UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2022

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

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 ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth 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 is a shell company (as defined in Rule 12b-2 of the Exchange 

Act).    Yes ☐  No ☒		 			

As of October 11, 2022, there were 650,059,553 shares of the registrant's common stock outstanding.
Table of Contents

Page

MANAGEMENT'S DISCUSSION AND ANALYSIS OF 

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

1

n Introduction 1

n Market Conditions and Economic Indicators 4

n Consolidated Results of Operations 9

n Consolidated Balance Sheets Analysis 14

n Our Portfolios 15

n Our Business Segments 17

n Risk Management 27

l	Credit Risk 27

l	Market Risk 35

n Liquidity and Capital Resources 38

n Critical Accounting Estimates 44

n Regulation and Supervision 45

n Forward-Looking Statements 47

FINANCIAL STATEMENTS 50

OTHER INFORMATION 100

CONTROLS AND PROCEDURES 102

EXHIBIT INDEX 103

SIGNATURES 104

FORM 10-Q INDEX 105

Table of Contents

Freddie Mac 3Q 2022 Form 10-Q i
MD&A TABLE INDEX

1 Summary of Consolidated Results of Operations 9

2 Components of Net Interest Income 10

3 Analysis of Net Interest Yield 11

4 Components of Guarantee Income 12

5 Investment Gains (Losses), Net 12

6 Benefit (Provision) for Credit Losses 12

7 Components of Legislative Assessments Expense 13

8 Summarized Condensed Consolidated Balance Sheets 14

9 Mortgage Portfolio 15

10 Guarantee Portfolio 15

11 Mortgage-Related Investments Portfolio 16

12 Other Investments Portfolio 16

13 Single-Family Segment Financial Results 22

14 Multifamily Segment Financial Results 26

15 Allowance for Credit Losses Activity 27

16 Allowance for Credit Losses Ratios 27

17 Single-Family New Business Activity 29

18 Single-Family Mortgage Portfolio CRT Issuance 29

19 Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding 30

20 Serious Delinquency Rates for Credit-Enhanced and Non-Credit-Enhanced Loans in Our Single-Family Mortgage Portfolio 30

21 Single-Family Credit Enhancement Receivables 31

22 Credit Quality Characteristics of Our Single-Family Mortgage Portfolio 31

23 Single-Family Mortgage Portfolio Attribute Combinations 32

24 Multifamily Mortgage Portfolio CRT Issuance 34

25 Credit-Enhanced and Non-Credit-Enhanced Loans Underlying Our Multifamily Mortgage Portfolio 34

26 PVS-YC and PVS-L Results Assuming Shifts of the Yield Curve 35

27 Duration Gap and PVS Results 36

28 PVS-L Results Before Derivatives and After Derivatives 36

29 Earnings Sensitivity to Changes in Interest Rates 37

30 Liquidity Sources 38

31 Funding Sources 39

32 Debt of Freddie Mac Activity 39

33 Maturity and Redemption Dates 40

34 Debt of Consolidated Trusts Activity 41

35 Net Worth Activity 42

36 Capital Metrics Under ERCF 43

37 Forecasted House Price Growth Rates 44

38 Current and Proposed 2023-2024 Multifamily Affordable Housing Goal Benchmark Levels 46

Table Description Page

 

Table of Contents

Freddie Mac 3Q 2022 Form 10-Q ii
Management's Discussion and Analysis of 

Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q 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-Q. We 

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

10-Q. 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 MD&A - Forward-Looking Statements section of this Form 10-Q and the 

Introduction and Risk Factors sections of our Annual Report on Form 10-K for the year ended December 31, 2021, or 2021 

Annual Report.

Throughout this Form 10-Q, we use certain acronyms and terms that are defined in the Glossary of our 2021 Annual Report. 

You should read the following MD&A in conjunction with our 2021 Annual Report and our condensed consolidated financial 

statements and accompanying notes for the three and nine months ended September 30, 2022 included in Financial 

Statements.

INTRODUCTION

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 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.

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. Our 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 the 

support provided by Treasury pursuant to the Purchase Agreement currently enables us to have adequate liquidity to conduct 

normal business activities. For additional information on the conservatorship and related matters and the Purchase Agreement, 

see our 2021 Annual Report.

Management's Discussion and Analysis Introduction

Freddie Mac 3Q 2022 Form 10-Q 1
Business Results

Consolidated Financial Results

Net Revenues and Net Income

(In billions)

$5.2

$5.6

$5.8

$5.4

$5.2

$2.9 $2.7

$3.8

$2.5

$1.3

Net Revenues Net Income

3Q21 4Q21 1Q22 2Q22 3Q22

Net Worth

(In billions)

$25.3

$28.0

$31.7

$34.1

$35.2

09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

n	 Net income was $1.3 billion for 3Q 2022, a decrease of 55% year-over-year, primarily driven by a credit reserve build in 

Single-Family.

n Net revenues were $5.2 billion, down 1% year-over-year, as higher net interest income in Single-Family was offset by a 

decline in non-interest income in Multifamily.

n	 Net worth was $35.2 billion as of September 30, 2022, up from $34.1 billion as of June 30, 2022 and $25.3 billion as of 

September 30, 2021. The quarterly increases in net worth have been, or will be, added to the aggregate liquidation 

preference of the senior preferred stock. The liquidation preference of the senior preferred stock was $106.7 billion on 

September 30, 2022, and will increase to $107.9 billion on December 31, 2022 based on the increase in net worth in 3Q 

2022. 

Market Liquidity

 Market Liquidity

(In thousands)

1,188 1,178

834

616

542

415 357 279 263 297

612

598

412

205 95

161 223

143

148

150

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

3Q21 4Q21 1Q22 2Q22 3Q22

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 $135 billion in liquidity to the mortgage 

market in 3Q 2022, which enabled the financing of 542,000 home purchases, refinancings, and rental units.

Management's Discussion and Analysis Introduction

Freddie Mac 3Q 2022 Form 10-Q 2
Mortgage Portfolio Balances

Mortgage Portfolio

(UPB in billions)

$3,086

$3,207

$3,299 $3,343 $3,387

$2,682 $2,792 $2,884 $2,928 $2,971

$404

$415

$415 $415 $416

Single-Family mortgage portfolio Multifamily mortgage portfolio

09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

n	 Our mortgage portfolio increased 10% year-over-year to $3.4 trillion, driven by an 11% increase in our Single-Family 

mortgage portfolio and a 3% increase in our Multifamily mortgage portfolio.

l	 The growth in our Single-Family mortgage portfolio was 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 recent quarters, which contributed to new business acquisitions having a larger 

loan size compared to older vintages that continued to run off.

l	 Our Multifamily mortgage portfolio increased as new business activities were partially offset by borrower prepayments.

Credit Risk Transfer

Single-Family Mortgage Portfolio with Credit Enhancement

(UPB in billions)

$1,345

$1,491

$1,594

$1,726

$1,803

50%

53%

55%

59%

61%

UPB Percentage

09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

Multifamily Mortgage Portfolio with Credit Enhancement

(UPB in billions)

$380 $389 $389 $397 $394

94% 94% 94% 96% 95%

UPB Percentage

09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

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

in various credit enhancement arrangements to reduce our credit risk exposure. We transfer a portion of the credit risk, 

primarily on recently acquired loans, through our CRT programs. We also reduce our credit risk exposure through other credit 

enhancement arrangements, mainly primary mortgage insurance. See MD&A - Risk Management – Credit Risk for 

additional information on our credit enhancements and CRT programs.

Management's Discussion and Analysis Introduction

Freddie Mac 3Q 2022 Form 10-Q 3
MARKET CONDITIONS AND ECONOMIC INDICATORS

The following graphs and related discussions present certain market and macroeconomic 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.

Interest Rates(1)

 Quarterly Ending Rates 

3.02% 3.01% 3.11%

4.67%

5.70%

6.70%

0.03% 0.05% 0.05% 0.16%

1.09%

2.47%

0.15% 0.13% 0.21%

0.96% 2.29%

3.75%

1.44% 1.57% 1.57%

2.37%

3.05%

3.83%

30-year PMMS SOFR

3-month LIBOR 10-year LIBOR

06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

(1) 30-year PMMS interest rates are as of the last week in each quarter. SOFR 

interest rates are 30-day average rates. 

n The 30-year Primary Mortgage Market Survey (PMMS) 

interest rate is indicative of what a consumer could 

expect to be offered on a first-lien prime conventional 

conforming home purchase mortgage with an LTV of 

80%. Increases (decreases) in the PMMS rate typically 

result in decreases (increases) in refinancing activity 

and total originations. 

n Changes in benchmark interest rates can significantly 

affect our financial position and results of operations, 

including our net interest income and the fair value of 

our financial instruments. We have elected hedge 

accounting for certain assets and liabilities in an effort 

to reduce GAAP earnings variability attributable to 

changes in benchmark interest rates.

Unemployment Rate and Monthly Net New Jobs 

543,000

637,000

539,000

349,000

372,000

4.7%

3.9% 3.6% 3.6% 3.5%

Average monthly net new jobs

(non-farm)

National unemployment rate

(as of the last month in each quarter)

3Q21 4Q21 1Q22 2Q22 3Q22

Source: U.S. Bureau of Labor Statistics.

n	 Changes in the national unemployment rate can affect 

several market factors, including the demand for 

single-family and multifamily housing and loan 

delinquency rates.

n The unemployment rate fell to 3.5% as of September 

2022, down from 4.7% as of September 2021. 

Employment growth remains strong, with the U.S. 

economy adding 3.8 million non-farm payroll jobs from 

December 2021 through September 2022 after 

seasonal adjustment.

Management's Discussion and Analysis Market Conditions and Economic Indicators 

Freddie Mac 3Q 2022 Form 10-Q 4
Single-Family Housing and Mortgage Market Conditions

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

6,782

6,958 6,833

5,982

5,378

6,067 6,203 6,057

5,373

4,770

715

755 776

609

608

3.4% 3.7%

4.9%

2.3%

(2.2)%

Sales of existing homes (units in thousands)

Sales of new homes (units in thousands)

Single-family house price growth rate

3Q21 4Q21 1Q22 2Q22 3Q22

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

House Price Index.

U.S. Single-Family Mortgage Originations 

(UPB in billions)

$1,125

$1,090

$995

$725

$650

2Q21 3Q21 4Q21 1Q22 2Q22

Source: Inside Mortgage Finance. 3Q 2022 U.S. single-family mortgage 

originations data is not yet available.

n	 Home sales decreased in 3Q 2022 compared to 3Q 

2021 due to the substantial increase in mortgage 

interest rates.

n	 Single-family house prices decreased 2.2% during 3Q 

2022, compared to an increase of 3.4% during 3Q 

2021.

n	 U.S. single-family loan origination volumes decreased 

to $0.7 trillion in 2Q 2022 from $1.1 trillion in 2Q 2021 

as a result of higher mortgage interest rates and 

increasing house prices.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 3Q 2022 Form 10-Q 5
Multifamily Housing and Mortgage Market Conditions 

Apartment Vacancy Rates and Change in Effective Rents 

4.8% 4.8% 4.6% 4.5% 4.4%

8.1%

3.0% 2.6% 2.9%

1.8%

0.8%

Apartment vacancy rates

Quarterly change in effective rents

Long-term quarterly effective rent growth rate

(2000 - 3Q22)

3Q21 4Q21 1Q22 2Q22 3Q22

Source: Reis. 

Apartment Completions and Net Absorption 

(Units in thousands)

49 47

26 27

17

114

45

39

47

24

Completions Net absorption

3Q21 4Q21 1Q22 2Q22 3Q22

Source: Reis.

n	 Vacancy rates continued to decrease during 3Q 2022. 

The decrease in vacancy rates was driven by ongoing 

demand resulting from the rising cost of single-family 

home ownership and a strong labor market.

n	 Effective rent growth (i.e., the average rent paid by the 

renter over the term of the lease, adjusted for 

concessions by the property owner and costs borne 

by the renter) increased at the national level and in 

most major geographic markets in 3Q 2022. While rent 

growth increased 10.7% over the past year, it has 

begun to decelerate and is expected to continue to 

moderate over the near term due to slower economic 

growth.

n	 Net absorptions have decreased from the cyclical 

highs seen earlier in the year. Meanwhile, completions 

have been relatively constrained during 3Q 2022 but 

are expected to increase in the future.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 3Q 2022 Form 10-Q 6
Mortgage Debt Outstanding 

Single-Family Mortgage Debt Outstanding

(UPB in billions) $12,024 $12,280 $12,549 $12,704 $12,985

21.3% 21.8% 22.2% 22.7% 22.5%

U.S. single-family mortgage debt outstanding

Freddie Mac share

2Q21 3Q21 4Q21 1Q22 2Q22

Source: Federal Reserve Financial Accounts of the United States of America. 3Q 

2022 U.S. single-family mortgage debt outstanding data is not yet available.

Multifamily Mortgage Debt Outstanding 

 (UPB in billions)

$1,808 $1,835

$1,883

$1,921

$1,961

19.0% 19.1% 19.1% 18.8% 18.5%

U.S. multifamily mortgage debt outstanding

Freddie Mac share

2Q21 3Q21 4Q21 1Q22 2Q22

Source: Federal Reserve Financial Accounts of the United States of America. 3Q 

2022 U.S. multifamily mortgage debt outstanding data is not yet available.

n	 U.S. single-family mortgage debt outstanding 

increased year-over-year, primarily driven by house 

price appreciation in recent quarters and first-time 

homebuyers. An increase in U.S. single-family 

mortgage debt outstanding typically results in the 

growth of our Single-Family mortgage portfolio.

n	 Our share of multifamily mortgage debt outstanding 

decreased in 2Q 2022 as we accounted for a smaller 

share of total multifamily mortgage debt origination 

volume. This reduction in our share of mortgage debt 

origination volume was driven by significant 

competition during 2Q 2022.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 3Q 2022 Form 10-Q 7
Delinquency Rates

Single-Family Serious Delinquency Rates

1.46%

1.12% 0.92% 0.76% 0.67%

3.40%

2.83%

2.39%

2.12%

Freddie Mac

Total mortgage market

3Q21 4Q21 1Q22 2Q22 3Q22

Source: National Delinquency Survey from the Mortgage Bankers Association. 

3Q 2022 total mortgage market rate is not yet available.

Multifamily Delinquency Rates

0.12%

0.08% 0.08% 0.07%

0.13%

1.30%

1.41%

1.26%

1.12%

0.99%

0.30%

0.25%

0.22%

0.18%

0.00% 0.00% 0.00% 0.00%

Freddie Mac

Multifamily CMBS market

FDIC insured institutions

ACLI investment bulletin

3Q21 4Q21 1Q22 2Q22 3Q22

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

Wells Fargo Securities (Multifamily CMBS market, excluding REOs), American 

Council of Life Insurers (ACLI). The 3Q 2022 delinquency rates for FDIC insured 

institutions and ACLI investment bulletin are not yet available.

n	 Our Single-Family serious delinquency rate is based 

on the number of loans in our Single-Family mortgage 

portfolio that are three monthly payments or more past 

due or in the process of foreclosure.

n	 Our Single-Family serious delinquency rate declined 

year-over-year primarily due to borrowers exiting 

forbearance and completing loan workout activities 

that return their mortgages to current status.

n	 Our Multifamily delinquency rate is based on the UPB 

of loans in our Multifamily mortgage portfolio that are 

two monthly payments or more past due or in the 

process of foreclosure.

n Our Multifamily delinquency rate increased slightly 

year-over-year and also increased quarter-overquarter. The quarter-over-quarter increase was 

primarily due to delinquencies related to two loan 

pools having a common sponsor. The loans in these 

two pools are included in K Certificates with 

subordination.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 3Q 2022 Form 10-Q 8
CONSOLIDATED RESULTS OF OPERATIONS

The discussion of our consolidated results of operations should be read in conjunction with our condensed consolidated 

financial statements and accompanying notes. 

The table below compares our summarized consolidated results of operations. Certain amounts in the prior period have been 

reclassified to conform to the current presentation. See Note 1 for additional information about the prior period 

reclassifications.

Table 1 - Summary of Consolidated Results of Operations

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Net interest income $4,554 $4,418 $136 3 % $13,417 $12,824 $593 5 %

Guarantee income 125 246 (121) (49) 400 850 (450) (53) 

Investment gains (losses), net 415 383 32 8 2,249 2,227 22 1 

Other income (loss) 87 200 (113) (57) 365 485 (120) (25) 

Net revenues 5,181 5,247 (66) (1) 16,431 16,386 45 — 

Benefit (provision) for credit 

losses (1,796) 243 (2,039) (839) (1,266) 1,179 (2,445) (207) 

Salaries and employee benefits (387) (352) (35) (10) (1,119) (1,042) (77) (7) 

Credit enhancement expense (542) (386) (156) (40) (1,559) (1,090) (469) (43) 

Benefit for (decrease in) credit 

enhancement recoveries 210 (60) 270 450 192 (510) 702 138 

Legislative assessments expense (753) (734) (19) (3) (2,260) (2,121) (139) (7) 

Other expense (353) (312) (41) (13) (1,031) (1,038) 7 1 

Non-interest expense (1,825) (1,844) 19 1 (5,777) (5,801) 24 — 

Income (loss) before income tax 

(expense) benefit 1,560 3,646 (2,086) (57) 9,388 11,764 (2,376) (20) 

Income tax (expense) benefit (247) (727) 480 66 (1,824) (2,399) 575 24 

Net income (loss) 1,313 2,919 (1,606) (55) 7,564 9,365 (1,801) (19) 

Other comprehensive income 

(loss), net of taxes and 

reclassification adjustments

 (181) (10) (171) (1,710) (367) (467) 100 21 

Comprehensive income (loss) $1,132 $2,909 ($1,777) (61) % $7,197 $8,898 ($1,701) (19) %

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 3Q 2022 Form 10-Q 9
Net Revenues

Net Interest Income

The table below presents the components of net interest income.

Table 2 - Components of Net Interest Income

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Guarantee net interest income:

Contractual net interest income(1) $3,577 $2,912 $665 23 % $10,379 $7,929 $2,450 31 %

Deferred fee income 550 955 (405) (42) 2,536 3,729 (1,193) (32) 

Total guarantee net interest income 4,127 3,867 260 7 12,915 11,658 1,257 11 

Investments net interest income 914 729 185 25 2,186 2,505 (319) (13) 

Income (expense) from hedge accounting (487) (178) (309) (174) (1,684) (1,339) (345) (26) 

Net interest income $4,554 $4,418 $136 3 % $13,417 $12,824 $593 5 %

(1) Includes majority of amounts previously presented as net interest income related to the legislated guarantee fees. Prior period amounts have been reclassified to 

conform to the current period presentation.

Key Drivers:

n Guarantee net interest income 

l	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - Increased primarily driven by continued mortgage portfolio 

growth and higher average portfolio guarantee fee rates, partially offset by lower deferred fee income, which was 

driven by slower prepayments as a result of higher mortgage interest rates.

n Investments net interest income 

l	 3Q 2022 vs. 3Q 2021 - Increased primarily due to higher returns on securities purchased under agreements to resell 

as a result of higher short-term interest rates.

l	 YTD 2022 vs. YTD 2021 - Decreased primarily due to a decline in the size of the mortgage-related investments 

portfolio.

n Income (expense) from hedge accounting

l	 3Q 2022 vs. 3Q 2021 - Expense increased primarily due to higher accruals of periodic cash settlements on derivatives 

in hedging relationships as a result of higher interest rates, partially offset by lower amortization of hedge accountingrelated basis adjustments driven by a lower unamortized balance.

l	 YTD 2022 vs. YTD 2021 - Expense increased primarily due to higher accruals of periodic cash settlements on 

derivatives in hedging relationships as a result of higher interest rates and an unfavorable earnings mismatch on 

qualifying fair value hedge relationships. This increase was partially offset by lower amortization of hedge accountingrelated basis adjustments driven by a lower unamortized balance.

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 3Q 2022 Form 10-Q 10
Net Interest Yield Analysis

The table below presents a yield analysis of interest-earning assets and interest-bearing liabilities. 

Table 3 - Analysis of Net Interest Yield 

3Q 2022 3Q 2021

(Dollars in millions)

Average

Balance

Interest

Income

(Expense)

Average

Rate

Average

Balance

Interest

Income

(Expense)

Average

Rate

Interest-earning assets:

Cash and cash equivalents $13,418 $52 1.54 % $26,657 $2 0.02 %

Securities purchased under agreements to resell 100,393 554 2.21 110,140 15 0.06 

Investment securities 46,561 416 3.57 57,549 627 4.35 

Mortgage loans(1) 2,992,378 20,843 2.79 2,670,685 15,124 2.27 

Other assets 3,882 29 2.93 6,543 23 1.39 

Total interest-earning assets 3,156,632 21,894 2.77 2,871,574 15,791 2.20 

Interest-bearing liabilities:

Debt of consolidated trusts 2,939,663 (16,166) (2.20) 2,602,220 (10,954) (1.68) 

Debt of Freddie Mac 177,205 (1,174) (2.64) 223,385 (419) (0.75) 

Total interest-bearing liabilities 3,116,868 (17,340) (2.22) 2,825,605 (11,373) (1.61) 

Impact of net non-interest-bearing funding 39,764 — 0.03 45,969 — 0.03 

Total funding of interest-earning assets 3,156,632 (17,340) (2.19) 2,871,574 (11,373) (1.58) 

Net interest income/yield $4,554 0.58 % $4,418 0.62 %

(1) Loan fees included in net interest income were $0.3 billion and $0.7 billion during 3Q 2022 and 3Q 2021, respectively.

YTD 2022 YTD 2021

(Dollars in millions)

Average

Balance

Interest

Income

(Expense)

Average

Rate

Average

Balance

Interest

Income

(Expense)

Average

Rate

Interest-earning assets:

Cash and cash equivalents $14,626 $71 0.64 % $70,708 $6 0.01 %

Securities purchased under agreements to resell 95,406 763 1.07 73,232 36 0.07 

Investment securities 49,196 1,264 3.43 57,433 1,854 4.30 

Mortgage loans(1) 2,949,123 57,477 2.60 2,564,295 42,969 2.23 

Other assets 4,555 67 1.93 5,844 58 1.32 

Total interest-earning assets 3,112,906 59,642 2.55 2,771,512 44,923 2.16 

Interest-bearing liabilities:

Debt of consolidated trusts 2,893,353 (44,010) (2.03) 2,474,639 (30,742) (1.66) 

Debt of Freddie Mac 177,934 (2,215) (1.66) 251,388 (1,357) (0.72) 

Total interest-bearing liabilities 3,071,287 (46,225) (2.01) 2,726,027 (32,099) (1.57) 

Impact of net non-interest-bearing funding 41,619 — 0.03 45,485 — 0.03 

Total funding of interest-earning assets 3,112,906 (46,225) (1.98) 2,771,512 (32,099) (1.54) 

Net interest income/yield $13,417 0.57 % $12,824 0.62 %

(1) Loan fees included in net interest income were $1.2 billion and $2.5 billion during YTD 2022 and YTD 2021, respectively.

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 3Q 2022 Form 10-Q 11
Guarantee Income

The table below presents the components of guarantee income. 

Table 4 - Components of Guarantee Income 

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Contractual guarantee fees $323 $311 $12 4 % $963 $900 $63 7 %

Guarantee obligation amortization 292 294 (2) (1) 897 854 43 5 

Guarantee asset fair value changes (490) (359) (131) (36) (1,460) (904) (556) (62) 

Guarantee income $125 $246 ($121) (49) % $400 $850 ($450) (53) %

Key Drivers:

n	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - Decreased due to fair value losses on guarantee assets as a result of 

higher interest rates.

Investment Gains (Losses), Net

The table below presents the components of investment gains (losses), net.

Table 5 - Investment Gains (Losses), Net 

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Single-Family ($13) ($247) $234 95 % $1,471 $190 $1,281 674 %

Multifamily 428 630 (202) (32) 778 2,037 (1,259) (62) 

Investment gains (losses), net $415 $383 $32 8 % $2,249 $2,227 $22 1 %

Key Drivers:

n	 3Q 2022 vs. 3Q 2021 - Increased primarily due to lower interest rate- and spread-related losses in Single-Family. This 

increase was partially offset by lower Multifamily gains due to spread widening and lower margins on new loan purchases 

and securitizations, partially offset by gains from interest-rate risk management activities.

n	 YTD 2022 vs. YTD 2021 - Increased primarily due to gains in Single-Family on commitments to hedge our securitization 

pipeline. This increase was partially offset by lower Multifamily gains due to spread widening and lower margins on new 

loan purchases and securitizations, partially offset by gains from interest-rate risk management activities.

Benefit (Provision) for Credit Losses

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

Table 6 - Benefit (Provision) for Credit Losses 

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

 Single-Family ($1,784) $244 ($2,028) (831) % ($1,251) $1,076 ($2,327) (216) %

 Multifamily (12) (1) (11) (1,100) (15) 103 (118) (115) 

Benefit (provision) for credit losses ($1,796) $243 ($2,039) (839) % ($1,266) $1,179 ($2,445) (207) %

Key Drivers:

n 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - A provision for credit losses in the 2022 periods, primarily driven by 

deterioration in housing market conditions, including lower observed and forecasted house price appreciation. The benefit 

for credit losses in the 2021 periods was primarily driven by observed house price appreciation and reduced expected 

credit losses related to COVID-19.

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 3Q 2022 Form 10-Q 12
Non-Interest Expense

Credit Enhancement Expense

Key Drivers:

n	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - Increased $0.2 billion and $0.5 billion, respectively, due to higher 

outstanding cumulative volumes of CRT transactions and higher spreads on recent transactions. 

Legislative Assessments Expense

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 the 

affordable housing funds and remitted to Treasury and HUD. The legislated guarantee fees relate to the 10 basis point 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. The affordable housing funds allocation relates to the GSE Act 

requirement 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. 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 legislative assessments expense.

Table 7 - Components of Legislative Assessments Expense

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Legislated guarantee fees expense ($696) ($602) ($94) (16) % ($2,046) ($1,706) ($340) (20) %

Affordable housing funds allocation (57) (132) 75 57 (214) (415) 201 48 

Legislative assessments expense ($753) ($734) ($19) (3) % ($2,260) ($2,121) ($139) (7) %

Key Drivers:

n	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - Increased primarily due to higher legislated guarantee fees expense 

due to growth in our Single-Family mortgage portfolio, partially offset by lower affordable housing funds allocation primarily 

due to lower Single-Family new business activity.

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 3Q 2022 Form 10-Q 13
CONSOLIDATED BALANCE SHEETS ANALYSIS

The table below compares our summarized condensed consolidated balance sheets.

Table 8 - Summarized Condensed Consolidated Balance Sheets

Change

(Dollars in millions) September 30, 2022 December 31, 2021 $ %

Assets:

Cash and cash equivalents $5,691 $10,150 ($4,459) (44) %

Securities purchased under agreements to resell 97,643 71,203 26,440 37 

Subtotal 103,334 81,353 21,981 27 

Investment securities, at fair value 43,270 53,015 (9,745) (18) 

Mortgage loans, net 3,007,373 2,848,109 159,264 6 

Accrued interest receivable, net 8,201 7,474 727 10 

Deferred tax assets, net 5,561 6,214 (653) (11) 

Other assets 22,917 29,421 (6,504) (22) 

Total assets $3,190,656 $3,025,586 $165,070 5 %

Liabilities and Equity:

Liabilities:

Accrued interest payable $6,915 $6,268 $647 10 %

Debt 3,137,222 2,980,185 157,037 5 

Other liabilities 11,289 11,100 189 2 

Total liabilities 3,155,426 2,997,553 157,873 5 

Total equity 35,230 28,033 7,197 26 

Total liabilities and equity $3,190,656 $3,025,586 $165,070 5 %

Key Drivers:

As of September 30, 2022 compared to December 31, 2021:

n	 Cash and cash equivalents and securities purchased under agreements to resell increased on a combined basis 

driven by new debt issuance, increased sales of mortgage-related securities, and cash provided by operating activities. 

This increase was partially offset by a decrease in trust cash driven by lower loan prepayments.

n	 Investment securities, at fair value decreased primarily due to sales and maturities of Treasury securities and sales of 

mortgage-related securities.

n	 Mortgage loans, net and debt increased primarily due to the increase in the size of the Single-Family mortgage portfolio.

n	 Other assets decreased primarily due to lower servicer receivables driven by a decrease in loan prepayments. 

Management's Discussion and Analysis Consolidated Balance Sheets Analysis 

Freddie Mac 3Q 2022 Form 10-Q 14
OUR PORTFOLIOS

Mortgage Portfolio

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

Table 9 - Mortgage Portfolio 

September 30, 2022 December 31, 2021

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

Securitized mortgage loans:

Held by consolidated trusts $2,893,676 $26,114 $2,919,790 $2,706,514 $18,757 $2,725,271

Held by nonconsolidated trusts 31,884 363,043 394,927 33,340 362,627 395,967

Total securitized mortgage loans 2,925,560 389,157 3,314,717 2,739,854 381,384 3,121,238 

Unsecuritized mortgage loans:

Securitization pipeline and other loans 9,909 16,474 26,383 21,189 22,771 43,960 

Seasoned loans 26,381 — 26,381 20,594 — 20,594 

Total unsecuritized mortgage loans 36,290 16,474 52,764 41,783 22,771 64,554 

Other 9,692 10,315 20,007 10,587 10,508 21,095 

Total mortgage portfolio $2,971,542 $415,946 $3,387,488 $2,792,224 $414,663 $3,206,887 

Guarantee Portfolio

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

Table 10 - Guarantee Portfolio 

September 30, 2022 December 31, 2021

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

Guaranteed mortgage-related securities:

Issued by consolidated trusts $2,906,631 $26,139 $2,932,770 $2,744,899 $18,883 $2,763,782 

Issued by nonconsolidated trusts 26,133 320,726 346,859 27,538 318,756 346,294 

Total guaranteed mortgage-related securities 2,932,764 346,865 3,279,629 2,772,437 337,639 3,110,076 

Other 9,692 10,315 20,007 10,587 10,508 21,095 

Total guarantee portfolio $2,942,456 $357,180 $3,299,636 $2,783,024 $348,147 $3,131,171 

Investments Portfolio

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

Mortgage-Related Investments Portfolio

The Purchase Agreement limits the size of our mortgage-related investments portfolio to a maximum amount of $250 billion, 

which will be reduced to $225 billion on 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 the 

Conservatorship and Related Matters section in our 2021 Annual Report.

Management's Discussion and Analysis Our Portfolios

Freddie Mac 3Q 2022 Form 10-Q 15
The table below presents the details of our mortgage-related investments portfolio.

Table 11 - Mortgage-Related Investments Portfolio

September 30, 2022 December 31, 2021

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

Unsecuritized mortgage loans $36,290 $16,474 $52,764 $41,783 $22,771 $64,554 

Mortgage-related securities 20,993 6,016 27,009 43,357 3,100 46,457 

Mortgage-related investments portfolio $57,283 $22,490 $79,773 $85,140 $25,871 $111,011 

10% of notional amount of interest-only

securities $22,133 $12,517 

Mortgage-related investments portfolio for

purposes of Purchase Agreement cap 101,906 123,528 

Other Investments Portfolio

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

Table 12 - Other Investments Portfolio

September 30, 2022 December 31, 2021

(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 $4,917 $678 $96 $5,691 $8,455 $1,596 $99 $10,150 

Securities purchased under 

agreements to resell 88,447 15,500 1,208 105,155 43,729 34,000 807 78,536 

Non-mortgage-related securities 23,591 — 2,979 26,570 28,078 — 4,695 32,773 

Other assets — — 5,729 5,729 — — 8,194 8,194 

Other investments portfolio $116,955 $16,178 $10,012 $143,145 $80,262 $35,596 $13,795 $129,653 

(1) Represents carrying value.

Management's Discussion and Analysis Our Portfolios

Freddie Mac 3Q 2022 Form 10-Q 16
OUR BUSINESS SEGMENTS

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

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 (Loss) 

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

Segment Net Revenues 

(In billions)

$5.2

$5.6 $5.8 $5.4 $5.2

$16.4 $16.4

$3.9

$4.7 $5.2 $4.9 $4.4

$12.5

$14.5

$1.3

$0.9

$0.6 $0.5 $0.8

$3.9

$1.9

Single-Family Multifamily

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

Segment Net Income (Loss) 

(In billions)

$2.9 $2.7

$3.8

$2.5

$1.3

$9.4

$7.6

$2.0 $2.2

$3.4

$2.2

$0.8

$6.7 $6.4

$0.9 $0.5

$0.4

$0.3

$0.5

$2.7

$1.2

Single-Family Multifamily

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

Management's Discussion and Analysis Our Business Segments

Freddie Mac 3Q 2022 Form 10-Q 17
Single-Family 

Business Results

The graphs, 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 Guarantee Fee Rate(1) Charged on New 

Acquisitions

(UPB in billions, guarantee fee rate in bps) 

$299

$271

$207

$138 $121

$949

$466

$132 $111 $93 $86 $98

$319

$277

$167

$160

$114

$52 $23

$630

$189

48

47

49

52

54

49

51

Home purchase

Refinance

Average guarantee fee rate charged

on new acquisitions

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

(1) 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)

1,027

955

691

468

392

3,281

1,551

415 357 279 263 297

1,021

839

612

598

412

205 95

2,260

712

$291,000

$284,000

$300,000

$294,000

$309,000

$289,000

$300,000

Home purchase borrowers

Refinance borrowers

Average loan UPB of new acquisitions

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

n	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021

l Our loan purchase and guarantee activity, particularly refinance activity, slowed significantly due to higher mortgage 

interest rates. We expect volume for the remainder of the year to be lower than 2021 due in part to higher mortgage 

interest rates.

l The average loan size of new acquisitions increased due to a higher conforming loan limit and house price 

appreciation in recent quarters.

l The average guarantee fee rate charged on new acquisitions increased in the 2022 periods primarily due to (i) higher 

credit fees we began to charge in April 2022 for certain loans, and (ii) a shift in the market leading to a decrease in 

deliveries of loans with certain characteristics (i.e., rate-term refinance loans) and an increase in deliveries of loans with 

other characteristics (i.e., loans secured by investment properties).

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

Freddie Mac 3Q 2022 Form 10-Q 18
Single-Family Mortgage Portfolio

Single-Family Mortgage Portfolio and Average Guarantee Fee 

Rate(1) Charged on Mortgage Portfolio

(UPB in billions, guarantee fee rate in bps)

$2,682

$2,792

$2,884 $2,928

$2,971

46 46

47 47

48

Single-Family mortgage portfolio

Average guarantee fee rate charged

on mortgage portfolio

09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

(1) Guarantee fee rate calculation excludes the legislated guarantee fees. 

Guarantee fee rate calculation also excludes certain loans, the majority of 

which are held by VIEs that we do not consolidate. The UPB of these 

excluded loans was $44 billion as of September 30, 2022.

Single-Family Mortgage Loans

(Loan count in millions)

12.8

13.1

13.4 13.5 13.6

$209,000

$213,000

$216,000 $217,000

$219,000

Single-Family mortgage portfolio

Average loan UPB

09/30/21 12/31/21 03/31/22 06/30/22 09/30/22

n	 Our Single-Family mortgage portfolio grew $289 billion, or 11%, 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 recent quarters, which contributed to new business acquisitions having a 

larger loan size compared to older vintages that continued to run off.

n	 The average guarantee fee rate charged on our Single-Family mortgage portfolio increased year-over-year as older 

vintages with lower charged guarantee fee rates were replaced by acquisitions of new loans with higher charged guarantee 

fee rates.

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

Freddie Mac 3Q 2022 Form 10-Q 19
CRT Activities

We transfer credit risk on a portion of our Single-Family mortgage portfolio to the private market, reducing the risk of future 

losses to us when borrowers default. The graphs below show the issuance amounts associated with CRT transactions for loans 

in our Single-Family mortgage portfolio.

 UPB Covered by New CRT Issuance New CRT Issuance Maximum Coverage

 (In billions) (In billions)

$167

$242

$208

$151

$136

$586

$495

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

$5

$6

$8

$7

$5

$14

$20

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

n	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 

l The percentage of our Single-Family acquisitions targeted for CRT transactions (primarily 30-year fixed rate loans with 

LTV ratios between 60% and 97%) increased to 79% and 72% during 3Q 2022 and YTD 2022, respectively, from 66% 

and 63% during 3Q 2021 and YTD 2021, respectively, primarily driven by higher LTV ratios of recently acquired loans 

and an increase in the percentage of 30-year loan acquisitions.

l The UPB of mortgage loans covered by CRT transactions issued during the 2022 periods decreased compared to the 

2021 periods due to a decrease in loan acquisition activity in recent quarters. The related maximum coverage 

increased during YTD 2022 as we obtained a higher amount of credit coverage on the recently acquired loans primarily 

in response to higher capital requirements under the ERCF.

See MD&A - Risk Management - Single-Family Mortgage Credit Risk - Transferring Credit Risk to Third-Party 

Investors for additional information on our CRT activities and other credit enhancements. See MD&A - Liquidity and 

Capital Resources - Capital Resources for additional information on the ERCF.

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

Freddie Mac 3Q 2022 Form 10-Q 20
Loss Mitigation Activities 

The following graph provides details about the single-family loan workout activities that were completed during the period. The 

forbearance data included below is limited to loans in forbearance that are past due based on the loans' original contractual 

terms and excludes both loans for which we do not control servicing and 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.

Completed Loan Workout Activity

(UPB in billions, number of loan workouts in thousands)

73

62

49

37

28

255

114

22 17

10 8 6

90

24

45

39

23

16

12

150

51

6

6

16

13

10

15

39

$16

$14

$11

$9

$6

$55

$26

Forbearance and other(1) Payment deferral plans Loan modifications Total UPB

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

(1) Other includes repayment plans and foreclosure alternatives.

n 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 quarter, such as forbearance plans 

that had been initiated but not completed and trial period modifications. There were approximately 31,000 loans in active 

forbearance plans and 11,000 loans in other active loss mitigation activity as of September 30, 2022. 

n 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - Our loan workout activity decreased as the overall forbearance 

population continued to decline.

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

Freddie Mac 3Q 2022 Form 10-Q 21
Financial Results 

The table below presents the components of net income and comprehensive income for our Single-Family segment.

Table 13 - Single-Family Segment Financial Results 

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Net interest income $4,363 $4,080 $283 7 % $12,704 $11,848 $856 7 %

Non-interest income (loss) 58 (119) 177 149 1,802 677 1,125 166 

Net revenues 4,421 3,961 460 12 14,506 12,525 1,981 16 

Benefit (provision) for credit losses (1,784) 244 (2,028) (831) (1,251) 1,076 (2,327) (216) 

Non-interest expense (1,653) (1,672) 19 1 (5,285) (5,284) (1) — 

Income (loss) before income tax (expense) benefit 984 2,533 (1,549) (61) 7,970 8,317 (347) (4) 

Income tax (expense) benefit (141) (505) 364 72 (1,548) (1,696) 148 9 

Net income (loss) 843 2,028 (1,185) (58) 6,422 6,621 (199) (3) 

Other comprehensive income (loss), net of taxes and 

reclassification adjustments (39) 18 (57) (317) (46) (384) 338 88 

Comprehensive income (loss) $804 $2,046 ($1,242) (61) % $6,376 $6,237 $139 2 %

Key Business Drivers:

n	3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021

l A provision for credit losses during the 2022 periods, primarily driven by deterioration in housing market conditions, 

including lower observed and forecasted house price appreciation. The benefit for credit losses during the 2021 

periods was primarily driven by observed house price appreciation and reduced expected credit losses related to 

COVID-19.

l Higher net interest income primarily due to continued mortgage portfolio growth and higher average portfolio 

guarantee fee rates. This increase was partially offset by lower deferred fee income, which was driven by slower 

prepayments as a result of higher mortgage interest rates.

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

Freddie Mac 3Q 2022 Form 10-Q 22
Multifamily 

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) 

$18

$25

$15 $15 $14

$45 $44

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

 Total Number of Units Financed(1)

 (In thousands)

161

223

143 148 150

432

441

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

(1) 1Q22 and 2Q22 data has been revised to reflect updated information.

n	 As of September 30, 2022, the total multifamily new business activity subject to the FHFA 2022 loan purchase cap of $78 

billion was $44.3 billion. Approximately 74% of this activity, based on UPB, was mission-driven, affordable housing, with 

approximately 38% being affordable to renters at or below 60% of AMI, both currently exceeding FHFA's minimum 

requirements (50% and 25%, respectively).

n	 Our new business activity was lower year-over-year due to rising interest rates and increased competition during the 2022 

periods.

n	 Outstanding commitments, including index lock agreements and commitments to purchase or guarantee multifamily 

assets, were $21.4 billion and $25.3 billion as of September 30, 2022 and September 30, 2021, respectively.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 3Q 2022 Form 10-Q 23
Multifamily Mortgage Portfolio and Guarantee Portfolio

 Mortgage Portfolio

 (In billions) $404

$415 $415 $415 $416

4,624

4,652

4,616

4,562

4,523

UPB of mortgage portfolio

Total units financed (in thousands)

09/30/21 12/31/21 3/31/22 6/30/22 09/30/22

 

 Guarantee Portfolio

 (In billions) $341

$348

$352

$356 $357

42 42

43 43 43

UPB of guarantee portfolio

Average guarantee fee rate charged (bps)

09/30/21 12/31/21 3/31/22 6/30/22 09/30/22

n	 Our Multifamily mortgage and guarantee portfolios increased year-over-year as new business activities were partially offset 

by borrower prepayments. 

n	 While the mortgage portfolio increased year-over-year, total portfolio unit count decreased, primarily driven by the impact 

of portfolio payoffs and higher average per unit costs of newly financed multifamily properties as a result of property price 

appreciation.

n	 In addition to our Multifamily mortgage portfolio, we own equity interests in LIHTC fund partnerships with carrying values 

totaling $2.3 billion and $1.5 billion as of September 30, 2022 and September 30, 2021, respectively. 

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 3Q 2022 Form 10-Q 24
CRT Activities

 UPB Covered by New CRT Issuance New CRT Issuance Maximum Coverage 

 (In billions) (In billions)

$18

$23

$14

$21

$11

$61

$46

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

 $1.3

$1.5

$1.0

$1.3

$0.8

$4.5

$3.1

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

n	 3Q 2022 vs. 3Q 2021 

l The UPB of mortgage loans covered by CRT transactions and the maximum coverage decreased primarily due to the 

issuance of a SCR Trust note in 3Q 2021 and a smaller average securitization pipeline. There were no SCR Trust note 

transactions in 3Q 2022. 

n	 YTD 2022 vs. YTD 2021 

l The UPB of mortgage loans covered by CRT transactions and the maximum coverage decreased due to fewer 

securitizations with subordination during YTD 2022 as a result of a smaller average securitization pipeline.

See MD&A - Risk Management - Multifamily Mortgage Credit Risk - Transferring Credit Risk to Third-Party 

Investors for more information on risk transfer transactions and credit enhancements on our Multifamily mortgage portfolio.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 3Q 2022 Form 10-Q 25
Financial Results

The table below presents the components of net income and comprehensive income for our Multifamily segment. 

Table 14 - Multifamily Segment Financial Results 

Change Change

(Dollars in millions) 3Q 2022 3Q 2021 $ % YTD 2022 YTD 2021 $ %

Net interest income $191 $338 ($147) (43) % $713 $976 ($263) (27) %

Non-interest income (loss) 569 948 (379) (40) 1,212 2,885 (1,673) (58) 

Net revenues 760 1,286 (526) (41) 1,925 3,861 (1,936) (50) 

Benefit (provision) for credit losses (12) (1) (11) (1,100) (15) 103 (118) (115) 

Non-interest expense (172) (172) — — (492) (517) 25 5 

Income (loss) before income tax (expense) 

benefit 576 1,113 (537) (48) 1,418 3,447 (2,029) (59) 

Income tax (expense) benefit (106) (222) 116 52 (276) (703) 427 61 

Net income (loss) 470 891 (421) (47) 1,142 2,744 (1,602) (58) 

Other comprehensive income (loss), net of taxes and 

reclassification adjustments (142) (28) (114) (407) (321) (83) (238) (287) 

Comprehensive income (loss) $328 $863 ($535) (62) % $821 $2,661 ($1,840) (69) %

Key Business Drivers: 

n	 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 

l Net income decreased mainly driven by lower non-interest income from:

– Lower guarantee income due to fair value losses on our guarantee assets as a result of higher interest rates. 

– Lower net investment gains due to spread widening and lower margins on new loan purchases and 

securitizations, partially offset by gains from interest-rate risk management activities. On June 22, 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.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 3Q 2022 Form 10-Q 26
RISK MANAGEMENT

To achieve our mission, we take risks as an integral part of our business activities. We are exposed to the following key types of 

risk: credit risk, market risk, liquidity risk, operational risk, strategic risk, reputation risk, and legal risk.

Credit Risk

Allowance for Credit Losses

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 3 for additional 

information on the adoption of this new accounting guidance.

The tables below present a summary of the changes in our allowance for credit losses and key allowance for credit losses 

ratios.

Table 15 - Allowance for Credit Losses Activity 

3Q 2022 3Q 2021 YTD 2022 YTD 2021

(Dollars in 

millions) 

SingleFamilyMultifamily TotalSingleFamilyMultifamily TotalSingleFamilyMultifamily TotalSingleFamilyMultifamily Total

Allowance for credit losses:

Beginning 

balance $5,342 $81 $5,423 $5,513 $96 $5,609 $5,440 $78 $5,518 $6,353 $200 $6,553 

Provision (benefit) 

for credit losses 1,784 12 1,796 (244) 1 (243) 1,251 15 1,266 (1,076) (103) (1,179) 

 Charge-offs (108) — (108) (288) — (288) (388) — (388) (729) — (729) 

 Recoveries 

collected 29 — 29 43 — 43 124 — 124 150 — 150 

Net charge-offs (79) — (79) (245) — (245) (264) — (264) (579) — (579) 

Other(1) 168 — 168 268 — 268 788 — 788 594 — 594 

Ending 

balance $7,215 $93 $7,308 $5,292 $97 $5,389 $7,215 $93 $7,308 $5,292 $97 $5,389 

Average loans 

outstanding 

during the 

period(2) $2,957,019 $33,614 $2,990,633 $2,649,506 $23,673 $2,673,179 $2,914,163 $30,500 $2,944,663 $2,538,629 $22,979 $2,561,608

Net charge-offs to 

average loans 

outstanding — % — % — % 0.01 % — % 0.01 % 0.01 % — % 0.01 % 0.02 % — % 0.02 %

Components of ending balance of allowance for credit losses:

Mortgage loans 

held-forinvestment $6,802 $49 $6,851 $4,490 $41 $4,531 

Advances of preforeclosure costs 354 — 354 592 — 592 

Accrued interest 

receivable on 

mortgage loans 6 — 6 157 — 157 

Off-balance sheet 

credit exposures 53 44 97 53 56 109 

Total ending 

balance $7,215 $93 $7,308 $5,292 $97 $5,389 

(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 held-for-investment loans. 

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 27
Table 16 - Allowance for Credit Losses Ratios

September 30, 2022 December 31, 2021

(Dollars in millions) Single-Family Multifamily Total Single-Family Multifamily Total

Allowance for credit losses on mortgage loans held-forinvestment $6,802 $49 $6,851 $4,913 $34 $4,947 

Total loans outstanding(1) 2,968,995 35,864 3,004,859 2,806,535 26,743 2,833,278 

Non-accrual loans(1) 10,315 42 10,357 18,650 — 18,650 

Allowance for credit losses(2) to total loans outstanding 0.23 % 0.14 % 0.23 % 0.18 % 0.13 % 0.17 %

Non-accrual loans to total loans outstanding 0.35 0.12 0.34 0.66 — 0.66 

Allowance for credit losses(3) to non-accrual loans 65.94 116.67 66.15 26.34 NM 26.53 

(1) Based on amortized cost basis of held-for-investment loans. 

(2) Represents allowance for credit losses on total held-for-investment loans. 

(3) NM - not meaningful due to the non-accrual loans balance rounding to zero.

As of September 30, 2022 compared to December 31, 2021: 

n	 The ratio of non-accrual loans to total loans outstanding decreased as borrowers continued to exit forbearance and 

complete loan workout activities that returned their mortgages to current status.

n	 The ratios of allowance for credit losses to total loans outstanding and to non-accrual loans increased as the 

allowance for credit losses increased due to the deterioration in housing market conditions, including lower observed 

and forecasted house price appreciation. The ratio of allowance for credit losses to non-accrual loans also increased 

as the balance of loans in non-accrual status decreased.

Single-Family Mortgage Credit Risk

Maintaining Prudent Underwriting Standards and Quality Control Practices and 

Managing Seller/Servicer Performance 

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 year-over-year 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 average original credit score decreased year-overyear as the credit scores associated with the refinance loans decreased. The percentage of loans with a DTI ratio greater than 

45% also increased year-over-year due to changes in market conditions, such as increasing house prices and higher mortgage 

interest rates in recent quarters.

Weighted Average Original LTV Ratio 

72% 71% 72%

75%

78%

71%

74%

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

Weighted Average Original Credit Score(1)

750 748 746 744

747

754

746

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

(1) Weighted average original credit score is based on three credit bureaus 

(Equifax, Experian, and TransUnion). 

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 28
The table below contains additional information about the single-family loans we purchased or guaranteed. 

Table 17 - Single-Family New Business Activity 

3Q 2022 3Q 2021 YTD 2022 YTD 2021

(Dollars in millions) Amount

% of 

Total Amount

% of 

Total Amount

% of 

Total Amount

% of 

Total

20- and 30-year or more, amortizing fixed-rate $112,585 93 % $256,682 86 % $419,472 90 % $808,696 85 %

15-year or less, amortizing fixed-rate 6,702 5 39,373 13 41,270 9 136,143 14 

Adjustable-rate 1,928 2 2,384 1 5,226 1 3,883 1 

Total $121,215 100 % $298,439 100 % $465,968 100 % $948,722 100 %

Percentage of purchases

DTI ratio > 45% 19 % 12 % 16 % 11 %

Original LTV ratio > 90% 24 14 18 11 

Transaction type:

Cash window 24 31 26 47 

Guarantor swap 76 69 74 53 

Property type:

Detached single-family houses and townhouses 92 93 92 93 

Condominium or co-op 8 7 8 7 

Occupancy type:

Primary residence 91 95 90 94 

Second home 2 3 3 3 

Investment property 7 2 7 3 

Loan purpose:

Purchase 80 44 59 34 

Cash-out refinance 16 26 27 23 

 Other refinance 4 30 14 43 

Transferring Credit Risk to Third-Party Investors 

To reduce our credit risk exposure, we engage in various credit enhancement arrangements, which include CRT transactions 

and other credit enhancements.

Single-Family Mortgage Portfolio CRT Issuance

The table below provides the UPB of the mortgage loans covered by CRT transactions issued during the periods presented as 

well as the maximum coverage provided by those transactions. 

Table 18 - Single-Family Mortgage Portfolio CRT Issuance 

3Q 2022 3Q 2021

(In millions) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2)

STACR $90,747 $2,849 $109,064 $2,257 

Insurance/reinsurance 44,770 1,767 113,135 2,093 

Other 625 132 966 278 

Less: UPB with more than one type of CRT — — (56,551) — 

Total CRT issuance $136,142 $4,748 $166,614 $4,628 

Referenced footnotes are included after the year-to-date table.

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 29
YTD 2022 YTD 2021

(In millions) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2)

STACR $325,721 $12,720 $386,907 $7,301 

Insurance/reinsurance 166,461 6,482 410,645 6,374 

Other 2,322 526 4,369 858 

Less: UPB with more than one type of CRT — — (216,386) — 

Total CRT issuance $494,504 $19,728 $585,535 $14,533 

(1) Represents the UPB of the assets included in the associated reference pool or securitization trust, as applicable.

(2) For STACR transactions, represents the balance held by third parties at issuance. For insurance/reinsurance transactions, represents the aggregate limit of 

insurance purchased from third parties at issuance. 

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 

September 30, 2022

(Dollars in millions) UPB(1) % of Portfolio Maximum Coverage(2)

Primary mortgage insurance(3) $600,802 20% $152,085 

STACR 1,214,036 41 36,478 

Insurance/reinsurance 926,379 31 20,017 

Other 39,941 1 10,635 

Less: UPB with multiple credit enhancements and other reconciling items(4) (977,982) (32) — 

Single-Family mortgage portfolio - credit-enhanced 1,803,176 61 219,215 

Single-Family mortgage portfolio - non-credit-enhanced 1,168,366 39 N/A

Total $2,971,542 100% $219,215 

December 31, 2021

(Dollars in millions) UPB(1) % of Portfolio Maximum Coverage(2)

Primary mortgage insurance(3) $545,293 20% $135,330 

STACR 1,024,013 37 32,641 

Insurance/reinsurance 914,003 33 16,209 

Other 42,273 1 10,598 

Less: UPB with multiple credit enhancements and other reconciling items(4) (1,034,546) (38) — 

Single-Family mortgage portfolio - credit-enhanced 1,491,036 53 194,778 

Single-Family mortgage portfolio - non-credit-enhanced 1,301,188 47 N/A

Total $2,792,224 100% $194,778 

(1) Represents the current UPB of the assets included in the associated reference pool or securitization trust, as applicable. 

(2) For STACR transactions, represents the outstanding balance held by third parties. For insurance/reinsurance 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.

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 30
Table 20 - Serious Delinquency Rates for Credit-Enhanced and Non-Credit-Enhanced Loans in Our Single-Family 

Mortgage Portfolio

September 30, 2022 December 31, 2021

(% of portfolio based on UPB)(1) % of Portfolio(2) SDQ Rate % of Portfolio(2) SDQ Rate

Credit-enhanced:

 Primary mortgage insurance 20 % 1.07 % 20 % 1.79 %

 CRT and other 56 0.68 47 1.24 

Non-credit-enhanced 39 0.59 47 0.93 

Total N/A 0.67 N/A 1.12 

(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.

Credit Enhancement Expenses and Recoveries 

The table below presents the details of the credit enhancement recovery receivables we have recognized within other assets on 

our condensed consolidated balance sheets.

Table 21 - Single-Family Credit Enhancement Receivables 

(In millions) September 30, 2022 December 31, 2021

Freestanding credit enhancement expected recovery receivables, net of allowance $324 $114 

Primary mortgage insurance receivables, net of allowance 53 76 

Total credit enhancement receivables $377 $190 

See MD&A - Consolidated Results of Operations for additional information on credit enhancement expense.

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 assess if our pricing and eligibility standards reflect the risk associated with the loans we purchase and 

guarantee.

Loan Characteristics 

The table below contains details of the characteristics of the loans in our Single-Family mortgage portfolio.

Table 22 - Credit Quality Characteristics of Our Single-Family Mortgage Portfolio 

September 30, 2022

(Dollars in millions) UPB

Original 

Credit

Score (1)

Current 

Credit

Score(1)(2)

Original

LTV Ratio

Current

LTV

Ratio

Current

LTV Ratio

>100%

Single-Family mortgage portfolio year of origination:

 2022 $369,924 745 743 75 % 73 % — %

 2021 1,071,887 752 757 71 59 — 

 2020 791,199 761 766 71 50 — 

 2019 134,941 746 752 76 50 — 

 2018 54,504 736 736 76 46 — 

 2017 and prior 549,087 737 751 75 34 — 

Total $2,971,542 750 756 72 53 — 

Referenced footnotes are included after the prior period table.

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 31
December 31, 2021

(Dollars in millions) UPB

Original 

Credit

Score (1)

Current 

Credit

Score(1)(2)

Original

LTV Ratio

Current

LTV

Ratio

Current

LTV Ratio

>100%

Single-Family mortgage portfolio year of origination:

 2021 $1,059,299 752 751 71 % 66 % — %

 2020 867,122 760 769 71 56 — 

 2019 157,971 746 751 76 55 — 

 2018 66,149 736 736 76 52 — 

 2017 88,800 741 746 75 46 — 

 2016 and prior 552,883 737 752 75 36 — 

Total $ 2,792,224 751 756 72 55 — 

(1) Original credit score is 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.

The following table presents the combination of credit score and CLTV ratio attributes of loans in our Single-Family mortgage 

portfolio.

Table 23 - Single-Family Mortgage Portfolio Attribute Combinations 

September 30, 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(1)

% of 

Portfolio

SDQ 

Rate(1)

% of 

Portfolio

SDQ 

Rate(1)

% of 

Portfolio

SDQ 

Rate(1)

% of 

Portfolio SDQ Rate

% 

Modified(2)

< 620 0.7 % 6.08 % 0.1 % 10.66 % — % NM — % NM — % NM 0.8 % 6.57 % 8.5 %

620 to 679 4.9 2.10 2.0 2.05 0.3 1.93 % 0.1 1.42 % — NM 7.3 2.08 3.6 

≥ 680 58.5 0.42 26.2 0.44 4.9 0.38 2.2 0.17 — NM 91.8 0.42 0.7 

Not available 0.1 5.55 — NM — NM — NM — NM 0.1 5.57 20.0 

Total 64.2 % 0.70 28.3 % 0.63 5.2 % 0.53 2.3 % 0.29 — % NM 100.0 % 0.67 1.1 

December 31, 2021

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(1)

% of 

Portfolio

SDQ 

Rate(1)

% of 

Portfolio

SDQ 

Rate(1)

% of 

Portfolio

SDQ 

Rate(1)

% of 

Portfolio SDQ Rate

% 

Modified(2)

< 620 0.8 % 6.69 % 0.2 % 11.68 % — % NM — % NM — % NM 1.0 % 7.50 % 8.5 %

620 to 679 4.4 3.29 2.3 3.05 0.3 2.56 % 0.1 2.57 % — NM 7.1 3.22 3.7 

≥ 680 51.9 0.80 32.3 0.78 5.3 0.54 2.3 0.25 — NM 91.8 0.78 0.6 

Not available 0.1 6.58 — NM — NM — NM — NM 0.1 6.85 18.7 

Total 57.2 % 1.19 34.8 % 1.04 5.6 % 0.77 2.4 % 0.47 — % NM 100.0 % 1.12 1.0

(1) NM - not meaningful due to the percentage of the portfolio rounding to zero.

(2) Primarily includes loans modified through the Freddie Mac Flex Modification program.

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 12 for more information about the geographic distribution of our Single-Family mortgage portfolio. 

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 32
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.

Single Family Delinquency Rates

0.76%

0.81%

0.73%

0.81% 0.79%

0.20% 0.20% 0.20% 0.19% 0.20%

1.46%

1.12%

0.92%

0.76%

0.67%

One month past due Two months past due Seriously delinquent

3Q21 4Q21 1Q22 2Q22 3Q22

Our Single-Family serious delinquency rate decreased to 0.67% as of September 30, 2022, compared to 1.46% as of 

September 30, 2021, as borrowers continued to exit forbearance and completed loan workout activities that returned their 

mortgages to current status. See Note 3 for additional information on the payment status of our single-family mortgage loans.

Multifamily Mortgage Credit Risk

Maintaining Policies and Procedures for New Business Activity, Including Prudent 

Underwriting Standards

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. The charts below provide the weighted average original LTV and DSCR for our 

new business activity for the periods presented. 

Weighted Average Original LTV Ratio 

67% 67% 67% 63% 59%

68%

63%

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

 Weighted Average Original DSCR

1.35 1.33 1.33 1.33 1.31

1.37 1.33

3Q21 4Q21 1Q22 2Q22 3Q22 YTD21 YTD22

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 33
Transferring Credit Risk to Third-Party Investors 

To reduce our credit risk exposure, we engage in a variety of CRT activities; however, securitizations remain our principal credit 

risk transfer mechanism. Through securitizations (i.e., subordination), 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.

Multifamily Mortgage Portfolio CRT Issuance

The table below provides the UPB of the mortgage loans covered by CRT transactions issued during the periods presented as 

well as the maximum coverage provided by those transactions.

Table 24 - Multifamily Mortgage Portfolio CRT Issuance

3Q 2022 3Q 2021 YTD 2022 YTD 2021

(In millions) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2) UPB(1)

Maximum 

Coverage(2)

Subordination $11,298 $791 $13,192 $938 $40,184 $2,705 $51,235 $3,908 

SCR — — 4,083 233 5,982 141 8,935 509 

Insurance/reinsurance — — — — 5,982 200 — — 

Lender risk-sharing 50 10 1,015 110 264 36 1,015 110 

Less: UPB with more than 

one type of CRT — — — — (5,982) — — — 

Total CRT issuance $11,348 $801 $18,290 $1,281 $46,430 $3,082 $61,185 $4,527 

(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 insurance/reinsurance transactions, represents the aggregate limit of insurance 

purchased from third parties at issuance. For lender risk-sharing, represents the 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 securitization 

transactions. As of September 30, 2022 and December 31, 2021, our maximum coverage provided by subordination in 

nonconsolidated VIEs was $42.2 billion and $43.9 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 25 - Credit-Enhanced and Non-Credit-Enhanced Loans Underlying Our Multifamily Mortgage Portfolio

September 30, 2022 December 31, 2021

(Dollars in millions) UPB Delinquency Rate UPB Delinquency Rate

Credit-enhanced:

Subordination $360,938 0.14 % $360,113 0.08 %

Other 33,177 0.14 28,565 0.16 

Total credit-enhanced 394,115 0.14 388,678 0.08 

Non-credit-enhanced 21,831 0.12 25,985 0.05 

Total $415,946 0.13 $414,663 0.08 

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 34
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 our investments in mortgage-related assets, the debt we 

issue to fund these assets, and our Single-Family guarantees. 

Interest-Rate Risk

Our primary interest-rate risk measures are duration gap and Portfolio Value Sensitivity (PVS). 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. 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 value to a 50 basis point 

parallel movement in interest rates (PVS-L) and the other to a non-parallel movement resulting from a 25 basis point change in 

the slope of the yield curve (PVS-YC). While we believe that duration gap and PVS are useful risk management tools, they 

should be understood as estimates rather than as precise measurements.

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 basis point shift in the yield curve. The interest-rate sensitivity of a mortgage portfolio varies across a wide 

range of interest rates.

Table 26 - PVS-YC and PVS-L Results Assuming Shifts of the Yield Curve

September 30, 2022 December 31, 2021

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 ($381) ($3,217) ($6,534) $368 $3,531 $7,101 

Guarantees(2) 92 560 1,175 (242) (1,181) (1,830) 

Total assets (289) (2,657) (5,359) 126 2,350 5,271 

Liabilities (60) 2,055 4,113 18 (2,385) (4,870) 

Derivatives 350 587 1,162 (144) 94 (217) 

Total $1 ($15) ($84) $— $59 $184 

PVS $1 $— $— $— $59 $184 

(1) The categorization of the PVS impact between assets, liabilities, and derivatives in 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 in this table.

(2) Represents the interest-rate risk from our Single-Family guarantees, which include buy-ups, float, and upfront fees (including buy-downs). 

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 35
Table 27 - Duration Gap and PVS Results

3Q 2022 3Q 2021

(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 — $4 $3 0.1 $12 $77 

Minimum (0.3) — — (1.2) — — 

Maximum 0.3 11 28 0.9 45 147 

Standard deviation 0.1 3 5 0.5 9 33 

YTD 2022 YTD 2021

(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 — $6 $6 0.3 $9 $52 

Minimum (0.4) — — (1.2) — — 

Maximum 0.4 18 77 1.0 45 200 

Standard deviation 0.1 4 13 0.4 7 48 

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 basis point shift in the yield curve for the periods presented, would have been higher if we had not used 

derivatives.

Table 28 - PVS-L Results Before Derivatives and After Derivatives 

PVS-L (50 bps)

(In millions)

Before

Derivatives

After

Derivatives

Effect of

Derivatives

September 30, 2022(1) $561 $— ($561) 

December 31, 2021(2) 508 59 (449) 

(1) Before derivatives, our adverse PVS-L rate movement was +50 bps, whereas after derivatives our adverse PVS-L rate movement was -50 bps.

(2) Before derivatives, our adverse PVS-L rate movement was -50 bps, whereas after derivatives our adverse PVS-L rate movement was +50 bps.

Earnings Sensitivity to Market Risk

The 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. See 

MD&A - Consolidated Results of Operations and MD&A - Our Business Segments for additional information on the 

effect of changes in interest rates and market spreads on our financial results.

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, changes in 

interest rates may still result in significant earnings variability from period to period.

By electing fair value hedge accounting for certain single-family mortgage loans and certain debt instruments, we are able to 

reduce the potential variability in our earnings attributable to changes in interest rates. See Note 8 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 basis points, non-parallel shifts in the yield curve in which long-term 

interest rates increase or decrease by 100 basis points, and non-parallel shifts in the yield curve in which short-term and 

medium-term interest rates increase or decrease by 100 basis points. 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 

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 36
the fair value option), 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 29 - Earnings Sensitivity to Changes in Interest Rates

(In millions) September 30, 2022 September 30, 2021

Interest Rate Scenarios(1)

Parallel yield curve shifts: 

 +100 basis points $62 $26 

 -100 basis points (62) (26) 

Non-parallel yield curve shifts - long-term interest rates:

 +100 basis points 202 (153) 

 -100 basis points (202) 153 

Non-parallel yield curve shifts - short-term and medium-term interest rates:

 +100 basis points (140) 179 

 -100 basis points 140 (179) 

(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.

Management's Discussion and Analysis Risk Management

Freddie Mac 3Q 2022 Form 10-Q 37
LIQUIDITY AND CAPITAL RESOURCES

Our business activities require that we maintain adequate liquidity to meet our financial obligations as they come due and to 

meet the needs of customers in a timely and cost-efficient manner. We are also required to comply with minimum liquidity 

requirements established by FHFA and to maintain adequate capital resources to avoid being placed into receivership by FHFA.

Liquidity

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 30 - Liquidity Sources

(In millions) September 30, 2022(1) December 31, 2021(1) Description

Other Investments Portfolio - 

Liquidity and Contingency 

Operating Portfolio

 $116,955 $80,262 The liquidity and contingency operating portfolio, included within 

our other investments portfolio, is primarily used for short-term 

liquidity management.

Mortgage Loans and MortgageRelated Securities  24,479 43,393 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 $4.7 billion and $3.5 billion as of September 30, 2022 and December 31, 2021, 

respectively.

The other investments portfolio also included cash collateral posted to us primarily by derivatives counterparties of $2.4 billion

and $1.2 billion as of September 30, 2022 and December 31, 2021, respectively. We have primarily invested this collateral in 

securities purchased under agreements to resell and non-mortgage-related securities as part of our liquidity and contingency 

operating portfolio, although the collateral may be subject to return to our counterparties based on the terms of our master 

netting and collateral agreements. See MD&A - Our Portfolios - Investments Portfolio - Other Investments Portfolio

for more information about our other investments portfolio.

Mortgage Loans and Mortgage-Related Securities 

We invest principally in mortgage loans and mortgage-related securities, certain categories of which are largely unencumbered 

and liquid. Our primary source of liquidity among these mortgage assets is our holdings of agency securities.

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 3Q 2022 Form 10-Q 38
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 31 - Funding Sources 

(In millions) September 30, 2022(1) December 31, 2021(1) Description

Debt of Freddie Mac $163,249 $177,131 Debt of Freddie Mac is used to fund our business activities.

Debt of

Consolidated Trusts

 2,973,973 2,803,054 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 business activities. Competition for funding can vary depending on economic, 

financial market, and regulatory environments. We issue debt of Freddie Mac based on a variety of factors, including an 

assessment of market conditions, debt funding spreads, and our liquidity requirements. 

The table below summarizes the par value and the average rate of debt of Freddie Mac 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 from time to time for a variety of reasons, including managing our funding composition and 

supporting the liquidity of our debt securities.

Table 32 - Debt of Freddie Mac Activity

3Q 2022 3Q 2021

(Dollars in millions) Par Value Average Rate(1) Par Value Average Rate(1)

Short-term:

Beginning balance $3,115 1.14 % $— — %

Issuances 33,182 2.19 — — 

Repayments — — — — 

Maturities (24,387) 1.87 — — 

Ending balance 11,910 2.46 — — 

Securities sold under agreements to repurchase 7,512 2.06 3,455 (0.01) 

Offsetting arrangements (7,512) (3,455) 

Securities sold under agreements to repurchase, net — — — — 

Total short-term debt 11,910 2.46 — — 

Long-term:

Beginning balance 165,433 1.52 230,476 1.17 

Issuances 12,876 4.12 — — 

Repayments (1,392) 5.68 (19,420) 0.60 

Maturities (13,603) 0.63 (13,645) 0.82 

Total long-term debt 163,314 1.83 197,411 1.25 

Total debt of Freddie Mac, net $175,224 1.87 % $197,411 1.25 %

Referenced footnote is included after the year-to-date table.

Management's Discussion and Analysis Liquidity and Capital Resources

Freddie Mac 3Q 2022 Form 10-Q 39
YTD 2022 YTD 2021

(Dollars in millions) Par Value Average Rate(1) Par Value Average Rate(1)

Short-term:

Beginning balance $— —% $4,955 1.31% 

Issuances 40,900 1.87 22,050 0.04 

Repayments — — (24,568) 0.15 

Maturities (28,990) 1.59 (2,437) 1.48 

Ending balance 11,910 2.46 — — 

Securities sold under agreements to repurchase 7,512 2.06 3,455 (0.01) 

Offsetting arrangements (7,512) (3,455) 

Securities sold under agreements to repurchase, net — — — — 

Total short-term debt 11,910 2.46 — — 

Long-term:

Beginning balance 181,613 1.11 281,386 1.12 

Issuances 29,948 3.58 1,090 0.60 

Repayments (3,297) 4.15 (56,436) 0.71 

Maturities (44,950) 0.37 (28,629) 1.12 

Total long-term debt 163,314 1.83 197,411 1.25 

Total debt of Freddie Mac, net $175,224 1.87 % $197,411 1.25 %

(1) Average rate is weighted based on par value.

The outstanding balance of total debt of Freddie Mac decreased from December 31, 2021 to September 30, 2022 primarily due 

to a lower mortgage-related investments portfolio balance and lower cash window purchase volume. As of September 30, 

2022, our aggregate indebtedness pursuant to the Purchase Agreement was $175.2 billion, which was below the current 

$300.0 billion debt cap limit. Our aggregate indebtedness calculation primarily includes the par value of short- and long-term 

debt.

Maturity and Redemption Dates

The following table presents the 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 33 - Maturity and Redemption Dates

As of September 30, 2022 As of December 31, 2021

(Par value in millions) Contractual Maturity Date Earliest Redemption Date Contractual Maturity Date Earliest Redemption Date

Debt of Freddie Mac(1):

1 year or less $51,863 $139,548 $55,958 $118,436 

1 year through 2 years 31,740 13,545 38,688 35,724 

2 years through 3 years 38,694 11,777 13,274 1,745 

3 years through 4 years 18,885 1,281 35,436 12,076 

4 years through 5 years 6,501 170 4,717 87 

Thereafter 30,208 11,570 31,736 11,741 

STACR and SCR debt(2) 4,845 4,845 9,139 9,139 

Total debt of Freddie Mac $182,736 $182,736 $188,948 $188,948 

(1) Includes payables related to securities sold under agreements to repurchase that we offset against receivables related to securities purchased under agreements to 

resell on our condensed consolidated balance sheets, when such amounts meet the conditions for offsetting in the accounting guidance.

(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 borrower at any time generally without penalty and are, therefore, included as a separate category in the table.

Management's Discussion and Analysis Liquidity and Capital Resources

Freddie Mac 3Q 2022 Form 10-Q 40
Debt of Consolidated Trusts

The largest component of debt on our condensed 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 fund our Single-Family activities. 

The table below shows activity for the debt of consolidated trusts.

Table 34 - Debt of Consolidated Trusts Activity 

(In millions) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Beginning balance $2,877,722 $2,506,334 $2,732,056 $2,240,602 

Issuances 172,989 377,326 672,155 1,181,467 

Repayments and extinguishments (129,666) (254,084) (483,166) (792,493) 

Ending balance 2,921,045 2,629,576 2,921,045 2,629,576 

Unamortized premiums and discounts 52,928 71,954 52,928 71,954 

Debt of consolidated trusts $2,973,973 $2,701,530 $2,973,973 $2,701,530 

Off-Balance Sheet Arrangements

We enter into certain business arrangements that are not recorded on our condensed 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 longterm liquidity needs. 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 securitization and other mortgage-related guarantee activities. 

Our off-balance sheet arrangements related to securitization activities primarily consist of guaranteed K Certificates and SB 

Certificates. Our guarantee of these securitization activities and other mortgage-related guarantees may result in liquidity needs 

to cover potential cash flow shortfalls from borrower defaults. As of September 30, 2022 and December 31, 2021, the 

outstanding UPB of the guaranteed securities was $365.4 billion and $366.0 billion, respectively.

In addition to our securitization and other mortgage-related guarantees, we have certain other guarantees that are accounted 

for as derivative instruments. These other guarantees are recognized on our condensed consolidated balance sheets at fair 

value and are not included in the totals above. See Note 8 for additional information on these guarantees.

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. As of 

September 30, 2022 and December 31, 2021, the total amount of our off-balance sheet exposure related to Fannie Mae 

securities backing Freddie Mac resecuritization products was approximately $122.6 billion and $111.2 billion, respectively.

Cash Flows 

Cash and cash equivalents (including restricted cash and cash equivalents) decreased by $3.8 billion from $9.5 billion as of 

September 30, 2021 to $5.7 billion as of September 30, 2022, primarily driven by an increase in securities purchased under 

agreements to resell.

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 3Q 2022 Form 10-Q 41
Capital Resources

The table below presents activity related to our net worth. 

Table 35 - Net Worth Activity

(In millions) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Beginning balance $34,098 $22,402 $28,033 $16,413 

Comprehensive income (loss) 1,132 2,909 7,197 8,898 

Capital draw from Treasury — — — — 

Senior preferred stock dividends declared — — — — 

Total equity / net worth $35,230 $25,311 $35,230 $25,311 

Remaining Treasury funding commitment 140,162 140,162 140,162 140,162 

Aggregate draws under Purchase Agreement 71,648 71,648 71,648 71,648 

Aggregate cash dividends paid to Treasury 119,680 119,680 119,680 119,680 

Liquidation preference of the senior preferred stock 106,746 95,050 106,746 95,050 

ERCF

FHFA has established the ERCF as a new enterprise regulatory capital framework for Freddie Mac and Fannie Mae. 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. Pursuant to the final rule, we are 

required to comply with the regulatory capital reporting requirements under the ERCF in 2022, and we filed with FHFA our initial 

quarterly capital report on May 27, 2022.

The ERCF establishes risk-based and leverage capital requirements and includes supplemental 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 (common equity tier 1 (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%, and 8%, respectively, of risk-weighted assets. We must also maintain statutory total capital 

equal to at least 8% of risk-weighted assets. To avoid limits on capital distributions and discretionary bonus payments, we also 

must maintain CET1 capital that exceeds the risk-based capital requirements by at least the amount of the prescribed capital 

conservation buffer amount (PCCBA).

Leverage Capital Requirements

Under the ERCF leverage capital requirements, we must maintain our Tier 1 capital ratio equal to at least 2.5% of adjusted total 

assets. We must also maintain our statutory core capital ratio equal to at least 2.5% of adjusted total assets. To avoid limits on 

capital distributions and discretionary bonus payments, we also must maintain our Tier 1 capital that exceeds the leverage 

capital requirements by at least the amount of the prescribed leverage buffer amount (PLBA).

Management's Discussion and Analysis Liquidity and Capital Resources

Freddie Mac 3Q 2022 Form 10-Q 42
Capital Metrics

The table below presents our capital metrics under the ERCF. 

Table 36 - Capital Metrics Under ERCF 

(In billions) September 30, 2022

Adjusted total assets $3,695 

Risk-weighted assets (standardized approach) 855 

(In billions) September 30, 2022

Stress capital buffer $27 

Stability capital buffer 23 

Countercyclical capital buffer — 

PCCBA $50 

PLBA $11 

September 30, 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 (statutory)(2) $68 N/A $68 ($30) ($98) 

CET1 capital(3) 38 $50 88 (57) (145) 

Tier 1 capital(3) 51 50 101 (43) (144) 

Adjusted total capital(3) 68 50 118 (43) (161) 

Risk-based capital ratios(4):

Total capital (statutory) 8.0 % N/A 8.0 % (3.5) % (11.5) %

CET1 capital 4.5 5.8 % 10.3 (6.7) (17.0) 

Tier 1 capital 6.0 5.8 11.8 (5.0) (16.8) 

Adjusted total capital 8.0 5.8 13.8 (5.0) (18.8) 

Leverage capital amounts:

Core capital (statutory)(5) $92 N/A $92 ($37) ($129) 

Tier 1 capital(3) 92 $11 103 (43) (146) 

Leverage capital ratios(6):

Core capital (statutory) 2.5 % N/A 2.5 % (1.0) % (3.5) %

Tier 1 capital 2.5 0.3 % 2.8 (1.2) (4.0) 

(1) PCCBA for risk-based capital and PLBA for leverage capital.

(2) Total capital is equal to core capital plus certain allowances for credit losses.

(3) Regulatory capital amounts exclude senior preferred stock, deferred tax assets arising from temporary differences that exceed 10% of CET1 capital, and certain 

other items.

(4) As a percentage of risk-weighted assets.

(5) Core capital excludes certain components of GAAP total equity (i.e., AOCI and senior preferred stock) as these items do not meet the statutory definition of core 

capital.

(6) As a percentage of adjusted total assets.

At September 30, 2022, our maximum payout ratio under the ERCF was 0.0%.

See Note 15 for additional information on our amounts of capital and ratios under the ERCF. 

Management's Discussion and Analysis Liquidity and Capital Resources

Freddie Mac 3Q 2022 Form 10-Q 43
CRITICAL ACCOUNTING ESTIMATES

Our critical accounting estimates and policies relate to the Single-Family allowance for credit losses. For additional information 

about our critical accounting estimates and other significant accounting policies, see Note 1 and Critical Accounting Estimates 

in our 2021 Annual Report. 

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 held-for-investment single-family mortgage loans 

on our condensed 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, the most significant of which is the probability of default. 

Changes in forecasted house price growth rates can have a significant effect on our allowance for credit losses. The table 

below shows our nationwide forecasted house price growth rates that were used in determining our allowance for credit losses. 

See Note 5 for additional information regarding our current period benefit (provision) for credit losses and estimation process.

Table 37 - Forecasted House Price Growth Rates

2022 2023

September 30, 2022(1) 6.7 % (0.2) %

June 30, 2022(1) 12.8 4.0 

March 31, 2022(1) 10.4 5.0 

December 31, 2021 6.2 2.5 

(1) Current year forecast includes actual rates observed in the prior months.

Management's Discussion and Analysis Critical Accounting Estimates

Freddie Mac 3Q 2022 Form 10-Q 44
REGULATION AND SUPERVISION

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 from time to time to 

change our processes, take action and/or stop taking action that could impact our business. Furthermore, regulatory activities 

by other government agencies can affect us indirectly, even if we are not directly subject to such agencies' regulation or 

oversight. For example, regulations that modify requirements applicable to the purchase or servicing of mortgages can affect 

us.

Federal Housing Finance Agency

Updated Minimum Financial Eligibility Requirements for Enterprise Seller/

Servicers

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 are effective on September 30, 2023.

FICO 10T and VantageScore 4.0

On October 24, 2022, FHFA announced the validation and approval of both the FICO 10T and the VantageScore 4.0 credit 

score models for use by the Enterprises. FHFA expects that implementation of the FICO 10T and VantageScore 4.0 models will 

be a multiyear effort. Once implemented, lenders will be required to deliver both FICO 10T and VantageScore 4.0 credit scores 

with each loan sold to the Enterprises. FHFA and the Enterprises will conduct outreach to stakeholders to ensure a smooth 

transition to the newer credit score models.

FHFA also announced that the Enterprises will work toward changing the requirement that lenders provide credit reports from 

all three nationwide consumer reporting agencies (CRAs). Instead, the Enterprises will require lenders to provide credit reports 

from two of the three nationwide CRAs. The Enterprises will work with stakeholders on a plan for implementing the change from 

a tri-merge credit report requirement to a bi-merge credit report requirement.

Targeted Pricing Changes to Enterprise Pricing Framework

On October 24, 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 

cash-out refinance loans.

As part of the pricing changes stemming from FHFA’s ongoing review of the Enterprises’ pricing framework announced last 

year, FHFA is eliminating upfront fees for:

n	 First-time homebuyers at or below 100 percent of area median income (AMI) in most of the United States and 

below 120 percent of AMI in high-cost 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	 Single-family loans supporting the Duty to Serve program.

Freddie Mac announced the updated changes on October 31, 2022. The implementation of new fees for cash-out refinance 

loans will begin on February 1, 2023. All other announced fee changes will go into effect on December 1, 2022.

Management's Discussion and Analysis Regulation and Supervision

Freddie Mac 3Q 2022 Form 10-Q 45
Legislative and Regulatory Developments

2022 Dodd-Frank Stress Test Results

On August 11, 2022, FHFA released a report providing the results of the 2022 annual stress tests for Freddie Mac. This report 

provides updated information on possible ranges of future financial results for Freddie Mac under severely adverse economic 

conditions. 

Proposed Multifamily Affordable Housing Goals for 2023-2024

On August 16, 2022, FHFA proposed its multifamily affordable housing goals for Freddie Mac for 2023-2024. Under FHFA’s 

existing housing goals regulation, the multifamily housing goals for the Enterprises include benchmark levels through the end of 

2022 based on the total number of affordable units in multifamily properties financed by mortgage loans purchased by the 

Enterprise each year. This proposed rule would amend 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 current and proposed affordable housing goal benchmark levels are set forth below. 

Table 38 - Current and Proposed 2023-2024 Multifamily Affordable Housing Goal Benchmark Levels

Affordable Housing Goals

Current

Benchmark

Levels for 2022 

(units)

Proposed

Benchmark

Levels for 

2023-2024

(% of units)

Multifamily 

Low-income goal 415,000 61 %

Very low-income subgoal 88,000 12 

Small multifamily (5-50 units) low-income subgoal 23,000 2 

Management's Discussion and Analysis Regulation and Supervision

Freddie Mac 3Q 2022 Form 10-Q 46
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-Q, 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 observed and forecasted house price appreciation, 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 effects of natural disasters, other catastrophic events, including the COVID-19 

pandemic, and significant climate change effects and actions taken in response thereto on our business, and our results of 

operations and financial condition. Forward-looking statements involve known and unknown risks and uncertainties, some of 

which are beyond our control. Forward-looking 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 in our 2021 Annual Report, and 

including, without limitation, the following:

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 support the housing market, such as programs implemented in 

response to the COVID-19 pandemic or to implement the recommendations 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 Uncertainty regarding the duration and severity of the COVID-19 pandemic and the effects of the pandemic and actions 

taken in response thereto on the U.S. economy and housing market, which could, in turn, adversely affect our business in 

numerous ways, including, for example, by increasing our credit losses, impairing the value of our mortgage-related 

securities, decreasing our liquidity and capital levels, and increasing our credit risk and operational risk;

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

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 generally, and as a result of the COVID-19 pandemic, including changes in 

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

n Changes in the U.S. residential mortgage market, including changes in the supply and type of loan products (e.g., 

refinance vs. purchase and fixed-rate vs. ARM);

n The success of our efforts to mitigate our losses on our Single-Family mortgage portfolio;

n The success of our strategy to transfer mortgage credit risk through STACR, ACIS, K Certificate, SB Certificate, and other 

CRT transactions;

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 

cyberattacks or other security incidents;

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 capital framework 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;

Management's Discussion and Analysis Forward-Looking Statements

Freddie Mac 3Q 2022 Form 10-Q 47
n	 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 of our and Fannie Mae's respective UMBS;

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; 

n The discontinuance of, transition from, or replacement of LIBOR and the adverse consequences it could have on our 

business and operations;

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

manage risks effectively;

n The occurrence of a major natural disaster, other 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-Q and our 2021 Annual Report, including in the MD&A section.

Forward-looking statements are made only as of the date of this Form 10-Q, 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-Q.

Management's Discussion and Analysis Forward-Looking Statements

Freddie Mac 3Q 2022 Form 10-Q 48
Financial Statements

Financial Statements

Freddie Mac 3Q 2022 Form 10-Q 49
FREDDIE MAC 

Condensed Consolidated Statements of Operations and 

Comprehensive Income (Loss) (Unaudited)

(In millions, except share-related amounts) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Net interest income

Interest income $21,894 $15,791 $59,642 $44,923 

Interest expense (17,340) (11,373) (46,225) (32,099) 

Net interest income 4,554 4,418 13,417 12,824 

Non-interest income (loss)

Guarantee income 125 246 400 850 

Investment gains (losses), net 415 383 2,249 2,227 

Other income (loss) 87 200 365 485 

Non-interest income (loss) 627 829 3,014 3,562 

Net revenues 5,181 5,247 16,431 16,386 

Benefit (provision) for credit losses (1,796) 243 (1,266) 1,179 

Non-interest expense

Salaries and employee benefits (387) (352) (1,119) (1,042) 

Credit enhancement expense (542) (386) (1,559) (1,090) 

Benefit for (decrease in) credit enhancement recoveries 210 (60) 192 (510) 

Legislative assessments expense (753) (734) (2,260) (2,121) 

Other expense (353) (312) (1,031) (1,038) 

Non-interest expense (1,825) (1,844) (5,777) (5,801) 

Income (loss) before income tax (expense) benefit 1,560 3,646 9,388 11,764 

Income tax (expense) benefit (247) (727) (1,824) (2,399) 

Net income (loss) 1,313 2,919 7,564 9,365 

Other comprehensive income (loss), net of taxes and reclassification 

adjustments (181) (10) (367) (467) 

Comprehensive income (loss) $1,132 $2,909 $7,197 $8,898 

Net income (loss) $1,313 $2,919 $7,564 $9,365 

Future increase in senior preferred stock liquidation preference (1,132) (2,909) (7,197) (8,898) 

Net income (loss) attributable to common stockholders $181 $10 $367 $467 

Net income (loss) per common share $0.06 $— $0.11 $0.14 

Weighted average common shares (in millions) 3,234 3,234 3,234 3,234 

The accompanying notes are an integral part of these condensed consolidated financial statements.

Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Income

Freddie Mac 3Q 2022 Form 10-Q 50
FREDDIE MAC

Condensed Consolidated Balance Sheets (Unaudited) 

September 30, December 31,

(In millions, except share-related amounts) 2022 2021

Assets

Cash and cash equivalents (includes $773 and $1,695 of restricted cash and cash equivalents) $5,691 $10,150 

Securities purchased under agreements to resell 97,643 71,203 

Investment securities, at fair value 43,270 53,015 

Mortgage loans held-for-sale (includes $3,542 and $10,498 at fair value) 9,365 19,778 

Mortgage loans held-for-investment (net of allowance for credit losses of $6,851 and $4,947) 2,998,008 2,828,331 

Accrued interest receivable, net 8,201 7,474 

Deferred tax assets, net 5,561 6,214 

Other assets (includes $6,008 and $6,594 at fair value) 22,917 29,421 

Total assets $3,190,656 $3,025,586 

Liabilities and equity

Liabilities

Accrued interest payable $6,915 $6,268 

Debt (includes $4,252 and $2,478 at fair value) 3,137,222 2,980,185 

Other liabilities (includes $961 and $287 at fair value) 11,289 11,100 

Total liabilities 3,155,426 2,997,553 

Commitments and contingencies (Notes 4, 8, 14)

Equity

Senior preferred stock (liquidation preference of $106,746 and $97,959) 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 (accumulated deficit) (47,429) (54,993) 

AOCI, net of taxes, related to:

Available-for-sale securities (77) 297 

Other (136) (143) 

AOCI, net of taxes (213) 154 

Treasury stock, at cost, 75,804,333 shares (3,885) (3,885) 

Total equity 35,230 28,033 

Total liabilities and equity $3,190,656 $3,025,586 

The table below presents the carrying value and classification of the assets and liabilities of consolidated VIEs on our condensed consolidated balance 

sheets.

 

September 30, December 31, 

(In millions) 2022 2021

Assets:

Cash and cash equivalents (includes $677 and $1,595 of restricted cash and cash equivalents) $678 $1,596 

Securities purchased under agreements to resell 15,500 34,000 

Investment securities, at fair value 309 420 

Mortgage loans held-for-investment, net 2,956,534 2,784,626 

Accrued interest receivable, net 7,721 7,019 

Other assets 6,439 11,265 

Total assets of consolidated VIEs $2,987,181 $2,838,926

Liabilities:

Accrued interest payable $6,449 $5,823 

Debt 2,973,973 2,803,054 

Total liabilities of consolidated VIEs $2,980,422 $2,808,877 

The accompanying notes are an integral part of these condensed consolidated financial statements.

Financial Statements Condensed Consolidated Balance Sheets

Freddie Mac 3Q 2022 Form 10-Q 51
FREDDIE MAC

Condensed Consolidated Statements of Equity (Unaudited) 

Shares Outstanding

Senior

Preferred

Stock

Preferred

Stock, at

Redemption

Value

Common

Stock, at

Par Value

Retained

Earnings

(Accumulated

Deficit)

AOCI,

Net of

Tax

Treasury

Stock, at

Cost

Total

(In millions) Equity 

Senior

Preferred

Stock

Preferred

Stock

Common

Stock

Balance at June 30, 2022 1 464 650 $72,648 $14,109 $— ($48,742) ($32) ($3,885) $34,098 

Comprehensive income (loss):

Net income (loss) — — — — — — 1,313 — — 1,313 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) 

on available-for-sale securities (net of 

taxes of $42 million) — — — — — — — (159) — (159) 

Reclassification adjustment for gains on 

available-for-sale securities included in 

net income (net of taxes of $7 million) — — — — — — — (25) — (25) 

Other (net of taxes of $1 million) — — — — — — — 3 — 3 

Comprehensive income (loss) — — — — — — 1,313 (181) — 1,132 

Ending balance at September 30, 2022 1 464 650 $72,648 $14,109 $— ($47,429) ($213) ($3,885) $35,230 

Balance at June 30, 2021 1 464 650 $72,648 $14,109 $— ($60,656) $186 ($3,885) $22,402 

Comprehensive income (loss):

Net income (loss) — — — — — — 2,919 — — 2,919 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) 

on available-for-sale securities (net of 

taxes of $2 million) — — — — — — — (6) — (6) 

Reclassification adjustment for gains on 

available-for-sale securities included in 

net income (net of taxes of $2 million) — — — — — — — (8) — (8) 

Other (net of taxes of $1 million) — — — — — — — 4 — 4 

Comprehensive income (loss) — — — — — — 2,919 (10) — 2,909 

Ending balance at September 30, 2021 1 464 650 $72,648 $14,109 $— ($57,737) $176 ($3,885) $25,311 

Shares Outstanding

Senior

Preferred

Stock

Preferred

Stock, at

Redemption

Value

Common

Stock, at

Par Value

Retained

Earnings

(Accumulated

Deficit)

AOCI,

Net of

Tax

Treasury

Stock, at

Cost

Total

(In millions) Equity 

Senior

Preferred

Stock

Preferred

Stock

Common

Stock

Balance at December 31, 2021 1 464 650 $72,648 $14,109 $— ($54,993) $154 ($3,885) $28,033 

Comprehensive income (loss):

Net income (loss) — — — — — — 7,564 — — 7,564 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) 

on available-for-sale securities (net of 

taxes of $94 million) — — — — — — — (353) — (353) 

Reclassification adjustment for gains on 

available-for-sale securities included in 

net income (net of taxes of $6 million) — — — — — — — (21) — (21) 

Other (net of taxes of $2 million) — — — — — — — 7 — 7 

Comprehensive income (loss) — — — — — — 7,564 (367) — 7,197 

Ending balance at September 30, 2022 1 464 650 $72,648 $14,109 $— ($47,429) ($213) ($3,885) $35,230 

Balance at December 31, 2020 1 464 650 $72,648 $14,109 $— ($67,102) $643 ($3,885) $16,413 

Comprehensive income (loss):

Net income (loss) — — — — — — 9,365 — — 9,365 

Other comprehensive income (loss):

Changes in net unrealized gains (losses) 

on available-for-sale securities (net of 

taxes of $28 million) — — — — — — — (105) — (105) 

Reclassification adjustment for gains on 

available-for-sale securities included in 

net income (net of taxes of $100 million) — — — — — — — (377) — (377) 

Other (net of taxes of $2 million) — — — — — — — 15 — 15 

Comprehensive income (loss) — — — — — — 9,365 (467) — 8,898 

Ending balance at September 30, 2021 1 464 650 $72,648 $14,109 $— ($57,737) $176 ($3,885) $25,311 

The accompanying notes are an integral part of these condensed consolidated financial statements.

Financial Statements Condensed Consolidated Statements of Equity

Freddie Mac 3Q 2022 Form 10-Q 52
FREDDIE MAC

Condensed Consolidated Statements of Cash Flows (Unaudited) 

(In millions) YTD 2022 YTD 2021

Net cash provided by (used in) operating activities $12,193 $17,318 

Cash flows from investing activities

Purchases of investment securities (107,222) (96,169) 

Proceeds from sales of investment securities 99,179 122,815 

Proceeds from maturities and repayments of investment securities 11,226 6,996 

Purchases of mortgage loans acquired as held-for-investment (130,568) (463,273) 

Proceeds from sales of mortgage loans acquired as held-for-investment 2,843 6,917 

Proceeds from repayments of mortgage loans acquired as held-for-investment 289,624 592,454 

Advances under secured lending arrangements (144,215) (194,127) 

Repayments of secured lending arrangements 369 478 

Net proceeds from dispositions of real estate owned and other recoveries 180 199 

Net (increase) decrease in securities purchased under agreements to resell (26,619) 16,282 

Derivative premiums and terminations, swap collateral, and exchange settlement payments, net 4,276 1,105 

Other, net (544) (488) 

Net cash provided by (used in) investing activities (1,471) (6,811) 

Cash flows from financing activities

Proceeds from issuance of debt of consolidated trusts 310,836 669,060 

Repayments and redemptions of debt of consolidated trusts (319,703) (608,468) 

Proceeds from issuance of debt of Freddie Mac 70,831 23,153 

Repayments of debt of Freddie Mac (77,319) (112,114) 

Net increase (decrease) in securities sold under agreements to repurchase 179 3,455 

Other, net (5) (4) 

Net cash provided by (used in) financing activities (15,181) (24,918) 

Net increase (decrease) in cash and cash equivalents (includes restricted cash and cash equivalents) (4,459) (14,411) 

Cash and cash equivalents (includes restricted cash and cash equivalents) at beginning of year 10,150 23,889 

Cash and cash equivalents (includes restricted cash and cash equivalents) at end of period $5,691 $9,478 

Supplemental cash flow information

Cash paid for:

Debt interest $55,491 $51,686 

Income taxes 2,500 3,124 

Non-cash investing and financing activities (Note 3 and 6)

 The accompanying notes are an integral part of these condensed consolidated financial statements. 

Financial Statements Condensed Consolidated Statements of Cash Flows

Freddie Mac 3Q 2022 Form 10-Q 53
Notes to Condensed 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. The conservatorship and related matters significantly affect our management, business activities, 

financial condition, and results of operations. 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. Our 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 the support provided by Treasury pursuant to the 

Purchase Agreement currently enables us to have adequate liquidity to conduct normal business activities. For more 

information on the conservatorship, the roles of FHFA and Treasury, and the Purchase Agreement, see our 2021 Annual Report. 

Throughout our unaudited condensed consolidated financial statements and related notes, we use certain acronyms and terms 

which are defined in the Glossary of our 2021 Annual Report. 

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited 

consolidated financial statements and related notes in our 2021 Annual Report.

Basis of Presentation

The accompanying unaudited condensed 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. In the opinion of management, our unaudited consolidated financial statements contain all 

adjustments, which include only normal recurring adjustments, necessary for a fair statement of our results. 

We have reclassified certain amounts within non-interest expense in our condensed consolidated statement of operations to 

better present the significant drivers of our non-interest expense activity. Prior period amounts have been reclassified to 

conform to the current period presentation. These reclassifications did not change the total amounts of non-interest expense, 

net income, or comprehensive income in any period presented.

Use of Estimates

The preparation of our condensed 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 at the date of the financial statements. 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.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 1

Freddie Mac 3Q 2022 Form 10-Q 54
Recently Issued Accounting Guidance

Recently Adopted Accounting Guidance

Standard Description Date of 

 Adoption

Effect on Consolidated Financial 

Statements

ASU 2021-04, Earnings Per 

Share (Topic 260), DebtModifications and 

Extinguishments (Subtopic 

470-50), Compensation-Stock 

Compensation (Topic 718), and 

Derivatives and HedgingContracts in Entity's Own Equity 

(Subtopic 815-40): Issuer's 

Accounting for Certain 

Modifications or Exchanges of 

Freestanding Equity-Classified 

Written Call Options

The amendments in this Update require issuers 

to account for modifications or exchanges of 

freestanding equity-classified written call 

options based on the reason for the 

modification or exchange, to issue equity, to 

issue or modify debt, or for other reasons.

January 1, 2022 The adoption of the amendments did 

not have a material effect on our 

consolidated financial statements.

ASU 2022-02, Financial 

Instruments—Credit Losses 

(Topic 326): Troubled Debt 

Restructurings and Vintage 

Disclosures

The amendments in this Update eliminate the 

recognition and measurement guidance related 

to TDRs in ASC Subtopic 310-40 for entities 

that have adopted ASC Topic 326. 

The amendments in this Update also 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, 2022 for the 

amendments related to the 

elimination of the 

recognition and 

measurement of TDRs;

January 1, 2023 for the 

amendments related to 

disclosure of gross writeoffs by year of origination.

We elected to early adopt the 

amendments related to the 

elimination of the recognition and 

measurement of TDRs on January 1, 

2022 on a prospective basis. This 

change did not have a material effect 

on our consolidated financial 

statements. See Note 3 for additional 

information on the adoption of these 

amendments and the new required 

disclosures. 

We do not expect the adoption of the 

amendments related to disclosure of 

gross write-offs by year of origination 

to have a material effect on our 

consolidated financial statements. 

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard Description Date of 

 Adoption

Effect on Consolidated Financial 

Statements

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 ASU 

amends the guidance in ASU 2017-12 that, 

among other things, establishes the "last-oflayer" 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. 

January 1, 2023 We do not expect the adoption of 

these amendments to have a 

material effect on our consolidated 

financial statements.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 1

Freddie Mac 3Q 2022 Form 10-Q 55
NOTE 2

Securitization Activities and Consolidation

Nonconsolidated VIEs

The following table presents the carrying amounts and classification of the assets and liabilities recorded on our condensed 

consolidated balance sheets related to 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 involvement with such VIEs primarily consists of 

investments in debt securities issued by resecuritization trusts and guarantees of senior securities issued by certain Multifamily 

securitization trusts.

Table 2.1 - Nonconsolidated VIEs

(In millions) September 30, 2022 December 31, 2021

Assets and Liabilities Recorded on our Condensed Consolidated Balance Sheets(1)

Assets:

Investment securities, at fair value $14,685 $16,506 

Accrued interest receivable, net 206 220 

Other assets(2) 5,279 5,589 

 Liabilities:

Debt 146 67 

Other liabilities(2) 5,885 5,172 

(1) Includes our variable interests in REMICs, Strips, commingled Supers, K Certificates, SB Certificates, certain senior subordinate securitization structures, and other 

securitization products that we do not consolidate. 

(2) Includes our guarantee asset in other assets and our guarantee obligation in other liabilities.

The table below presents total assets and the maximum exposure to loss of the VIEs for which we are not the primary 

beneficiary and therefore do not consolidate.

Table 2.2 - Total Assets and Maximum Exposure to Loss for our Nonconsolidated VIEs(1)

September 30, 2022 December 31, 2021

(In millions) Total Assets Maximum Exposure(2) Total Assets Maximum Exposure(2)

Securitization Activities

Single-Family:

 Other securitization products(3) $32,116 $26,504 $33,603 $27,975 

Multifamily:

 K Certificates 323,309 285,876 321,149 281,910 

 SB Certificates 24,280 21,726 24,944 22,389 

 Other securitization products 15,276 13,426 16,683 14,772 

CRT Activities 32,651 76 23,605 44 

(1) Excludes resecuritization products.

(2) For securitization activities, the maximum exposure primarily represents the contractual amounts that could be lost if counterparties or borrowers defaulted, without 

consideration of proceeds from related collateral liquidation and possible recoveries under credit enhancements. For CRT activities, the maximum exposure 

represents our recorded expected recovery receivable.

(3) Total assets excludes certain nonfinancial assets held by the VIEs.

In addition, the UPB of Fannie Mae securities underlying commingled Freddie Mac resecuritization trusts for which we are not 

the primary beneficiary totaled $122.5 billion and $110.8 billion as of September 30, 2022 and December 31, 2021, respectively. 

As a result of the recently implemented ERCF, we charge a 50 basis point fee for any commingled security issued on or after 

July 1, 2022. We apply the fee to collateral issued by Fannie Mae, at the time that such collateral is used for a new commingled 

security. See Note 4 for additional information on our guarantee of Fannie Mae securities.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 2

Freddie Mac 3Q 2022 Form 10-Q 56
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 our investments in certain non-Freddie Mac mortgage-related securities, 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 tables 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. See Note 6 for additional information regarding our investments in 

non-Freddie Mac mortgage-related securities. See Note 3 for more information regarding multifamily loans.

We do not believe the maximum exposure to loss from our involvement with VIEs for which we are not the primary beneficiary 

shown above 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, including possible recoveries under credit enhancements. Certain 

of our interest-rate risk-related guarantees to VIEs for which we are not the primary beneficiary may create exposure to loss 

that is unlimited. We account for these interest-rate risk-related guarantees at fair value as discussed further in Note 4 and 

generally reduce our exposure to these guarantees with unlimited interest rate exposure through separate derivative contracts 

with third parties. See Note 8 for additional information on derivatives.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 2

Freddie Mac 3Q 2022 Form 10-Q 57
NOTE 3

Mortgage Loans

The table below provides details of the loans on our condensed consolidated balance sheets.

Table 3.1 - Mortgage Loans 

September 30, 2022 December 31, 2021

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

Held-for-sale UPB $3,722 $6,800 $10,522 $5,446 $14,871 $20,317 

Cost basis and fair value adjustments, net (721) (436) (1,157) (813) 274 (539) 

Total held-for-sale loans, net 3,001 6,364 9,365 4,633 15,145 19,778 

Held-for-investment UPB 2,926,244 35,788 2,962,032 2,742,851 26,657 2,769,508 

Cost basis adjustments 42,751 76 42,827 63,684 86 63,770 

Allowance for credit losses (6,802) (49) (6,851) (4,913) (34) (4,947) 

Total held-for-investment loans, net 2,962,193 35,815 2,998,008 2,801,622 26,709 2,828,331 

Total mortgage loans, net $2,965,194 $42,179 $3,007,373 $2,806,255 $41,854 $2,848,109 

For the purposes of certain single-family mortgage loan disclosures below, we present loans by class of financing receivable 

type. Financing receivable classes used for disclosure consist of: "20- and 30-year or more, amortizing fixed-rate," "15-year or 

less, amortizing fixed-rate," and "adjustable-rate and other." The "other" class consists of Alt-A, interest-only, and option ARM 

loans.

The table below provides details of the UPB of loans we purchased and sold during the periods presented.

Table 3.2 - Loans Purchased and Sold 

(In millions) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Single-Family:

Purchases:

 Held-for-investment loans $121,215 $297,554 $465,815 $945,222 

Sales of held-for-sale loans(1) 537 928 1,981 3,965 

Multifamily:

Purchases:

 Held-for-investment loans 5,617 2,959 11,139 5,879 

 Held-for-sale loans 8,835 13,744 32,474 37,580 

Sales of held-for-sale loans(2) 11,475 13,390 40,666 52,221 

(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 and SB Certificates. 

Reclassifications 

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 3.3 - Loan Reclassifications 

3Q 2022 3Q 2021

(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 $361 $10 $— $388 $19 $— 

Held-for-sale to held-for-investment(1) 30 (3) 2 81 4 — 

Multifamily reclassifications from:

Held-for-investment to held-for-sale 188 — — 445 — — 

 Held-for-sale to held-for-investment — — — — — — 

Referenced footnote is included after the year-to-date table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 58
YTD 2022 YTD 2021

(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 $934 $20 $— $1,358 $54 $— 

Held-for-sale to held-for-investment(1) 167 (10) 5 183 13 — 

Multifamily reclassifications from:

Held-for-investment to held-for-sale 889 1 — 2,175 6 — 

 Held-for-sale to held-for-investment 285 — — 21 — — 

(1) Allowance for credit losses established upon loan reclassification 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

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 period 

end. 

Table 3.4 - Amortized Cost Basis of Held-for-Investment Loans on Non-Accrual 

Non-Accrual Amortized Cost Basis Interest Income Recognized(1)

(In millions) June 30, 2022 September 30, 2022 3Q 2022 YTD 2022

Single-Family:

20- and 30-year or more, amortizing fixed-rate $11,021 $9,462 $37 $121 

15-year or less, amortizing fixed-rate 562 457 1 4 

Adjustable-rate and other 435 396 1 4 

Total Single-Family 12,018 10,315 39 129 

Total Multifamily 42 42 — — 

Total Single-Family and Multifamily $12,060 $10,357 $39 $129 

 

Non-Accrual Amortized Cost Basis Interest Income Recognized(1)

(In millions) June 30, 2021 September 30, 2021 3Q 2021 YTD 2021

Single-Family:

20- and 30-year or more, amortizing fixed-rate $19,431 $17,524 $35 $115 

15-year or less, amortizing fixed-rate 914 862 1 4 

Adjustable-rate and other 879 818 2 6 

Total Single-Family 21,224 19,204 38 125 

Total Multifamily — — — — 

Total Single-Family and Multifamily $21,224 $19,204 $38 $125 

(1) 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 condensed 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 3.5 - Accrued Interest Receivable, Net and Related Charge-Offs

Accrued Interest Receivable, Net Accrued Interest Receivable Related Charge-Offs

(In millions) September 30, 2022 December 31, 2021 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Single-Family loans $7,752 $7,065 ($47) ($222) ($192) ($507) 

Multifamily loans 142 125 — — — — 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 59
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 table below presents 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. For reporting purposes:

n	 Alt-A loans continue to be presented in the "adjustable-rate and other" category following modification, even though the 

borrower may have provided full documentation of assets and income to complete the modification and

n Option ARM loans continue to be presented in the "adjustable-rate and other" category following modification, even 

though the modified loan no longer provides for optional payment provisions.

Table 3.6 - Amortized Cost Basis of Single-Family Held-for-Investment Loans by Current LTV Ratio and Vintage

September 30, 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 $60,081 $412,520 $508,101 $90,428 $40,315 $419,068 $1,530,513 

> 60 to 80 145,978 426,339 183,723 28,502 7,845 10,671 803,058 

> 80 to 90 61,350 86,815 3,898 546 148 459 153,216 

> 90 to 100 61,850 5,333 383 52 22 155 67,795 

> 100 213 5 1 3 5 173 400 

 Total 20- and 30-year or more, amortizing fixed-rate 329,472 931,012 696,106 119,531 48,335 430,526 2,554,982 

 15-year or less, amortizing fixed-rate

≤ 60 15,657 120,897 112,740 15,175 5,847 72,814 343,130 

> 60 to 80 12,244 24,272 2,994 167 20 20 39,717 

> 80 to 90 1,350 449 8 — 1 2 1,810 

> 90 to 100 488 5 — — — 1 494 

> 100 — — — — — 2 2 

 Total 15-year or less, amortizing fixed-rate 29,739 145,623 115,742 15,342 5,868 72,839 385,153 

 Adjustable-rate and other

≤ 60 1,110 2,918 1,585 665 452 15,889 22,619 

> 60 to 80 2,004 1,954 208 75 29 436 4,706 

> 80 to 90 778 169 4 1 1 36 989 

> 90 to 100 517 7 — — — 13 537 

> 100 1 — — — — 8 9 

 Total adjustable-rate and other 4,410 5,048 1,797 741 482 16,382 28,860 

Total Single-Family loans $363,621 $1,081,683 $813,645 $135,614 $54,685 $519,747 $2,968,995 

Total for all loan product types by current LTV ratio:

≤ 60 $76,848 $536,335 $622,426 $106,268 $46,614 $507,771 $1,896,262 

> 60 to 80 160,226 452,565 186,925 28,744 7,894 11,127 847,481 

> 80 to 90 63,478 87,433 3,910 547 150 497 156,015 

> 90 to 100 62,855 5,345 383 52 22 169 68,826 

> 100 214 5 1 3 5 183 411 

Total Single-Family loans $363,621 $1,081,683 $813,645 $135,614 $54,685 $519,747 $2,968,995 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 60
December 31, 2021

Year of Origination 

Total

(In millions) 2021 2020 2019 2018 2017 Prior

Current LTV ratio:

 20- and 30-year or more, amortizing fixed-rate

≤ 60 $260,244 $397,680 $77,812 $39,143 $61,434 $405,467 $1,241,780 

> 60 to 80 467,193 334,560 60,570 18,914 12,715 17,354 911,306 

> 80 to 90 124,074 28,944 2,034 482 208 818 156,560 

> 90 to 100 66,851 1,083 126 45 29 309 68,443 

> 100 75 2 4 8 18 328 435 

 Total 20- and 30-year or more, amortizing fixed-rate 918,437 762,269 140,546 58,592 74,404 424,276 2,378,524 

 15-year or less, amortizing fixed-rate

≤ 60 93,732 111,899 17,335 7,161 13,602 78,001 321,730 

> 60 to 80 52,521 18,834 1,136 137 54 36 72,718 

> 80 to 90 3,785 168 6 2 2 3 3,966 

> 90 to 100 598 2 1 1 1 2 605 

> 100 4 — — 1 1 3 9 

 Total 15-year or less, amortizing fixed-rate 150,640 130,903 18,478 7,302 13,660 78,045 399,028 

 Adjustable-rate and other

≤ 60 2,054 1,554 727 543 1,657 17,517 24,052 

> 60 to 80 2,435 535 209 90 190 795 4,254 

> 80 to 90 417 16 6 3 4 66 512 

> 90 to 100 116 — — — — 30 146 

> 100 1 — — — — 18 19 

 Total adjustable-rate and other 5,023 2,105 942 636 1,851 18,426 28,983 

Total Single-Family loans $1,074,100 $895,277 $159,966 $66,530 $89,915 $520,747 $2,806,535 

Total for all loan product types by current LTV ratio:

≤ 60 $356,030 $511,133 $95,874 $46,847 $76,693 $500,985 $1,587,562 

> 60 to 80 522,149 353,929 61,915 19,141 12,959 18,185 988,278 

> 80 to 90 128,276 29,128 2,046 487 214 887 161,038 

> 90 to 100 67,565 1,085 127 46 30 341 69,194 

> 100 80 2 4 9 19 349 463 

Total Single-Family loans $1,074,100 $895,277 $159,966 $66,530 $89,915 $520,747 $2,806,535 

Multifamily

The table below presents the amortized cost basis of our multifamily held-for-investment loans, 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 the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 61
Table 3.7 - Amortized Cost Basis of Multifamily Held-for-Investment Loans by Credit Quality Indicator and Vintage

September 30, 2022

Year of Origination

(In millions) 2022 2021 2020 2019 2018 Prior Total

Revolving 

Loans

Category:

Pass $9,381 $7,852 $6,576 $5,177 $939 $3,108 $2,046 $35,079 

Special mention — 39 65 443 7 56 — 610 

Substandard — — 31 60 4 80 — 175 

Doubtful — — — — — — — — 

Total $9,381 $7,891 $6,672 $5,680 $950 $3,244 $2,046 $35,864 

December 31, 2021

Year of Origination

(In millions) 2021 2020 2019 2018 2017 Prior Total

Revolving 

Loans

Category:

Pass $6,955 $7,116 $5,273 $979 $610 $2,795 $2,275 $26,003 

Special mention — 40 372 — 3 42 — 457 

Substandard — 62 171 4 2 44 — 283 

Doubtful — — — — — — — — 

Total $6,955 $7,218 $5,816 $983 $615 $2,881 $2,275 $26,743 

Past Due Status

The table below presents the amortized cost basis of our single-family and multifamily held-for-investment loans, by payment 

status. 

Table 3.8 - Amortized Cost Basis of Held-for-Investment Loans by Payment Status

September 30, 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 $2,523,119 $16,055 $3,657 $12,151 $2,554,982 $3,067 $546 

 15-year or less, amortizing fixed-rate 383,084 1,233 223 613 385,153 170 10 

Adjustable-rate and other 28,080 291 79 410 28,860 32 78 

Total Single-Family 2,934,283 17,579 3,959 13,174 2,968,995 3,269 634 

Total Multifamily 35,819 3 — 42 35,864 — 42 

Total Single-Family and Multifamily $2,970,102 $17,582 $3,959 $13,216 $3,004,859 $3,269 $676 

December 31, 2021

(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 $2,338,076 $14,833 $3,214 $22,401 $2,378,524 $5,784 $857 

15-year or less, amortizing fixed-rate 396,030 1,550 230 1,218 399,028 392 13 

Adjustable-rate and other 27,752 280 89 862 28,983 95 102 

Total Single-Family 2,761,858 16,663 3,533 24,481 2,806,535 6,271 972 

Total Multifamily 26,743 — — — 26,743 — — 

Total Single-Family and Multifamily $2,788,601 $16,663 $3,533 $24,481 $2,833,278 $6,271 $972 

Referenced footnotes are on the next page.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 62
(1) Includes $1.5 billion and $0.7 billion of single-family loans that were in the process of foreclosure as of September 30, 2022 and December 31, 2021, respectively.

(2) Loans with no allowance for loan losses primarily represent those loans that were previously charged off and therefore the collateral value 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.

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 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:

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 and 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 (and up to 18 months to 

certain borrowers affected by the COVID-19 pandemic). 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 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 63
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 $1.6 billion as 

of September 30, 2022. 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.

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 3.9 - Single-Family Loan Restructurings Involving Borrowers Experiencing Financial Difficulty(1)

3Q 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 $6,435 $750 $1,254 $8,439 0.3 %

15-year or less, amortizing fixed-rate 381 24 6 411 0.1 

Adjustable-rate and other 98 12 22 132 0.5 

Total Single-Family loan restructurings $6,914 $786 $1,282 $8,982 0.3 

YTD 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 $18,207 $1,868 $6,554 $26,629 1.0 %

15-year or less, amortizing fixed-rate 1,130 24 6 1,160 0.3 

Adjustable-rate and other 357 32 105 494 1.7 

Total Single-Family loan restructurings $19,694 $1,924 $6,665 $28,283 1.0 

(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 $2.8 billion and $10.8 billion related to payment deferral plans for 3Q 2022 and YTD 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 3.10 – Financial Effects of Single-Family Loan Restructurings Involving Borrowers Experiencing Financial 

Difficulty(1)

3Q 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 1.1 % 183 $19 

15-year or less, amortizing fixed-rate 0.6 366 21 

Adjustable-rate and other 1.9 221 20 

Referenced footnotes are included after the year-to-date table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 64
YTD 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 $22 

15-year or less, amortizing fixed-rate 0.6 366 24 

Adjustable-rate and other 2.3 225 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.

The following table provides the amortized cost basis of single-family held-for-investment loans restructured during YTD 2022 

involving borrowers experiencing financial difficulty that subsequently defaulted (i.e., loans that became two months delinquent) 

during the periods presented. 

Table 3.11 - Subsequent Defaults of Single-Family Restructured Loans Involving Borrowers Experiencing Financial 

Difficulty(1)

3Q 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 $483 $53 $140 $676 

15-year or less, amortizing fixed-rate 28 — — 28 

Adjustable-rate and other 9 1 1 11 

Total Single-Family $520 $54 $141 $715 

YTD 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 $1,194 $94 $216 $1,504 

15-year or less, amortizing fixed-rate 67 — — 67 

Adjustable-rate and other 31 3 3 37 

Total Single-Family $1,292 $97 $219 $1,608 

(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 table below presents the amortized cost basis of single-family held-for-investment loans restructured during YTD 2022 by 

payment status. 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. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 65
Table 3.12 - Payment Status of Single-Family Restructured Loans Involving Borrowers Experiencing Financial Difficulty

September 30, 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 $17,282 $2,289 $1,535 $5,523 $26,629 

15-year or less, amortizing fixed-rate 696 107 81 276 1,160 

Adjustable-rate and other 303 30 23 138 494 

Total Single-Family $18,281 $2,426 $1,639 $5,937 $28,283 

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 for the nine months ended September 

30, 2022.

Prior Period Troubled Debt Restructuring Information 

The table below provides details of our single-family loan modifications that were classified as TDRs during the periods 

presented. 

Table 3.13 - Single-Family TDR Modification Metrics 

3Q 2021 YTD 2021

Percentage of single-family loan modifications that were classified as TDRs with:

 Interest rate reductions and related term extensions 12% 13% 

 Principal forbearance and related interest rate reductions and term extensions 34 35 

Average coupon interest rate reduction 0.4 % 0.4 %

Average months of term extension 154 151

The table below presents the volume of single-family and multifamily loans that were newly classified as TDRs during the 

periods 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 3.14 - TDR Activity

3Q 2021 YTD 2021

(Dollars in millions) Number of Loans

Post-TDR 

Amortized Cost 

Basis Number of Loans

Post-TDR

Amortized Cost 

Basis

Single-Family:(1)(2)

20- and 30-year or more, amortizing fixed-rate 3,136 $562 10,647 $1,889 

15-year or less, amortizing fixed-rate 365 37 1,262 131 

Adjustable-rate and other 146 24 553 82 

Total Single-Family 3,647 623 12,462 2,102 

Multifamily — — — — 

(1) The pre-TDR amortized cost basis for single-family loans initially classified as TDRs during 3Q 2021 and YTD 2021 was $0.6 billion and $2.1 billion, respectively.

(2) Includes certain bankruptcy events and forbearance plans, repayment plans, payment deferral plans, and modification activities that do 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.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 66
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 periods presented and had completed a modification during the year 

preceding the payment default. 

Table 3.15 - Payment Defaults of Completed TDR Modifications

3Q 2021 YTD 2021

(Dollars in millions) Number of Loans

Post-TDR 

Amortized Cost 

Basis Number of Loans

Post-TDR

Amortized Cost 

Basis

Single-Family:

20- and 30-year or more, amortizing fixed-rate 595 $103 2,408 $425 

15-year or less, amortizing fixed-rate 15 2 101 11 

Adjustable-rate and other 70 10 307 48 

Total Single-Family 680 115 2,816 484 

Multifamily — — — — 

Non-Cash Investing and Financing Activities

During YTD 2022 and YTD 2021, we acquired $339.6 billion and $507.4 billion, respectively, of loans held-for-investment in 

exchange for the issuance of debt of consolidated trusts in guarantor swap transactions. We received approximately $146.6 

billion and $189.3 billion of loans held-for-investment from sellers during YTD 2022 and YTD 2021, respectively, to satisfy 

advances to lenders that were recorded in other assets on our condensed consolidated balance sheets.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 3Q 2022 Form 10-Q 67
NOTE 4 

Guarantees and Other Off-Balance Sheet Credit Exposures

The table below shows our maximum exposure, recognized liability, and maximum remaining term of our guarantees to 

nonconsolidated VIEs and other third parties. This table does not include certain of our unrecognized guarantees, such as 

guarantees to consolidated VIEs or to resecuritization trusts that do not expose us to incremental credit risk. The maximum 

exposure disclosed in the table is not representative of the actual loss we are likely to incur, based on our historical loss 

experience and after consideration of proceeds from collateral liquidation, including possible credit enhancement recoveries.

Table 4.1 - Financial Guarantees

September 30, 2022 December 31, 2021

(Dollars in millions, terms in years)

Maximum

Exposure(1)

Recognized

Liability(2)

Maximum

Remaining

Term

Maximum

Exposure(1)

Recognized

Liability(2)

Maximum

Remaining

Term

Single-Family:

Securitization activity guarantees $26,504 $395 40 $27,975 $398 39

Other mortgage-related guarantees 9,692 214 30 10,588 251 30

Guarantees of Fannie Mae securities 122,576 — 39 111,150 — 40

Total Single-Family $158,772 $609 $149,713 $649 

Multifamily:

Securitization activity guarantees $318,924 $4,826 38 $317,006 $4,663 38

Other mortgage-related guarantees 10,263 378 32 10,456 404 32

Total Multifamily $329,187 $5,204 $327,462 $5,067 

Other guarantees:

Written options $45,410 $2,005 9 $34,861 $1,596 10

CRT-related derivatives 39,434 130 30 33,188 35 30

Other 5,727 445 30 1,750 21 29

Total other guarantees $90,571 $2,580 $69,799 $1,652 

(1) The maximum exposure represents the contractual amounts that could be lost if counterparties or borrowers defaulted, without consideration of proceeds from 

collateral liquidation, including possible credit enhancement recoveries. For other guarantees, this amount primarily represents the notional amount or UPB of our 

interest rate and market value guarantees and guarantees of third-party derivatives. For certain of our other guarantees, our exposure may be unlimited; however, 

we generally reduce our exposure through separate derivative contracts with third parties.

(2) For securitization activity guarantees and other mortgage-related guarantees, this amount represents the guarantee obligation on our condensed consolidated 

balance sheets and excludes our allowance for credit losses on off-balance sheet credit exposures. For other guarantees, this amount represents the fair value of the 

contract.

The table below shows the payment status of the mortgage loans underlying our guarantees that are not measured at fair value.

Table 4.2 – UPB of Loans Underlying Our Guarantees by Payment Status 

September 30, 2022

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or

More Past Due,

or in Foreclosure Total(1)

Single-Family $36,983 $1,951 $729 $2,023 $41,686 

Multifamily 370,636 47 67 426 371,176 

Total $407,619 $1,998 $796 $2,449 $412,862 

December 31, 2021

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or

More Past Due,

or in Foreclosure Total(1)

Single-Family $38,964 $2,040 $692 $2,341 $44,037 

Multifamily 370,541 47 7 317 370,912 

Total $409,505 $2,087 $699 $2,658 $414,949 

(1) Loan-level payment status is not available for certain guarantees totaling $0.2 billion and $0.4 billion as of September 30, 2022 and December 31, 2021, 

respectively, and therefore is not included in the table above.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 3Q 2022 Form 10-Q 68
NOTE 5

Allowance for Credit Losses

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 3 for more information on the adoption of the new accounting guidance. 

The table below summarizes changes in our allowance for credit losses. 

Table 5.1 - Details of the Allowance for Credit Losses 

3Q 2022 3Q 2021 YTD 2022 YTD 2021

 (In millions) 

SingleFamilyMultifamily TotalSingleFamilyMultifamily TotalSingleFamilyMultifamily TotalSingleFamilyMultifamily Total

Beginning balance $5,342 $81 $5,423 $5,513 $96 $5,609 $5,440 $78 $5,518 $6,353 $200 $6,553 

Provision (benefit) for 

credit losses 1,784 12 1,796 (244) 1 (243) 1,251 15 1,266 (1,076) (103) (1,179) 

Charge-offs (108) — (108) (288) — (288) (388) — (388) (729) — (729) 

Recoveries collected 29 — 29 43 — 43 124 — 124 150 — 150 

Other(1) 168 — 168 268 — 268 788 — 788 594 — 594 

Ending balance $7,215 $93 $7,308 $5,292 $97 $5,389 $7,215 $93 $7,308 $5,292 $97 $5,389 

Components of the ending balance of the allowance for credit losses:

Mortgage loans heldfor-investment $6,802 $49 $6,851 $4,490 $41 $4,531 

Advances of preforeclosure costs 354 — 354 592 — 592 

Accrued interest 

receivable on 

mortgage loans 6 — 6 157 — 157 

Off-balance sheet 

credit exposures 53 44 97 53 56 109 

Total ending balance $7,215 $93 $7,308 $5,292 $97 $5,389 

(1) Primarily includes capitalization of past due interest related to non-accrual loans that receive payment deferral plans and loan modifications.

n 3Q 2022 vs. 3Q 2021 and YTD 2022 vs. YTD 2021 - A provision for credit losses in the 2022 periods, primarily driven by 

deterioration in housing market conditions, including lower observed and forecasted house price appreciation. The benefit 

for credit losses in the 2021 periods was primarily driven by observed house price appreciation and reduced expected 

credit losses related to COVID-19.

In addition, charge-offs decreased year-over-year due to a decrease in charge-offs of accrued interest receivable during the 

2022 periods.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 5

Freddie Mac 3Q 2022 Form 10-Q 69
NOTE 6

Investment Securities

The table below summarizes the fair values of our investments in debt securities by classification.

Table 6.1 - Investment Securities 

(In millions) September 30, 2022 December 31, 2021

Trading securities $37,221 $49,003 

Available-for-sale securities 6,049 4,012 

Total fair value of investment securities $43,270 $53,015 

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 6.2 - Trading Securities

(In millions) September 30, 2022 December 31, 2021

Mortgage-related securities $10,651 $16,231 

Non-mortgage-related securities 26,570 32,772 

Total fair value of trading securities $37,221 $49,003 

For trading securities held at September 30, 2022, we recorded net unrealized losses of $0.9 billion and $2.0 billion during 3Q 

2022 and YTD 2022, respectively. For trading securities held at September 30, 2021, we recorded net unrealized losses of 

$0.5 billion and $1.2 billion during 3Q 2021 and YTD 2021, respectively. 

Available-for-Sale Securities 

The table below provides details of the securities classified as available-for-sale on our condensed consolidated balance 

sheets. 

Table 6.3 - Available-for-Sale Securities

Amortized

Cost

Basis

Gross Unrealized 

Gains in Other 

Comprehensive 

Income

Gross Unrealized

Losses in Other 

Comprehensive 

Income Fair Value

Accrued Interest 

(In millions) Receivable

September 30, 2022 $6,150 $192 ($293) $6,049 $14 

December 31, 2021 3,638 376 (2) 4,012 10 

The fair value of our available-for-sale securities held at September 30, 2022 scheduled to contractually mature after ten years 

was $1.5 billion, with $3.7 billion scheduled to contractually mature after five years through ten years. 

The table below summarizes the gross realized gains and gross realized losses from sales of available-for-sale securities. 

Table 6.4 - Gross Realized Gains and Gross Realized Losses from Sales of Available-for-Sale Securities 

(In millions) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Gross realized gains $33 $14 $34 $534 

Gross realized losses (3) (4) (7) (57) 

Net realized gains (losses) $30 $10 $27 $477 

Non-Cash Investing and Financing Activities

During YTD 2022 and YTD 2021, we recognized $9.0 billion and $32.4 billion, respectively, of investment 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 YTD 2022, we derecognized $10.5 billion of mortgage-related securities and debt of consolidated trusts where we were 

no longer deemed the primary beneficiary. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 6

Freddie Mac 3Q 2022 Form 10-Q 70
NOTE 7

Debt

The table below summarizes the balances of total debt on our condensed consolidated balance sheets.

Table 7.1 - Total Debt

(In millions) September 30, 2022 December 31, 2021

Debt of consolidated trusts $2,973,973 $2,803,054 

Debt of Freddie Mac:

Short-term debt 11,902 — 

Long-term debt 151,347 177,131 

Total debt of Freddie Mac 163,249 177,131 

Total debt $3,137,222 $2,980,185 

As of September 30, 2022, our aggregate indebtedness pursuant to the Purchase Agreement was $175.2 billion, which was 

below the current $300.0 billion debt cap limit. Our aggregate indebtedness calculation primarily includes the par value of 

short- and long-term debt.

Debt of Consolidated Trusts 

The table below summarizes the debt of consolidated trusts based on underlying loan product type.

Table 7.2 - Debt of Consolidated Trusts

September 30, 2022 December 31, 2021

(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(3):

20- and 30-year or more, fixed-rate 2022 - 2061 $2,489,938 $2,535,520 2.71 % 2022 - 2061 $2,297,650 $2,358,397 2.62 %

15-year or less, fixed-rate 2022 - 2037 378,630 385,588 2.13 2022 - 2037 390,320 399,647 2.13 

Adjustable-rate and other 2022 - 2052 23,520 24,152 2.73 2022 - 2052 24,248 24,921 2.31 

Total Single-Family 2,892,088 2,945,260 2,712,218 2,782,965 

Multifamily 2022 - 2052 28,957 28,713 2.52 2022 - 2051 19,838 20,089 2.17 

Total debt of consolidated trusts $2,921,045 $2,973,973 $2,732,056 $2,803,054 

(1) Includes $3.1 billion and $1.1 billion as of September 30, 2022 and December 31, 2021, 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 2.23% and 1.71% as of September 30, 2022 and December 31, 2021, respectively.

(3) Prior period was revised to conform to the current period presentation.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 7

Freddie Mac 3Q 2022 Form 10-Q 71
Debt of Freddie Mac

The table below summarizes the balances and effective interest rates for debt of Freddie Mac.

Table 7.3 - Total Debt of Freddie Mac 

September 30, 2022 December 31, 2021

(Dollars in millions) Par Value

Carrying 

Amount(1)

Weighted

Average

Effective Rate(2) Par Value

Carrying 

Amount(1)

Weighted

Average

Effective Rate(2)

Short-term debt:

Discount notes and Reference Bills $11,020 $11,012 2.51 % $— $— — %

Medium-term notes 890 890 1.81 — — — 

Securities sold under agreements to repurchase 7,512 7,512 2.06 7,333 7,333 (0.10) 

Offsetting arrangements(3) (7,512) (7,512) (7,333) (7,333) 

Total short-term debt 11,910 11,902 2.46 — — — 

Long-term debt:

Original maturities on or before December 31,

2022 4,990 4,996 0.25 48,625 48,641 0.18 

2023 40,937 40,914 0.59 38,688 38,644 0.47 

2024 23,917 23,900 1.80 13,274 13,257 0.46 

2025 49,169 48,888 1.67 35,436 35,108 0.84 

2026 5,194 5,192 1.12 4,717 4,715 0.83 

Thereafter 34,262 32,736 3.00 31,736 30,052 2.91 

STACR and SCR debt(4) 4,845 4,720 7.33 9,139 8,981 4.23 

Hedging-related basis adjustments N/A (9,999) N/A (2,267) 

Total long-term debt 163,314 151,347 1.80 181,615 177,131 1.07 

Total debt of Freddie Mac(5) $175,224 $163,249 $181,615 $177,131 

(1) Represents par value, net of associated discounts or premiums and issuance cost. Includes $1.2 billion and $1.4 billion at September 30, 2022 and December 31, 

2021, 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.

(3) We offset payables related to securities sold under agreements to repurchase against receivables related to securities purchased under agreements to resell on our 

condensed consolidated balance sheets, when such amounts meet the conditions for offsetting in the accounting guidance.

(4) 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 reference pool of mortgage assets that may be prepaid by the related mortgage borrower at any time, generally without penalty. 

(5) Carrying amount for debt of Freddie Mac includes callable debt of $97.9 billion and $68.5 billion at September 30, 2022 and December 31, 2021, respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 7

Freddie Mac 3Q 2022 Form 10-Q 72
NOTE 8

Derivatives

We use derivatives primarily to hedge interest-rate sensitivity mismatches between our financial assets and liabilities. 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. When we use derivatives to mitigate our exposures, we consider a number of factors, including 

cost, exposure to counterparty risk, and our overall risk management strategy.

We apply fair value hedge accounting to certain single-family mortgage loans and certain issuances of debt where we hedge 

the changes in fair value of these items attributable to the designated benchmark interest rate, using interest-rate swaps.

Derivative Assets and Liabilities at Fair Value

The table below presents the notional value and fair value of derivatives reported on our condensed consolidated balance 

sheets. 

Table 8.1 - Derivative Assets and Liabilities at Fair Value

September 30, 2022 December 31, 2021

Notional or

Contractual

Amount

Derivatives at Fair Value Notional or

Contractual

Amount

Derivatives at Fair Value

(In millions) Assets Liabilities Assets Liabilities

Not designated as hedges

Interest-rate risk management derivatives:

Swaps $520,850 $1,827 ($547) $561,393 $1,748 ($3,319) 

Written options 45,410 — (2,005) 34,861 — (1,597) 

Purchased options(1) 88,005 4,356 — 137,873 3,585 — 

Futures 169,676 — — 126,528 — — 

Total interest-rate management derivatives 823,941 6,183 (2,552) 860,655 5,333 (4,916) 

Mortgage commitment derivatives:

Forward contracts to purchase mortgage loans 2,054 2 (31) 7,582 15 (5) 

Forward contracts to purchase mortgage-related securities 16,422 — (120) 16,605 26 (8) 

Forward contracts to sell mortgage-related securities 24,088 43 (1) 59,469 38 (73) 

Total mortgage commitment derivatives 42,564 45 (152) 83,656 79 (86) 

CRT-related derivatives 39,565 1 (132) 33,351 15 (37) 

Other 8,184 2 (445) 4,335 2 (21) 

Total derivatives not designated as hedges 914,254 6,231 (3,281) 981,997 5,429 (5,060) 

Designated as fair value hedges

Interest-rate risk management derivatives:

Swaps 171,180 324 (8,069) 154,819 37 (2,689) 

Total derivatives designated as fair value hedges 171,180 324 (8,069) 154,819 37 (2,689) 

Derivative interest receivable (payable)(2) 806 (725) 360 (413) 

Netting adjustments(3) (6,910) 11,265 (5,366) 7,880 

Total derivative portfolio, net $1,085,434 $451 ($810) $1,136,816 $460 ($282) 

(1) Includes swaptions on credit indices with a notional or contractual amount of $8.8 billion and $9.4 billion at September 30, 2022 and December 31, 2021, 

respectively, and a fair value of $5.0 million and $1.0 million at September 30, 2022 and December 31, 2021, respectively. 

(2) Includes other derivative receivables and payables.

(3) Represents counterparty netting and cash collateral netting.

See Note 9 for information related to our derivative counterparties and collateral held and posted.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 8 

Freddie Mac 3Q 2022 Form 10-Q 73
Gains and Losses on Derivatives

The table below presents the gains and losses on derivatives, including the accrual of periodic cash settlements, while not 

designated in qualifying hedge relationships and reported on our condensed consolidated statements of operations and 

comprehensive income (loss) as investment gains (losses), net.

Table 8.2 - Gains and Losses on Derivatives 

(In millions) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Not designated as hedges

Interest-rate risk management derivatives:

Swaps $954 $649 $1,708 $2,303 

Written options (278) (9) (962) (165) 

Purchased options 579 (225) 1,685 (859) 

Futures 788 30 2,212 189 

Total interest-rate risk management derivatives fair value gains (losses) 2,043 445 4,643 1,468 

Mortgage commitment derivatives 203 46 2,922 662 

CRT-related derivatives (222) (2) (189) (29) 

Other (115) 14 (150) 22 

Total derivatives not designated as hedges fair value gains (losses) 1,909 503 7,226 2,123 

 Accrual of periodic cash settlements on swaps(1) (233) (471) (619) (1,283) 

Total $1,676 $32 $6,607 $840 

(1) Includes interest on variation margin on cleared interest-rate swaps.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 8 

Freddie Mac 3Q 2022 Form 10-Q 74
Fair Value Hedges 

The table below presents the effects of fair value hedge accounting by condensed consolidated statements of operations and 

comprehensive income (loss) 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 8.3 - Gains and Losses on Fair Value Hedges

3Q 2022 3Q 2021

(In millions) Interest Income Interest Expense Interest Income Interest Expense 

Total amounts of income and expense line items presented in 

our condensed consolidated statements of operations and 

comprehensive income in which the effects of fair value 

hedges are recorded: $21,894 ($17,340) $15,791 ($11,373) 

Interest contracts on mortgage loans held-for-investment:

Gain (loss) on fair value hedging relationships:

Hedged items (1,839) — 38 — 

Derivatives designated as hedging instruments 1,731 — (58) — 

Interest accruals on hedging instruments (5) — (14) — 

Discontinued hedge-related basis adjustments amortization 12 — (332) — 

Interest contracts on debt:

Gain (loss) on fair value hedging relationships:

Hedged items — 2,558 — 211 

Derivatives designated as hedging instruments — (2,586) — (256) 

Interest accruals on hedging instruments — (353) — 236 

Discontinued hedge-related basis adjustments amortization — 1 — 6 

YTD 2022 YTD 2021

(In millions) Interest Income Interest Expense Interest Income Interest Expense 

Total amounts of income and expense line items presented in 

our condensed consolidated statements of operations and 

comprehensive income in which the effects of fair value 

hedges are recorded: $59,642 ($46,225) $44,923 ($32,099) 

Interest contracts on mortgage loans held-for-investment:

Gain (loss) on fair value hedging relationships:

Hedged items (5,989) — (399) — 

Derivatives designated as hedging instruments 5,194 — 379 — 

Interest accruals on hedging instruments (421) — (267) — 

Discontinued hedge-related basis adjustments amortization (116) — (1,624) — 

Interest contracts on debt:

Gain (loss) on fair value hedging relationships:

Hedged items — 7,719 — 1,725 

Derivatives designated as hedging instruments — (7,810) — (1,876) 

Interest accruals on hedging instruments — (253) — 739 

Discontinued hedge-related basis adjustments amortization — 13 — 14 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 8 

Freddie Mac 3Q 2022 Form 10-Q 75
The table below presents the cumulative basis adjustments and the carrying amounts of the hedged item by its respective 

balance sheet line item.

Table 8.4 - Cumulative Basis Adjustments Due to Fair Value Hedging

September 30, 2022

Carrying 

Amount 

Assets / 

(Liabilities)

Cumulative Amount of Fair Value Hedging Basis 

Adjustments Included in the Carrying Amount

Closed Portfolio Under the Lastof-Layer Method

(In millions) Total

Under the 

Last-of-Layer 

Method

Discontinued - 

Hedge Related

Total Amount 

by Amortized 

Cost Basis

Designated 

Amount by 

UPB

Mortgage loans held-for-investment $1,076,474 ($3,331) ($1,026) ($2,305) $81,446 $11,516 

Mortgage loans held-for-sale 56 1 — 1 — — 

Debt (133,271) 9,999 — 11 — — 

December 31, 2021

Carrying 

Amount 

Assets / 

(Liabilities)

Cumulative Amount of Fair Value Hedging Basis 

Adjustments Included in the Carrying Amount

Closed Portfolio Under the Lastof-Layer Method

(In millions) Total

Under the 

Last-of-Layer 

Method

Discontinued - 

Hedge Related

Total Amount 

by Amortized 

Cost Basis

Designated 

Amount by 

UPB

Mortgage loans held-for-investment $855,173 $2,774 $— $2,774 $— $— 

Debt (124,235) 2,267 — (30) — — 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 8 

Freddie Mac 3Q 2022 Form 10-Q 76
NOTE 9

Collateralized Agreements and Offsetting Arrangements

Offsetting of Financial Assets and Liabilities

The table below presents offsetting and collateral information related to derivatives, securities purchased under agreements to 

resell, and securities sold under agreements to repurchase which are subject to enforceable master netting agreements or 

similar arrangements. 

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. This change did not materially affect our financial condition or result of operations.

Table 9.1 - Offsetting and Collateral Information of Financial Assets and Liabilities

September 30, 2022

Gross

Amount

Recognized

Amount 

Offset in the Condensed

Consolidated

Balance Sheets

Net Amount

Presented in the 

Condensed 

Consolidated

Balance Sheets

Gross Amount

Not Offset in the 

Condensed  

Consolidated

Balance 

Sheets(2)

Net

(In millions) Amount

Counterparty 

Netting

Cash 

Collateral 

Netting(1)

Assets:

Derivatives:

OTC derivatives $7,168 ($5,337) ($1,604) $227 ($125) $102 

Cleared and exchange-traded derivatives 120 (20) 46 146 — 146 

Mortgage commitment derivatives 70 — 5 75 (1) 74 

Other 3 — — 3 — 3 

Total derivatives 7,361 (5,357) (1,553) 451 (126) 325 

Securities purchased under agreements to resell 105,155 (7,512) — 97,643 (97,643) — 

Total $112,516 ($12,869) ($1,553) $98,094 ($97,769) $325 

Liabilities:

Derivatives:

OTC derivatives ($11,304) $5,336 $5,903 ($65) $15 ($50) 

Cleared and exchange-traded derivatives (42) 20 6 (16) 16 — 

Mortgage commitment derivatives (152) — — (152) 17 (135) 

Other (577) — — (577) — (577) 

Total derivatives (12,075) 5,356 5,909 (810) 48 (762) 

Securities sold under agreements to repurchase (7,512) 7,512 — — — — 

Total ($19,587) $12,868 $5,909 ($810) $48 ($762) 

 Referenced footnotes are included after the next table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 9

Freddie Mac 3Q 2022 Form 10-Q 77
December 31, 2021

Gross

Amount

Recognized

Amount 

Offset in the Condensed

Consolidated

Balance Sheets Net Amount

Presented in the 

Condensed 

Consolidated

Balance Sheets

Gross Amount

Not Offset in the 

Condensed  

Consolidated

Balance 

Sheets(2)

Net

(In millions) Amount

Counterparty 

Netting

Cash 

Collateral 

Netting(1)

Assets:

Derivatives:

OTC derivatives $5,670 ($4,437) ($963) $270 ($250) $20 

Cleared and exchange-traded derivatives 60 (4) 38 94 — 94 

Mortgage commitment derivatives 79 — — 79 — 79 

Other 17 — — 17 — 17 

Total derivatives 5,826 (4,441) (925) 460 (250) 210 

Securities purchased under agreements to resell 78,536 (7,333) — 71,203 (71,203) — 

Total $84,362 ($11,774) ($925) $71,663 ($71,453) $210 

Liabilities:

Derivatives:

OTC derivatives ($7,979) $4,437 $3,417 ($125) $— ($125) 

Cleared and exchange-traded derivatives (39) 4 22 (13) 13 — 

Mortgage commitment derivatives (86) — — (86) — (86) 

Other (58) — — (58) — (58) 

Total derivatives (8,162) 4,441 3,439 (282) 13 (269) 

Securities sold under agreements to repurchase (7,333) 7,333 — — — — 

Total ($15,495) $11,774 $3,439 ($282) $13 ($269) 

(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 condensed consolidated balance sheets. Mortgage commitment derivatives exclude collateral posted totaling $0.8 billion as of December 31, 2021. There was 

no variation margin collateral for mortgage commitment derivatives as of September 30, 2022, as a result of the MBSD/FICC clearing rules change.

Collateral Pledged

Collateral Pledged to Freddie Mac

We have cash pledged to us as collateral primarily related to OTC derivative transactions. We had $2.4 billion and $1.2 billion

pledged to us as collateral that was invested as part of our other investments portfolio as of September 30, 2022 and 

December 31, 2021, respectively.

We execute securities purchased under agreements to resell transactions with central clearing organizations where we have the 

right to repledge the collateral that has been pledged to us. At September 30, 2022 and December 31, 2021, we had 

$27.6 billion and $32.7 billion, respectively, of securities pledged to us in these transactions. In addition, as of September 30, 

2022 and December 31, 2021, we had $1.2 billion and $0.8 billion, respectively, of securities pledged to us for transactions 

involving securities purchased under agreements to resell not executed with central clearing organizations that we had the right 

to repledge. At September 30, 2022, we repledged collateral with fair value of $0.1 billion.

Collateral Pledged by Freddie Mac

For cash collateral related to commitments and securities purchased under agreements to resell transactions primarily with 

central clearing organizations, we posted less than $0.1 billion as of September 30, 2022 and December 31, 2021.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 9

Freddie Mac 3Q 2022 Form 10-Q 78
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 9.2 - Collateral in the Form of Securities Pledged 

September 30, 2022

(In millions) Derivatives

Securities Sold 

Under 

Agreements to 

Repurchase Other(1) Total

Trading securities $1,363 $7,403 $697 $9,463 

Total securities pledged $1,363 $7,403 $697 $9,463 

December 31, 2021

(In millions) Derivatives

Securities Sold 

Under 

Agreements to 

Repurchase Other(1) Total

Debt of consolidated trusts(2) $— $— $161 $161 

Trading securities 1,542 7,333 1,115 9,990 

Total securities pledged $1,542 $7,333 $1,276 $10,151 

(1) Includes other collateralized borrowings and collateral related to transactions with certain clearinghouses.

(2) Represents debt of consolidated trusts held by us in our mortgage-related investments portfolio which are recorded as a reduction to debt of consolidated trusts on 

our condensed consolidated balance sheets.

The table below summarizes the underlying collateral pledged and the remaining contractual maturity of our gross obligations 

under securities sold under agreements to repurchase.

Table 9.3 - Underlying Collateral Pledged 

September 30, 2022

(In millions)

Overnight and 

Continuous 30 Days or Less

After 30 Days 

Through 90 Days

Greater Than 90 

Days Total

U.S. Treasury securities and other $— $4,054 $3,349 $— $7,403 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 9

Freddie Mac 3Q 2022 Form 10-Q 79
NOTE 10

Net Interest Income

The table below presents the components of net interest income per our condensed consolidated statements of operations and 

comprehensive income (loss).

Table 10.1 - Components of Net Interest Income

(In millions) 3Q 2022 3Q 2021 YTD 2022 YTD 2021

Interest income

Mortgage loans $20,843 $15,124 $57,477 $42,969 

Investment securities 416 627 1,264 1,854 

Other 635 40 901 100 

Total interest income 21,894 15,791 59,642 44,923 

Interest expense

Debt of consolidated trusts (16,166) (10,954) (44,010) (30,742) 

Debt of Freddie Mac:

Short-term debt (82) — (102) (2) 

Long-term debt (1,092) (419) (2,113) (1,355) 

Total interest expense (17,340) (11,373) (46,225) (32,099) 

Net interest income 4,554 4,418 13,417 12,824 

Benefit (provision) for credit losses (1,796) 243 (1,266) 1,179 

Net interest income after benefit (provision) for credit losses $2,758 $4,661 $12,151 $14,003 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 10

Freddie Mac 3Q 2022 Form 10-Q 80
NOTE 11

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

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. On June 22, 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. 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 11.1 - Segment Financial Results 

3Q 2022 3Q 2021

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

Net interest income $4,363 $191 $4,554 $4,080 $338 $4,418 

Non-interest income (loss)

Guarantee income 16 109 125 (20) 266 246 

Investment gains (losses), net (13) 428 415 (247) 630 383 

Other income (loss) 55 32 87 148 52 200 

Non-interest income (loss) 58 569 627 (119) 948 829 

Net revenues 4,421 760 5,181 3,961 1,286 5,247 

Benefit (provision) for credit losses (1,784) (12) (1,796) 244 (1) 243 

Non-interest expense (1,653) (172) (1,825) (1,672) (172) (1,844) 

Income (loss) before income tax 

(expense) benefit 984 576 1,560 2,533 1,113 3,646 

Income tax (expense) benefit (141) (106) (247) (505) (222) (727) 

Net income (loss) 843 470 1,313 2,028 891 2,919 

Other comprehensive income (loss), net 

of taxes and reclassification adjustments (39) (142) (181) 18 (28) (10) 

Comprehensive income (loss) $804 $328 $1,132 $2,046 $863 $2,909 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 11

Freddie Mac 3Q 2022 Form 10-Q 81
YTD 2022 YTD 2021

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

Net interest income $12,704 $713 $13,417 $11,848 $976 $12,824 

Non-interest income (loss)

Guarantee income 81 319 400 79 771 850 

Investment gains (losses), net 1,471 778 2,249 190 2,037 2,227 

Other income (loss) 250 115 365 408 77 485 

Non-interest income (loss) 1,802 1,212 3,014 677 2,885 3,562 

Net revenues 14,506 1,925 16,431 12,525 3,861 16,386 

Benefit (provision) for credit losses (1,251) (15) (1,266) 1,076 103 1,179 

Non-interest expense (5,285) (492) (5,777) (5,284) (517) (5,801) 

Income (loss) before income tax 

(expense) benefit 7,970 1,418 9,388 8,317 3,447 11,764 

Income tax (expense) benefit (1,548) (276) (1,824) (1,696) (703) (2,399) 

Net income (loss) 6,422 1,142 7,564 6,621 2,744 9,365 

Other comprehensive income (loss), net of 

taxes and reclassification adjustments (46) (321) (367) (384) (83) (467) 

Comprehensive income (loss) $6,376 $821 $7,197 $6,237 $2,661 $8,898 

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 11.2 - Segment Assets 

(In millions) September 30, 2022 December 31, 2021

Single-Family $2,971,542 $2,792,224 

Multifamily 415,946 414,663 

Total segment assets 3,387,488 3,206,887 

Reconciling items(1) (196,832) (181,301) 

Total assets per condensed consolidated balance sheets $3,190,656 $3,025,586 

(1) Reconciling items include assets in our mortgage portfolio that are not recognized on our condensed consolidated balance sheets and assets recognized on our 

condensed consolidated balance sheets that are not allocated to the reportable segments. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 11

Freddie Mac 3Q 2022 Form 10-Q 82
NOTE 12

Concentration of Credit and Other Risks

Single-Family Mortgage Portfolio

The table below summarizes the concentration by geographic area of our Single-Family mortgage portfolio. See Note 3, Note 

4, and Note 5 for more information about credit risk associated with single-family loans that we hold or guarantee.

Table 12.1 - Concentration of Credit Risk of Our Single-Family Mortgage Portfolio(1)

September 30, 2022 December 31, 2021

(Dollars in millions) Portfolio UPB(2) % of Portfolio SDQ Rate Portfolio UPB(2) % of Portfolio SDQ Rate

Region:(3)

West $905,490 30 % 0.49 % $858,535 31 % 0.92 %

Northeast 693,755 23 0.86 660,103 24 1.37 

North Central 434,486 15 0.67 416,214 15 0.98 

Southeast 507,228 17 0.70 461,084 16 1.21 

Southwest 430,300 15 0.65 395,953 14 1.14 

Total $2,971,259 100 % 0.67 $2,791,889 100 % 1.12 

State:

California $518,053 17 % 0.52 $497,521 18 % 0.99 

Texas 197,278 7 0.66 176,501 6 1.23 

Florida 188,785 6 0.72 168,572 6 1.36 

New York 129,042 4 1.26 120,655 4 2.07 

Illinois 112,624 4 0.94 109,171 4 1.44 

All other 1,825,477 62 0.64 1,719,469 62 1.03 

Total $2,971,259 100 % 0.67 $2,791,889 100 % 1.12 

(1) Credit loss amounts related to our Single-Family mortgage portfolio were insignificant during both the 2022 periods and the 2021 periods.

(2) Excludes UPB of loans underlying certain securitization products for which data was not available.

(3) 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); North Central (IL, IN, IA, 

MI, MN, ND, OH, SD, WI); Southeast (AL, FL, GA, KY, MS, NC, PR, SC, TN, VI); Southwest (AR, CO, KS, LA, MO, NE, NM, OK, TX, WY).

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 12

Freddie Mac 3Q 2022 Form 10-Q 83
NOTE 13

Fair Value Disclosures

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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents our assets and liabilities measured on our condensed 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 13.1 - Assets and Liabilities Measured at Fair Value on a Recurring Basis 

September 30, 2022

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustments(1) Total

Assets:

Investment securities:

Available-for-sale $— $4,947 $1,102 $— $6,049 

Trading:

Mortgage-related securities — 7,793 2,858 — 10,651 

Non-mortgage-related securities 25,982 588 — — 26,570 

Total trading securities 25,982 8,381 2,858 — 37,221 

Total investment securities 25,982 13,328 3,960 — 43,270 

Mortgage loans held-for-sale — 3,230 312 — 3,542 

Other assets:

 Guarantee assets — — 5,432 — 5,432 

 Derivative assets, net — 6,552 3 — 6,555 

 Netting adjustments(1) — — — (6,104) (6,104) 

Total derivative assets, net — 6,552 3 (6,104) 451 

 Other assets — 1 124 — 125 

Total other assets — 6,553 5,559 (6,104) 6,008 

Total assets carried at fair value on a recurring basis $25,982 $23,111 $9,831 ($6,104) $52,820 

Liabilities:

Debt:

Debt of consolidated trusts $— $2,785 $277 $— $3,062 

Debt of Freddie Mac — 1,086 104 — 1,190 

Total debt — 3,871 381 — 4,252 

Other liabilities:

 Derivative liabilities, net 35 11,211 104 — 11,350 

 Netting adjustments(1) — — — (10,540) (10,540) 

Total derivative liabilities, net 35 11,211 104 (10,540) 810 

Other liabilities — 151 — — 151 

Total other liabilities 35 11,362 104 (10,540) 961 

Total liabilities carried at fair value on a recurring basis $35 $15,233 $485 ($10,540) $5,213 

Referenced footnote is included after the prior period table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 84
December 31, 2021

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustments(1) Total

Assets:

Investment securities:

Available-for-sale $— $2,726 $1,286 $— $4,012 

Trading:

Mortgage-related securities: — 12,845 3,386 — 16,231 

Non-mortgage-related securities 31,780 992 — — 32,772 

Total trading securities 31,780 13,837 3,386 — 49,003 

Total investment securities 31,780 16,563 4,672 — 53,015 

Mortgage loans held-for-sale — 10,498 — — 10,498 

Other assets:

 Guarantee assets — — 5,919 — 5,919 

 Derivative assets, net 33 5,416 17 — 5,466 

 Netting adjustments(1) — — — (5,006) (5,006) 

Total derivative assets, net 33 5,416 17 (5,006) 460 

 Other assets — 131 84 — 215 

Total other assets 33 5,547 6,020 (5,006) 6,594 

Total assets carried at fair value on a recurring basis $31,813 $32,608 $10,692 ($5,006) $70,107 

Liabilities:

Debt:

Debt of consolidated trusts $— $910 $184 $— $1,094 

 Debt of Freddie Mac — 1,274 110 — 1,384 

Total debt — 2,184 294 — 2,478 

Other liabilities:

 Derivative liabilities, net — 7,726 23 — 7,749 

Netting adjustments(1) — — — (7,467) (7,467) 

Total derivative liabilities, net — 7,726 23 (7,467) 282 

 Other liabilities — 4 1 — 5 

 Total other liabilities — 7,730 24 (7,467) 287 

 Total liabilities carried at fair value on a recurring basis $— $9,914 $318 ($7,467) $2,765 

(1) Represents counterparty netting, cash collateral netting, and net derivative interest receivable or payable.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 85
Level 3 Fair Value Measurements

The table below presents a reconciliation of all assets and liabilities measured on our condensed 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 condensed consolidated statements of operations and comprehensive income (loss) for Level 3 assets and 

liabilities. 

Table 13.2 - Fair Value Measurements of Assets and Liabilities Using Significant Unobservable Inputs 

3Q 2022

Balance,

July 1,

2022

Total Realized/Unrealized 

Gains (Losses)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2022

Change in 

Unrealized 

Gains (Losses) 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2022(2)

Change in 

Unrealized 

Gains (Losses), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

(In millions) 2022

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $1,124 $30 ($55) $169 $— ($120) ($46) $— $— $1,102 $— ($11) 

Trading 3,319 (334) — 260 — — (122) — (265) 2,858 (154) — 

Total investment 

securities 4,443 (304) (55) 429 — (120) (168) — (265) 3,960 (154) (11) 

Mortgage loans held-forsale 339 (42) — — — (36) (1) 52 — 312 (42) — 

Other assets:

Guarantee assets 5,649 (264) — — 272 — (225) — — 5,432 (264) — 

Other assets 132 9 — (6) 3 (3) (8) — — 127 9 — 

Total other assets 5,781 (255) — (6) 275 (3) (233) — — 5,559 (255) — 

Total assets $10,563 ($601) ($55) $423 $275 ($159) ($402) $52 ($265) $9,831 ($451) ($11) 

Balance,

July 1,

2022

Total Realized/Unrealized 

(Gains) Losses

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2022

Change in 

Unrealized 

(Gains) Losses 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2022(2)

Change in 

Unrealized 

(Gains) Losses, 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2022

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Liabilities

Debt $457 ($18) $— ($14) $6 $— ($50) $— $— $381 ($7) $— 

Other liabilities 58 47 — — — — (1) — — 104 46 — 

Total liabilities $515 $29 $— ($14) $6 $— ($51) $— $— $485 $39 $— 

 Referenced footnotes are included after the prior period table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 86
YTD 2022

Balance,

January 1,

2022

Total Realized/Unrealized 

Gains (Losses)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2022

Change in 

Unrealized 

Gains (Losses) 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2022(2)

Change in 

Unrealized 

Gains (Losses), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

(In millions) 2022

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $1,286 $30 ($98) $168 $— ($78) ($236) $30 $— $1,102 ($1) ($38) 

Trading 3,386 (993) — 641 — — (156) — (20) 2,858 (468) — 

Total investment 

securities 4,672 (963) (98) 809 — (78) (392) 30 (20) 3,960 (469) (38) 

Mortgage loans held-forsale — (56) — — — (41) (25) 434 — 312 (56) — 

Other assets:

Guarantee assets 5,919 (774) — — 980 — (693) — — 5,432 (774) — 

Other assets 101 58 — (15) 11 (8) (20) — — 127 58 — 

Total other assets 6,020 (716) — (15) 991 (8) (713) — — 5,559 (716) — 

Total assets $10,692 ($1,735) ($98) $794 $991 ($127) ($1,130) $464 ($20) $9,831 ($1,241) ($38) 

Balance,

January 1,

2022

Total Realized/Unrealized 

(Gains) Losses

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2022

Change in 

Unrealized 

(Gains) Losses 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2022(2)

Change in 

Unrealized 

(Gains) Losses, 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2022

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Liabilities

Debt $294 $18 $— ($21) $148 $— ($58) $— $— $381 $48 $— 

Other liabilities 24 85 — 1 — — (6) — — 104 81 — 

Total liabilities $318 $103 $— ($20) $148 $— ($64) $— $— $485 $129 $— 

 Referenced footnotes are included after the prior period table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 87
3Q 2021

Balance,

July 1,

2021

Total Realized/Unrealized 

Gains (Losses)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2021

Change in 

Unrealized 

Gains (Losses) 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2021(2)

Change in 

Unrealized 

Gains (Losses), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

(In millions) 2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $1,474 $6 $12 $— $— $— ($103) $— $— $1,389 $6 $10 

Trading 3,523 (210) — 344 — (96) (23) — (75) 3,463 (207) — 

Total investment 

securities 4,997 (204) 12 344 — (96) (126) — (75) 4,852 (201) 10 

Other assets:

Guarantee assets 5,869 (113) — — 333 — (246) — — 5,843 (113) — 

Other assets 95 9 — (4) 4 — (4) — — 100 9 — 

Total other assets 5,964 (104) — (4) 337 — (250) — — 5,943 (104) — 

Total assets $10,961 ($308) $12 $340 $337 ($96) ($376) $— ($75) $10,795 ($305) $10 

Balance,

July 1,

2021

Total Realized/Unrealized 

(Gains) Losses

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2021

Change in 

Unrealized 

(Gains) Losses 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2021(2)

Change in 

Unrealized 

(Gains) Losses, 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Liabilities

Debt $368 ($11) $— ($8) $61 $— ($19) $— $— $391 ($7) $— 

Other liabilities 23 2 — 2 — — (2) — — 25 (1) — 

Total liabilities $391 ($9) $— ($6) $61 $— ($21) $— $— $416 ($8) $— 

 Referenced footnotes are included after the prior period table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 88
YTD 2021

Balance,

January 1,

2021

Total Realized/Unrealized 

Gains (Losses)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2021

Change in 

Unrealized 

Gains (Losses) 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2021(2)

Change in 

Unrealized 

Gains (Losses), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

(In millions) 2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale $1,588 $18 $16 $— $— $— ($233) $— $— $1,389 $18 $12 

Trading 3,259 (563) — 1,284 — (276) (61) — (180) 3,463 (565) — 

Total investment 

securities 4,847 (545) 16 1,284 — (276) (294) — (180) 4,852 (547) 12 

Other assets: — 

Guarantee assets 5,509 (196) — — 1,238 — (708) — — 5,843 (196) — 

Other assets 171 (59) — (3) 14 (9) (14) — — 100 (59) — 

Total other assets 5,680 (255) — (3) 1,252 (9) (722) — — 5,943 (255) — 

Total assets $10,527 ($800) $16 $1,281 $1,252 ($285) ($1,016) $— ($180) $10,795 ($802) $12 

Balance,

January 1,

2021

Total Realized/Unrealized 

(Gains) Losses

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3

Transfers

out of

Level 3(1)

Balance,

September 

30,

2021

Change in 

Unrealized 

(Gains) Losses 

Included in Net 

Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2021(2)

Change in 

Unrealized 

(Gains) Losses, 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

September 30, 

2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Liabilities

Debt $323 ($21) $— ($8) $151 $— ($54) $— $— $391 ($15) $— 

Other liabilities 19 9 — 3 2 1 (9) — — 25 1 — 

Total liabilities $342 ($12) $— ($5) $153 $1 ($63) $— $— $416 ($14) $— 

(1) Transfers out of Level 3 consisted primarily of certain mortgage-related securities due to an increased volume and level of activity in the market and availability of 

price quotes from dealers and third-party pricing services. Certain agency securities are classified as Level 3 at issuance and generally are classified as Level 2 

when they begin trading. 

(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 September 30, 2022 and September 30, 2021. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 89
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 condensed consolidated balance sheets at fair value on a recurring basis.

Table 13.3 - Quantitative Information about Recurring Level 3 Fair Value Measurements 

September 30, 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 $587 

Median of external 

sources

External pricing 

sources $66.4 - $76.5 $71.2 

 515 Other

 Trading 2,460 Single external source External pricing source $0.0 - $6,031.4 $238.2 

 398 Other

Mortgage loans held-for-sale 312 Single external source External pricing source $39.6 - $98.3 $77.0 

Guarantee assets 5,067 Discounted cash flows OAS 17 - 186 bps 45 bps

 365 Other

Insignificant Level 3 assets(2) 127 

Total level 3 assets $9,831 

Liabilities

Insignificant Level 3 liabilities(2) 485 

Total level 3 liabilities $485 

December 31, 2021

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 $839 

Median of external 

sources

External pricing 

sources $72.8 - $83.7 $77.0 

 446 Other

 Trading 2,846 Single external source External pricing source $0.0 - $7,343.1 $396.7 

 541 Other

 Guarantee assets 5,531 Discounted cash flows OAS 17 - 186 bps 45 bps

 388 Other

 Insignificant Level 3 assets(2) 101 

Total level 3 assets $10,692 

Liabilities

Insignificant Level 3 liabilities(2) 318 

Total level 3 liabilities $318 

(1) Unobservable inputs were weighted primarily by the relative fair value of the financial instruments.

(2) Represents the aggregate amount of Level 3 assets and liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 90
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 measurement of impairment based on the fair 

value of the underlying collateral. Certain of the fair values in the tables below were not obtained as of period end, but were 

obtained during the period.

The table below presents assets measured on our condensed consolidated balance sheets at fair value on a non-recurring 

basis. 

Table 13.4 - Assets Measured at Fair Value on a Non-Recurring Basis 

September 30, 2022 December 31, 2021

(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Assets measured at fair value on a 

non-recurring basis:

Mortgage loans(1) $— $146 $1,620 $1,766 $— $12 $797 $809 

(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 condensed consolidated balance sheets at fair value on a non-recurring basis.

Table 13.5 - Quantitative Information About Non-Recurring Level 3 Fair Value Measurements 

September 30, 2022

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except for 

unobservable inputs as shown) Type Range

Weighted

Average(1)

Non-recurring fair value 

measurements

Mortgage loans $1,466 Median of external sources External pricing sources $75.1 - $100.6 $88.1

154 Other

Total $1,620 

December 31, 2021

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except for 

unobservable inputs as shown) Type Range

Weighted

Average(1)

Non-recurring fair value 

measurements

Mortgage loans $625 Median of external sources External pricing sources $61.9 - $107.1 $97.3

172 Other

Total $797 

(1) Unobservable inputs were weighted primarily by the relative fair value of the financial instruments.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 91
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 condensed consolidated balance sheets approximates fair value, as these assets and liabilities 

are short-term in nature and have limited fair value volatility. 

Table 13.6 - Fair Value of Financial Instruments

September 30, 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 $5,691 $5,691 $— $— $— $5,691 

Securities purchased under agreements 

to resell Amortized cost 97,643 — 105,155 — (7,512) 97,643 

Investment securities:

Available-for-sale FV - OCI 6,049 — 4,947 1,102 — 6,049 

Trading FV - NI 37,221 25,982 8,381 2,858 — 37,221 

Total investment securities 43,270 25,982 13,328 3,960 — 43,270 

Mortgage loans:

Loans held by consolidated trusts 2,956,534 — 2,303,717 219,637 — 2,523,354 

Loans held by Freddie Mac 50,839 — 15,579 30,964 — 46,543 

Total mortgage loans Various(3) 3,007,373 — 2,319,296 250,601 — 2,569,897 

Guarantee assets FV - NI 5,432 — — 5,434 — 5,434 

Derivative assets, net FV - NI 451 — 6,552 3 (6,104) 451 

Non-derivative purchase and other 

commitments FV - NI 1 — 27 — — 27 

Advances to lenders Amortized cost 2,520 — — 2,520 — 2,520 

Secured lending Amortized cost 894 — 894 — — 894 

Total financial assets $3,163,275 $31,673 $2,445,252 $262,518 ($13,616) $2,725,827 

Financial Liabilities

Debt:

Debt of consolidated trusts $2,973,973 $— $2,520,957 $703 $— $2,521,660 

Debt of Freddie Mac 163,249 — 167,801 3,175 (7,512) 163,464 

Total debt Various(4) 3,137,222 — 2,688,758 3,878 (7,512) 2,685,124 

Guarantee obligations Amortized cost 5,813 — — 5,998 — 5,998 

Derivative liabilities, net FV - NI 810 35 11,211 104 (10,540) 810 

Non-derivative purchase and other 

commitments FV - NI 162 — 171 2,104 — 2,275 

Total financial liabilities $3,144,007 $35 $2,700,140 $12,084 ($18,052) $2,694,207 

(1) FV - NI denotes fair value through net income. FV - OCI denotes fair value through other comprehensive income.

(2) Represents counterparty netting, cash collateral netting, and net derivative interest receivable or payable.

(3) As of September 30, 2022, the GAAP carrying amounts measured at amortized cost, lower-of-cost-or-fair-value, and FV - NI were $3.0 trillion, $5.8 billion, and $3.5 

billion, respectively. 

(4) As of September 30, 2022, the GAAP carrying amounts measured at amortized cost and FV - NI were $3.1 trillion and $4.3 billion, respectively. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 92
December 31, 2021

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 $10,150 $10,150 $— $— $— $10,150 

Securities purchased under agreements 

to resell Amortized cost 71,203 — 78,536 — (7,333) 71,203 

Investment securities:

Available-for-sale FV - OCI 4,012 — 2,726 1,286 — 4,012 

Trading FV - NI 49,003 31,780 13,837 3,386 — 49,003 

Total investment securities 53,015 31,780 16,563 4,672 — 53,015 

Mortgage loans:

Loans held by consolidated trusts 2,784,626 — 2,563,588 238,133 — 2,801,721 

Loans held by Freddie Mac 63,483 — 35,856 29,803 — 65,659 

Total mortgage loans Various(3) 2,848,109 — 2,599,444 267,936 — 2,867,380 

Guarantee assets FV - NI 5,919 — — 5,923 — 5,923 

Derivative assets, net FV - NI 460 33 5,416 17 (5,006) 460 

Non-derivative purchase and other 

commitments FV - NI 131 — 217 — — 217 

Advances to lenders Amortized cost 4,932 — — 4,932 — 4,932 

Secured lending Amortized cost 1,263 — 1,187 76 — 1,263 

Total financial assets $2,995,182 $41,963 $2,701,363 $283,556 ($12,339) $3,014,543 

Financial Liabilities

Debt:

Debt of consolidated trusts $2,803,054 $— $2,803,030 $656 $— $2,803,686 

Debt of Freddie Mac 177,131 — 185,793 3,957 (7,333) 182,417 

Total debt Various(4) 2,980,185 — 2,988,823 4,613 (7,333) 2,986,103 

Guarantee obligations Amortized cost 5,716 — — 6,240 — 6,240 

Derivative liabilities, net FV - NI 282 — 7,726 23 (7,467) 282 

Non-derivative purchase and other 

commitments FV - NI 13 — 4 101 — 105 

Total financial liabilities $2,986,196 $— $2,996,553 $10,977 ($14,800) $2,992,730 

(1) FV - NI denotes fair value through net income. FV - OCI denotes fair value through other comprehensive income.

(2) Represents counterparty netting, cash collateral netting, and net derivative interest receivable or payable.

(3) As of December 31, 2021, the GAAP carrying amounts measured at amortized cost, lower-of-cost-or-fair-value, and FV - NI were $2.8 trillion, $9.3 billion, and 

$10.5 billion, respectively. 

(4) As of December 31, 2021, the GAAP carrying amounts measured at amortized cost and FV - NI were $3.0 trillion and $2.5 billion, respectively.

Fair Value Option

We elected the fair value option for certain multifamily held-for-sale loans, multifamily held-for-sale loan purchase 

commitments, and debt.

The table below presents the fair value and UPB related to certain loans and debt for which we have elected the fair value 

option. This table does not include interest-only securities related to debt of consolidated trusts and debt of Freddie Mac with a 

fair value of $0.5 billion and $0.3 billion as of September 30, 2022 and December 31, 2021, respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 93
Table 13.7 - Difference between Fair Value and UPB for Certain Financial Instruments with Fair Value Option Elected 

September 30, 2022 December 31, 2021

(In millions)

Multifamily

Held-For-Sale

 Loan 

Purchase 

Commitments

Multifamily

Held-For-Sale

 Loans

Debt of 

Freddie Mac

Debt of 

Consolidated 

Trusts

Multifamily

Held-For-Sale

 Loan 

Purchase 

Commitments

Multifamily

Held-For-Sale

 Loans

Debt of 

Freddie Mac

Debt of 

Consolidated 

Trusts

Fair value ($150) $3,542 $968 $2,783 $127 $10,498 $1,252 $958 

UPB N/A 3,961 956 2,993 N/A 10,224 1,220 958 

Difference N/A ($419) $12 ($210) N/A $274 $32 $— 

Changes in Fair Value Under the Fair Value Option Election

The table below presents the changes in fair value included in investment gains (losses), net, on our condensed consolidated 

statements of operations and comprehensive income (loss), related to items for which we have elected the fair value option. 

Table 13.8 - Changes in Fair Value Under the Fair Value Option Election

3Q 2022 3Q 2021 YTD 2022 YTD 2021

(In millions) Gains (Losses) Gains (Losses) 

Multifamily held-for-sale loans ($333) ($100) ($1,282) ($330) 

Multifamily held-for-sale loan purchase commitments (86) 423 (292) 960 

Debt of Freddie Mac (18) 6 (44) 36 

Debt of consolidated trusts 182 7 425 16 

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 the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 3Q 2022 Form 10-Q 94
NOTE 14

Legal Contingencies

We are involved as a party 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. 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 and claims resolution are subject to many uncertainties and are not susceptible to accurate prediction. 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.

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 October 2013, defendants filed motions to dismiss the complaint. In October 2014, the District Court granted defendants' 

motions and dismissed the case in its entirety against all defendants, with prejudice. In November 2014, plaintiff filed a notice of 

appeal in the U.S. Court of Appeals for the Sixth Circuit. In July 2016, the Sixth Circuit reversed the District Court's dismissal 

and remanded the case to the District Court for further proceedings. In August 2018, the District Court denied the plaintiff's 

motion for class certification, and in January 2019, the Sixth Circuit denied plaintiff's petition for leave to appeal that decision. 

On September 17, 2020, the District Court granted a request from the plaintiff for summary judgment and entered final 

judgment in favor of Freddie Mac and the other defendants. On October 9, 2020, the plaintiff filed a notice of appeal in the Sixth 

Circuit. On January 27, 2021, Freddie Mac filed a motion to dismiss the appeal, which the Sixth Circuit denied on January 6, 

2022.

At present, it is not possible for us to predict the probable outcome of this lawsuit or any potential effect on our business, 

financial condition, liquidity, or results of operations. In addition, we are unable to reasonably estimate the possible loss or 

range of possible loss in the event of an adverse judgment in the foregoing matter due to the following factors, among others: 

the inherent uncertainty of the appellate process, and the inherent uncertainty of pre-trial litigation in the event the case is 

ultimately remanded to the District Court in whole or in part. In particular, while the District Court denied plaintiff's motion for 

class certification, this decision and the entry of final judgment in defendants' favor have been appealed. Absent a final 

resolution of whether a class will be certified, the identification of a class if one is certified, and the identification of the alleged 

statement or statements that survive dispositive motions, we cannot reasonably estimate any possible loss or range of possible 

loss.

LIBOR Lawsuit

On March 14, 2013, Freddie Mac filed a lawsuit in the U.S. District Court for the Eastern District of Virginia against the British 

Bankers Association and the 16 U.S. Dollar LIBOR panel banks and a number of their affiliates. The case was subsequently 

transferred to the U.S. District Court for the Southern District of New York. The complaint alleges, among other things, that the 

defendants fraudulently and collusively depressed LIBOR, a benchmark interest rate indexed to trillions of dollars of financial 

products, and asserts claims for antitrust violations, breach of contract, tortious interference with contract, and fraud. Freddie 

Mac filed an amended complaint in July 2013, and a second amended complaint in October 2014. In August 2015, the District 

Court dismissed the portion of our claim related to antitrust violations and fraud and we filed a motion for reconsideration. In 

March 2016, the District Court granted a portion of our motion, finding personal jurisdiction over certain defendants, and denied 

the portion of our motion with respect to statutes of limitation for our fraud claims. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 14

Freddie Mac 3Q 2022 Form 10-Q 95
In May 2016, in a related case, the U.S. Court of Appeals for the Second Circuit reversed the District Court's dismissal of 

certain plaintiffs' antitrust claims and remanded the case to the District Court for consideration of whether, among other things, 

the plaintiffs are "efficient enforcers" of the antitrust laws. In December 2016, the District Court denied in part and granted in 

part defendants' renewed motions to dismiss on personal jurisdiction and efficient enforcer grounds. The District Court held 

that Freddie Mac is an efficient enforcer of the antitrust laws, but dismissed on personal jurisdiction grounds Freddie Mac's 

antitrust claims against all defendants except HSBC USA, N.A. (HSBC). In February 2017, the District Court effectively 

dismissed Freddie Mac's remaining antitrust claim against HSBC.

In February 2018, in a related case, the Second Circuit reversed the District Court's dismissal of certain plaintiffs' state law 

fraud and unjust enrichment claims on statutes of limitations grounds. The Second Circuit also reversed certain aspects of the 

District Court's personal jurisdiction rulings and remanded with instructions to allow the named appellant to amend its 

complaint. The District Court subsequently granted in part Freddie Mac's motion for leave to amend its complaint, and Freddie 

Mac filed its third amended complaint in April 2019. Subsequently, the District Court held that Freddie Mac's fraud claims were 

not reinstated by the Second Circuit's February 2018 decision.

In December 2021, in a related case, the Second Circuit reversed the District Court’s December 2016 ruling with respect to 

certain personal jurisdiction issues. While Freddie Mac was not a party to that appeal, this ruling may apply to Freddie Mac’s 

claims.

In January 2022, in a related case, the Second Circuit reversed the District Court’s dismissal of certain class plaintiffs’ state law 

fraud claims on personal jurisdiction and statutes of limitations grounds. While Freddie Mac was not a party to that appeal, this 

ruling may apply to Freddie Mac’s claims.

At present, Freddie Mac's only remaining causes of action are certain contract-based claims against Bank of America, N.A., 

Barclays Bank, Citibank, N.A., Credit Suisse, Deutsche Bank, Royal Bank of Scotland, and UBS AG. The court has established 

a process to determine the impact of the appellate decisions on the previously dismissed claims.

Litigation Concerning the Purchase Agreement

Since July 2013, a number of lawsuits have been filed against us concerning the August 2012 amendment to the Purchase 

Agreement, which created the net worth sweep dividend provisions of the senior preferred stock. The plaintiffs in the lawsuits 

allege that they are holders of common stock and/or junior preferred stock issued by Freddie Mac and Fannie Mae. (For 

purposes of this discussion, junior preferred stock refers to the various series of preferred stock of Freddie Mac and Fannie 

Mae other than the senior preferred stock issued to Treasury.) It is possible that similar lawsuits will be filed in the future. The 

lawsuits against us are described below.

Litigation 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 filed by certain institutional investors 

(“Individual Plaintiffs”) against FHFA and its Director, Treasury, 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. Class Plaintiffs and Individual Plaintiffs seek unspecified damages, equitable 

and injunctive relief, and costs and expenses, including attorneys’ fees. 

On January 10, 2018, FHFA and its Director, Fannie Mae, and Freddie Mac moved to dismiss the amended complaints. 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. On December 7, 2021, the District Court certified three classes in the In Re Fannie Mae/Freddie Mac Senior 

Preferred Stock Purchase Agreement Class Action Litigations based on share type, including a "Freddie Preferred Class" for 

holders of Freddie Mac junior preferred stock and a "Freddie Common Class" for holders of Freddie Mac common stock. To be 

included in one of these classes, shareholders must have held their shares as of December 7, 2021 or acquired their shares 

after December 7, 2021 and before any final judgment is entered or settlement is reached in the lawsuit. The parties filed 

motions for summary judgment on March 21, 2022 in both the In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase 

Agreement Class Action Litigations and the Fairholme Funds lawsuit. On September 23 and October 11, 2022, the District Court 

ruled on the motions for summary judgment and related matters. The rulings limited the Plaintiffs’ remaining damages theories 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 14

Freddie Mac 3Q 2022 Form 10-Q 96
to those based on the decline in Freddie Mac’s and Fannie Mae’s share value 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, the Plaintiffs requested that the jury award $832 million plus pre-judgment interest as damages 

against Freddie Mac. The trial ran from October 17, 2022 through November 1, 2022, after which the jury began deliberations. 

The jury was not able to reach a unanimous verdict and on November 7, 2022 the judge declared a mistrial. We expect the 

court to set a new trial date. At this time, we do not believe the likelihood of loss is probable; therefore, we have not established 

an accrual in connection with these lawsuits. However, it is reasonably possible that the Plaintiffs could prevail in this matter 

and, if so, we may incur a loss up to $832 million plus pre-judgment interest as discussed above. 

Litigation in the U.S. Court of Federal Claims

Reid and Fisher vs. the United States of America and Federal Home Loan Mortgage Corporation. This case was 

filed as a derivative lawsuit, purportedly on behalf of Freddie Mac as a "nominal" defendant, 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. On 

March 8, 2018, the plaintiffs filed an amended complaint under seal, with a redacted copy filed on November 14, 2018. The 

United States filed a motion to dismiss on August 1, 2018 and an amended motion to dismiss on October 1, 2018. The Court 

denied the United States' motion to dismiss on May 8, 2020 and granted plaintiffs' motion to certify the decisions for 

interlocutory appeal on June 11, 2020. The Federal Circuit denied the petition for interlocutory appeal on August 21, 2020. 

These proceedings are stayed pending final resolution of the Fairholme Funds appeals discussed below.

Fairholme Funds, Inc., et al. vs. the United States of America, Federal National Mortgage Association, and 

Federal Home Loan Mortgage Corporation. This case was originally filed on July 9, 2013 against the United States of 

America. On March 8, 2018, plaintiffs filed an amended complaint under seal. A redacted public version was filed on May 11, 

2018 and adds Freddie Mac and Fannie Mae as nominal defendants. The amended complaint alleges, among other items, that 

the net worth sweep dividend provisions of the senior preferred stock constitute an unlawful taking or exaction of private 

property for public use without just compensation, and that by enacting the net worth sweep, the government breached the 

fiduciary duty it owed to Freddie Mac and Fannie Mae, and implied-in-fact contracts between the United States on the one 

hand and Freddie Mac and Fannie Mae on the other. The plaintiffs ask that plaintiffs, Freddie Mac, and Fannie Mae be awarded 

(1) just compensation for the government's alleged taking or exaction of their property, (2) damages for the government's 

breach of fiduciary duties, and (3) damages for the government's breach of the alleged implied-in-fact contracts. In addition, 

plaintiffs seek pre- and post-judgment interest, attorneys' fees, costs, and other expenses. The United States filed a motion to 

dismiss on August 1, 2018 and an amended motion to dismiss on October 1, 2018. On December 6, 2019, the Court dismissed 

the claims plaintiffs labeled as direct claims and denied defendant's motion to dismiss with respect to the claims plaintiffs 

labeled as derivative. Accordingly, derivative takings, exaction, breach of fiduciary duty, and breach of implied-in-fact contract 

claims remained. By order dated March 9, 2020, the Court granted unopposed motions by plaintiffs and defendant to certify the 

December 6 opinion for interlocutory review, modified its December 6 opinion to include the language necessary for an 

interlocutory appeal to the U.S. Court of Appeals for the Federal Circuit, and stayed further proceedings in the case pending the 

completion of the interlocutory appeal process. The Federal Circuit granted the petition for interlocutory appeal and, on 

February 22, 2022, held that all of the plaintiffs' claims should be dismissed. On July 22, 2022, plaintiffs filed a petition for writ 

of certiorari with the U.S. Supreme Court seeking review of the Federal Circuit's decision.

Perry Capital LLC vs. the United States of America, Federal National Mortgage Association, and Federal Home 

Loan Mortgage Corporation. This case was filed as a derivative lawsuit, purportedly on behalf of Freddie Mac and Fannie 

Mae as "nominal" defendants, on August 15, 2018. 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 or an illegal exaction in violation of the Fifth Amendment, and that by enacting the net worth sweep, the 

government breached the fiduciary duty it owed to Freddie Mac and Fannie Mae, and implied-in-fact contracts between the 

United States on the one hand and Freddie Mac and Fannie Mae on the other. The plaintiff asks that it, Freddie Mac, and 

Fannie Mae be awarded just compensation for the government's alleged taking of their property or damages for the illegal 

exaction; damages for the government's breach of fiduciary duties; and damages for the government's breach of the alleged 

implied-in-fact contracts. These proceedings are stayed pending final resolution of the Fairholme Funds appeals discussed in 

the paragraph immediately above.

At present, it is not possible for us to predict the probable outcome of the lawsuits discussed above in the U.S. District Courts 

and the U.S. Court of Federal Claims (including the resolution of any appeals) or any potential effect on our business, financial 

condition, liquidity, or results of operations. In addition, we are unable to reasonably estimate the possible loss or range of 

possible loss in the matters pending in the U.S. Court of Federal Claims due to a number of factors, including the inherent 

uncertainty of litigation.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 14

Freddie Mac 3Q 2022 Form 10-Q 97
NOTE 15

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 has established the ERCF as a new enterprise regulatory capital framework for Freddie Mac and Fannie Mae. 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. Pursuant to the final rule, we are 

required to comply with the regulatory capital reporting requirements under the ERCF in 2022, and we filed with FHFA our initial 

quarterly capital report on May 27, 2022.

The ERCF establishes risk-based and leverage capital requirements and includes supplemental 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%, and 8%, respectively, of risk-weighted assets. We must also maintain statutory total capital 

equal to at least 8% of risk-weighted assets. To avoid limits on capital distributions and discretionary bonus payments, we also 

must maintain CET1 capital that exceeds the risk-based capital requirements by at least the amount of the prescribed capital 

conservation buffer amount (PCCBA).

Leverage Capital Requirements

Under the ERCF leverage capital requirements, we must maintain our Tier 1 capital ratio equal to at least 2.5% of adjusted total 

assets. We must also maintain our statutory core capital ratio equal to at least 2.5% of adjusted total assets. To avoid limits on 

capital distributions and discretionary bonus payments, we also must maintain our Tier 1 capital that exceeds the leverage 

capital requirements by at least the amount of the prescribed leverage buffer amount (PLBA). 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 15

Freddie Mac 3Q 2022 Form 10-Q 98
Capital Metrics

The table below presents our capital metrics under the ERCF. 

Table 15.1 - ERCF Available Capital and Capital Requirements 

(In billions) September 30, 2022

Adjusted total assets $3,695 

Risk-weighted assets (standardized approach) 855 

September 30, 2022

(Dollars in billions)

Minimum 

Capital 

Requirement

Capital 

Requirement 

(Including Buffer(1))

Available 

Capital (Deficit)

Risk-based capital amounts:

Total capital (statutory)(2) $68 $68 ($30) 

CET1 capital(3) 38 88 (57) 

Tier 1 capital(3) 51 101 (43) 

Adjusted total capital(3) 68 118 (43) 

Risk-based capital ratios(4):

Total capital (statutory) 8.0 % 8.0 % (3.5) %

CET1 capital 4.5 10.3 (6.7) 

Tier 1 capital 6.0 11.8 (5.0) 

Adjusted total capital 8.0 13.8 (5.0) 

Leverage capital amounts:

Core capital (statutory)(5) $92 $92 ($37) 

Tier 1 capital(3) 92 103 (43) 

Leverage capital ratios(6):

Core capital (statutory) 2.5 % 2.5 % (1.0) %

Tier 1 capital 2.5 2.8 (1.2) 

(1) PCCBA for risk-based capital and PLBA for leverage capital.

(2) Total capital is equal to core capital plus certain allowances for credit losses.

(3) Regulatory capital amounts exclude senior preferred stock, deferred tax assets arising from temporary differences that exceed 10% of CET1 capital, and certain 

other items.

(4) As a percentage of risk-weighted assets.

(5) Core capital excludes certain components of GAAP total equity (i.e., AOCI and senior preferred stock) as these items do not meet the statutory definition of core 

capital. 

(6) As a percentage of adjusted total assets.

END OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND ACCOMPANYING NOTES

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 15

Freddie Mac 3Q 2022 Form 10-Q 99
Other Information

LEGAL PROCEEDINGS

We are involved as a party to a variety of legal proceedings. For more information, see Note 14.

In addition, a number of lawsuits have been filed against the U.S. government related to the conservatorship and the Purchase 

Agreement. Some of these cases also have challenged the constitutionality of the structure of FHFA. For information on these 

lawsuits, see the Legal Proceedings section in our 2021 Annual Report. One such case, originally filed in the U.S. District 

Court for the Western District of Michigan, was appealed to the U.S. Court of Appeals for the Sixth Circuit. On October 4, 2022, 

the Sixth Circuit remanded the case to the District Court to determine what remedy, if any, the shareholders are entitled to for 

their claim that the “for cause” removal provision for the director of FHFA in HERA is unconstitutional.

RISK FACTORS 

This Form 10-Q should be read together with the Risk Factors section in our 2021 Annual Report, which describe various 

risks and uncertainties to which we are or may become subject. These risks and uncertainties could, directly or indirectly, 

adversely affect our business, financial condition, results of operations, cash flows, strategies, and/or prospects.

UNREGISTERED SALES OF EQUITY SECURITIES AND 

USE OF PROCEEDS

Recent Sales of Unregistered Securities

The securities we issue are "exempted securities" under the Securities Act of 1933, as amended. 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 those plans to employees and members of the 

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.

Information About Certain Securities Issuances by Freddie Mac

We make available, free of charge through our website at www.freddiemac.com, 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 an internet site 

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

electronically with the SEC. 

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 debt notes 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 and SB 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 mortgage-related securities offerings.

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

transactions 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 activities, which can be found at 

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

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

Other Information

Freddie Mac 3Q 2022 Form 10-Q 100
EXHIBITS

The exhibits are listed in the Exhibit Index of this Form 10-Q.

Other Information

Freddie Mac 3Q 2022 Form 10-Q 101
Controls and Procedures

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 Chief Executive Officer and Chief Financial Officer, 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.

Management, including the company's Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the 

effectiveness of our disclosure controls and procedures as of September 30, 2022. As a result of management's evaluation, our 

Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as 

of September 30, 2022, 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. We consider this situation to be a material weakness in our internal control over financial reporting. 

CHANGES IN INTERNAL CONTROL OVER FINANCIAL 

REPORTING DURING 3Q 2022

We evaluated the changes in our internal control over financial reporting that occurred during 3Q 2022 and concluded that 

there were no changes that materially affected, or are reasonably likely to materially affect, our internal control over financial 

reporting.

MITIGATING ACTIONS RELATED TO THE MATERIAL 

WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL 

REPORTING

As described above under Evaluation of Disclosure Controls and Procedures, we have one material weakness in 

internal control over financial reporting as of September 30, 2022 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-Q, and engage in 

discussions with us regarding issues associated with the information contained in those filings. Prior to filing this Form 10-

Q, FHFA provided us with a written acknowledgment that it had reviewed the Form 10-Q, was not aware of any material 

misstatements or omissions in the Form 10-Q, and had no objection to our filing the Form 10-Q.

n	 The Director of FHFA is in frequent communication with our Chief Executive Officer, typically meeting (in person or by 

phone) on at least a bi-weekly basis.

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 condensed consolidated financial 

statements for 3Q 2022 have been prepared in conformity with GAAP.

Controls and Procedures

Freddie Mac 3Q 2022 Form 10-Q 102
Exhibit Index

Exhibit Description*

3.1 Bylaws of the Federal Home Loan Mortgage Corporation, as amended and restated July 28, 2022

10.1 PC Master Trust Agreement, dated July 30, 2022

10.2 UMBS and MBS Master Trust Agreement, dated July 30, 2022

10.3 2022 Executive Management Compensation Program†

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 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 numbers 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 are 000-53330 and 001-34139.

† This exhibit is a management contract or compensatory plan, contract, or arrangement.

Exhibit Index

Freddie Mac 3Q 2022 Form 10-Q 103
Signatures

Pursuant to the requirements 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

(Principal Executive Officer)

Date: November 8, 2022

By: /s/ Christian M. Lown

Christian M. Lown

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: November 8, 2022

Signatures

Freddie Mac 3Q 2022 Form 10-Q 104
Form 10-Q Index

Item Number Page(s)

PART I FINANCIAL INFORMATION

Item 1. Financial Statements 49 - 99

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 1 - 48

Item 3. Quantitative and Qualitative Disclosures About Market Risk 35 - 37

Item 4. Controls and Procedures 102

PART II OTHER INFORMATION

Item 1. Legal Proceedings 100

Item 1A. Risk Factors 100

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 100

Item 6. Exhibits 101

Exhibit Index 103

Signatures 104

Form 10-Q Index

Freddie Mac 3Q 2022 Form 10-Q 105
Exhibit 3.1

BYLAWS OF THE FEDERAL HOME LOAN MORTGAGE CORPORATION

As amended and restated July 28, 2022
FREDDIE MAC BYLAWS

TABLE OF CONTENTS

Page

ARTICLE 1 OFFICES 1

Section 1.1 Offices 1

ARTICLE 2 CAPITAL STOCK 1

Section 2.1 Issuance 1

Section 2.2 Common Stock 1

Section 2.3 Preferred Stock 1

Section 2.4 Consideration 1

Section 2.5 Shares Owned by the Corporation 1

Section 2.6 Fractional Shares 2

Section 2.7 Certificates 2

Section 2.8 Transfer of Shares 2

Section 2.9 Lost, Destroyed and Mutilated Certificates 3

Section 2.10 Fixing a Record Date 3

Section 2.11 Record of Stockholders 3

Section 2.12 Ownership of Shares 4

Section 2.13 Share Options and Other Instruments 4

ARTICLE 3 MEETINGS OF THE STOCKHOLDERS 4

Section 3.1 Annual Meetings 4

Section 3.2 Special Meetings 5

Section 3.3 Notice of Meetings 6

Section 3.4 Quorum 7

Section 3.5 Organization 8

Section 3.6 Conduct of Business 8

Section 3.7 Voting 10

Section 3.8 Voting Entitlement of Shares 10

Section 3.9 Proxies 11

Section 3.10 Stockholders’ List 12

-i-
TABLE OF CONTENTS

(continued)

Page

ARTICLE 4 BOARD OF DIRECTORS 13

Section 4.1 General Powers 13

Section 4.2 Number, Qualification and Term of Office 13

Section 4.3 Nominations 13

Section 4.4 Vacancies 14

Section 4.5 Elections 14

Section 4.6 Chair 15

Section 4.7 Lead Director 15

Section 4.8 Regular Meetings 16

Section 4.9 Special Meetings 16

Section 4.10 Quorum 16

Section 4.11 Participation in Meetings 16

Section 4.12 Conduct of Business 17

Section 4.13 Reimbursement and Compensation of Directors 18

Section 4.14 Committees of the Board of Directors 18

Section 4.15 Resignation 19

Section 4.16 Removal of Directors 19

Section 4.17 Termination of Voluntary Registration of Common Stock 19

ARTICLE 5 OFFICERS 19

Section 5.1 Officers of the Corporation 19

Section 5.2 Appointment and Term 19

Section 5.3 Removal, Resignation, Vacancy 20

Section 5.4 Compensation 20

Section 5.5 Duties 21

Section 5.6 Chief Executive Officer 21

Section 5.7 President 21

Section 5.8 Chief Operating Officer 21

Section 5.9 General Auditor 21

Section 5.10 Vice Presidents 21

Section 5.11 Corporate Secretary 21

Section 5.12 Delegation of Authority 22

-ii-
TABLE OF CONTENTS

(continued)

Page

ARTICLE 6 INSPECTION OF RECORDS 22

Section 6.1 Inspection of Records by Stockholders 22

Section 6.2 Inspection of Records by Directors 23

ARTICLE 7 NOTICES 23

Section 7.1 Notices 23

Section 7.2 Written Waivers 25

ARTICLE 8 INDEMNIFICATION AND LIMITATION OF LIABILITY 25

Section 8.1 Indemnification 25

Section 8.2 Right of Indemnitee to Bring Suit 27

Section 8.3 Non-Exclusivity of Rights 28

Section 8.4 Insurance 28

Section 8.5 Limitation of Liability 28

ARTICLE 9 SEAL 29

Section 9.1 Corporate Seal 29

ARTICLE 10 FISCAL YEAR 29

Section 10.1 Fiscal Year 29

ARTICLE 11 MISCELLANEOUS 29

Section 11.1 Time Periods 29

Section 11.2 Severability 29

Section 11.3 Corporate Governance Practices and Procedures and 

Governing Law 29

Section 11.4 Certificates of Designation 30

Section 11.5 Statutory References 30

Section 11.6 Control Share Acquisitions 30

ARTICLE 12 AMENDMENTS 30

Section 12.1 General 30

Section 12.2 Amendment by the Board of Directors 30

Section 12.3 Amendment by the Stockholders 31

-iii-
ARTICLE 1 – OFFICES

Section 1.1 Offices. The principal office of the Corporation shall be in Fairfax 

County, Virginia or at any other place determined by the Board of Directors. The 

Corporation may have such other offices as the Board of Directors or the Chief Executive 

Officer shall determine appropriate.

ARTICLE 2 – CAPITAL STOCK

Section 2.1 Issuance. The Board of Directors shall have the power to authorize 

the issuance of one or more classes or series of stock of the Corporation, including, 

without limitation, voting common and preferred stock. All stock shall be issued on such 

terms and conditions as the Board of Directors shall prescribe from time to time.

Section 2.2 Common Stock. The voting common stock of the Corporation (the 

“Common Stock”) shall consist of such number of shares as may be issued or authorized 

for issuance from time to time by the Board of Directors (without limitation upon the 

authority of the Board of Directors to authorize the issuance of additional shares from time 

to time). The Common Stock shall have the designation, powers, rights, privileges, 

qualifications, limitations, restrictions, terms and conditions set forth in the Eighth 

Amended and Restated Certificate of Designation, Powers, Preferences, Rights, 

Privileges, Qualifications, Limitations, Restrictions, Terms and Conditions of Voting 

Common Stock adopted on September 10, 2008, as further amended or restated from 

time to time (the “Common Stock Certificate of Designation”). No holder of Common Stock 

shall as such holder have any preemptive right to purchase or subscribe for any other 

shares, rights, options, or other securities of any class of the Corporation which at any 

time may be sold or offered for sale by the Corporation.

Section 2.3 Preferred Stock. The preferred stock of the Corporation shall 

consist of such number of shares as may be issued or authorized for issuance from time 

to time by the Board of Directors (without limitation upon the authority of the Board of 

Directors to authorize the issuance of additional shares from time to time). Each class of 

preferred stock shall have the designation, powers, preferences, rights, privileges, 

qualifications, limitations, restrictions, terms and conditions set forth in the certificate of 

designation approved by the Board of Directors for such class.

Section 2.4 Consideration. Shares of stock may be issued to the Corporation’s 

stockholders pro rata and without consideration. Shares of stock may also be issued for 

consideration consisting of any tangible or intangible property or benefit to the Corporation 

as the Board of Directors deems appropriate. Upon the Board of Directors making a good 

faith determination that the consideration received for the shares to be issued is adequate, 

the shares issued therefor shall be fully paid and nonassessable.

Section 2.5 Shares Owned by the Corporation. Any shares of capital stock 

owned by the Corporation shall retain the status of issued shares, unless and until the 

Corporation shall retire and cancel the same, but such shares shall not be regarded as 

outstanding while so owned.
Section 2.6 Fractional Shares. No fractional interests in shares of common 

stock will be created or recognized by the Corporation except as otherwise provided in the 

Corporation’s Employee Stock Purchase Plan or any other executive compensation or 

employee benefit plan or any direct stock purchase plan currently in effect or hereafter 

adopted by the Corporation. The holder of a fractional share is entitled to exercise the 

rights of a shareholder, including the right to vote, to receive dividends, and to participate 

in the assets of the Corporation upon dissolution.

Section 2.7 Certificates.

(a) The Board of Directors may authorize the issuance of shares of stock of the 

Corporation with or without certificates. The rights and obligations of stockholders shall be 

identical whether or not their shares are represented by certificates. Stock certificates 

shall be in the form approved by the Corporate Secretary. Each stock certificate shall 

contain the name of the Corporation, the name of the stockholder, the number and kind of 

shares of stock owned by such stockholder, and reference to any other material terms of 

the stock represented thereby, including, without limitation, the information required to be 

set forth on such certificates by the Common Stock Certificate of Designation, shall be 

signed by the Chief Executive Officer or President and countersigned by the Corporate 

Secretary or an Assistant Secretary, and shall be sealed with the Corporation’s seal or a 

facsimile of such seal. Within a reasonable time after the issuance or transfer of shares 

without certificates, the Corporation shall send to the registered stockholder a written 

statement containing the information required to be set forth on the certificates, including, 

without limitation, the information required to be set forth on such certificates by the 

Common Stock Certificate of Designation, or a statement that the Corporation will furnish 

such information upon request and without charge.

(b) When any stock certificate is countersigned by a transfer agent or a 

registrar, other than the Corporation or its employee, any other signature on such 

certificate may be a facsimile. If any corporate officer who has signed any certificate 

ceases to be a corporate officer before such certificate is issued, whether because of 

death, resignation or otherwise, the certificate may nevertheless be issued and delivered 

by the Corporation as if such officer had not ceased to be such as of the certificate’s issue 

date.

Section 2.8 Transfer of Shares. Except as otherwise provided in the 

Corporation’s Employee Stock Purchase Plan or any other executive compensation or 

employee benefit plan or any direct stock purchase plan currently in effect or hereafter 

adopted by the Corporation, the Common Stock shall be transferable only in whole 

shares. Subject to the foregoing, the stock of the Corporation shall be transferable or 

assignable only on the transfer books of the Corporation or by transfer agents designated 

to transfer shares of stock of the Corporation by the registered holder thereof, in person or 

by a duly authorized attorney, and, in the case of certificated shares, upon the surrender 

and cancellation of such certificates representing the shares to be transferred, properly 

endorsed and, if sought to be transferred by such attorney,

Freddie Mac Bylaws

July 28, 2022

Page 2
accompanied by a written power of attorney to have the same transferred on the books of 

the Corporation. The Board of Directors shall have power and authority to make such 

other rules and regulations concerning the issuance, transfer and registration of 

certificates of stock as it may deem appropriate.

Section 2.9 Lost, Destroyed and Mutilated Certificates. If any holder of the 

shares of the Corporation in certificated form shall notify the Corporation of any loss, theft, 

destruction or mutilation of such certificate(s), the Chief Executive Officer may, in his or 

her discretion, cause one or more new certificate(s) for the same number of shares in the 

aggregate to be issued to such stockholder upon the surrender of the mutilated certificate, 

or upon delivery by the stockholder or such stockholder’s legal representative of a bond, 

with or without surety, or such other agreement, undertaking or security as the Corporate 

Secretary shall determine is appropriate, to indemnify the Corporation against any claim 

that may be made against the Corporation on account of the alleged loss, theft or 

destruction of any such certificate(s) or the issuance of any new certificate(s).

Section 2.10 Fixing a Record Date. Except as otherwise provided in the 

Common Stock Certificate of Designation, or any other certificate of designation relating to 

any class of the Corporation’s preferred stock, for the purpose of determining stockholders 

entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, 

or entitled to receive payment of any dividend, or in order to make a determination of 

stockholders for any other proper purpose, the Board of Directors may fix in advance a 

date as the record date for any such determination of stockholders, such date in any case 

to be not more than 70 days before the meeting or action requiring a determination of 

stockholders and, in the case of record dates for dividends on the preferred stock, subject 

to any additional limitations set forth in the related certificate of designation. If no record 

date is fixed for the determination of (i) stockholders entitled to notice of, or to vote at, a 

meeting of stockholders or (ii) stockholders entitled to receive payment of a dividend, the 

date on which notices of the meeting are first mailed or otherwise given or the date on 

which the resolution of the Board of Directors declaring such dividend is adopted, as the 

case may be, shall be the record date for such determination of stockholders. When a 

determination of stockholders entitled to vote at any meeting of stockholders has been 

made as provided in this Section, such determination shall apply to any adjournment 

thereof unless the Board of Directors fixes a new record date, which it shall do if the 

meeting is adjourned to a date more than 120 days after the date fixed for the original 

meeting.

Section 2.11 Record of Stockholders. A record shall be kept of the names of the 

persons and entities owning the stock represented by each share of stock of the 

Corporation, the number of shares represented by each certificate or information 

statement issued in respect of noncertificated shares and the dates of issuance thereof in 

a form that permits the preparation of a list of the names and addresses of all stockholders 

in alphabetical order showing the number of shares held by each.

Freddie Mac Bylaws

July 28, 2022

Page 3
Section 2.12 Ownership of Shares. The Corporation and any agent thereof may 

deem and treat the holder of a share or shares of stock, as shown in the Corporation’s 

books and records, as the absolute owner of such share or shares of stock for the 

purpose of receiving payment of dividends in respect of such share or shares of stock and 

for all other purposes whatsoever, and neither the Corporation nor any agent thereof shall 

be affected by any notice to the contrary. All payments made to or upon the order of any 

such person shall be valid and, to the extent of the sum or sums so paid, effectual to 

satisfy and discharge liabilities for moneys payable by the Corporation on or with respect 

to any such share or shares of stock.

Section 2.13 Share Options and Other Instruments. The Corporation may 

issue rights, options or warrants for the purchase of shares or other securities of the 

Corporation, subject to stockholder approval to the extent required by applicable laws, 

regulations or listing standards. The Board of Directors may authorize the issuance of 

rights, options or warrants and determine the terms upon which the rights, options or 

warrants are issued, including, without limitation, the consideration for which the shares or 

other securities are to be issued. The authorization for the Corporation to issue such 

rights, options or warrants constitutes authorization of the issuance of the shares or other 

securities for which the rights, options or warrants are exercisable.

ARTICLE 3 – MEETINGS OF THE STOCKHOLDERS

Section 3.1 Annual Meetings.

(a) An annual meeting of the stockholders, for the election of directors and for 

the transaction of such other business as may properly come before the meeting, shall be 

held on such date, at such time and at such place as the Board of Directors shall each 

year fix, which date shall be within 15 months after the immediately preceding meeting of 

stockholders. The failure to hold an annual meeting at the time stated in, or fixed in 

accordance with, these Bylaws shall not affect the validity of any corporate action.

(b) Upon notice to the Corporation, any stockholder of the Corporation entitled 

to participate in an annual meeting may petition the United States District Court for the 

district within which the Corporation’s principal office is located to order an annual meeting 

of stockholders if an annual meeting has not been held within 15 months after the 

Corporation’s immediately preceding annual meeting. The court may fix the time and place 

of the meeting, determine the shares entitled to notice of and to vote at the meeting, 

prescribe the form and content of the meeting notice and enter other orders necessary to 

accomplish the purpose or purposes of the meeting.

Freddie Mac Bylaws

July 28, 2022

Page 4
Section 3.2 Special Meetings.

(a) Special meetings of the stockholders, for any purpose or purposes 

prescribed in the notice of the meeting, may be called by a majority of the directors then in 

office or the Chair of the Board (“Chair”), and shall be held on such date, at such time and 

at such place as they or he or she shall fix.

(b) Special meetings of the stockholders, for any purpose or purposes 

prescribed in the notice of the meeting, may also be called by the Corporate Secretary 

upon the written request of the holders of at least a majority of all shares of voting stock 

entitled to vote; provided, however, a special meeting of the stockholders for the purposes 

of Section 4.16 of these Bylaws must be requested by the holders of at least one-third of 

all shares of voting stock entitled to vote. A special meeting of the stockholders called 

pursuant to the preceding sentence shall be referred to in these Bylaws as a “Stockholder 

Requested Special Meeting”. A Stockholder Requested Special Meeting shall be held on 

such date, at such time and at such place as determined by the Corporate Secretary as 

soon as is reasonably practicable following the Corporation’s receipt of a written request 

that is in compliance with this Section 3.2 (the “Delivery Date”) and, unless the 

penultimate paragraph of this Section applies, within 75 calendar days of the Delivery 

Date. The record date for determining stockholders entitled to request for a Stockholder 

Requested Special Meeting shall be the later of (i) the date the first stockholder signs the 

request, or (ii) the earliest record date permitted by Section 2.10 of these Bylaws.

Upon notice to the Corporation, any stockholder of the Corporation who 

signed the request for a Stockholder Requested Special Meeting, may petition the United 

States District Court for the district within which the Corporation’s principal office is located 

to order a special meeting of stockholders if a special meeting notice has not been held as 

provided herein. The court may fix the time and place of the meeting, determine the 

shares entitled to notice of and to vote at the meeting, prescribe the form and content of 

the meeting notice, and enter other orders necessary to accomplish the purpose or 

purposes of the meeting.

A written request of the holders of the voting stock made pursuant to this 

Section 3.2 must (i) be signed, dated and delivered to the Corporate Secretary at the 

principal executive offices of the Corporation by each stockholder making the request for a 

Stockholder Requested Special Meeting, (ii) identify the name and record address of each 

stockholder making the request for a Stockholder Requested Special Meeting,

(iii) include a brief description of the business desired to be brought before such 

Stockholder Requested Special Meeting, the reasons for conducting such business, a 

statement of specific purpose(s) of the meeting and the matter proposed to be acted on at 

it, which matter must be a proper subject for stockholder action, (iv) shall be accompanied 

by documentation to verify the class and number of shares of the Corporation that are 

beneficially owned by each stockholder making such request in accordance with the 

Securities Exchange Act of 1934, as amended (the “Exchange Act”), specifically Rule 

14a-8(b)(2) of Regulation 14A (Solicitation of Proxies) (the “Proxy Rules Requirement”),

Freddie Mac Bylaws

July 28, 2022

Page 5
(v) contain a representation that each stockholder submitting the request intends to 

appear in person or by proxy at the Stockholder Requested Special Meeting to transact 

the business specified, and (vi) contain a representation that each stockholder submitting 

the request intends to continue ownership of shares of the voting stock through the date of 

the Stockholder Requested Special Meeting. The Corporation may require any 

stockholder making such request to furnish such other information as may reasonably be 

required by the Corporation to determine the eligibility of stockholders to make a written 

request pursuant to this Section 3.2. Failure of the stockholders who sign the request for a 

Stockholder Requested Special Meeting to comply with the representations identified in 

(v) and (vi) above, shall be deemed to constitute a revocation of such request. Any 

stockholder who submitted a request for a Stockholder Requested Special Meeting may 

revoke such request at any time by written revocation delivered to the Corporate 

Secretary at the principal executive offices of the Corporation.

The Corporate Secretary shall not be required to call a Stockholder 

Requested Special Meeting if (i) the Board of Directors calls an annual or special meeting 

of stockholders to be held not later than 75 days after the Delivery Date and the 

purpose(s) of such meeting includes the purpose(s) specified by the requisite number of 

stockholders in the special meeting request(s), or (ii) an annual or special meeting was 

held not more than 12 months before the Delivery Date, which included the purpose(s) 

specified by the requisite number of stockholders in the special meeting request(s), with 

such determination being made in good faith by the Board of Directors. In determining 

whether a request for a Stockholder Requested Special Meeting has been submitted by 

stockholders holding the requisite number of shares of voting stock, there may be 

excluded from the computation, the shares of the voting stock owned by any stockholder 

who has signed the request for a Stockholder Requested Special Meeting at any time 

during the 2 calendar years preceding the Delivery Date and has failed to comply with the 

representations identified in (v) and (vi) above.

(c) At a special meeting, no business shall be transacted and no action shall be 

taken other than as stated in the notice of the meeting; provided that nothing herein shall 

prohibit the Board of Directors from submitting other matters to the stockholders at a 

Stockholder Requested Special Meeting.

Section 3.3 Notice of Meetings.

(a) Written or printed notice of the date, time and place of all meetings of the 

stockholders and, in the case of a special meeting, the purpose or purposes for which the 

meeting is called, shall be given no fewer than 10 nor more than 60 days before the date 

on which the meeting is to be held, to each holder of voting stock entitled to vote at such 

meeting, except as otherwise provided in these Bylaws.

When a meeting is adjourned to another date, time or place, written notice 

need not be given of the adjourned meeting if the date, time or place thereof are 

announced at the meeting at which the adjournment is taken; provided, however, that, if

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the date of any adjourned meeting is more than 120 days after the date for which the 

meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, 

written notice of the date, time or place of the adjourned meeting shall be given in 

conformity herewith.

(b) A stockholder’s attendance at a meeting, whether in person or by proxy, (i) 

waives objection to lack of notice or defective notice of the meeting, unless the 

stockholder at the beginning of the meeting objects to holding the meeting or transacting 

business at the meeting; and (ii) waives objection to consideration of a particular matter at 

the meeting that is not within the purpose or purposes described in the meeting notice 

unless the stockholder objects to considering the matter when it is presented.

Notwithstanding the foregoing, no notice of a stockholders’ meeting need 

be given to a stockholder if (i) notices to such stockholder of two consecutive annual 

meetings, and all notices of meetings during the period between two consecutive annual 

meetings, have been sent, other than by electronic transmission, to such stockholder at 

such stockholder’s address as shown on the records of the Corporation and have been 

returned undeliverable or could not be delivered or (ii) all, but not less than two, 

distributions to stockholders during a period of more than 12 months, have been sent to 

such stockholder at such stockholder’s address as shown on the records of the 

Corporation and have been returned undeliverable or could not be delivered. If any 

stockholder, for which notice is not required, delivers to the Corporation a written notice 

setting forth such stockholder’s then-current address, the requirement that notice be given 

shall be reinstated.

(c) For purposes of these Bylaws, “electronic transmission” means any form or 

process of communication, not directly involving the physical transfer of paper or other 

tangible medium, that (i) is suitable for the retention, retrieval, and reproduction of 

information by the recipient and (ii) is retrievable in paper form by the recipient through an 

automated process used in conventional commercial practice; provided, however, a notice 

or other communication may be in the form of an electronic transmission that cannot be 

directly reproduced in paper form by the recipient through an automated process used in 

conventional commercial practice if (x) the electronic transmission is otherwise retrievable 

in perceivable form and (y) the sender and the recipient have consented in writing to the 

use of such form of electronic transmission.

Section 3.4 Quorum.

(a) At any meeting of the stockholders, the holders of a majority of all shares of 

voting stock entitled to vote at the meeting, present in person or by proxy, shall constitute 

a quorum, except as otherwise provided in this Section. If a quorum shall fail to attend a 

meeting, the chair of the meeting or the holders of a majority of all shares of voting stock 

entitled to vote at the meeting who are present, in person or by proxy, may adjourn the 

meeting to another date, time or place.

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(b) Once a share of stock is represented for any purpose at a meeting, it is 

deemed present for quorum purposes for the remainder of the meeting and for any 

adjournment of that meeting unless a new record date is or shall be set for that adjourned 

meeting.

Section 3.5 Organization. The Chair or, in the absence of the Chair, another 

director designee of the Board of Directors or, in the absence of the Chair and such a 

designation, the Chief Executive Officer or in his or her absence, the President or, in the 

absence of both such officers, such person as may be chosen by the holders of a majority 

of all shares of voting stock entitled to vote who are present, in person or by proxy, shall 

call to order any meeting of the stockholders and shall act as chair of the meeting. In the 

absence of the Corporate Secretary, the secretary of the meeting shall be such person as 

the chair of the meeting appoints.

Section 3.6 Conduct of Business.

(a) The chair of any meeting of stockholders shall determine the order of 

business and shall have the authority to establish rules for the conduct of the meeting, 

including such regulation of the manner of voting and the conduct of discussion, 

restrictions on attendance at a meeting so long as stockholders or their proxies are not 

excluded, and adjournment of the meeting to be reconvened at a later date, as seem to 

him or her in order and not inconsistent with these Bylaws.

(b) No business shall be brought before any meeting except in accordance with 

the procedures set forth in these Bylaws, and the rules, if any, established by the chair of 

the meeting for the conduct of the meeting; provided, however, that nothing in this Section 

shall be deemed to preclude discussion by any stockholder of any business properly 

brought before such meeting.

(c) At any meeting of the stockholders, only such business shall be conducted 

as shall have been properly brought before the meeting. The chair of any meeting shall, if 

the facts warrant, determine that business was not properly brought before the meeting, 

and, if the chair should so determine, he or she shall so declare to the meeting and any 

such business not properly brought before the meeting shall not be conducted. At any 

adjourned meeting, any business may be transacted and any action taken which might 

have been transacted or taken at the original meeting.

(d) To be properly brought before an annual meeting, business must be 

specified in the notice of meeting (or any supplement thereto) given by or at the direction 

of the Board of Directors, or otherwise brought before the meeting by or at the direction of 

the Board of Directors, or otherwise properly brought before the meeting by a stockholder. 

In addition to any other applicable requirements, including, without limitation, Rule 14a-8 

under the Exchange Act, if applicable, for business other than a director nomination to be 

properly brought before an annual meeting by a stockholder, the stockholder must have 

given timely notice thereof in writing to the Corporate Secretary at the principal executive 

office of the Corporation. (The exclusive procedures for stockholders to make nominations

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for the election of directors at any annual meeting are set forth in Section 4.3.) The 

content of the stockholders’ notice must comply with the requirements of this Section 3.6. 

The requirements of this Section 3.6 shall apply to any business a stockholder wishes to 

bring before an annual meeting, whether under Rule 14a-8 under the Exchange Act or 

otherwise. To be timely, a stockholder’s notice must be received at the principal office of 

the Corporation no fewer than 75 days prior to such annual meeting. In the event that 

fewer than 90 days’ notice or prior public disclosure of the date of such annual meeting is 

given or made to stockholders, notice by the stockholder, to be timely, must be so 

received not later than the close of business on the 15th day following the day on which 

such notice of the date of such annual meeting was mailed or such public disclosure was 

made, whichever first occurs. A written notice must (i) be signed, dated and delivered to 

the Corporate Secretary at the principal executive offices of the Corporation by the 

stockholder, (ii) identify the name and record address of the stockholder submitting the 

notice, (iii) include a brief description of the business, which must be a proper subject for 

stockholder action, desired to be brought before such annual meeting and the reasons for 

conducting such business, (iv) shall be accompanied by documentation to verify the class 

and number of shares of the Corporation that are beneficially owned by the stockholder 

submitting such notice in accordance with the Exchange Act, specifically the Proxy Rules 

Requirement, (v) contain a representation that the stockholder submitting the notice 

intends to appear in person or by proxy at the annual meeting to transact the business 

specified, (vi) contain a representation that the stockholder submitting the notice intends to 

continue ownership of shares of the voting stock through the date of the annual meeting, 

and (vii) set forth any material interest of the stockholder in the matter identified in (iii) 

above. The Corporation may require any stockholder submitting such notice to furnish 

such other information as may reasonably be required by the Corporation to determine the 

eligibility of stockholders to give a written notice pursuant to this Section 3.6.

(e) At a special meeting, no business shall be transacted and no action shall be 

taken other than as stated in the notice of the meeting; provided that nothing herein shall 

prohibit the Board of Directors from submitting other matters to the stockholders at a 

Stockholder Requested Special Meeting.

(f) To the extent authorized by the Board of Directors with respect to any 

meeting, which may be held at a physical location or in a fully virtual environment, 

stockholders may participate in such a meeting by use of any means of communication by 

which all stockholders participating may simultaneously hear each other during the 

meeting including, without limitation, by use of internet accessible electronic meeting 

facilities. A stockholder participating in a stockholders’ meeting by such means is deemed 

to be present in person at the meeting.

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Section 3.7 Voting.

(a) Except as otherwise provided in Section 8.1(c) of these Bylaws, each 

stockholder shall have one vote for every share of stock entitled to vote which is 

registered in his or her name on the record date for the meeting.

(b) Subject to the determination of the Board of Directors of the Corporation to 

authorize action by written consent under Section 3(b) of the Common Stock Certificate of 

Designation, votes shall be cast in person or by proxy at annual or special meetings of the 

holders of the shares of voting stock entitled to vote. All voting, including the election of 

directors, may be by a voice vote; provided, however, that upon demand by a holder of 

voting stock entitled to vote or his or her proxy or in the discretion of the chair of the 

meeting, a vote shall be taken by ballots, each of which shall state the name of the 

stockholder or proxy voting and such other information as may be required under the rules 

of conduct established for the meeting.

(c) The Corporation shall appoint one or more inspectors to oversee, determine 

and certify attendance and results of any voting at the meeting and make a written report 

of the inspector’s determinations. Each inspector, before entering upon the discharge of 

his duties, shall take and sign an oath faithfully to execute the duties of inspector with 

strict impartiality and according to the best of his or her ability. The inspectors may appoint 

or retain other persons or entities to assist the inspectors in the performance of their 

duties.

(d) All elections for a seat on the Board of Directors shall be determined as 

provided by Section 4.5 of these Bylaws, and on all other matters, action shall be 

approved if the votes cast favoring the action exceed the votes cast opposing the action, 

unless a greater vote is prescribed by the Board of Directors or other person proposing 

the matter or otherwise required by these Bylaws.

(e) An abstention or an election by a stockholder not to vote on an action 

because of failure to receive voting instructions from the beneficial owner of the shares 

shall not be considered a vote cast.

(f) Stockholders shall not vote their shares cumulatively.

Section 3.8 Voting Entitlement of Shares.

(a) Shares standing in the name of another corporation may be voted by such 

officer, agent or proxy as the bylaws of such corporation may prescribe, or, in the absence 

of such provision, as the board of directors of such corporation may determine.

(b) Shares standing in the name of a partnership may be voted by any partner. 

Shares standing in the name of a limited liability company may be voted as the articles of 

organization or an operating agreement may prescribe, or in the absence of any such 

provision as the managers, or if there are no managers, the members of the limited liability 

company may determine.

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(c) Shares held by two or more persons as joint tenants or tenants in common 

or tenants by the entirety may be voted by any of such persons. If more than one of such 

tenants vote such shares, the vote shall be divided among them in proportion to the 

number of such tenants voting.

(d) Shares held by an administrator, executor, guardian, committee or curator 

representing the holder of voting stock may be voted by such person without a transfer of 

such shares into such person’s name. Shares standing in the name of a trustee may be 

voted by the trustee, but no trustee shall be entitled to vote shares held by him or her 

without a transfer of such shares into the trustee’s name.

(e) Shares standing in the name of a receiver or a trustee in proceedings under 

the applicable bankruptcy laws may be voted by such person. Shares held by or under the 

control of a receiver or a trustee in proceedings under the applicable bankruptcy laws may 

be voted by such person without the transfer thereof into his or her name if authority to do 

so is contained in an order of the court by which such person was appointed.

(f) Nothing herein contained shall prevent trustees or other fiduciaries holding 

shares registered in the name of a nominee from causing such shares to be voted by such 

nominee as the trustee or other fiduciary may direct. Such nominee may vote shares as 

directed by a trustee or other fiduciary without the necessity of transferring the shares to 

the name of the trustee or other fiduciary.

(g) When shares are held by more than one fiduciary, the shares shall be voted 

as determined by a majority of such fiduciaries, except that: (i) if they are equally divided 

as to a vote, the vote of shares shall be divided equally and (ii) if only one of such 

fiduciaries is present in person or by proxy at a meeting, such fiduciary shall be entitled to 

vote all the shares.

(h) A holder of voting stock whose shares are pledged shall be entitled to vote 

such shares until the shares have been transferred into the name of the pledgee, and 

thereafter the pledgee shall be entitled to vote the shares so transferred.

Section 3.9 Proxies.

(a) At any meeting of the stockholders, every holder of voting stock entitled to 

vote may vote in person or by proxy. A stockholder or the stockholder’s agent or attorneyin-fact may appoint a proxy to vote or otherwise act for the stockholder by signing an 

appointment form or by an electronic transmission. An electronic transmission shall 

contain or be accompanied by information from which one can determine that the 

stockholder, the stockholder’s agent or the stockholder’s attorney-in-fact authorized the 

transmission. Any copy, facsimile telecommunication or other reliable reproduction of the 

writing or transmission created pursuant to this Subsection may be substituted or used in 

lieu of the original writing or transmission for any and all purposes for which the original 

writing or transmission could be used, provided that such copy, facsimile

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telecommunication or other reproduction shall be a complete reproduction of the entire 

original writing or transmission. No proxy shall be voted after eleven months from its date, 

unless a longer period is expressly provided in the appointment form or electronic 

transmission.

(b) An appointment of a proxy is revocable unless the appointment form or 

electronic transmission states that it is irrevocable and the appointment is coupled with an 

interest. An appointment made irrevocable in accordance with the immediately preceding 

sentence is revoked when the interest with which it is coupled is extinguished.

(c) The death or incapacity of the stockholder appointing a proxy does not 

affect the right of the Corporation to accept the proxy’s authority unless notice of the death 

or incapacity is received by the Corporate Secretary or other officer or agent authorized to 

tabulate votes before the proxy exercises his or her authority under the appointment.

(d) Subject to Section 3.8 of these Bylaws and to any express limitation on the 

proxy’s authority stated in the appointment form or electronic transmission, the 

Corporation is entitled to accept the proxy’s vote or other action as that of the stockholder 

making the appointment.

(e). Any fiduciary who is entitled to vote any shares may vote such shares by 

proxy.

Section 3.10 Stockholders’ List.

(a) A complete list of stockholders entitled to vote at any meeting of 

stockholders, showing the address of each such stockholder and the number of shares 

registered in his or her name, shall be open to the examination of any such stockholder, 

for any purpose germane to the meeting, during ordinary business hours for a period of at 

least 10 days prior to the meeting, either at the principal office of the Corporation or at the 

office of its transfer agent.

(b) The stockholders’ list shall also be kept at the place of the meeting during 

the whole time thereof and shall be open to the examination of any such stockholder who 

is present. This list shall presumptively determine the identity of the stockholders entitled 

to vote at the meeting and the number of shares held by each of them.

(c) If the requirements of this Section have not been substantially complied 

with, the meeting shall, on the demand of any stockholder in person or by proxy, be 

adjourned until such requirements are complied with. Refusal or failure to prepare or make 

available the stockholders’ list shall not affect the validity of action taken at the meeting 

prior to the making of any such demand, but any action taken by the stockholders after the 

making of any such demand shall be invalid and of no effect.

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ARTICLE 4 – BOARD OF DIRECTORS

Section 4.1 General Powers. Subject to the limitations of law and regulation, 

the Board of Directors shall determine the general policies that govern the operations of 

the Corporation, and the Corporation shall be under the direction of the Board of Directors.

Section 4.2 Number, Qualification and Term of Office.

(a) The Board of Directors of the Corporation shall consist of 13 persons, or 

such other number as the Director of the Federal Housing Finance Agency determines 

appropriate who shall be elected annually by the stockholders. The Board of Directors 

shall at all times have as members at least one person from the homebuilding industry, at 

least one person from the mortgage lending industry, at least one person from the real 

estate industry, and at least one person from an organization that has represented 

consumer or community interests for not less than two years or one person who has 

demonstrated a career commitment to the provision of housing for low-income 

households.

(b) Each member of the Board of Directors shall be elected for a term ending 

on the date of the next annual meeting of the stockholders.

(c) The Board of Directors shall establish standards and qualifications relating 

to independence from management and may establish other qualifications for service on 

the Board of Directors, including limitations on length of service and age, as required 

under, or consistent with, applicable laws, regulations and stock exchange listing 

standards.

Section 4.3 Nominations.

(a) Only persons who are nominated in accordance with the following 

procedures shall be eligible for election as directors at any annual meeting of 

stockholders. Nominations of persons for election to the Board of Directors of the 

Corporation at any annual meeting of stockholders may be made only by (i) the Board of 

Directors, or (ii) by any stockholder of the Corporation entitled to vote for the election of 

directors at the meeting who complies with the notice procedures set forth in this Section; 

this clause (ii) shall be the exclusive means for a stockholder to make nominations for 

election of directors at any annual meeting of stockholders. (The exclusive procedures for 

stockholders to bring business other than nominations before a stockholders’ meeting are 

set forth in Section 3.6.) Such nominations made by a stockholder entitled to vote in the 

election of directors shall be made pursuant to timely notice in writing to the Corporate 

Secretary at the principal executive office of the Corporation. To be timely, a stockholder’s 

notice shall be received no fewer than 75 days prior to the meeting. In the event that fewer 

than 90 days’ notice or prior public disclosure of the date of the meeting is given or made 

to stockholders, notice by the stockholder, to be timely, must be so received not later than

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the close of business on the 15th day following the day on which such notice of the date of 

the meeting was mailed or such public disclosure was made, whichever first occurs. Such 

stockholder’s notice to the Corporate Secretary shall set forth (a) as to each person who 

the stockholder proposes to nominate for election or reelection as a director, (i) the name, 

age, business address and residential address of the person, (ii) the principal occupation 

or employment of the person, (iii) a description of all arrangements or understandings 

between the stockholder and each nominee and any other person(s) (naming such 

person(s)) pursuant to which arrangements or understandings the nominations(s) are to 

be made by the stockholder and (iv) such other information regarding each nominee 

proposed by such stockholder as is required to be disclosed in solicitations for proxies for 

election of directors pursuant to Section 14(a) of the Exchange Act; and (b) as to the 

stockholder submitting the notice, the notice must (i) be signed and dated by the 

stockholder, (ii) identify the name and record address of the stockholder submitting the 

notice, (iii) be accompanied by documentation to verify the class and number of shares of 

the Corporation that are beneficially owned by the stockholder submitting such notice in 

accordance with the Exchange Act, specifically the Proxy Rules Requirement, (iv) contain 

a representation that the stockholder submitting the notice intends to appear in person or 

by proxy at the annual meeting to make the nomination(s) the stockholder has proposed, 

and (v) contain a representation that the stockholder submitting the notice intends to 

continue ownership of shares of the voting stock through the date of the annual meeting. 

The Corporation may require any proposed nominee to furnish such other information as 

may reasonably be required by the Corporation to determine the eligibility of such 

proposed nominee to serve as director of the Corporation and such nominee’s 

independence. No person shall be eligible for election as a director of the Corporation 

unless nominated in accordance with the procedures set forth in this Section.

(b) The chair of the meeting shall, if the facts warrant, determine that a 

nomination was not made in accordance with the foregoing procedures, and, if the chair 

should so determine, he or she shall so declare to the meeting and the defective 

nomination shall be disregarded.

Section 4.4 Vacancies. Any seat on the Board of Directors that becomes 

vacant after the annual election of the directors may be filled only by the Board of 

Directors, but only for the unexpired portion of the term. If the directors remaining in office 

constitute fewer than six directors, the remaining directors may fill such vacant seats on 

the Board of Directors as may exist by the affirmative vote of a majority of such remaining 

directors.

Section 4.5 Elections.

(a) Each director nominated for a seat on the Board of Directors of the 

Corporation shall be elected only if he or she receives a majority of the votes cast with 

respect to his or her election at the annual meeting of stockholders, provided that if it is 

determined that the number of persons properly nominated to serve as directors of the 

Corporation exceeds the number of directors to be elected (a “contested election”), the

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directors shall be elected by a plurality of the votes of the shares represented at the 

meeting and entitled to vote on the election of directors. A “majority of the votes cast” 

means that the number of votes cast “for” a director must exceed the number of votes cast 

“against” that director.

(b) Following any uncontested election, any incumbent director who was a 

nominee for a seat and who did not receive a majority of the votes cast by the 

stockholders shall promptly tender to the committee responsible for nominating and 

governance matters his or her offer of resignation for consideration by the Board of 

Directors. Within 60 days following certification of the election results, the committee of the 

Board of Directors responsible for nominating and governance matters shall recommend 

to the Board of Directors the action to be taken with respect to such offer of resignation. 

Within 90 days following certification of the election results, the Board of Directors shall 

act on the offered resignation. In determining whether or not to accept the offered 

resignation, the Board of Directors shall consider any recommendation of the committee 

responsible for nominating and governance matters, the factors considered by that 

committee and any additional information and factors that the Board of Directors believes 

to be relevant. No director who submits his or her resignation pursuant to this Section 4.5 

shall participate in the deliberations or decisions of the committee responsible for 

nominating and governance matters or the Board of Directors regarding such director’s 

resignation.

(c) If the submitted resignation is not accepted by the Board of Directors, the 

director shall continue to serve until the next annual meeting and until his or her successor 

is duly elected, or his or her death, resignation, retirement or removal in accordance with 

these Bylaws, applicable law or regulation, whichever event shall first occur. If a director’s 

resignation is accepted by the Board of Directors, or if a nominee for director who is not an 

incumbent director is not elected by the majority of the votes cast by the stockholders, 

then the Board of Directors, in its sole discretion, may fill any resulting vacancy in 

accordance with Section 4.4 of these Bylaws.

Section 4.6 Chair. Each year at the first meeting of the Board of Directors 

following the annual stockholders’ meeting, the Board of Directors shall elect from among 

its members a person to serve as Chair of the Board. The Chair shall be a member of the 

Board of Directors and shall preside at all meetings of the Board of Directors at which he 

or she is present.

Section 4.7 Lead Director. If the Chair is not independent from management 

under standards established by the Board of Directors pursuant to Section 4.2 of these 

Bylaws, those directors who are not employed by the Corporation shall elect from among 

themselves a person who is independent from management to serve as Lead Director. 

That election, if necessary, shall take place each year at the first meeting of the Board of 

Directors following the annual stockholders’ meeting and at any other time that the Board 

of Directors lacks a Lead Director who is independent from management. If the Chair is 

independent from management, the Chair shall serve as Lead Director unless the 

directors who are not employed by the Corporation elect from among themselves another

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director who is independent from management to serve as Lead Director. The Lead 

Director shall preside at all meetings of the directors who are not employees of the 

Corporation and of the directors who are independent from management at which he or 

she is present and shall perform such other duties as may be assigned by those directors.

Section 4.8 Regular Meetings. A regular meeting of the Board of Directors 

shall be held as soon as practicable after adjournment of the annual meeting of 

stockholders at such place as the Board of Directors may designate by resolution and 

without other notice than such resolution. The Board of Directors may provide, by 

resolution, for the date, time and place of additional regular meetings without other notice 

than such resolution.

Section 4.9 Special Meetings.

(a) Special meetings of the Board of Directors may be called by a majority of 

the directors then in office or by the Chair and shall be held on such date, at such time 

and at such place as they or he or she shall fix. Notice of the date, time and place of each 

such special meeting shall be given in accordance with Section 7.1 of these Bylaws to 

each director by (i) written notice given by mail, private courier or in person not less than 

48 hours before the meeting, (ii) oral notice given in person or by telephone not less than 

24 hours before the meeting or (iii) electronic transmission sent not less than 24 hours 

before the meeting. Unless otherwise indicated in the notice thereof, any and all business 

may be transacted at a special meeting.

(b) A director’s attendance at or participation in a meeting waives any required 

notice to him or her of the meeting unless the director at the beginning of the meeting or 

promptly upon arrival objects to holding the meeting or transacting business at the 

meeting and does not thereafter vote for or assent to action taken at the meeting.

Section 4.10 Quorum. At any meeting of the Board of Directors, a quorum shall 

consist of the greater of (i) one-third of the fixed number of directors or the prescribed 

number within a variable range of directors, as applicable, or (ii) a majority of the directors 

then in office. If a quorum shall fail to attend any meeting, a majority of those present may 

adjourn the meeting to another date, time or place, without further notice or waiver thereof. 

Members may not be represented by proxy at any meeting of the Board of Directors.

Section 4.11 Participation in Meetings. Members of the Board of Directors, or 

of any committee thereof, may participate in a meeting of the Board of Directors or of such 

committee by any means of communication by which all members participating in the 

meeting can simultaneously hear each other during the meeting and such participation 

shall constitute presence in person at such meeting.

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Section 4.12 Conduct of Business.

(a). At each meeting of the Board of Directors, the Chair shall preside or, in the 

absence of the Chair, a director selected by the Board of Directors. The Corporate 

Secretary or an Assistant Secretary designated by the Corporate Secretary shall act as 

secretary for the meeting, unless the Chair or director presiding at the meeting appoints 

another individual present at the meeting to act as secretary for the meeting.

(b) At any meeting of the Board of Directors, business shall be transacted in 

such order and manner as the Board of Directors may from time to time determine, and all 

matters shall be determined by the vote of a majority of the directors present at a meeting 

at which a quorum is present, except as otherwise provided in these Bylaws or in the 

Virginia Stock Corporation Act. A director shall not vote by proxy. A director present at a 

meeting is presumed to assent to actions unless the director objects at the beginning of 

the meeting, or promptly upon his or her arrival, to holding the meeting or transacting 

specified business at the meeting or the director votes against or abstains from the action 

and such objection, dissent or abstention is entered into the minutes of the meeting.

(c) Action may be taken by the Board of Directors without a meeting if each 

director signs a consent describing the action to be taken and delivers it to the 

Corporation. A director’s consent may be withdrawn by a revocation signed by the director 

and delivered to the Corporation prior to delivery to the Corporation of unrevoked written 

consents signed by all the directors. Such written consent and the signing thereof may be 

accomplished by one or more electronic transmissions.

(d) Action taken under the preceding paragraph shall be effective when the last 

director signs the consent unless the consent specifies a different effective date, in which 

event such action shall be effective as of the date specified therein, provided that the 

consent contains the date of execution of each director.

(e) Any director may provide that a consent to action shall be effective at a 

future time, including the time when an event occurs, but such future time shall not be 

more than 60 days after such provision is made. Any such consent shall be deemed to 

have been made for purposes of this subsection at the specified future time, provided that 

the director did not revoke the consent prior to such future time. Any such consent may be 

revoked, in the manner provided in subsection (c), prior to its becoming effective.

(f) A consent signed under this Section shall have the effect of action taken at 

a meeting of the Board of Directors and may be described as such in any document.

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Section 4.13 Reimbursement and Compensation of Directors. Pursuant to 

resolution of the Board of Directors, directors, as such, may receive fixed fees and other 

compensation for their services as directors, including, without limitation, their services as 

members of committees of the Board of Directors and may receive reimbursement of 

expenses incurred in respect of rendering such services; except that any member of the 

Board of Directors who is a full-time officer or employee of the federal government or fulltime officer or employee of the Corporation shall not receive compensation for services as 

a member of the Board of Directors or as a member of any committee of the Board of 

Directors.

Section 4.14 Committees of the Board of Directors.

(a) The Board of Directors may, from time to time, designate committees of the 

Board of Directors (and subcommittees of those committees), with such delegable powers 

and duties as it thereby confers, to serve at the pleasure of the Board of Directors and 

shall, for those committees and any others provided for herein, elect at least two directors 

to serve as the members. Any committee or subcommittee so designated may exercise 

the power and authority of the Board of Directors to the extent any resolution of the Board 

of Directors shall so provide, except that a committee or subcommittee may not: (i) 

approve or recommend to stockholders action that these Bylaws require be approved by 

stockholders; (ii) fill vacancies on the Board of Directors or on any of its committees; (iii) 

adopt, amend or repeal these Bylaws; (iv) approve a plan of merger not requiring 

stockholder approval; (v) authorize or approve a distribution, except according to a 

general formula or method prescribed by the Board of Directors; or (vi) authorize or 

approve the issuance or sale or contract for sale of shares, or determine the designation 

and rights, preferences and limitations of a class or series of shares, except that the Board 

of Directors may authorize a committee or the Chair to do so subject to such limits, if any, 

as may be prescribed by the Board of Directors.

(b) Unless otherwise provided by Board of Directors or committee or 

subcommittee resolution, the provisions of these Bylaws on date, time and place of, and 

notice required for, meetings of the Board of Directors shall govern committees of the 

Board of Directors (and their subcommittees). A majority of directors then appointed as 

members of a committee or a subcommittee shall constitute a quorum and all matters 

shall be determined by a majority vote of the members present at a meeting at which a 

quorum is present. Action may be taken by a committee (or a subcommittee) without a 

meeting if each member signs a consent describing the action to be taken and delivers it 

to the Corporation. A member’s consent may be withdrawn by a revocation signed by the 

member and delivered to the Corporation prior to delivery to the Corporation of unrevoked 

written consents signed by all the members. Such written consent and the signing thereof 

may be accomplished by one or more electronic transmissions. All minutes of committee 

or subcommittee meetings and unanimous consents of action taken by a committee or a 

subcommittee without a meeting shall also be submitted to the Board of Directors.

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(c) The Board of Directors shall designate committees responsible for 

overseeing the Corporation’s financial statements and relationship with its independent 

auditor, executive compensation matters and governance and nominating matters. The 

membership of each of those committees shall consist solely of directors who are 

independent from management under the standards established pursuant to Section 4.2 

of these Bylaws and shall comply with applicable laws, regulations and listing standards.

Section 4.15 Resignation. Any director may resign at any time by delivering a 

written resignation to the Board of Directors, the Chair or the Corporate Secretary. A 

resignation shall be effective upon delivery unless the notice specifies a later effective 

date. If a resignation is made effective at a later date, the Board of Directors may fill the 

pending vacancy before the effective date if the successor does not take office until the 

effective date.

Section 4.16 Removal of Directors. At a Stockholder Requested Special 

Meeting called expressly for that purpose, any director may be removed, but only with 

cause, by a vote of the holders of a majority of the voting stock then entitled to vote at an 

election of directors.

Section 4.17 Termination of Voluntary Registration of Common Stock.

The Corporation shall take no action to terminate the registration of the Corporation’s 

common stock under Section 12(g) of the Exchange Act, unless such action has been 

approved by unanimous action of all members of the Board of Directors then in office.

ARTICLE 5 – OFFICERS

Section 5.1 Officers of the Corporation. There shall be a Chief Executive 

Officer of the Corporation and a General Auditor. In the event of a vacancy in either office, 

such vacancy shall be addressed by resolution by the Board of Directors or an appropriate 

committee thereof. Other officers of the Corporation may include a President, a Chief 

Operating Officer, a Chief Compliance Officer, a Chief Risk Officer, one or more Vice 

Presidents (any one or more of whom may be designated Executive Vice President or 

Senior Vice President and may be given other descriptive titles), a Corporate Secretary 

and all other officers or assistant officers deemed necessary and desirable for the conduct 

of the Corporation’s business. Any of the above offices may be held by the same person, 

except that the office of the Corporate Secretary may not be held by the same person that 

holds the office of Chief Executive Officer, President, Chief Operating Officer or General 

Auditor.

Section 5.2 Appointment and Term.

(a) The Board of Directors shall elect the Chief Executive Officer.

(b) The Audit Committee of the Board of Directors shall elect the General 

Auditor.

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(c) Except as otherwise determined by the Board of Directors or provided 

herein, the Chief Executive Officer shall appoint all additional officers at the Executive Vice 

President and Senior Vice President level or above.

(d) Except as otherwise determined by the Board of Directors or provided 

herein, the Chief Executive Officer or his or her designee(s) (each individually an 

“Appointing Officer” and collectively the “Appointing Officers”) shall appoint all officers at 

the Vice President level and below, other than those identified in Sections 5.2 (a), (b) and 

(c).

(e) Except as provided herein, the appointment of a President and/or Chief 

Operating Officer, if one or both of such positions are to be filled, shall be subject to prior 

review by the Board of Directors.

(f) Any appointment by an Appointing Officer under this section is subject to 

the legal, regulatory or supervisory limitations, requirements and approvals that apply to 

appointments by the Board of Directors. Each officer elected by the Board of Directors or 

appointed by an Appointing Officer shall hold office until his or her successor is elected or 

appointed and qualified or until his or her death, resignation or removal as provided in this 

Article 5. Election or appointment of an officer shall not, in and of itself, create any contract 

rights in the officer against the Corporation.

Section 5.3 Removal, Resignation, Vacancy.

(a) Any officer may be removed, with or without cause, by a vote of the Board 

of Directors. The General Auditor may be removed, with or without cause, by a vote of the 

Audit Committee. Except as otherwise determined by these Bylaws or the Board of 

Directors, an Appointing Officer may remove, with or without cause, any officer he or she 

may appoint.

(b) Any officer may resign at any time by delivering a notice of resignation to 

the Corporation. A resignation shall be effective upon delivery unless the notice specifies a 

later effective time. If a resignation is made effective at a later time, the Board of Directors 

or the appropriate Appointing Officer may fill the pending vacancy before the effective time 

if the successor does not take office until the effective time. A vacancy in any office shall 

be filled in the manner prescribed in these Bylaws for election or appointment to such 

office.

Section 5.4 Compensation. The compensation of all officers of the Corporation 

shall be fixed by or under the authority of the Board of Directors. No officer shall be 

prevented from receiving such compensation by reason of the fact that such officer is also 

a director of the Corporation.

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Section 5.5 Duties. The officers of the Corporation shall have such powers and 

duties as are provided for in these Bylaws as well as such other authority as provided by 

the Board of Directors or, in the case of the officers other than the Chief Executive Officer, 

by the appropriate Appointing Officer.

Section 5.6 Chief Executive Officer. The Chief Executive Officer of the 

Corporation shall be primarily responsible for the implementation of the policies, orders 

and resolutions of the Board of Directors. Subject to the direction of the Board of 

Directors, he or she shall have general charge of and responsibility for supervision of the 

business and affairs of the Corporation. The Chief Executive Officer may sign and execute 

in the name of the Corporation all certificates, contracts and instruments. The Chief 

Executive Officer may vote stock in other corporations, in person or by proxy, and shall 

perform such other duties of management as may be commonly incident to the office of 

chief executive or as may be prescribed by resolution or as otherwise may be assigned to 

the Chief Executive Officer by the Board of Directors.

Section 5.7 President. The President shall perform such duties as from time to 

time may be assigned by the Board of Directors or the Chief Executive Officer.

Section 5.8 Chief Operating Officer. The Chief Operating Officer shall perform 

such duties as from time to time may be assigned by the Board of Directors or the Chief 

Executive Officer.

Section 5.9 General Auditor. The General Auditor shall report to, and be hired, 

supervised and terminated, if deemed appropriate, by the Audit Committee of the Board of 

Directors. The General Auditor shall be responsible for examining and evaluating the 

adequacy and effectiveness of the Corporation’s system of internal controls. The General 

Auditor shall perform such other duties as from time to time may be assigned by the Audit 

Committee of the Board of Directors.

Section 5.10 Vice Presidents. The Corporation shall have one or more Vice 

Presidents, which may include Executive Vice Presidents or Senior Vice Presidents, 

elected or appointed as herein provided. Each such Vice President shall have such duties 

as from time to time may be assigned to him or her by the Board of Directors, the 

appropriate Appointing Officer or the supervising officer to whom a Vice President reports 

directly or that are commonly incident to such Vice President’s office.

Section 5.11 Corporate Secretary. The Corporate Secretary shall keep the 

minutes of the meetings of the stockholders and of the Board of Directors and of 

committees of the Board of Directors and their subcommittees in books provided for that 

purpose; shall see that all notices of such meetings are duly given in accordance with the 

provisions of these Bylaws; may sign certificates of stock of the Corporation with the Chief 

Executive Officer; shall be custodian of the corporate seal; shall see that the corporate 

seal is affixed to all documents as appropriate; shall certify all documents pertaining to 

actions of the stockholders and the Board of Directors and any of its committees (and their 

subcommittees) and all other corporate documents and, in general, shall perform all duties

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and have all powers as may be commonly incident to the office of a secretary of a 

corporation, and such other duties as from time to time may be assigned to the Corporate 

Secretary by the Board of Directors or the Chief Executive Officer. The Corporate 

Secretary may appoint such Assistant Secretaries as he or she deems appropriate. The 

duties of the Corporate Secretary may be performed by one or more Assistant 

Secretaries.

Section 5.12 Delegation of Authority. Subject to the control of the Board of 

Directors, the functions delegated to the holder of a particular office pursuant to these 

Bylaws (the “Officer”) shall be performed by such holder, or under his or her direction, by 

such individuals as may from time to time be delegated authority to perform such functions 

by the Officer. A person to whom a function is delegated by the Board of Directors may 

further delegate that function to another person under his or her direction to the extent that 

such person is permitted to do so by the original delegation to him or her by the Board of 

Directors.

ARTICLE 6 – INSPECTION OF RECORDS

Section 6.1 Inspection of Records by Stockholders.

(a) The Corporation’s Bylaws and all amendments thereto, all Board of 

Directors resolutions creating one or more classes or series of shares and minutes of all 

stockholders’ meetings for the then most recent three years, all written communications to 

stockholders generally within the past three years (including all financial statements 

furnished for the past three years) and the names and business addresses of its current 

directors and officers shall be open to inspection at the Corporation’s principal office 

during its regular business hours upon written request therefor, received by the 

Corporation at least 10 business days prior to the date such inspection is requested, from 

any person who is a stockholder.

(b) Excerpts from the minutes of any meeting of the Board of Directors, records 

of any action of a committee of the Board of Directors (or a subcommittee of a committee) 

while acting in place of the Board of Directors on behalf of the Corporation, minutes of any 

meeting of the stockholders, and records of action taken by the Board of Directors without 

a meeting, to the extent not subject to inspection under Subsection (a), accounting 

records of the Corporation and the record of stockholders shall be open to inspection at a 

reasonable location specified by the Corporation during its regular business hours upon 

written request therefor, received by the Corporation at least 10 business days prior to the 

date such inspection is requested, provided that the request is made by a stockholder who 

has been a stockholder of record for at least six months immediately preceding such 

request or is the holder of record of at least five percent of all of the Corporation’s 

outstanding shares, and provided further that (i) such request is made in good faith and for 

a proper purpose, (ii) such request describes with reasonable particularity the purpose of 

such request and the records to be inspected, and (iii) the records requested are directly 

connected with his or her purpose. The stockholder’s written request shall be 

accompanied by (i) documentation to verify the class and number of shares of the

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Corporation that are beneficially owned by the stockholder in accordance with the Proxy 

Rules Requirements and (ii) proof of the stockholder’s ownership when making a request 

under this Subsection (b).

(c) Any inspection made pursuant to this Section may be made in person or by 

an agent or attorney and shall include the right to make copies, including copies through 

an electronic transmission if available and so requested by the stockholder. A request for 

any such inspection shall be served upon the Chief Executive Officer or the Corporate 

Secretary. This right of inspection is in addition to the stockholders’ right to inspect the 

stockholders’ list as provided in Section 3.10 of these Bylaws.

(d) For purposes of this Section, stockholder includes a beneficial owner whose 

shares are held in a voting trust or by a nominee on the stockholder’s behalf.

Section 6.2 Inspection of Records by Directors. A director of the 

Corporation is entitled to inspect and copy the books, records and documents of the 

Corporation at any reasonable time to the extent reasonably related to the performance of 

the director’s duties as a director, including duties as a member of a committee or a 

subcommittee, but not for any other purpose or in any manner that would violate any duty 

to the Corporation.

ARTICLE 7 – NOTICES

Section 7.1 Notices.

(a) Except as otherwise specifically provided in these Bylaws, all notices 

required to be given to any stockholder, director, officer, employee or agent shall be in 

writing, in the English language (unless otherwise agreed by the sender and the recipient) 

and may in every instance be effectively given by hand delivery; by mail or commercial 

courier; or by electronic transmission. Where these Bylaws expressly permit oral notice, 

such notice may be communicated in person, by telephone, voice mail or by other 

electronic means. If these forms of personal notice are impracticable, notice may be 

communicated by a newspaper of general circulation in the area where the notice is 

intended to be given or by radio, television or other form of public communication in the 

area where notice is intended to be given. In addition to the manner in which notices may 

be given under these Bylaws, notices may also be given as set forth in the Common Stock 

Certificate of Designation.

(b) Without limiting the manner by which notice otherwise may be given 

effectively to stockholders or directors, any notice to stockholders or directors given by the 

Corporation under these Bylaws shall be effective if given by a form of electronic 

transmission consented to by the stockholder or the director to whom notice is given, 

provided that it shall not be necessary to obtain consent to send notices of meetings of 

directors to directors by electronic transmission except to the extent required under 

Section 3.3(c)(y) of these Bylaws. In the case of stockholders’ meeting notices given to 

employee stockholders where such employees have regular access to electronic mail

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delivery in the course of their employment, consent to receipt of such notices by electronic 

transmission to the employee’s employment related e-mail address shall be implied unless 

and until the employee specifies a different address to which notices should be 

electronically transmitted or requests delivery of notice in print.

(c) Any consent to receive notices by electronic transmission shall be 

revocable by the stockholder or director by written notice to the Corporation. Any such 

consent shall be deemed revoked if (i) the Corporation is unable to deliver by electronic 

transmission two consecutive notices given by the Corporation in accordance with such 

consent and (ii) such inability becomes known to the Corporate Secretary or an Assistant 

Secretary of the Corporation or to the transfer agent or other person responsible for the 

giving of notice; provided however, that inadvertent failure to treat such inability as a 

revocation shall not invalidate any meeting or other action.

(d) Any such notice shall be addressed to such stockholder, director, officer, 

employee or agent at his or her last known address as the same appears on the books of 

the Corporation, or in the case of a notice given by electronic transmission, shall be sent 

to the address at which the stockholder or director has consented to receive notice or, in 

the case of notices of directors’ meetings delivered by electronic transmission, sent to an 

information processing system that the director has designated or uses for the purpose of 

receiving electronic transmissions.

(e) Notice to a stockholder, if given by mail or physical delivery, is effective (i) 

upon deposit in the United States mail or (ii) when the physical delivery is actually 

received or left at the stockholder’s address of record. Notice to persons other than 

stockholders, if given by physical delivery or mail, is effective at the earliest of the 

following (i) when it is actually received; (ii) five days after its deposit in the United States 

mail; (iii) on the date shown on the return receipt if sent by registered or certified mail, 

return receipt requested, and the receipt is signed by the addressee; (iv) in the case of 

notice to a director, when it is left at the director’s residence or usual place of business; or 

(v) in the case of notice to the Corporation, when it is left at the Corporation’s principal 

place of business or at the Corporation’s registered office when left with the Corporation’s 

registered agent.

(f) Oral notice is effective when communicated.

(g) Notice given by electronic transmission to a stockholder, director or other 

person, who has consented to receive notices by such means, or whose consent is not 

required under Subsection (b) of this Section, is effective when received. An electronic 

transmission is received when (i) it enters an information processing system that the 

recipient has designated or uses for the purpose of receiving electronic transmissions or 

information of the type sent, and from which the recipient is able to retrieve the electronic 

transmission and (ii) it is in a form capable of being processed by that system. An 

electronic transmission is received even if no individual is aware of its receipt.

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(h) The Corporation shall be deemed to have delivered notice of an annual or 

special meeting of stockholders who share a common address as shown on the 

Corporation’s current record of stockholders if (i) the Corporation delivers one meeting 

notice to the common address; (ii) the Corporation addresses the meeting notice (or a 

proxy statement, annual report, or notice of Internet availability of proxy materials 

containing such meeting notice)(collectively, the “Meeting Notice”) to those stockholders 

sharing a common address either as a group (for example, “Jane Doe and Household” or 

“The Smith Family”), to each of them individually (for example, “Jane Doe, John Doe and 

Richard Doe”) or to the stockholders in a form to which each of those stockholders has 

consented in writing; (iii) each of those stockholders consents, including any implied 

consent pursuant to Virginia Stock Corporation Act § 13.1-610.1(B), in accordance with 

procedures required by Rule 14a-3(e) of Regulation 14A (Solicitation of Proxies) under the 

Exchange Act of 1934, to the delivery of a single Meeting Notice to the stockholders’ 

common address; (iv) the Corporation delivers a separate proxy card for each stockholder 

at the common address; and (v) the Corporation includes in the Meeting Notice an 

undertaking to deliver promptly, upon written or oral request, a separate copy of the 

Meeting Notice to a stockholder at a common address to which a single copy of the 

Meeting Notice was delivered. If a stockholder, orally or in writing revokes a consent to 

delivery of one Meeting Notice to a common address, the Corporation shall begin 

providing individual notices to the revoking stockholder no later than 30 days after the 

Corporation receives revocation of the stockholder’s consent.

Section 7.2 Written Waivers. A written waiver of any notice, signed by a 

stockholder, director, officer, employee or agent, whether before or after the time of the 

event for which notice is to be given, shall be deemed equivalent to the notice required to 

be given to such stockholder, director, officer, employee or agent. Neither the business nor 

the purpose of any meeting need be specified in such a waiver.

ARTICLE 8 – INDEMNIFICATION AND LIMITATION OF LIABILITY

Section 8.1 Indemnification.

(a) Subject to the conditions set forth in Subsection (b) of this Section, each 

person who was or is made a party or is threatened to be made a party to any action, suit 

or proceeding, whether civil, criminal, administrative, arbitrative or investigative and 

whether formal or informal, including a derivative action or action brought by the 

Corporation (hereinafter, a “proceeding”), by reason of the fact that he or she is or was a 

director, officer or employee of the Corporation or is or was serving at the request of the 

Corporation as a director, officer, manager, partner, trustee, fiduciary, employee or agent 

of another corporation, limited liability company, partnership, joint venture, trust or other 

entity, including service with respect to an employee benefit plan (hereinafter, an 

“indemnitee”), shall be indemnified and held harmless by the Corporation against all 

liability (including the obligation to pay a judgment, settlement, penalty or fine, including 

any excise tax assessed with respect to an employee benefit plan) and expense (including 

attorneys’ fees) reasonably incurred or suffered by such indemnitee in connection 

therewith, except such liabilities and expenses as are incurred because of the 

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indemnitee’s willful misconduct or knowing violation of criminal law or of any federal or 

state securities law, including, without limitation, any unlawful insider trading or the 

manipulation of the market for any security; provided, however, that the Corporation may 

not indemnify an indemnitee in connection with any proceeding charging improper 

personal benefit to the indemnitee, whether or not involving action in his or her official 

capacity, to the extent the indemnitee was adjudged liable on the basis that personal 

benefit was improperly received by the indemnitee. Such indemnification shall continue as 

to an indemnitee who has ceased to be a director, officer or employee and shall inure to 

the benefit of the indemnitee’s heirs, executors and administrators.

(b) Indemnification shall be made by the Corporation only as authorized in the 

specific case after a determination has been made as provided in Subsection (c) of this 

Section that the indemnitee met the relevant standard of conduct set forth in Subsection

(a) of this Section. The termination of a proceeding by judgment, order, settlement or 

conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, 

determinative that the indemnitee did not meet the standard of conduct set forth in 

Subsection (a) of this Section.

(c) The determination of whether the indemnitee met the standard of conduct 

set forth in Subsection (a) of this Section shall be made: (i) by the Board of Directors by a 

majority vote of a quorum consisting of directors not at the time parties to the proceeding; 

(ii) by a majority vote of a committee duly designated by the Board of Directors (in which 

designation directors who are parties may participate), consisting solely of two or more 

directors not at the time parties to the proceeding; (iii) by special legal counsel (1) selected 

by the Board of Directors or its committee in a manner prescribed in Subsection (c)(i) or 

(c)(ii) hereof, or (2) if a quorum of the Board of Directors cannot be obtained under 

Subsection (c)(i) hereof and a committee cannot be designated under Subsection (c)(ii) 

hereof, selected by a majority vote of the full Board of Directors (in which selection 

directors who are parties may participate); or (iv) by the stockholders, provided, however, 

that shares owned by or voted under the control of directors who are at the time parties to 

the proceeding may not be voted on the determination.

(d) Authorization of indemnification and evaluation as to reasonableness of 

expenses shall be made in the same manner as the determination that indemnification is 

permissible, as provided in Subsection (c) of this Section, provided however, that, if the 

determination is made by special legal counsel, authorization of indemnification and 

evaluation as to the reasonableness of expenses shall be made by those entitled under 

Subsection (c)(iii) of this Section to select such special legal counsel.

(e) Notwithstanding any other provision of this Section, the Corporation shall 

indemnify a director or indemnitee who entirely prevails, on the merits or otherwise, in the 

defense of any proceeding to which the indemnitee was a party because he or she is or 

was director or officer or employee of the Corporation or was serving at the request of the 

Corporation as a director, officer, manager, partner, trustee, fiduciary, employee or agent 

of another corporation, limited liability company, partnership, joint venture, trust or other 

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entity, including service with respect to an employee benefit plan, against reasonable 

expenses (including attorneys’ fees) incurred by the indemnitee in connection with the 

proceeding.

(f) Except as provided in Section 8.2 of these Bylaws with respect to 

proceedings to enforce rights to indemnification, the Corporation shall indemnify an 

indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee 

only if such proceeding (or part thereof) was authorized by the Board of Directors.

(g) The rights to indemnification and liability limitation conferred in this Article 8 

shall be deemed a contract right between an individual indemnitee and the Corporation, 

and any subsequent repeal or modification of these Bylaws shall not diminish the 

indemnitee’s rights under this Article 8 with respect to any act or omission occurring before 

such amendment.

(h) The indemnitee shall have the right to be paid by the Corporation the 

expenses reasonably incurred or suffered in defending any proceeding in advance of its 

final disposition (hereinafter, an “advancement of expenses”); provided, however, that an 

advancement of expenses shall be made (i) only upon delivery to the Corporation of a 

written statement by the indemnitee of the indemnitee’s good faith belief that he or she 

has met the standard of conduct set forth in Subsection (a) of this Section, and (ii) only if 

the indemnitee furnishes to the Corporation a written undertaking, executed by or on 

behalf of such indemnitee, to repay any funds advanced if the indemnitee is not entitled to 

mandatory indemnification under Subsection (e) of this Section and it is ultimately 

determined that such indemnitee is not entitled to indemnification. The undertaking 

required by provision (h)(ii) of this Subsection shall be an unlimited general obligation of 

the indemnitee but need not be secured and shall be accepted without reference to the 

financial ability of the indemnitee to make repayment.

(i) The Corporation may, by action of its Board of Directors, provide 

indemnification to agents of the Corporation with the same scope and effect as the 

indemnification of indemnitees as provided in this Article 8.

(j) The Chief Executive Officer is authorized to enter into contracts of 

indemnification with each indemnitee of the Corporation with respect to the indemnification 

provided in this Article 8 and renegotiate such contracts as necessary to reflect changing 

laws and business circumstances.

Section 8.2 Right of Indemnitee to Bring Suit. If a claim under Section 8.1 of 

these Bylaws is not paid in full by the Corporation within 90 days after a written claim has 

been received by the Corporation, except in the case of a claim for an advancement of 

expenses, in which case the applicable period shall be 20 days, the indemnitee may at 

any time thereafter apply to either the United States District Court for the district within 

which the Corporation’s principal office is located or to the court where the proceeding is 

pending, if any, for an order directing the Corporation to make an advancement of

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expenses or to provide indemnification. The court shall order the Corporation to make an 

advancement of expenses or to provide indemnification, as the case may be, if it 

determines that the indemnitee is entitled under these Bylaws to such an advancement of 

expenses or indemnification, and in such event shall order the Corporation to pay the 

indemnitee’s reasonable expenses (including attorneys’ fees) to obtain the order. Neither 

the failure of the Corporation (including its Board of Directors, committee, special legal 

counsel or its stockholders) to have made a determination, as provided in Subsection (c) 

of Section 8.1 of these Bylaws, prior to the commencement of such action permitted by 

this Section, that the indemnitee is entitled to receive an advancement of expenses or 

indemnification, nor the determination by the Corporation (including its Board of Directors, 

committee, special legal counsel or its stockholders) that the indemnitee is not entitled to 

an advancement of expenses or indemnification, shall create a presumption to that effect 

or otherwise itself be a defense to that indemnitee’s application for an advancement of 

expenses or indemnification.

Section 8.3 Non-Exclusivity of Rights. The rights to indemnification and to the 

advancement of expenses conferred in these Bylaws shall not be exclusive of any other 

right which any person may have or hereafter acquire under any statute (including the 

Corporation’s enabling legislation), or any agreement, vote of stockholders or 

disinterested directors or otherwise.

Section 8.4 Insurance. The Corporation may purchase and maintain insurance, 

at its expense, on behalf of itself and also on behalf of any individual who is or was a 

director, officer, employee or agent of the Corporation or who, while a director, officer, 

employee or agent of the Corporation, is or was serving at the request of the Corporation 

as a director, officer, manager, partner, trustee, employee, or agent of another corporation, 

limited liability company, partnership, joint venture, trust, employee benefit plan or other 

entity against any expense, liability or loss, asserted against or incurred or suffered by him 

or her in that capacity or arising from his or her status as a director, officer, manager, 

employee or agent, whether or not the Corporation would have the power to indemnify 

such person against such expense, liability or loss under this Article 8.

Section 8.5 Limitation of Liability. No monetary damages or monetary liability 

of any kind may be assessed against an officer or director in any proceeding brought by or 

in the right of the Corporation or brought by or on behalf of the stockholders of the 

Corporation; provided, however, that this elimination of liability shall not be applicable if 

the officer or director engaged in willful misconduct, a transaction from which the director 

or officer derived an improper personal benefit, or a knowing violation of the criminal law 

or of any federal or state securities law, including, without limitation, any claim of unlawful 

insider trading or the manipulation of the market for any security.

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ARTICLE 9 – SEAL

Section 9.1 Corporate Seal. The Board of Directors may adopt a suitable seal, 

containing the name of the Corporation, which seal shall be in the charge of the Corporate 

Secretary.

ARTICLE 10 – FISCAL YEAR

Section 10.1 Fiscal Year. The fiscal year of the Corporation shall be the 

calendar year.

ARTICLE 11 – MISCELLANEOUS

Section 11.1 Time Periods. In applying any provision of these Bylaws which 

requires that an act be done or not be done a specified number of days prior to an event 

or that an act be done during a period of a specified number of days prior to an event, 

calendar days shall be used in making such computations, the day of the doing of the act 

shall be excluded and the day of the event shall be included.

Section 11.2 Severability. If any provision or provisions of these Bylaws shall 

be held invalid or unenforceable for any reason whatsoever, the validity and enforceability 

of the remaining provisions shall not in any way be affected or impaired thereby and, to 

the fullest extent possible, the remaining provisions shall be construed so as to effectuate 

the intent manifested by the invalidated or unenforceable provision(s).

Section 11.3 Corporate Governance Practices and Procedures and 

Governing Law.

(a) The corporate governance practices and procedures of the Corporation 

shall comply with the Corporation’s enabling legislation and other Federal law, rules, and 

regulations, and shall be consistent with the safe and sound operation of the Corporation. 

To the extent not inconsistent with the foregoing, the Corporation shall follow the corporate 

governance practices and procedures of the law of the Commonwealth of Virginia, 

including without limitation the Virginia Stock Corporation Act as the same may be 

amended from time to time. Subject to all of the foregoing, these Bylaws and any rights 

and obligations created by these Bylaws shall be construed in accordance with, and 

governed by, the laws of the United States, using the law of the Commonwealth of Virginia 

as the federal rule of decision in all instances.

(b) Section 1.1, Section 2.1, Section 2.2, Section 2.3, Section 2.4, Section 2.5, 

Section 2.6, Section 2.7, Section 3.2, Section 3.7, Section 4.1, Section 4.2, Section 4.5, 

Section 4.17, Article 8, Section 11.3, Section 11.4, Section 11.6, Article 12 of these 

Bylaws, and any new bylaw which may be adopted from time to time and designated as a 

“Level 1 Provision” in accordance with Article 12 of these Bylaws shall collectively be 

referred to herein as “Level 1 Provisions.” Level 1 Provisions shall be deemed to 

constitute provisions of the Corporation’s “articles of incorporation” for all purposes of

Freddie Mac Bylaws

July 28, 2022

Page 29
the Virginia Stock Corporation Act. Any bylaw that is not a Level 1 Provision and any new 

bylaw that may be adopted from time to time and is not designated as a “Level 1 

Provision” by the Board of Directors shall collectively be referred to herein as “Level 2 

Provisions.”

Section 11.4 Certificates of Designation. The provisions of these Bylaws shall 

supplement the terms of the Common Stock Certificate of Designation and any certificate 

of designation approved by the Board of Directors with respect to any class of the 

Corporation’s preferred stock. In the event of any conflict between the terms of any such 

certificate of designation and these Bylaws, the terms of the certificate of designation shall 

govern.

Section 11.5 Statutory References. Each reference in these Bylaws to a 

particular statute or regulation, or a provision thereof, is a reference to such provision as 

amended or re-enacted or as modified by other statutory provisions from time to time and 

includes subsequent legislation and regulations made under the relevant statute.

Section 11.6 Control Share Acquisitions. Article 14.1 of the Virginia Stock 

Corporation Act shall not apply to acquisitions of shares of the Corporation. This section 

has been included in these Bylaws for the avoidance of doubt as to whether the election of 

Virginia law in Section 11.3 and other sections of these Bylaws for purposes of the 

Corporation’s corporate governance practices and procedures was intended to include 

Article 14.1 of the Virginia Stock Corporation Act.

ARTICLE 12 – AMENDMENTS

Section 12.1 General. Subject to the provisions of this Article 12, Level 1 

Provisions or Level 2 Provisions may be amended, adopted, rescinded or repealed by the 

Board of Directors or the stockholders at any meeting, provided that in the case of such an 

action by the stockholders, notice of the proposed change must be given in the notice of 

the meeting.

Section 12.2 Amendment by the Board of Directors. Any new bylaw adopted 

by the Board of Directors and any Level 1 Provision, may be amended only by the Board 

of Directors pursuant to Section 12.1 of these Bylaws. Upon adopting or amending such 

bylaw, as the case may be, the Board of Directors shall designate such bylaw as a “Level 

1 Provision” for all purposes under these Bylaws. If the Board of Directors does not 

designate a bylaw as a Level 1 Provision or if the Board of Directors is otherwise silent on 

the designation, the bylaw shall be deemed to be a Level 2 Provision.

Freddie Mac Bylaws

July 28, 2022

Page 30
Section 12.3 Amendment by the Stockholders. Notwithstanding any other 

provisions of these Bylaws, or any provisions of law, which might otherwise permit a lesser 

vote or no vote, but in addition to any affirmative vote of the stockholders required by law, 

the Common Stock Certificate of Designation, or these Bylaws, the affirmative vote of the 

holders of at least a majority of all shares of voting stock then outstanding and entitled to 

vote shall be required to amend, adopt, rescind or repeal any Level 2 Provision of these 

Bylaws (the “Proposed Level 2 Provision”); provided, however, that, as determined by the 

Board of Directors, (i) the Proposed Level 2 Provision shall comply with the Corporation’s 

enabling legislation and other Federal law, rules, regulations, regulatory guidance and 

other issuances, (ii) the Proposed Level 2 Provision shall be consistent with the safe and 

sound operation of the Corporation, (iii) the subject matter of the Proposed Level 2 

Provision does not or would not involve the subject matter of any Level 1 Provision, the 

Common Stock Certificate of Designation or any other certificate of designation of the 

Corporation, and (iv) the Proposed Level 2 Provision does not or would not be 

inconsistent with any Level 1 Provision, the Common Stock Certificate of Designation or 

any other certificate of designation of the Corporation. The stockholders may not amend, 

adopt, rescind or repeal any Level 1 Provision unless such action is explicitly authorized 

and referred to the stockholders by the Board of Directors (for the avoidance of doubt, this 

Section 12.3 in no way obligates the Board of Directors to seek stockholder approval for 

any action pursuant to Section 12.2 of these Bylaws) in which case such amendment, 

adoption, rescission, or repeal shall be by the affirmative vote of the holders of at least a 

majority of all shares of the voting stock then outstanding and entitled to vote.

Freddie Mac Bylaws

July 28, 2022

Page 31
Exhibit 10.1

Freddie Mac

PC MASTER TRUST AGREEMENT

THIS PC MASTER TRUST AGREEMENT is entered into as of July 30, 2022, by and among 

Freddie Mac in its corporate capacity as Depositor, Administrator and Guarantor, Freddie Mac in its 

capacity as Trustee, and the Holders of the PCs offered from time to time pursuant to Freddie Mac’s 

Offering Circular referred to herein.

WHEREAS:

(a) Freddie Mac is a corporation duly organized and existing under and by virtue of the Freddie Mac 

Act and has full corporate power and authority to enter into this Agreement and to undertake the 

obligations undertaken by it herein; and

(b) Freddie Mac may from time to time (i) purchase Mortgages, in accordance with the applicable 

provisions of the Freddie Mac Act, (ii) as Depositor, transfer and deposit such Mortgages into various trust 

funds that are established pursuant to this Agreement and that are referred to herein as “PC Pools,” (iii) as 

Administrator, on behalf of the Trustee, create and issue hereunder, on behalf of the related PC Pool, PCs 

representing undivided beneficial ownership interests in the assets of that PC Pool, (iv) as Trustee, act as 

trustee for each such PC Pool, (v) as Guarantor, guarantee the payment of interest and principal for the 

benefit of the Holders of such PCs and (vi) as Administrator, administer the affairs of each such PC Pool.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this 

Agreement, the parties to this Agreement, do hereby declare and establish this Agreement and do hereby 

undertake and otherwise agree as follows with respect to the transfer of the Mortgages to various PC Pools, 

the issuance of the PCs and the establishment of the rights and obligations of the parties.

Definitions

The following terms used in this Agreement have the respective meanings set forth below.

Accrual Period: As to any PC and any Payment Date, (i) the calendar month preceding the month of 

the Payment Date for Gold PCs or (ii) the second calendar month preceding the month of the Payment Date 

for ARM PCs.

Administrator: Freddie Mac, in its corporate capacity, as administrator of the PC Pools created under 

this Agreement.

Agreement: This PC Master Trust Agreement, dated as of July 30, 2022, by and among Freddie Mac 

in its corporate capacity as Depositor, Administrator and Guarantor, Freddie Mac in its capacity as Trustee, 

and the Holders of the various PCs, as originally executed, or as modified, amended or supplemented in 

accordance with the provisions set forth herein. Unless the context requires otherwise, the term 

“Agreement” shall be deemed to include any applicable Pool Supplement entered into pursuant to Section 

1.01 of this Agreement.

ARM: An adjustable rate Mortgage. 

ARM PC: A PC with a Payment Delay of 75 days and which is backed by ARMs. ARM PCs include 

Deferred Interest PCs.

1
Book-Entry Rules: The provisions from time to time in effect, currently contained in Title 12, Part 

1249 of the Code of Federal Regulations, setting forth the terms and conditions under which Freddie Mac 

may issue securities on the book-entry system of the Federal Reserve Banks and authorizing a Federal 

Reserve Bank to act as its agent in connection with such securities.

Business Day: A day other than (i) a Saturday or Sunday and (ii) a day when the Federal Reserve 

Bank of New York (or other agent acting as Freddie Mac’s fiscal agent) is closed or, as to any Holder, a 

day when the Federal Reserve Bank that maintains the Holder’s account is closed.

Conventional Mortgage: A Mortgage that is not guaranteed or insured by the United States or any 

agency or instrumentality of the United States.

Custodial Account: As defined in Section 3.05(e) of this Agreement.

Deferred Interest: The amount by which the interest due on a Mortgage exceeds the borrower’s 

monthly payment, which amount is added to the unpaid principal balance of the Mortgage.

Deferred Interest PC: A PC representing an undivided beneficial ownership interest in a PC Pool 

that includes Mortgages providing for negative amortization.

Depositor: Freddie Mac, in its corporate capacity, as depositor of Mortgages into the PC Pools 

created under this Agreement.

Eligible Investments: Any one or more of the following obligations, securities or holdings maturing 

on or before the Payment Date applicable to the funds so invested:

(i) obligations of, or obligations guaranteed as to the full and timely payment of principal and 

interest by, the United States; 

(ii) obligations of any agency or instrumentality of the United States (other than Freddie Mac, 

except as provided in subsection (viii) below) or taxable debt obligations of any state or local 

government (or political subdivision thereof) that have a long-term rating or a short-term rating, as 

applicable, from S&P, Moody’s or Fitch in any case in one of its two highest rating categories for 

long-term securities or in its highest ratings category for short-term securities; 

(iii) federal funds (which are typically overnight, unsecured cash loans to depository institutions 

or Federal Home Loan Banks, closely resembling bank-to-bank loans executed in the so-called federal 

funds market), certificates of deposit, time deposits and bankers’ acceptances with a fixed maturity of 

no more than 365 days of any depository institution or trust company, provided that the short-term 

securities of the depository institution or trust company are rated by S&P, Moody’s or Fitch in the 

highest applicable ratings category for short-term securities; 

(iv) commercial paper with a fixed maturity of no more than 270 days, of any corporation that is 

rated by S&P, Moody’s or Fitch in its highest short-term ratings category; 

(v) debt securities that have a long-term rating or a short-term rating, as applicable, from S&P, 

Moody’s or Fitch, in any case in one of its two highest ratings categories for long-term securities or in 

its highest ratings category for short-term securities; 

(vi) money market funds that are registered under the Investment Company Act of 1940, as 

amended, are entitled, pursuant to Rule 2a-7 of the Securities and Exchange Commission, or any 

2
successor to that rule, to hold themselves out to investors as money market funds, and are rated by 

S&P, Moody’s or Fitch in one of its two highest ratings categories for money market funds; 

(vii) asset-backed commercial paper that is rated by S&P, Moody’s or Fitch in its highest shortterm ratings category;

(viii) in the case of funds with respect to PCs issued on or after March 1, 2017, discount notes 

and other short-term debt obligations (in each case, with a stated final maturity, as of the related issue 

date, of one year or less) issued by Freddie Mac;

(ix) repurchase agreements on obligations that are either specified in any of clauses (i), (ii), (iii), 

(iv), (v), (vii) or (viii) above or are mortgage-backed securities insured or guaranteed by an entity that 

is an agency or instrumentality of the United States; provided that the counterparty to the repurchase 

agreement is an entity whose short-term debt securities are rated by S&P, Moody’s or Fitch in its 

highest ratings category for short-term securities; and

(x) any other investment without options that is approved by Freddie Mac and is within the two 

highest ratings categories of the applicable rating agency for long-term securities or the highest ratings 

category of the applicable rating agency for short-term securities.

The rating requirement will be satisfied if the relevant security, issue or fund at the time of purchase 

receives at least the minimum stated rating from at least one of S&P, Moody’s or Fitch. The rating 

requirement will not be satisfied by a rating that is the minimum rating followed by a minus sign or by a 

rating lower than Aa2 from Moody’s. 

Event of Default: As defined in Section 5.01 of this Agreement.

FHA/VA Mortgage: A Mortgage insured by the Federal Housing Administration or by the 

Department of Agriculture Rural Development (formerly the Rural Housing Service) or guaranteed by the 

Department of Veterans Affairs or the Department of Housing and Urban Development.

Final Payment Date: As to any PC, the first day of the latest month in which the related Pool Factor 

will be reduced to zero. The Administrator publishes the Final Payment Date upon formation of the related 

PC Pool.

Fitch: Fitch, Inc., also known as Fitch Ratings, or any successor thereto.

Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporation created pursuant to the 

Freddie Mac Act for the purpose of establishing and supporting a secondary market in residential 

mortgages. Unless the context requires otherwise, the term “Freddie Mac” shall be deemed to refer to 

Freddie Mac acting in one or more of its corporate capacities, as specified or as provided in context, and not 

in its capacity as Trustee.

Freddie Mac Act: Title III of the Emergency Home Finance Act of 1970, as amended, 12 U.S.C. 

§§1451-1459.

Gold PC: A PC with a Payment Delay of 45 days and which is backed by fixed-rate Mortgages.

Guarantor: Freddie Mac, in its corporate capacity, as guarantor of the PCs issued by each PC Pool.

3
Guide: Freddie Mac’s Single-Family Seller/Servicer Guide, as supplemented and amended from time 

to time, in which Freddie Mac sets forth its mortgage purchase standards, credit, appraisal and underwriting 

guidelines and servicing policies.

Holder: With respect to any PC Pool, any entity that appears on the records of a Federal Reserve 

Bank as a holder of the related PCs.

Monthly Reporting Period: The period, which period the Administrator has the right to change as 

provided in Section 3.05(d) of this Agreement, during which servicers report Mortgage payments to the 

Administrator, generally consisting of:

(i) prior to the May 2019 Monthly Reporting Period, in the case of all payments other than full 

prepayments on the Mortgages, the one-month period (A) ending on the 15th of the month preceding 

the related Payment Date for Gold PCs and (B) ending on the 15th of the second month preceding the 

related Payment Date for ARM PCs; 

(ii) commencing with the May 2019 Monthly Reporting Period and thereafter, in the case of all 

payments other than full prepayments on the Mortgages, the one-month period (A) ending on the last 

day of the month preceding the related Payment Date for Gold PCs and (B) ending on the last day of 

the second month preceding the related Payment Date for ARM PCs; and 

(iii) in the case of full prepayments on the Mortgages (including repurchases of the Mortgages 

pursuant to Section 1.02(c) of this Agreement), the calendar month preceding the related Payment Date 

for Gold PCs and the second calendar month preceding the related Payment Date for ARM PCs.

Moody’s: Moody’s Investors Service, Inc., or any successor thereto.

Mortgage: A mortgage loan or a participation interest in a mortgage loan that is secured by a first or 

second lien on a one-to-four family dwelling and that has been purchased by the Depositor and transferred 

by the Depositor to the Trustee for inclusion in the related PC Pool. With respect to each PC Pool, the 

Mortgages to be included therein shall be identified on the books and records of the Depositor and the 

Administrator.

Mortgage Coupon: The per annum fixed or adjustable interest rate of a Mortgage.

MultiLender Swap Program: A program under which Freddie Mac purchases Mortgages from one or 

more sellers in exchange for PCs representing undivided beneficial ownership interests in a PC Pool 

consisting of Mortgages that may or may not be those delivered by the seller(s).

Negative Amortization Factor: With respect to PCs backed by Mortgages providing for negative 

amortization, a rounded (or, prior to the Negative Amortization Factors for the month of August 2016, 

truncated rather than rounded) eight-digit decimal number that reflects the amount of Deferred Interest 

added to the principal balances of the related Mortgages in the preceding month.

Offering Circular: Freddie Mac’s Mortgage Participation Certificates Offering Circular dated June 1, 

2021, as amended and supplemented by any Supplements issued from time to time, or any successor 

thereto, as it may be amended and supplemented from time to time.

Payment Date: The 15th of each month or, if the 15th is not a Business Day, the next Business Day.

Payment Delay: The delay between the first day of the Accrual Period for a PC and the related 

Payment Date.

4
PC: With respect to each PC Pool, a Mortgage Participation Certificate issued pursuant to this 

Agreement, representing a beneficial ownership interest in such PC Pool. The term “PC’’ includes a Gold 

PC or an ARM PC unless the context requires otherwise.

PC Coupon: The per annum fixed or adjustable rate of a PC calculated as described in the Offering 

Circular or the applicable Pool Supplement, computed on the basis of a 360-day year of twelve 30-day 

months.

PC Issue Date: With respect to each PC Pool, the date specified in the related Pool Supplement or, if 

not specified therein, the date on which Freddie Mac issues a PC in exchange for the Mortgages delivered 

by a dealer or other customer.

PC Pool: With respect to each PC, the corpus of the related trust fund created by this Agreement, 

consisting of (i) the related Mortgages and all proceeds thereof, (ii) amounts on deposit in the Custodial 

Account, to the extent allocable to such PC Pool, (iii) the right to receive payments under the related 

guarantee and (iv) any other assets specified in the related Pool Supplement, excluding any investment 

earnings on any of the assets of that PC Pool. With respect to each PC Pool, and unless expressly stated 

otherwise, the provisions of this Agreement will be interpreted as referring only to the Mortgages included 

in that PC Pool, the PCs issued by that PC Pool and the Holders of those PCs.

Person: Any legal person, including any individual, corporation, partnership, limited liability 

company, financial institution, joint venture, association, joint stock company, trust, unincorporated 

organization or governmental unit or political subdivision of any governmental unit. 

Pool Factor: With respect to each PC Pool, a rounded (or, prior to the Pool Factors for the month of 

August 2016, truncated rather than rounded) eight-digit decimal calculated for each month by the 

Administrator which, when multiplied by the original principal balance of the related PCs, will equal their 

remaining principal amount. The Pool Factor for any month reflects the remaining principal amount after 

the payment to be made on the Payment Date in the same month for Gold PCs or in the following month 

for ARM PCs.

Pool Supplement: Any physical or electronic document or record (which may be a supplement to the 

Offering Circular or any other supplemental document prepared by Freddie Mac for the related PCs), 

which, together herewith, evidences the establishment of a PC Pool and modifies, amends or supplements 

the provisions hereof in any respect whatsoever. The Pool Supplement for a particular PC Pool shall be 

binding and effective upon formation of the related PC Pool and issuance of the related PCs, whether or not 

such Pool Supplement is executed, delivered or published by Freddie Mac.

Purchase Documents: The mortgage purchase agreements between Freddie Mac and its Mortgage 

sellers and servicers, which are the contracts that govern the purchase and servicing of Mortgages and 

which include, among other things, the Guide and any negotiated modifications, amendments or 

supplements to the Guide. 

Record Date: As to any Payment Date, the close of business on the last day of (i) the preceding 

month for Gold PCs or (ii) the second preceding month for ARM PCs.

S&P: S&P Global Ratings, or any successor thereto. 

Trustee: Freddie Mac, in its capacity as trustee of each PC Pool formed under this Agreement, and its 

successors and assigns, which will have the trustee responsibilities specified in this Agreement, as amended 

or supplemented from time to time. 

Trustee Event of Default: As defined in Section 6.06 of this Agreement. 

5
ARTICLE I

Conveyance of Mortgages; Creation of PC Pools

Section 1.01. Declaration of Trust; Transfer of Mortgages; Assignment of Principal and 

Interest and Acceptance of Beneficial Interests. (a) The Depositor, by delivering any Mortgages 

pursuant to this Agreement, unconditionally, absolutely and irrevocably hereby transfers, assigns, sets over 

and otherwise conveys to the Trustee, on behalf of the related Holders, all of the Depositor’s right, title and 

interest in and to such Mortgages, including all payments of principal and interest thereon received after the 

month in which the PC Issue Date occurs. Once Mortgages have been identified as being part of a related 

PC Pool for which at least one PC has been issued, they shall remain in that PC Pool unless removed in a 

manner consistent with this Agreement. Concurrently with the Depositor’s transferring, assigning, setting 

over and otherwise conveying the Mortgages to the Trustee for a PC Pool, the Trustee hereby accepts the 

Mortgages so conveyed and acknowledges that it holds the entire corpus of each PC Pool in trust for the 

exclusive benefit of the related Holders and shall deliver to, or on the order of, the Depositor, the PCs 

issued by such PC Pool. The Administrator agrees to administer the related PC Pool and such PCs in 

accordance with the terms of this Agreement. On the related PC Issue Date and upon payment to the 

Depositor for any such PC by a Holder, such Holder shall, by virtue thereof, acknowledge, accept and agree 

to be bound by all of the terms and conditions of this Agreement.

The Trustee shall make an election under Section 860D of the Code as a “real estate mortgage 

investment conduit” (“REMIC”) with respect to beneficial interests in principal and interest payments on 

all or a portion of the assets comprising each PC Pool issued by Freddie Mac on or after July 1, 2018, 

except as indicated in the Offering Circular. With respect to any such REMIC election and the assets 

subject to such REMIC election, the Trustee shall take any action, or cause each PC Pool with beneficial 

interests in principal and interest payments with respect to such PC Pool subject to such REMIC election to 

take any action, necessary or appropriate to establish and maintain the REMIC status of any assets with 

respect to which such REMIC election is made. 

A Pool Supplement shall evidence the establishment of a particular PC Pool and shall relate to 

specific PCs representing the entire beneficial ownership interests in such PC Pool. If for any reason the 

creation of a Pool Supplement is delayed, Freddie Mac shall create one as soon as practicable, and such 

delay shall not affect the validity and existence of the PC Pool or the related PCs. With respect to each PC 

Pool, the collective terms hereof and of the related Pool Supplement shall govern the issuance and 

administration of the PCs related to such PC Pool, and all matters related thereto, and shall have no 

applicability to any other PC Pool or PCs. As applied to each PC Pool, the collective terms hereof and of 

the related Pool Supplement shall constitute an agreement as if the collective terms of those instruments 

were set forth in a single instrument. In the event of a conflict between the terms hereof and the terms of a 

Pool Supplement for a PC Pool, the terms of the Pool Supplement shall control with respect to that PC 

Pool. A Pool Supplement is not considered an amendment to this Agreement requiring approval pursuant 

to Section 7.05.

(b) The Trustee shall assign, to one or more separate trust funds established by the Depositor, 

beneficial interests in principal and interest payments on the Mortgages comprising all or a portion of a 

specified PC Pool, in exchange for beneficial interests in the principal and interest payments on such 

Mortgages represented by the related REMIC regular interests created pursuant to such separate trust funds.

6
Section 1.02. Identity of the Mortgages; Substitution and Repurchase. 

(a) In consideration for the transfer of the related Mortgages by the Depositor to a PC Pool, the 

Depositor (i) shall receive the PCs issued by such PC Pool and (ii) may retain such PCs or transfer them to 

the related Mortgage seller or otherwise, as the Depositor deems appropriate.

(b) After the PC Issue Date but prior to the first Payment Date, the Depositor may, in accordance with 

its customary mortgage purchase and pooling procedures, adjust the amount and identity of the Mortgages 

to be transferred to a PC Pool, the PC Coupon and/or the original unpaid principal balance of the PCs and 

the Mortgages in the PC Pool, provided that any changes to the characteristics of the PCs shall be 

evidenced by an amendment or supplement to the related Pool Supplement.

(c) Except as provided in this Section 1.02 or in Section 1.03, once the Depositor has transferred a 

Mortgage to a particular PC Pool, such Mortgage may not be transferred out of such PC Pool, except (x) if 

a mortgage insurer exercises an option under an insurance contract to purchase such Mortgage or (y) in the 

case of repurchase by the Guarantor, the Administrator or the related Mortgage seller or servicer, under the 

following circumstances:

(i) The Guarantor may repurchase from the related PC Pool a Mortgage in connection with a 

guarantee payment under Section 3.09(a)(ii).

(ii) The Administrator may repurchase from the related PC Pool, or require or permit a 

Mortgage seller or servicer to repurchase, any Mortgage if a repurchase is necessary or advisable (A) 

to maintain servicing of the Mortgage in accordance with the provisions of the Guide, or (B) to 

maintain the status of the PC Pool as a grantor trust for federal income tax purposes or, to the extent 

not inconsistent with this clause (B), to maintain the REMIC status of any assets with respect to which 

a REMIC election is made.

(iii) The Guarantor may repurchase from the related PC Pool, or require or permit a Mortgage 

seller or servicer to repurchase, any Mortgage if (A) such Mortgage is 120 or more days delinquent, or 

(B) the Guarantor determines, on the basis of information from the related borrower or servicer, that 

loss of ownership of the property securing a Mortgage is likely or default is imminent due to borrower 

incapacity, death or hardship or other extraordinary circumstances that make future payments on such 

Mortgage unlikely or impossible.

(iv) The Guarantor may repurchase from the related PC Pool a Mortgage if a bankruptcy court 

approves a plan that materially affects the terms of the Mortgage or authorizes a transfer or substitution 

of the underlying property.

(v) The Administrator may repurchase from the related PC Pool, or require or permit a 

Mortgage seller or servicer to repurchase, any Mortgage or (within six months of the issuance of the 

related PCs) substitute for any Mortgage a Mortgage of comparable type, unpaid principal balance, 

remaining term and yield, if there is (A) a material breach of warranty by the Mortgage seller or 

servicer, (B) a material defect in documentation as to such Mortgage or (C) a failure by a seller or 

servicer to comply with any requirements or terms set forth in the Guide and, if applicable, other 

Purchase Documents.

(vi) The Administrator shall repurchase from the related PC Pool any Mortgage or (within two 

years of the issuance of the related PCs) substitute for any Mortgage a Mortgage of comparable type, 

unpaid principal balance, remaining term and yield, if (A) a court of competent jurisdiction or a federal 

government agency duly authorized to oversee or regulate Freddie Mac’s mortgage purchase business 

determines that Freddie Mac’s purchase of such Mortgage was unauthorized and Freddie Mac 

determines that a cure is not practicable without unreasonable effort or expense or (B) such court or 

government agency requires repurchase of such Mortgage.

7
(vii) To the extent a PC Pool includes convertible ARMs or Balloon/Reset Mortgages (each, as 

defined in the Offering Circular), the Administrator shall repurchase from the related PC Pool or 

require or allow the Mortgage seller or servicer to repurchase such Mortgages (a) when the borrower 

exercises its option to convert the related interest rate from an adjustable rate to a fixed rate, in the case 

of a convertible ARM; and (b) shortly before such Mortgage reaches its scheduled balloon repayment 

date, in the case of a Balloon/Reset Mortgage.

(d) The purchase price of a Mortgage repurchased by a Mortgage seller or servicer shall be equal to 

the then unpaid principal balance of such Mortgage, less any principal on such Mortgage that the Mortgage 

seller or servicer advanced to the Depositor or the Administrator. The purchase price of a Mortgage 

repurchased by the Administrator or the Guarantor under this Agreement shall be equal to the then unpaid 

principal balance of such Mortgage, less any outstanding advances of principal on such Mortgage that the 

Administrator, on behalf of the Trustee, distributed to Holders. The Administrator, on behalf of the 

Trustee, agrees to release any Mortgage from the PC Pool upon payment of the applicable purchase price.

(e) In determining whether a Mortgage shall be repurchased from the related PC Pool as described in 

this Section 1.02, the Guarantor and the Administrator may consider such factors as they deem appropriate, 

including the reduction of administrative costs (in the case of the Administrator) or possible exposure as 

Guarantor under its guarantee (in the case of the Guarantor).

Section 1.03. Post-Settlement Purchase Adjustments

(a) The Administrator shall make any post-settlement purchase adjustments necessary to reflect the 

actual aggregate unpaid principal balance of the related Mortgages or other Mortgage characteristics as of 

the date of their purchase by the Depositor or their delivery to the Administrator, on behalf of the Trustee, 

in exchange for PCs, as the case may be.

(b) Post-settlement adjustments may be made in such manner as the Administrator deems appropriate, 

but shall not adversely affect any Holder’s rights to monthly payments of interest at the PC Coupon, any 

Holder’s pro rata share of principal or any Holder’s rights under the Guarantor’s guarantees. Any reduction 

in the principal balance of the Mortgages held by a PC Pool shall be reflected by the Administrator as a 

corresponding reduction in the principal balance of the related PCs with a corresponding principal payment 

to the related Holders, on a pro rata basis.

Section 1.04. Custody of Mortgage Documents. With respect to each PC Pool, the Administrator, a 

custodian acting as its agent (which may be a third party or a trust or custody department of the related 

seller or servicer), or the originator or seller of the Mortgage may hold the related Mortgage documents, 

including Mortgage notes and participation certificates evidencing the Trustee’s legal ownership interest in 

the Mortgages. The Administrator may adopt and modify its policies and procedures for the custody of 

Mortgage documents at any time, provided such modifications are prudent and do not materially and 

adversely affect the Holders’ interests.

Section 1.05. Interests Held or Acquired by Freddie Mac. Freddie Mac shall have the right to 

purchase and hold for its own account any PCs. Subject to Section 7.06, PCs held or acquired by Freddie 

Mac from time to time and PCs held by other Holders shall have equal and proportionate benefits, without 

preference, priority or distinction. In the event that Freddie Mac retains any interest in a Mortgage, the 

remaining interest in which is part of a PC Pool, Freddie Mac’s interest in such Mortgage shall rank equally 

with that of the related PC Pool, without preference, priority or distinction. No Holder shall have any 

priority over any other Holder.

Section 1.06. Intended Characterization. It is intended that the conveyance, transfer, assignment 

and setting over of the Mortgages by the Depositor to the Trustee pursuant to this Agreement be a true,

8
absolute and unconditional sale of the related Mortgages by the Depositor to the Trustee, and not a pledge 

of the Mortgages to secure a debt or other obligation of the Depositor, and that the Holders of the related 

PCs shall be the beneficial owners of such Mortgages. Notwithstanding this express intention, however, if 

the Mortgages are determined by a court of competent jurisdiction or other competent authority to be the 

property of the Depositor, then it is intended that: (a) this Agreement be deemed to be a security agreement 

within the meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the conveyances provided for 

in Section 1.01 shall be deemed to be (1) a grant by the Depositor to the Trustee on behalf of the related 

Holders of a security interest in all of the Depositor’s right (including the power to convey title thereto), 

title and interest, whether now owned or hereafter acquired, in and to the related Mortgages, any and all 

general intangibles consisting of, arising from or relating to any of the foregoing, and all proceeds of the 

conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, 

including without limitation all amounts from time to time held or invested in the Custodial Account and 

allocable to such Mortgages, whether in the form of cash, instruments, securities or other property and (2) 

an assignment by the Depositor to the Trustee on behalf of the related Holders of any security interest in 

any and all of the Depositor’s right (including the power to convey title thereto), title and interest, whether 

now owned or hereafter acquired, in and to the property described in the foregoing clause (1); and (c) 

notifications to Persons holding such property, and acknowledgments, receipts or confirmations from 

Persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or 

confirmations from, financial intermediaries, bailees or agents (as applicable) of the Administrator, on 

behalf of the Trustee of the related Holders, for the purpose of perfecting such security interest under 

applicable law.

Section 1.07. Encumbrances. Except as may otherwise be provided expressly in this Agreement, 

neither Freddie Mac nor the Trustee, shall directly or indirectly, assign, sell, dispose of or transfer all or any 

portion of or interest in any PC Pool, or permit all or any portion of any PC Pool to be subject to any lien, 

claim, mortgage, security interest, pledge or other encumbrance of any other Person. This Section shall not 

be construed as a limitation on Freddie Mac’s rights with respect to PCs held by it in its corporate capacity.

ARTICLE II

Administration and Servicing of the Mortgages

Section 2.01. The Administrator as Primary Servicer. With respect to each PC Pool, the 

Administrator shall service or supervise servicing of the related Mortgages and administer, on behalf of the 

Trustee, in accordance with the provisions of the Guide and this Agreement, including management of any 

property acquired through foreclosure or otherwise, all for the benefit of the related Holders. The 

Administrator shall have full power and authority to do or cause to be done any and all things in connection 

with such servicing and administration that the Administrator deems necessary or desirable. The 

Administrator shall seek from the Trustee, as representative of the related Holders any consents or 

approvals relating to the control, management and servicing of the Mortgages included in any PC Pool and 

that are required hereunder.

Section 2.02. Servicing Responsibilities. With respect to each PC Pool, the Administrator shall 

service or supervise servicing of the related Mortgages in a manner consistent with prudent servicing 

standards and in substantially the same manner as the Administrator services or supervises the servicing of 

unsold mortgages of the same type in its portfolio. In performing its servicing responsibilities hereunder, 

the Administrator may engage servicers, subservicers and other independent contractors or agents. The 

Administrator may discharge its responsibility to supervise servicing of the Mortgages by monitoring 

servicers’ performance on a reporting and exception basis. Except as provided in Articles V and VI and 

Sections 7.05 and 7.06 of this Agreement, Freddie Mac, as Administrator shall not be subject to the control 

of the Holders in the discharge of its responsibilities pursuant to this Article. Except with regard to its 

guarantee obligations pursuant to Section 3.09 with respect to a PC Pool, the Administrator shall have no 

liability to any related Holder for the Administrator’s actions or omissions in discharging its responsibilities 

under this Article II other than for any direct damage resulting from its failure to exercise that degree of 

9
ordinary care it exercises in the conduct and management of its own affairs. In no event shall the 

Administrator have any liability for consequential damages.

Any servicing or administrative practice adopted, implemented, changed or discontinued by the 

Administrator, the Trustee, any paying agent or any servicer, subservicer or other independent contractor or 

agent in order to accommodate servicing or administrative practices or processes (including systems 

limitations) will be considered to be consistent with this Agreement and expectations of a reasonable 

investor in mortgage-backed securities if such practice achieves substantial compliance in all material 

respects with this Agreement.

Section 2.03. Realization Upon Defaulted Mortgages. With respect to each PC Pool, unless the 

Administrator deems that another course of action (e.g., charge-off) would be in the best economic interest 

of the Holders, the Administrator (or its authorized designee or representative) shall, as soon as practicable, 

foreclose upon (or otherwise comparably convert the ownership of) any real property securing a Mortgage 

which comes into and continues in default and as to which no satisfactory arrangements can be made for 

collection of delinquent payments. In connection with such foreclosure or conversion, the Administrator 

(or its authorized designee or representative) shall follow such practices or procedures as it deems 

necessary or advisable and consistent with general mortgage servicing standards.

Section 2.04. Automatic Acceleration and Assumptions.

(a) With respect to each PC Pool, to the extent provided in the Guide, the Administrator shall enforce 

the terms of each applicable Mortgage that gives the mortgagee the right to demand full payment of the 

unpaid principal balance of the Mortgage upon sale or transfer of the property securing the Mortgage 

regardless of the creditworthiness of the transferee (a right of “automatic acceleration’’), subject to 

applicable state and federal law and the Administrator’s then-current servicing policies.

(b) With respect to each PC Pool, the Administrator shall permit the assumption by a new mortgagor 

of an FHA/VA Mortgage upon the sale or transfer of the underlying property, as required by applicable 

regulations. Any such assumption shall be in accordance with applicable regulations, policies, procedures 

and credit requirements and shall not result in loss or impairment of any insurance or guaranty.

Section 2.05. Prepayment Penalties. Unless otherwise provided in the Pool Supplement for a PC 

Pool, the related Holders shall not be entitled to receive any prepayment penalties, assumption fees or other 

fees charged on the Mortgages included in such PC Pool, and either the related servicer or the 

Administrator shall retain such amounts.

Section 2.06. Mortgage Insurance and Guarantees.

(a) With respect to each PC Pool, if a Conventional Mortgage is insured by a mortgage insurer and the 

mortgage insurance policy is an asset of such PC Pool, the related Holders acknowledge that the insurer 

shall have no obligation to recognize or deal with any Person other than the Administrator, the Trustee, or 

their respective authorized designees or representatives regarding the mortgagee’s rights, benefits and 

obligations under the related insurance contract.

(b) With respect to each PC Pool, each FHA/VA Mortgage shall have in full force and effect a 

certificate or other satisfactory evidence of insurance or guaranty, as the case may be, as may be issued by 

the applicable government agency from time to time. None of these agencies has any obligation to 

recognize or deal with any Person other than the Administrator, the Trustee, or their respective authorized 

designees or representatives with regard to the rights, benefits and obligations of the mortgagee under the 

contract of insurance or guaranty relating to each FHA/VA Mortgage included in such PC Pool.

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ARTICLE III

Distributions to Holders; Guarantees

Section 3.01. Monthly Reporting Period. For purposes of this Agreement with respect to any PC 

Pool, any payment or any event with respect to any Mortgage included in such PC Pool that is reported to 

the Administrator by the related servicer as having been made or having occurred within a Monthly 

Reporting Period shall be deemed to have been received by the Administrator or to have in fact occurred 

within such Monthly Reporting Period used by the Administrator for such purposes. Payments reported by 

servicers include all principal and interest payments made by a borrower, insurance proceeds, liquidation 

proceeds and repurchase proceeds. Events reported by servicers include foreclosure sales, payments of 

insurance claims and payments of guarantee claims.

Section 3.02. Holder’s Undivided Beneficial Ownership Interest. With respect to each PC Pool, 

the Holder of a PC on the Record Date shall be the owner of record of a pro rata undivided beneficial 

ownership interest in the remaining principal balance of the Mortgages in the related PC Pool as of such 

date and shall be entitled to interest at the PC Coupon on such pro rata undivided beneficial ownership 

interest, in each case on the related Payment Date. Such pro rata undivided beneficial ownership interest 

shall change accordingly if any Mortgage is added to or removed from such PC Pool in accordance with 

this Agreement. A Holder’s pro rata undivided beneficial ownership interest in the Mortgages included in a 

PC Pool is calculated by dividing the original unpaid principal balance of the Holder’s PC by the original 

unpaid principal balance of all the Mortgages in the related PC Pool.

Section 3.03. Distributions of Principal. With respect to each PC Pool, the Administrator, on 

behalf of the Trustee, shall withdraw from the Custodial Account and shall distribute to each related Holder 

its pro rata share of principal collections with respect to the Mortgages in such PC Pool, including, if 

applicable, each Holder’s pro rata share of the aggregate amount of any Deferred Interest that has been 

added to the principal balance of the related Mortgages; provided, however, that with respect to 

guarantee payments, the Guarantor’s obligations herein shall be subject to its subrogation rights pursuant to 

Section 3.10. The Administrator may retain from any prepayment or delinquent principal payment on any 

Mortgage, for reimbursement to the Guarantor, any amount not previously received with respect to such 

Mortgage but paid by the Guarantor to the related Holders under its guarantee. For Mortgages purchased 

by the Depositor in exchange for PCs under its MultiLender Swap Program, the Depositor shall retain 

principal payments made on such Mortgages in the amount of any difference between the aggregate unpaid 

principal balance of the Mortgages as of delivery by the seller and the aggregate unpaid principal balance as 

of the PC Issue Date, and the Depositor shall purchase additional Mortgages with such principal payments; 

such additional Mortgages may or may not be included in the related PC Pool represented by the PCs 

received by the seller.

Section 3.04. Distributions of Interest. With respect to each PC Pool, the Administrator, on behalf 

of the Trustee, shall withdraw from the Custodial Account and shall distribute to each related Holder its pro 

rata share of interest collections with respect to the Mortgages included in such PC Pool, at a rate equal to 

the PC Coupon (excluding, if applicable, each Holder’s pro rata share of any Deferred Interest that has been 

added to the principal balance of the related Mortgages). Interest shall accrue during the applicable 

Accrual Periods. The Administrator may retain from any delinquent interest payment on any Mortgage, for 

reimbursement to the Guarantor, any amount not previously received with respect to such Mortgage but 

paid by the Guarantor to the related Holders under its guarantee. With respect to each PC Pool, a partial 

month’s interest retained by Freddie Mac or remitted to the related Holders with respect to prepayments 

shall constitute an adjustment to the fee payable to the Administrator and the Guarantor pursuant to Section 

3.08(a) for such PC Pool.

Section 3.05. Payments.

(a) With respect to each PC Pool, distributions of principal and interest on the related PCs shall begin 

in the month after issuance for Gold PCs and in the second month after issuance for ARM PCs. The 

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Administrator, on behalf of the Trustee, shall calculate, or cause to be calculated, for each PC the 

distribution amount for the current calendar month.

(b) On or before each Payment Date, the Administrator, on behalf of the Trustee, shall instruct the 

Federal Reserve Banks to credit payments on PCs from the Custodial Account to the appropriate Holders’ 

accounts. The related PC Pool’s payment obligations shall be met upon transmittal of the Administrator’s 

payment order to the Federal Reserve Banks provided sufficient funds are then on deposit in the Custodial 

Account. A Holder shall receive the payment of principal, if applicable, and interest on each Payment Date 

on each PC held by such Holder as of the related Record Date.

(c) The Administrator relies on servicers’ reports of mortgage activity to prepare the Pool Factors. 

There may be delays or errors in processing mortgage information, such as a servicer’s failure to file an 

accurate or timely report of its collections of principal or its having filed a report that cannot be processed. 

In these situations the Administrator’s calculation of scheduled principal to be made on Gold PCs may not 

reflect actual payments on the related Mortgages. The Administrator shall account for and reconcile any 

differences as soon as practicable.

(d) The Administrator reserves the right to change the period during which a servicer may hold funds 

prior to payment to the Administrator, as well as the period for which servicers report payments to the 

Administrator, including adjustments to the Monthly Reporting Period. Either change may change the time 

at which prepayments are distributed to Holders. Any such change, however, shall not impair Holders’ 

rights to payments as otherwise provided in this Section.

(e) The Administrator shall maintain one or more accounts (together, the “Custodial Account”), 

segregated from the general funds of Freddie Mac, in its corporate capacity, for the deposit of collections of 

principal (including full and partial principal prepayments) and interest received from or advanced by the 

servicers in respect of the Mortgages. Mortgage collections in respect of the PC Pools established by 

Freddie Mac under this Agreement or trust funds established by Freddie Mac pursuant to any other trust 

agreements may be commingled in the Custodial Account, provided that the Administrator keeps, or causes 

to be kept, separate records of funds with respect to each such PC Pool and other trust fund. Collections due 

to Freddie Mac, in its corporate capacity as owner of mortgages held in its portfolio, may also be 

commingled in the Custodial Account, provided that the Administrator may withdraw such amounts for 

remittance to Freddie Mac from time to time. Funds on deposit in the Custodial Account may be invested 

by the Administrator in Eligible Investments. Investment earnings on deposits in the Custodial Account 

shall be for the benefit of the Administrator, and any losses on such investments shall be paid by the 

Administrator. On each Payment Date, amounts on deposit in the Custodial Account shall be withdrawn 

upon the order of the Administrator, on behalf of the Trustee, for the purpose of making distributions to the 

related Holders, in accordance with this Agreement.

Section 3.06. Pool Factors.

(a) The Administrator, on behalf of the Trustee, shall calculate and make payments to Holders on each 

Payment Date based on the monthly Pool Factors (including Negative Amortization Factors) until such 

time as the Administrator determines that a more accurate and practicable method for calculating such 

payments is available and implements that method. Pursuant to Section 7.05(e), the Administrator may 

modify the Pool Factor methodology from time to time, without the consent of Holders. With respect to 

each PC Pool, the Administrator, on behalf of the Trustee, shall do the following:

(i) The Administrator shall publish or cause to be published for each month a Pool Factor with 

respect to each PC Pool. Beginning in the month after formation of a PC Pool, Pool Factors shall be 

published on or about the fifth Business Day of the month, which Pool Factors may reflect 

prepayments reported to the Administrator after the end of the related Monthly Reporting Period and 

before the publication of the applicable Pool Factors. However, the Administrator may, in its own

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discretion, publish Pool Factors on any other Business Day. The Pool Factor for the month in 

which the PC Pool is established is 1.00000000 and need not be published.

(ii) The Administrator shall distribute principal each month to a Holder of a Gold PC in an 

amount equal to such Holder’s pro rata share of such principal, calculated by multiplying the original 

principal balance of the Gold PC by the difference between its Pool Factors for the preceding and 

current months.

(iii) The Administrator shall distribute principal each month to a Holder of an ARM PC in an 

amount equal to such Holder’s pro rata share of such principal, calculated by multiplying the original 

principal balance of the ARM PC by the difference between its Pool Factors for the two preceding 

months.

(iv) The Administrator shall distribute interest each month in arrears to a Holder (assuming no 

Deferred Interest) in an amount equal to 1/12th of the applicable PC Coupon multiplied by such 

Holder’s pro rata share of principal, calculated by multiplying the original principal balance of such 

Holder’s PC by the preceding month’s Pool Factor for Gold PCs or by the second preceding month’s 

Pool Factor for ARM PCs.

(v) For any month that Deferred Interest has accrued on a Deferred Interest PC, the 

Administrator shall distribute principal (if any is due) to a Holder in an amount equal to such Holder’s 

pro rata share of principal, calculated by (A) subtracting the preceding month’s Pool Factor from the 

second preceding month’s Pool Factor, (B) adding to the difference the Negative Amortization Factor 

for the preceding month and (C) multiplying the resulting sum by the original PC principal balance. 

The interest payment on the Deferred Interest PC in that month shall be (i) 1/12th of the PC Coupon 

multiplied by (ii) the original principal balance of the Holder’s PC multiplied by (iii) the preceding 

month’s Pool Factor minus the preceding month’s Negative Amortization Factor.

(b) With respect to each PC Pool, a Pool Factor shall reflect prepayments reported for the applicable 

Monthly Reporting Period. The Administrator, on behalf of the Trustee, may also, in its discretion, reflect 

in a Pool Factor any prepayments reported after the end of the applicable Monthly Reporting Period. To the 

extent a given Pool Factor (adjusted as necessary for payments made pursuant to the Guarantor’s guarantee 

of timely payment of scheduled principal on Gold PCs) does not reflect the actual unpaid principal balance 

of the related Mortgages, the Administrator shall account for any difference by adjusting subsequent Pool 

Factors as soon as practicable.

(c) In the case of a PC Pool that is comprised of ARMs, a Pool Factor shall be based upon the unpaid 

principal balance of the related Mortgages that servicers report to the Administrator for the Monthly 

Reporting Period that ended in the month preceding the month in which the Pool Factor is published. The 

Administrator, on behalf of the Trustee, may also, in its discretion, include as part of the aggregate principal 

payment in any month any prepayments received after the Monthly Reporting Period that ended in the 

month preceding the month in which the Pool Factor is published. To the extent a given Pool Factor does 

not reflect the actual aggregate unpaid principal balance of the Mortgages, the Administrator shall account 

for any difference by adjusting subsequent Pool Factors as soon as practicable.

(d) The Pool Factor method for a PC Pool may affect the timing of receipt of payments by related 

Holders but shall not affect the Guarantor’s guarantee with respect to such PC Pool, as set forth in Section 

3.09. The Guarantor’s guarantee shall not be affected by the implementation of any different method for 

calculating and paying principal and interest for any PC Pool, as permitted by this Section 3.06.

Section 3.07. Servicing Fees; Retained Interest.

(a) To the extent provided by contractual arrangement with the Administrator, with respect to each PC 

Pool, the related servicer of each Mortgage included in such PC Pool shall be entitled to retain each month,

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as a servicing fee, any interest payable by the borrower on a Mortgage that exceeds the servicer’s required 

remittance with respect to such Mortgage. Each servicer is required to pay all expenses incurred by it in 

connection with its servicing activities and shall not be entitled to reimbursement for those expenses, except 

as provided in Section 3.08(c). If a servicer advances any principal and/or interest on a Mortgage to the 

Administrator prior to the receipt of such funds from the borrower, the servicer may retain (i) from 

prepayments or collections of delinquent principal on such Mortgage any payments of principal so 

advanced, or (ii) from collections of delinquent interest on such Mortgage any payments of interest so 

advanced. To the extent permitted by its servicing agreement, the servicer is entitled to retain as additional 

compensation certain incidental fees related to Mortgages it services.

(b) With respect to a PC Pool, pursuant to the related Purchase Documents, a seller may retain each 

month as extra compensation a fixed amount of interest on a Mortgage included in such PC Pool. In such 

event, the related servicer shall retain each month as a servicing fee the excess of any interest payable by 

the borrower on such Mortgage (less the seller’s retained interest amount) over the servicer’s required 

remittance with respect to such Mortgage.

Section 3.08. Administration Fee; Guarantee Fee.

(a) Subject to any adjustments required by Section 3.04, with respect to any PC Pool, the 

Administrator and the Guarantor shall be entitled to receive from monthly interest payments on each related 

Mortgage a fee (to be allocated between the Administrator and the Guarantor as they may agree) equal to 

the excess of any interest received by the Administrator from the servicer over the amount of interest 

payable to the related Holders; provided, however, that the aggregate fee amount shall be automatically 

adjusted with respect to each PC Pool to the extent a Pool Factor does not reflect the unpaid principal 

balance of the Mortgages. Any such adjustment shall equal the difference between (i) interest at the 

applicable PC Coupon computed on the aggregate unpaid principal balance of the Mortgages for such 

month based on monthly principal payments actually received by the Administrator and (ii) interest at the 

applicable PC Coupon computed on the remaining balance of the Mortgages included in the PC Pool 

derived from the Pool Factor. The Administrator shall (i) withdraw the aggregate fee amount from the 

Custodial Account prior to distributions to the related Holders, (ii) retain its portion of the fee for the 

Administrator’s own account and (iii) remit the remaining portion of the fee to the Guarantor as the 

guarantee fee. In addition, the Administrator is entitled to retain as additional compensation certain 

incidental fees on the Mortgages as provided in Section 2.05 and certain investment earnings as provided in 

Section 3.05(e).

(b) The Depositor shall pay all expenses incurred in connection with the transfer of the Mortgages, the 

establishment and administration of each PC Pool and the issuance of the PCs. Any amounts (including 

attorney’s fees) expended by the Trustee or the Administrator (or the servicers on the Administrator’s 

behalf) for the protection, preservation or maintenance of the Mortgages, or of the real property securing 

the Mortgages, or of property received in liquidation of or realization upon the Mortgages, shall be 

expenses to be borne pro rata by the Administrator and the Holders in accordance with their interests in 

each Mortgage. The Administrator, on behalf of the Trustee, may retain an amount sufficient to pay the 

portion of such expenses borne pro rata by the Depositor and the Holders from payments otherwise due to 

Holders, which may affect the timing of receipt of payments by Holders but shall not affect the Guarantor’s 

obligations under Section 3.09.

(c) The Administrator shall reimburse a servicer for any amount (including attorney’s fees) it expends 

(on the Administrator’s behalf and with its approval) for the protection, preservation or maintenance of the 

Mortgages, or of the real property securing the Mortgages, or of property received in liquidation of or 

realization upon the Mortgages. Such expenses shall be reimbursable to the servicer from the assets of the 

related PC Pool, to the extent provided in the Guide.

(d) Any fees and expenses described above shall not affect the Guarantor’s guarantee with respect to 

any PC Pool, as set forth in Section 3.09.

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Section 3.09. Guarantees.

(a) With respect to each PC Pool, the Guarantor guarantees to the Trustee and to each Holder of a PC:

(i) the timely payment of interest at the applicable PC Coupon;

(ii) the full and final payment of principal on the underlying Mortgages on or before the 

Payment Date that falls (A) in the month of its Final Payment Date, for Gold PCs, or (B) in the month 

after its Final Payment Date, for ARM PCs; and

(iii) for Gold PCs only, the timely payment of scheduled principal on the underlying Mortgages.

In the case of Deferred Interest PCs, the Guarantor’s guarantee of principal includes, and its guarantee of 

interest excludes, any Deferred Interest added to the principal balances of the related Mortgages. The 

Guarantor shall make payments of any guaranteed amounts by transfer to the Custodial Account for 

distribution to the related Holders, in accordance with Sections 3.03 and 3.04. The guarantees pursuant to 

this Section will inure to the benefit of each PC Pool and its related Holders, and shall be enforceable by the 

Trustee of that PC Pool and by such Holders, as provided in Article V of this Agreement.

(b) The Guarantor shall compute guaranteed scheduled monthly principal payments on any Gold PC, 

subject to any applicable adjustments, in accordance with procedures adopted by the Guarantor from time 

to time. With respect to each PC Pool, any payment the Guarantor makes to the Administrator, on behalf of 

the Trustee, on account of the Guarantor’s guarantee of scheduled principal payments shall be considered to 

be a payment of principal for purposes of calculating the Pool Factor for such PC Pool and the Holder’s pro 

rata share of the remaining unpaid principal balance of the related Mortgages.

(c) The Guarantor’s guarantees shall continue to be effective or shall be reinstated (i) in the event that 

any principal or interest payment made to a Holder is for any reason returned by the Holder pursuant to an 

order, decree or judgment of any court of competent jurisdiction that the Holder was not entitled to retain 

such payment pursuant to this Agreement and (ii) notwithstanding any provision hereof permitting fees, 

expenses, indemnities or other amounts to be paid from the assets of any PC Pool.

Section 3.10. Subrogation. With respect to each PC Pool, the Guarantor shall be subrogated to all 

the rights, interests, remedies, powers and privileges of each related Holder in respect of any Mortgage 

included in such PC Pool on which it has made guarantee payments of principal and/or interest to the extent 

of such payments. Nothing in this Section shall impair the Guarantor’s right to receive distributions in its 

capacity as Holder, if it is a Holder of any PCs.

Section 3.11. Termination Upon Final Payment. Each PC Pool is irrevocable and will terminate 

only in accordance with the terms of this Agreement. Except as provided in Sections 3.05(e), 6.06 and 

7.01, with respect to each PC Pool, Freddie Mac’s and the Trustee’s obligations and responsibilities under 

this Agreement shall terminate as to a PC Pool and its Holders upon (i) the full payment to such Holders of 

all principal and interest due to the Holders based on the Pool Factors or by reason of the Guarantor’s 

guarantees or (ii) the payment to the Holder of all amounts held by Freddie Mac and the Trustee, 

respectively, and required to be paid hereunder; provided, however, that in no event shall any PC Pool 

created hereby continue beyond the expiration of 21 years from the death of the survivor of the descendants 

of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James’s, living on the 

date hereof.

Section 3.12. Effect of Final Payment Date. The actual final payment on a PC may occur prior to 

the Payment Date specified in Section 3.09(a)(ii) due to prepayments of principal, including prepayments 

made in connection with the repurchase of any Mortgage from the related PC Pool.

15
Section 3.13. Payment Error Corrections. In the event of a principal or interest payment error, the 

Administrator, in its sole discretion, may effect corrections by the adjustment of payments to be made on 

future Payment Dates or in such other manner as it deems appropriate.

ARTICLE IV

PCs

Section 4.01. Form and Denominations. With respect to each PC Pool, the principal balances, PC 

Coupons and other characteristics of the PCs to be issued shall be specified in the related Pool Supplement. 

Delivery of the PCs of a PC Pool shall constitute the issuance of the PCs for that PC Pool. PCs shall be 

issued, held and transferable only on the book-entry system of the Federal Reserve Banks in minimum 

original principal amounts of $1,000 and additional increments of $1. PCs shall at all times remain on 

deposit with a Federal Reserve Bank in accordance with the provisions of the Book-Entry Rules. A Federal 

Reserve Bank will maintain a book-entry recordkeeping system for all transactions in PCs with respect to 

Holders.

Section 4.02. Transfer of PCs. PCs may be transferred only in minimum original principal amounts 

of $1,000 and additional increments of $1. PCs may not be transferred if, as a result of the transfer, the 

transferor or the new Holder would have on deposit in its account PCs of the same issue with an original 

principal amount of less than $1,000. The transfer, exchange or pledge of PCs shall be governed by the 

fiscal agency agreement between Freddie Mac and a Federal Reserve Bank, the Book-Entry Rules and such 

other procedures as shall be agreed upon from time to time by Freddie Mac and a Federal Reserve Bank. A 

Federal Reserve Bank shall act only upon the instructions of the Holder in recording transfers of a PC. A 

charge may be made for any transfer of a PC and shall be made for any tax or other governmental charge 

imposed in connection with a transfer of a PC. Freddie Mac hereby assigns to the Administrator, on behalf 

of the Trustee, Freddie Mac’s rights under each fiscal agency agreement with respect to PCs issued by any 

PC Pool.

Section 4.03. Record Date. The Record Date for each Payment Date shall be the close of business 

on the last day of the preceding month for Gold PCs and the second preceding month for ARM PCs. A 

Holder of a PC on the books and records of a Federal Reserve Bank on the Record Date shall be entitled to 

payment of principal and interest on the related Payment Date. A transfer of a PC made on or before the 

Record Date in a month shall be recognized as effective as of the first day of such month.

ARTICLE V

Remedies

Section 5.01. Events of Default. With respect to each PC Pool, an “Event of Default’’ means any 

one of the following events:

(a) Default by the Guarantor or the Administrator in the payment of interest or principal to the related 

Holders as and when the same shall become due and payable as provided in this Agreement, and 

the continuance of such default for a period of 30 days.

(b) Failure by the Guarantor or the Administrator to observe or perform any other covenants of this 

Agreement relating to their respective obligations, and the continuance of such failure for a period of 60 

days after the date of receipt by such party of written notice of such failure and a demand for remedy by the 

affected Holders representing not less than 65 percent of the remaining principal balance of any affected PC 

Pool.

(c) The entry by any court having jurisdiction over the Guarantor or the Administrator of a decree or 

order for relief in an involuntary case under any applicable bankruptcy, insolvency or other similar law now 

16
or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian or sequestrator (or 

other similar official) of the Guarantor or the Administrator or for any substantial part of its property, or for 

the winding up or liquidation of its affairs, if such decree or order remains unstayed and in effect for a 

period of 60 consecutive days.

(d) Commencement by the Guarantor or the Administrator of a voluntary case under any applicable 

bankruptcy, insolvency or other similar law now or hereafter in effect, or consent by the Guarantor or the 

Administrator to the entry of an order for relief in an involuntary case under any such law, or its consent to 

the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian or 

sequestrator (or other similar official) of the Guarantor or the Administrator or for any substantial part of 

their respective properties, or any general assignment made by the Guarantor or the Administrator for the 

benefit of creditors, or failure by the Guarantor or the Administrator generally to pay their debts as they 

become due.

The appointment of a conservator (or other similar official) by a regulator having jurisdiction over the 

Guarantor or the Administrator, whether or not such party consents to such appointment, shall not 

constitute an Event of Default.

Section 5.02. Remedies.

(a) If an Event of Default occurs and is continuing with respect to a PC Pool, the Holders of PCs 

representing a majority of the remaining principal balance of such PC Pool may, by written notice to 

Freddie Mac, remove Freddie Mac as Administrator and nominate its successor under this Agreement with 

respect to such PC Pool. The nominee shall be deemed appointed as Freddie Mac’s successor as 

Administrator unless Freddie Mac objects within 10 days after such nomination. Upon such objection:

(i) The Administrator may petition any court of competent jurisdiction for the appointment of its 

successor; or

(ii) Any bona fide Holder that has been a Holder for at least six months may, on behalf of such 

Holder and all others similarly situated, petition any such court for appointment of the Administrator’s 

successor.

(b) If a successor Administrator is appointed, the Administrator shall submit to its successor a 

complete written report and accounting of the Mortgages in the affected PC Pool and shall take all other 

steps necessary or desirable to transfer its interest in and administration of such PC Pool to its successor.

(c) Subject to the Freddie Mac Act, a successor may take any action with respect to the Mortgages as 

may be reasonable and appropriate in the circumstances. Prior to the designation of a successor, the Holders 

of PCs representing a majority of the remaining principal balance of any affected PC Pool may waive any 

past or current Event of Default.

(d) Appointment of a successor shall not relieve Freddie Mac, in its capacity as Guarantor, of its 

guarantee obligations as set forth in this Agreement.

Section 5.03. Limitation on Suits by Holders.

(a) With respect to any PC Pool, except as provided in Section 5.02, no Holder shall have any right to 

institute any action or proceeding at law or in equity or in bankruptcy or otherwise or seek any other 

remedy whatsoever against Freddie Mac or the Trustee with respect to this Agreement or the related PCs or 

Mortgages, unless:

(i) Such Holder previously has given the Trustee written notice of an Event of Default and the 

continuance thereof;

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(ii) The Holders of PCs representing a majority of the remaining principal balance of any 

affected PC Pool have made a written request to the Trustee to institute an action or proceeding in its 

own name and have offered the Trustee reasonable indemnity against the costs, expenses and liabilities 

to be incurred;

(iii) The Trustee has failed to institute any such action or proceeding for 60 days after its receipt 

of the written notice, request and offer of indemnity described above; and

(iv) The Trustee has not received from such Holders any direction inconsistent with the written 

request described above during the 60-day period.

(b) No Holder shall have any right under this Agreement to prejudice the rights of any other Holder, 

to obtain or seek preference or priority over any other Holder or to enforce any right under this Agreement, 

except for the ratable and common benefit of all Holders of PCs representing interests in any affected PC 

Pool.

(c) For the protection and enforcement of the provisions of this Section, Freddie Mac, the Trustee and 

each and every Holder shall be entitled to such relief as can be given either at law or in equity. 

Notwithstanding the foregoing, no Holder’s right to receive payment (or to institute suit to enforce 

payment) of principal and interest as provided herein on or after the due date of such payment shall be 

impaired or affected without the consent of the Holder.

ARTICLE VI

Trustee

Section 6.01. Duties of Trustee. 

(a) If an Event of Default has occurred and is continuing with respect to a PC Pool, the Trustee 

shall exercise the rights and powers vested in it by this Agreement and use the same degree of care and skill 

in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such 

person’s own affairs.

(b) Except during the continuance of an Event of Default, the Trustee undertakes to perform such 

duties and only such duties as are specifically set forth in this Agreement and shall not be liable except for 

the performance of such duties and obligations as are specifically set forth in this Agreement and no 

implied covenants or obligations shall be read into this Agreement against the Trustee.

(c) The Trustee and its directors, officers, employees and agents may not be protected from 

liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence 

in the performance of their respective duties or by reason of reckless disregard of obligations and duties 

under this Agreement, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any action taken, or not taken, by the Trustee in good faith 

pursuant to this Agreement or for errors in judgment; and

(iii) the Trustee shall not be required to take notice or be deemed to have notice or knowledge of 

any default or Event of Default, unless the Trustee obtains actual knowledge or written notice of such 

default or Event of Default. In the absence of such actual knowledge or notice, the Trustee may 

conclusively assume that there is no default or Event of Default.

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(d) Every provision of this Agreement shall be subject to the provisions of this Section and Section 

6.02.

(e) The Trustee shall not be liable for indebtedness evidenced by or arising under this Agreement, 

including principal of or interest on the PCs, or interest on any money received by it except as the Trustee 

may agree in writing.

(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent 

required by law or the terms of this Agreement.

(g) No provision of this Agreement shall require the Trustee to expend, advance or risk its own 

funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the 

exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such 

funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(h) The Trustee, or the Administrator on its behalf, may, but shall not be obligated to, undertake 

any legal action that it deems necessary or desirable in the interest of Holders. The Trustee, or the 

Administrator on its behalf, may be reimbursed for the legal expenses and costs of such action from the 

assets of the related PC Pool.

Section 6.02. Certain Matters Affecting the Trustee.

(a) The Trustee, and any director, officer, employee or agent of the Trustee may rely in good faith 

on any certificate, opinion or other document of any kind which, prima facie, is properly executed and 

submitted by any appropriate Person respecting any matters arising hereunder. The Trustee may rely on 

any such documents believed by it to be genuine and to have been signed or presented by the proper Person 

and on their face conforming to the requirements of this Agreement. The Trustee need not investigate any 

fact or matter stated in such documents.

(b) Before the Trustee acts or refrains from acting, it may require an officer’s certificate or an 

opinion of counsel, which shall not be at the expense of the Trustee. The Trustee shall not be liable for any 

action it takes or omits to take in good faith in reliance on an officer’s certificate or opinion of counsel. 

The right of the Trustee to perform any discretionary act enumerated in this Agreement shall not be 

construed as a duty and the Trustee shall not be answerable for other than its willful misfeasance, bad faith 

or gross negligence in the performance of such act.

(c) The Trustee may execute any of the trusts or powers hereunder or perform any duties 

hereunder either directly or by or through agents or attorneys or a custodian or nominee.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it 

believes to be authorized or within its rights or powers; provided, that the Trustee’s conduct does not 

constitute willful misfeasance, bad faith or gross negligence. In no event shall the Trustee have any 

liability for consequential damages.

(e) The Trustee may consult with and rely on the advice of counsel, accountants and other advisors 

and shall not be liable for errors in judgment or for anything it does or does not do in good faith if it so 

relies. Any opinion of counsel with respect to legal matters relating to this Agreement and the PCs shall be 

full and complete authorization and protection from liability in respect to any action taken, omitted or 

suffered by it hereunder in good faith and in accordance with any opinion of such counsel.

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(f) Any fees, expenses and indemnities payable from the assets of any PC Pool to Freddie Mac, in 

its capacity as Trustee, in the performance of its duties and obligations hereunder shall not affect Freddie 

Mac’s guarantee with respect to that PC Pool, as set forth in Section 3.09.

Section 6.03. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no 

representation as to the validity or adequacy of this Agreement, the assets of the PC Pool or the PCs.

Section 6.04. Trustee May Own PCs. Subject to Section 7.06, the Trustee in its individual or any 

other capacity may become the owner or pledgee of PCs with the same rights as it would have if it were not 

the Trustee.

Section 6.05. Indemnity. Each PC Pool shall indemnify the Trustee and the Trustee’s employees, 

directors, officers and agents, as provided in this Agreement, against any and all claims, losses, liabilities or 

expenses (including attorneys’ fees) incurred by it in connection with the administration of this trust and the 

performance of its duties under this Agreement (to the extent not previously reimbursed above), including, 

without limitation, the execution and filing of any federal or state tax returns and information returns and 

being the mortgagee of record with respect to the related Mortgages. The Trustee shall notify the 

Administrator promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify 

the Administrator shall not relieve the related PC Pool of its obligations hereunder. A PC Pool shall not be 

required to reimburse any expense or indemnify against any loss, liability or expense incurred by the 

Trustee through the Trustee’s own willful misfeasance, bad faith or gross negligence.

The Trustee’s rights pursuant to this Section shall survive the discharge of this Agreement.

Section 6.06. Replacement of Trustee. The Trustee may resign at any time. Any successor 

Trustee shall resign if it ceases to be eligible in accordance with the provisions of Section 6.09. In either 

case, the resignation of the Trustee shall become effective, and the resigning Trustee shall be discharged 

from its obligations with respect to the PC Pools created under this Agreement by giving 90 days’ written 

notice of the resignation to the Depositor, the Guarantor and the Administrator and upon the effectiveness 

of an appointment of a successor Trustee, which may be as of a date prior to the end of the 90-day period. 

Upon receiving such notice of resignation, the Depositor shall promptly appoint one or more successor 

Trustees by written instrument, one copy of which is delivered to the resigning Trustee and one copy of 

which is delivered to the successor Trustee. The successor Trustee need not be the same Person for all PC 

Pools. If no successor Trustee has been appointed for a PC Pool, or one that has been appointed has not 

accepted the appointment within 90 days after giving such notice of resignation, the resigning Trustee may 

petition any court of competent jurisdiction for the appointment of a successor Trustee.

Prior to an Event of Default, or if an Event of Default has occurred and has been cured with 

respect to a PC Pool, Freddie Mac cannot be removed as Trustee with respect to that PC Pool. If an Event 

of Default has occurred and is continuing while Freddie Mac is the Trustee, at the direction of Holders of 

PCs representing a majority of the remaining principal balance of such PC Pool, Freddie Mac shall resign 

or be removed as Trustee, and to the extent permitted by law, all of the rights and obligations of the Trustee 

with respect to the related PC Pool only, will be terminated by notifying the Trustee in writing. Holders of 

PCs representing a majority of the remaining principal balance of the PC Pool will then be authorized to 

name and appoint one or more successor Trustees. Notwithstanding the termination of the Trustee, its 

liability under this Agreement and arising prior to such termination shall survive such termination.

If a successor Trustee is serving as the Trustee, the following events are “Trustee Events of 

Default” with respect to a PC Pool:

(i) the Trustee fails to comply with Section 6.09;

(ii) the Trustee is adjudged bankrupt or insolvent;

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(iii) a receiver or other public officer takes charge of the Trustee or its property; or

(iv) the Trustee otherwise becomes incapable of acting.

If at any time a Trustee Event of Default has occurred and is continuing, the Guarantor (or if an 

Event of Default has occurred and is continuing, the Depositor) may, and if directed by Holders of PCs 

representing a majority of the remaining principal balance of such PC Pool, shall, remove the Trustee as to 

such PC pool and appoint a successor Trustee by written instrument, one copy of which shall be delivered 

to the Trustee so removed and one copy of which shall be delivered to the successor Trustee, and the 

Guarantor (or if an Event of Default has occurred and is continuing, the Depositor) shall give written notice 

of the successor Trustee to the Holders affected by the succession. Notwithstanding the termination of the 

Trustee, its liability under this Agreement arising prior to such termination will survive such termination.

If the Trustee resigns or is removed or if a vacancy exists in the office of the Trustee for any 

reason (the Trustee in such event being referred to herein as the retiring Trustee), the Depositor shall 

promptly appoint a successor Trustee that satisfies the eligibility requirements of Section 6.09.

The retiring Trustee agrees to cooperate with the Depositor and any successor Trustee in effecting 

the termination of the retiring Trustee’s responsibilities and rights hereunder and shall promptly provide 

such successor Trustee all documents and records reasonably requested by it to enable it to assume the 

Trustee’s functions hereunder.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee 

and to the Depositor, the Guarantor and the Administrator. Thereupon the resignation or removal of the 

retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and 

duties of the Trustee under this Agreement with respect to such PC Pool. The successor Trustee shall mail 

a notice of its succession to the related Holders. The retiring Trustee shall promptly transfer all property 

held by it as Trustee to the successor Trustee.

If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is 

removed, the retiring Trustee or the Depositor may petition any court of competent jurisdiction for the 

appointment of a successor Trustee.

Section 6.07. Successor Trustee By Merger. If a successor Trustee consolidates with, merges or 

converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation 

or banking association, the resulting, surviving or transferee corporation without any further act shall be the 

successor Trustee; provided, that such corporation or banking association shall be otherwise qualified and 

eligible under Section 6.09.

Section 6.08. Appointment of Co-Trustee or Separate Trustee.

(a) Notwithstanding any other provisions of this Agreement, at any time, for the purpose of 

meeting any legal requirement of any jurisdiction in which any part of a PC Pool may at the time be 

located, the Trustee shall have the power and may execute and deliver all instruments to appoint one or 

more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part

of such PC Pool and to vest in such Person or Persons, in such capacity and for the benefit of the related 

Holders, such title to such PC Pool, or any part thereof, and, subject to the other provisions of this Section, 

such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No 

co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor

trustee under Section 6.09 and no notice to the related Holders of the appointment of any co-trustee or

separate trustee shall be required under Section 6.06 hereof.

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(b) With respect to each PC Pool, every separate trustee and co-trustee shall, to the extent

permitted by law, be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be 

conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or 

co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act

separately without the Trustee joining in such act), except to the extent that under any law of any 

jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or 

unqualified to perform such act or acts, in which event such rights, powers, duties and obligations 

(including the holding of title to the related PC Pool or any portion thereof in any such jurisdiction) 

shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the

direction of the Trustee;

(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other 

trustee hereunder; and

(iii) the Trustee may at any time accept the resignation of or remove any separate trustee or 

co-trustee.

(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to 

each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every 

instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of

this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be 

vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee 

or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically 

including every provision of this Agreement relating to the conduct of, affecting the liability of, or 

affording protection to, the Trustee. Every such instrument shall be filed with the Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or

attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act

under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee

shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies 

and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the 

appointment of a new or successor trustee.

Section 6.09. Eligibility; Disqualification. Freddie Mac is eligible to act as the Trustee and is 

initially the Trustee for the PC Pools created under this Agreement. Any successor to Freddie Mac (i) at 

the time of its appointment as Trustee, must be reasonably acceptable to Freddie Mac and (ii) must be 

organized as a corporation or association doing business under the laws of the United States or any State 

thereof, be authorized under such laws to exercise corporate trust powers, have combined capital and 

surplus of at least $50,000,000 and be subject to supervision or examination by federal or state financial 

regulatory authorities. If any successor Trustee shall cease to satisfy the eligibility requirements set forth in 

(ii) above, that successor Trustee shall resign immediately in the manner and with the effect specified in 

Section 6.06.

ARTICLE VII

Miscellaneous Provisions

Section 7.01. Annual Statements. Within a reasonable time after the end of each calendar year, the 

Administrator (or its agent) shall furnish to each Holder on any Record Date during such year information

22
that the Administrator deems necessary or desirable to enable Holders and beneficial owners of PCs to 

prepare their United States federal income tax returns, if applicable.

Section 7.02. Limitations on Liability. Neither Freddie Mac, in its corporate capacity, nor any of its 

directors, officers, employees, authorized designees, representatives or agents (“related persons’’) shall be 

liable to Holders for any action taken, or not taken, by them or by a servicer in good faith pursuant to this 

Agreement or for errors in judgment. This provision shall not protect Freddie Mac or any related person 

against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross 

negligence in the performance of duties or by reason of reckless disregard of obligations and duties under 

this Agreement. In no event shall Freddie Mac or any related person be liable for any consequential 

damages. Freddie Mac and any related person may rely in good faith on any document or other 

communication of any kind properly executed and submitted by any Person with respect to any matter 

arising under this Agreement. Freddie Mac has no obligation to appear in, prosecute or defend any legal 

action which is not incidental to its duties to service or supervise the servicing of the Mortgages in 

accordance with this Agreement and which in its opinion may involve any expense or liability for Freddie 

Mac. Freddie Mac may, in its discretion, undertake or participate in any action it deems necessary or 

desirable with respect to any Mortgage, this Agreement, the PCs or the rights and duties of the parties 

hereto and the interests of the Holders hereunder. In such event, the legal expenses and costs of such action 

and any resulting liability shall be expenses for the protection, preservation and maintenance of the 

Mortgages borne pro rata by Freddie Mac and Holders as provided in Section 3.08(b).

Section 7.03. Limitation on Rights of Holders. The death or incapacity of any Person having an 

interest in a PC shall not terminate this Agreement or any PC Pool. Such death or incapacity shall not 

entitle the legal representatives or heirs of such Person, or any Holder for such Person, to claim an 

accounting, take any action or bring any proceeding in any court for a partition or winding up of the related 

PC Pool, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

Section 7.04. Control by Holders. With respect to any PC Pool, except as otherwise provided in 

Articles V and VI and Sections 7.05 and 7.06, no Holder shall have any right to vote or to otherwise control 

in any manner the operation and management of the Mortgages included in such PC Pool, or the obligations 

of the parties hereto. This Agreement shall not be construed so as to make the Holders from time to time 

partners or members of an association. Holders shall not be liable to any third person by reason of any 

action taken by the parties to this Agreement pursuant to any provision hereof.

Section 7.05. Amendment.

(a) Freddie Mac and the Trustee may amend this Agreement (including any related Pool Supplement) 

from time to time without the consent of any Holders to (i) cure any ambiguity or correct or supplement 

any provision in this Agreement, provided, however, that any such amendment shall not have a material 

adverse effect on any Holder; (ii) maintain the classification of any PC Pool as a grantor trust for federal 

income tax purposes, as it may then be in effect, or, in the event a REMIC election is made with respect to 

the beneficial interests in principal and interest payments on all or a portion of the assets comprising any 

PC Pool, to maintain the REMIC status of any assets with respect to which such REMIC election is made; 

or (iii) avoid the imposition of any state or federal tax on a PC Pool; it being understood that any 

amendment permitting the repurchase of a Mortgage by Freddie Mac due to a delinquency of less than 120 

days, other than in the circumstances described in Section 1.02(c)(iii), may not be adopted under this clause 

(a).

(b) Except as provided in Section 7.05(c), Freddie Mac and the Trustee may amend this Agreement as 

to any PC Pool, with the consent of Holders representing not less than a majority of the remaining principal 

balance of the affected PC Pool. 

(c) Freddie Mac and the Trustee may not amend this Agreement, without the consent of a Holder, if 

such amendment would impair or affect the right of such Holder to receive payment of principal and 

23
interest on or after the due date of such payment or to institute suit for the enforcement of any such 

payment on or after such date.

(d) To the extent that any provisions of this Agreement differ from the provisions of any Freddie Mac 

Mortgage Participation Certificates Agreement or PC Master Trust Agreement dated prior to the date of this 

Agreement, this Agreement shall be deemed to amend such provisions of the prior agreement, but only to 

the extent that Freddie Mac, under the terms of such prior agreement, could have effected such change as 

an amendment of such prior agreement without the consent of Holders of PCs thereunder; provided, 

however, that the trust declarations and related provisions set forth in Section 7.05(d) of the PC Master 

Trust Agreement dated as of December 31, 2007 are hereby reaffirmed with respect to each PC Pool 

created before December 31, 2007.

(e) Notwithstanding any other provision of this Section, (i) the Administrator (in its own discretion 

and in its own interest) and the Trustee (at the Administrator’s direction) may amend this Agreement to 

reflect any modification in the Administrator’s methodology of calculating payments to Holders, including 

any modifications described in Section 3.05(d) and Section 3.06(a) and the manner in which it distributes 

prepayments to Holders, (ii) the Administrator (in its own discretion and in its own interest) and the Trustee 

(at the Administrator’s direction) may amend this Agreement to cure any inconsistency between this 

Agreement and the provisions of the Guide and (iii) the Depositor (in its own discretion and in its own 

interest) and the Trustee (at the Administrator’s direction) may amend any Pool Supplement to make the 

adjustments described in Section 1.02(b) to the characteristics of the Mortgages to be transferred to a PC 

Pool or to the related PCs.

Section 7.06. Voting Rights. 

If Freddie Mac is acting as Administrator or Trustee and an Event of Default has occurred and is 

continuing, any PCs held by Freddie Mac for its own account shall be disregarded and deemed not to be 

outstanding for purposes of exercising the remedies set forth in Section 5.02 and the second paragraph of 

Section 6.06. 

Section 7.07. Persons Deemed Owners. With respect to each PC Pool, Freddie Mac, the Trustee, 

the Administrator and a Federal Reserve Bank (or any agent of any of them) may deem and treat the related 

Holder(s) as the absolute owner(s) of a PC and the undivided beneficial ownership interests in the 

Mortgages included in the related PC Pool for the purpose of receiving payments and for all other purposes, 

and none of Freddie Mac, the Trustee, the Administrator or a Federal Reserve Bank (nor any agent of any 

of them) shall be affected by any notice to the contrary. All payments made to a Holder, or upon such 

Holder’s order, shall be valid, and, to the extent of the payment, shall satisfy and discharge the related PC 

Pool’s payment obligations with respect to the Holder’s PC. None of Freddie Mac, the Trustee, the 

Administrator or any Federal Reserve Bank shall have any direct obligation to any beneficial owner unless 

it is also the Holder of a PC.

Section 7.08. Governing Law. THIS AGREEMENT AND THE PARTIES’ RIGHTS AND 

OBLIGATIONS WITH RESPECT TO PCs, SHALL BE GOVERNED BY THE LAWS OF THE UNITED 

STATES. INSOFAR AS THERE MAY BE NO APPLICABLE PRECEDENT, AND INSOFAR AS TO 

DO SO WOULD NOT FRUSTRATE THE PURPOSES OF THE FREDDIE MAC ACT OR ANY 

PROVISION OF THIS AGREEMENT OR THE TRANSACTIONS GOVERNED HEREBY, THE 

LOCAL LAWS OF THE STATE OF NEW YORK SHALL BE DEEMED REFLECTIVE OF THE LAWS 

OF THE UNITED STATES.

Section 7.09. Grantor Trust and REMIC Status. No provision in this Agreement shall be 

construed to grant Freddie Mac, the Trustee or any other Person authority to act in any manner which (i) 

would cause a PC Pool not to be treated as a grantor trust for federal income tax purposes, or (ii) in the 

event a REMIC election is made with respect to the beneficial interests in principal and interest payments

24
on all or a portion of the assets comprising any PC Pool, would affect the status of such assets as a REMIC 

for federal income tax purposes.

Section 7.10. Payments Due on Non-Business Days. If the date fixed for any payment on any PC is 

a day that is not a Business Day, then such payment shall be made on the next succeeding Business Day, 

with the same force and effect as though made on the date fixed for such payment, and no interest shall 

accrue for the period after such date.

Section 7.11. Successors. This Agreement shall be binding upon and inure to the benefit of the 

parties and their respective successors, including any successor by operation of law, and permitted assigns.

Section 7.12. Headings. The headings in this Agreement are for convenience only and shall not 

affect the construction of this Agreement.

Section 7.13. Notice and Demand.

(a) Any notice, demand or other communication required or permitted under this Agreement to be 

given to or served upon any Holder may be given or served (i) in writing by deposit in the United States 

mail, postage prepaid, and addressed to such Holder as such Holder’s name and address may appear on the 

books and records of a Federal Reserve Bank or (ii) by transmission to such Holder through the 

communication system of the Federal Reserve Banks. Any notice, demand or other communication to or 

upon a Holder shall be deemed to have been sufficiently given or made, for all purposes, upon mailing or 

transmission.

(b) Any notice, demand or other communication which is required or permitted to be given to or 

served under this Agreement may be given in writing addressed as follows (i) in the case of Freddie Mac in 

its corporate capacity, to Freddie Mac, 8200 Jones Branch Drive, McLean, Virginia 22102, Attention: 

Executive Vice President — General Counsel and Secretary and (ii) in the case of the Trustee, to: Freddie 

Mac (as Trustee), 1551 Park Run Drive, McLean, Virginia 22102, Attention: Office of Trustee; email: 

Freddie_Mac_Trustee@freddiemac.com, with a copy to the Executive Vice President – General Counsel 

and Secretary at the address set forth in clause (i).

(c) Any notice, demand or other communication to or upon Freddie Mac or the Trustee shall be 

deemed to have been sufficiently given or made only upon its actual receipt of the writing.

Section 7.14. Counterparts. This Agreement may be executed in any number of counterparts, each 

of which counterpart shall be deemed to be an original, and such counterparts shall constitute but one and 

the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in Portable 

Document Format (PDF) or by facsimile transmission shall be as effective as delivery of a manually 

executed original counterpart of this Agreement.

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THE SALE OF A PC AND RECEIPT AND ACCEPTANCE OF A PC BY OR ON BEHALF OF A 

HOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL 

CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND ALL OTHERS 

HAVING A BENEFICIAL INTEREST IN SUCH PC OF ALL THE TERMS AND PROVISIONS OF 

THIS AGREEMENT (INCLUDING THE RELATED POOL SUPPLEMENT) AND THE AGREEMENT 

OF FREDDIE MAC, SUCH HOLDER AND SUCH OTHERS THAT THOSE TERMS AND 

PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE.

FEDERAL HOME LOAN MORTGAGE 

CORPORATION, as Trustee

/s/ John J. Kelly 

Authorized Signatory

FEDERAL HOME LOAN MORTGAGE 

CORPORATION, in its corporate capacity as Depositor, 

Administrator and Guarantor 

/s/ Mark D. Hanson 

Authorized Signatory

26
Exhibit 10.2

Freddie Mac

UMBS AND MBS MASTER TRUST AGREEMENT

THIS UMBS AND MBS MASTER TRUST AGREEMENT is entered into as of July 30, 2022, by 

and among Freddie Mac in its corporate capacity as Depositor, Administrator and Guarantor, Freddie Mac 

in its capacity as Trustee, and the Holders of the UMBS and MBS offered from time to time pursuant to 

Freddie Mac’s Offering Circular referred to herein.

WHEREAS:

(a) Freddie Mac is a corporation duly organized and existing under and by virtue of the Freddie Mac 

Act and has full corporate power and authority to enter into this Agreement and to undertake the 

obligations undertaken by it herein; and

(b) Freddie Mac may from time to time (i) purchase Mortgages, in accordance with the applicable 

provisions of the Freddie Mac Act, (ii) as Depositor, transfer and deposit such Mortgages into various trust 

funds that are established pursuant to this Agreement and that are referred to herein as “UMBS Pools” and 

“MBS Pools,” (iii) as Administrator, on behalf of the Trustee, create and issue hereunder, on behalf of the 

related Pool, Securities representing undivided beneficial ownership interests in the assets of that Pool, (iv) 

as Trustee, act as trustee for each such Pool, (v) as Guarantor, guarantee the payment of interest and 

principal for the benefit of the Holders of such Securities and (vi) as Administrator, administer the affairs of 

each such Pool.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this 

Agreement, the parties to this Agreement do hereby declare and establish this Agreement and do hereby 

undertake and otherwise agree as follows with respect to the transfer of the Mortgages to various Pools, the 

issuance of the Securities and the establishment of the rights and obligations of the parties.

Definitions

The following terms used in this Agreement have the respective meanings set forth below.

Accrual Period: As to any Security and any Payment Date, the calendar month preceding the month 

of the Payment Date.

Administrator: Freddie Mac, in its corporate capacity, as administrator of the Pools created under 

this Agreement.

Agreement: This UMBS and MBS Master Trust Agreement, dated as of July 30, 2022, by and among 

Freddie Mac in its corporate capacity as Depositor, Administrator and Guarantor, Freddie Mac in its 

capacity as Trustee, and the Holders of the various Securities, as originally executed, or as modified, 

amended or supplemented in accordance with the provisions set forth herein. Unless the context requires 

otherwise, the term “Agreement” shall be deemed to include any applicable Pool Supplement entered into 

pursuant to Section 1.01 of this Agreement.
Book-Entry Rules: The provisions from time to time in effect, currently contained in Title 12, Part 

1249 of the Code of Federal Regulations, setting forth the terms and conditions under which Freddie Mac 

may issue securities on the book-entry system of the Federal Reserve Banks and authorizing a Federal 

Reserve Bank to act as its agent in connection with such securities.

Business Day: A day other than (i) a Saturday or Sunday and (ii) a day when the Federal Reserve 

Bank of New York (or other agent acting as Freddie Mac’s fiscal agent) is closed or, as to any Holder, a 

day when the Federal Reserve Bank that maintains the Holder’s account is closed.

Conventional Mortgage: A Mortgage that is not guaranteed or insured by the United States or any 

agency or instrumentality of the United States.

Coupon: UMBS Coupon or MBS Coupon, as applicable.

Custodial Account: As defined in Section 3.05(e) of this Agreement.

Depositor: Freddie Mac, in its corporate capacity, as depositor of Mortgages into the Pools created 

under this Agreement.

Eligible Investments: Any one or more of the following obligations, securities or holdings maturing 

on or before the Payment Date applicable to the funds so invested:

(i) obligations of, or obligations guaranteed as to the full and timely payment of principal and 

interest by, the United States; 

(ii) obligations of any agency or instrumentality of the United States (other than Freddie Mac, 

except as provided in subsection (viii) below) or taxable debt obligations of any state or local 

government (or political subdivision thereof) that have a long-term rating or a short-term rating, as 

applicable, from S&P, Moody’s or Fitch in any case in one of its two highest rating categories for 

long-term securities or in its highest ratings category for short-term securities; 

(iii) federal funds (which are typically overnight, unsecured cash loans to depository institutions or 

Federal Home Loan Banks, closely resembling bank-to-bank loans executed in the so-called federal 

funds market), certificates of deposit, time deposits and bankers’ acceptances with a fixed maturity of 

no more than 365 days of any depository institution or trust company, provided that the short-term 

securities of the depository institution or trust company are rated by S&P, Moody’s or Fitch in the 

highest applicable ratings category for short-term securities; 

(iv) commercial paper with a fixed maturity of no more than 270 days, of any corporation that is 

rated by S&P, Moody’s or Fitch in its highest short-term ratings category; 

(v) debt securities that have a long-term rating or a short-term rating, as applicable, from S&P, 

Moody’s or Fitch, in any case in one of its two highest ratings categories for long-term securities or in 

its highest ratings category for short-term securities; 

(vi) money market funds that are registered under the Investment Company Act of 1940, as 

amended, are entitled, pursuant to Rule 2a-7 of the Securities and Exchange Commission, or any 

successor to that rule, to hold themselves out to investors as money market funds, and are rated by 

S&P, Moody’s or Fitch in one of its two highest ratings categories for money market funds;

(vii) asset-backed commercial paper that is rated by S&P, Moody’s or Fitch in its highest shortterm ratings category;

(viii) discount notes and other short-term debt obligations (in each case, with a stated final 

maturity, as of the related issue date, of one year or less) issued by Freddie Mac;

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(ix) repurchase agreements on obligations that are either specified in any of clauses (i), (ii), (iii), 

(iv), (v), (vii) or (viii) above or are mortgage-backed securities insured or guaranteed by an entity that 

is an agency or instrumentality of the United States; provided that the counterparty to the repurchase 

agreement is an entity whose short-term debt securities are rated by S&P, Moody’s or Fitch in its 

highest ratings category for short-term securities; and

(x) any other investment without options that is approved by Freddie Mac and is within the two 

highest ratings categories of the applicable rating agency for long-term securities or the highest ratings 

category of the applicable rating agency for short-term securities.

The rating requirement will be satisfied if the relevant security, issue or fund at the time of purchase 

receives at least the minimum stated rating from at least one of S&P, Moody’s or Fitch. The rating 

requirement will not be satisfied by a rating that is the minimum rating followed by a minus sign or by 

a rating lower than Aa2 from Moody’s. 

Event of Default: As defined in Section 5.01 of this Agreement.

FHA/VA Mortgage: A Mortgage insured by the Federal Housing Administration or by the 

Department of Agriculture Rural Development (formerly the Rural Housing Service) or guaranteed by the 

Department of Veterans Affairs or the Department of Housing and Urban Development.

Final Payment Date: As to any Security, the first day of the latest month in which the related Pool 

Factor will be reduced to zero. The Administrator publishes the Final Payment Date upon formation of the 

related Pool.

Fitch: Fitch, Inc., also known as Fitch Ratings, or any successor thereto.

Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporation created pursuant to the 

Freddie Mac Act for the purpose of establishing and supporting a secondary market in residential 

mortgages. Unless the context requires otherwise, the term “Freddie Mac” shall be deemed to refer to 

Freddie Mac acting in one or more of its corporate capacities, as specified or as provided in context, and not 

in its capacity as Trustee.

Freddie Mac Act: Title III of the Emergency Home Finance Act of 1970, as amended, 12 U.S.C. 

§§1451-1459.

Guarantor: Freddie Mac, in its corporate capacity, as guarantor of the Securities issued by each Pool.

Guide: Freddie Mac’s Single-Family Seller/Servicer Guide, as supplemented and amended from time 

to time, in which Freddie Mac sets forth its mortgage purchase standards, credit, appraisal and underwriting 

guidelines and servicing policies.

Holder: With respect to any Pool, any entity that appears on the records of a Federal Reserve Bank 

as a holder of the related Securities.

Issue Date: UMBS Issue Date or MBS Issue Date, as applicable.

MBS or Mortgage-Backed Security: With respect to each MBS Pool, a mortgage-backed security 

issued pursuant to this Agreement, representing a beneficial ownership interest in such MBS Pool. 

MBS Coupon: The per annum fixed rate of an MBS calculated as described in the Offering Circular 

or the applicable Pool Supplement, computed on the basis of a 360-day year of twelve 30-day months.

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MBS Issue Date: With respect to each MBS Pool, the date specified in the related Pool Supplement 

or, if not specified therein, the date on which Freddie Mac issues an MBS in exchange for the Mortgages 

delivered by a dealer or other customer.

MBS Pool: With respect to each MBS, the corpus of the related trust fund created by this Agreement, 

consisting of (i) the related Mortgages and all proceeds thereof, (ii) amounts on deposit in the Custodial 

Account, to the extent allocable to such MBS Pool, (iii) the right to receive payments under the related 

guarantee and (iv) any other assets specified in the related Pool Supplement, excluding any investment 

earnings on any of the assets of that Pool. With respect to each MBS Pool, and unless expressly stated 

otherwise, the provisions of this Agreement will be interpreted as referring only to the Mortgages included 

in that Pool, the MBS issued by that Pool and the Holders of those MBS.

Monthly Reporting Period: The period, which period the Administrator has the right to change as 

provided in Section 3.05(d) of this Agreement, during which servicers report Mortgage payments to the 

Administrator. The Monthly Reporting Period for all payments is generally from the 1st of a month 

through the last calendar day of that month. Accordingly, for any Payment Date, the applicable Monthly 

Reporting Period generally is the calendar month preceding that Payment Date. 

Moody’s: Moody’s Investors Service, Inc., or any successor thereto.

Mortgage: A mortgage loan or a participation interest in a mortgage loan that is secured by a first or 

second lien on a one-to-four family dwelling and that has been purchased by the Depositor and transferred 

by the Depositor to the Trustee for inclusion in the related Pool. With respect to each Pool, the Mortgages 

to be included therein shall be identified on the books and records of the Depositor and the Administrator.

Mortgage Coupon: The per annum fixed interest rate of a Mortgage.

MultiLender Swap Program: A program under which Freddie Mac purchases Mortgages from one or 

more sellers in exchange for Securities representing undivided beneficial ownership interests in a Pool 

consisting of Mortgages that may or may not be those delivered by the seller(s).

Offering Circular: Freddie Mac’s Uniform Mortgage-Backed Securities and Mortgage-Backed 

Securities Offering Circular dated July 30, 2022, as amended and supplemented by any Supplements issued 

from time to time, or any successor thereto, as it may be amended and supplemented from time to time.

Payment Date: The 25th of each month or, if the 25th is not a Business Day, the next Business Day.

Payment Delay: The delay between the first day of the Accrual Period for a Security and the related 

Payment Date.

Person: Any legal person, including any individual, corporation, partnership, limited liability 

company, financial institution, joint venture, association, joint stock company, trust, unincorporated 

organization or governmental unit or political subdivision of any governmental unit. 

Pool: A UMBS Pool or MBS Pool, as applicable.

Pools: UMBS Pools and/or MBS Pools, as applicable.

Pool Factor: With respect to each Pool, a rounded eight-digit decimal calculated for each month by 

the Administrator which, when multiplied by the original principal balance of the related Securities, will 

4
equal their remaining principal amount. The Pool Factor for any month reflects the remaining principal 

amount after the payment to be made on the Payment Date in the same month.

Pool Supplement: Any physical or electronic document or record (which may be a supplement to the 

Offering Circular or any other supplemental document prepared by Freddie Mac for the related Securities), 

which, together herewith, evidences the establishment of a Pool and modifies, amends or supplements the 

provisions hereof in any respect whatsoever. The Pool Supplement for a particular Pool shall be binding 

and effective upon formation of the related Pool and issuance of the related Securities, whether or not such 

Pool Supplement is executed, delivered or published by Freddie Mac.

Purchase Documents: The mortgage purchase agreements between Freddie Mac and its Mortgage 

sellers and servicers, which are the contracts that govern the purchase and servicing of Mortgages and 

which include, among other things, the Guide and any negotiated modifications, amendments or 

supplements to the Guide. 

Record Date: As to any Payment Date, the close of business on the last day of the preceding month.

S&P: S&P Global Ratings, or any successor thereto. 

Security: A UMBS or MBS, as applicable.

Securities: UMBS and/or MBS, as applicable.

Trustee: Freddie Mac, in its capacity as trustee of each Pool formed under this Agreement, and its 

successors and assigns, which will have the trustee responsibilities specified in this Agreement, as amended 

or supplemented from time to time. 

Trustee Event of Default: As defined in Section 6.06 of this Agreement. 

UMBS or Uniform Mortgage-Backed Security: With respect to each UMBS Pool, a mortgage-backed 

security issued pursuant to this Agreement, representing a beneficial ownership interest in such UMBS 

Pool. 

UMBS Coupon: The per annum fixed rate of a UMBS calculated as described in the Offering 

Circular or the applicable Pool Supplement, computed on the basis of a 360-day year of twelve 30-day 

months.

UMBS Issue Date: With respect to each UMBS Pool, the date specified in the related Pool 

Supplement or, if not specified therein, the date on which Freddie Mac issues a UMBS in exchange for the 

Mortgages delivered by a dealer or other customer.

UMBS Pool: With respect to each UMBS, the corpus of the related trust fund created by this 

Agreement, consisting of (i) the related Mortgages and all proceeds thereof, (ii) amounts on deposit in the 

Custodial Account, to the extent allocable to such UMBS Pool, (iii) the right to receive payments under the 

related guarantee and (iv) any other assets specified in the related Pool Supplement, excluding any 

investment earnings on any of the assets of that Pool. With respect to each UMBS Pool, and unless 

expressly stated otherwise, the provisions of this Agreement will be interpreted as referring only to the 

Mortgages included in that Pool, the UMBS issued by that Pool and the Holders of those UMBS.

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ARTICLE I

Conveyance of Mortgages; Creation of Pools

Section 1.01. Declaration of Trust; Transfer of Mortgages; Assignment of Principal and 

Interest and Acceptance of Beneficial Interests. (a) The Depositor, by delivering any Mortgages 

pursuant to this Agreement, unconditionally, absolutely and irrevocably hereby transfers, assigns, sets over 

and otherwise conveys to the Trustee, on behalf of the related Holders, all of the Depositor’s right, title and 

interest in and to such Mortgages, including all payments of principal and interest thereon received after the 

month in which the Issue Date occurs. Once Mortgages have been identified as being part of a related Pool 

for which at least one Security has been issued, they shall remain in that Pool unless removed in a manner 

consistent with this Agreement. Concurrently with the Depositor’s transferring, assigning, setting over and 

otherwise conveying the Mortgages to the Trustee for a Pool, the Trustee hereby accepts the Mortgages so 

conveyed and acknowledges that it holds the entire corpus of each Pool in trust for the exclusive benefit of 

the related Holders and shall deliver to, or on the order of, the Depositor, the Securities issued by such 

Pool. The Administrator agrees to administer the related Pool and such Securities in accordance with the 

terms of this Agreement. On the related Issue Date and upon payment to the Depositor for any such 

Security by a Holder, such Holder shall, by virtue thereof, acknowledge, accept and agree to be bound by 

all of the terms and conditions of this Agreement.

The Trustee shall make an election under Section 860D of the Code as a “real estate mortgage 

investment conduit” (“REMIC”) with respect to beneficial interests in principal and interest payments on 

all or a portion of the assets comprising each Pool, except as indicated in the Offering Circular. With 

respect to any such REMIC election and the assets subject to such REMIC election, the Trustee shall take 

any action, or cause each Pool with beneficial interests in principal and interest payments with respect to 

such Pool subject to such REMIC election to take any action, necessary or appropriate to establish and 

maintain the REMIC status of any assets with respect to which such REMIC election is made. 

A Pool Supplement shall evidence the establishment of a particular Pool and shall relate to specific 

Securities representing the entire beneficial ownership interests in such Pool. If for any reason the creation 

of a Pool Supplement is delayed, Freddie Mac shall create one as soon as practicable, and such delay shall 

not affect the validity and existence of the Pool or the related Securities. With respect to each Pool, the 

collective terms hereof and of the related Pool Supplement shall govern the issuance and administration of 

the Securities related to such Pool, and all matters related thereto, and shall have no applicability to any 

other Pool or Securities. As applied to each Pool, the collective terms hereof and of the related Pool 

Supplement shall constitute an agreement as if the collective terms of those instruments were set forth in a 

single instrument. In the event of a conflict between the terms hereof and the terms of a Pool Supplement 

for a Pool, the terms of the Pool Supplement shall control with respect to that Pool. A Pool Supplement is 

not considered an amendment to this Agreement requiring approval pursuant to Section 7.05.

(b) The Trustee shall assign, to one or more separate trust funds established by the Depositor, 

beneficial interests in principal and interest payments on the Mortgages comprising all or a portion of a 

specified Pool, in exchange for beneficial interests in the principal and interest payments on such 

Mortgages represented by the related REMIC regular interests created pursuant to such separate trust funds.

Section 1.02. Identity of the Mortgages; Repurchase. 

(a) In consideration for the transfer of the related Mortgages by the Depositor to a Pool, the Depositor 

(i) shall receive the Securities issued by such Pool and (ii) may retain such Securities or transfer them to the 

related Mortgage seller or otherwise, as the Depositor deems appropriate.

(b) After the Issue Date but prior to the first Payment Date, the Depositor may, in accordance with its 

customary mortgage purchase and pooling procedures, adjust the amount and identity of the Mortgages to

6
be transferred to a Pool, the Coupon and/or the original unpaid principal balance of the Securities and the 

Mortgages in the Pool, provided that any changes to the characteristics of the Securities shall be evidenced 

by an amendment or supplement to the related Pool Supplement.

(c) Except as provided in this Section 1.02 or in Section 1.03, once the Depositor has transferred a 

Mortgage to a particular Pool, such Mortgage may not be transferred out of such Pool, except (x) if a 

mortgage insurer exercises an option under an insurance contract to purchase such Mortgage or (y) in the 

case of repurchase by the Guarantor, the Administrator or the related Mortgage seller or servicer, under the 

following circumstances:

(i) The Guarantor may repurchase from the related Pool a Mortgage in connection with a 

guarantee payment under Section 3.09(a)(ii).

(ii) The Administrator may repurchase from the related Pool, or require or permit a Mortgage 

seller or servicer to repurchase, any Mortgage if a repurchase is necessary or advisable (A) to maintain 

servicing of the Mortgage in accordance with the provisions of the Guide, or (B) to maintain the status 

of the Pool as a grantor trust for federal income tax purposes or, to the extent not inconsistent with this 

clause (B), to maintain the REMIC status of any assets with respect to which a REMIC election is 

made.

(iii) The Guarantor may repurchase from the related Pool, or require or permit a Mortgage seller or 

servicer to repurchase, any Mortgage if (A) such Mortgage is 120 or more days delinquent, or (B) the 

Guarantor determines, on the basis of information from the related borrower or servicer, that loss of 

ownership of the property securing a Mortgage is likely or default is imminent due to borrower 

incapacity, death or hardship or other extraordinary circumstances that make future payments on such 

Mortgage unlikely or impossible.

(iv) The Guarantor may repurchase from the related Pool a Mortgage if a bankruptcy court 

approves a plan that materially affects the terms of the Mortgage or authorizes a transfer or substitution 

of the underlying property.

(v) The Administrator may repurchase from the related Pool, or require or permit a Mortgage 

seller or servicer to repurchase, any Mortgage, if there is (A) a material breach of warranty by the 

Mortgage seller or servicer, (B) a material defect in documentation as to such Mortgage or (C) a failure 

by a seller or servicer to comply with any requirements or terms set forth in the Guide and, if 

applicable, other Purchase Documents.

(vi) The Administrator shall repurchase from the related Pool a Mortgage, if (A) Freddie Mac 

determines that its acquisition of the Mortgage was unauthorized and repurchase of such Mortgage is 

necessary to comply with applicable law or (B) a court of competent jurisdiction or a federal 

government agency duly authorized to oversee or regulate Freddie Mac’s mortgage purchase business 

requires repurchase of such Mortgage. 

(vii) The Administrator may repurchase from the related Pool a Mortgage if compliance with 

applicable law requires a change in any of the terms of such Mortgage (including a change in the 

Mortgage Coupon, principal balance, amortization schedule, timing of payments or last scheduled 

payment date).

(viii) The Administrator may repurchase from the related Pool a Mortgage at any time after that 

Mortgage has been in a state of continuous delinquency, without having been fully cured with respect 

to payments required by the related mortgage documents (including the mortgage note or other 

instrument evidencing the borrower’s indebtedness), during the period from the first missed payment 

date through the fourth consecutive payment date (or eighth consecutive payment date, in the case of a 

biweekly mortgage), without regard to (i) whether any particular payment was made in whole or in part

7
during the period extending from the earliest through the latest payment date, (ii) any grace or cure 

period (with respect to the latest such payment date) under the related mortgage documents, and (iii) 

any period during which a loss mitigation alternative is in effect (unless such loss mitigation alternative 

is deemed to cure the payment default, in which case any previous delinquency with respect to that 

Mortgage will be disregarded for purposes of calculations of future delinquency on that Mortgage).

(ix) The Administrator may repurchase from the related Pool a Mortgage, if the Mortgage has 

ceased to be secured by the related mortgaged property. 

(x) The Administrator may repurchase from the related Pool a Mortgage, if the mortgaged 

property securing the Mortgage is acquired on behalf of a trust created under this Agreement, with 

such acquisition occurring through foreclosure or deed-in-lieu of foreclosure or other means of 

conversion by which title to a mortgaged property securing a Mortgage or interests in that mortgaged 

property are transferred to or for the benefit of the trust.

(d) The purchase price of a Mortgage repurchased by a Mortgage seller or servicer shall be equal to 

the then unpaid principal balance of such Mortgage, less any principal on such Mortgage that the Mortgage 

seller or servicer advanced to the Depositor or the Administrator. The purchase price of a Mortgage 

repurchased by the Administrator or the Guarantor under this Agreement shall be equal to the then unpaid 

principal balance of such Mortgage, less any outstanding advances of principal on such Mortgage that the 

Administrator, on behalf of the Trustee, distributed to Holders. The Administrator, on behalf of the 

Trustee, agrees to release any Mortgage from the related Pool upon payment of the applicable purchase 

price.

(e) In determining whether a Mortgage shall be repurchased from the related Pool as described in this 

Section 1.02, the Guarantor and the Administrator may consider such factors as they deem appropriate, 

including the reduction of administrative costs (in the case of the Administrator) or possible exposure as 

Guarantor under its guarantee (in the case of the Guarantor).

Section 1.03. Post-Settlement Purchase Adjustments

(a) The Administrator shall make any post-settlement purchase adjustments necessary to reflect the 

actual aggregate unpaid principal balance of the related Mortgages or other Mortgage characteristics as of 

the date of their purchase by the Depositor or their delivery to the Administrator, on behalf of the Trustee, 

in exchange for Securities, as the case may be.

(b) Post-settlement adjustments may be made in such manner as the Administrator deems appropriate, 

but shall not adversely affect any Holder’s rights to monthly payments of interest at the Coupon, any 

Holder’s pro rata share of principal or any Holder’s rights under the Guarantor’s guarantees. Any reduction 

in the principal balance of the Mortgages held by a Pool shall be reflected by the Administrator as a 

corresponding reduction in the principal balance of the related Securities with a corresponding principal 

payment to the related Holders, on a pro rata basis.

Section 1.04. Custody of Mortgage Documents. With respect to each Pool, the Administrator, a 

custodian acting as its agent (which may be a third party or a trust or custody department of the related 

seller or servicer), or the originator or seller of the Mortgage may hold the related Mortgage documents, 

including Mortgage notes and participation certificates evidencing the Trustee’s legal ownership interest in 

the Mortgages. The Administrator may adopt and modify its policies and procedures for the custody of 

Mortgage documents at any time, provided such modifications are prudent and do not materially and 

adversely affect the Holders’ interests.

Section 1.05. Interests Held or Acquired by Freddie Mac. Freddie Mac shall have the right to 

purchase and hold for its own account any Securities. Subject to Section 7.06, Securities held or acquired 

by Freddie Mac from time to time and Securities held by other Holders shall have equal and proportionate

8
benefits, without preference, priority or distinction. In the event that Freddie Mac retains any interest in a 

Mortgage, the remaining interest in which is part of a Pool, Freddie Mac’s interest in such Mortgage shall 

rank equally with that of the related Pool, without preference, priority or distinction. No Holder shall have 

any priority over any other Holder.

Section 1.06. Intended Characterization. It is intended that the conveyance, transfer, assignment 

and setting over of the Mortgages by the Depositor to the Trustee pursuant to this Agreement be a true, 

absolute and unconditional sale of the related Mortgages by the Depositor to the Trustee, and not a pledge 

of the Mortgages to secure a debt or other obligation of the Depositor, and that the Holders of the related 

Securities shall be the beneficial owners of such Mortgages. Notwithstanding this express intention, 

however, if the Mortgages are determined by a court of competent jurisdiction or other competent authority 

to be the property of the Depositor, then it is intended that: (a) this Agreement be deemed to be a security 

agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the conveyances 

provided for in Section 1.01 shall be deemed to be (1) a grant by the Depositor to the Trustee on behalf of 

the related Holders of a security interest in all of the Depositor’s right (including the power to convey title 

thereto), title and interest, whether now owned or hereafter acquired, in and to the related Mortgages, any 

and all general intangibles consisting of, arising from or relating to any of the foregoing, and all proceeds of 

the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other 

property, including without limitation all amounts from time to time held or invested in the Custodial 

Account and allocable to such Mortgages, whether in the form of cash, instruments, securities or other 

property and (2) an assignment by the Depositor to the Trustee on behalf of the related Holders of any 

security interest in any and all of the Depositor’s right (including the power to convey title thereto), title 

and interest, whether now owned or hereafter acquired, in and to the property described in the foregoing 

clause (1); and (c) notifications to Persons holding such property, and acknowledgments, receipts or 

confirmations from Persons holding such property, shall be deemed notifications to, or acknowledgments, 

receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the 

Administrator, on behalf of the Trustee of the related Holders, for the purpose of perfecting such security 

interest under applicable law.

Section 1.07. Encumbrances. Except as may otherwise be provided expressly in this Agreement, 

neither Freddie Mac nor the Trustee shall directly or indirectly, assign, sell, dispose of or transfer all or any 

portion of or interest in any Pool, or permit all or any portion of any Pool to be subject to any lien, claim, 

mortgage, security interest, pledge or other encumbrance of any other Person. This Section shall not be 

construed as a limitation on Freddie Mac’s rights with respect to Securities held by it in its corporate 

capacity.

ARTICLE II

Administration and Servicing of the Mortgages

Section 2.01. The Administrator as Primary Servicer. With respect to each Pool, the 

Administrator shall service or supervise servicing of the related Mortgages and administer, on behalf of the 

Trustee, in accordance with the provisions of the Guide and this Agreement, including management of any 

property acquired through foreclosure or otherwise, all for the benefit of the related Holders. The 

Administrator shall have full power and authority to do or cause to be done any and all things in connection 

with such servicing and administration that the Administrator deems necessary or desirable. The 

Administrator shall seek from the Trustee, as representative of the related Holders, any consents or 

approvals relating to the control, management and servicing of the Mortgages included in any Pool and that 

are required hereunder.

Section 2.02. Servicing Responsibilities. With respect to each Pool, the Administrator shall service 

or supervise servicing of the related Mortgages in a manner consistent with prudent servicing standards and 

in substantially the same manner as the Administrator services or supervises the servicing of unsold 

mortgages of the same type in its portfolio. In performing its servicing responsibilities hereunder, the 

Administrator may engage servicers, subservicers and other independent contractors or agents. The 

Administrator may discharge its responsibility to supervise servicing of the Mortgages by monitoring 

9
servicers’ performance on a reporting and exception basis. Except as provided in Articles V and VI and 

Sections 7.05 and 7.06 of this Agreement, Freddie Mac, as Administrator shall not be subject to the control 

of the Holders in the discharge of its responsibilities pursuant to this Article. Except with regard to its 

guarantee obligations pursuant to Section 3.09 with respect to a Pool, the Administrator shall have no 

liability to any related Holder for the Administrator’s actions or omissions in discharging its responsibilities 

under this Article II other than for any direct damage resulting from its failure to exercise that degree of 

ordinary care it exercises in the conduct and management of its own affairs. In no event shall the 

Administrator have any liability for consequential damages.

Any servicing or administrative practice adopted, implemented, changed or discontinued by the 

Administrator, the Trustee, any paying agent or any servicer, subservicer or other independent contractor or 

agent in order to accommodate servicing or administrative practices or processes (including systems 

limitations) will be considered to be consistent with this Agreement and expectations of a reasonable 

investor in mortgage-backed securities if such practice achieves substantial compliance in all material 

respects with this Agreement.

Section 2.03. Realization Upon Defaulted Mortgages. With respect to each Pool, unless the 

Administrator deems that another course of action (e.g., charge-off) would be in the best economic interest 

of the Holders, the Administrator (or its authorized designee or representative) shall, as soon as practicable, 

foreclose upon (or otherwise comparably convert the ownership of) any real property securing a Mortgage 

which comes into and continues in default and as to which no satisfactory arrangements can be made for 

collection of delinquent payments. In connection with such foreclosure or conversion, the Administrator 

(or its authorized designee or representative) shall follow such practices or procedures as it deems 

necessary or advisable and consistent with general mortgage servicing standards.

Section 2.04. Automatic Acceleration and Assumptions.

(a) With respect to each Pool, to the extent provided in the Guide, the Administrator shall enforce the 

terms of each applicable Mortgage that gives the mortgagee the right to demand full payment of the unpaid 

principal balance of the Mortgage upon sale or transfer of the property securing the Mortgage regardless of 

the creditworthiness of the transferee (a right of “automatic acceleration’’), subject to applicable state and 

federal law and the Administrator’s then-current servicing policies.

(b) With respect to each Pool, the Administrator shall permit the assumption by a new mortgagor of 

an FHA/VA Mortgage upon the sale or transfer of the underlying property, as required by applicable 

regulations. Any such assumption shall be in accordance with applicable regulations, policies, procedures 

and credit requirements and shall not result in loss or impairment of any insurance or guaranty.

Section 2.05. Prepayment Penalties. Unless otherwise provided in the Pool Supplement for a Pool, 

the related Holders shall not be entitled to receive any prepayment penalties, assumption fees or other fees 

charged on the Mortgages included in such Pool, and either the related servicer or the Administrator shall 

retain such amounts.

Section 2.06. Mortgage Insurance and Guarantees.

(a) With respect to each Pool, if a Conventional Mortgage is insured by a mortgage insurer and the 

mortgage insurance policy is an asset of such Pool, the related Holders acknowledge that the insurer shall 

have no obligation to recognize or deal with any Person other than the Administrator, the Trustee, or their 

respective authorized designees or representatives regarding the mortgagee’s rights, benefits and 

obligations under the related insurance contract.

(b) With respect to each Pool, each FHA/VA Mortgage shall have in full force and effect a certificate 

or other satisfactory evidence of insurance or guaranty, as the case may be, as may be issued by the

10
applicable government agency from time to time. None of these agencies has any obligation to recognize or 

deal with any Person other than the Administrator, the Trustee, or their respective authorized designees or 

representatives with regard to the rights, benefits and obligations of the mortgagee under the contract of 

insurance or guaranty relating to each FHA/VA Mortgage included in such Pool.

ARTICLE III

Distributions to Holders; Guarantees

Section 3.01. Monthly Reporting Period. For purposes of this Agreement with respect to any Pool, 

any payment or any event with respect to any Mortgage included in such Pool that is reported to the 

Administrator by the related servicer as having been made or having occurred within a Monthly Reporting 

Period shall be deemed to have been received by the Administrator or to have in fact occurred within such 

Monthly Reporting Period used by the Administrator for such purposes. Payments reported by servicers 

include all principal and interest payments made by a borrower, insurance proceeds, liquidation proceeds 

and repurchase proceeds. Events reported by servicers include foreclosure sales, payments of insurance 

claims and payments of guarantee claims.

Section 3.02. Holder’s Undivided Beneficial Ownership Interest. With respect to each Pool, the 

Holder of a Security on the Record Date shall be the owner of record of a pro rata undivided beneficial 

ownership interest in the remaining principal balance of the Mortgages in the related Pool as of such date 

and shall be entitled to interest at the Coupon on such pro rata undivided beneficial ownership interest, in 

each case on the related Payment Date. Such pro rata undivided beneficial ownership interest shall change 

accordingly if any Mortgage is added to or removed from such Pool in accordance with this Agreement. A 

Holder’s pro rata undivided beneficial ownership interest in the Mortgages included in a Pool is calculated 

by dividing the original unpaid principal balance of the Holder’s Security by the original unpaid principal 

balance of all the Mortgages in the related Pool.

Section 3.03. Distributions of Principal. With respect to each Pool, the Administrator, on behalf of 

the Trustee, shall withdraw from the Custodial Account and shall distribute to each related Holder its pro 

rata share of principal collections with respect to the Mortgages in such Pool; provided, however, that with 

respect to guarantee payments, the Guarantor’s obligations herein shall be subject to its subrogation rights 

pursuant to Section 3.10. The Administrator may retain from any prepayment or delinquent principal 

payment on any Mortgage, for reimbursement to the Guarantor, any amount not previously received with 

respect to such Mortgage but paid by the Guarantor to the related Holders under its guarantee. For 

Mortgages purchased by the Depositor in exchange for Securities under its MultiLender Swap Program, the 

Depositor shall retain principal payments made on such Mortgages in the amount of any difference between 

the aggregate unpaid principal balance of the Mortgages as of delivery by the seller and the aggregate 

unpaid principal balance as of the Issue Date, and the Depositor shall purchase additional Mortgages with 

such principal payments; such additional Mortgages may or may not be included in the related Pool 

represented by the Securities received by the seller.

Section 3.04. Distributions of Interest. With respect to each Pool, the Administrator, on behalf of 

the Trustee, shall withdraw from the Custodial Account and shall distribute to each related Holder its pro 

rata share of interest collections with respect to the Mortgages included in such Pool, at a rate equal to the 

Coupon. Interest shall accrue during each Accrual Period. The Administrator may retain from any 

delinquent interest payment on any Mortgage, for reimbursement to the Guarantor, any amount not 

previously received with respect to such Mortgage but paid by the Guarantor to the related Holders under 

its guarantee. With respect to each Pool, a partial month’s interest retained by Freddie Mac or remitted to 

the related Holders with respect to prepayments shall constitute an adjustment to the fee payable to the 

Administrator and the Guarantor pursuant to Section 3.08(a) for such Pool.

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Section 3.05. Payments.

(a) With respect to each Pool, distributions of principal and interest on the related Securities shall 

begin in the month after issuance. The Administrator, on behalf of the Trustee, shall calculate, or cause to 

be calculated, for each Security the distribution amount for the current calendar month.

(b) On or before each Payment Date, the Administrator, on behalf of the Trustee, shall instruct the 

Federal Reserve Banks to credit payments on Securities from the Custodial Account to the appropriate 

Holders’ accounts. The related Pool’s payment obligations shall be met upon transmittal of the 

Administrator’s payment order to the Federal Reserve Banks provided sufficient funds are then on deposit 

in the Custodial Account. A Holder shall receive the payment of principal, if applicable, and interest on 

each Payment Date on each Security held by such Holder as of the related Record Date.

(c) The Administrator relies on servicers’ reports of mortgage activity to prepare the Pool Factors. 

There may be delays or errors in processing mortgage information, such as a servicer’s failure to file an 

accurate or timely report of its collections of principal or its having filed a report that cannot be processed. 

In these situations the Administrator’s calculation of scheduled principal to be made on Securities may not 

reflect actual payments on the related Mortgages. The Administrator shall account for and reconcile any 

differences as soon as practicable.

(d) The Administrator reserves the right to change the period during which a servicer may hold funds 

prior to payment to the Administrator, as well as the period for which servicers report payments to the 

Administrator, including adjustments to the Monthly Reporting Period. Either change may change the time 

at which prepayments are distributed to Holders. Any such change, however, shall not impair Holders’ 

rights to payments as otherwise provided in this Section.

(e) The Administrator shall maintain one or more accounts (together, the “Custodial Account”), 

segregated from the general funds of Freddie Mac, in its corporate capacity, for the deposit of collections of 

principal (including full and partial principal prepayments) and interest received from or advanced by the 

servicers in respect of the Mortgages. Mortgage collections in respect of the Pools established by Freddie 

Mac under this Agreement or trust funds established by Freddie Mac pursuant to any other trust agreements 

may be commingled in the Custodial Account, provided that the Administrator keeps, or causes to be kept, 

separate records of funds with respect to each such Pool and other trust fund. Collections due to Freddie 

Mac, in its corporate capacity as owner of mortgages held in its portfolio, may also be commingled in the 

Custodial Account, provided that the Administrator may withdraw such amounts for remittance to Freddie 

Mac from time to time. Funds on deposit in the Custodial Account may be invested by the Administrator in 

Eligible Investments. Investment earnings on deposits in the Custodial Account shall be for the benefit of 

the Administrator, and any losses on such investments shall be paid by the Administrator. On each 

Payment Date, amounts on deposit in the Custodial Account shall be withdrawn upon the order of the 

Administrator, on behalf of the Trustee, for the purpose of making distributions to the related Holders, in 

accordance with this Agreement.

Section 3.06. Pool Factors.

(a) The Administrator, on behalf of the Trustee, shall calculate and make payments to Holders on each 

Payment Date based on the monthly Pool Factors until such time as the Administrator determines that a 

more accurate and practicable method for calculating such payments is available and implements that 

method. Pursuant to Section 7.05(e), the Administrator may modify the Pool Factor methodology from time 

to time, without the consent of Holders. With respect to each Pool, the Administrator, on behalf of the 

Trustee, shall do the following:

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(i) The Administrator shall publish or cause to be published for each month a Pool Factor with 

respect to each Pool. Beginning in the month after formation of a Pool, Pool Factors shall be published 

on or about the fifth Business Day of the month, which Pool Factors may reflect prepayments reported 

to the Administrator after the end of the related Monthly Reporting Period and before the publication 

of the applicable Pool Factors. However, the Administrator may, in its own discretion, publish Pool 

Factors on any other Business Day. The Pool Factor for the month in which the Pool is established is 

1.00000000 and need not be published.

(ii) The Administrator shall distribute principal each month to a Holder of a Security in an amount 

equal to such Holder’s pro rata share of such principal, calculated by multiplying the original principal 

balance of the Security by the difference between its Pool Factors for the preceding and current 

months.

(iii) The Administrator shall distribute interest each month in arrears to a Holder in an amount 

equal to 1/12th of the applicable Coupon multiplied by such Holder’s pro rata share of principal, 

calculated by multiplying the original principal balance of such Holder’s Security by the preceding 

month’s Pool Factor.

(b) With respect to each Pool, a Pool Factor shall reflect prepayments reported for the applicable 

Monthly Reporting Period. The Administrator, on behalf of the Trustee, may also, in its discretion, reflect 

in a Pool Factor any prepayments reported after the end of the applicable Monthly Reporting Period. To the 

extent a given Pool Factor (adjusted as necessary for payments made pursuant to the Guarantor’s guarantee 

of timely payment of scheduled principal on Securities) does not reflect the actual unpaid principal balance 

of the related Mortgages, the Administrator shall account for any difference by adjusting subsequent Pool 

Factors as soon as practicable.

(c) The Pool Factor method for a Pool may affect the timing of receipt of payments by related Holders 

but shall not affect the Guarantor’s guarantee with respect to such Pool, as set forth in Section 3.09. The 

Guarantor’s guarantee shall not be affected by the implementation of any different method for calculating 

and paying principal and interest for any Pool, as permitted by this Section 3.06.

Section 3.07. Servicing Fees; Retained Interest.

(a) To the extent provided by contractual arrangement with the Administrator, with respect to each 

Pool, the related servicer of each Mortgage included in such Pool shall be entitled to retain each month, as a 

servicing fee, any interest payable by the borrower on a Mortgage that exceeds the servicer’s required 

remittance with respect to such Mortgage. Each servicer is required to pay all expenses incurred by it in 

connection with its servicing activities and shall not be entitled to reimbursement for those expenses, except 

as provided in Section 3.08(c). If a servicer advances any principal and/or interest on a Mortgage to the 

Administrator prior to the receipt of such funds from the borrower, the servicer may retain (i) from 

prepayments or collections of delinquent principal on such Mortgage any payments of principal so 

advanced, or (ii) from collections of delinquent interest on such Mortgage any payments of interest so 

advanced. To the extent permitted by its servicing agreement, the servicer is entitled to retain as additional 

compensation certain incidental fees related to Mortgages it services.

(b) With respect to a Pool, pursuant to the related Purchase Documents, a seller may retain each 

month as extra compensation a fixed amount of interest on a Mortgage included in such Pool. In such 

event, the related servicer shall retain each month as a servicing fee the excess of any interest payable by 

the borrower on such Mortgage (less the seller’s retained interest amount) over the servicer’s required 

remittance with respect to such Mortgage.

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Section 3.08. Administration Fee; Guarantee Fee.

(a) Subject to any adjustments required by Section 3.04, with respect to any Pool, the Administrator 

and the Guarantor shall be entitled to receive from monthly interest payments on each related Mortgage a 

fee (to be allocated between the Administrator and the Guarantor as they may agree) equal to the excess of 

any interest received by the Administrator from the servicer over the amount of interest payable to the 

related Holders; provided, however, that the aggregate fee amount shall be automatically adjusted with 

respect to each Pool to the extent a Pool Factor does not reflect the unpaid principal balance of the 

Mortgages. Any such adjustment shall equal the difference between (i) interest at the applicable Coupon 

computed on the aggregate unpaid principal balance of the Mortgages for such month based on monthly 

principal payments actually received by the Administrator and (ii) interest at the applicable Coupon 

computed on the remaining balance of the Mortgages included in the Pool derived from the Pool Factor. 

The Administrator shall (i) withdraw the aggregate fee amount from the Custodial Account prior to 

distributions to the related Holders, (ii) retain its portion of the fee for the Administrator’s own account and 

(iii) remit the remaining portion of the fee to the Guarantor as the guarantee fee. In addition, the 

Administrator is entitled to retain as additional compensation certain incidental fees on the Mortgages as 

provided in Section 2.05 and certain investment earnings as provided in Section 3.05(e).

(b) The Depositor shall pay all expenses incurred in connection with the transfer of the Mortgages, the 

establishment and administration of each Pool and the issuance of the Securities. Any amounts (including 

attorney’s fees) expended by the Trustee or the Administrator (or the servicers on the Administrator’s 

behalf) for the protection, preservation or maintenance of the Mortgages, or of the real property securing 

the Mortgages, or of property received in liquidation of or realization upon the Mortgages, shall be 

expenses to be borne pro rata by the Administrator and the Holders in accordance with their interests in 

each Mortgage. The Administrator, on behalf of the Trustee, may retain an amount sufficient to pay the 

portion of such expenses borne pro rata by the Administrator and the Holders from payments otherwise due 

to Holders, which may affect the timing of receipt of payments by Holders but shall not affect the 

Guarantor’s obligations under Section 3.09.

(c) The Administrator shall reimburse a servicer for any amount (including attorney’s fees) it expends 

(on the Administrator’s behalf and with its approval) for the protection, preservation or maintenance of the 

Mortgages, or of the real property securing the Mortgages, or of property received in liquidation of or 

realization upon the Mortgages. Such expenses shall be reimbursable to the servicer from the assets of the 

related Pool, to the extent provided in the Guide.

(d) Any fees and expenses described above shall not affect the Guarantor’s guarantee with respect to 

any Pool, as set forth in Section 3.09.

Section 3.09. Guarantees.

(a) With respect to each Pool, the Guarantor guarantees to the Trustee and to each Holder of a 

Security:

(i) the timely payment of interest at the applicable Coupon;

(ii) the full and final payment of principal on the underlying Mortgages on or before the Payment 

Date that falls in the month of its Final Payment Date; and

(iii) the timely payment of scheduled principal on the underlying Mortgages.

The Guarantor shall make payments of any guaranteed amounts by transfer to the Custodial Account for 

distribution to the related Holders, in accordance with Sections 3.03 and 3.04. The guarantees pursuant to 

this Section will inure to the benefit of each Pool and its related Holders, and shall be enforceable by the 

Trustee of that Pool and by such Holders, as provided in Article V of this Agreement.

(b) The Guarantor shall compute guaranteed scheduled monthly principal payments on any Security, 

subject to any applicable adjustments, in accordance with procedures adopted by the Guarantor from time 

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to time. With respect to each Pool, any payment the Guarantor makes to the Administrator, on behalf of the 

Trustee, on account of the Guarantor’s guarantee of scheduled principal payments shall be considered to be 

a payment of principal for purposes of calculating the Pool Factor for such Pool and the Holder’s pro rata 

share of the remaining unpaid principal balance of the related Mortgages.

(c) The Guarantor’s guarantees shall continue to be effective or shall be reinstated (i) in the event that 

any principal or interest payment made to a Holder is for any reason returned by the Holder pursuant to an 

order, decree or judgment of any court of competent jurisdiction that the Holder was not entitled to retain 

such payment pursuant to this Agreement and (ii) notwithstanding any provision hereof permitting fees, 

expenses, indemnities or other amounts to be paid from the assets of any Pool.

Section 3.10. Subrogation. With respect to each Pool, the Guarantor shall be subrogated to all the 

rights, interests, remedies, powers and privileges of each related Holder in respect of any Mortgage 

included in such Pool on which it has made guarantee payments of principal and/or interest to the extent of 

such payments. Nothing in this Section shall impair the Guarantor’s right to receive distributions in its 

capacity as Holder, if it is a Holder of any Securities.

Section 3.11. Termination Upon Final Payment. Each Pool is irrevocable and will terminate only 

in accordance with the terms of this Agreement. Except as provided in Sections 3.05(e), 6.06 and 7.01, 

with respect to each Pool, Freddie Mac’s and the Trustee’s obligations and responsibilities under this 

Agreement shall terminate as to a Pool and its Holders upon (i) the full payment to such Holders of all 

principal and interest due to the Holders based on the Pool Factors or by reason of the Guarantor’s 

guarantees or (ii) the payment to the Holder of all amounts held by Freddie Mac and the Trustee, 

respectively, and required to be paid hereunder; provided, however, that in no event shall any Pool created 

hereby continue beyond the expiration of 21 years from the death of the survivor of the descendants of 

Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James’s, living on the date 

hereof.

Section 3.12. Effect of Final Payment Date. The actual final payment on a Security may occur prior 

to the Payment Date specified in Section 3.09(a)(ii) due to prepayments of principal, including prepayments 

made in connection with the repurchase of any Mortgage from the related Pool.

Section 3.13. Payment Error Corrections. In the event of a principal or interest payment error, the 

Administrator, in its sole discretion, may effect corrections by the adjustment of payments to be made on 

future Payment Dates or in such other manner as it deems appropriate.

ARTICLE IV

UMBS and MBS

Section 4.01. Form and Denominations. With respect to each Pool, the principal balances, Coupons 

and other characteristics of the Securities to be issued shall be specified in the related Pool Supplement. 

Delivery of the Securities of a Pool shall constitute the issuance of the Securities for that Pool. Securities 

shall be issued, held and transferable only on the book-entry system of the Federal Reserve Banks in 

minimum original principal amounts of $1,000 and additional increments of $1. Securities shall at all times 

remain on deposit with a Federal Reserve Bank in accordance with the provisions of the Book-Entry Rules. 

A Federal Reserve Bank will maintain a book-entry recordkeeping system for all transactions in Securities 

with respect to Holders.

Section 4.02. Transfer of Securities. Securities may be transferred only in minimum original 

principal amounts of $1,000 and additional increments of $1. Securities may not be transferred if, as a

15
result of the transfer, the transferor or the new Holder would have on deposit in its account Securities of the 

same issue with an original principal amount of less than $1,000. The transfer, exchange or pledge of 

Securities shall be governed by the fiscal agency agreement between Freddie Mac and a Federal Reserve 

Bank, the Book-Entry Rules and such other procedures as shall be agreed upon from time to time by 

Freddie Mac and a Federal Reserve Bank. A Federal Reserve Bank shall act only upon the instructions of 

the Holder in recording transfers of a Security. A charge may be made for any transfer of a Security and 

shall be made for any tax or other governmental charge imposed in connection with a transfer of a Security. 

Freddie Mac hereby assigns to the Administrator, on behalf of the Trustee, Freddie Mac’s rights under each 

fiscal agency agreement with respect to Securities issued by any Pool.

Section 4.03. Record Date. The Record Date for each Payment Date shall be the close of business 

on the last day of the preceding month. A Holder of a Security on the books and records of a Federal 

Reserve Bank on the Record Date shall be entitled to payment of principal and interest on the related 

Payment Date. A transfer of a Security made on or before the Record Date in a month shall be recognized 

as effective as of the first day of such month.

ARTICLE V

Remedies

Section 5.01. Events of Default. With respect to each Pool, an “Event of Default’’ means any one of 

the following events:

(a) Default by the Guarantor or the Administrator in the payment of interest or principal to the related 

Holders as and when the same shall become due and payable as provided in this Agreement, and the 

continuance of such default for a period of 30 days.

(b) Failure by the Guarantor or the Administrator to observe or perform any other covenants of this 

Agreement relating to their respective obligations, and the continuance of such failure for a period of 60 

days after the date of receipt by such party of written notice of such failure and a demand for remedy by the 

affected Holders representing not less than 65 percent of the remaining principal balance of any affected 

Pool.

(c) The entry by any court having jurisdiction over the Guarantor or the Administrator of a decree or 

order for relief in an involuntary case under any applicable bankruptcy, insolvency or other similar law now 

or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian or sequestrator (or 

other similar official) of the Guarantor or the Administrator or for any substantial part of their respective 

properties, or for the winding up or liquidation of their respective affairs, if such decree or order remains 

unstayed and in effect for a period of 60 consecutive days.

(d) Commencement by the Guarantor or the Administrator of a voluntary case under any applicable 

bankruptcy, insolvency or other similar law now or hereafter in effect, or consent by the Guarantor or the 

Administrator to the entry of an order for relief in an involuntary case under any such law, or its consent to 

the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian or 

sequestrator (or other similar official) of the Guarantor or the Administrator or for any substantial part of 

their respective properties, or any general assignment made by the Guarantor or the Administrator for the 

benefit of creditors, or failure by the Guarantor or the Administrator generally to pay their debts as they 

become due.

The appointment of a conservator (or other similar official) by a regulator having jurisdiction over the 

Guarantor or the Administrator, whether or not such party consents to such appointment, shall not 

constitute an Event of Default.

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Section 5.02. Remedies.

(a) If an Event of Default occurs and is continuing with respect to a Pool, the Holders of Securities 

representing a majority of the remaining principal balance of such Pool may, by written notice to Freddie 

Mac, remove Freddie Mac as Administrator and nominate its successor under this Agreement with respect 

to such Pool. The nominee shall be deemed appointed as Freddie Mac’s successor as Administrator unless 

Freddie Mac objects within 10 days after such nomination. Upon such objection:

(i) The Administrator may petition any court of competent jurisdiction for the appointment of its 

successor; or

(ii) Any bona fide Holder that has been a Holder for at least six months may, on behalf of such 

Holder and all others similarly situated, petition any such court for appointment of the Administrator’s 

successor.

(b) If a successor Administrator is appointed, the Administrator shall submit to its successor a 

complete written report and accounting of the Mortgages in the affected Pool and shall take all other steps 

necessary or desirable to transfer its interest in and administration of such Pool to its successor.

(c) Subject to the Freddie Mac Act, a successor may take any action with respect to the Mortgages as 

may be reasonable and appropriate in the circumstances. Prior to the designation of a successor, the Holders 

of Securities representing a majority of the remaining principal balance of any affected Pool may waive any 

past or current Event of Default.

(d) Appointment of a successor shall not relieve Freddie Mac, in its capacity as Guarantor, of its 

guarantee obligations as set forth in this Agreement.

Section 5.03. Limitation on Suits by Holders.

(a) With respect to any Pool, except as provided in Section 5.02, no Holder shall have any right to 

institute any action or proceeding at law or in equity or in bankruptcy or otherwise or seek any other 

remedy whatsoever against Freddie Mac or the Trustee with respect to this Agreement or the related 

Securities or Mortgages, unless:

(i) Such Holder previously has given the Trustee written notice of an Event of Default and the 

continuance thereof;

(ii) The Holders of Securities representing a majority of the remaining principal balance of any 

affected Pool have made a written request to the Trustee to institute an action or proceeding in its own 

name and have offered the Trustee reasonable indemnity against the costs, expenses and liabilities to 

be incurred;

(iii) The Trustee has failed to institute any such action or proceeding for 60 days after its receipt of 

the written notice, request and offer of indemnity described above; and

(iv) The Trustee has not received from such Holders any direction inconsistent with the written 

request described above during the 60-day period.

(b) No Holder shall have any right under this Agreement to prejudice the rights of any other Holder, 

to obtain or seek preference or priority over any other Holder or to enforce any right under this Agreement, 

except for the ratable and common benefit of all Holders of Securities representing interests in any affected 

Pool.

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(c) For the protection and enforcement of the provisions of this Section, Freddie Mac, the Trustee and 

each and every Holder shall be entitled to such relief as can be given either at law or in equity. 

Notwithstanding the foregoing, no Holder’s right to receive payment (or to institute suit to enforce 

payment) of principal and interest as provided herein on or after the due date of such payment shall be 

impaired or affected without the consent of the Holder.

ARTICLE VI

Trustee

Section 6.01. Duties of Trustee.

 

(a) If an Event of Default has occurred and is continuing with respect to a Pool, the Trustee shall 

exercise the rights and powers vested in it by this Agreement and use the same degree of care and skill in its 

exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s 

own affairs.

(b) Except during the continuance of an Event of Default, the Trustee undertakes to perform such 

duties and only such duties as are specifically set forth in this Agreement and shall not be liable except for 

the performance of such duties and obligations as are specifically set forth in this Agreement and no 

implied covenants or obligations shall be read into this Agreement against the Trustee.

(c) The Trustee and its directors, officers, employees and agents may not be protected from 

liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence 

in the performance of their respective duties or by reason of reckless disregard of obligations and duties 

under this Agreement, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any action taken, or not taken, by the Trustee in good faith 

pursuant to this Agreement or for errors in judgment; and

(iii) the Trustee shall not be required to take notice or be deemed to have notice or knowledge of 

any default or Event of Default, unless the Trustee obtains actual knowledge or written notice of such 

default or Event of Default. In the absence of such actual knowledge or notice, the Trustee may 

conclusively assume that there is no default or Event of Default.

(d) Every provision of this Agreement shall be subject to the provisions of this Section and Section 

6.02.

(e) The Trustee shall not be liable for indebtedness evidenced by or arising under this Agreement, 

including principal of or interest on the Securities, or interest on any money received by it except as the 

Trustee may agree in writing.

(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent 

required by law or the terms of this Agreement.

(g) No provision of this Agreement shall require the Trustee to expend, advance or risk its own 

funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the 

exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such 

funds or adequate indemnity against such risk or liability is not reasonably assured to it.

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(h) The Trustee, or the Administrator on its behalf, may, but shall not be obligated to, undertake 

any legal action that it deems necessary or desirable in the interest of Holders. The Trustee, or the 

Administrator on its behalf, may be reimbursed for the legal expenses and costs of such action from the 

assets of the related Pool.

Section 6.02. Certain Matters Affecting the Trustee.

(a) The Trustee, and any director, officer, employee or agent of the Trustee, may rely in good faith 

on any certificate, opinion or other document of any kind which, prima facie, is properly executed and 

submitted by any appropriate Person respecting any matters arising hereunder. The Trustee may rely on 

any such documents believed by it to be genuine and to have been signed or presented by the proper Person 

and on their face conforming to the requirements of this Agreement. The Trustee need not investigate any 

fact or matter stated in such documents.

(b) Before the Trustee acts or refrains from acting, it may require an officer’s certificate or an 

opinion of counsel, which shall not be at the expense of the Trustee. The Trustee shall not be liable for any 

action it takes or omits to take in good faith in reliance on an officer’s certificate or opinion of counsel. 

The right of the Trustee to perform any discretionary act enumerated in this Agreement shall not be 

construed as a duty and the Trustee shall not be answerable for other than its willful misfeasance, bad faith 

or gross negligence in the performance of such act.

(c) The Trustee may execute any of the trusts or powers hereunder or perform any duties 

hereunder either directly or by or through agents or attorneys or a custodian or nominee.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it 

believes to be authorized or within its rights or powers; provided, that the Trustee’s conduct does not 

constitute willful misfeasance, bad faith or gross negligence. In no event shall the Trustee have any 

liability for consequential damages.

(e) The Trustee may consult with and rely on the advice of counsel, accountants and other advisors 

and shall not be liable for errors in judgment or for anything it does or does not do in good faith if it so 

relies. Any opinion of counsel with respect to legal matters relating to this Agreement and the Securities 

shall be full and complete authorization and protection from liability in respect to any action taken, omitted 

or suffered by it hereunder in good faith and in accordance with any opinion of such counsel.

(f) Any fees, expenses and indemnities payable from the assets of any Pool to Freddie Mac, in its 

capacity as Trustee, in the performance of its duties and obligations hereunder shall not affect Freddie 

Mac’s guarantee with respect to that Pool, as set forth in Section 3.09.

Section 6.03. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no 

representation as to the validity or adequacy of this Agreement, the assets of any Pool or the Securities.

Section 6.04. Trustee May Own Securities. Subject to Section 7.06, the Trustee in its individual or 

any other capacity may become the owner or pledgee of Securities with the same rights as it would have if 

it were not the Trustee.

Section 6.05. Indemnity. Each Pool shall indemnify the Trustee and the Trustee’s employees, 

directors, officers and agents, as provided in this Agreement, against any and all claims, losses, liabilities or 

expenses (including attorneys’ fees) incurred by it in connection with the administration of this trust and the 

performance of its duties under this Agreement (to the extent not previously reimbursed above), including, 

without limitation, the execution and filing of any federal or state tax returns and information returns and 

being the mortgagee of record with respect to the related Mortgages. The Trustee shall notify the

19
Administrator promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify 

the Administrator shall not relieve the related Pool of its obligations hereunder. A Pool shall not be 

required to reimburse any expense or indemnify against any loss, liability or expense incurred by the 

Trustee through the Trustee’s own willful misfeasance, bad faith or gross negligence.

The Trustee’s rights pursuant to this Section shall survive the discharge of this Agreement.

Section 6.06. Replacement of Trustee. The Trustee may resign at any time. Any successor Trustee 

shall resign if it ceases to be eligible in accordance with the provisions of Section 6.09. In either case, the 

resignation of the Trustee shall become effective, and the resigning Trustee shall be discharged from its 

obligations with respect to the Pools created under this Agreement, by giving 90 days’ written notice of the 

resignation to the Depositor, the Guarantor and the Administrator and upon the effectiveness of an 

appointment of a successor Trustee, which may be as of a date prior to the end of the 90-day period. Upon 

receiving such notice of resignation, the Depositor shall promptly appoint one or more successor Trustees 

by written instrument, one copy of which is delivered to the resigning Trustee and one copy of which is 

delivered to the successor Trustee. The successor Trustee need not be the same Person for all Pools. If no 

successor Trustee has been appointed for a Pool, or one that has been appointed has not accepted the 

appointment within 90 days after giving such notice of resignation, the resigning Trustee may petition any 

court of competent jurisdiction for the appointment of a successor Trustee.

Prior to an Event of Default, or if an Event of Default has occurred and has been cured with 

respect to a Pool, Freddie Mac cannot be removed as Trustee with respect to that Pool. If an Event of 

Default has occurred and is continuing while Freddie Mac is the Trustee, at the direction of Holders of 

Securities representing a majority of the remaining principal balance of such Pool, Freddie Mac shall resign 

or be removed as Trustee, and to the extent permitted by law, all of the rights and obligations of the Trustee 

with respect to the related Pool only, will be terminated by notifying the Trustee in writing. Holders of 

Securities representing a majority of the remaining principal balance of the Pool will then be authorized to 

name and appoint one or more successor Trustees. Notwithstanding the termination of the Trustee, its 

liability under this Agreement and arising prior to such termination shall survive such termination.

If a successor Trustee is serving as the Trustee, the following events are “Trustee Events of 

Default” with respect to a Pool:

(i) the Trustee fails to comply with Section 6.09;

(ii) the Trustee is adjudged bankrupt or insolvent;

(iii) a receiver or other public officer takes charge of the Trustee or its property; or

(iv) the Trustee otherwise becomes incapable of acting.

If at any time a Trustee Event of Default has occurred and is continuing, the Guarantor (or if an 

Event of Default has occurred and is continuing, the Depositor) may, and if directed by Holders of 

Securities representing a majority of the remaining principal balance of such Pool, shall, remove the 

Trustee as to such Pool and appoint a successor Trustee by written instrument, one copy of which shall be 

delivered to the Trustee so removed and one copy of which shall be delivered to the successor Trustee, and 

the Guarantor (or if an Event of Default has occurred and is continuing, the Depositor) shall give written 

notice of the successor Trustee to the Holders affected by the succession. Notwithstanding the termination 

of the Trustee, its liability under this Agreement arising prior to such termination will survive such 

termination.

20
If the Trustee resigns or is removed or if a vacancy exists in the office of the Trustee for any 

reason (the Trustee in such event being referred to herein as the retiring Trustee), the Depositor shall 

promptly appoint a successor Trustee that satisfies the eligibility requirements of Section 6.09.

The retiring Trustee agrees to cooperate with the Depositor and any successor Trustee in effecting 

the termination of the retiring Trustee’s responsibilities and rights hereunder and shall promptly provide 

such successor Trustee all documents and records reasonably requested by it to enable it to assume the 

Trustee’s functions hereunder.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee 

and to the Depositor, the Guarantor and the Administrator. Thereupon the resignation or removal of the 

retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and 

duties of the Trustee under this Agreement with respect to such Pool. The successor Trustee shall mail a 

notice of its succession to the related Holders. The retiring Trustee shall promptly transfer all property held 

by it as Trustee to the successor Trustee.

If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is 

removed, the retiring Trustee or the Depositor may petition any court of competent jurisdiction for the 

appointment of a successor Trustee.

Section 6.07. Successor Trustee By Merger. If a successor Trustee consolidates with, merges or 

converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation 

or banking association, the resulting, surviving or transferee corporation without any further act shall be the 

successor Trustee; provided, that such corporation or banking association shall be otherwise qualified and 

eligible under Section 6.09.

Section 6.08. Appointment of Co-Trustee or Separate Trustee.

(a) Notwithstanding any other provisions of this Agreement, at any time, for the purpose of 

meeting any legal requirement of any jurisdiction in which any part of a Pool may at the time be located, 

the Trustee shall have the power and may execute and deliver all instruments to appoint one or more 

Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of such

Pool and to vest in such Person or Persons, in such capacity and for the benefit of the related Holders, such 

title to such Pool, or any part thereof, and, subject to the other provisions of this Section, such powers, 

duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or

separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under 

Section 6.09 and no notice to the related Holders of the appointment of any co-trustee or separate trustee

shall be required under Section 6.06 hereof.

(b) With respect to each Pool, every separate trustee and co-trustee shall, to the extent permitted

by law, be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be 

conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or 

co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act

separately without the Trustee joining in such act), except to the extent that under any law of any 

jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or 

unqualified to perform such act or acts, in which event such rights, powers, duties and obligations 

(including the holding of title to the related Pool or any portion thereof in any such jurisdiction) shall 

be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of

the Trustee;

21
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other 

trustee hereunder; and

(iii) the Trustee may at any time accept the resignation of or remove any separate trustee or 

co-trustee.

(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to 

each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every

instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of

this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be 

vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee 

or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically 

including every provision of this Agreement relating to the conduct of, affecting the liability of, or 

affording protection to, the Trustee. Every such instrument shall be filed with the Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or

attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act

under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee

shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies 

and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the 

appointment of a new or successor trustee.

Section 6.09. Eligibility; Disqualification. Freddie Mac is eligible to act as the Trustee and is 

initially the Trustee for the Pools created under this Agreement. Any successor to Freddie Mac (i) at the 

time of its appointment as Trustee, must be reasonably acceptable to Freddie Mac and (ii) must be 

organized as a corporation or association doing business under the laws of the United States or any State 

thereof, be authorized under such laws to exercise corporate trust powers, have combined capital and 

surplus of at least $50,000,000 and be subject to supervision or examination by federal or state financial 

regulatory authorities. If any successor Trustee shall cease to satisfy the eligibility requirements set forth in 

(ii) above, that successor Trustee shall resign immediately in the manner and with the effect specified in 

Section 6.06.

ARTICLE VII

Miscellaneous Provisions

Section 7.01. Annual Statements. Within a reasonable time after the end of each calendar year, the 

Administrator (or its agent) shall furnish to each Holder on any Record Date during such year information 

that the Administrator deems necessary or desirable to enable Holders and beneficial owners of Securities 

to prepare their United States federal income tax returns, if applicable.

Section 7.02. Limitations on Liability. Neither Freddie Mac, in its corporate capacity, nor any of its 

directors, officers, employees, authorized designees, representatives or agents (“related persons’’) shall be 

liable to Holders for any action taken, or not taken, by them or by a servicer in good faith pursuant to this 

Agreement or for errors in judgment. This provision shall not protect Freddie Mac or any related person 

against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross 

negligence in the performance of duties or by reason of reckless disregard of obligations and duties under 

this Agreement. In no event shall Freddie Mac or any related person be liable for any consequential 

damages. Freddie Mac and any related person may rely in good faith on any document or other 

communication of any kind properly executed and submitted by any Person with respect to any matter 

arising under this Agreement. Freddie Mac has no obligation to appear in, prosecute or defend any legal 

action which is not incidental to its duties to service or supervise the servicing of the Mortgages in

22
accordance with this Agreement and which in its opinion may involve any expense or liability for Freddie 

Mac. Freddie Mac may, in its discretion, undertake or participate in any action it deems necessary or 

desirable with respect to any Mortgage, this Agreement, the Securities or the rights and duties of the parties 

hereto and the interests of the Holders hereunder. In such event, the legal expenses and costs of such action 

and any resulting liability shall be expenses for the protection, preservation and maintenance of the 

Mortgages borne pro rata by Freddie Mac and Holders as provided in Section 3.08(b).

Section 7.03. Limitation on Rights of Holders. The death or incapacity of any Person having an 

interest in a Security shall not terminate this Agreement or any Pool. Such death or incapacity shall not 

entitle the legal representatives or heirs of such Person, or any Holder for such Person, to claim an 

accounting, take any action or bring any proceeding in any court for a partition or winding up of the related 

Pool, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

Section 7.04. Control by Holders. With respect to any Pool, except as otherwise provided in 

Articles V and VI and Sections 7.05 and 7.06, no Holder shall have any right to vote or to otherwise control 

in any manner the operation and management of the Mortgages included in such Pool, or the obligations of 

the parties hereto. This Agreement shall not be construed so as to make the Holders from time to time 

partners or members of an association. Holders shall not be liable to any third person by reason of any 

action taken by the parties to this Agreement pursuant to any provision hereof.

Section 7.05. Amendment.

(a) Freddie Mac and the Trustee may amend this Agreement (including any related Pool Supplement) 

from time to time without the consent of any Holders to (i) cure any ambiguity or correct or supplement 

any provision in this Agreement, provided, however, that any such amendment shall not have a material 

adverse effect on any Holder; (ii) maintain the classification of any Pool as a grantor trust for federal 

income tax purposes, as it may then be in effect, or, in the event a REMIC election is made with respect to 

the beneficial interests in principal and interest payments on all or a portion of the assets comprising any 

Pool, to maintain the REMIC status of any assets with respect to which such REMIC election is made; or 

(iii) avoid the imposition of any state or federal tax on a Pool.

(b) Except as provided in Section 7.05(c), Freddie Mac and the Trustee may amend this Agreement as 

to any Pool, with the consent of Holders representing not less than a majority of the remaining principal 

balance of the affected Pool. 

(c) Freddie Mac and the Trustee may not amend this Agreement, without the consent of a Holder, if 

such amendment would impair or affect the right of such Holder to receive payment of principal and 

interest on or after the due date of such payment or to institute suit for the enforcement of any such 

payment on or after such date.

(d) To the extent that any provisions of this Agreement differ from the provisions of any UMBS and 

MBS Master Trust Agreement dated prior to the date of this Agreement, this Agreement shall be deemed to 

amend such provisions of the prior agreement, but only to the extent that Freddie Mac, under the terms of 

such prior agreement, could have effected such change as an amendment of such prior agreement without 

the consent of Holders of Securities thereunder.

(e) Notwithstanding any other provision of this Section, (i) the Administrator (in its own discretion 

and in its own interest) and the Trustee (at the Administrator’s direction) may amend this Agreement to 

reflect any modification in the Administrator’s methodology of calculating payments to Holders, including 

any modifications described in Section 3.05(d) and Section 3.06(a) and the manner in which it distributes 

prepayments to Holders, (ii) the Administrator (in its own discretion and in its own interest) and the Trustee 

(at the Administrator’s direction) may amend this Agreement to cure any inconsistency between this 

Agreement and the provisions of the Guide and (iii) the Depositor (in its own discretion and in its own

23
interest) and the Trustee (at the Administrator’s direction) may amend any Pool Supplement to make the 

adjustments described in Section 1.02(b) to the characteristics of the Mortgages to be transferred to a Pool 

or to the related Securities.

Section 7.06. Voting Rights. If Freddie Mac is acting as Administrator or Trustee and an Event of 

Default has occurred and is continuing, any Securities held by Freddie Mac for its own account shall be 

disregarded and deemed not to be outstanding for purposes of exercising the remedies set forth in Section 

5.02 and the second paragraph of Section 6.06. 

Section 7.07. Persons Deemed Owners. With respect to each Pool, Freddie Mac, the Trustee, the 

Administrator and a Federal Reserve Bank (or any agent of any of them) may deem and treat the related 

Holder(s) as the absolute owner(s) of a Security and the undivided beneficial ownership interests in the 

Mortgages included in the related Pool for the purpose of receiving payments and for all other purposes, 

and none of Freddie Mac, the Trustee, the Administrator or a Federal Reserve Bank (nor any agent of any 

of them) shall be affected by any notice to the contrary. All payments made to a Holder, or upon such 

Holder’s order, shall be valid, and, to the extent of the payment, shall satisfy and discharge the related 

Pool’s payment obligations with respect to the Holder’s Security. None of Freddie Mac, the Trustee, the 

Administrator or any Federal Reserve Bank shall have any direct obligation to any beneficial owner unless 

it is also the Holder of a Security.

Section 7.08. Governing Law. THIS AGREEMENT AND THE PARTIES’ RIGHTS AND 

OBLIGATIONS WITH RESPECT TO SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE 

UNITED STATES. INSOFAR AS THERE MAY BE NO APPLICABLE PRECEDENT, AND INSOFAR 

AS TO DO SO WOULD NOT FRUSTRATE THE PURPOSES OF THE FREDDIE MAC ACT OR ANY 

PROVISION OF THIS AGREEMENT OR THE TRANSACTIONS GOVERNED HEREBY, THE 

LOCAL LAWS OF THE STATE OF NEW YORK SHALL BE DEEMED REFLECTIVE OF THE LAWS 

OF THE UNITED STATES.

Section 7.09. Grantor Trust and REMIC Status. No provision in this Agreement shall be 

construed to grant Freddie Mac, the Trustee or any other Person authority to act in any manner which (i) 

would cause a Pool not to be treated as a grantor trust for federal income tax purposes, or (ii) in the event a 

REMIC election is made with respect to the beneficial interests in principal and interest payments on all or 

a portion of the assets comprising any Pool, would affect the status of such assets as a REMIC for federal 

income tax purposes.

Section 7.10. Payments Due on Non-Business Days. If the date fixed for any payment on any 

Security is a day that is not a Business Day, then such payment shall be made on the next succeeding 

Business Day, with the same force and effect as though made on the date fixed for such payment, and no 

interest shall accrue for the period after such date.

Section 7.11. Successors. This Agreement shall be binding upon and inure to the benefit of the 

parties and their respective successors, including any successor by operation of law, and permitted assigns.

Section 7.12. Headings. The headings in this Agreement are for convenience only and shall not 

affect the construction of this Agreement.

Section 7.13. Notice and Demand.

(a) Any notice, demand or other communication required or permitted under this Agreement to be 

given to or served upon any Holder may be given or served (i) in writing by deposit in the United States 

mail, postage prepaid, and addressed to such Holder as such Holder’s name and address may appear on the 

books and records of a Federal Reserve Bank or (ii) by transmission to such Holder through the 

communication system of the Federal Reserve Banks. Any notice, demand or other communication to or

24
upon a Holder shall be deemed to have been sufficiently given or made, for all purposes, upon mailing or 

transmission.

(b) Any notice, demand or other communication which is required or permitted to be given to or 

served under this Agreement may be given in writing addressed as follows (i) in the case of Freddie Mac in 

its corporate capacity, to Freddie Mac, 8200 Jones Branch Drive, McLean, Virginia 22102, Attention: 

Executive Vice President — General Counsel and Secretary and (ii) in the case of the Trustee, to: Freddie 

Mac (as Trustee), 1551 Park Run Drive, McLean, Virginia 22102, Attention: Office of Trustee; email: 

Freddie_Mac_Trustee@freddiemac.com, with a copy to the Executive Vice President – General Counsel 

and Secretary at the address set forth in clause (i). Such notice, demand or other communication to or upon 

Freddie Mac or the Trustee shall be deemed to have been sufficiently given or made only upon actual 

receipt of the writing.

(c) Any notice, demand or other communication to or upon Freddie Mac or the Trustee shall be 

deemed to have been sufficiently given or made only upon its actual receipt of the writing.

Section 7.14. Counterparts. This Agreement may be executed in any number of counterparts, each 

of which counterpart shall be deemed to be an original, and such counterparts shall constitute but one and 

the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in Portable 

Document Format (PDF) or by facsimile transmission shall be as effective as delivery of a manually 

executed original counterpart of this Agreement.

25
THE SALE OF A SECURITY AND RECEIPT AND ACCEPTANCE OF A SECURITY BY OR ON 

BEHALF OF A HOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF 

ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND 

ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH SECURITY OF ALL THE TERMS 

AND PROVISIONS OF THIS AGREEMENT (INCLUDING THE RELATED POOL SUPPLEMENT) 

AND THE AGREEMENT OF FREDDIE MAC, SUCH HOLDER AND SUCH OTHERS THAT THOSE 

TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE.

FEDERAL HOME LOAN MORTGAGE CORPORATION, 

as Trustee

/s/ John J. Kelly 

 Authorized Signatory

FEDERAL HOME LOAN MORTGAGE CORPORATION, 

in its corporate capacity as Depositor, Administrator 

and Guarantor 

/s/ Mark D. Hanson 

 Authorized Signatory

26
Exhibit 10.3

2022 EXECUTIVE MANAGEMENT COMPENSATION PROGRAM (“2022 EMCP”)

Program Document 

Effective January 1, 2022

Covered Positions A “Covered Officer” is any Freddie Mac1 officer at the Senior Vice President (“SVP”) 

level and above other than the Chief Executive Officer (“CEO”).

Covered Position 

Participation 

Requirement

Participation in the 2022 EMCP is conditioned on the Covered Officer’s agreement to 

the terms and conditions set forth herein and in the EMCP Recapture and Forfeiture 

Agreement (“Recapture Agreement”). A Covered Officer who does not agree to the 

terms of both the 2022 EMCP and the Recapture Agreement will receive only Base 

Salary. The terms and conditions set forth in the Recapture Agreement are 

incorporated in and made a part of this 2022 EMCP. However, a Covered Officer who 

previously signed the 2020 EMCP will not have to sign the 2022 EMCP and this is 

being provided for information regarding updates.

Target Total Direct 

Compensation2

A Covered Officer’s target total direct compensation (“Target TDC”) is the sum of Base 

Salary and Deferred Salary, each of which is paid in cash.

Base Salary Base Salary is earned and paid on the company’s standard payroll cycle and cannot 

exceed $600,000 without Federal Housing Finance Agency (“FHFA”) approval.

Deferred Salary The portion of Target TDC not paid in Base Salary is Deferred Salary, which is earned 

on the company’s standard payroll cycle. The amount earned in each quarter, plus 

interest earned on that amount as described below under “Interest on Deferred 

Salary,” will be paid in cash according to the “Approved Payment Schedule”. Deferred 

Salary consists of the following two elements:

At-Risk Deferred Salary – At-Risk Deferred Salary shall be equal to 30% of the 

Covered Officer’s Target TDC. The amount of At-Risk Deferred Salary earned in a 

calendar year is subject to reduction based on corporate and individual 

performance as follows:

• One-half of At-Risk Deferred Salary (or 15% of Target TDC) is subject to 

reduction based on an assessment by FHFA of performance against 

Conservatorship Scorecard objectives relevant for the calendar year in which 

the At-Risk Deferred Salary is earned.3 The reduction can range from 0% (no 

reduction) to 100% (the maximum reduction).

• One-half of At-Risk Deferred Salary (or 15% of Target TDC) is subject to 

reduction based on the Covered Officer’s performance against individual 

objectives and an assessment of the company’s performance against 

Corporate Scorecard objectives, each relevant to the calendar year in which 

the At-Risk Deferred Salary is earned. The total reduction can range from 0% 

(no reduction) to 100% (the maximum reduction).

A Covered Officer’s performance during the calendar year will be assessed by 

the CEO, in his/her sole discretion, pursuant to the performance assessment 

and reduction process in effect for such year.

__________________

1

 For purposes of this Program Document, Freddie Mac refers to the Federal Home Loan Mortgage Corporation and any of its wholly-owned 

subsidiaries.

2

 Initially expressed as an annual rate. Amount will be prorated, as appropriate, to reflect date of hire, promotion into a Covered Position, date of 

termination, or other adjustment to Target TDC.

3

 For the Covered Officer leading the Internal Audit function, the reduction will be based on the appropriate Board committee’s and FHFA’s 

assessment of performance against the Internal Audit Scorecard objectives.
2022 Executive Management Compensation Program

Page 2 of 5

Deferred Salary 

(continued)

At-Risk Deferred Salary payments for Covered Officers are subject to review and 

approval by the Committee and FHFA, as appropriate.

Fixed Deferred Salary – Fixed Deferred Salary shall be equal to the Covered 

Officer’s Target TDC less Base Salary and less At-Risk Deferred Salary and is not 

subject to reduction based on either corporate or individual performance.

Payment of both At-Risk and Fixed Deferred Salary is also subject, if applicable, to the 

“Treatment Upon Termination” provisions set forth below.

Deferred Salary 

Approved Payment 

Schedule

At-Risk Deferred Salary – For Covered Officers hired on or after January 1, 2020, AtRisk 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.

For Covered Officers hired prior to January 1, 2020:

• At-Risk Deferred Salary earned in each quarter prior to January 1, 2022, will 

be paid on the last regular pay date in the corresponding quarter of the 

following calendar year.

• At-Risk Deferred Salary earned in each quarter during 2022, one-half will be 

paid on the last regular pay date in the corresponding quarter of the following 

calendar year and one-half will be paid on the last regular pay date in the 

corresponding quarter of the second calendar year.

• At-Risk Deferred Salary earned in each quarter beginning January 1, 2023 or, 

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 – Fixed Deferred Salary earned in each quarter will be paid on 

the last regular pay date within the corresponding quarter of the following calendar 

year.

Interest on Deferred 

Salary

Interest will be credited on the amount of a Covered Officer’s At-Risk and Fixed 

Deferred Salary earned during each calendar quarter. The interest rate used is onehalf the one-year Treasury Bill rate in effect on the last business day immediately 

preceding the year in which Deferred Salary is earned. The amount on which interest 

is accrued will take into account any reduction for corporate and/or individual 

performance applicable to a Covered Officer’s At-Risk Deferred Salary and any 

reduction applicable to a Covered Officer’s Fixed Deferred Salary resulting from 

certain terminations of employment as described in “Treatment Upon Termination: 

Fixed Deferred Salary.” Interest is earned from the first day of the calendar quarter 

following the quarter during which the Deferred Salary is earned through the payment 

date under the Approved Payment Schedule or, in the event of death, the actual 

payment date.

The amount of interest payable with respect to a Covered Officer’s Deferred Salary will 

be determined as of the payment date and will be paid at the same time as the 

Deferred Salary to which it relates. If Deferred Salary is forfeited or recaptured for any 

of the reasons described in the Recapture Agreement, the related interest will also be 

forfeited or recaptured.
2022 Executive Management Compensation Program

Page 3 of 5

Impact on Retirement, 

Executive, and Welfare 

Plans

The treatment of Base Salary and Deferred Salary as compensation for purposes of 

Freddie Mac’s retirement and welfare benefit plans is governed by the actual terms of 

those plans. The table below summarizes whether the Base Salary and Deferred 

Salary a Covered Officer receives while an active employee are treated as 

compensation for purposes of the following Freddie Mac retirement and welfare benefit 

plans. Freddie Mac retains the right to amend, revise or discontinue any of the 

retirement and welfare benefit plans and the terms of each plan will prevail in the event 

that there is any conflict between those terms and the table below.

Impact on Retirement, 

Executive, and Welfare 

Plans (continued)

Interest earned on Deferred Salary, as well as any Base Salary or Deferred Salary a 

Covered Officer receives after termination of employment are not treated as 

compensation for purposes of any Freddie Mac retirement or welfare benefit plan.

Treatment Upon 

Termination: 

Base Salary

Base Salary will cease upon termination of employment, regardless of the reason for 

such termination.

___________________________

4

 Compensation for purposes of the Non-Qualified Thrift/401(k) SERP may not exceed two times a Covered Officer’s Base Salary.
2022 Executive Management Compensation Program

Page 4 of 5

Treatment Upon Termination:

At-Risk Deferred Salary

The timing and payment of any unpaid portion of At-Risk Deferred Salary is based on 

the reason for termination of employment, as follows:

• Forfeiture Event – All earned but unpaid At-Risk Deferred Salary and related 

interest is subject to forfeiture if a Covered Officer is terminated due to the 

occurrence of an event or conduct described in the Recapture Agreement;

• Death - All earned but unpaid At-Risk Deferred Salary and related interest is 

paid as soon as administratively possible, but not later than 90 calendar days 

after the date of death, subject to the terms and conditions of the Recapture 

Agreement; and

• Any Other Reason5 – All earned but unpaid At-Risk Deferred Salary and 

related interest is paid in accordance with the Approved Payment Schedule, 

subject to the terms and conditions of the Recapture Agreement.

Payment of earned but unpaid At-Risk Deferred Salary and related interest following a 

termination of employment shall be subject to the performance assessment and 

reduction process. The performance assessment and reduction process for At-Risk 

Deferred Salary is waived, however, in cases of death or Long-Term Disability (as 

defined in the Long-Term Disability Plan in effect on the date of termination) if the 

process is not complete as of the termination date.

Treatment Upon 

Termination:

Fixed Deferred Salary

The timing and payment of any unpaid portion of Fixed Deferred Salary is based on 

the reason for termination of employment, as follows:

• Forfeiture Event – All earned but unpaid Fixed Deferred Salary and related 

interest is subject to forfeiture if a Covered Officer is terminated due to the 

occurrence of an event or conduct described in the Recapture Agreement;

• Death - All earned but unpaid Fixed Deferred Salary and related interest is 

paid in full as soon as administratively possible, but not later than 90 calendar 

days after the date of death, subject to the terms and conditions of the 

Recapture Agreement; and

• Any Other Reason5 – All earned but unpaid Fixed Deferred Salary and related 

interest is paid in accordance with the Approved Payment Schedule, subject to 

the terms and conditions of the Recapture Agreement.

A Covered Officer’s earned but unpaid Fixed Deferred Salary will be reduced by 2% for 

each full or partial month by which the termination precedes January 31 of the second 

calendar year following the calendar year in which the Fixed Deferred Salary is 

earned.

This reduction will not be applied in cases of death, Long-Term Disability, a severanceeligible termination, as defined in the severance plan applicable to Covered Officers 

who are not executive officers, or retirement. A Covered Officer is considered to have 

retired when s/he voluntarily terminates employment after attaining or exceeding 62 

years of age, regardless of length of service, or attaining or exceeding 55 years of age 

with 10 or more years of continuous service.

___________________________

5

 Any Other Reason includes, but is not limited to, voluntary terminations, retirement, Long-Term Disability, and involuntary termination for any 

reason other than a Forfeiture Event.
2022 Executive Management Compensation Program

Page 5 of 5

Reservation of Rights 

and Applicable Law

Each Covered Officer’s employment with Freddie Mac is “at-will,” meaning that either 

the Covered Officer or Freddie Mac may terminate such employment at any time with 

or without cause or notice. Nothing in this Program Document or any other document 

referred to or incorporated by reference herein shall be held or construed to change 

the at-will nature of any Covered Officer’s employment with Freddie Mac.

Nothing in this Program Document is intended or shall be construed to abrogate 

FHFA’s authority to either: (i) modify or terminate any compensation plan or program 

(including the 2020 EMCP); or (ii) disapprove the actual payment of any form of 

compensation to be paid pursuant to the 2022 EMCP.

FHFA retains the right to modify any of the terms and conditions of your employment, 

including the right to modify or rescind the terms and conditions of the 2020 EMCP as 

well as the actual payment of compensation to you pursuant thereto, without giving 

rise to liability on the part of Freddie Mac.

The 2020 EMCP is subject to and shall be construed in accordance with: (i) any 

applicable law and any applicable regulation, guidance or interpretation of FHFA and/

or the United States Department of the Treasury; and (ii) the substantive laws of the 

Commonwealth of Virginia, excluding provisions of the Virginia law concerning choiceof-law that would result in the law of any state other than Virginia being applied.

Payment of Deferred Salary under the 2020 EMCP is intended to comply with the 

requirements of Section 409A of the Internal Revenue Code of 1986 (“Section 409A”), 

as amended, and, specifically, with the separation pay exemption and short-term 

deferral exemption of Section 409A, and shall in all respects be construed, interpreted, 

and administered in accordance with Section 409A. Notwithstanding anything in the 

2020 EMCP to the contrary, payments may only be made pursuant to the 2020 EMCP 

upon an event and in a manner permitted by Section 409A or an applicable exemption. 

All payments to be made upon a termination of employment under this Program 

Document may only be made upon a “separation from service” under section 409A. If 

a Covered Officer is a “specified employee” (within the meaning of Section 

409A(a)(2)(B)(i)) at the time of a separation from service, payments scheduled to be 

made during the six months following the separation from service shall, to the extent 

required by Section 409A, be deferred to and payable on the first day of the seventh 

month following the separation from service. Although the Corporation intends to 

administer the EMCP to prevent taxation under Code section 409A, the Corporation 

does not represent or warrant that the EMCP will comply with Code section 409A or 

any other provision of federal, state, local, or non-United States law. The Corporation, 

its affiliates, and their respective directors, officers, employees, and advisers will not be 

liable to any person for any tax, interest, or penalties that might be owed with respect 

to a benefit.

This 2022 EMCP will be in effect for 2022 and subsequent years unless and until amended or superseded. By signing below, I 

acknowledge that I understand and voluntarily agree to the terms of this 2022 EMCP:

____________________________________ __________________________

Covered Officer’s Signature Date

____________________________________

Printed Name

____________________________________

Title
Exhibit 31.1

CERTIFICATION

PURSUANT TO SECURITIES EXCHANGE ACT RULE 13a-14(a)

I, Michael J. DeVito, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 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: November 8, 2022

/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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 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: November 8, 2022

/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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 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: November 8, 2022

/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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 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: November 8, 2022

/s/ Christian M. Lown

Christian M. Lown

Executive Vice President and Chief Financial Officer