1

ss

SEC. 301. SHORT TITLE AND STATEMENT OF PURPOSE (12 U.S.C. 

§1451 note)

(a) This title may be cited as the “Federal Home Loan Mortgage Corporation

Act.”

(b) It is the purpose of the Federal Home Loan Mortgage Corporation1—

(1) to provide stability in the secondary market for residential

mortgages2;

(2) to respond appropriately to the private capital market;

(3) to provide ongoing assistance to the secondary market for residential

mortgages (including activities relating to mortgages on housing for

low- and moderate-income families involving a reasonable economic

return that may be less than the return earned on other activities)3 by

increasing the liquidity of mortgage investments and improving the

distribution of investment capital available for residential mortgage

financing; and

(4) to promote access to mortgage credit throughout the Nation

(including central cities, rural areas, and underserved areas) by

increasing the liquidity of mortgage investments and improving the

distribution of investment capital available for residential mortgage

financing.4

SEC. 302. DEFINITIONS (12 U.S.C. §1451)

As used in this title—

(a) The term "Board of Directors" means the Board of Directors of the

Corporation.

(b) The term "Corporation" means the Federal Home Loan Mortgage

Corporation created by this chapter.

(c) The term "law" includes any law of the United States or of any State

(including any rule of law or of equity).

1 Section 731(a) of the Financial Institutions, Reform, Recovery, and Enforcement Act of 1989, 

Public Law No. 101-73, approved August 9, 1989 (“FIRREA”), amended this section to include 

a “purposes” provision.

2 Section 1382(a)(1) of the Federal Housing Enterprises Financial Safety and Soundness Act of 

1992, Public Law No. 102-550, approved October 29, 1992 (“Housing Enterprises Act”), 

substituted “residential” for each place “home” appeared in the purpose section.

3 Section 1382(a)(3) of the Housing Enterprises Act, supra note 2, added the parenthetical 

phrase relating to rates of return on mortgages for low- and moderate-income housing.

4 Section 1382(a)(4) of the Housing Enterprises Act, supra note 2, added the fourth clause of 

the purposes section.

Short Title

Purpose

FEDERAL HOME LOAN MORTGAGE CORPORATION ACT

Public Law No. 91-351, 84 Stat. 450

Approved July 24, 1970

As amended through January 3, 2023
2

(d) The term "mortgage" includes such classes of liens as are commonly 

given or are legally effective to secure advances on, or the unpaid purchase 

price of, real estate under the laws of the State in which the real estate is 

located or a manufactured home that is personal property under the laws of 

the State in which the manufactured home is located5, together with the 

credit instruments, if any, secured thereby, and includes interests in 

mortgages.

(e) The term "organization" means any corporation, partnership, association, 

business trust, or business entity.

(f) The term "prescribe" means to prescribe by regulations or otherwise.

(g) The term "property" includes any property, whether real, personal, 

mixed, or otherwise, including without limitation on the generality of the 

foregoing choses in action and mortgages, and includes any interest in any 

of the foregoing.

(h) The term "residential mortgage" means a mortgage which (1) is a 

mortgage on real estate, in fee simple or under a leasehold having such term 

as may be prescribed by the Corporation, upon which there is located a 

structure or structures designed in whole or in part for residential use, or 

which comprises or includes one or more condominium units or dwelling 

units (as defined by the Corporation) and (2) has such characteristics and 

meets such requirements as to amount, term, repayment provisions, number 

of families, status as a lien6 on such real estate, and otherwise, as may be 

prescribed by the Corporation. The term "residential mortgage" also 

includes a loan or advance of credit insured under title I of the National 

Housing Act [12 U.S.C. 1702 et seq.] whose original proceeds are applied 

for in order to finance energy conserving improvements, or the addition of a 

solar energy system, to residential real estate. The term "residential 

mortgage" also includes a loan or advance of credit for such purposes, or 

purchased from any public utility carrying out activities in accordance with 

the requirements of title II of the National Energy Conservation Policy Act 

[42 U.S.C. 8211 et seq.] if the residential mortgage to be purchased is a loan 

or advance of credit the original proceeds of which are applied for in order 

to finance the purchase and installation of residential energy conservation 

measures (as defined in section 210(11) of the National Energy 

Conservation Policy Act) in residential real estate,7 not having the benefit of 

such insurance and includes loans made where the lender relies for purposes 

of repayment primarily on the borrower's general credit standing and 

forecast of income, with or without other security.8 The term "residential 

5 Section 2092(a) of the Secondary Mortgage Market Enhancement Act of 1984, Public Law 

No. 98-440, approved October 3, 1984 (“SMMEA”), amended the definition of “mortgage” to 

include liens on manufactured homes.

6 Section 203(b)(1)(A) of SMMEA, supra note 5, amended the definition of “residential 

mortgage” by deleting the word “first” preceding the word “lien.”

7 Section 534(a)(2) of the Energy Security Act, Public Law No. 96-294, approved June 30, 

1980, amended the definition of “residential mortgage” to include certain loans made by public 

utility companies to finance energy conservation measures in residential real estate. Section 

1382(b) of the Housing Enterprises Act, supra note 2, further amended the aspect of the 

definition of “residential mortgage” relating to loans purchased from public utilities to reflect 

revisions to section 305(a)(1) of the Federal Home Loan Mortgage Corporation Act (“Freddie 

Mac Act”) made by section 1382(j) of the Housing Enterprises Act.

8 Section 245 of the National Energy Conservation Act, Public Law No. 95-619, approved 

November 9, 1978, amended the definition of “residential mortgage” to include loans used to 

finance energy conserving improvements.

SEC. 302

Residential Mortgages

Energy Loans
3

mortgage" is also deemed to include a secured loan or advance of credit the 

proceeds of which are intended to finance the rehabilitation, renovation, 

modernization, refurbishment, or improvement of properties as to which the 

Corporation may purchase a "residential mortgage" as defined under the first 

sentence of this subsection.9 Such term shall also include other secured loans 

that are secured by a subordinate lien against a property as to which the 

Corporation may purchase a residential mortgage as defined under the first 

sentence of this subsection. A "secured loan or advance of credit" is one in 

which a security interest is taken in the rehabilitated, renovated, modernized, 

refurbished, or improved property.10 Such term shall also include a 

mortgage, lien, or other security interest on the stock or membership 

certificate issued to a tenant-stockholder or resident-member by a 

cooperative housing corporation, as defined in section 216 of title 26, and 

on the proprietary lease, occupancy agreement, or right of tenancy in the 

dwelling unit of the tenant-stockholder or resident-member in such 

cooperative housing corporation.11 The term "residential mortgage" also 

includes a loan or advance of credit secured by a mortgage or other lien on 

a manufactured home that is the principal residence of the borrower, without 

regard to whether the security property is real, personal, or mixed.12

(i) The term "conventional mortgage" means a mortgage other than a 

mortgage as to which the Corporation has the benefit of any guaranty, 

insurance or other obligation by the United States or any of its agencies or 

instrumentalities.13

(j) The term "security" has the meaning ascribed to it by section 2 of the 

Securities Act of 1933 [15 U.S.C. 77].

(k) The term "State", whether used as a noun or otherwise, includes the 

several States, the District of Columbia, the Commonwealth of Puerto Rico, 

and the territories and possessions of the United States.

(l) The term "mortgage insurance program" includes, in the case of a 

residential mortgage secured by a manufactured home, any manufactured 

home lending program under title I of the National Housing Act [12 U.S.C. 

1702 et seq.].14

9 Section 203(b)(1)(B) of SMMEA, supra note 5, amended the definition of “residential 

mortgage” to include loans secured by subordinated liens.

10 Section 1702 of the Financial Institutions Regulatory and Interest Rate Control Act of 1978, 

Public Law No. 95-630, approved November 10, 1978, amended the definition of “residential 

mortgage” to include secured home improvement loans.

11 Section 1316(c) of the Housing and Community Development Amendments of 1979, Public 

Law No. 96-153, approved December 21, 1979, (the “1979 Amendments”), amended the 

definition of “residential mortgage” to include loans secured by cooperative housing units.

12 Section 202(b) of the SMMEA, supra note 5, amended the definition of “residential 

mortgage” to include a loan secured by a lien on a manufactured home.

13 Section 204 of SMMEA, supra note 5, substituted the words “any of its agencies or 

instrumentalities” for the words “a State or an agency or instrumentality of either.”

14 Section 202(c) of SMMEA, supra note 5, added the definition of “mortgage insurance 

program” to section 302 of the Freddie Mac Act.

Manufactured Homes

Cooperatives

Second Mortgages
4

SEC. 303. ESTABLISHMENT OF THE CORPORATION (12 U.S.C. § 

1452)

(a) CREATION; BOARD OF DIRECTORS; POLICIES; PRINCIPAL 

OFFICE; MEMBERSHIP; TERM VACANCIES. —

(1) There is hereby created the Federal Home Loan Mortgage 

Corporation, which shall be a body corporate under the direction of a 

Board of Directors. Within the limitations of law and regulation, the 

Board of Directors shall determine the general policies that govern the 

operations of the Corporation. The principal office of the Corporation 

shall be in the District of Columbia or at any other place determined 

by the Corporation.

(2)(A) The Board of Directors of the Corporation shall consist of 13 

persons, or such other number as the Director determines appropriate, 

who15 shall be elected annually by the voting common stockholders. 

Except to the extent action under section 1377 of the Federal Housing 

Enterprises Financial Safety and Soundness Act of 1992 [12 U.S.C 

4636a] temporarily results in a lesser number, the16 Board of Directors 

shall at all times have as members17 at least 1 person from the 

homebuilding industry, at least 1 person from the mortgage lending 

industry, at least 1 person from the real estate industry, and at least 1 

person from an organization that has represented consumer or 

community interests for not less than 2 years or 1 person who has 

demonstrated a career commitment to the provision of housing for lowincome households.18

(B) Each member of the Board of Directors shall be19 elected for a 

term ending on the date of the next annual meeting of the voting 

common stockholders20.

15 Section 1162(b)(1)(A)(i) of the Federal Housing Finance Regulatory Reform Act of 2008, 

Public Law 110-289, approved July 30, 2008 (“FHFRRA of 2008”), amends section 303(a)(2) 

(12 U.S.C. 1452(a)(2)) in subparagraph A, in the first sentence, by striking ‘‘18 persons, 5 of 

whom shall be appointed annually by the President of the United States and the remainder of 

whom’’ and inserting ‘‘13 persons, or such other number as the Director determines 

appropriate, who’’.

16 Section 1153(b)(3) of the FHFRRA of 2008 amends section 303(a)(2)(A) of the Federal 

Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)), in the second sentence, by 

striking ‘‘The’’ and inserting ‘‘Except to the extent action under section 1377 of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 temporarily results in a lesser 

number, the’’.

17 Section 1162(b)(1)(A)(ii) of the FHFRRA of 2008 amends section 303(a)(2) of the Federal 

Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)), in subparagraph A, in the 

second sentence, by striking ‘‘appointed by the President of the United States”.

18 Section 1382(c)(1)(B) of the Housing Enterprises Act, supra note 2, added the provision 

relating to a person from a consumer or community organization or having a commitment to 

low-income housing. As provided by section 1382(c)(2) of the Housing Enterprises Act, this 

provision becomes effective for the first annual appointment to the Board of Directors 

subsequent to October 28, 1992.

19 Section 1162(b)(1)(B)(i) of the FHFRRA of 2008, supra note 15, amends section 303(a)(2) 

of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)), in 

subparagraph B, by striking “such or”.

20 Section 1162(b)(1)(B)(ii) of the FHFRRA of 2008, supra note 15, amends section 303(a)(2) 

of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)), in 

subparagraph B, by striking “, except that any appointed member may be removed from office 

Composition of 

Board of Directors
5

(C)21 Any22 seat on the Board of Directors that becomes vacant after 

the annual election of the directors shall be filled by the Board of 

Directors, but only for the unexpired portion of the term.

(D) Any member of the Board of Directors who is a full-time 

officer or employee of the Federal Government shall not, as such 

member, receive compensation for services as such a member.23

(b) CAPITAL DISTRIBUTIONS; LIMITATIONS. —

(1)24 Except as provided in paragraph (2), the Corporation may make 

such capital distributions (as such term is defined in section 4502 of 

this title) as may be declared by the Board of Directors.

(2) The Corporation may not make any capital distribution that would 

decrease the total capital of the Corporation (as such term is defined in 

section 4502 of this title) to an amount less than the risk-based capital 

level for the Corporation established under section 4611 of this title or 

that would decrease the core capital of the Corporation (as such term is 

defined in section 4502 of this title) to an amount less than the minimum 

capital level for the Corporation established under section 4612 of this 

title, without prior written approval of the distribution by the Director 

of the Federal Housing Finance Agency.

by the President for good cause”. This provision had been inserted in the Housing Enterprises 

Act.

21 Section 1162(b)(1)(C)(i) of the FHFRRA of 2008, supra note 15, amends section 303(a)(2) 

of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)), in 

subparagraph C, by striking the first sentence.

22 Section 1162(b)(1)(C)(ii) of the FHFRRA of 2008, supra note 15, amends section 303(a)(2) 

of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)), in 

subparagraph C, by striking “elective”.

23 Section 731(b)(1) of FIRREA, supra note 1, added a new subsection (a) to section 303 of the 

Freddie Mac Act providing for a new Board of Directors. Section 731(b)(2) of FIRREA 

contained provisions establishing an interim Board of Directors which expired in February, 

1990 when the first election was held for the shareholder-elected directors.

24 Section 1382(e) of the Housing Enterprises Act, supra note 2, added subsection (b) relating 

to restrictions on capital distributions. Section 1382(e) also deleted provisions of the Freddie 

Mac Act, which had been added by section 731(c) of FIRREA, supra note 1, relating to (1) the 

general regulatory power of the Secretary of Housing and Urban Development (“Secretary”); 

(2) the Secretary’s authority to require purchase of mortgages secured by housing for low- and 

moderate-income families; (3) the Secretary’s authority to approve the rate of return for 

common stock dividends; (4) the Secretary’s authority to examine and audit the Federal Home 

Loan Mortgage Corporation (“Freddie Mac”); (5) a 15-to-1 unsecured debt-to-equity ratio 

limiting the amount of Freddie Mac’s outstanding unsecured debt obligations; (6) the 

Secretary’s authority to approve issuance of stock and debt obligations convertible into stock; 

(7) the Secretary’s authority to approve new purchase and sale programs for conventional 

mortgage; and (8) time limits applicable to actions by the Secretary on requests for approval 

submitted by Freddie Mac. Aspects of several of the deleted provisions included in sections 

1321 to 1349 of the Housing Enterprises Act, supra note 2. Section 1161(c)(1) of the Federal 

Housing Finance Regulatory Reform Act amends sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 

303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 U.S.C. 1456(c)(1)), by striking 

“Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing 

and Urban Development” each place that term appears, and inserting “Director of the Federal 

Housing Finance Agency”.

SEC. 303

Capital Distributions
6

(c)25 POWERS OF THE CORPORATION. —The Corporation shall have 

power (1) to adopt, alter, and use a corporate seal; (2) to have succession 

until dissolved by Act of Congress; (3) to make and enforce such bylaws, 

rules, and regulations as may be necessary or appropriate to carry out the 

purposes or provisions of this chapter; (4) to make and perform contracts, 

agreements, and commitments; (5) to prescribe and impose fees and 

charges for services by the Corporation; (6) to settle, adjust, and 

compromise, and with or without consideration or benefit to the 

Corporation to release or waive in whole or in part, in advance or 

otherwise, any claim, demand, or right of, by, or against the Corporation; 

(7) to sue and be sued, complain and defend, in any State, Federal, or other 

court; (8) to acquire, take, hold, and own, and to deal with and dispose of 

any property; and (9) to determine its necessary expenditures and the 

manner in which the same shall be incurred, allowed, and paid, and 

appoint, employ, and fix and provide for the compensation and benefits of 

officers, employees, attorneys, and agents as the Board of Directors 

determines reasonable and comparable with compensation for employment 

in other similar businesses (including publicly held financial institutions or 

other major financial services companies) involving similar duties and 

responsibilities, except that a significant portion of potential compensation 

of all executive officers (as such term is defined in subsection (h)(3) of this 

section) of the Corporation26 shall be based on the performance of the 

Corporation, all without regard to any other law except as may be provided 

by the Corporation or by laws hereafter enacted by the Congress expressly 

in limitation of this sentence.27 The Corporation, with the consent of any 

such department, establishment, or instrumentality,28 including any field 

services thereof, may utilize and act through any such department, 

establishment, or instrumentality and may avail itself of the use of 

information, services, facilities, and personnel thereof, and may pay 

compensation therefor, and all of the foregoing are hereby authorized to 

provide the same to the Corporation as it may request.

(d) INVESTMENT OF FUNDS; DESIGNATION AS 

DEPOSITARY, CUSTODIAN, OR AGENT FOR CORPORATION 

OF ANY FEDERAL RESERVE BANK, FEDERAL HOME LOAN 

BANK, OR ANY BANK DESIGNATED AS DEPOSITARY OF 

PUBLIC MONEY. —Funds of the Corporation may be invested in such 

investments as the Board of Directors may prescribe. Any Federal Reserve 

bank or Federal home loan bank, or any bank as to which at the time of its 

designation by the Corporation there is outstanding a designation by the 

Secretary of the Treasury as a general or other depositary of public money, 

may be designated by the Corporation as a depositary or custodian or as a 

fiscal or other agent of the Corporation, and is hereby authorized to act as 

such depositary, custodian, or agent. When designated for that purpose by 

25 Section 731(c)(1) of FIRREA, supra note 1, redesignated subsections (b) through (f) as 

subsections (c) through (g). Section 1382(h) of the Housing Enterprises Act, supra note 2, 

repealed a sentence which prohibited prejudgment attachment of Freddie Mac’s property.

26 Section 1382(f)(1) of the Housing Enterprises Act, supra note 2, added the provision 

requiring the Board of Directors to determine reasonable compensation levels for executive 

officers comparable with compensation levels for employment in other similar businesses.

27 Section 1382(g) of the Housing Enterprises Act, supra note 2, deleted a sentence relating to 

Freddie Mac’s ability to appoint as an officer or employee of Freddie Mac any officer or 

employee of a department, establishment or instrumentality of the United States.

28 As described in note 27 supra, the “such department, establishment or instrumentality” refers 

to the “department, establishment or instrumentality” described in the sentence deleted by 

section 1382(g) of the Housing Enterprises Act, supra note 2.

SEC. 303

Investment of 

Corporate Funds

Depositary, Custodian

or Fiscal Agent
7

the Secretary of the Treasury, the Corporation shall be a depositary of 

public money, under such regulations as may be prescribed by the 

Secretary of the Treasury, and may also be employed as fiscal or other 

agent of the United States, and it shall perform all such reasonable duties 

as such depositary or agent as may be required of it.

(e) EXEMPTION FROM FEDERAL, STATE, AND LOCAL 

TAXATION; EXCEPTION; APPLICABILITY OF OTHER 

PROVISIONS.—The Corporation, including its franchise, activities, 

capital, reserves, surplus, and income, shall be exempt from all taxation 

now or hereafter imposed by any territory, dependency, or possession of 

the United States or by any State, county, municipality, or local taxing 

authority, except that any real property of the Corporation shall be subject 

to State, territorial, county, municipal, or local taxation to the same extent 

according to its value as other real property is taxed.29

(f) ACTION BY AND AGAINST THE CORPORATION; 

JURISDICTION; REMOVAL OF ACTIONS; ATTACHMENT 

OR EXECUTION ISSUED AGAINST THE CORPORATION.—

Notwithstanding section 1349 of title 28 or any other provision of law, (1) 

the Corporation shall be deemed to be an agency included in sections 1345 

and 1442 of such title 28; (2) all civil actions to which the Corporation is a 

party shall be deemed to arise under the laws of the United States, and the 

district courts of the United States shall have original jurisdiction of all 

such actions, without regard to amount or value; and (3) any civil or other 

action, case or controversy in a court of a State, or in any court other than a 

district court of the United States, to which the Corporation is a party may 

at any time before the trial thereof be removed by the Corporation, without 

the giving of any bond or security, to the district court of the United States 

for the district and division embracing the place where the same is 

pending, or, if there is no such district court, to the district court of the 

United States for the district in which the principal office of the 

Corporation is located, by following any procedure for removal of causes 

in effect at the time of such removal.30

(g) MORTGAGES, OBLIGATION, OR OTHER SECURITIES 

SOLD BY CORPORATION DEEMED LAWFUL 

INVESTMENTS FOR SECURITY PURPOSES. —All mortgages, 

obligations, or other securities which are or have been sold by the 

Corporation pursuant to section 1454 or 1455 of this title shall be lawful 

investments, and may be accepted as security for all fiduciary, trust, and 

public funds, the investment or deposits of which shall be under the 

authority and control of the United States or any officers thereof.

(h) REPORT ON COMPARABILITY OF COMPENSATION POLICIES 

AND FINANCIAL PERFORMANCE OF CORPORATION AND 

PAYMENTS EARNED BY EXECUTIVE OFFICERS; PROHIBITION 

ON PAYMENTS TO TERMINATED EXECUTIVE OFFICERS.—

(1) Not later than June 30, 1993, and annually thereafter, the 

Corporation shall submit a report to the Committee on Banking, 

29 Section 177(a) of the Deficit Reduction Act of 1984, Public Law No. 98-369, approved July 

18, 1984, amended section 303(e) of the Freddie Mac Act to eliminate Freddie Mac’s exemption 

from federal taxation.

30 Section 316(b) of the 1979 Amendments, supra note 11, added subsection (f) to section 303 

of the Freddie Mac Act.

Tax Exempt Status

Civil Actions

SEC. 303

Freddie Mac Securities as

Legal Investments

Report on Compensation

Policies
8

Finance and Urban Affairs of the House of Representatives and the 

Committee on Banking, Housing, and Urban Affairs of the Senate on 

(A) the comparability of the compensation policies of the Corporation 

with the compensation policies of other similar businesses, (B) in the 

aggregate, the percentage of total cash compensation and payments 

under employee benefit plans (which shall be defined in a manner 

consistent with the Corporation's proxy statement for the annual 

meeting of shareholders for the preceding year) earned by executive 

officers of the Corporation during the preceding year that was based 

on the Corporation's performance, and (C) the comparability of the 

Corporation's financial performance with the performance of other 

similar businesses. The report shall include a copy of the Corporation's 

proxy statement for the annual meeting of shareholders for the 

preceding year.

(2) Notwithstanding the first sentence of subsection (c) of this section, 

after October 28, 1992, the Corporation may not enter into any 

agreement or contract to provide any payment of money or other thing 

of current or potential value in connection with the termination of 

employment of any executive officer of the Corporation, unless such 

agreement or contract is approved in advance by the Director of the 

Federal Housing Finance Agency. The Director may not approve any 

such agreement or contract unless the Director determines that the 

benefits provided under the agreement or contract are comparable to 

benefits under such agreements for officers of other public and private 

entities involved in financial services and housing interests who have 

comparable duties and responsibilities. For purposes of this paragraph, 

any renegotiation, amendment, or change after October 28, 1992, to any 

such agreement or contract entered into on or before October 28, 1992, 

shall be considered entering into an agreement or contract.

(3) For purposes of this subsection, the term "executive officer" has the 

meaning given the term in section 4502 of this title.

31

(4)32 Notwithstanding any other provision of this section, the 

Corporation shall not transfer, disburse, or pay compensation to any 

executive officer, or enter into an agreement with such executive 

officer, without the approval of the Director, for matters being reviewed 

under section 1318 of the Federal Housing Enterprises Financial Safety 

and Soundness Act of 1992 (12 U.S.C. 4518).

SEC. 304. CAPITALIZATION OF FEDERAL HOME LOAN 

MORTGAGE CORPORATION (12 U.S.C. § 1453)

(a) COMMON STOCK; ISSUANCE. —The common stock of the 

Corporation shall consist of voting common stock, which shall be issued to 

such holders in the manner and amount, and subject to any limitations on 

concentration of ownership, as may be established by the Corporation.33

31 Section 1382(f)(2) of the Housing Enterprises Act, supra note 2, added subsection (h) relating 

to reports on compensation policies and contracts for termination of executive officers.

32 Section 1113(b)(2) of the FHFRRA of 2008, supra note 15, amends section 303(h) by 

adding new subsection (4).

33 Section 1382(i) of the Housing Enterprises Act, supra note 2, struck sections (b), (c), and 

(d).

Contracts for Termination

of Employment

SEC. 303

Common Stock
9

(b) PAR VALUE. —The voting common stock shall have such par value 

and other characteristics as the Corporation provides. The voting common 

stock shall be vested with all voting rights, each share being entitled to 1 

vote. The free transferability of the voting common stock at all times to any 

person, firm, corporation or other entity shall not be restricted except that, 

as to the Corporation, it shall be transferable only on the books of the 

Corporation.34

SEC. 305. PURCHASE AND SALE OF MORTGAGES; RESIDENTIAL 

MORTGAGES; CONVENTIONAL MORTGAGES; TERMS AND 

CONDITIONS OF SALE OR OTHER DISPOSITION; AUTHORITY TO 

ENTER INTO, PERFORM, AND CARRY OUT TRANSACTIONS (12 

U.S.C. § 1454)

(a) AUTHORITY FOR PURCHASE AND SALE; RESIDENTIAL 

MORTGAGES; CONVENTIONAL MORTGAGES TERMS AND 

CONDITIONS OF SALE OR OTHER DISPOSITION; LENDING 

ACTIVITIES. —

(1) The Corporation is authorized to purchase, and make commitments 

to purchase, residential mortgages.35 The Corporation may hold36 and 

deal with, and sell or otherwise dispose of, pursuant to commitments or 

otherwise, any such mortgage or interest therein.37 The operations of the 

Corporation under this section shall be confined so far as practicable to 

residential mortgages which are deemed by the Corporation to be of 

such quality, type, and class as to meet generally the purchase standards 

imposed by private institutional mortgage investors. The Corporation 

may establish requirements, and impose charges or fees, which may be 

regarded as elements of pricing, for different classes of sellers or 

servicers, and for such purposes the Corporation is authorized to 

classify sellers or servicers according to type, size, location, assets, or, 

without limitation on the generality of the foregoing, on such other basis 

or bases of differentiation as the Corporation may consider necessary or 

appropriate to effectuate the purposes or provisions of this chapter. The 

Corporation may specify requirements concerning among other things, 

(A) minimum net worth; (B) supervisory mechanisms; (C) warranty 

compensation mechanisms; (D) prior approval of facilities; (E) prior 

origination and servicing experience with respect to different types of 

mortgages; (F) capital contributions and substitutes; (G) mortgage 

purchase volume limits; and (H) reduction of mortgage purchases 

during periods of borrowing. With respect to any particular type of 

seller, the Corporation shall not be required to make available programs 

involving prior approval of mortgages, optional delivery of mortgages, 

and purchase of other than conventional mortgages to an extent greater 

34 Section 731(d) of FIRREA, supra note 1, added provisions creating voting common stock 

and causing all outstanding shares of senior participating preferred stock to be converted to 

voting common stock. Section 1382(i) of the Housing Enterprises Act, supra note 2, repealed 

provisions relating to the issuance and retirement of non-voting common stock held by the 

Federal Home Loan Banks.

35 Section 1382(j)(1) of the Housing Enterprises Act, supra note 2, deleted the lists of entities 

eligible to sell mortgages to Freddie Mac.

36 Section 805(a)(1) of the Housing and Community Development Act of 1974, Public Law No. 

93-383, approved August 22, 1974 (the “1974 Housing Act”), substituted “The Corporation 

may hold” for “and to hold.”

37 Section 1382(j)(2) of the Housing Enterprises Act, supra note 2, deleted the lists of entities 

qualified to service mortgages for Freddie Mac.

Mortgage Purchase

Authority

Institutional Investor Authority

Requirements for Classes of Sellers

Availability of Programs
10

than the Corporation elects to make such programs available to other 

types of eligible sellers. Any requirements specified by the Corporation 

pursuant to the preceding three sentences must bear a rational 

relationship to the purposes or provisions of this chapter, but will not be 

considered discriminatory solely on the grounds of differential effects 

on types of eligible sellers. Insofar as is practicable, the Corporation 

shall make reasonable efforts to encourage participation in its programs 

by each type of eligible seller.38 Nothing in this section authorizes the 

Corporation to impose any charge or fee upon any mortgagee approved 

by the Secretary of Housing and Urban Development for participation 

in any mortgage insurance program under the National Housing Act [12 

U.S.C. 1701 et seq.] solely because of such status.39

(2) No conventional mortgage secured by a property comprising one- to 

four-family dwelling units40 shall be purchased under this section if the 

outstanding principal balance of the mortgage at the time of purchase 

exceeds 80 per centum41 of the value of the property securing the 

mortgage, unless (A) the seller retains a participation of not less than 10 

per centum in the mortgage; (B) for such period and under such 

circumstances as the Corporation may require, the seller agrees to 

repurchase or replace the mortgage upon demand of the Corporation in 

the event that the mortgage is in default; or (C) that portion of the unpaid 

principal balance of the mortgage which is in excess of such 80 per 

centum is guaranteed or insured by a qualified42 insurer as determined 

by the Corporation. The Corporation shall not issue a commitment to 

purchase a conventional mortgage prior to the date the mortgage is 

originated, if such mortgage is eligible for purchase under the preceding 

sentence only by reason of compliance with the requirements of clause 

(A) of such sentence. The Corporation may purchase a conventional 

mortgage which was originated more than one year prior to the purchase 

date only if the seller is the Federal Deposit Insurance Corporation, the

Resolution Trust Corporation,43 the National Credit Union 

Administration, or any other seller currently engaged in mortgage 

lending or investing activities.44 With respect to any transaction in 

which a seller contemporaneously sells mortgages originated more than 

38 Section 321(b) of the Housing and Community Development Amendments of 1978, Public 

Law No. 95-557, approved October 31, 1978, added the provisions relating to the classification 

of sellers and servicers.

39 Section 731(e)(1) of FIRREA, supra note 1, added a new sentence relating to mortgages 

approved by the Department of Housing and Urban Development (“HUD”) for mortgage 

insurance programs under the National Housing Act.

40 Section 205(b) of SMMEA, supra note 5, added the phrase relating to one-to-four family 

dwelling units and thereby eliminated the loan-to-value requirements for multifamily dwelling 

units.

41 Section 805(b)(1) of the 1974 Housing Act, supra note 35, substituted “80 per centum” for 

“75 per centum” each place “75 per centum” appeared in section 305(a)(2) of the Freddie Mac 

Act.

42 Section 805(b)(2) of the 1974 Housing Act, supra note 35, deleted the word “private” in 

clause (C) of section 305(a)(2) of the Freddie Mac Act.

43 Section 731(f)(2)(A) of FIRREA, supra note 1, changed “Federal Savings and Loan 

Insurance Corporation” to “Resolution Trust Corporation.”

44 Section 202(a) of the Mortgage Purchase Amendments, Title II of the International Banking 

Facility Deposit Insurance Act, Public Law 97-110, approved December 26, 1981 (the “1981 

Amendments”), added the Federal Deposit Insurance corporation, Federal Savings and Loan 

Insurance Corporation and National Credit Union Administration to the list of eligible sellers 

of conventional mortgages more than one year old.

Loan-to-Value Ratio

Requirements
11

one year old prior to the date of sale to the Corporation and receives in 

payment for such mortgages securities representing undivided interests 

only in those mortgages, the Corporation shall not impose any fee or 

charge upon an eligible seller which is not a member of a Federal Home 

Loan Bank which differs from that imposed upon an eligible seller 

which is such a member.45

The Corporation shall establish limitations governing the maximum 

original principal obligation of conventional mortgages that are 

purchased by it; in any case in which the Corporation purchases a 

participation interest in such a mortgage, the limitation shall be 

calculated with respect to the total original principal obligation of the 

mortgage and not merely with respect to the interest purchased by the 

Corporation.46 Such limitations shall not exceed $417,000 for a 

mortgage secured by a single-family residence, $533,850 for a 

mortgage secured by a 2-family residence, $645,300 for a mortgage 

secured by a 3-family residence, and $801,950 for a mortgage secured 

by a 4-family residence, except that such maximum limitations shall be 

adjusted effective January 1 of each year beginning after the effective 

date of the Federal Housing Finance Regulatory Reform Act of 2008, 

subject to the limitations in this paragraph. Each adjustment shall be 

made by adding to each such amount (as it may have been previously 

adjusted) a percentage thereof equal to the percentage increase, during 

the most recent 12-month or 4-quarter period ending before the time of 

determining such annual adjustment, in the housing price index 

maintained by the Director of the Federal Housing Finance Agency 

(pursuant to section 1322 of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the change in 

such house price index during the most recent 12-month or 4-quarter 

period ending before the time of determining such annual adjustment is 

a decrease, then no adjustment shall be made for the next year, and the 

next adjustment shall take into account prior declines in the house price 

index, so that any adjustment shall reflect the net change in the house 

price index since the last adjustment. Declines in the house price index 

shall be accumulated and then reduce increases until subsequent 

increases exceed prior declines.47 The foregoing limitations may be 

increased by not to exceed 50 per centum with respect to properties 

located in Alaska, Guam, Hawaii, and the Virgin Islands.48 Such 

foregoing limitations shall also be increased, with respect to properties 

of a particular size located in any area for which 115 percent of the 

median house price for such size residence exceeds the foregoing 

limitation for such size residence, to the lesser of 150 percent of such 

limitation for such size residence or the amount that is equal to 115 

45 Section 202(b)(1) of the 1981 Amendments, supra note 43, prohibited the imposition of a 

nonmember fee for certain transactions involving the exchange of mortgages for securities. 

Under section 202(b)(2) of the 1981 Amendments, this prohibition applied to purchase 

commitments entered into on or after January 1, 1982.

46 Section 201(b) of SMMEA, supra note 5, amended provisions relating to the calculation of 

the maximum original principal obligation of conventional mortgages purchased in 

participation form by Freddie Mac.

47 Section 1124(b)(1) of the FHFRRA of 2008, supra note 15, amends section 305(a)(2) by 

striking the 6th and 7th sentences concerning loan limits and the annual adjustments of loan 

limits; and inserting new loan limits and a new annual adjustment for loan limits tied to a 

house price index.

48 Section 1382(k) of the Housing Enterprises Act, supra note 2, added the Virgin Islands to the 

list of designated high cost areas.

Loan Limitations

Annual Adjustment of 

Loan Limitations
12

percent of the median house price in such area for such size residence.49, 

48A, 48B

(3) The sale or other disposition by the Corporation of a mortgage under 

this section may be with or without recourse, and shall be upon such 

terms and conditions relating to resale, repurchase, guaranty, 

substitution, replacement, or otherwise as the Corporation may 

prescribe.

(4)(A) The Corporation is authorized to purchase, service, sell, lend on 

the security of, and otherwise deal in (i) residential mortgages that are 

secured by a subordinate lien against a one- to four-family residence 

that is the principal residence of the mortgagor; and (ii) residential 

mortgages that are secured by a subordinate lien against a property 

comprising five or more family dwelling units50. If the Corporation shall 

have purchased, serviced, sold, or otherwise dealt with any other 

outstanding mortgage secured by the same residence, the aggregate 

original amount of such other mortgage and the mortgage authorized to 

be purchased, serviced, sold, or otherwise dealt with under this 

paragraph shall not exceed the applicable limitation determined under 

paragraph (2).

(B) The Corporation shall establish limitations governing the 

maximum original principal obligation of such mortgages. In any 

case in which the Corporation purchases a participation interest in 

such a mortgage, the limitation shall be calculated with respect to 

the total original principal obligation of such mortgage secured by 

a subordinate lien and not merely with respect to the interest 

purchased by the Corporation. Such limitations shall not exceed (i) 

with respect to mortgages described in subparagraph (A)(i), 50 per 

centum of the single-family residence mortgage limitation 

determined under paragraph (2); and (ii) with respect to mortgages 

described in subparagraph (A)(ii), the applicable limitation 

determined under paragraph (2).

(C) No subordinate mortgage against a one- to four-family 

residence shall be purchased by the Corporation if the total 

outstanding indebtedness secured by the property as a result of such 

mortgage exceeds 80 per centum of the value of such property 

unless (i) that portion of such total outstanding indebtedness that 

exceeds such 80 per centum is guaranteed or insured by a qualified 

insurer as determined by the Corporation; (ii) the seller retains a 

participation of not less than 10 per centum in the mortgage; or (iii) 

for such period and under such circumstances as the Corporation 

49 Section 1124(b)(2) of the FHFRRA of 2008, supra note 15, amends section 305(a)(2) by 

adding language setting higher home price limits.

48A Cf. pages 15A and 15B for content of these footnotes. Section 1124(c) of FHFRRA of 

2008 adds “(c) Sense of Congress.--

It is the sense of the Congress that the securitization of mortgages by the Federal National 

Mortgage Association and the Federal Home Loan Mortgage Corporation plays an important 

role in providing liquidity to the United States housing markets. Therefore, the Congress 

encourages the Federal National Mortgage Association and the Federal Home Loan Mortgage 

Corporation to securitize mortgages acquired under the increased conforming loan limits 

established under this Act.”

50 Section 1068 of the Stewart B. McKinney Homeless Assistance Act of 1988, Public Law No. 

100-628, approved November 7, 1988, deleted “until October 1, 1985” from the second clause 

of this sentence.

Selling and Guarantee

Authority

SEC. 305

Second Mortgage Loan

Limitations 

Purchase of Second

Mortgages

Second Mortgage 

Participations

Second Mortgage

Loan-to-Value Ratio

Requirements

SEC. 305
13

may require, the seller agrees to repurchase or replace the mortgage 

upon demand of the Corporation in the event that the mortgage is 

in default. The Corporation shall not issue a commitment to 

purchase a subordinate mortgage prior to the date the mortgage is 

originated, if such mortgage is eligible for purchase under the 

preceding sentence only by reason of compliance with the 

requirements of clause (iii)51 of such sentence.52

(5) The Corporation is authorized to lend on the security of, and to make 

commitments to lend on the security of, any mortgage that the 

Corporation is authorized to purchase under this section. The volume of 

the Corporation's lending activities and the establishment of its loan 

ratios, interest rates, maturities, and charges or fees in its secondary 

market operations under this paragraph, shall be determined by the 

Corporation from time to time; and such determinations shall be 

consistent with the objectives that the lending activities shall be 

conducted on such terms as will reasonably prevent excessive use of the 

Corporation's facilities, and that the operations of the Corporation under 

this paragraph shall be within its income derived from such operations 

and that such operations shall be fully self-supporting. The Corporation 

shall not be permitted to use its lending authority under this paragraph 

(A) to advance funds to a mortgage seller on an interim basis, using 

mortgage loans as collateral, pending the sale of the mortgages in the 

secondary market; or (B) to originate mortgage loans. Notwithstanding 

any Federal, State, or other law to the contrary, the Corporation is 

hereby empowered, in connection with any loan under this paragraph, 

whether before or after any default, to provide by contract with the 

borrower for the settlement or extinguishment, upon default, of any 

redemption, equitable, legal, or other right, title, or interest of the 

borrower in any mortgage or mortgages that constitute the security for 

the loan; and with respect to any such loan, in the event of default and 

pursuant otherwise to the terms of the contract, the mortgages that 

constitute such security shall become the absolute property of the 

Corporation.53

(b) AUTHORITY OF OTHER INSTITUTIONS TO ENTER INTO, 

PERFORM, AND CARRYOUT TRANSACTIONS.—Notwithstanding 

any other law, authority to enter into and to perform and carry out any 

transactions or matter referred to in this section is conferred on any Federal 

home loan bank, the Resolution Trust Corporation,54 the Federal Deposit 

Insurance Corporation, the National Credit Union Administration,55 any 

Federal savings and loan association, any Federal home loan bank member, 

and any other financial institution the deposits or accounts of which are 

51 The reference to clause (iii) appears to be a technical error. The reference is probably 

intended to refer to clause (ii) of the preceding sentence.

52 Section 203(b)(2) of SMMEA, supra note 5, added provisions authorizing Freddie Mac to 

purchase mortgages secured by subordinated liens.

53 Section 731(e)(2) of FIRREA, supra note 1, added a new subsection 5 to section 305(a), 

relating to lending activities.

54 Section 731(f)(2)(A) of FIRREA, supra note 1, substituted the Resolution Trust Corp-oration 

as a successor agency to the Federal Savings and Loan Insurance Corporation.

55 Section 203 of the 1981 Amendments, supra note 43, added the Federal Deposit Insurance 

Corporation and the National Credit Union Administration to the list of agencies and 

institutions having the authority to enter into and to perform and carry out transactions and 

matters referred to in section 305 of the Freddie Mac Act.

Authority to Lend on the 

Security of Mortgages

Authority to Deal with

Freddie Mac
14

insured by an agency of the United States to the extent that Congress has the 

power to confer such authority.

(c) PRIOR APPROVAL OF SECRETARY FOR NEW PROGRAMS. —

The Corporation may not implement any new program (as such term is 

defined in section 4502 of this title) before obtaining the approval of the 

Secretary under section 4542 of this title.

56

(d)57 USE OF CREDIT SCORES AS CONDITION FOR APPROVAL OF 

RESIDENTIAL MORTGAGES. —

(1) DEFINITION.—In this subsection, the term “credit score” means a 

numerical value or a categorization created by a third party derived from 

a statistical tool or modeling system used by a person who makes or 

arranges a loan to predict the likelihood of certain credit behaviors, 

including default.

(2) USE OF CREDIT SCORES. —The Corporation shall condition 

purchase of a residential mortgage by the Corporation under this section 

on the provision of a credit score for the borrower only if—

(A) the credit score is derived from any credit scoring model that has 

been validated and approved by the Corporation under this subsection; 

and

(B) the Corporation provides for the use of the credit score by all of 

the automated underwriting systems of the Corporation and any other 

procedures and systems used by the Corporation to purchase 

residential mortgages that use a credit score.

(3) VALIDATION AND APPROVAL PROCESS. —The Corporation 

shall establish a validation and approval process for the use of credit score 

models, under which the Corporation may not validate and approve a 

credit score model unless the credit score model—

(A) satisfies minimum requirements of integrity, reliability, and 

accuracy;

(B) has a historical record of measuring and predicting default rates 

and other credit behaviors;

(C) is consistent with the safe and sound operation of the corporation;

(D) complies with any standards and criteria established by the 

Director of the Federal Housing Finance Agency under section 

1328(1) of the Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992; and

(E) satisfies any other requirements, as determined by the Corporation.

(4) REPLACEMENT OF CREDIT SCORE MODEL. —If the 

Corporation has validated and approved 1 or more credit score models 

56 Section 1382(l) of the Housing Enterprises Act, supra note 2, repealed the provisions 

permitting the Board of Directors to impose annual limitations on the amount of mortgages 

purchased and section 1382(m) of the Housing Enterprises Act substituted the current provision 

relating to approvals for new programs.

57 Section 310(b) of the Economic Growth, Regulatory Relief, and Consumer Protection Act, 

115 P.L. 174 (enacted May 24, 2018).

Approval for New

Programs

Use of Credit Scores
15

under paragraph (3) and the Corporation validates and approves an 

additional credit score model, the Corporation may determine that—

(A) the additional credit score model has replaced the credit score 

model or credit score models previously validated and approved; and

(B) the credit score model or credit score models previously validated 

and approved shall no longer be considered validated and approved for 

the purposes of paragraph (2).

(5) PUBLIC DISCLOSURE. —Upon establishing the validation and 

approval process required under paragraph (3), the Corporation shall 

make publicly available a description of the validation and approval 

process.

(6) APPLICATION. —Not later than 30 days after the effective date of 

this subsection, the Corporation shall solicit applications from developers 

of credit scoring models for the validation and approval of those models 

under the process required under paragraph (3).

(7) TIMEFRAME FOR DETERMINATION; NOTICE. —

(A) IN GENERAL. —The Corporation shall make a determination 

with respect to any application submitted under paragraph (6), and 

provide notice of that determination to the applicant, before a date 

established by the Corporation that is not later than 180 days after the 

date on which an application is submitted to the Corporation.

(B) EXTENSIONS. —The Director of the Federal Housing Finance 

Agency may authorize not more than 2 extensions of the date 

established under subparagraph (A), each of which shall not exceed 30 

days, upon a written request and a showing of good cause by the 

Corporation.

(C) STATUS NOTICE. —The Corporation shall provide notice to an 

applicant regarding the status of an application submitted under 

paragraph (6) not later than 60 days after the date on which the 

application was submitted to the Corporation.

(D) REASONS FOR DISAPPROVAL. —If an application submitted 

under paragraph (6) is disapproved, the Corporation shall provide to 

the applicant the reasons for the disapproval not later than 30 days 

after a determination is made under this paragraph.

(8) AUTHORITY OF DIRECTOR.—If the Corporation elects to use a 

credit score under this subsection, the Director of the Federal Housing 

Finance Agency shall require the Corporation to periodically review the 

validation and approval process required under paragraph (3) as the 

Director determines necessary to ensure that the process remains 

appropriate and adequate and complies with any standards and criteria 

established pursuant to section 1328(1) of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992.

(9) EXTENSION. —If, as of the effective date of this subsection, a credit 

score model has not been approved under paragraph (3), the Corporation 

may use a credit score model that was in use before the effective date of 

this subsection, if necessary to prevent substantial market disruptions, 

until the earlier of—

(A) the date on which a credit score model is validated and approved 

under paragraph (3); or

(B) the date that is 2 years after the effective date of this subsection.”
16

SEC. 306. OBLIGATIONS AND SECURITIES OF THE 

CORPORATION (12 U.S.C. § 1455)

(a) AUTHORITY TO ISSUE; TERMS AND CONDITIONS; VALIDITY. 

—The Corporation is authorized, upon such terms and conditions as it may 

prescribe, to borrow, to give security, to pay interest or other return, and to 

issue notes, debentures, bonds, or other obligations, or other securities, 

including without limitation mortgage-backed securities guaranteed by the 

Government National Mortgage Association in the manner provided in 

section 1721(g) of this title. Any obligation or security of the Corporation 

shall be valid and binding notwithstanding that a person or persons

purporting to have executed or attested the same may have died, become 

under disability, or ceased to hold office or employment before the issuance 

thereof.

(b) PROHIBITIONS AND RESTRICTIONS; CREATION OF LIENS 

AND CHARGES; RANK AND PRIORITY; CAUSES OF ACTION TO 

ENFORCE; JURISDICTION; SERVICE OF PROCESS.—The 

Corporation may, by regulation or by writing executed by the Corporation, 

establish prohibitions or restrictions upon the creation of indebtedness or 

obligations of the Corporation or of liens or charges upon property of the 

Corporation, including after-acquired property, and create liens and charges, 

which may be floating liens or charges, upon all or any part or parts of the 

property of the Corporation, including after-acquired property. Such 

prohibitions, restrictions, liens, and charges shall have such effect, including 

without limitation on the generality of the foregoing such rank and priority, 

as may be provided by regulations of the Corporation or by writings 

executed by the Corporation, and shall create causes of action which may be 

enforced by action in the United States District Court for the District of 

Columbia or in the United States district court for any judicial district in 

which any of the property affected is located. Process in any such action may 

run to and be served in any judicial district or any place subject to the 

jurisdiction of the United States.

(c) PURCHASE OF OBLIGATIONS; FUNDS, MAXIMUM AMOUNT 

OF PURCHASES, ETC.—

(1) The Secretary of the Treasury may purchase any obligations issued 

under subsection (a) of this section. For such purpose, the Secretary may 

use as a public debt transaction the proceeds of the sale of any securities 

issued under chapter 31 of title 31, and the purposes for which securities 

may be issued under such chapter are extended to include such purpose.

(2) The Secretary of the58 Treasury shall not at any time purchase any 

obligations under this subsection if the purchase would increase the 

aggregate principal amount of the outstanding holdings of obligations 

under this subsection by the Secretary to an amount greater than 

$2,250,000,000.

(3) Each purchase of obligations by the Secretary of the Treasury under 

this subsection shall be upon terms and conditions established to yield 

a rate of return determined by the Secretary to be appropriate, taking 

into consideration the current average rate on outstanding marketable 

58 Section 1161(c)(2)(A) of FHFRRA of 2008, supra note 15, made a technical correction to 

section 306(c)(2) by adding “the” before Treasury.

Authority to Issue Notes,

Debentures, Bonds, or

Other Obligations or

Securities

Establishment of Liens

Purchase of Obligations

By the Secretary of the

Treasury

SEC. 306
17

obligations of the United States as of the last day of the month preceding 

the making of the purchase.

(4) The Secretary of the Treasury may at any time sell, upon terms and 

conditions and at prices determined by the Secretary, any of the 

obligations acquired by the Secretary under this subsection.

(5) All redemptions, purchases and sales by the Secretary of the 

Treasury of obligations under this subsection shall be treated as public 

debt transactions of the United States.59

(d) VALIDITY OF PROVISIONS; VALIDITY OF RESTRICTIONS, 

PROHIBITIONS, LIENS OR CHARGES. —The provisions of this section 

and of any restriction, prohibition, lien, or charge referred to in subsection 

(b) of this section shall be fully effective notwithstanding any other law, 

including without limitation on the generality of the foregoing any law of or 

relating to sovereign immunity or priority.

(e) AUTHORITY TO PURCHASE, HOLD, OR INVEST BY PERSON, 

TRUST OR ORGANIZATION.—

(1) Any person, trust, or organization created pursuant to or existing 

under the laws of the United States or any State shall be authorized to 

purchase, hold, and invest in mortgages, obligations, or other securities 

which are or have been sold by the Corporation pursuant to this section 

or pursuant to section 1454 of this title to the same extent that such 

person, trust, or organization is authorized under any applicable law to 

purchase, hold, or invest in obligations issued by or guaranteed as to 

principal and interest by the United States or any agency or 

instrumentality thereof. Where State law limits the purchase, holding, 

or investment in obligations issued by the United States by such a 

person, trust, or organization, such Corporation mortgages, obligations, 

and other securities shall be considered to be obligations issued by the 

United States for purposes of the limitation.

(2) The provisions of paragraph (1) shall not apply with respect to a 

particular person, trust, or organization or class thereof in any State 

which, after December 21, 1979, enacts a statute which specifically 

names the Corporation and either prohibits or provides for a more 

limited authority to purchase, hold, or invest in such securities by such 

person, trust, or organization or class thereof than is provided in 

paragraph (1). The enactment by any State of any statute of the type 

described in the preceding sentence shall not affect the validity of any 

contractual commitment to purchase, hold, or invest which was made 

prior thereto.

(3) Any authority granted by paragraph (1) and not granted by any other 

Federal statute shall expire as of the end of June 30, 1985. Such 

expiration shall not affect the validity of any contractual commitment 

to purchase, hold, or invest which was made prior thereto pursuant to 

paragraph (1), and shall not affect the validity of any contractual 

59 Section 731(g) of FIRREA, supra note 1, amended subsection (c) of section 306 of the 

Freddie Mac Act by deleting the provision authorizing the Federal Home Loan Banks to 

guarantee obligations issue by Freddie Mac and by adding a new subsection (c) relating to the 

powers of the Secretary of the Treasury to purchase obligations issued under subsection (a).

Freddie Mac Securities as

Legal Investments

SEC. 306
18

commitment or other action to purchase, hold, or invest pursuant to any 

other authorization.60

(f) PREFFERED STOCK. —The Corporation may have preferred stock on 

such terms and conditions as the Board of Directors shall prescribe. Any 

preferred stock shall not be entitled to vote with respect to the election of 

any member of the Board of Directors.61

(g) SECURITIES EXEMPT FROM REGULATION. —All securities issued 

or guaranteed by the Corporation (other than securities guaranteed by the 

Corporation that are backed by mortgages not purchased by the Corporation) 

shall, to the same extent as securities that are direct obligations of or 

obligations guaranteed as to principal or interest by the United States, be 

deemed to be exempt securities within the meaning of the laws administered 

by the Securities and Exchange Commission.62

(h) SECURITIES BACKED BY MORTGAGES NOT PURCHASED BY 

CORPORATION. —

(1) The Corporation may not guarantee mortgage-backed securities or 

mortgage related payment securities backed by mortgages not 

purchased by the Corporation.63

(2)64 The Corporation shall insert appropriate language in all of the 

obligations and securities of the Corporation issued under this section 

and section 1454 of this title clearly indicating that such obligations and 

securities, together with the interest thereon, are not guaranteed by the 

United States and do not constitute a debt or obligation of the United 

States or any agency or instrumentality thereof other than the 

Corporation.

(i) PROHIBITION ON ASSESSMENT OR COLLECTION OF FEE OR 

CHARGE BY UNITED STATES.—Except for fees paid pursuant to 

sections 1452(c) and 1455(c) of this title65 66 and assessments pursuant to 

section 4516 of this title,67 68 no fee or charge may be assessed or collected 

60 Section 316(a) of the 1979 Amendments, supra note 11, added subsection (e) to section 306 

of the Freddie Mac Act.

61 Section 731(h) of FIRREA, supra note 1, amended subsection (f) of section 306 of the Freddie 

Mac Act by deleting references to non-voting common stock and be deleting a requirement that 

preferred stock have such terms as would make it eligible for listing on the New York Stock 

Exchange.

62 Section 5 of the Joint Resolution for the Extension of Federal Housing Administration 

Mortgage Insurance Programs, Public Law No. 98-35, approved May 26, 1983, added 

subsection (g) to section 306 of the Freddie Mac Act.

63 Section 210 of SMMEA, supra note 5, added subsection (h)(1) to section 306 of the Freddie 

Mac Act.

64 Section 1382(n)(1)(B) of the Housing Enterprises Act, supra note 2, added subsection (h)(2) 

to section 306 of the Freddie Mac Act.

65 Section 1161(c)(2)(B)(i) of FHFRRA of 2008, supra note 15, replaces “section 1316(c)” with 

“section 306(c)”, but the language reads sections 303(c) and 1316(c), so the text should 

probably read “sections 303(c) and 306(c)”.

66 Section 1452(c) was redesignated section 1452(d) of this title by FIRREA, supra note 1.

67 Section 1161(c)(2)(B)(ii) of FHFRRA of 2008, supra note 15, replaced “section 106” with 

“section 1316”.

68 Section 1382(n)(2) of the Housing Enterprises Act, supra note 2, added the references to 

section 1316(c) of the Freddie Mac Act and section 106 of the Housing Enterprises Act. 

Preferred Stock

SEC Exemption

Guarantee Restriction

Disclosure Language

SEC. 306 Fee Limitation
19

by the United States (including any executive department, agency, or 

independent establishment of the United States) on or with regard to the 

purchase, acquisition, sale, pledge, issuance, guarantee, or redemption of 

any mortgage, asset, obligation, or other security by the Corporation. No 

provision of this subsection shall affect the purchase of any obligation by 

any Federal home loan bank pursuant to section 1452(a) of this title.69

(j) NOTES, DEBENTURES, OR SUBSTANTIALLY IDENTICAL TYPES 

OF OBLIGATIONS; ISSUANCE, MATURITIES, INTEREST RATES, 

ETC.—

(1) Any notes, debentures, or substantially identical types of unsecured 

obligations of the Corporation evidencing money borrowed, whether 

general or subordinated, shall be issued upon the approval of the 

Secretary of the Treasury and shall have such maturities and bear such 

rate or rates of interest as may be determined by the Corporation with 

the approval of the Secretary of the Treasury.

(2) Any notes, debentures, or substantially70 identical types of 

unsecured obligations of the Corporation having maturities of 1 year or 

less that the Corporation has issued or is issuing as of August 9, 1989, 

shall be deemed to have been approved by the Secretary of the Treasury 

as required by this subsection. Such deemed approval shall expire 365 

days after August 9, 1989.

(3) Any notes, debentures, or substantially identical types of unsecured 

obligations of the Corporation having maturities of more than 1 year 

that the Corporation has issued or is issuing as of August 9, 1989, shall 

be deemed to have been approved by the Secretary of the Treasury as 

required by this subsection. Such deemed approval shall expire 60 days 

after August 9, 1989.

(k) SECURITIES IN FORM OF DEBT OBLIGATIONS OR TRUST 

CERTIFICATES OF BENEFICIAL INTEREST; ISSUANCE, 

MATURITIES, INTEREST RATES, ETC.—

(1) Any securities in the form of debt obligations or trust certificates of 

beneficial interest, or both, and based upon mortgages held and set aside 

by the Corporation, shall be issued upon the approval of the Secretary 

of the Treasury and shall have such maturities and shall bear such rate 

or rates of interest as may be determined by the Corporation with the 

approval of the Secretary of the Treasury.

(2) Any securities in the form of debt obligations or trust certificates of 

beneficial interest, or both, and based upon mortgages held and set aside 

by the Corporation, that the Corporation has issued or is issuing as of 

69 Section 441 of the Housing and Community Development Act of 1987, Public Law No. 100-

242, approved February 5, 1988, added the basic provisions of subsection (i) to section 306 of 

the Freddie Mac Act.

70 Section 1161(c)(2)(C) of the FHFRRA of 2008, supra note 15, amends the Federal Home 

Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) subsection (j)(2), by striking “of 

substantially” and inserting “or substantially”.

Approval by Secretary of

The Treasury of

Unsecured Obligations

Temporary Authority of

Secretary of the Treasury

to Purchase Obligations

and Securities
20

August 9, 1989, shall be deemed to have been approved by the Secretary 

of the Treasury as required by this subsection.71

(l)72 TEMPORARY AUTHORITY OF TREASURY TO PURCHASE 

OBLIGATIONS AND SECURITIES; CONDITIONS.—

(1) AUTHORITY TO PURCHASE.—

(A) GENERAL AUTHORITY.—In addition to the authority under 

subsection (c) of this section, the Secretary of the Treasury is 

authorized to purchase any obligations and other securities issued 

by the Corporation under any section of this Act, on such terms and 

conditions as the Secretary may determine and in such amounts as 

the Secretary may determine. Nothing in this subsection requires 

the Corporation to issue obligations or securities to the Secretary 

without mutual agreement between the Secretary and the 

Corporation. Nothing in this subsection permits or authorizes the 

Secretary, without the agreement of the Corporation, to engage in 

open market purchases of the common securities of the 

Corporation. 

(B) EMERGENCY DETERMINATION REQUIRED.—In 

connection with any use of this authority, the Secretary must 

determine that such actions are necessary to—

(i) provide stability to the financial markets; 

(ii) prevent disruptions in the availability of mortgage finance; 

and 

(iii) protect the taxpayer. 

(C) CONSIDERATIONS.—To protect the taxpayers, the Secretary 

of the Treasury shall take into consideration the following in 

connection with exercising the authority contained in this 

paragraph: 

(i) The need for preferences or priorities regarding payments 

to the Government. 

(ii) Limits on maturity or disposition of obligations or 

securities to be purchased. 

(iii) The Corporations plan for the orderly resumption of 

private market funding or capital market access. 

(iv) The probability of the Corporation fulfilling the terms of 

any such obligation or other security, including repayment. 

(v) The need to maintain the Corporations status as a private 

shareholder-owned company. 

71 Section 731(i) of FIRREA, supra note 1, added new subsections (j) and (k) to section 306 of 

the Freddie Mac Act relating to Treasury approval for issuance of securities.

72 Section 1117(b) of the FHFRRA of 2008, supra note 15, adds new subsection (l) which 

provides Treasury temporary authority to purchase obligations and securities.

SEC. 306
21

(vi) Restrictions on the use of Corporation resources, including limitations 

on the payment of dividends and executive compensation and any such 

other terms and conditions as appropriate for those purposes. 

(D) REPORTS TO CONGRESS.—Upon exercise of this authority, the 

Secretary shall report to the Committees on the Budget, Financial Services, and 

Ways and Means of the House of Representatives and the Committees on the 

Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate as to 

the necessity for the purchase and the determinations made by the Secretary 

under subparagraph (B) and with respect to the considerations required under 

subparagraph (C), and the size, terms, and probability of repayment or 

fulfillment of other terms of such purchase. 

(2) RIGHTS; SALE OF OBLIGATIONS AND SECURITIES.—

(A) EXERCISE OF RIGHTS.—The Secretary of the Treasury may, at any 

time, exercise any rights received in connection with such purchases. 

(B) SALE OF OBLIGATION AND SECURITIES.—The Secretary of the 

Treasury may, at any time, subject to the terms of the security or otherwise 

upon terms and conditions and at prices determined by the Secretary, sell any 

obligation or security acquired by the Secretary under this subsection. 

(C)70A DEFICIT REDUCTION. —The Secretary of the Treasury shall deposit 

in the General Fund of the Treasury any amounts received by the Secretary 

from the sale of any obligation acquired by the Secretary under this subsection, 

where such amounts shall be—

(i) dedicated for the sole purpose of deficit reduction; and

(ii) prohibited from use as an offset for other spending increases or 

revenue reductions.

(D) APPLICATION OF SUNSET TO PURCHASED OBLIGATIONS OR 

SECURITIES.—The authority of the Secretary of the Treasury to hold, 

exercise any rights received in connection with, or sell, any obligations or 

securities purchased is not subject to the provisions of paragraph (4). 

(3) FUNDING.—For the purpose of the authorities granted in this subsection, the 

Secretary of the Treasury may use the proceeds of the sale of any securities issued 

under chapter 31 of Title 31, and the purposes for which securities may be issued 

under chapter 31 of Title 31 are extended to include such purchases and the exercise 

of any rights in connection with such purchases. Any funds expended for the 

purchase of, or modifications to, obligations and securities, or the exercise of any 

rights received in connection with such purchases under this subsection shall be 

deemed appropriated at the time of such purchase, modification, or exercise. 

(4) TERMINATION OF AUTHORITY.—The authority under this subsection (l), 

with the exception of paragraphs (2) and (3) of this subsection, shall expire 

December 31, 2009. 

(5) AUTHORITY OF THE DIRECTOR WITH RESPECT TO EXECUTIVE 

COMPENSATION.—The Director shall have the power to approve, disapprove, or 

modify the executive compensation of the Corporation, as defined under Regulation 

S-K, 17 C.F.R. 229.

70A Section 1304(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 

Public Law 111-203, approved July 21, 2010 (“Dodd-Frank”), amends section 306(l) by 

redesignating subparagraph (C) as subparagraph (D) and inserting a new subparagraph (C).

SEC. 306

Executive Compensation

Revised July 21, 2010
22

SEC. 307. IMMUNITY OF CORPORATION; AUDITS AND 

REPORTING REQUIREMENTS; DATA COLLECTION; HOUSING 

ADVISORY COUNCIL (12 U.S.C. § 1456)

(a) RIGHTS AND REMEDIES OF CORPORATION; STATE 

QUALIFICATIONS OR SIMILAR STATUTES.—All rights and remedies 

of the Corporation, including without limitation on the generality of the 

foregoing any rights and remedies of the Corporation on, under, or with 

respect to any mortgage or any obligation secured thereby, shall be immune 

from impairment, limitation, or restriction by or under (1) any law (except 

laws enacted by the Congress expressly in limitation of this sentence) which 

becomes effective after the acquisition by the Corporation of the subject or 

property on, under, or with respect to which such right or remedy arises or 

exists or would so arise or exist in the absence of such law, or (2) any 

administrative or other action which becomes effective after such 

acquisition.73 The Corporation is authorized to conduct its business without 

regard to any qualification or similar statute in any State.74

(b) GOVERNMENT AUDITS; PROCEDURE; ACCESS TO RECORDS, 

ETC.; REIMBURSEMENT OF COSTS. —

(1) The programs, activities, receipts, expenditures, and financial 

transactions of the Corporation shall be subject to audit by the 

Comptroller General75 of the United States under such rules and 

regulations as may be prescribed by the Comptroller General. The 

Representatives of the Government Accountability Office shall have 

access to all books, accounts, financial records, reports, files and all 

other papers, things, or property belonging to or in use by the 

Corporation and necessary to facilitate the audit, and they shall be 

afforded full facilities for verifying transactions with the balances or 

securities held by depositaries, fiscal agents, and custodians. A report 

on each such audit shall be made by the Comptroller General to the 

Congress. The Corporation shall reimburse the Government 

Accountability Office for the full cost of any such audit as billed 

therefor by the Comptroller General.

(2) To carry out this subsection, the representatives of the Government 

Accountability Office shall have access, upon request to the 

Corporation or any auditor for an audit of the Corporation under 

subsection (d) of this section, to any books, accounts, financial records, 

reports, files, or other papers, things, or property belonging to or in use 

by the Corporation and used in any such audit and to any papers, 

records, files, and reports of the auditor used in such an audit.76

73 Section 731(j)(1) of FIRREA, supra note 1, deleted the last sentence from section 307(a) of 

the Freddie Mac Act relating to Freddie Mac’s immunities and priorities to which it was entitled 

as if it had been the United States or an unincorporated agency of the United States.

74 Section 731(j)(1) of FIRREA, supra note 1, added a new sentence to section 307(a) of the 

Freddie Mac Act authorizing Freddie Mac to conduct business without regard to any 

qualification or similar statute in any State.

75 Section 1382(o)(2) of the Housing Enterprises Act, supra note 2, expanded the audit authority 

of the Comptroller General to include programs, activities, receipts and expenditures. The 

previous sentence covered only financial transactions.

76 Section 1382(o)(3) of the Housing Enterprises Act, supra note 2, added subsection (b)(2) to 

section 307(b) of the Freddie Mac Act dealing with access to books and records.

Remedial Provision

GAO Audit
23

(c) FINANCIAL REPORTS; SUBMISSION TO DIRECTOR; 

CONTENTS. —

(1) The Corporation shall submit to the Director of the Federal Housing 

Finance Agency77 annual and quarterly reports of the financial condition 

and operations of the Corporation which shall be in such form, contain 

such information, and be submitted on such dates as the Director shall 

require.

(2) Each such annual report shall include—

(A) financial statements prepared in accordance with generally 

accepted accounting principles;

(B) any supplemental information or alternative presentation that 

the Director may require; and

(C) an assessment (as of the end of the Corporation's most recent 

fiscal year), signed by the chief executive officer and chief 

accounting or financial officer of the Corporation, of—

(i) the effectiveness of the internal control structure and 

procedures of the Corporation; and

(ii) the compliance of the Corporation with designated safety 

and soundness laws.

(3) The Corporation shall also submit to the Director any other reports 

required by the Director pursuant to section 1314 of the Federal 

Housing Enterprises Financial Safety and Soundness Act of 1992 [12 

U.S.C. 4514].

(4) Each report of financial condition shall contain a declaration by the 

president, vice president, treasurer, or any other officer designated by 

the Board of Directors of the Corporation to make such declaration, that 

the report is true and correct to the best of such officer's knowledge and 

belief.78

(d) INDEPENDENT AUDITS OF FINANCIAL STATEMENTS. —(1) The 

Corporation shall have an annual independent audit made of its financial 

statements by an independent public accountant in accordance with 

generally accepted auditing standards.

(2) In conducting an audit under this subsection, the independent public 

accountant shall determine and report on whether the financial 

statements of the Corporation (A) are presented fairly in accordance 

with generally accepted accounting principles, and (B) to the extent 

77 Section 1161(c)(1) of the FHFRRA of 2008, supra note 15, amends in each of sections 

303(b)(2) (12 U.S.C. 1452(b)(2)), 303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 

U.S.C. 1456(c)(1)), by striking ‘‘Director of the Office of Federal Housing Enterprise 

Oversight of the Department of Housing and Urban Development’’ each place that term 

appears, and inserting ‘‘Director of the Federal Housing Finance Agency’’.

78 Section 1382(p) of the Housing Enterprises Act, supra note 2, added subsection (c) to section 

307 of the Freddie Mac Act dealing with reports of financial condition and operations.

Reports of Financial

Condition

SEC. 307

Annual Independent Audit
24

determined necessary by the Director, comply with any disclosure 

requirements imposed under subsection (c)(2)(B) of this section.79

(e) MORTGAGE DATA COLLECTION AND REPORTING 

REQUIREMENTS. —

(1) The Corporation shall collect, maintain, and provide to the Director 

of the Federal Housing Finance Agency, in a form determined by the 

Director80, data relating to its mortgages on housing consisting of 1 to 4 

dwelling units. Such data shall include—

(A) the income, census tract location, race, and gender of 

mortgagors under such mortgages;

(B) the loan-to-value ratios of purchased mortgages at the time of 

origination;

(C) whether a particular mortgage purchased is newly originated or 

seasoned;

(D) the number of units in the housing subject to the mortgage and 

whether the units are owner-occupied; and

(E) any other characteristics that the Secretary considers 

appropriate, to the extent practicable.

(2) The Corporation shall collect, maintain, and provide to the Director 

of the Federal Housing Finance Agency, in a form determined by the 

Director81, data relating to its mortgages on housing consisting of more 

than 4 dwelling units. Such data shall include—

(A) census tract location of the housing;

(B) income levels and characteristics of tenants of the housing (to 

the extent practicable);

(C) rent levels for units in the housing;

(D) mortgage characteristics (such as the number of units financed 

per mortgage and the amount of loans);

(E) mortgagor characteristics (such as nonprofit, for-profit, limited 

equity cooperatives);

(F) use of funds (such as new construction, rehabilitation, 

refinancing);

79 Section 1382(q) of the Housing Enterprises Act, supra note 2, added subsection (d) to section 

307 of the Freddie Mac Act dealing with annual audits of financial statements.

80 Section 1161(c)(3)(A)(i) of the FHFRRA of 2008, supra note 15, amends section 307 (12 

U.S.C. 1456) in subsection (e) in paragraph (1), by striking “to the Secretary, in a form 

determined by the Secretary” and inserting “to the Director of the Federal Housing Finance 

Agency, in a form determined by the Director”.

81 Section 1161(c)(3)(A)(ii) of the FHFRRA of 2008, supra note 15, amends section 307 (12 

U.S.C. 1456) in subsection (e) in paragraph (2), by striking “to the Secretary, in a form 

determined by the Secretary” and inserting “to the Director of the Federal Housing 

Finance Agency, in a form determined by the Director”.

Mortgage Data Collection

Requirements
25

(G) type of originating institution; and

(H) any other information that the Secretary considers appropriate, 

to the extent practicable.

(3)(A) Except as provided in subparagraph (B), this subsection shall 

apply only to mortgages purchased by the Corporation after December 

31, 1992.

(B) This subsection shall apply to any mortgage purchased by the 

Corporation after the date determined under subparagraph (A) if 

the mortgage was originated before such date, but only to the extent 

that the data referred in paragraph (1) or (2), as applicable, is 

available to the Corporation.82

(f) REPORT OF HOUSING ACTIVITIES; CONTENTS; PUBLIC 

DISLOSURE. —

(1) The Corporation shall submit to the Committee on Banking, Finance 

and Urban Affairs of the House of Representatives, the Committee on 

Banking, Housing, and Urban Affairs of the Senate, and the Director of 

the Federal Housing Finance Agency83 a report on its activities under 

subpart B of part 2 of subtitle A of the Federal Housing Enterprises 

Financial Safety and Soundness Act of 1992 [12 U.S.C. 4561 et seq.].

(2) The report under this subsection shall—

(A) include, in aggregate form and by appropriate category, 

statements of the dollar volume and number of mortgages on 

owner-occupied and rental properties purchased which relate to 

each of the annual housing goals established under such subpart;

(B) include, in aggregate form and by appropriate category, 

statements of the number of families served by the Corporation, the 

income class, race, and gender of homebuyers served, the income 

class of tenants of rental housing (to the extent such information is 

available), the characteristics of the census tracts, and the 

geographic distribution of the housing financed;

(C) include a statement of the extent to which the mortgages 

purchased by the Corporation have been used in conjunction with 

public subsidy programs under Federal law;

(D) include statements of the proportion of mortgages on housing 

consisting of 1 to 4 dwelling units purchased by the Corporation 

that have been made to first-time homebuyers, as soon as providing 

such data is practicable, and identifying any special programs (or 

revisions to conventional practices) facilitating homeownership 

opportunities for first-time homebuyers;

82 Section 1382(r) of the Housing Enterprises Act, supra note 2, added subsection (e) to section 

307 of the Freddie Mac Act dealing with mortgage data collection and reporting requirements.

83 Section 1161(c)(3)(B)(i) of the FHFRRA of 2008, supra note 15, amends section 307 (12 

U.S.C. 1456) in subsection (f) in paragraph (1), by striking “and the Secretary” and inserting 

“and the Director of the Federal Housing Finance Agency”.

SEC. 307

Reports Related to

Housing Goals
26

(E) include, in aggregate form and by appropriate category, the data 

provided to the and the Director of the Federal Housing Finance 

Agency84 under subsection (e)(1)(B) of this section;

(F) compare the level of securitization versus portfolio activity;

(G) assess underwriting standards, business practices, repurchase 

requirements, pricing, fees, and procedures, that affect the purchase 

of mortgages for low- and moderate-income families, or that may 

yield disparate results based on the race of the borrower, including 

revisions thereto to promote affordable housing or fair lending;

(H) describe trends in both the primary and secondary multifamily 

housing mortgage markets, including a description of the progress 

made, and any factors impeding progress, toward standardization 

and securitization of mortgage products for multifamily housing;

(I) describe trends in the delinquency and default rates of 

mortgages secured by housing for low- and moderate-income 

families that have been purchased by the Corporation, including a 

comparison of such trends with delinquency and default 

information for mortgage products serving households with 

incomes above the median level that have been purchased by the 

Corporation, and evaluate the impact of such trends on the 

standards and levels of risk of mortgage products serving low- and 

moderate-income families;

(J) describe in the aggregate the seller and servicer network of the 

Corporation, including the volume of mortgages purchased from 

minority-owned, women-owned, and community-oriented lenders, 

and any efforts to facilitate relationships with such lenders;

(K) describe the activities undertaken by the Corporation with 

nonprofit and for-profit organizations and with State and local 

governments and housing finance agencies, including how the 

Corporation's activities support the objectives of comprehensive 

housing affordability strategies under section 12705 of title 42; and

(L) include any other information that the Director of the Federal 

Housing Finance Agency considers appropriate.

(3)(A) The Corporation shall make each report under this subsection 

available to the public at the principal and regional offices of the 

Corporation.

(B) Before making a report under this subsection available to the 

public, the Corporation may exclude from the report information 

the Director of the Federal Housing Finance Agency85 has 

determined is proprietary information under section 1326 of the 

84 Section 1161(c)(3)(B)(ii) of the FHFRRA of 2008, supra note 15, amends section 307 (12 

U.S.C. 1456) in subsection (f) in paragraph (2), by striking “the Secretary” each place that 

term appears and inserting “the Director of the Federal Housing Finance Agency”.

85 Section 1161(c)(3)(B)(iii) of the FHFRRA of 2008, supra note 15, amends section 307 (12 

U.S.C. 1456) in subsection (f) in paragraph (3)(B), by striking “Secretary” and inserting 

“Director of the Federal Housing Finance Agency”.
27

Federal Housing Enterprises Financial Safety and Soundness Act 

of 1992 [12 U.S.C. 4546].86

(g) AFFORDABLE HOUSING ADVISORY COUNCIL. —

(1) Not later than 4 months after October 28, 1992, the Corporation shall 

appoint an Affordable Housing Advisory Council to advise the 

Corporation regarding possible methods for promoting affordable 

housing for low- and moderate-income families.

(2) The Affordable Housing Advisory Council shall consist of 15 

individuals, who shall include representatives of community-based and 

other nonprofit and for-profit organizations and State and local 

government agencies actively engaged in the promotion, development, 

or financing of housing for low- and moderate-income families.87

SEC. 308. PROHIBITED ACTIVITIES; PENALTIES FOR VIOLATIONS 

BY ORGANIZATIONS, OFFICERS AND MEMBERS OF 

ORGANIZATIONS, AND INDIVIDUALS (12 U.S.C. § 1457)

Except as expressly authorized by statute of the United States, no individual 

or organization (except the Corporation) shall use the term "Federal Home 

Loan Mortgage Corporation", or any combination of words including the 

words "Federal", and "Home Loan", and "Mortgage", as a name or part 

thereof under which any individual or organization does any business, but 

this sentence shall not make unlawful the use of any name under which 

business is being done on July 24, 1970. No individual or organization shall 

use or display (1) any sign, device, or insigne prescribed or approved by the 

Corporation for use or display by the Corporation or by members of the 

Federal home loan banks, (2) any copy, reproduction, or colorable imitation 

of any such sign, device, or insigne, or (3) any sign, device, or insigne 

reasonably calculated to convey the impression that it is a sign, device, or 

insigne used by the Corporation or prescribed or approved by the 

Corporation, contrary to regulations of the Corporation prohibiting, or 

limiting or restricting, such use or display by such individual or organization. 

An organization violating this subsection shall for each violation be 

punished by a fine of not more than $10,000. An officer or member of an 

organization participating or knowingly acquiescing in any violation of this 

subsection shall be punished by a fine of not more than $5,000 or 

imprisonment for not more than one year, or both. An individual violating 

this subsection shall for each violation be punished as set forth in the

sentence next preceding this sentence.88

86 Section 1382(s) of the Housing Enterprises Act, supra note 2, added subsection (f) to section 

307 of the Freddie Mac Act dealing with reports related to accomplishment of housing goals.

87 Section 1382(s) of the Housing Enterprises Act, supra note 2, added subsection (g) to section 

307 of the Freddie Mac Act establishing the Affordable Housing Advisory Council.

88 Section 731(k) of FIRREA, supra note 1, deleted the subsection designated in subsection (a) 

and deleted subsections (b), (c), (d), (e), and (f) which related to certain penal provisions found 

in 18 U.S.C. §§ 201, 202, 203, 205, 207, 208, 209, 286, 287, 371, 506, 595, 602, 641, 654, 701,

872, 1001, 1002, 1016, 1017, 1361, 1505 and 2073.

Affordable Housing

Advisory Council

SEC. 307

Exclusive Use of Name
28

SEC. 309. TERRITORIAL APPLICABILITY (12 U.S.C. § 1458)

Notwithstanding any other law, this chapter shall be applicable to the several 

States, the District of Columbia, the Commonwealth of Puerto Rico, and the 

territories and possessions of the United States.

SEC. 310. SEPARABILITY (12 U.S.C. § 1459)89

Notwithstanding any other evidences of the intention of Congress, it is 

hereby declared to be the controlling intent of Congress that if any provision 

of this chapter, or the application thereof to any person or circumstances, is 

held invalid, the remainder of this chapter, or the application of such 

provision to persons or circumstances other than those as to which it is held 

invalid, shall not be affected thereby.

89 Section 731(l) of FIRREA, supra note 1, deleted the first sentence of section 310 of the 

Freddie Mac Act which related to the powers and functions of the Board of Directors of Freddie 

Mac under the Freddie Mac Act being exercisable without regard to any other law.