard, the 

factors considered by FHFA included our completion of all of the Conservatorship Scorecard objectives and our performance 

against the Assessment Criteria.

In making its assessment, FHFA used the following criteria (collectively, the Assessment Criteria), including how:

n Our products and programs fostered liquid, competitive, efficient, and resilient housing finance markets that support 

affordable, sustainable, and equitable access to homeownership and rental housing. 

n We conducted business in a safe and sound manner.

n	 We met expectations under all FHFA requirements, including those pertaining to capital, liquidity, and credit risk transfer.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 245
n We continued to manage operations while in conservatorship in a manner that preserves and conserves assets through the 

prudent stewardship of our resources.

n We cooperated and collaborated with FHFA to meet the Conservator’s priorities and guidance throughout the course of the 

year.

n We delivered work products that are high quality, thorough, creative, effective, and timely, and that consider effects on 

homeowners, multifamily property owners and renters, the company, the industry, and other stakeholders.

n We ensured that DEI remained a top priority in strategic planning, operations, and business development.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 246
The table below presents the 2023 Conservatorship Scorecard objectives and FHFA's assessment of our achievement against 

those objectives. 

I. Promote Equitable Access to Affordable and Sustainable Housing (50%)

Take significant actions to ensure that all borrowers and renters have equitable 

access to long-term affordable housing opportunities, including efforts that 

further energy efficiency, resiliency, and cost savings in the mortgage process. 

Develop and implement strategies to support and advance the following:

• Sustainable homeownership and affordable rental housing

- Explore options to expand energy efficiency and to improve resiliency product 

offerings and policy guidelines.

Goal was achieved.

- Explore the feasibility of expanding tenant protections in properties financed 

by the Enterprises.

Exceeded goal by developing several innovative and 

precedent-setting resident-centered property 

management practices.

- Identify strategies and activities to facilitate greater affordable housing supply 

within the limits of charter authorities.

Goal was achieved.

- Plan for implementation of the approved credit score models, informed by 

stakeholder outreach.

Goal was achieved.

• Equitable access to housing

- Take meaningful actions to achieve the goals and objectives of the 

Enterprises’ Equitable Housing Finance Plans.

Goal was achieved.

- Continue efforts to minimize single-family appraisal bias and improve 

valuation equity, including by supporting FHFA's implementation of the 

Property and Valuation Equity (PAVE) action plan.

Goal was achieved.

• Efficiency in the mortgage market

- Continue modernization of single-family appraisal processes and practices. Goal was achieved.

- Leverage data, technology, and other innovations to promote efficiency and 

cost savings in mortgage processes.

Exceeded goal by updating and republishing an expanded 

body of documentation for the Uniform Appraisal Dataset 

and actively addressing consumer advocate concerns and 

through Uniform Collateral Data Portal implementation 

progress.

• Climate risks

- Identify and pursue measures to enhance consumer awareness of climate 

risks in housing.

Goal was achieved.

- Continue research to identify at-risk borrowers, properties, and communities 

to inform policy and improve climate-resiliency efforts.

Goal was achieved.

Manage new multifamily purchases to remain within the multifamily cap 

requirements, including an expanded focus on workforce/moderate income 

housing.

Goal was achieved.

II. Operate the Business in a Safe and Sound Manner (50%)

Ensure that Freddie Mac is resilient to operational, market, credit, economic, 

and climate risks.

• Address examination and supervision findings promptly. Goal was achieved.

• Maintain effective risk management systems appropriate for entities that need to 

minimize risk to capital as they rebuild their capital buffers.

Goal was achieved.

• Take appropriate action to address risk exposure and enhance Enterprise 

counterparty risk controls.

Goal was achieved.

• Strengthen risk management capabilities in identifying, assessing, controlling, 

monitoring, and reporting on climate risk and incorporating these capabilities into 

the overall Enterprise risk framework.

Goal was achieved.

• Maintain ability to respond to operational events without significant disruption to 

the primary or secondary mortgage market.

Goal was achieved.

• Maintain liquidity at levels required by FHFA and sufficient to sustain Enterprise 

operations through severe stress events.

Goal was achieved.

• Continue to develop the pricing framework to maintain support for core mission 

single-family borrowers, ensure a level playing field for small and large sellers, 

foster capital accumulation, and achieve viable returns on capital.

Goal was achieved.

Transfer a meaningful amount of credit risk to private investors in a 

commercially reasonable and safe and sound manner, reducing risk to 

taxpayers.

Exceeded goal in Multifamily by transferring a substantial 

amount of credit risk beyond the goal; goal was achieved 

in Single-Family.

Performance Goals FHFA's Summary of Performance

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 247
At-Risk Deferred Salary Based on Corporate Scorecard Goals and 

Individual Performance

The other half of each eligible NEO's At-Risk Deferred Salary, also equal to 15% of Target TDC, was first subject to adjustment 

based on the company's performance against the Corporate Scorecard goals and other relevant factors, as determined by the 

CHC Committee. The Corporate Scorecard goals drive how we manage and improve the commercial aspects of our business 

and are intended to complement the FHFA Strategic Plan and Conservatorship Scorecard. Then, an adjustment can be applied 

based on the eligible NEO’s individual performance. Any adjustment for individual performance, however, cannot result in an 

amount in excess of the eligible NEO’s target for this portion of At-Risk Deferred Salary. 

The CHC Committee considered management’s assessment of its performance against the goals and also discussed the 

company’s performance with our CEO. The Corporate Scorecard does not have assigned weightings for the various Corporate 

Scorecard goals. As a result, it was necessary for the CHC Committee to use its judgment in determining the overall level of 

performance. Despite challenging economic and market conditions, the company achieved or exceeded all of its Corporate and 

Conservatorship Scorecard goals, enhanced its commitment to its mission, and improved its control environment. As a first 

step in the process, the CHC Committee determined that the portion of NEO At-Risk Deferred Salary should reflect 100%, in 

light of its assessment of the company's performance against the Corporate Scorecard as well as other factors that it deemed 

relevant for consideration. The second step in the process to determine this portion of each eligible NEO's At-Risk Deferred 

Salary reflecting the individual performance assessments is described below under Assessment of 2023 Individual 

Performance. 

The table below presents the 2023 Corporate Scorecard goals and the CHC Committee's assessment of our achievement 

against those goals. 

Corporate Scorecard Goal Assessment of Performance

Deliver on our Affordable Housing 

Mission

We achieved or exceeded goals for all 2023 Conservatorship Scorecard objectives, achieved or exceeded all 

2023 Single-Family and Multifamily affordable housing and feasible Duty to Serve goals, and executed on 

our corporate sustainability strategy.

Identify, Assess, and Manage Risk We achieved or exceeded all elements of this goal, including managing risk within established limits, timely 

remediation of significant issues, and design and meet milestones to reduce operational risk and achieve 

compliance.

Grow, Develop, and Empower Talent 

for Today and Tomorrow

We achieved or exceeded all elements of this goal, including those related to DEI and progress on employee 

engagement.

Build Financial Strength We achieved or exceeded all elements of this goal related to corporate expenses, earnings, and return on 

capital.

Assessment of 2023 Individual Performance 

Half of each eligible NEO’s 2023 At-Risk Deferred Salary was subject to reduction based on individual performance in 2023, as 

determined by the CHC Committee with FHFA’s approval. The non-employee directors also assessed the performance of our 

CEO, who does not receive at-risk deferred salary. After assessing the company's performance against the 2023 Corporate 

Scorecard, the CHC Committee assessed individual performance of each eligible NEO, taking into consideration input from Mr. 

DeVito. Because certain individual performance objectives for eligible NEOs were either Corporate Scorecard goals or directly 

supported their achievement, performance against the Corporate Scorecard was one of the factors the CHC Committee used 

to determine the individual performance of the NEOs. FHFA reviewed and approved the compensation associated with these 

determinations.

Each eligible NEO's individual performance assessment and the funding level for the individual performance-based at-risk 

deferred salary for 2023 is discussed below.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 248
Michael T. Hutchins, President

Performance Highlights

n Effectively led Freddie Mac’s four major divisions: Single-Family, Multifamily, Investments and Capital Markets, and EO&T.

n Provided strong leadership on all aspects of the company, including: advancing the company’s mission to Make Home Possible during challenging 

market and operating conditions; focusing the company on enterprise-wide consistency to enhance efficiency; and evaluating technology and data 

strategies.

n Partnered with other leaders to develop methodologies for assessing, categorizing, and managing risk through improved operational capabilities, 

processes, and tools.

n Reorganized resources to improve accountability and focus in key areas; and provided opportunities for top / high potential talent to grow with new 

or additional responsibilities.

At-Risk Deferred Salary (Corporate Scorecard/Individual) Funding Decision

The CHC Committee determined that Mr. Hutchins should receive 100% of his At-Risk Deferred Salary that was subject to adjustment based on his 

individual performance after taking into account the company’s performance against the Corporate Scorecard.

Christian M. Lown, EVP & CFO

Performance Highlights

n Led the advancement of several large financial projects, including implementing a new enterprise-wide budget planning process to better align how 

resources are invested and enhancing the company’s investment governance and capital allocation processes.

n Partnered with other leaders to identify opportunities for operational and financial efficiency and implemented solutions. 

n Continued focus on enhanced analytical and forecasting capabilities as well as improved financial analysis for more robust business insights.

n Advanced initiatives to support equitable and sustainable housing goals as well as ESG practices in our business and operations.

n Strong leadership in the ongoing development of the Finance Division staff with continued focus on expanding hiring pipelines and skill sets needed 

for future organizational success as well as ongoing job rotation.

At-Risk Deferred Salary (Corporate Scorecard/Individual) Funding Decision

The CHC Committee determined that Mr. Lown should receive 100% of his At-Risk Deferred Salary that was subject to adjustment based on his 

individual performance after taking into account the company’s performance against the Corporate Scorecard.

Anil D. Hinduja, EVP - CRO

Performance Highlights

n Continued to partner with divisions to advance on firm-wide matters, such as executing on mission-accretive strategies and mitigating financial risk 

in a rising rate and volatile environment.

n Further developed the climate risk program setting the foundation for integrating risk assessments within business practices, conducting scenario 

analyses, and identifying data and methodological limitations.

n Successfully led a firm-wide effort to align, calibrate and prioritize programs to reduce the most significant risks in the company.

n Continued to invest in and strengthen identification, measurement, monitoring, and control of compliance risks through firm-wide programs.

n Advanced firm-wide risk learning and increased enterprise engagement efforts. Strong leadership in the ongoing development of risk management 

staff with a focus on expanding skill sets needed for future organizational success. 

At-Risk Deferred Salary (Corporate Scorecard/Individual) Funding Decision

The CHC Committee determined that Mr. Hinduja should receive 100% of his At-Risk Deferred Salary that was subject to adjustment based on his 

individual performance after taking into account the company’s performance against the Corporate Scorecard.

Heidi L. Mason, EVP & General Counsel

Performance Highlights

n Supported the successful achievement of numerous business objectives, including important mission-related initiatives, by effectively navigating 

legal and regulatory matters with thought leadership, coordinated legal advice, and collaborative partnership.

n Advised the Board and senior management on a wide variety of complex legal and governance issues.

n Led support to help effectively navigate and reach favorable outcomes on significant business issues during challenging market and operating 

conditions.

n Continued the ongoing enhancement of the Legal Division’s resourcing, expertise, and strategic alignment in providing advice and services that 

support firm-wide objectives.

At-Risk Deferred Salary (Corporate Scorecard/Individual) Funding Decision

The CHC Committee determined that Ms. Mason should receive 100% of her At-Risk Deferred Salary that was subject to adjustment based on her 

individual performance after taking into account the company’s performance against the Corporate Scorecard.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 249
2023 Deferred Salary

The following chart reports the actual amounts of 2023 Deferred Salary for each NEO, other than Mr. DeVito who was not 

eligible for 2023 Deferred Salary. At-Risk Deferred Salary earned in 2023 will be paid on the last pay date of the corresponding 

calendar quarter in 2025. See Executive Compensation - CD&A - Overview of EMCP for additional information.

Table 64 - 2023 Deferred Salary

   2023 Actual Deferred Salary

Fixed

At-Risk

Named Executive 

Officer

Conservatorship 

Scorecard

Corporate Scorecard / 

Individual

Michael T. Hutchins $1,920,000 $480,600 $540,000

Christian M. Lown 1,605,000 420,525 472,500 

Anil D. Hinduja 1,290,000 360,450 405,000 

Heidi L. Mason 1,150,000 333,750 375,000 

Written Agreements Relating to NEO Employment

We entered into agreements with each of our NEOs, in connection with their hiring, which set forth the specific initial levels of 

compensation, including, as applicable, Base Salary and Target TDC. The compensation of each NEO is subject to change by 

FHFA and the terms of the EMCP. See Executive Compensation - CD&A - Determination of 2023 Target TDC for 

Eligible NEOs - 2023 Target TDC for 2023 Target TDC amounts for our eligible NEOs. Other than the agreements described 

below, there are no remaining material provisions of any of the agreements we entered into with our NEOs in connection with 

their hiring as they have either been superseded by the EMCP, as described above, or the provisions are no longer effective, 

such as sign-on bonuses that have been paid and are no longer subject to repayment.

We entered into a memorandum agreement with Mr. DeVito in connection with his hiring as our CEO. Consistent with the Equity 

in Government Compensation Act of 2015, the agreement provides for direct compensation consisting solely of Base Salary at 

the rate of $600,000 per year. In addition, the agreement provides that Mr. DeVito is eligible to participate in all employee 

benefit plans offered to Freddie Mac’s other executive officers. See Executive Compensation - CD&A - CEO 

Compensation for more information. In connection with Mr. DeVito's appointment as our CEO, he was offered relocation 

benefits to reimburse him for his costs associated with relocating to the Washington, D.C., area. Those relocation benefits are 

no longer subject to repayment. 

We entered into a letter agreement with Mr. Lown in connection with his employment as our EVP & CFO. The terms of Mr. 

Lown's agreement provided him with an annual Target TDC opportunity of $3,000,000, consisting of Base Salary of $600,000, 

Fixed Deferred Salary of $1,500,000, and At-Risk Deferred Salary of $900,000, as well as the opportunity to participate in all 

employee benefit plans offered to our executive officers pursuant to the terms of those plans, and certain relocation benefits 

(which are no longer subject to repayment). The letter agreement with Mr. Lown also provided for a cash sign-on award of 

$1,275,000 in recognition of forfeited compensation at his previous employer, payable in three installments: $475,000 was paid 

in February 2021; $475,000 was paid in February 2022; and $325,000 was paid in February 2023. 

In connection with Ms. Mason’s appointment as our EVP & General Counsel in 2022, she was offered an annual Target TDC 

opportunity of $2,343,600, consisting of Base Salary of $600,000, Fixed Deferred Salary of $1,040,520, and At-Risk Deferred 

Salary of $703,080, as well as the opportunity to participate in all employee benefit plans offered to our executive officers 

pursuant to the terms of those plans, and certain relocation benefits to reimburse her for her costs associated with relocating to 

the Washington, D.C., area. These relocation benefits are subject to repayment if, within two years of receiving them, Ms. 

Mason terminates her employment with us for any reason or Freddie Mac terminates her employment due to the occurrence of 

any of the Forfeiture Events described in the Recapture and Forfeiture Agreement. 

We have also entered into restrictive covenant and confidentiality agreements with each of our NEOs. The non-competition and 

non-solicitation provisions included in the restrictive covenant and confidentiality agreements are described in Executive 

Compensation - CD&A - Written Agreements Relating to NEO Employment - Restrictive Covenant and Confidentiality 

Agreements.

The NEOs are not currently entitled to severance benefits upon any type of termination event. For additional information on 

compensation and benefits payable in the event of a termination of employment, see Executive Compensation - 2023 

Compensation Information for NEOs - Potential Payments Upon Termination of Employment.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 250
Restrictive Covenant and Confidentiality Agreements 

Each of our NEOs is subject to a restrictive covenant and confidentiality agreement with us. Each agreement provides that the 

NEO will not seek or accept employment with designated competitors that involves performing similar duties for twelve months 

immediately following termination of employment, regardless of whether the NEO's employment is terminated by the NEO, by 

us, or by mutual agreement. During this period, each NEO agrees not to solicit or recruit any of our managerial employees. The 

agreements also provide for the confidentiality of information that constitutes trade secrets or proprietary or other confidential 

information. In addition, the restrictive covenant and confidentiality agreement provides in some circumstances for a six-month 

“cooling off” period after a separation from employment, during which the NEO will be prohibited from participating directly or 

indirectly in a transaction involving Freddie Mac. 

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 251
Recapture and Forfeiture Agreement

To participate in the EMCP, each of our eligible NEOs has entered into a Recapture and Forfeiture Agreement. Mr. DeVito was 

not eligible to participate in the EMCP due to his service as our CEO and, as such, has not entered into a Recapture and 

Forfeiture Agreement.

The Recapture and Forfeiture Agreement provides for the recapture and/or forfeiture of Deferred Salary (including related 

interest) earned, paid, or to be paid pursuant to the terms of the EMCP if, after providing the required notice, our Board of 

Directors, in the good faith exercise of its sole discretion, determines that a Forfeiture Event has occurred. The Forfeiture Events 

and compensation subject to recapture and/or forfeiture are described below. 

Because the company is not currently listed on the NYSE or any other national securities exchange, we are not required to 

comply with the requirements of Rule 10D-1 of the Exchange Act and Section 303A.14 of the NYSE Listed Company Manual or 

other similar rule (the "Clawback Rules") and the terms of the Recapture and Forfeiture Agreement differ in certain respects 

from the requirements of the Clawback Rules.

Materially Inaccurate Information

n Forfeiture Event - The NEO has earned or obtained the legally binding right to a payment of Deferred Salary based on 

materially inaccurate financial statements or any other materially inaccurate performance measure.

n Compensation Subject to Recapture and/or Forfeiture - Any Deferred Salary earned up to two years prior to the 

Forfeiture Event in excess of the amount that the Board of Directors determines Freddie Mac would have paid if the 

Forfeiture Event had been considered at the time of the earlier compensation decisions (amounts may vary depending on 

the specific Forfeiture Event). 

Termination for Felony Conviction or Willful Misconduct

n Forfeiture Event - The NEO's employment is terminated in any of the following circumstances:

l Termination of employment because the NEO is convicted of, or pleads guilty or nolo contendere to, a felony;

l Subsequent to termination of employment, the NEO is convicted of, or pleads guilty or nolo contendere to, a felony, 

based on conduct occurring prior to termination, and within one year of such conviction or plea, the Board of Directors 

determines that such conduct is materially harmful to Freddie Mac; or

l Termination of employment because, or, within two years of termination, the Board of Directors determines that, the 

NEO engaged in willful misconduct in the performance of their duties that was materially harmful to Freddie Mac.

n Compensation Subject to Recapture and/or Forfeiture - Any Deferred Salary earned during the two years prior to the 

date that the NEO is terminated, any Deferred Salary scheduled to be paid within two years after termination, and any cash 

payment made or to be made as consideration for any release of claims agreement.

Gross Neglect or Gross Misconduct

n Forfeiture Event - The NEO's employment is terminated because, in carrying out their duties, the NEO engages in conduct 

that constitutes gross neglect or gross misconduct that is materially harmful to Freddie Mac, or, within two years after the 

NEO's termination of employment, the Board of Directors determines that the NEO, prior to their termination, engaged in 

such conduct.

n Compensation Subject to Recapture and/or Forfeiture - Any Deferred Salary paid at the time of termination or 

subsequent to the date of termination, including any cash payment made as consideration for any release of claims 

agreement. 

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 252
Violation of a Post-Termination Non-Competition Covenant

n Forfeiture Event - The NEO violates a post-termination non-competition covenant set forth in the restrictive covenant and 

confidentiality agreement in effect when a payment of Deferred Salary is scheduled to be made.

n Compensation Subject to Recapture and/or Forfeiture - 50% of the Deferred Salary paid during the twelve months 

immediately preceding the violation and 100% of any unpaid Deferred Salary.

Under the Recapture and Forfeiture Agreement, the Board of Directors has discretion to determine the appropriate dollar 

amount, if any, to be recaptured from and/or forfeited by the NEO, which is intended to be the gross amount of compensation 

in excess of what Freddie Mac would have paid the NEO had Freddie Mac taken the Forfeiture Event into consideration at the 

time such compensation decision was made.

Indemnification Agreements

We have entered into an indemnification agreement with each of our directors and executive officers (including each of our 

NEOs). The form of agreement provides that indemnification rights under the agreement would terminate if and when the 

executive officer remained employed by Freddie Mac after ceasing to report directly to the CEO or President with respect to 

any claims arising from matters occurring after the officer no longer reported directly to the CEO or President. In that event, 

similar indemnification rights would continue to be available to such executive officer under our Bylaws going forward. The 

indemnification agreement provides that we will indemnify the indemnitee to the fullest extent permitted by our Bylaws and 

Virginia law. This obligation includes, subject to certain terms and conditions, indemnification against all liabilities and 

reasonable expenses (including attorneys' fees) actually incurred by the indemnitee in connection with any threatened or 

pending action, suit, or proceeding, except such liabilities and expenses as are incurred because of the indemnitee's willful 

misconduct or knowing violation of criminal law. The indemnification agreements provide that if requested by the indemnitee, 

we will advance expenses, subject to repayment by the indemnitee of any funds advanced if it is ultimately determined that the 

indemnitee is not entitled to indemnification. The rights to indemnification under the indemnification agreements are not 

exclusive of any other right the indemnitee may have under any statute, agreement, or otherwise. Our obligations under the 

indemnification agreements will continue after the indemnitee is no longer a director or officer of the company with respect to 

any possible claims based on the fact that the indemnitee was a director or officer, and the indemnification agreements will 

remain in effect in the event the conservatorship is terminated. The indemnification agreements also provide that 

indemnification for actions instituted by FHFA will be governed by the standards set forth in FHFA’s Rule on Golden Parachute 

and Indemnification Payments.

Other Executive Compensation Considerations

Accounting Restatement Resulting from Misconduct

If, as a result of misconduct, we are required to prepare an accounting restatement due to material non-compliance with 

financial reporting requirements, the CEO and CFO are required to reimburse us for amounts determined in accordance with 

Section 304 of the Sarbanes-Oxley Act of 2002.

Effect of Termination of Employment

The timing and payment of any unpaid portion of Deferred Salary and related interest is based upon the reason for termination, 

as discussed in Potential Payments Upon Termination of Employment.

Perquisites

We believe that perquisites should be a minimal part of the compensation package for our NEOs. Total annual perquisites for 

any NEO cannot exceed $25,000 without FHFA approval, and we do not provide a gross-up to cover any taxes due on the 

perquisite itself. The company offers no executive perquisites other than a relocation program. 

SERP

After our NEOs have satisfied the one-year service requirement, they are eligible to participate in our SERP. The SERP is 

designed to provide participants with the full amount of benefits to which they would have been entitled under our Thrift/401(k) 

Plan if that plan was not subject to certain dollar limits under the Internal Revenue Code. This is referred to as the "SERP 

Benefit." For participants in the EMCP, no SERP Benefit is accrued with respect to annual pay in excess of two times a 

participant's Base Salary.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 253
For additional information regarding these benefits, see Executive Compensation - 2023 Compensation Information 

for NEOs - Nonqualified Deferred Compensation.

Stock Ownership, Hedging, and Pledging Policies

Our stock ownership guidelines were suspended when conservatorship began because we ceased paying our executive 

officers stock-based compensation. The Purchase Agreement prohibits us from issuing any shares of our equity securities 

without the prior written consent of Treasury. The suspension of stock ownership requirements is expected to continue through 

conservatorship and until such time that we resume granting stock-based compensation.

Pursuant to our company policy, all employees, including our NEOs, and our directors are prohibited from: 

n Engaging in all transactions (including purchasing and selling equity and non-equity securities) involving our securities 

(except selling company securities owned prior to the implementation of the policy and then only with pre-clearance);

n Purchasing or selling derivative securities related to our equity securities or dealing in any derivative securities related to 

our equity securities;

n Transacting in options (other than options granted by us, and then only with pre-clearance) or other hedging instruments 

related to our securities; and

n Holding our securities in a margin account or pledging our securities as collateral for a loan.

Legal, Regulatory, and Conservator Restrictions on Executive 

Compensation

The amount of compensation we may pay our NEOs is subject to a number of legal, regulatory, and conservator restrictions, 

particularly while we are in conservatorship. Conservatorship also significantly affects the process by which the CHC 

Committee determines our executive officers’ compensation. We describe below legal and regulatory requirements that 

significantly affect our executive compensation program and policies.

Requirements Applicable During Conservatorship

While we are in conservatorship, we are subject to additional legal and regulatory requirements relating to our executive 

compensation, including the following:

n Equity in Government Compensation Act. The Equity in Government Compensation Act of 2015 limits the compensation 

and benefits for our CEO to the same level in effect as of January 1, 2015, while we are in conservatorship or receivership. 

This law also provides that compensation and benefits for our CEO may not be increased while we are in conservatorship 

or receivership. Accordingly, annual direct compensation for our CEO is limited to Base Salary at an annual rate of 

$600,000. See Executive Compensation - CD&A - CEO Compensation for additional information.

n STOCK Act. Pursuant to the STOCK Act and related FHFA regulations, our senior officers, including our NEOs, are 

prohibited from receiving bonuses during conservatorship. FHFA defines a bonus as a payment that rewards an employee 

for work performed, where details of the award (such as the decision to grant it or its amounts) are determined after the 

performance period using discretion or inherently subjective measures.

n FHFA Instructions – Executive Compensation. The powers of FHFA as our Conservator include the authority to set 

executive compensation. FHFA, as Conservator, has retained the authority to approve the terms and amounts of our 

executive compensation. In its instructions to us, FHFA directed that management obtain FHFA’s decision before entering 

into new compensation arrangements or increasing amounts or benefits payable under existing compensation 

arrangements of NEOs or other executive officers as defined in SEC rules.

n FHFA Instructions – Other Compensation. Pursuant to FHFA instructions, FHFA’s decision as Conservator is required with 

regard to any changes in employee compensation that could significantly impact our employees, including but not limited 

to retention awards for senior officers, special incentive plans, and merit increase pool funding.

n FHFA Directives. As Conservator, from time to time FHFA issues or updates directives that relate to compensation of our 

executives and other employees. Pursuant to its currently applicable directives, FHFA has directed us to:

l	 Limit base salaries for all executive officers to no more than $600,000;

l	 Adjust the mandatory deferral period for At-Risk Deferred Salary as described under Executive Compensation - 

CD&A - Overview of EMCP - Elements of Target TDC; 

l	 Include in our policies and procedures penalties for executive officers and certain other covered employees who are 

found to have engaged in specified activities, including the recapture and/or forfeiture of Deferred Salary in 

appropriate circumstances to the extent permitted by law. See Executive Compensation - CD&A - Written 

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 254
Agreements Related to NEO Employment - Recapture and Forfeiture Agreement for a description of the 

compensation forfeiture and recoupment provisions we have implemented pursuant to this FHFA directive; 

l	 May target between the 25th and 50th percentiles of the market compensation when recommending compensation to 

be provided to any senior officers, unless FHFA has granted an exception; 

l	Implement the Comparator Group and benchmarking approach as described in Comparator Group Companies; and

l	Effective for 2024 compensation, utilize a new Comparator Group and benchmarking approach. 

n Shareholder Powers. FHFA, as Conservator, has all powers of our shareholders. Accordingly, we have not held 

shareholders’ meetings since entering into conservatorship, nor have we held any shareholder advisory votes on executive 

compensation. 

n Golden Parachute Regulation. A golden parachute payment generally refers to a compensatory payment that is contingent 

on or provided in connection with termination of employment. FHFA regulation pursuant to the GSE Act generally prohibits 

us from making golden parachute payments to any current or former director, officer, or employee of the company during 

any period in which we are in conservatorship, receivership, or other troubled condition, unless either a specific exemption 

applies or the Director of FHFA approves the payments. Specific exemptions include qualified pension or retirement plans, 

nondiscriminatory employee plans or programs that meet specified requirements, and bona fide deferred compensation 

plans or arrangements that meet specified requirements. 

Other Applicable Requirements

We are also subject to legal and regulatory requirements relating to our executive compensation that apply whether or not we 

are in conservatorship, including the following:

n	 Purchase Agreement. Under the terms of the Purchase Agreement, until the senior preferred stock is repaid or redeemed in 

full:

l	 We may not enter into any new compensation arrangements with, or increase amounts or benefits payable under 

existing compensation arrangements of, any NEOs or other executive officers as defined in SEC rules without the 

consent of the Director of FHFA, in consultation with the Secretary of the Treasury.

l	 We may not sell or issue any equity securities without the prior written consent of Treasury except under limited 

circumstances, which effectively eliminates our ability to offer stock-based compensation.

n	Our Charter. Under our Charter and related FHFA regulations, FHFA as our regulator must approve any termination benefits 

we offer to our NEOs and certain other officers identified by FHFA.

n	GSE Act. Pursuant to the GSE Act and related FHFA regulations, FHFA as our regulator has specified oversight authority 

over our executive compensation. The GSE Act directs FHFA to prohibit us from providing compensation to our NEOs and 

certain other officers identified by FHFA that is not reasonable or comparable with compensation for employment in other 

similar businesses involving similar duties and responsibilities. FHFA may at any time review the reasonableness and 

comparability of an executive officer’s compensation and may require us to withhold any payment to the executive officer 

during such review. The GSE Act also provides that, if we are classified as significantly undercapitalized, FHFA’s prior 

written approval is required to pay any bonus to an executive officer or to provide certain increases in compensation to an 

executive officer. 

Section 162(m) Limits on the Tax Deductibility of Compensation 

Section 162(m) of the Internal Revenue Code imposes a $1 million limit on the amount that we may annually deduct for 

compensation (including performance-based compensation) to: (1) anyone serving as CEO or CFO at any time during the year, 

(2) the three highest paid NEOs (other than the CEO and CFO) employed by us at any time during the year, and (3) any 

individual who was a CEO, CFO, or one of the top three highest paid NEOs after 2016 and who is receiving Freddie Mac 

compensation.

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 255
Compensation and Human Capital Committee Report

The CHC Committee has reviewed and discussed the CD&A with management and, based on such review and discussion, has 

recommended to the Board of Directors that the CD&A be included in this Form 10-K.

This report is respectfully submitted by the members of the CHC Committee.

Lance F. Drummond, Chair

Mark H. Bloom

Aleem Gillani

Christopher E. Herbert

Grace A. Huebscher

Alberto G. Musalem

Executive Compensation Compensation Discussion and Analysis

FREDDIE MAC | 2023 Form 10-K 256
COMPENSATION AND RISK

Our management conducted an assessment of our compensation policies and practices that apply to employees at all levels, 

including those participating in the EMCP. The assessment took into account: 

n The types of compensation offered (including fixed, variable/incentive, and deferred);

n Eligibility for participation in compensation programs;

n Compensation program design and governance;

n The process for establishing performance objectives; 

n Processes and program approvals for our compensation programs; and

n A risk assessment provided by the CHC Committee’s independent compensation consultant.

The assessment and risk performance was discussed with the CHC Committee in January 2024. Management's conclusion, 

with which the CHC Committee concurred, is that the company's compensation programs and practices do not encourage 

unnecessary or excessive risk behaviors in pursuit of Corporate or Conservatorship Scorecard objectives or otherwise, and the 

programs and practices would not be reasonably likely to have a material adverse effect on Freddie Mac.

Executive Compensation Compensation and Risk

FREDDIE MAC | 2023 Form 10-K 257
CEO PAY RATIO 

SEC rules require annual disclosure of the ratio of a company's CEO's total annual compensation to that of its median 

employee. For 2023, we used the 2023 median employee who we identified as of December 31, 2023, using payroll data as 

reported on Form W-2, Box 5 and annualizing it for individuals who had not worked the full year. Except as noted below, we 

calculated that employee's total annual compensation for 2023 using the same method required for calculating total annual 

compensation for our CEO (and other NEOs) for purposes of Table 67 - Summary Compensation Table. 

The table below sets forth the total annual compensation for our CEO and median employee and the ratio between the two.

Table 65 - CEO Pay Ratio 

CEO Pay Ratio

Employee Total Compensation Ratio 

Michael J. DeVito (CEO) $651,000

3.9 to 1

Median Employee $168,105(1)

(1) Reflects actual 2023 total compensation for the median employee except for estimated incentive compensation payment because, as of the filing of this Form 10-K, 

we have not concluded our performance year 2023 compensation planning process for employees other than our NEOs. This estimate includes the projected 

incentive payout for individuals with similar performance ratings.

Given the different methodologies that companies may use to determine their CEO pay ratio, the ratio reported above should 

not be used as a basis for comparison between companies.

Executive Compensation CEO Pay Ratio

FREDDIE MAC | 2023 Form 10-K 258
2023 COMPENSATION INFORMATION FOR NEOs

The following sections set forth compensation information for our NEOs: Mr. DeVito (who has served as CEO since June 1, 

2021); Mr. Lown (who has served as our CFO since June 15, 2020); and the three other most highly compensated executive 

officers who were serving as executive officers as of December 31, 2023. 

Summary Compensation Table 

Table 66 - Compensation Summary 

   Salary

Bonus(3)

Non-Equity 

Incentive Plan 

Compensation(4)

All Other 

Compensation(5) Total

Named Executive Officer Year

Earned During 

Year(1) Deferred(2)

Michael J. DeVito 2023 $600,000 — — — $51,000 $651,000 

CEO 2022 600,000 — — — 31,385 631,385 

2021 355,385 — — — 87,647 443,032 

Michael T. Hutchins 2023 600,000 1,920,000 — 1,068,874 147,408 3,736,282 

President 2022 600,000 1,920,000 — 1,053,372 105,744 3,679,116 

2021 600,000 1,675,000 — 936,468 102,838 3,314,306 

Christian M. Lown 2023 600,000 1,605,000 325,000 935,265 139,958 3,605,223 

EVP & CFO 2022 600,000 1,500,000 475,000 889,957 104,925 3,569,882 

2021 600,000 1,500,000 475,000 864,864 116,682 3,556,546 

Anil D. Hinduja 2023 600,000 1,290,000 801,656 132,509 2,824,165 

EVP - CRO 2022 600,000 1,220,000 760,769 104,379 2,685,148 

2021 600,000 1,220,000 — 749,174 102,610 2,671,784 

Heidi L. Mason 2023 600,000 1,150,000 742,274 136,105 2,628,379 

EVP & General Counsel

(1) Amounts shown in this sub-column consist of base salary paid during the year on a bi-weekly basis.

(2) Amounts shown reflect Fixed Deferred Salary earned during the year. The interest rate for Fixed Deferred Salary earned during 2023, 2022, and 2021 was 2.365%, 

0.195%, and 0.05%, respectively, which is equal to 50% of the one-year Treasury Bill rate as of December 31 of the applicable prior year. Fixed Deferred Salary 

earned during each quarter is paid in cash on the last pay date of the corresponding quarter in the following year, along with accrued interest. Interest on Fixed 

Deferred Salary earned during 2023, 2022, and 2021 is included in All Other Compensation.

(3) Amount shown reflects a cash sign-on payment made to Mr. Lown in connection with his hiring in 2020. Although we classified the payment in the “Bonus” column 

for purposes of the Summary Compensation Table, it is not considered a “bonus” under the STOCK Act. Please see Executive Compensation - CD&A - Written 

Agreements Relating to NEO Employment and Executive Compensation - CD&A - Other Executive Compensation Considerations - Legal, 

Regulatory, and Conservator Restrictions on Executive Compensation for additional details.

(4) Amounts shown reflect At-Risk Deferred Salary earned during each year, as well as interest on that At-Risk Deferred Salary. The interest rate for At-Risk Deferred 

Salary earned during 2023, 2022, and 2021 was the same as noted for the interest rate for the Fixed Deferred Salary. Except in the case of Mr. Lown, At-Risk 

Deferred Salary earned during each quarter of 2021 was paid in cash on the last pay date of the corresponding quarter in 2022. Except in the case of Mr. Lown, for 

At-Risk Deferred Salary earned during each quarter of 2022, one-half was paid in cash on the last pay date of the corresponding quarter in 2023, and the remaining 

one-half will be paid on the last pay date of 2024. For Mr. Lown, At-Risk Deferred Salary earned during each quarter of 2021 and 2022 will be paid in cash on the 

last pay date of the corresponding quarter in the second calendar year following the quarter in which the amount was earned. At-Risk Salary earned during each 

quarter of 2023 will be paid in cash on the last pay date of the corresponding quarter in 2025. See Executive Compensation - CD&A - Determination of 2023 

At-Risk Deferred Salary and Executive Compensation - CD&A - EMCP Overview.

(5) Amounts for 2023 reflect: (1) contributions made under our tax-qualified Thrift/401(k) Plan for plan year 2023; (2) accruals earned pursuant to the SERP Benefit for 

plan year 2023; (3) interest on Fixed Deferred Salary earned during 2023; and (4) reimbursement of certain relocation expenses incurred by Ms. Mason, as 

described below. The amounts for 2023 are as follows: 

Named Executive Officer Thrift/401(k) Plan

Contributions

SERP Benefit

Accruals

Interest on Fixed 

Deferred Salary Other

Michael J. DeVito $28,050 $22,950 $— $— 

Michael T. Hutchins 28,050 73,950 45,408 —

Christian M. Lown 28,050 73,950 37,958 —

Anil D. Hinduja 28,050 73,950 30,509 —

Heidi L. Mason 22,512 63,796 27,198 22,600 

Executive Compensation 2023 Compensation Information for NEOs

FREDDIE MAC | 2023 Form 10-K 259
Employer contributions to the Thrift/401(k) Plan are generally available on the same terms to all our employees. After the first year of employment, we match up to 

6% of eligible compensation at 100% of the employee's contributions. Also, after their first year of employment, employees receive an additional employer 

contribution to our Thrift/401(k) Plan equal to 2.5% of compensation earned in the prior year. Employee contributions, our matching contributions, and the 2.5% 

employer contribution are invested in accordance with the employee's investment elections and are immediately vested. For additional information regarding the 

SERP Benefit, see Executive Compensation - 2023 Compensation Information for NEOs - Nonqualified Deferred Compensation.

Perquisites are valued at their aggregate incremental cost to us. During the years reported, the aggregate value of perquisites received by any NEO was less than 

$10,000, except for Ms. Mason, who, in 2023, was reimbursed $22,600 for relocation expenses. Therefore, in accordance with SEC rules, amounts shown under 

"All Other Compensation" do not include perquisites, other than for Ms. Mason.

(6) Pursuant to SEC reporting requirements, because Ms. Mason first became an NEO in 2023, information for 2022 and 2021 is not required to be disclosed.

Grants of Plan-Based Awards

The following table contains information concerning grants of plan-based awards to each of the NEOs during 2023. The 

Purchase Agreement prohibits us from issuing equity securities without Treasury's prior written consent. No stock awards were 

granted during 2023. For a description of the performance and other measures used to determine payouts, see Executive 

Compensation - CD&A - Elements of Target Total Direct Compensation - Determination of 2023 Target TDC for NEOs

- Determination of 2023 At-Risk Deferred Salary - 2023 Deferred Salary.

Table 67 - Grants of Plan-Based Awards

  

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards(2)

Named Executive Officer(1) At-Risk Deferred Salary Award Threshold Target/Maximum

Michael T. Hutchins Conservatorship Scorecard — $540,000

Corporate Scorecard/Individual — 540,000 

Total — 1,080,000 

Christian M. Lown Conservatorship Scorecard — 472,500 

Corporate Scorecard/Individual — 472,500 

Total — 945,000 

Anil D. Hinduja Conservatorship Scorecard — 405,000 

Corporate Scorecard/Individual — 405,000 

Total — 810,000 

Heidi L. Mason Conservatorship Scorecard — 375,000 

Corporate Scorecard/Individual — 375,000 

Total — 750,000 

(1) Mr. DeVito was not eligible to receive Deferred Salary in 2023, and therefore is not included in this table.

(2) The amounts reported reflect At-Risk Deferred Salary granted in 2023 which is subject to reduction based on: (1) corporate performance against the 

Conservatorship Scorecard; and (2) the company's performance against the Corporate Scorecard goals and an officer's individual performance. The amount of AtRisk Deferred Salary actually earned can range from 0% of target (reported in the Threshold column) to a maximum of 100% of target (reported in the Target/

Maximum column). Actual At-Risk Deferred Salary amounts earned during 2023 are reported in the Non-Equity Incentive Plan Compensation column of Table 67 - 

Summary Compensation Table.

Outstanding Equity Awards at Fiscal Year-End

None of the NEOs had unexercised options or unvested RSUs as of December 31, 2023.

Option Exercises and Stock Vested

None of the NEOs exercised options or had RSUs vest during 2023.

Pension Benefits

No Pension Benefits table is presented here as the Pension Plan termination was completed in 2015. For additional information, 

see Executive Compensation - CD&A - Other Executive Compensation Considerations.

Executive Compensation 2023 Compensation Information for NEOs

FREDDIE MAC | 2023 Form 10-K 260
Nonqualified Deferred Compensation

Nonqualified deferred compensation for the NEOs consists of the SERP Benefit. The SERP is an unfunded, nonqualified 

defined contribution plan designed to provide participants with the full amount of benefits to which they would have been 

entitled under the Thrift/401(k) Plan if the plan was not subject to certain dollar limits under the Internal Revenue Code. 

The SERP Benefit equals the amount of the employer matching and 2.5% contributions for each NEO that would have been 

made to the Thrift/401(k) Plan during the year, based upon the participant's eligible compensation, without application of those 

limits, less the amount of the matching contributions and 2.5% contributions made to the Thrift/401(k) Plan during the year, but 

does not take into account pay that exceeds two times the NEO's Base Salary. We believe the SERP Benefit is an appropriate 

benefit because offering such a benefit helps us remain competitive with the companies in our Comparator Group.

To be eligible for the SERP Benefit, the NEO must be eligible for matching contributions and the 2.5% contribution under the 

Thrift/401(k) Plan for part of the year, as discussed in Footnote 5 to Table 66 - Summary Compensation Table. In addition, to 

be eligible for the portion of the SERP Benefit attributable to employer matching contributions, the NEO must contribute the 

maximum amount permitted under the terms of the Thrift/401(k) Plan on either a pre- or post-tax basis.

Participants are credited with earnings or losses in their SERP Benefit account based upon each participant's individual 

direction of the investment of such notional amounts among the virtual investment funds available under the SERP, which are 

the same as the investment options available under the Thrift/401(k) Plan. The SERP Benefit is generally distributed in a lump 

sum 90 days after the end of the calendar year in which a separation from service occurs. A six-month delay in the 

commencement of distributions on account of a separation from service applies to key employees, in accordance with Internal 

Revenue Code Section 409A. If the NEO dies, the vested SERP Benefit is paid in the form of a lump sum within 90 days of 

death.

The following table shows the contributions, earnings, withdrawals and distributions, and accumulated balances under the 

SERP Benefit for each NEO:

Table 68 - SERP Benefit

Named Executive Officer

Executive

Contribution in

2023(1)

Freddie Mac

Accruals in

2023(2)

Aggregate

Earnings in

2023(3)

Aggregate

Withdrawals/

Distributions

Balance at

December 31, 

2023(4)

Michael J. DeVito $— $22,950 $1,151 $— $43,537 

Michael T. Hutchins — 73,950 152,172 — 910,760

Christian M. Lown — 73,950 42,342 — 231,166

Anil D. Hinduja — 73,950 138,609 — 782,223

Heidi L. Mason — 63,796 831 — 64,627

(1) The SERP does not allow for employee contributions.

(2) Amounts reported reflect accruals under the SERP during 2023, including the 2.5% contribution accruals which will be allocated to NEO accounts in 2024. These 

amounts are also reported in the "All Other Compensation" column in Table 66 - Summary Compensation Table.

(3) Amounts reported represent the total interest and other earnings credited to each NEO under the SERP Benefit.

(4) Amounts reported reflect the accumulated balance under the SERP Benefit for each NEO and include the plan year 2023 accruals noted in footnote 2 above. All 

NEOs are fully vested in their SERP. The following 2022 SERP Benefit accrual amounts were reported in the "All Other Compensation" column in the 2022 Summary 

Compensation Table as compensation for each NEO for whom accruals were made during 2022: Mr. DeVito: $19,306, Mr. Hutchins: $76,075, Mr. Hinduja: $76,075, 

Mr. Lown: $76,075. See our Annual Report on Form 10-K filed on February 22, 2023.

Potential Payments Upon Termination of Employment

The EMCP addresses the treatment of Base Salary and Deferred Salary upon various termination events. Base Salary ceases 

upon an NEO's termination of employment, regardless of the termination reason. An NEO generally does not need to be 

employed by us on the payment date to receive payments of Deferred Salary (including related interest) that are unpaid at the 

time of termination of employment. The following table describes the effect of various termination events upon unpaid Deferred 

Salary. The actual payment of any level of termination benefits that is not otherwise provided for in the EMCP is subject to 

FHFA review and approval.

n Forfeiture Event - All earned but unpaid Fixed and At-Risk Deferred Salary (including related interest) is subject to 

forfeiture upon the occurrence of a Forfeiture Event, as described above under Executive Compensation - CD&A -

Written Agreements Relating to NEO Employment - Recapture and Forfeiture Agreement.

Executive Compensation 2023 Compensation Information for NEOs

FREDDIE MAC | 2023 Form 10-K 261
n Death - All earned but unpaid Fixed and At-Risk Deferred Salary (including related interest) is paid in full as soon as 

administratively possible, but not later than 90 calendar days after the date of death. Any earned but unpaid At-Risk 

Deferred Salary is not subject to reduction based on corporate and individual performance if the reduction has not been 

determined as of the date of death.

n Long-Term Disability - All earned but unpaid Fixed and At-Risk Deferred Salary (including related interest) is paid in full in 

accordance with the Approved Payment Schedule. Any earned but unpaid At-Risk Deferred Salary is not subject to 

reduction based on corporate and individual performance if the reduction has not been determined as of the termination 

date.

n Any Other Reason (including, but not limited to, voluntary termination, retirement, and involuntary termination for 

any reason other than a Forfeiture Event) - All earned but unpaid Deferred Salary (including related interest) is paid in 

accordance with the Approved Payment Schedule, and earned but unpaid At-Risk Deferred Salary remains subject to the 

performance assessment and reduction process. Except in the case of retirement, the amount of earned but unpaid Fixed 

Deferred Salary will be reduced by 2% for each full or partial month by which the NEO's termination precedes January 31 

of the second calendar year following the calendar year in which the Fixed Deferred Salary is earned. No such reduction is 

applicable if an NEO retires, which is deemed to have occurred upon a voluntary termination of employment after attaining 

or exceeding 62 years of age, without regard to length of service, or attaining or exceeding 55 years of age with 10 or more 

years of service.

The table below describes the compensation and benefits that would have been payable to each NEO had the officer 

terminated their employment under various circumstances as of December 31, 2023. 

The table below does not address changes in control, as we are not obligated to provide any additional compensation to our 

NEOs in connection with a change in control. The table also does not address potential payments upon a termination for cause, 

which is a termination resulting from the occurrence of an event or conduct described in the Recapture and Forfeiture 

Agreement. All earned but unpaid Deferred Salary is subject to forfeiture upon the occurrence of such a termination. However, 

the amount of compensation, if any, to be recaptured and/or forfeited is determined by the Board of Directors, which can only 

occur following the occurrence of a for cause termination. See Executive Compensation - CD&A - Written Agreements 

Relating to NEO Employment - Recapture and Forfeiture Agreement.

The table below does not include vested balances in the SERP. All NEOs are fully vested in their account balances. Amounts 

shown in the table also do not include certain items available to all employees generally upon a termination event. 

The table below also does not include stock options or RSUs, as there were no outstanding stock options or RSUs held by 

NEOs as of December 31, 2023. 

Executive Compensation 2023 Compensation Information for NEOs

FREDDIE MAC | 2023 Form 10-K 262
Table 69 - Compensation and Benefits if NEO Terminated Employment as of December 31, 2023

Named Executive Officer(1) Death Disability Retirement(2)

All Other Not

For Cause

Terminations(3)

Michael T. Hutchins

Pay Component

2023 Fixed Deferred Salary $1,920,000 $1,920,000 $1,920,000 

2023 At-Risk Deferred Salary(4) 1,080,000 1,080,000 1,020,600 

2023 Interest on Deferred Salary(6) 44,344 96,492 93,682 

2022 At-Risk Deferred Salary(5) 525,150 525,150 525,150 

2022 Interest on Deferred Salary(6) 1,664 2,048 2,048 

Total $3,571,158 $3,623,690 $3,561,480 

Christian M. Lown

Pay Component

2023 Fixed Deferred Salary $1,605,000 $1,605,000 $1,187,700 

2023 At-Risk Deferred Salary(4) 945,000 945,000 893,025 

2023 Interest on Deferred Salary(6) 37,692 82,657 70,329 

2022 At-Risk Deferred Salary(5) 886,500 886,500 886,500 

2022 Interest on Deferred Salary(6) 2,809 3,457 3,457 

Total $3,477,001 $3,522,614 $3,041,011 

Anil D. Hinduja

Pay Component

2023 Fixed Deferred Salary $1,290,000 $1,290,000 $954,600 

2023 At-Risk Deferred Salary(4) 810,000 810,000 765,450 

2023 Interest on Deferred Salary(6) 31,041 68,822 58,782 

2022 At-Risk Deferred Salary(5) 379,275 379,275 379,275 

2022 Interest on Deferred Salary(6) 1,202 1,479 1,479 

Total $2,511,518 $2,549,576 $2,159,586 

Heidi L. Mason

Pay Component

2023 Fixed Deferred Salary $1,150,000 $1,150,000 $851,000 

2023 At-Risk Deferred Salary(4) 750,000 750,000 708,750 

2023 Interest on Deferred Salary(6) 28,084 62,673 53,650 

2022 At-Risk Deferred Salary(5) 560,291 560,291 560,291 

2022 Interest on Deferred Salary(6) 1,685 2,185 2,185 

Total $2,490,060 $2,525,149 $2,175,876 

(1) Mr. DeVito is excluded from this table because he was not eligible for any additional compensation in connection with a termination of employment.

(2) Mr. Hutchins is the only retirement-eligible NEO under the EMCP.

(3) All Other Not For Cause Terminations refer to (1) voluntary terminations other than for retirement; or (2) involuntary terminations other than for cause. No amount is 

shown for Mr. Hutchins because he is retirement eligible. In accordance with early termination provisions in the EMCP, the amounts disclosed for Fixed Deferred Salary 

for all other NEOs have been reduced by 26% to reflect a December 31, 2023 termination event. 

(4) The amounts reported for 2023 At-Risk Deferred Salary in the Retirement and All Other Not For Cause Terminations columns reflect both the funding level determined 

by FHFA with respect to performance against the 2023 Conservatorship Scorecard and the assessment of 2023 corporate performance approved by the CHC 

Committee and FHFA. In cases of death or disability, the process for determining funding level is waived if the funding level has not been determined at the date of 

termination.

(5) The amounts reported for 2022 At-Risk Deferred Salary for all termination scenarios reflect both the funding level determined by FHFA with respect to performance 

against the 2022 Conservatorship Scorecard and the assessment of 2022 corporate performance approved by the CHC Committee and FHFA. These amounts reflect 

amounts earned in 2022 that, pursuant to the EMCP, will be paid in 2024.

Executive Compensation 2023 Compensation Information for NEOs

FREDDIE MAC | 2023 Form 10-K 263
(6) Interest on Deferred Salary is accrued and paid in accordance with the terms of the EMCP. The amount of interest in the Death column assumes that payment occurs 

on the 90th day following the date of death, which is assumed to be December 31, 2023. The interest on At-Risk Deferred Salary in the case of disability and all other 

not for cause terminations is calculated for two years based on the two-year deferral period in accordance with the EMCP (refer to the Elements of Target TDC section).

Executive Compensation 2023 Compensation Information for NEOs

FREDDIE MAC | 2023 Form 10-K 264
Security Ownership of Certain Beneficial Owners 

and Management and Related Stockholder 

Matters

SECURITY OWNERSHIP

Our only class of voting stock is our common stock. Upon its appointment as Conservator, FHFA immediately succeeded to the 

voting rights of holders of our common stock. The following tables show the beneficial ownership of our common stock as of 

February 14, 2024, by our directors, our NEOs, all of our directors and executive officers as a group, and holders of more than 

5% of our common stock. Beneficial ownership is determined in accordance with SEC rules for computing the number of 

shares of common stock beneficially owned by a person and the ownership percentage of that person. As of February 14, 

2024, each director and NEO, and all of our directors and executive officers as a group, owned less than 1% of our outstanding 

common stock. We ceased paying our executive officers and directors stock-based compensation when we entered 

conservatorship. In addition, the Purchase Agreement prohibits us from issuing any of our equity securities, including as 

compensation to our directors and executive officers, without the prior written consent of Treasury, and no equity securities, 

other than the senior preferred stock issued to Treasury, have been issued since we entered conservatorship. In addition, 

company policy prohibits directors and executive officers from engaging in transactions involving our equity securities, except 

selling company securities owned prior to the implementation of the policy. See Executive Compensation - CD&A - Other 

Executive Compensation Considerations - Stock Ownership, Hedging, and Pledging Policies for additional information. 

Unless otherwise noted, the information presented below is based on information provided to us by the individuals or entities 

specified in the table. 

Stock Ownership By Directors and Executive Officers

Table 70 - Stock Ownership by Directors and Executive Officers

Directors and Named 

Executive Officers

Position Common Stock

Beneficially Owned

Stock Options

Exercisable

Total Common Stock 

Beneficially Owned

Mark H. Bloom Director — — —

Kathleen L. Casey Director — — —

Kevin G. Chavers Director — — —

Lance F. Drummond Director — — —

Aleem Gillani Director — — —

Mark B. Grier Director — — —

Luke S. Hayden Director — — —

Christopher E. Herbert Director — — —

Grace A. Huebscher Director — — —

Sara Mathew Director — — —

Allan P. Merrill Director — — —

Alberto G. Musalem Director — — —

Michael J. DeVito CEO & Director — — —

Michael T. Hutchins President — — —

Christian M. Lown EVP & CFO — — —

Anil D. Hinduja EVP - CRO — — —

Heidi L. Mason EVP & General Counsel — — —

All directors and executive officers as a group (23 persons) 904 — 904(2)

(1) Includes shares of stock beneficially owned as of February 14, 2024.

(2) Represents shares of stock beneficially owned prior to the company's entry into conservatorship.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

FREDDIE MAC | 2023 Form 10-K 265
Stock Ownership by Greater-Than 5% Holders

Table 71 - Stock Ownership by Greater-Than 5% Holders

5% Holders(1)

Common Stock  

Beneficially Owned Percent of Class

U.S. Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220

Variable(2) 79.9%

(1) Pershing Square Capital Management, L.P., PS Management GP, LLC, and William A. Ackman ("Pershing") have filed certain reports on Schedule 13D, the latest of 

which was filed on March 31, 2014. In that report, Pershing reported a beneficial ownership percentage calculation of 9.78%, based solely on the 650,039,533 

shares of our common stock outstanding as reported in our Annual Report on Form 10-K filed on February 27, 2014, and excluding the shares issuable to Treasury 

pursuant to the Warrant. The Schedule 13D indicated that Pershing also had additional economic exposure to approximately 8,434,958 notional shares of common 

stock, bringing the total aggregate economic exposure on the date of that filing to 72,010,523 shares of common stock (approximately 11.08% of the outstanding 

common stock). In that filing, Pershing indicated that because it believes our common stock is not a voting security, it had determined not to file future reports on 

Schedule 13D. We do not know Pershing's current beneficial ownership of our common stock.

(2) In September 2008, we issued Treasury the Warrant to purchase, for one one-thousandth of a cent ($0.00001) per share, shares of our common stock equal to 

79.9% of the total number of shares of our common stock outstanding on a fully diluted basis at the time the Warrant is exercised. The Warrant may be exercised in 

whole or in part at any time until September 7, 2028. As of the date of this filing, Treasury has not exercised the Warrant. The information above assumes Treasury 

beneficially owns no other shares of our common stock.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER 

EQUITY COMPENSATION PLANS

We have no shares of common stock available for issuance upon the exercise of options, warrants, and rights under our 

existing equity compensation plans as of December 31, 2023. Prior to conservatorship, stockholders approved the Employee 

Stock Purchase Plan, the 2004 Stock Compensation Plan, the 1995 Stock Compensation Plan (together, the "Employee 

Plans"), and the 1995 Directors' Stock Compensation Plan (the "Directors' Plan"). The authorizations to issue shares of 

common stock under the Employee Plans and Directors' Plan have expired pursuant to their respective terms. Therefore, we 

are not providing an Equity Compensation Table.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

FREDDIE MAC | 2023 Form 10-K 266
Certain Relationships And Related Transactions

POLICY GOVERNING RELATED PERSON 

TRANSACTIONS

The Board of Directors has adopted a written policy governing the approval of related person transactions. This policy sets 

forth procedures for the review and approval or ratification of transactions involving related persons. Under the policy, "related 

person" means any person who is, or was at any time since the beginning of our last completed fiscal year, a director, a 

director nominee, an executive officer, or an immediate family member of any of the foregoing persons.

Under authority delegated by the Board of Directors, the Nominating and Governance Committee, or its Chair or other 

designated member under certain circumstances, each an Authorized Approver, is responsible for applying the Related Person 

Transactions Policy. Transactions covered by the Related Person Transactions Policy consist of any transaction, arrangement, 

or relationship or series of similar transactions, arrangements, or relationships, in which: 

n The aggregate amount involved exceeded or is expected to exceed $120,000; 

n We were or are expected to be a participant; and 

n Any related person had or will have a direct or indirect material interest. 

The Related Person Transactions Policy includes a list of categories of transactions identified by the Board of Directors as 

having no significant potential for an actual conflict of interest or the appearance of a conflict or benefit to a related person, and 

thus such transactions are not considered potential related person transactions subject to review.

Our Legal Division (or our Compliance department in certain limited circumstances) assesses whether any proposed transaction 

involving a related person is covered by the Related Person Transactions Policy. If so, the transaction is reviewed by the 

appropriate Authorized Approver. 

In determining whether to approve or ratify a related person transaction covered by the Related Person Transactions Policy, the 

Authorized Approver reviews and considers all relevant information, which may include: 

n The nature of the related person's interest in the transaction; 

n The approximate total dollar value of, and extent of the related person's interest in, the transaction;

n Whether the transaction was or would be undertaken in the ordinary course of business; 

n Whether the transaction is proposed to be, or was, entered into on terms no less favorable to us than terms that could 

have been reached with an unrelated third party; and 

n The purpose, and potential benefits to us, of the transaction.

TRANSACTIONS WITH 5% SHAREHOLDERS

In connection with our entry into conservatorship, we issued the Warrant to Treasury to purchase shares of our common stock 

equal to 79.9% of the total number of shares of our common stock outstanding, on a fully diluted basis. There have been a 

number of transactions between us and Treasury since the beginning of 2023, as discussed in MD&A - Consolidated 

Results of Operations, MD&A - Liquidity and Capital Resources, MD&A - Conservatorship and Related 

Matters, MD&A - Regulation and Supervision, Note 2, Note 8, and Note 11.

FHFA, as Conservator, approved the Purchase Agreement. The remaining transactions described in the sections referenced 

above did not require review and approval under any of our policies and procedures relating to transactions with related 

persons.

TRANSACTIONS WITH INSTITUTIONS RELATED TO 

EXECUTIVE OFFICERS

Mr. Lown’s brother, Jeffrey Lown, serves as the CEO and President of Cherry Hill Mortgage Investment Corporation (“Cherry 

Hill”) and serves as the President and a director of one of Cherry Hill’s subsidiaries, Aurora Financial Group Inc. (“Aurora”). 

Aurora is a single-family servicer servicing approximately 33,000 loans with a UPB of $7.4 billion as of December 31, 2023. 

These transactions are conducted in the ordinary course and on an arm's length basis. 

Certain Relationships and Related Transactions

FREDDIE MAC | 2023 Form 10-K 267
CONSERVATORSHIP AGREEMENTS

Treasury, FHFA, and the Federal Reserve have taken a number of actions to support us during conservatorship, including 

entering into the Purchase Agreement, described in this Form 10-K. See MD&A - Conservatorship and Related Matters

and Note 2.

Certain Relationships and Related Transactions

FREDDIE MAC | 2023 Form 10-K 268
Principal Accounting Fees and Services

DESCRIPTION OF FEES

PricewaterhouseCoopers LLP has served as our independent public accountants since 2002. The following is a description of 

fees billed to us by PricewaterhouseCoopers LLP during 2023 and 2022.

Auditor Fees(1)

Table 72 - Auditor Fees

(In thousands) 2023 2022

Audit Fees(2) $22,699 $20,649 

Audit-Related Fees(3) 5,524 6,381 

Tax Fees(4) 1,473 1,844 

All Other Fees(5) 1 55 

Total $29,697 $28,929 

(1) These fees represent amounts billed (including reimbursable expenses within the designated year).

(2) Audit fees include fees in connection with quarterly reviews of our interim financial information and the audit of our annual consolidated financial statements.

(3) Audit-related fees include: (1) fees for the performance of certain agreed-upon procedures regarding aspects of compliance with the Purchase Agreement 

covenants; (2) attestation-related services on debt offerings; (3) compliance evaluation of the minimum servicing standards as set forth in the Uniform Single 

Attestation Program for Mortgage Bankers; (4) fees related to accounting policy consultations; (5) fees for the performance of certain agreed-upon procedures 

related to our risk transfer and structured transactions, pursuant to engagement letters with the company, including where the fees are billed to and paid by 

unconsolidated trusts created in connection with such transactions; and (6) fees related to certain wire system and sustainability reporting attestations. 

(4) The tax fees related to non-audit tax compliance and consulting services arising from certain tax credits and advice and recommendations related to tax planning 

and reporting matters.

(5) All other fees include: (1) our subscription to a web-based suite of human resources benchmark data; and (2) our subscription to accounting research and disclosure 

software. 

APPROVAL OF INDEPENDENT AUDITOR SERVICES 

AND FEES

Under its charter, the Audit Committee is responsible for the following: 

n Appointing our independent public accounting firm (subject to FHFA approval as required); 

n Approving all audit and non-audit services permitted under applicable law to be performed by the independent public 

accounting firm (subject to FHFA approval as required);

n Approving our independent public accounting firm's proposed integrated audit scope and approach with respect to the 

annual audit; and

n Overseeing the performance of, and relationship with, our independent public accounting firm.

The Sarbanes-Oxley Act of 2002 and related SEC rules require that all services provided to companies subject to the reporting 

requirements of the Exchange Act by their independent auditors be pre-approved by their audit committee or by authorized 

members of the committee, with certain exceptions. The Audit Committee's charter requires that the Audit Committee preapprove any audit services, and any non-audit services permitted under applicable law, to be performed by our independent 

auditors (or to designate one or more members of the Audit Committee to pre-approve such services and report such preapproval to the Audit Committee). 

Audit services that are within the scope of an auditor's engagement approved by the Audit Committee prior to the performance 

of those services are deemed pre-approved and do not require separate pre-approval. Audit services not within the scope of an 

Audit Committee-approved engagement, as well as permissible non-audit services, must be separately pre-approved by the 

Audit Committee.

When the Audit Committee pre-approves a service, it sets a dollar limit for such service. Management obtains pre-approval of 

the Audit Committee, or of the Chair of the Audit Committee (when the Chair of the Audit Committee has been delegated such 

authority), before it incurs fees exceeding the dollar limit. If the Chair of the Audit Committee approves the increase, the Chair 

will report such approval at the Audit Committee's next scheduled meeting. The Audit Committee has delegated to the Chair 

the authority to address requests to pre-approve certain additional audit and non-audit services to be performed by the 

Principal Accounting Fees and Services

FREDDIE MAC | 2023 Form 10-K 269
company's independent auditor with fees totaling up to a maximum of $250,000 per quarter, with reporting of any such 

approval decisions to the Audit Committee at its next scheduled meeting. The pre-approval procedure is administered by our 

senior financial management, which reports throughout the year to the Audit Committee. The Audit Committee pre-approved all 

audit, audit-related, tax, and other services performed by our independent public accounting firm in 2023 and 2022.

The Audit Committee appoints the independent public accounting firm on an annual basis. In connection with applicable 

partner rotation requirements, the Audit Committee and its Chair are involved in considering the selection of the independent 

registered public accounting firm’s new lead partner. In evaluating the performance of the independent public accounting firm, 

the Audit Committee considers a number of factors, including the following:

n The firm's status as a registered public accounting firm with the Public Company Accounting Oversight Board (United 

States), or PCAOB, as required by the Sarbanes-Oxley Act of 2002 and the Rules of the PCAOB; 

n Its independence and processes for maintaining its independence;

n Its approach to resolving significant accounting and auditing matters;

n Its capability and expertise in handling the complexity of the company's business, including the capability and expertise of 

the lead audit partner and of the key members of the engagement team;

n Historical and recent performance, including the extent and quality of the independent public accounting firm's 

communications with the Audit Committee, and the results of a management survey of the independent public accounting 

firm's overall performance;

n Data related to audit quality and performance, including recent PCAOB inspection reports on the firm; and

n The appropriateness of its fees, both on an absolute basis and as compared with peers.

The Audit Committee has determined that the non-audit services rendered by PricewaterhouseCoopers during its most recent 

fiscal year are compatible with maintaining PricewaterhouseCoopers' independence.

Principal Accounting Fees and Services

FREDDIE MAC | 2023 Form 10-K 270
Exhibits and Financial Statement Schedules

 (a) Documents filed as part of this report:

 (1) Consolidated Financial Statements

The consolidated financial statements required to be filed in this Form 10-K are included in 

Financial Statements and Supplementary Data.

 (2) Financial Statement Schedules

 None.

 (3) Exhibits

An Exhibit Index has been filed as part of this Form 10-K beginning on page 280.

Exhibits and Financial Statement Schedules

FREDDIE MAC | 2023 Form 10-K 271
Glossary

This Glossary includes acronyms and defined terms that are used throughout this report.

n	 ACIS - Agency Credit Insurance Structure - Transactions in which we purchase insurance policies that provide credit 

protection for certain specified credit events on the mortgage loans in the related reference pools, or provide front-end 

credit risk transfer as loans come into the portfolio. Under each of these insurance policies, we pay monthly premiums that 

are determined based on the outstanding balance of the reference pool. When specific credit events occur, we generally 

receive compensation from the insurance policy up to an aggregate limit based on actual losses.

n Administration - Executive branch of the U.S. government and its agencies, including but not limited to FHFA and 

Treasury.

n	 Agency securities - Generally refers to mortgage-related securities issued or guaranteed by the GSEs or government 

agencies.

n	 AI/ML - Artificial Intelligence/Machine Learning.

n	 AMI - Area Median Income.

n	 AOCI - Accumulated other comprehensive income (loss), net of taxes.

n	 ARM - Adjustable-rate mortgage - A mortgage loan with an interest rate that adjusts periodically over the life of the loan 

based on changes in a benchmark index.

n	 ARRC - Alternative Reference Rates Committee - A group of private-market participants convened by the Federal Reserve 

Board and the New York Fed to help ensure a successful transition from U.S. Dollar LIBOR to a more robust reference rate, 

SOFR. 

n	 ASU - Accounting Standards Update. 

n	 ATA - Adjusted total assets.

n	 Back-end coverage type - Applies to transactions in which the credit risk transfer occurs after our purchase of the loan or 

guarantee of a security.

n	 Bps - Basis points - One one-hundredth of 1%. This term is commonly used to quote the yields of debt instruments or 

movements in interest rates.

n	 Capital Reserve Amount - See Net worth sweep dividend, Net Worth Amount, Capital Reserve Amount, and Capital 

Reserve End Date for additional information.

n	 Capital Reserve End Date - See Net worth sweep dividend, Net Worth Amount, Capital Reserve Amount, and 

Capital Reserve End Date for additional information.

n	 CARES Act - Coronavirus Aid, Relief, and Economic Security Act - An economic stimulus bill signed into law on March 27, 

2020, designed to mitigate the negative economic effects of the COVID-19 pandemic in the United States.

n	 CD&A - Compensation Discussion and Analysis.

n	 CEO - Chief Executive Officer.

n	 CET1 - Common Equity Tier 1.

n	 CFO - Chief Financial Officer.

n	 CFPB - Consumer Financial Protection Bureau.

n	 Charge-offs - Represent the amount of a financial asset that is removed from our consolidated balance sheets when 

deemed uncollectible, regardless of when the impact of the credit loss was recorded on our consolidated statements of 

comprehensive income. For mortgage loans, generally the amount of a charge-off is the recorded investment in excess of 

the fair value of the loan's collateral.

n	 Charter - The Federal Home Loan Mortgage Corporation Act, as amended, 12 U.S.C. § 1451 et seq.

n	 CHC Committee - The Compensation and Human Capital Committee of the Board of Directors.

n	 CMBS - Commercial mortgage-backed security - A security backed by loans on commercial property (often including 

multifamily rental properties) as opposed to one-to-four family residential real estate. 

n	 CMC - Capital Management Council.

n	 CMOs - Collateralized Mortgage Obligations.

n	 CODM - Chief Operating Decision Maker.

n	 Comprehensive income - Consists of net income plus other comprehensive income (loss).

Glossary

FREDDIE MAC | 2023 Form 10-K 272
n	 Conforming loan/Conforming loan limit - A conventional single-family loan with an original principal balance that is equal 

to or less than the applicable statutory conforming loan limit, which is a dollar amount cap on the original principal balance 

of single-family loans we are permitted by law to purchase or securitize. The conforming loan limit is determined annually 

based on changes in FHFA's house price index.

n	 Conservator - FHFA, acting in its capacity as Conservator of Freddie Mac.

n	 Conservatorship Scorecard - FHFA's mechanism for outlining specific conservatorship priorities for Freddie Mac, Fannie 

Mae, and their joint venture, Common Securitization Solutions, LLCSM.

n	 Convexity - A measure of how much a financial instrument's duration changes as interest rates change.

n	 Corporate Governance Rule - FHFA's rule regarding the Responsibilities of Board of Directors, Corporate Practices and 

Corporate Governance Matters.

n	 Credit enhancement - A financial arrangement that is designed to reduce credit risk by partially or fully compensating an 

investor in a mortgage or security (e.g., Freddie Mac) in the event of specified losses. Examples of credit enhancements 

include insurance, CRT transactions, overcollateralization, indemnification agreements, and government guarantees.

n	 Credit fee - A fee charged to sellers above base contractual guarantee fees to compensate us for higher levels of risk in 

some loan products.

n	 Credit risk transfer (CRT) transactions - Arrangements where we actively transfer the credit risk exposure on mortgages 

that we own or guarantee.

n	 Credit score - Credit score data is based on FICO scores, a credit scoring system developed by Fair Isaac Corporation. 

FICO scores are currently the most commonly used credit scores. FICO scores are ranked on a scale of approximately 300 

to 850 points with a higher value indicating a lower likelihood of credit default. 

l	Original credit score - The credit score of the borrower at the time of loan origination or our purchase.

l	Current credit score - The credit score of the borrower as of the first month of the most recent quarter.

n	 CRO - Chief Risk Officer.

n	 CSS - Common Securitization Solutions, LLC.

n	 CSS Board - Board of Managers of CSS.

n	 CSP - Common Securitization Platform.

n Current LTV Ratio or CLTV - The current LTV ratios are management estimates, which are updated on a monthly basis. 

Current market values are estimated by adjusting the value of the property at origination based on changes in the market 

value of homes in the same geographic area since that time irrespective of the type of features of the specific property 

relative to other properties in that same geographic area. Changes in market value of single-family properties are derived 

from our internal index, which measures price changes for repeat sales and refinancing activity on the same properties 

using Freddie Mac and Fannie Mae single-family loan acquisitions. Estimates of the current LTV ratio exclude any 

secondary financing by third parties.

n	 December 2017 Letter Agreement - An agreement that we through the Conservator, acting on our behalf, entered into 

with Treasury on December 21, 2017 to amend the Amended and Restated Certificate of Creation, Designation, Powers, 

Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms, and Conditions of Variable Liquidation 

Preference Senior Preferred Stock (Par Value $1.00 Per Share) dated September 27, 2012.

n	 Deed in lieu of foreclosure - An alternative to foreclosure in which the borrower voluntarily conveys title to the property to 

the lender and the lender accepts such title (sometimes together with an additional payment by the borrower) in full 

satisfaction of the mortgage indebtedness.

n	 DEI - Diversity, Equity, and Inclusion. 

n	 Delinquency - A failure to make timely payments of principal and/or interest on a loan. For single-family loans, we 

generally report delinquency rate information based on the number of loans that are seriously delinquent. We report singlefamily loans in forbearance as delinquent during the forbearance period to the extent that payments are past due based on 

the loan's original contractual terms, irrespective of the forbearance plan. For multifamily loans, we report delinquency rate 

information based on the UPB of loans that are two monthly payments or more past due or in the process of foreclosure. 

Loans that have been modified or received forbearance are not counted as delinquent as long as the borrower is 

performing pursuant to the terms of the modified loan or forbearance agreement. Unless stated otherwise, multifamily 

delinquency rates presented in this Form 10-K refer to gross delinquency rates before consideration of risk transfers.

n	 Derivative - A financial instrument whose value depends upon the characteristics and value of an underlying such as a 

financial asset or index. Examples of underlyings include security or commodity prices, interest or currency rates, and 

other financial indices.

n	 Director - Director or Acting Director.

n	 Dodd-Frank Act - Dodd-Frank Wall Street Reform and Consumer Protection Act.

n	 DSCR - Debt Service Coverage Ratio - An indicator of future credit performance for multifamily loans. The DSCR estimates 

a multifamily borrower's ability to service its mortgage obligation using the secured property's cash flow, after deducting 

Glossary

FREDDIE MAC | 2023 Form 10-K 273
non-mortgage expenses from income. The higher the DSCR, the more likely a multifamily borrower will be able to continue 

servicing its loan obligation.

n	 DTI - Debt-to-income.

n	 Duration - A measure of a financial instrument's price sensitivity to changes in interest rates.

n	 Duration gap - One of our primary interest-rate risk measures. Duration gap is a measure of the difference between the 

estimated durations of our interest rate sensitive assets and liabilities. We present the duration gap of our financial 

instruments in units expressed as months. A duration gap of zero implies that the change in value of our interest rate 

sensitive assets from an instantaneous change in interest rates would be expected to be accompanied by an equal and 

offsetting change in the value of our interest rate sensitive liabilities, thus leaving economic value unchanged.

n	 EMCP - Executive Management Compensation Program.

n	 Enterprises - Freddie Mac and Fannie Mae.

n	 EO&T - Enterprise Operations & Technology Division.

n	 ERCF - Enterprise Regulatory Capital Framework - Final rule adopted by FHFA in 2020 that establishes a new regulatory 

capital framework for Freddie Mac and Fannie Mae.

n	 ERM - Enterprise Risk Management.

n	 ERM Program - Freddie Mac's enterprise risk management program.

n	 ESG - Environmental, Social, and Governance.

n	 EVP - Executive Vice President.

n	 Exchange Act - Securities Exchange Act of 1934, as amended.

n	 Fannie Mae - Federal National Mortgage Association.

n	 FASB - Financial Accounting Standards Board.

n	 FDIC - Federal Deposit Insurance Corporation.

n	 Federal Reserve - Board of Governors of the Federal Reserve System.

n FEMA - Federal Emergency Management Agency.

n FHA - Federal Housing Administration.

n	 FHFA - Federal Housing Finance Agency - An independent agency of the U.S. government with responsibility for regulating 

Freddie Mac, Fannie Mae, and the FHLBs.

n	 FHLB - Federal Home Loan Bank.

n	 55-day MBS - A single-class pass-through security with a 55-day payment delay for non-TBA-eligible fixed-rate mortgage 

loans. Freddie Mac began issuing 55-day MBS on and after June 3, 2019.

n	 Fitch - Fitch Ratings Limited.

n	 Fixed-rate loan - Refers to a loan originated at a specific rate of interest that remains constant over the life of the loan. For 

purposes of presentation in this report, we have categorized a number of modified loans as fixed-rate loans, even though 

the modified loans have rate adjustment provisions. In these cases, while the terms of the modified loans provide for the 

interest rate to adjust in the future, such future rates are determined at the time of the modification rather than at a 

subsequent date.

n	 Foreclosure alternative - A workout option pursued when a home retention action is not successful or not possible. A 

foreclosure alternative is either a short sale or deed in lieu of foreclosure.

n	 Foreclosure or foreclosure sale - Refers to our completion of a transaction provided for by the foreclosure laws of the 

applicable state, in which a delinquent borrower's ownership interest in a mortgaged property is terminated and title to the 

property is transferred to us or to a third party. When we, as loan holder, acquire a property in this manner, we pay for it by 

extinguishing some or all of the mortgage debt.

n	 Front-end coverage - Applies to transactions in which the credit risk transfer occurs prior to, or simultaneously with, our 

purchase or guarantee of the loan.

n	 GAAP - Generally accepted accounting principles in the United States of America.

n	 Giant MBS - Resecuritizations of newly issued 55-day MBS (and/or Giant MBS), and/or 55-day MBS (and/or Giant MBS) 

that Freddie Mac has issued in exchange for non-TBA-eligible PCs and non-TBA-eligible Giant PCs that have been 

delivered to Freddie Mac in response to the exchange offer. Giant MBS are single-class securities that involve the direct 

pass-through of all cash flows of the underlying collateral to holders of the beneficial interests.

n	 Giant PCs - Resecuritizations of previously issued PCs or Giant PCs. Giant PCs are single-class securities that involve the 

direct pass through of all cash flows of the underlying collateral to holders of the beneficial interests.

n	 Ginnie Mae - Government National Mortgage Association, which guarantees the timely payment of principal and interest 

on mortgage-related securities backed by federally insured or guaranteed loans, primarily those insured by FHA or 

guaranteed by the VA.

Glossary

FREDDIE MAC | 2023 Form 10-K 274
n	 Green Advantage loan - A multifamily loan that we offer under our Green Advantage initiative, whereby borrowers finance 

the installation of green technologies that reduce energy and water consumption.

n GSD/FICC - Government Securities Division of the Fixed Income Clearing Corporation.

n	 GSE Act - The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Reform Act.

n	 GSEs - Government-sponsored enterprises - Refers to certain legal entities created by the U.S. government, including 

Freddie Mac, Fannie Mae, and the FHLBs.

n	 Guarantee fee - The fee that we receive for guaranteeing the payment of principal and interest to mortgage security 

investors, which consists primarily of a combination of a monthly guarantee fee paid as a percentage of the UPB of the 

underlying loans, and initial upfront payments, such as credit fees.

n	 Guide - The Single-Family Seller/Servicer Guide consists of Freddie Mac's requirements relating to the purchase, sale, and 

servicing of single-family mortgages.

n	 Guidelines - Corporate Governance Guidelines, as revised.

n	 HFA - State or local Housing Finance Agency.

n	 HUD - U.S. Department of Housing and Urban Development. 

n	 Initial margin - The collateral that we post with a derivatives clearinghouse or to a counterparty in order to do business 

with such clearinghouse or trade with such counterparty. The amount of initial margin varies over time.

n	 January 2021 Letter Agreement - An agreement that we through the Conservator, acting on our behalf, entered into with 

Treasury on January 14, 2021 to further amend (1) the Amended and Restated Certificate of Creation, Designation, Powers, 

Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms, and Conditions of Variable Liquidation 

Preference Senior Preferred Stock (Par Value $1.00 Per Share) dated September 30, 2019 and (2) the Purchase Agreement.

n	 K Certificates - Structured pass-through certificates backed primarily by recently originated multifamily loans purchased 

by Freddie Mac.

n	 Legislated guarantee fees - The 10 basis point increase in guarantee fees we implemented for all single-family residential 

mortgages delivered to us on or after April 1, 2012, at the direction of FHFA pursuant to the Temporary Payroll Tax Cut 

Continuation Act of 2011 as extended by the Infrastructure Investment and Jobs Act. We are required to charge and remit 

to Treasury this 10 basis point fee for all single-family residential mortgage loans delivered to us through October 1, 2032.

n	 Level 1 Securitization Products - Single-class pass-through securities that represent undivided beneficial interests in 

trusts that hold pools of loans. These products include UMBS, 55-day MBS, and PCs.

n	 LIBOR - London Interbank Offered Rate.

n	 LIHTC partnerships - Low-income housing tax credit partnerships - These LIHTC partnerships invest directly in limited 

partnerships that own and operate affordable multifamily rental properties that generate federal income tax credits and 

deductible operating losses.

n	 Liquidation preference - Generally refers to an amount that holders of preferred securities are entitled to receive out of 

available assets upon liquidation of a company. The initial liquidation preference of our senior preferred stock was 

$1.0 billion. The aggregate liquidation preference of our senior preferred stock includes the initial liquidation preference 

plus amounts funded by Treasury under the Purchase Agreement, as well as $3.0 billion added pursuant to the December 

2017 Letter Agreement. In addition, pursuant to the September 2019 Letter Agreement and January 2021 Letter 

Agreement, increases in the Net Worth, if any, during the immediately prior fiscal quarter have been, or will be, added to 

the liquidation of the senior preferred stock at the end of each fiscal quarter, from September 30, 2019 through the Capital 

Reserve End Date. We may make payments to reduce the liquidation preference of the senior preferred stock only in 

limited circumstances.

n	 Liquidity and Contingency Operating Portfolio - Subset of our other investments portfolio. Consists of cash and cash 

equivalents, certain securities purchased under agreements to resell, and certain non-mortgage-related securities.

n	 LLC - Limited liability company.

n	 LLRE - Limited life regulated entity.

n	 Long-term debt - Debt due after one year based on the original contractual maturity of the debt instrument. Our long-term 

debt issuances include medium-term notes, Reference Notes securities, STACR debt notes, and SCR debt notes.

n	 LTV ratio - Loan-to-value ratio - The ratio of the unpaid principal amount of a loan to the value of the property that serves 

as collateral for the loan, expressed as a percentage. We report LTV ratios based solely on the amount of the loan 

purchased or guaranteed by us.

n Market spread - The difference between the yields of two debt securities, or the difference between the yield of a debt 

security and a benchmark yield, such as LIBOR or SOFR. We measure market spreads primarily using our models.

n MBS - Mortgage-backed security.

n	 MBSD/FICC - Mortgage-Backed Securities Division of the Fixed Income Clearing Corporation.

n	 MCIP - Multifamily Credit Insurance Pool.

n	 MD&A - Management's Discussion and Analysis of Financial Condition and Results of Operations.

Glossary

FREDDIE MAC | 2023 Form 10-K 275
n	 Moody's - Moody's Investor Service.

n	 Mortgage assets - Refers to both loans and mortgage-related securities we hold in our mortgage-related investments 

portfolio.

n	 MSA - Metropolitan Statistical Area.

n	 Multifamily loan - A loan secured by a property with five or more residential rental units or by a manufactured housing 

community.

n	 Multifamily PC - A fully guaranteed securitization product in which Freddie Mac retains the credit risk of the underlying 

mortgage loan.

n	 Multifamily new business activity - Represents loan purchases, issuances of other mortgage-related guarantees, and 

issuances of other securitization products for which we have not previously purchased the underlying loans.

n	 NCUSIF - National Credit Union Share Insurance Fund.

n	 Net Worth Amount - See Net worth sweep dividend, Net Worth Amount, Capital Reserve Amount, and Capital 

Reserve End Date for additional information.

n	 Net worth - The amount by which our total assets exceed our total liabilities as reflected on our consolidated balance 

sheets prepared in conformity with GAAP.

n	 Net worth sweep dividend, Net Worth Amount, Capital Reserve Amount, and Capital Reserve End Date - For each 

quarter from January 1, 2013 through the Capital Reserve End Date, the dividend requirement on the senior preferred stock 

will be the amount, if any, by which our Net Worth Amount at the end of the immediately preceding fiscal quarter, less the 

applicable Capital Reserve Amount, exceeds zero. The term Net Worth Amount is defined as the total assets of Freddie 

Mac (excluding Treasury's commitment and any unfunded amounts thereof), less our total liabilities (excluding any 

obligation in respect of capital stock), in each case as reflected on our consolidated balance sheets prepared in conformity 

with GAAP. If the calculation of the dividend payment for a quarter does not exceed zero, then no dividend shall accrue or 

be payable for that quarter. The applicable Capital Reserve Amount was $3.0 billion for 2018, increased to $20.0 billion in 

3Q 2019 pursuant to the September 2019 Letter Agreement, and later increased further to the amount of adjusted total 

capital necessary to meet capital requirements and buffers set forth in the ERCF. If we were not to pay our dividend 

requirement on the senior preferred stock in full in any future period until the Capital Reserve End Date, the applicable 

Capital Reserve Amount would thereafter be zero. The Capital Reserve End Date is the last day of the second consecutive 

fiscal quarter during which Freddie Mac has had and maintained capital equal to or in excess of all of the capital 

requirements and buffers under the ERCF.

n	 Non-accrual loan - A loan for which we are not accruing interest income. We place loans on non-accrual status when we 

believe collectability of principal and interest in full is not reasonably assured, which generally occurs when a loan is three 

monthly payments past due, unless the loan is well secured and in the process of collection based upon an individual loan 

assessment.

n	 NYSE - New York Stock Exchange.

n	 OAS - Option-adjusted spread - An estimate of the incremental yield spread between a particular financial instrument (e.g., 

a security, loan, or derivative contract) and a benchmark yield curve (e.g., LIBOR, SOFR, agency, or U.S. Treasury 

securities). This includes consideration of potential variability in the instrument's cash flows resulting from any options 

embedded in the instrument, such as prepayment options. When the OAS on a given asset widens, the fair value of that 

asset will typically decline, all other market factors being equal. The opposite is true when the OAS on a given asset 

tightens.

n	 Optigo® - Freddie Mac's Multifamily lender network and loan offerings.

n	 Original LTV ratio - A credit measure for loans, calculated as the UPB of the loan divided by the value of the property at 

the time of loan origination.

n	 OTC - Over-the-counter.

n	 OTCQB - A marketplace, operated by the OTC Markets Group Inc., for OTC-traded U.S. companies that are registered and 

current in their reporting with the SEC or a U.S. banking or insurance regulator.

n	 PCs - Participation Certificates - Single-class pass-through securities that we issue and guarantee as part of a 

securitization transaction.

l Gold PCs - Single-class pass-through securities with a 45-day payment delay that Freddie Mac issued for fixed-rate 

mortgage loans prior to June 3, 2019. Freddie Mac no longer issues Gold PCs. Existing Gold PCs are eligible for 

exchange into UMBS (for TBA-eligible securities) or 55-day MBS (for non-TBA-eligible securities).

l ARM PCs - Single-class pass-through securities with a 75-day payment delay for ARM products. 

n	 PCCBA - Prescribed capital conservation buffer amount.

n	 Pension Plan - The Federal Home Loan Mortgage Corporation Employees' Pension Plan.

n	 PLBA - Prescribed leverage buffer amount.

n	 PMMS - Primary Mortgage Market Survey.

Glossary

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n	 Primary mortgage market - The market where lenders originate loans by lending funds to borrowers. We do not lend 

money directly to homeowners and do not participate in this market.

n	 Purchase Agreement / Senior Preferred Stock Purchase Agreement - An agreement that we through the Conservator, 

acting on our behalf, entered into with Treasury on September 7, 2008, relating to Treasury's purchase of senior preferred 

stock and warrant, which was subsequently amended and restated on September 26, 2008 and further amended on 

May 6, 2009, December 24, 2009, August 17, 2012, December 21, 2017, September 27, 2019, January 14, 2021, and 

September 14, 2021.

n	 PVS - Portfolio Value Sensitivity - One of our primary interest-rate risk measures. PVS measures are estimates of the 

amount of average potential pre-tax loss in the value of our financial assets and liabilities due to parallel (PVS-L) and nonparallel (PVS-YC) changes in SOFR.

n	 Reform Act - The Federal Housing Finance Regulatory Reform Act of 2008, which, among other things, amended the GSE 

Act by establishing a single regulator, FHFA, for Freddie Mac, Fannie Mae, and the FHLBs.

n	 REIT - Real estate investment trust.

n	 Relief refinance loan - A single-family loan delivered to us for purchase or guarantee that meets the criteria of one of our 

relief refinance programs which include Enhanced Relief Refinance and other legacy programs.

n	 REMIC - Real Estate Mortgage Investment Conduit - A type of multiclass mortgage-related security that divides the cash 

flows (principal and interest) of the underlying mortgage-related assets into two or more classes that meet the investment 

criteria and portfolio needs of different investors. This structure allows commingling of TBA-eligible Freddie Mac and 

Fannie Mae collateral.

n	 REO - Real estate owned - Real estate which we have acquired through a foreclosure sale or through a deed in lieu of 

foreclosure.

n	 Reperforming loan - A single-family unsecuritized loan that was previously three months or more past due based on the 

loan’s original contractual terms or in the process of foreclosure, but the borrower subsequently made payments or 

entered into payment deferral plans such that the loan returns to less than three months past due, or a performing modified 

loan, which is a loan that was modified and is less than three months past due and is not in the process of foreclosure.

n	 Reputation risk - The risk of damage to the Freddie Mac brand and reputation from any action, inaction, or association 

that is perceived to be inappropriate, unethical, or inconsistent with our mission.

n	 Risk Framework - Enterprise risk framework. 

n	 RSU - Restricted stock unit. 

n	 RWA - Risk-weighted assets.

n	 S&P - Standard & Poor's.

n	 SCR debt note - Structured Credit Risk debt note - A debt security where the principal balance is subject to the 

performance of a reference pool of multifamily loans guaranteed by Freddie Mac.

n	 SCR Trust note - Structured Credit Risk Trust note - A debt security issued by a nonconsolidated trust where the principal 

balance is linked to the credit performance of a reference pool of multifamily loans owned or guaranteed by Freddie Mac. 

We make payments to the trust to support payment of the interest due on the notes, and we receive payments from the 

trust as a result of defined credit events on the reference pool. 

n	 SEC - U.S. Securities and Exchange Commission.

n	 Secondary mortgage market - A market consisting of institutions engaged in buying and selling loans in the form of 

whole loans (i.e., loans that have not been securitized) and mortgage-related securities. We participate in the secondary 

mortgage market by issuing guaranteed mortgage-related securities and by purchasing loans and mortgage-related 

securities for investment.

n	 Senior preferred stock - The shares of Variable Liquidation Preference Senior Preferred Stock issued to Treasury under 

the Purchase Agreement.

n	 September 2019 Letter Agreement - An agreement that we through the Conservator, acting on our behalf, entered into 

with Treasury on September 27, 2019 to amend the Amended and Restated Certificate of Creation, Designation, Powers, 

Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms, and Conditions of Variable Liquidation 

Preference Senior Preferred Stock (Par Value $1.00 Per Share) dated September 27, 2012.

n	 Seriously delinquent or SDQ - Single-family loans that are three monthly payments or more past due or in the process of 

foreclosure as reported to us by our servicers. Unless stated otherwise, SDQ rates presented in this Form 10-K refer to 

gross SDQ rates before consideration of credit enhancements.

n	 SERP - The Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan.

n	 SFHAs - Special Flood Hazard Areas designated by FEMA.

n	 Short sale - An alternative to foreclosure consisting of a sale of a mortgaged property in which the homeowner sells the 

home at market value and the lender accepts proceeds (sometimes together with an additional payment or promissory 

note from the borrower) that are less than the outstanding loan indebtedness in full satisfaction of the loan.

Glossary

FREDDIE MAC | 2023 Form 10-K 277
n	 Short-term debt - Debt due within one year based on the original contractual maturity of the debt instrument. Our shortterm debt issuances primarily include discount notes and Reference Bills securities.

n	 SIFMA - Securities Industry and Financial Markets Association.

n	 Single-family loan - A loan secured by a property containing one to four residential dwelling units.

n	 Single-family new business activity - Single-family loans we purchased or guaranteed.

n	 SOFR - Secured Overnight Financing Rate.

n	 SPCPs - Special Purpose Credit Programs.

n	 STACR debt note - Structured Agency Credit Risk debt note - A Freddie Mac issued debt security where the principal 

balance is linked to the credit performance of a reference pool of single-family loans owned or guaranteed by Freddie Mac.

n	 STACR Trust note - Structured Agency Credit Risk Trust note - A debt security issued by a nonconsolidated trust where 

the principal balance is linked to the credit performance of a reference pool of single-family loans owned or guaranteed by 

Freddie Mac. We make payments to the trust to support payment of the interest due on the notes, and we receive 

payments from the trust as a result of defined credit events on the reference pool. 

n	 Strategic risk - The risk to earnings, capital, profitability, mission, or reputation arising from adverse business decisions, or 

the improper implementation of those decisions, that may negatively affect the company's strategy.

n	 Strips - Multiclass securities that are formed by resecuritizing previously issued Level 1 Securitization Products or singleclass resecuritization products and issuing stripped securities, including principal-only and interest-only securities or 

floating rate and inverse floating rate securities, backed by the cash flows from the underlying collateral. This structure 

allows commingling of TBA-eligible Freddie Mac and Fannie Mae collateral.

n	 Supers - Resecuritizations of UMBS and certain other mortgage securities. Supers are single-class securities that involve 

the direct pass-through of all cash flows of the underlying collateral to holders of the beneficial interests. This structure 

allows commingling of TBA-eligible Freddie Mac and Fannie Mae collateral.

n	 SVP - Senior Vice President.

n	 Swaption - An option contract to enter into an interest-rate swap. In exchange for an option premium, a buyer obtains the 

right but not the obligation to enter into a specified swap agreement with the issuer on a specified future date.

n	 Target TDC - Target total direct compensation.

n	 TBA - To be announced.

n	 TDR - Troubled debt restructuring - A restructuring of a debt constitutes a TDR if the creditor, for economic or legal 

reasons related to the debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider.

n	 Thrift/401(k) Plan - The Federal Home Loan Mortgage Corporation Thrift/401(k) Savings Plan.

n	 Treasury - U.S. Department of the Treasury.

n	 UMBS - Uniform mortgage-backed security - A single (common) mortgage-related security with a 55-day payment delay 

for TBA-eligible fixed-rate mortgage loans. Freddie Mac and Fannie Mae began issuing UMBS on and after June 3, 2019. 

The UMBS represents undivided beneficial ownership interest in, and the right to receive payments from, pools of one- to 

four- family residential mortgages that are held in trust for investors. 

n	 UPB - Unpaid principal balance - Loan UPB amounts in this report have not been reduced by charge-offs recognized prior 

to the loan being subject to a foreclosure sale, deed in lieu of foreclosure, or short sale transaction.

n	 Upfront fee - A fee charged to sellers that primarily includes credit fees that are calculated based on credit risk factors 

such as the loan product type, loan purpose, LTV ratio, and credit score.

n	 USDA - U.S. Department of Agriculture.

n	 VA - U.S. Department of Veterans Affairs.

n	 Variation margin - Payments we make to or receive from a derivatives clearinghouse or counterparty based on the change 

in fair value of a derivative instrument. Variation margin is typically transferred within one business day.

n	 VIE - Variable Interest Entity - A VIE is an entity that has a total equity investment at risk that is not sufficient to finance its 

activities without additional subordinated financial support provided by another party, or where the group of equity holders 

does not have: (1) the ability to make significant decisions about the entity's activities; (2) the obligation to absorb the 

entity's expected losses; or (3) the right to receive the entity's expected residual returns.

n	 VP - Vice President.

n	 Warrant - Refers to the warrant we issued to Treasury on September 7, 2008 pursuant to the Purchase Agreement. The 

warrant provides Treasury the ability to purchase, for a nominal price, shares of our common stock equal to 79.9% of the 

total number of shares of Freddie Mac common stock outstanding on a fully diluted basis on the date of exercise.

n	 When-Issued K-Deal (WI K-Deal) Certificates - Guaranteed certificates initially backed by cash until a future K Certificate 

is delivered.

n	 Workforce housing - Multifamily housing that is affordable to the majority of low to middle income households.

n	 Workout, or loan workout - A workout is either a home retention action, which is either a loan modification, repayment 

Glossary

FREDDIE MAC | 2023 Form 10-K 278
plan, payment deferral plan, or forbearance plan, or a foreclosure alternative, which is either a short sale or a deed in lieu of 

foreclosure.

n	 XBRL - eXtensible Business Reporting Language.

n	 Yield curve - A graphical display of the relationship between yields and maturity dates for bonds of the same credit quality. 

The slope of the yield curve is an important factor in determining the level of net interest yield on a new mortgage asset, 

both initially and over time. For example, if a mortgage asset is purchased when the yield curve is inverted (i.e., short-term 

interest rates higher than long-term interest rates), our net interest yield on the asset will tend to be lower initially and then 

increase over time. Likewise, if a mortgage asset is purchased when the yield curve is steep (i.e., short-term interest rates 

lower than long-term interest rates), our net interest yield on the asset will tend to be higher initially and then decrease over 

time. 

Glossary

FREDDIE MAC | 2023 Form 10-K 279
Exhibit Index 

Exhibit Description*

3.1

Federal Home Loan Mortgage Corporation Act (12 U.S.C. §1451 et seq.), as amended by the Economic Growth, Regulatory Relief, and 

Consumer Protection Act (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on July 31, 2018)

3.2

Bylaws of the Federal Home Loan Mortgage Corporation, as amended and restated July 2, 2023 (incorporated by reference to Exhibit 3.1 to 

the Registrant’s Quarterly Report on Form 10-Q filed on August 2, 2023)

4.1

Eighth Amended and Restated Certificate of Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, 

Terms and Conditions of Voting Common Stock (no par value per share) dated September 10, 2008 (incorporated by reference to Exhibit 

4.1 to the Registrant’s Current Report on Form 8-K filed on September 11, 2008)

4.2

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Variable Rate, Non-Cumulative Preferred Stock (par value $1.00 per share), dated April 23, 1996 (incorporated by reference to Exhibit 

4.2 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.3

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.81% Non-Cumulative Preferred Stock (par value $1.00 per share), dated October 27, 1997 (incorporated by reference to Exhibit 4.3 to 

the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.4

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5% Non-Cumulative Preferred Stock (par value $1.00 per share), dated March 23, 1998 (incorporated by reference to Exhibit 4.4 to the 

Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.5

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.1% Non-Cumulative Preferred Stock (par value $1.00 per share), dated September 23, 1998 (incorporated by reference to Exhibit 4.5 

to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.6

Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, 

Restrictions, Terms and Conditions of Variable Rate, Non-Cumulative Preferred Stock (par value $1.00 per share), dated September 29, 

1998 (incorporated by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.7

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.3% Non-Cumulative Preferred Stock (par value $1.00 per share), dated October 28, 1998 (incorporated by reference to Exhibit 4.7 to 

the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.8

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.1% Non-Cumulative Preferred Stock (par value $1.00 per share), dated March 19, 1999 (incorporated by reference to Exhibit 4.8 to 

the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.9

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.79% Non-Cumulative Preferred Stock (par value $1.00 per share), dated July 21, 1999 (incorporated by reference to Exhibit 4.9 to the 

Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.10

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Variable Rate, Non-Cumulative Preferred Stock (par value $1.00 per share), dated November 5, 1999 (incorporated by reference to 

Exhibit 4.10 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

* The SEC file number for the Registrant's Registration Statement on Form 10, Annual Reports on Form 10-K, Quarterly Reports on Form 10-

Q, and Current Reports on Form 8-K is 001-34139.

Exhibit Index

FREDDIE MAC | 2023 Form 10-K 280
Exhibit Description*

4.11

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Variable Rate, Non-Cumulative Preferred Stock (par value $1.00 per share), dated January 26, 2001 (incorporated by reference to Exhibit 

4.11 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.12

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Variable Rate, Non-Cumulative Preferred Stock (par value $1.00 per share), dated March 23, 2001 (incorporated by reference to Exhibit 

4.12 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.13

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.81% Non-Cumulative Preferred Stock (par value $1.00 per share), dated March 23, 2001 (incorporated by reference to Exhibit 4.13 to 

the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.14

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Variable Rate, Non-Cumulative Preferred Stock (par value $1.00 per share), dated May 30, 2001 (incorporated by reference to Exhibit 

4.14 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.15

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 6% Non-Cumulative Preferred Stock (par value $1.00 per share), dated May 30, 2001 (incorporated by reference to Exhibit 4.15 to the 

Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.16

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.7% Non-Cumulative Preferred Stock (par value $1.00 per share), dated October 30, 2001 (incorporated by reference to Exhibit 4.16 to 

the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.17

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.81% Non-Cumulative Preferred Stock (par value $1.00 per share), dated January 29, 2002 (incorporated by reference to Exhibit 4.17 

to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.18

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Variable Rate, Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated July 17, 2006 (incorporated by reference to 

Exhibit 4.18 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.19

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 6.42% Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated July 17, 2006 (incorporated by reference to Exhibit 

4.19 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.20

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.9% Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated October 16, 2006 (incorporated by reference to 

Exhibit 4.20 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.21

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.57% Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated January 16, 2007 (incorporated by reference to 

Exhibit 4.21 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.22

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 5.66% Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated April 16, 2007 (incorporated by reference to Exhibit 

4.22 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.23

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 6.02% Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated July 24, 2007 (incorporated by reference to Exhibit 

4.23 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

* The SEC file number for the Registrant's Registration Statement on Form 10, Annual Reports on Form 10-K, Quarterly Reports on Form 10-

Q, and Current Reports on Form 8-K is 001-34139.

Exhibit Index

FREDDIE MAC | 2023 Form 10-K 281
Exhibit Description*

4.24

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of 6.55% Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated September 28, 2007 (incorporated by reference to 

Exhibit 4.24 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.25

Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions 

of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock (par value $1.00 per share), dated December 4, 2007 (incorporated by 

reference to Exhibit 4.25 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)

4.26

Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, 

Restrictions, Terms and Conditions of Variable Liquidation Preference Senior Preferred Stock (par value $1.00 per share), dated 

September 27, 2012 (incorporated by reference to Exhibit 4.26 to the Registrant's Annual Report on Form 10-K filed on February 28, 2013)

4.27

Second Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, 

Restrictions, Terms and Conditions of Variable Liquidation Preference Senior Preferred Stock (par value $1.00 per share), dated January 1, 

2018 (incorporated by reference to Exhibit 4.27 to the Registrant's Annual Report on Form 10-K filed on February 15, 2018)

4.28

Third Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, 

Restrictions, Terms and Conditions of Variable Liquidation Preference Senior Preferred Stock (par value $1.00 per share), dated September 

30, 2019 (incorporated by reference to Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2019)

4.29

Fourth Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, 

Restrictions, Terms and Conditions of Variable Liquidation Preference Senior Preferred Stock (par value $1.00 per share), dated April 13, 

2021 (incorporated by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q filed on April 29, 2021)

4.30 Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

4.31

Federal Home Loan Mortgage Corporation Global Debt Facility Agreement, dated February 22, 2023 (incorporated by reference to Exhibit 

4.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 3, 2023)

10.1

Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as amended and restated effective January 1, 2008) 

(incorporated by reference to Exhibit 10.33 to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)†

10.2

First Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as amended and restated 

January 1, 2008) (incorporated by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K filed on February 24, 2010)†

10.3

Second Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as amended and restated 

January 1, 2008) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 28, 2011)†

10.4

Third Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as amended and restated 

January 1, 2008) (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 6, 2012)†

10.5

Fourth Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as amended and restated 

January 1, 2008) (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 7, 2013)†

10.6

Fifth Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan (as amended and restated 

January 1, 2008) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 25, 2013)†

* The SEC file number for the Registrant's Registration Statement on Form 10, Annual Reports on Form 10-K, Quarterly Reports on Form 10-

Q, and Current Reports on Form 8-K is 001-34139.

† This exhibit is a management contract or compensatory plan, contract, or arrangement.

Exhibit Index

FREDDIE MAC | 2023 Form 10-K 282
Exhibit Description*

10.7

Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan II (effective January 1, 2014) (incorporated by reference 

to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K filed on February 19, 2015)†

10.8

First Amendment to the Federal Home Loan Mortgage Corporation Supplemental Executive Retirement Plan II (effective January 1, 2014) 

(incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on August 4, 2015)†

10.9

Federal Home Loan Mortgage Corporation Long-Term Disability Plan (incorporated by reference to Exhibit 10.34 to the Registrant’s 

Registration Statement on Form 10 filed on July 18, 2008)†

10.10

First Amendment to the Federal Home Loan Mortgage Corporation Long-Term Disability Plan (incorporated by reference to Exhibit 10.35 to 

the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)†

10.11 Second Amendment to the Federal Home Loan Mortgage Corporation Long-Term Disability Plan (incorporated by reference to Exhibit 10.36 

to the Registrant’s Registration Statement on Form 10 filed on July 18, 2008)†

10.12

Third Amendment to the Federal Home Loan Mortgage Corporation Long-Term Disability Plan (incorporated by reference to Exhibit 10.21 to 

the Registrant's Annual Report on Form 10-K filed on February 18, 2016)†

10.13

Fourth Amendment to the Federal Home Loan Mortgage Corporation Long-Term Disability Plan (incorporated by reference to Exhibit 10.17 

to the Registrant's Annual Report on Form 10-K filed on February 16, 2017)†

10.14

Executive Management Compensation Program Recapture and Forfeiture Agreement (incorporated by reference to Exhibit 10.18 to the 

Registrant's Annual Report on Form 10-K filed on February 16, 2017)†

10.15

2020 Executive Management Compensation Program (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on 

Form 10-Q filed on October 30, 2019)†

10.16 2022 Executive Management Compensation Program (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on 

Form 10-Q filed on November 8, 2022)†

10.17

Restrictive Covenant and Confidentiality Agreement, dated June 4, 2021, between Freddie Mac and Michael DeVito (incorporated by 

reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed on July 29, 2021)†

10.18

Form of Restrictive Covenant and Confidentiality Agreement between the Federal Home Loan Mortgage Corporation and Executive Officers 

(incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed on July 29, 2021)†

10.19 Memorandum Agreement, dated May 4, 2021, between Freddie Mac and Michael J. DeVito (incorporated by reference to Exhibit 10.1 to 

the Registrant’s Quarterly Report on Form 10-Q filed on July 29, 2021)†

10.20

Memorandum Agreement, dated May 22, 2020, between Freddie Mac and Christian M. Lown (incorporated by reference to Exhibit 10.1 to 

the Registrant's Current Report on Form 8-K filed on June 2, 2020)†

* The SEC file number for the Registrant's Registration Statement on Form 10, Annual Reports on Form 10-K, Quarterly Reports on Form 10-

Q, and Current Reports on Form 8-K is 001-34139.

† This exhibit is a management contract or compensatory plan, contract, or arrangement.

Exhibit Index

FREDDIE MAC | 2023 Form 10-K 283
Exhibit Description*

10.21 Description of Non-Employee Director Compensation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 

8-K filed on December 23, 2008)†

10.22 Form of Indemnification Agreement between the Federal Home Loan Mortgage Corporation and Executive Officers (incorporated by 

reference to Exhibit 10.27 to the Registrant's Annual Report on Form 10-K filed on February 10, 2022)†

10.23 Form of Indemnification Agreement between the Federal Home Loan Mortgage Corporation and Outside Directors (incorporated by 

reference to Exhibit 10.28 to the Registrant's Annual Report on Form 10-K filed on February 10, 2022)†

10.24 PC Master Trust Agreement, dated July 30, 2022 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 

10-Q filed November 8, 2022)

10.25

UMBS and MBS Master Trust Agreement, dated July 30, 2022 (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly 

Report on Form 10-Q filed on November 8, 2022)

10.26

Amended and Restated Senior Preferred Stock Purchase Agreement dated as of September 26, 2008, between the United States 

Department of the Treasury and Federal Home Loan Mortgage Corporation, acting through the Federal Housing Finance Agency as its duly 

appointed Conservator (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 14, 

2008)

10.27

Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of May 6, 2009, between the United States 

Department of the Treasury and Federal Home Loan Mortgage Corporation, acting through the Federal Housing Finance Agency as its duly 

appointed Conservator (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2009)

10.28

Second Amendment dated as of December 24, 2009, to the Amended and Restated Senior Preferred Stock Purchase Agreement dated as 

of September 26, 2008, between the United States Department of the Treasury and Federal Home Loan Mortgage Corporation, acting 

through the Federal Housing Finance Agency as its duly appointed Conservator (incorporated by reference to Exhibit 10.1 to the 

Registrant’s Current Report on Form 8-K filed on December 29, 2009)

10.29

Third Amendment dated as of August 17, 2012, to the Amended and Restated Senior Preferred Stock Purchase Agreement dated as of 

September 26, 2008, between the United States Department of the Treasury and Federal Home Loan Mortgage Corporation, acting through 

the Federal Housing Finance Agency as its duly appointed Conservator (incorporated by reference to Exhibit 10.1 to the Registrant’s 

Current Report on Form 8-K filed on August 17, 2012)

10.30

Letter Agreement dated December 21, 2017 between the United States Department of the Treasury and the Federal Home Loan Mortgage 

Corporation, acting through the Federal Housing Finance Agency as its Conservator (incorporated by reference to Exhibit 10.1 to the 

Registrant's Current Report on Form 8-K filed on December 21, 2017)

10.31

Letter Agreement dated September 27, 2019 between the United States Department of the Treasury and the Federal Home Loan Mortgage 

Corporation, acting through the Federal Housing Finance Agency as its Conservator (incorporated by reference to Exhibit 10.1 to the 

Registrant's Current Report on Form 8-K filed on October 1, 2019)

10.32

Letter Agreement dated January 14, 2021 between the United States Department of the Treasury and the Federal Home Loan Mortgage 

Corporation, acting through the Federal Housing Finance Agency as its Conservator (incorporated by reference to Exhibit 10.1 to the 

Registrant's Current Report on Form 8-K filed on January 19, 2021)

10.33

Letter Agreement dated September 14, 2021 between the United States Department of the Treasury and the Federal Home Loan Mortgage 

Corporation, acting through the Federal Housing Finance Agency as its Conservator (incorporated by reference to Exhibit 10.1 to the 

Registrant's Current Report on Form 8-K filed on September 20, 2021)

* The SEC file number for the Registrant's Registration Statement on Form 10, Annual Reports on Form 10-K, Quarterly Reports on Form 10-

Q, and Current Reports on Form 8-K is 001-34139.

† This exhibit is a management contract or compensatory plan, contract, or arrangement.

Exhibit Index

FREDDIE MAC | 2023 Form 10-K 284
Exhibit Description*

10.34 Warrant to Purchase Common Stock, dated September 7, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current 

Report on Form 8-K filed on September 11, 2008)

10.35 Fourth Amended and Restated Limited Liability Company Agreement to Common Securitization Solutions, LLC, dated as of January 21, 

2021 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed on April 28, 2022)

10.36 Memorandum Agreement, dated February 3, 2022, between Freddie Mac and Heidi L. Mason†

10.37 Form of Senior Executive Relocation Repayment Agreement†

24.1 Powers of Attorney

31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)

31.2 Certification of Executive Vice President and Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2 Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within 

the Inline XBRL document

101.SCH XBRL Taxonomy Extension Schema

101.CAL XBRL Taxonomy Extension Calculation

101.DEF XBRL Taxonomy Extension Definition

101.LAB XBRL Taxonomy Extension Label

101.PRE XBRL Taxonomy Extension Presentation

104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are 

embedded within the Inline XBRL document

* The SEC file number for the Registrant's Registration Statement on Form 10, Annual Reports on Form 10-K, Quarterly Reports on Form 10-

Q, and Current Reports on Form 8-K is 001-34139.

† This exhibit is a management contract or compensatory plan, contract, or arrangement.

Exhibit Index

FREDDIE MAC | 2023 Form 10-K 285
Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this 

report to be signed on its behalf by the undersigned thereunto duly authorized.

Federal Home Loan Mortgage Corporation

By: /s/ Michael J. DeVito

Michael J. DeVito

Chief Executive Officer

Date: February 14, 2024

Signatures

FREDDIE MAC | 2023 Form 10-K 286
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 

persons on behalf of the registrant and in the capacities and on the dates indicated. 

Signature Capacity Date

/s/ Sara Mathew* Non-Executive Chair of the Board February 14, 2024

Sara Mathew

/s/ Michael J. DeVito Chief Executive Officer and Director February 14, 2024

Michael J. DeVito (Principal Executive Officer)

/s/ Christian M. Lown Executive Vice President and Chief Financial Officer February 14, 2024

Christian M. Lown (Principal Financial Officer)

/s/ Donald F. Kish Senior Vice President — Corporate Controller and February 14, 2024

Donald F. Kish Principal Accounting Officer (Principal Accounting Officer)

/s/ Mark H. Bloom* Director February 14, 2024

Mark H. Bloom

/s/ Kathleen L. Casey* Director February 14, 2024

Kathleen L. Casey

/s/ Kevin G. Chavers* Director February 14, 2024

Kevin G. Chavers

/s/ Launcelot F. Drummond* Director February 14, 2024

Launcelot F. Drummond

/s/ Aleem Gillani* Director February 14, 2024

Aleem Gillani

/s/ Mark B. Grier* Director February 14, 2024

Mark B. Grier

/s/ Luke S. Hayden* Director February 14, 2024

Luke S. Hayden

/s/ Christopher E. Herbert* Director February 14, 2024

Christopher E. Herbert

/s/ Grace A. Huebscher* Director February 14, 2024

Grace A. Huebscher

/s/ Allan P. Merrill* Director February 14, 2024

Allan P. Merrill

/s/ Alberto G. Musalem* Director February 14, 2024

Alberto G. Musalem

*By: /s/ Alicia S. Myara

Alicia S. Myara

Attorney-in-Fact

Signatures

FREDDIE MAC | 2023 Form 10-K 287
Form 10-K Index

Item Number Page(s)

PART I

Item 1 Business 1, 4-9, 24-35 40-44, 

101-110

Item 1A Risk Factors 112-130

Item 1B Unresolved Staff Comments Not Applicable

Item 1C Cybersecurity 85-87

Item 2 Properties 9

Item 3 Legal Proceedings 131

Item 4 Mine Safety Disclosures Not Applicable

PART II

Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer 

Purchases of Equity Securities 132

Item 6 Reserved Not Applicable

Item 7 Management's Discussion and Analysis of Financial Condition and Results of 

Operations

1-5, 11-23, 36-39, 

45-100, 111

Item 7A Quantitative and Qualitative Disclosures About Market Risk 79-84

Item 8 Financial Statements and Supplementary Data 136-216

Item 9 Changes in and Disagreements With Accountants on Accounting and Financial 

Disclosure Not Applicable

Item 9A Controls and Procedures 88, 134-135, 217-218

Item 9B Other Information 219

Item 9C Disclosure Regarding Foreign Jurisdiction that Prevent Inspection Not Applicable

PART III

Item 10 Directors, Executive Officers and Corporate Governance 49-51, 220-241

Item 11 Executive Compensation 237-238, 242-264

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related 

Stockholder Matters 265-266

Item 13 Certain Relationships and Related Transactions, and Director Independence 229-230, 267-268

Item 14 Principal Accounting Fees and Services 269-270

PART IV

Item 15 Exhibits and Financial Statement Schedules 271, 280-285

Item 16 Form 10-K Summary Not Applicable

Signatures 286-287

Index

FREDDIE MAC | 2023 Form 10-K 288
Exhibit 4.30

Description of Registrant’s Securities

Registered Pursuant to Section 12 of

The Securities Exchange Act of 1934

Federal Home Loan Mortgage Corporation (Freddie Mac) has 21 classes of securities registered under Section 12 of the 

Securities Exchange Act of 1934, as amended: (1) our voting common stock, no par value per share (Common Stock) and (2) 

twenty series of perpetual, non-cumulative preferred stock, par value of $1.00 per share (Preferred Stock). We also have four 

classes of perpetual, non-cumulative preferred stock outstanding that were issued through private placement and are not 

registered under Section 12.

Since September 2008, we have been operating in conservatorship, with the Federal Housing Finance Agency (FHFA) as our 

Conservator. In connection with our entry into conservatorship, we, through FHFA, in its capacity as Conservator, entered into 

the Senior Preferred Stock Purchase Agreement with the U.S. Department of the Treasury (Treasury). Under this Purchase 

Agreement, we issued Treasury one million shares of Variable Liquidation Preference Senior Preferred Stock (Senior Preferred 

Stock) and a warrant to purchase, for a nominal price, shares of our Common Stock equal to 79.9% of the total number of 

shares of our Common Stock outstanding on a fully diluted basis at the time the warrant is exercised (Warrant). The 

conservatorship, Senior Preferred Stock Purchase Agreement as amended and restated (Purchase Agreement), Senior 

Preferred Stock, and Warrant have a significant impact on the rights, preferences, and privileges of the holders of our Common 

Stock and Preferred Stock.

The following description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by 

reference to the Certificate of Designation for the Common Stock or class of Preferred Stock (as applicable, each a Certificate 

of Designation), Federal Home Loan Mortgage Corporation Act, as amended (our Charter), and our Amended and Restated 

Bylaws (Bylaws), each of which are incorporated by reference as an exhibit to this Annual Report on Form 10-K. We encourage 

you to read the Certificates of Designation, Charter, Bylaws, Purchase Agreement, and applicable provisions of Virginia law for 

additional information.

I. Description of Common Stock

General

Under Section 304 of our Charter, we are authorized to issue an unlimited number of shares of Common Stock. The Common 

Stock has the terms set forth in the Certificate of Designation. Computershare Trust Company, N.A., is the transfer agent, 

dividend disbursing agent, and registrar for the Common Stock.

Authorized Issuance

Our Common Stock was created by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Under 

Section 731(d) of this Act, shares of our then-outstanding senior participating preferred stock were automatically converted into 

an equivalent number of shares of Common Stock. 

The outstanding shares of our Common Stock are fully paid and non-assessable. Any additional shares of Common Stock that 

we issue will be fully paid and non-assessable. Our Board of Directors may increase the authorized number of shares of 

Common Stock at any time, without the consent of the holders of Common Stock.

Under the Purchase Agreement, we cannot repurchase our Common Stock without Treasury’s consent.

Dividends

Dividends on shares of our Common Stock are not mandatory. Holders of our Common Stock are entitled to receive dividends 

when, as, and if declared by our Board of Directors out of assets legally available therefor. The Board of Directors fixes both the 

amount of dividends, if any, to be paid to holders of our outstanding Common Stock and the dates of payment. We will pay 

each dividend on shares of Common Stock to the holders of record of outstanding shares as they appear in our books and 

records on the record date fixed by our Board of Directors. The record date must not be earlier than 45 days or later than ten 

days before a dividend payment date. 

Our payment of dividends is subject to the following restrictions:

• Restrictions Relating to the Conservatorship - During conservatorship, any dividends will be declared by, and paid 

at the direction of, the Conservator, acting as successor to the rights, titles, powers, and privileges of the Board of 

Directors. The Conservator has prohibited us from paying any dividends on our Common Stock. FHFA has instructed 

our Board of Directors that it should consult with and obtain the approval of FHFA before taking actions involving 

dividends. In addition, FHFA has adopted a regulation prohibiting us from making capital distributions during 

conservatorship, except as authorized by the Director of FHFA.
• Restrictions Under the Purchase Agreement - The Purchase Agreement prohibits us and any of our subsidiaries 

from declaring or paying any dividends on the Common Stock without the prior written consent of the Treasury.

• Restrictions Under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended 

(GSE Act) - Under the GSE Act, FHFA has authority to prohibit capital distributions, including payment of dividends, if 

we fail to meet applicable capital requirements. However, our capital requirements have been suspended during 

conservatorship.

• Restrictions Under our Charter - Without regard to our capital classification, we must obtain prior written approval of 

FHFA to make any capital distribution that would decrease total capital to an amount less than the risk-based capital 

level or that would decrease core capital to an amount less than the minimum capital level. As noted above, our capital 

requirements have been suspended during conservatorship.

• Restrictions Relating to Preferred Stock - Payment of dividends on our Common Stock is also subject to the prior 

payment of dividends on our 24 series of preferred stock and one series of Senior Preferred Stock outstanding. 

Payment of dividends on all outstanding preferred stock, other than the Senior Preferred Stock, is subject to the prior 

payment of dividends on the Senior Preferred Stock.

Voting Rights

During conservatorship, the holders of our Common Stock have no voting rights. Upon its appointment as Conservator, FHFA 

immediately succeeded to the voting rights of holders of our Common Stock, including the right to elect members of our Board 

of Directors.

If the company was not in conservatorship, holders of our Common Stock would have the right to vote:

• For the election of members of our Board of Directors, to the extent prescribed by applicable federal law;

• With respect to amendment, alteration, supplementation, or repeal of the provisions of the Certificate of Designation 

(described below);

• With respect to such other matters, if any, as may be prescribed by our Board of Directors, in its sole discretion, or by 

applicable federal law. 

Holders of our Common Stock are not granted any right under our Charter or the Certificate of Designation to vote on specified 

matters in which stockholders in business corporations under state law are typically entitled to vote, such as amendments to 

our Charter or changes in our capital structure.

Holders of our Common Stock entitled to vote are entitled to one vote per share on all matters presented to them for their vote. 

Holders may cast votes in person or by proxy at a meeting of the holders of our Common Stock or, if so determined by our 

Board of Directors, by written consent of the holders of the requisite number of shares of our Common Stock. In connection 

with any meeting of the holders of shares of our Common Stock, our Board of Directors will fix a record date, which must not 

be earlier than 60 days or later than 10 days before the date of such meeting. The holders of record of shares of our Common 

Stock on the record date are entitled to notice of, and to vote at, any such meeting and any adjournment. We may establish 

reasonable rules and procedures regarding the solicitation of the vote of holders of our Common Stock at any such meeting or 

otherwise, the conduct of such vote, quorum requirements and the requisite number or percentage of affirmative votes required 

for the approval of any matter and as to all related questions. Such rules and procedures shall conform to the requirements of 

any national securities exchange on which our Common Stock may be listed.

Ownership Reports

The Certificate of Designation includes provisions that require certain persons to report to us their beneficial ownership of our 

Common Stock. Except as otherwise provided in the Certificate of Designation, any “beneficial owner” (as that term is defined 

in Rule 13d-3 under the Exchange Act) of the outstanding Common Stock must report such ownership to us and the NYSE (and 

to any other exchange on which our Common Stock is then listed). The required reports of beneficial ownership and any 

amendments must be submitted in writing to us and each exchange where the Common Stock is listed on the forms, in the 

time periods, and in the manner as would be required by Sections 13(d) and 13(g) of the Exchange Act and the rules and 

regulations thereunder if the Common Stock were registered under Section 12 of the Exchange Act. 

To ensure compliance with the beneficial ownership reporting requirements relating to our Common Stock, we may refuse to 

permit the voting of any shares of Common Stock in excess of 5% beneficially owned by any person who fails to comply with 

those requirements. Any beneficial owner of our Common Stock that we believe to be in violation of the beneficial ownership 

reporting requirements must respond to our inquiries for the purpose of determining the existence, nature, or extent of any such 

violation. If a response satisfactory to us has not been received within five business days after the date on which the inquiry 

was mailed, the shares of our Common Stock to which the inquiry relates will be considered for all purposes to be beneficially 

owned in violation of the reporting requirements, and we are authorized to take appropriate remedial actions, including the 

refusal to permit the voting of those excess shares. 
No Preemptive Rights and No Conversion  

No holder of our Common Stock has any preemptive right to purchase or subscribe for any of our other shares, rights, options, 

or other securities. The holders of shares of our Common Stock do not have any right to convert their shares into or exchange 

their shares for any of our other classes or series of stock or other securities or other obligations of Freddie Mac. 

No Redemption  

We do not have the right to redeem any shares of our Common Stock, and no holders of our Common Stock have the right to 

require us to redeem their shares. 

No Sinking Fund

Our Common Stock is not subject to any sinking fund, which is a separate capital reserve maintained to pay stockholders with 

preferred rights for their investment in the event of liquidation or redemption.

Liquidation Rights  

Upon our dissolution, liquidation, or winding up, after payment of or provision for our liabilities and the expenses of our 

dissolution, liquidation, or winding up, and after any payment or distribution has been made on any of our other classes or 

series of stock ranking prior to our Common Stock upon liquidation, the holders of the outstanding shares of our Common 

Stock will be entitled to receive out of our assets available for distribution to stockholders, before any payment or distribution is 

made on any of our other classes or series of stock ranking junior to Common Stock upon liquidation, the amount of $0.21 per 

share, plus a sum equal to all dividends declared but unpaid on their shares to the date of final distribution. The holders of the 

outstanding shares of any class or series of our stock ranking prior to, on a parity with, or junior to our Common Stock upon 

liquidation will also receive out of those assets payment of any corresponding preferential amount to which the holders of that 

stock may, by the terms thereof, be entitled. No stock with that corresponding right currently exists. The remaining balance of 

any of our assets available for distribution to stockholders upon a dissolution, liquidation or winding up will be distributed to the 

holders of our outstanding Common Stock in the aggregate. The Senior Preferred Stock has a liquidation preference that takes 

priority over both our Common Stock and the 24 outstanding classes of our preferred stock. We are authorized to issue an 

unlimited amount of preferred stock.

Neither the sale of all or substantially all of our property or business, nor our merger, consolidation, or combination into or with 

any other corporation or entity, will be deemed to be a dissolution, liquidation, or winding up for the purpose of these provisions 

on liquidation rights. 

Additional Classes or Series of Stock

We have the right to create and issue additional classes or series of stock ranking prior to, on a parity with, or junior to our 

Common Stock, as to dividends, liquidation, or otherwise, without the consent of holders of our Common Stock. 

Amendments  

Without the consent of the holders of our Common Stock, we have the right to amend, alter, supplement, or repeal any terms of 

our Common Stock in the Certificate of Designation to cure any ambiguity, to correct or supplement any term that may be 

defective or inconsistent with any other term, or to make any other provisions so long as such action does not materially and 

adversely affect the interests of the holders of our Common Stock. Otherwise, the Certificate of Designation may be amended, 

altered, supplemented, or repealed only with the consent of the holders of at least two-thirds of the outstanding shares of our 

Common Stock. The creation of additional classes and series of stock whether ranking prior to, on a parity with, or junior to our 

Common Stock, or a split or reverse split of our Common Stock (including an attendant adjustment to its par value), does not 

require any consent. As a consequence, the rights of holders of our Common Stock could be adversely affected by the creation 

of additional classes or series of stock. The Conservator currently holds voting rights on any such matters requiring consent of 

the holders of our Common Stock. 

Listing

On July 8, 2010, we delisted our Common Stock from the NYSE pursuant to a directive by our Conservator. Our Common 

Stock is traded exclusively in the OTCQB Marketplace under the ticker symbol FMCC. We expect that our Common Stock will 

continue to trade in the OTCQB Marketplace so long as market makers demonstrate an interest in trading the Common Stock.

II. Description of Preferred Stock

Summary of Key Terms and Listing 

Under Section 306(f) of our Charter, we are authorized to issue an unlimited number of shares of preferred stock, on such terms 

and conditions as the Board of Directors shall prescribe. Each class of the Preferred Stock has the terms set forth in its 

Certificate of Designation. Computershare Trust Company, N.A., is the transfer agent, dividend disbursing agent, and registrar 

for the Preferred Stock.
On July 8, 2010, we delisted our Preferred Stock from the NYSE pursuant to a directive by our Conservator. Our Preferred 

Stock is traded exclusively in the OTCQB Marketplace. We expect that our Preferred Stock will continue to trade in the OTCQB 

Marketplace so long as market makers demonstrate an interest in trading the Preferred Stock.

On May 11, 2023, we posted fallback information on our legacy LIBOR-indexed securities, including the classes of our 

Preferred Stock that used either three-month LIBOR or 12-month LIBOR as their reference rates. Beginning on July 1, 2023, 

those classes transitioned from three-month LIBOR and 12-month LIBOR to spread-adjusted three-month CME Term SOFR 

and spread-adjusted 12-month CME Term SOFR, respectively.

The table below provides a summary of the Preferred Stock outstanding, including dividend rates, issue dates, shares 

authorized and outstanding, redemption prices per share, total outstanding balances, earliest redemption dates, and ticker 

symbols. 

(Amounts in millions, except 

redemption price per share) Issue Date

Shares

Authorized

Shares

Outstanding

Redemption

Price per

Share

Total

Outstanding

Balance

Redeemable

On or After

OTCQB

Symbol

1996 Variable-rate(1) April 26, 1996 5.00 5.00 $50.00 $250 June 30, 2001 FMCCI

5% March 23, 1998 8.00 8.00 50.00 400 March 31, 2003 FMCKK

1998 Variable-rate(2) Sept 23/29, 1998 4.40 4.40 50.00 220 Sept 30, 2003 FMCCG

5.10% Sept 23, 1998 8.00 8.00 50.00 400 Sept 30, 2003 FMCCH

5.79% July 21, 1999 5.00 5.00 50.00 250 June 30, 2009 FMCCK

1999 Variable-rate(3) November 5, 1999 5.75 5.75 50.00 287 December 31, 2004 FMCCL

2001 Variable-rate(4) January 26, 2001 6.50 6.50 50.00 325 March 31, 2003 FMCCM

2001 Variable-rate(5) March 23, 2001 4.60 4.60 50.00 230 March 31, 2003 FMCCN

5.81% March 23, 2001 3.45 3.45 50.00 173 March 31, 2011 FMCCO

6% May 30, 2001 3.45 3.45 50.00 173 June 30, 2006 FMCCP

2001 Variable-rate(6) May 30, 2001 4.02 4.02 50.00 201 June 30, 2003 FMCCJ

5.70% October 30, 2001 6.00 6.00 50.00 300 December 31, 2006 FMCKP

2006 Variable-rate(7) July 17, 2006 15.00 15.00 50.00 750 June 30, 2011 FMCCS

6.42% July 17, 2006 5.00 5.00 50.00 250 June 30, 2011 FMCCT

5.90% October 16, 2006 20.00 20.00 25.00 500 Sept 30, 2011 FMCKO

5.57% January 16, 2007 44.00 44.00 25.00 1,100 December 31, 2011 FMCKM

5.66% April 16, 2007 20.00 20.00 25.00 500 March 31, 2012 FMCKN

6.02% July 24, 2007 20.00 20.00 25.00 500 June 30, 2012 FMCKL

6.55% Sept 28, 2007 20.00 20.00 25.00 500 Sept 30, 2017 FMCKI

2007 Fixed-to-floating rate(8) December 4, 2007 240.00 240.00 25.00 6,000 December 31, 2012 FMCKJ

(1) Dividend rate resets quarterly and is equal to the sum of spread-adjusted three-month CME Term SOFR plus 1% divided by 1.377. The dividend rate is capped at 

9.00%. 

(2) Dividend rate resets quarterly and is equal to the sum of spread-adjusted three-month CME Term SOFR plus 1% divided by 1.377. The dividend rate is capped at 

7.50%. 

(3) Dividend rate resets on January 1 every five years after January 1, 2005 based on a five-year Constant Maturity Treasury (CMT) rate. The dividend rate is capped at 

11.00%. Optional redemption on December 31, 2004 and on December 31 every five years thereafter. 

(4) Dividend rate resets on April 1 every two years after April 1, 2003 based on the two-year CMT rate plus 0.10%. The dividend rate is capped at 11.00%. Optional 

redemption on March 31, 2003 and on March 31 every two years thereafter. 

(5) Dividend rate resets on April 1 every year based on spread-adjusted 12-month CME Term SOFR minus 0.20%. The dividend rate is capped at 11.00%. Optional 

redemption on March 31, 2003 and on March 31 every year thereafter. 

(6) Dividend rate resets on July 1 every two years after July 1, 2003 based on the two-year CMT rate plus 0.20%. The dividend rate is capped at 11.00%. Optional 

redemption on June 30, 2003 and on June 30 every two years thereafter. 

(7) Dividend rate resets quarterly and is equal to the sum of spread-adjusted three-month CME Term SOFR plus 0.50% but not less than 4.00%. 

(8) Dividend rate was set at an annual fixed rate of 8.375% from December 4, 2007 through December 31, 2012. For the period beginning on or after January 1, 2013, 

dividend rate resets quarterly and is equal to the higher of: (a) the sum of spread-adjusted three-month CME Term SOFR plus 4.16% per annum or (b) 7.875% per 

annum. Optional redemption on December 31, 2012 and on December 31 every five years thereafter. 

The outstanding shares of our Preferred Stock are fully paid and non-assessable. Any additional shares of Preferred Stock that 

we issue will be fully paid and non-assessable. Our Board of Directors may increase the authorized number of shares of any 

class of our Preferred Stock at any time, without the consent of the holders of any class of our Preferred Stock.
The Preferred Stock shall rank prior to the Common Stock to the extent provided in the Certificate of Designation; shall rank, as 

to both dividends and distributions upon liquidation, on a parity with the other classes of Preferred Stock as well as the four 

classes of perpetual, non-cumulative preferred stock that we issued through private placements; and shall rank junior to the 

Senior Preferred Stock.

Dividends and Dividend Restrictions

Dividends on shares of our Preferred Stock are not mandatory and are non-cumulative. Holders of our Preferred Stock are 

entitled to receive dividends when, as, and if declared by our Board of Directors out of assets legally available therefor on the 

payment dates as prescribed in the applicable Certificate of Designation. The Preferred Stock has the dividend rates as 

described in the table above. We will pay each dividend on shares of Preferred Stock to the holders of record of outstanding 

shares as they appear in our books and records on the record date fixed by our Board of Directors. The record date must not 

be earlier than 45 days or later than 10 days before a dividend payment date. 

Our payment of dividends is subject to the following restrictions:

• Restrictions Relating to the Conservatorship - During conservatorship, any dividends will be declared by, and paid 

at the direction of, the Conservator, acting as successor to the rights, titles, powers, and privileges of the Board of 

Directors. The Conservator has prohibited us from paying any dividends on our Preferred Stock. FHFA has instructed 

our Board of Directors that it should consult with and obtain the approval of FHFA before taking actions involving 

dividends. In addition, FHFA has adopted a regulation prohibiting us from making capital distributions during 

conservatorship, except as authorized by the Director of FHFA.

• Restrictions Under the Purchase Agreement - The Purchase Agreement prohibits us and any of our subsidiaries 

from declaring or paying any dividends on our Preferred Stock without the prior written consent of Treasury.

• Restrictions Under the GSE Act - Under the GSE Act, FHFA has authority to prohibit capital distributions, including 

payment of dividends, if we fail to meet applicable capital requirements. However, our capital requirements have been 

suspended during conservatorship.

• Restrictions Under our Charter - Without regard to our capital classification, we must obtain prior written approval of 

FHFA to make any capital distribution that would decrease total capital to an amount less than the risk-based capital 

level or that would decrease core capital to an amount less than the minimum capital level. As noted above, our capital 

requirements have been suspended during conservatorship.

• Restrictions Relating to Senior Preferred Stock - Payment of dividends on our Preferred Stock is subject to the 

prior payment of dividends on our Senior Preferred Stock.

Optional Redemption

Freddie Mac has the option to redeem the Preferred Stock, in whole or in part, out of funds legally available therefor, at the 

redemption price prescribed in the applicable Certificate of Designation plus the amount of any dividend that would otherwise 

be payable for the dividend period that ends on the date of redemption, whether or not declared. The Preferred Stock has the 

redemption prices and timing limitations as described in the table above. The dividend that would otherwise be payable will be 

included in the redemption price of the shares and will not be separately payable. 

If less than all of the outstanding shares are to be redeemed, Freddie Mac will select shares to be redeemed from the 

outstanding shares by lot or pro rata or by any other method which Freddie Mac in its sole discretion decides equitable.

During conservatorship and pursuant to the Purchase Agreement, we cannot redeem the Preferred Stock without FHFA and 

Treasury consent.

No Voting Rights

The shares of Preferred Stock shall not have any voting rights, general or special, other than with respect to amendment, 

alteration, supplementation, or repeal of the provisions of the applicable Certificate of Designation (described below).

During conservatorship, the holders of Preferred Stock have no voting rights. Upon its appointment as Conservator, FHFA 

immediately succeeded to the voting rights of holders of our Preferred Stock.

No Preemptive Rights and No Conversion

No holder of our Preferred Stock has any preemptive right to purchase or subscribe for any other shares, rights, options, or 

other securities. The holders of shares of our Preferred Stock do not have any right to convert their shares into or exchange 

their shares for any of our other classes or series of stock or other securities or other obligations of Freddie Mac. 

Liquidation Rights and Preference  

Upon our dissolution, liquidation, or winding up, after payment of or provision for our liabilities and the expenses of our 

dissolution, liquidation, or winding up, and after any payment or distribution has been made on any of our other classes or 

series of stock ranking prior to our Preferred Stock upon liquidation, the holders of the outstanding shares of our Preferred 

Stock will be entitled to receive out of our assets available for distribution to stockholders, before any payment or distribution is 
made on the Common Stock or any of our other classes or series of stock ranking junior to the Preferred Stock upon 

liquidation, the amount of the liquidation preference in the applicable Certificate of Designation (which amount equals the 

redemption price per share summarized in the table above), plus a sum equal to any dividend that would otherwise be payable 

for the dividend period through and including the date of final distribution. The holders of the outstanding shares of any class or 

series of our stock ranking on parity with the Preferred Stock upon liquidation shall be entitled to receive out of our assets 

available for distribution to shareholders, before any such payment or distribution shall be made on the Common Stock or any 

other class or series of stock of Freddie Mac ranking junior to the Preferred Stock and to such parity stock upon liquidation, any 

corresponding preferential amount to which the holders of that stock may, by the terms thereof, be entitled. The remaining 

balance of any of our assets available for distribution to stockholders upon a dissolution, liquidation, or winding up will be 

distributed to the holders of our outstanding Common Stock in the aggregate. If our assets available for distribution to 

stockholders shall be insufficient for the payment of the amount which the holders of the outstanding Preferred Stock shall be 

entitled to receive upon such dissolution, liquidation, or winding up, all of our assets available for distribution to stockholders 

shall be distributed to the holders of outstanding shares of Preferred Stock pro rata, so that the amounts so distributed shall 

bear to each other the same ratio that the respective distributive amounts to which they are so entitled bear to each other, and 

the holders of outstanding shares of Preferred Stock shall not be entitled to any further participation in any distribution of our 

assets. The Senior Preferred Stock has a liquidation preference that takes priority over the 24 outstanding classes of our 

preferred stock. We are authorized to issue an unlimited amount of preferred stock.

Neither the sale of all or substantially all of our property or business, nor our merger, consolidation, or combination into or with 

any other corporation or entity, will be deemed to be a dissolution, liquidation, or winding up for the purpose of these provisions 

on liquidation rights. 

Additional Classes or Series of Stock

We have the right to authorize, create, and issue additional classes or series of stock ranking prior to, on a parity with, or junior 

to our Preferred Stock, as to dividends, liquidation, or otherwise, without the consent of holders of our Preferred Stock. 

Amendments

Without the consent of the holders of the Preferred Stock, we have the right to amend, alter, supplement, or repeal the terms of 

any series of our Preferred Stock to cure any ambiguity, to correct or supplement any provision that may be defective or 

inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under the 

applicable Certificate of Designation so long as such action does not materially and adversely affect the interests of the holders 

of the applicable series of Preferred Stock. Otherwise, the terms of any series of our Preferred Stock may be amended, altered, 

supplemented, or repealed only with the consent of the holders of at least two-thirds of the outstanding shares of the 

applicable series of our Preferred Stock. The creation and issuance of additional classes and series of stock, or the issuance of 

additional shares of any existing class or series of our stock, whether ranking prior to, on a parity with, or junior to our Preferred 

Stock does not require any consent. As a consequence, the rights of holders of our Preferred Stock could be adversely affected 

by the creation of additional classes or series of stock. The Conservator currently holds voting rights on any such matters 

requiring consent of the holders of our Preferred Stock.
February 3, 2022

 Heidi Mason

*Address Redacted*

Dear Heidi:

Congratulations!

On behalf of the hiring team at Freddie Mac, I am pleased to extend this offer of employment to you for the 

position of Executive Vice President – General Counsel, effective on a mutually agreed upon start date, 

reporting to Michael DeVito, our Chief Executive Officer.

Since 1970, we’ve made home ownership and rental housing more accessible and affordable for more 

people across the nation. Our promise to seller/servicers, homeowners, renters, investors, and the 

American taxpayer is simple: we will build a better Freddie Mac and a better housing finance system. It’s a 

big promise, but one we’ve repeatedly delivered on.

As we look to the future, we need leaders who can continue positioning Freddie Mac as a competitive, 

innovative force in the industry. With your skills and experiences, you are the right leader, right now, to help 

us execute on our mission for our customers and win in the commercial marketplace.

Congratulations again, and I look forward to you joining the Freddie Mac team!

Below is an outline of the terms and conditions of your employment with us, including your compensation 

and benefits, which have been approved by the Compensation & Human Capital Committee of the Board of 

Directors and Federal Housing Finance Agency (the “FHFA”).

Compensation

Your target total direct compensation (“Target TDC”) will be $2,343,600, which will be pro-rated in the first 

calendar year of employment based on your date of hire. Your Target TDC will consist of two components – 

Base Salary and Deferred Salary – that are both paid in cash and are summarized below.

Base Salary – The annualized amount of your Base Salary will be $600,000.

Deferred Salary – The annualized amount of your Deferred Salary will be $1,743,600 and is comprised of 

two components noted below.

Exhibit 10.36
• At-Risk Deferred Salary – This portion of your Deferred Salary is equal to thirty percent (30%) of 

your Target TDC, or $703,080, up to half of which may be reduced based on the company’s 

performance against objectives established by FHFA and up to half of which may be reduced based 

on both the company’s performance against corporate objectives and your performance against 

individual objectives. At-Risk Deferred Salary earned in each quarter will be paid on the last regular 

pay date in the corresponding quarter of the second calendar year following the quarter in which it 

was earned.

• Fixed Deferred Salary – This portion of your Deferred Salary is equal to your Target TDC less your 

Base Salary and At-Risk Deferred Salary and is equal to $1,040,520. Fixed Deferred Salary earned 

in each quarter will be paid on the last regular pay date in the corresponding quarter of the following 

calendar year.

Your compensation is governed by the Executive Management Compensation Program (“ECMP”). To 

participate in the ECMP you must agree to the terms of the ECMP Document, which outlines the terms and 

conditions of the compensation program for senior officers.

Relocation

You are eligible to participate in the Senior Officer Relocation Program, which will be provided to you under 

separate cover.

You understand and agree that if you choose to elect to use the Senior Officer Relocation Program, you 

must use it within two years of your start date.

Benefits

Our stage-in-life benefits and wellness offerings are some of the best in the industry and are customizable 

for you to meet the unique needs of you and your family—whether at work or at home, on the job or off. As 

an officer, you will also be eligible to participate in the Supplemental Executive Retirement Program (SERP) 

after completing one year of service.

The medical, dental and vision benefits you elect will become effective on the first day of the month after 

your first day of employment. You will automatically be enrolled to contribute to the 401(k) Plan shortly 

after you begin employment and become eligible for company contributions after one year of service.

During your new hire orientation, we will provide an overview of our comprehensive offerings that you can 

take advantage of during your career with us.

Administration

As discussed, our background check partner completed the following series of verifications:

• Verified the information you provided on your application

• Completed a formal background check

• Conducted professional references

Heidi L. Mason

February 3, 2022

2
You must complete the drug screen within two (2) business days of being contacted. Refusal to submit to 

screening or receiving a positive test score may result in termination of employment. In the event you fail 

any component of your background check (drug, criminal, etc.) and your employment is terminated, you will 

not be a Severance Eligible Employee under the Severance policy (3-254).

General Terms and Conditions

Restrictive Covenant and Confidentiality Agreement

The terms of your compensation provided in this letter are contingent upon your agreement to be bound by 

the terms of the Restrictive Covenant and Confidentiality Agreement, which describes post-employment, 

non-competition and non-recruitment restrictions as well as restrictions concerning treatment of confidential 

information.

Recapture and Forfeiture Agreement

The terms of your compensation provided in this letter are also contingent upon your agreement to be 

bound by the terms of the enclosed Recapture and Forfeiture Agreement, which describes the 

circumstances under which certain compensation is subject to repayment and/or forfeiture.

FHFA’s Review and Approval Authority

The terms and conditions of your compensation have been approved by FHFA. Notwithstanding such 

approval and any provision of this letter, you acknowledge and understand that any compensation paid or to 

be paid during or after your employment remains subject to any withholding, escrow or prohibition 

consistent with FHFA’s authority pursuant to the Federal Home Loan Corporation Act, as amended, or the 

Federal Housing Enterprise Financial Safety and Soundness Act of 1992, as amended.

Outside Activities and Family Member Activities

During your employment with us, you agree to devote substantially all your time, attention, energies to our 

business, and to not be engaged in any other business activity unless permitted under our Outside Activities 

and Family Member Activities policy. This restriction will not prevent you from devoting a reasonable amount 

of time to charitable or public interest activities or from making passive investments of your assets in such 

form or manner as you desire, consistent with Freddie Mac’s Employee Trading policy, and except as 

provided herein.

Employment At-Will

Executive’s employment with the Company shall be "at-will" and not for a fixed term. Executive understands 

and acknowledges that no statement, whether written or verbal, by the Company or any of its officers, 

employees or representatives may in any way modify, alter, or change the "at-will" nature of Executive's 

employment by the Company. Executive and the Company each retains the right to terminate Executive’s 

employment at any time, for any reason or no reason.

==================================

Heidi L. Mason

February 3, 2022

3
During your review of this letter, Freddie Mac expects that you have had the opportunity to consult and 

receive assistance from appropriate advisors, including legal, tax, and financial advisors.

This letter shall be construed, and the rights and obligations herein determined, exclusively in accordance

with the substantive law of the Commonwealth of Virginia, excluding provisions of Virginia law concerning

choice-of-law that would result in the law of any state other than Virginia being applied.

Please confirm that the terms and conditions in this letter conform to your understanding by returning a 

signed copy of this letter as well as copies of the EMCP, the Recapture and Forfeiture Agreement and the 

Restrictive Covenant and Confidentiality Agreement.

Heidi, I look forward to having you join the team during this exciting time as we continue making home 

possible for our customers.

Sincerely, 

/s/ Michele Espada______

Michele Espada

Talent Acquisition Leader

/s/ Heidi L. Mason______

Heidi L. Mason

February 4, 2022

Heidi L. Mason

February 3, 2022

4
Exhibit 10.37

	SENIOR	EXECUTIVE	RELOCATION	REPAYMENT	AGREEMENT

This	Relocation	Repayment	Agreement	(“Agreement”)	is	executed	on	this	___	day	of																												,	20___	

by	and	between	the	Federal	Home	Loan	Mortgage	Corporation	(“Freddie	Mac”)	and	

__________________________,	hereafter	referred	to	as	“Employee.”	

1. A.		Termination	of	Employment:		Employee	will	be	required	to	reimburse	Freddie	Mac	for	all	relocation	

expenses	paid	by	Freddie	Mac	in	connection	with	the	Employee’s	relocation	in	the	event	employment	

terminates	for	a	“Termination	Event”	within	2	years	of	receiving	benefits	under	this	program.	

						A	“Termination	Event”	means:

• The	senior	officer	voluntarily	resigns	employment.

• Freddie	Mac	terminates	the	senior	officer’s	employment	due	to	the	occurrence	of	any	of	the	Forfeiture	

Events	described	in	the	Recapture	and	Forfeiture	Agreement;	or

• Other	than	Executive	Officers,	Freddie	Mac	terminates	the	senior	officer’s	employment,	and	the	senior	

officer	is	not	a	Severance	Eligible	Senior	Officer	under	the	Senior	Officer	Severance	Plan.

2.	 Repayment	Requirements:		The	entire	gross	amount	paid	by	the	company	must	be	repaid	to	Freddie	Mac	

by	the	employee	within	thirty	calendar	days	following	the	termination	date.	

The	employee	agrees	and	authorizes	Freddie	Mac	to	withhold	any	unpaid	repayment	amount	from	any	

outstanding	Deferred	Salary	and	to	pay	any	and	all	of	Freddie	Mac’s	reasonable	expenses,	including	

attorney’s	fees	and	other	costs,	incurred	in	its	obtaining	repayment	and	collection	of	any	unpaid	

repayment	amount.

3.	 Employment	at	Will:		Nothing	in	this	agreement	gives	Employee	any	express	or	implied	right	to	be	

employed	by	Freddie	Mac	for	any	particular	length	of	time	or	in	any	particular	capacity,	or	otherwise	

interferes	in	any	way	with	the	right	of	Freddie	Mac	to	terminate	or	otherwise	alter	the	terms	and	

conditions	of	the	employment	of	Employee	at	any	time,	with	or	without	cause.	

Any	change	to	the	preprinted	language	in	this	document	must	be	made	in	a	prominent	manner	and	

initialed	by	all	parties	in	order	to	be	binding	on	the	parties.

EMPLOYEE	NAME		

Signature:																																																																																							Date:																																																																											

1	of	1
Exhibit 24.1

Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

 KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 6, 2023.

/s/ Mark H. Bloom 

Mark H. Bloom
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 5, 2023.

/s/ Kathleen L. Casey 

Kathleen L. Casey
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 6, 2023.

 /s/ Kevin G. Chavers 

Kevin G. Chavers
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 5, 2023.

 /s/ Launcelot F. Drummond 

Launcelot F. Drummond
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 5, 2023.

 /s/ Aleem Gillani 

Aleem Gillani
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 6, 2023.

 /s/ Mark B. Grier 

Mark B. Grier
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 6, 2023.

 /s/ Luke S. Hayden 

Luke S. Hayden
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 5, 2023.

 /s/ Christopher E. Herbert 

Christopher E. Herbert
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 7, 2023.

 /s/ Grace A. Huebscher 

Grace A. Huebscher
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 5, 2023.

 /s/ S. Sara Mathew 

 S. Sara Mathew
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 6, 2023.

 /s/ Allan P. Merrill 

 Allan P. Merrill
Power of Attorney

Annual Report on Form 10-K 

Freddie Mac

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a director of Freddie Mac (formally known as 

the Federal Home Loan Mortgage Corporation), a federally chartered corporation, hereby constitute and appoint Michael J. 

DeVito, Christian M. Lown, Heidi Mason, and Alicia S. Myara, and each of them severally, my true and lawful attorney-in-fact 

with power of substitution and resubstitution to sign in my name, place and stead, in any and all capacities, to do any and all 

things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange 

Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with 

the Annual Report on Form 10-K for the year ended December 31, 2023 and any and all amendments thereto, as fully for all 

intents and purposes as I might or could do in person, and hereby ratify and confirm all said attorneys-in-fact, each acting 

alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 IN WITNESS WHEREOF, I have executed this Power of Attorney as of December 7, 2023.

 /s/ Alberto G. Musalem 

Alberto G. Musalem
Exhibit 31.1

CERTIFICATION

PURSUANT TO SECURITIES EXCHANGE ACT RULE 13a-14(a)

I, Michael J. DeVito, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2023 of the Federal Home Loan Mortgage Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 

the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 

by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the 

financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in 

Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 

15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our 

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by 

others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our 

supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for 

external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the 

effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most 

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely 

to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to 

the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are 

reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal 

control over financial reporting.

Date: February 14, 2024

/s/ Michael J. DeVito

Michael J. DeVito

Chief Executive Officer
Exhibit 31.2

CERTIFICATION

PURSUANT TO SECURITIES EXCHANGE ACT RULE 13a-14(a)

I, Christian M. Lown, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2023 of the Federal Home Loan Mortgage Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 

the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 

by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the 

financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in 

Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 

15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our 

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by 

others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our 

supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for 

external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the 

effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most 

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely 

to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to 

the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are 

reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal 

control over financial reporting.

Date: February 14, 2024

/s/ Christian M. Lown

Christian M. Lown

Executive Vice President and Chief Financial Officer
Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the year ended December 31, 2023 of the Federal Home Loan Mortgage 

Corporation (the "Company"), as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, 

Michael J. DeVito, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 

Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of 

operations of the Company.

Date: February 14, 2024

/s/ Michael J. DeVito

Michael J. DeVito

Chief Executive Officer
Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the year ended December 31, 2023 of the Federal Home Loan Mortgage 

Corporation (the "Company"), as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, 

Christian M. Lown, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of 

operations of the Company.

Date: February 14, 2024

/s/ Christian M. Lown

Christian M. Lown

Executive Vice President and Chief Financial Officer