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 March 31, 2021

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 April 13, 2021, 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 8

n Consolidated Results of Operations 13

n Consolidated Balance Sheets Analysis 19

n Our Portfolios 20

n Our Business Segments 23

n Risk Management 36

l	Credit Risk 36

l	Market Risk 55

n Liquidity and Capital Resources 58

n Critical Accounting Policies and Estimates 64

n Regulation and Supervision 65

n Forward-Looking Statements 66

FINANCIAL STATEMENTS 69

OTHER INFORMATION 132

CONTROLS AND PROCEDURES 133

EXHIBIT INDEX 134

SIGNATURES 135

FORM 10-Q INDEX 136

Table of Contents

Freddie Mac 1Q 2021 Form 10-Q i
MD&A TABLE INDEX

1 Summary of Condensed Consolidated Statements of Comprehensive Income (Loss) 13

2 Components of Net Interest Income 14

3 Analysis of Net Interest Yield 15

4 Components of Guarantee Fee Income 15

5 Components of Investment Gains (Losses), Net 16

6 Components of Mortgage Loans Gains (Losses) 16

7 Components of Investment Securities Gains (Losses) 16

8 Components of Debt Gains (Losses) 17

9 Components of Derivative Gains (Losses) 17

10 Components of Benefit (Provision) for Credit Losses 18

11 Summarized Condensed Consolidated Balance Sheets 19

12 Mortgage Portfolio 20

13 Guarantee Portfolio 21

14 Mortgage-Related Investments Portfolio 21

15 Single-Family Segment Financial Results 29

16 Multifamily Segment Financial Results 35

17 Single-Family New Business Activity 37

18 Single-Family Mortgage Portfolio CRT Issuance 38

19 Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding 38

20 Credit-Enhanced and Non-Credit-Enhanced Loans in Our Single-Family Mortgage Portfolio 39

21 Credit Enhancement Coverage by Year of Origination 39

22 Single-Family Mortgage Portfolio Without Credit Enhancement 40

23 Details of Single-Family Credit Enhancement Costs, Investment Gains (Losses), and Recoveries 40

24 Single-Family Credit Enhancement Receivables 40

25 Credit Quality Characteristics of Our Single-Family Loans in Forbearance 41

26 Single-Family Loans in Forbearance Plans by Payment Status 41

27 Single-Family Loans in Forbearance 42

28 Status of Single-Family Loans That Received Forbearance 42

29 Single-Family Allowance for Credit Losses Activity 43

30 Single-Family Mortgage Portfolio Credit Performance Metrics 44

31 Single-Family TDR and Non-Accrual Loans 44

32 Foregone Interest Income on Single-Family TDRs and Non-Accrual Loans 45

33 Single-Family TDR Loan Activity 45

34 Credit Quality Characteristics of Our Single-Family Mortgage Portfolio 46

35 Single-Family Mortgage Portfolio Attribute Combinations 47

36 Alt-A Loans in Our Single-Family Mortgage Portfolio 48

37 Concentration of Credit Risk of Our Single-Family Mortgage Portfolio 48

38 Single-Family REO Activity 50

39 Current Credit Quality of Multifamily Loans Under a Forbearance Program 52

40 Multifamily Allowance for Credit Losses Activity 52

41 Credit-Enhanced and Non-Credit-Enhanced Loans Underlying Our Multifamily Mortgage Portfolio 52

42 Level of Subordination Outstanding 53

43 Credit Quality of Our Multifamily Mortgage Portfolio Without Credit Enhancement 53

44 Single-Family Mortgage Portfolio Non-Depository Servicers 53

45 Single-Family Mortgage Insurers 54

Table Description Page

Table of Contents

Freddie Mac 1Q 2021 Form 10-Q ii
46 Single-Family ACIS Counterparties 54

47 PVS-YC and PVS-L Results Assuming Shifts of the LIBOR Yield Curve 55

48 Duration Gap and PVS Results 55

49 PVS-L Results Before Derivatives and After Derivatives 56

50 Earnings Sensitivity to Changes in Interest Rates 56

51 Liquidity Sources 58

52 Other Investments Portfolio 58

53 Funding Sources 59

54 Debt of Freddie Mac Activity 60

55 Activity for Debt Securities of Consolidated Trusts Held by Third Parties 62

56 Net Worth Activity 63

57 Forecasted House Price Growth Rates 64

Table Description Page

Table of Contents

Freddie Mac 1Q 2021 Form 10-Q iii
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, including the 

effects the COVID-19 pandemic and the actions taken in response may have on our liquidity, business activities, financial 

condition, and results of operations, and 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, 2020, or 2020 Annual Report.

Throughout this Form 10-Q, we use certain acronyms and terms that are defined in the Glossary of our 2020 Annual Report. 

You should read the following MD&A in conjunction with our 2020 Annual Report and our condensed consolidated financial 

statements and accompanying notes for the three months ended March 31, 2021 included in Financial Statements.

INTRODUCTION

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

U.S. housing market. We do this primarily by purchasing 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 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. We 

are working with FHFA, our customers, and the industry to build a better housing finance system for the nation.

COVID-19 Pandemic Response Efforts

During 1Q 2021, the COVID-19 pandemic continued to have adverse effects on the U.S. economy, although the economy 

showed signs of improvement as vaccination rates increased and the federal government continued to provide economic 

stimulus. In addition, the housing market has continued to perform well during the pandemic. Throughout the pandemic, we 

have remained focused on serving our mission and the crucial role we play in the U.S. housing finance system while supporting 

the health and safety of our communities, customers, and staff. We continue to actively monitor the effects of the pandemic 

and to make decisions based on guidance from national, state, and local governments and public health authorities, including 

the U.S. CDC. More than 95% of our staff continued to work remotely as of March 31, 2021.

We have taken actions to help homeowners with Freddie Mac-owned mortgages who are directly or indirectly affected by the 

COVID-19 pandemic stay in their homes during this challenging time. We have also provided support to the multifamily 

mortgage market. For additional information on our support of the mortgage markets during the pandemic, see MD&A - Our 

Business Segments - Single-Family, MD&A - Our Business Segments - Multifamily, MD&A - Risk Management 

- Credit Risk - Single-Family Mortgage Credit Risk, and MD&A - Risk Management - Credit Risk - Multifamily 

Mortgage Credit Risk.

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 1
Business Results

Consolidated Financial Results

Net Revenues, Net Income, and Comprehensive Income

(In billions)

$2.4

$4.1

$5.1 $5.0 $5.3

$0.2

$1.8

$2.5 $2.9 $2.8

$0.6

$1.9 $2.4 $2.5 $2.4

Net Revenues Net Income Comprehensive Income

1Q20 2Q20 3Q20 4Q20 1Q21

n	 Net income was $2.8 billion for 1Q 2021, an increase of $2.6 billion year-over-year. Comprehensive income was $2.4 billion

for 1Q 2021, an increase of $1.8 billion year-over-year. The increases in both net income and comprehensive income were 

driven by higher net revenues and lower credit-related expense. 

n Net revenues increased 118% year-over-year to $5.3 billion, primarily due to higher net interest income and higher net 

investment gains. 

Net Worth

(In billions)

$9.5

$11.4

$13.9

$16.4

$18.8

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

n	 Net worth was $18.8 billion as of March 31, 2021, up from $16.4 billion as of December 31, 2020.

n	 Pursuant to the January 2021 Letter Agreement, the liquidation preference of the senior preferred stock increased from 

$86.5 billion on December 31, 2020 to $89.1 billion on March 31, 2021 based on the $2.5 billion increase in our Net Worth 

Amount during 4Q 2020, and will increase to $91.4 billion on June 30, 2021 based on the $2.4 billion increase in our Net 

Worth Amount during 1Q 2021.

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 2
Market Liquidity

 Market Liquidity

(In thousands)

637

1,028

1,338

1,598

1,365

217 218

340 356 291

309

609

813

936 940

111

201

185

306

134

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

1Q20 2Q20 3Q20 4Q20 1Q21

We support the U.S. housing market by executing our Charter Mission to provide liquidity and help maintain credit availability 

for new and refinanced single-family mortgages as well as for rental housing. We provided $377 billion in liquidity to the 

mortgage market in 1Q 2021, which enabled the financing of nearly 1.4 million home purchases, refinancings, and rental units. 

Single-family refinance activity increased year-over-year, as borrowers continued to take advantage of low mortgage interest 

rates during 1Q 2021. 

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 3
Portfolio Balances

Mortgage Portfolio

(UPB in billions)

$2,362 $2,415

$2,545

$2,714

$2,852

$2,020 $2,061 $2,179 $2,326 $2,458

$342 $354

$366

$388

$394

Single-family mortgage portfolio

Multifamily mortgage portfolio

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

Investments Portfolio

(UPB in billions)

$334 $349 $345 $345 $339

$211 $194 $198 $182 $174

$123 $155 $147 $163 $165

Mortgage-related investments portfolio

Other investments portfolio

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

n	 Our total mortgage portfolio increased 21% year-over-year to $2,852 billion, driven by a 22% increase in our single-family 

mortgage portfolio and a 15% increase in our multifamily mortgage portfolio.

l	 The growth in our single-family mortgage portfolio was primarily driven by higher new business activity. Additionally, 

continued house price appreciation contributed to new business acquisitions having a higher average loan size 

compared to older vintages that continued to run off.

l	 The growth in our multifamily mortgage portfolio was primarily driven by increased loan purchase and securitization 

activity attributable to continued high demand for multifamily financing.

n	 Our total investments portfolio increased 1% year-over-year to $339 billion, primarily due to an increase in our other 

investments portfolio, partially offset by a decrease in our mortgage-related investments portfolio. 

l	 The increase in our other investments portfolio was driven by higher loan prepayments and increased near-term cash 

needs for higher expected single-family cash window loan purchases, as well as our compliance with updated 

minimum liquidity requirements established by FHFA that have been in effect since December 2020.

l Since 2019, FHFA has instructed us to maintain the mortgage-related investments portfolio at or below $225 billion at 

all times and to include 10% of the notional value of certain interest-only securities we own in the calculation of this 

portfolio. Pursuant to the January 2021 Letter Agreement, the Purchase Agreement currently caps our mortgagerelated investments portfolio at $250 billion, and the calculation of mortgage assets subject to this cap also includes 

10% of the notional value of our interest-only securities. At the end of 2022, the Purchase Agreement cap will be 

lowered from $250 billion to $225 billion. With respect to composition, in August 2020, FHFA instructed us to further 

limit the amount and type of assets we hold in our mortgage-related investments portfolio. For more information on 

limits to our mortgage-related investments portfolio, see MD&A - Our Portfolios - Investments Portfolio - 

Mortgage-Related Investments Portfolio.

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 4
Credit Risk Transfer

Single-Family Mortgage Portfolio with Credit Enhancement 

(UPB in billions)

$1,172 $1,103 $1,133 $1,178 $1,258

58%

54%

52% 51% 51%

UPB Percentage

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

Multifamily Mortgage Portfolio with Credit Enhancement 

(UPB in billions)

$310 $314 $332 $346 $362

91% 89%91% 89%

92%

UPB Percentage

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

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

developed CRT programs that distribute mortgage credit risk to third-party investors. We regularly transfer a portion of the 

credit risk, primarily on recently acquired loans, with 51% of our single-family mortgage portfolio and 92% of our multifamily 

mortgage portfolio covered by credit enhancements as of March 31, 2021. Credit enhancement coverage of the singe-family 

mortgage portfolio decreased year-over-year, primarily due to a higher proportion of recently acquired loans with lower LTV 

ratios and the high volume of new business activity which has not been included in CRT transactions yet, but may be included 

in future periods. See MD&A - Our Business Segments - Single-Family Guarantee - Business Overview - Products 

and Activities and MD&A - Our Business Segments - Multifamily - Business Overview - Products and Activities 

for additional information on our credit enhancements.

Business Segments

During 1Q 2021, our chief operating decision maker began making decisions about allocating resources and assessing 

segment performance based on two reportable segments, Single-family and Multifamily. Prior to 1Q 2021, we managed our 

business based on three reportable segments, Single-family Guarantee, Multifamily, and Capital Markets.

For additional information on our change in segment reporting presentation, see MD&A - Our Business Segments and 

Note 15.

Conservatorship and Government Support for Our Business

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

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

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

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

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

issued Treasury both senior preferred stock and a warrant to purchase common stock. The senior preferred stock and warrant 

were issued as an initial commitment fee in consideration for Treasury's commitment to provide funding to us under the 

Purchase Agreement. 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 that the support provided by Treasury 

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

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 5
Our Purchase Agreement with Treasury significantly affects our business activities, including by: limiting our secondary market 

activities; the amount and type of single-family and multifamily loans we can acquire; the amount of indebtedness we can incur; 

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

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

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

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

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

Under the August 2012 amendment to the Purchase Agreement, our cash dividend requirement each quarter is the amount, if 

any, by which our Net Worth Amount at the end of the immediately preceding fiscal quarter, less the applicable Capital Reserve 

Amount, exceeds zero. Pursuant to the January 2021 Letter Agreement, the applicable Capital Reserve Amount is the amount 

of adjusted total capital necessary to meet the capital requirements and buffers set forth in the ERCF. This Capital Reserve 

Amount will remain in effect until the last day of the second fiscal quarter during which we have reached and maintained such 

level of capital (the Capital Reserve End Date). As a result of increases in the applicable Capital Reserve Amount since 

December 2017, we have been able to retain earnings and build capital, but the increases in our Net Worth Amount have been, 

or will be, added to the aggregate liquidation preference of the senior preferred stock. If for any reason we were not to pay our 

dividend requirement on the senior preferred stock in full in any future period until the Capital Reserve End Date, the unpaid 

amount would be added to the liquidation preference and the applicable Capital Reserve Amount would thereafter be zero. This 

would not affect our ability to draw funds from Treasury at the request of FHFA, our Conservator, under the Purchase 

Agreement. After the Capital Reserve End Date, we will be subject to a new periodic cash dividend requirement, as well as a 

periodic commitment fee to be agreed upon with Treasury in consultation with the Chairman of the Federal Reserve.

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

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

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

Net Worth, Liquidation Preference, and 

Treasury Funding Commitment

(In billions)

$18.8

$89.1

$140.2

Net worth

Senior preferred stock liquidation

preference

Remaining Treasury funding commitment

As of March 31, 2021

Draws and Dividend Payments

(In billions)

$71.6

$119.7

Cumulative draws from Treasury

Cumulative dividend payments to Treasury

As of March 31, 2021

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 6
Pursuant to the Purchase Agreement and terms of the senior preferred stock, both as amended:

n	 Our Net Worth Amount was $18.8 billion as of March 31, 2021, up from $16.4 billion as of December 31, 2020. As our Net 

Worth Amount as of December 31, 2020 was below the amount necessary to meet the capital requirements and buffers set 

forth in the ERCF, we did not have a dividend requirement to Treasury on the senior preferred stock for 1Q 2021, and we 

will not have a dividend requirement on the senior preferred stock until we reach such capital levels. 

n	 The liquidation preference of the senior preferred stock increased from $86.5 billion on December 31, 2020 to $89.1 billion 

on March 31, 2021 based on the $2.5 billion increase in our Net Worth Amount during 4Q 2020, and will increase to $91.4 

billion on June 30, 2021 based on the $2.4 billion increase in our Net Worth Amount during 1Q 2021. 

At March 31, 2021, our assets exceeded our liabilities under GAAP; therefore, no draw is being requested from Treasury under 

the Purchase Agreement. As of March 31, 2021, our aggregate funding received from Treasury under the Purchase Agreement 

was $71.6 billion. The remaining Treasury commitment under the Purchase Agreement was $140.2 billion at March 31, 2021, 

and will be reduced by any future draws.

For more information on the conservatorship and government support for our business, including our dividend requirements on 

and increases in the liquidation preference of the senior preferred stock, see Note 2.

Management's Discussion and Analysis Introduction

Freddie Mac 1Q 2021 Form 10-Q 7
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. 

Interest Rates(1)

Quarterly Ending Rates

3.74%

3.50%

3.13%

2.90%

2.67%

3.17%

1.55%

0.65%

0.08% 0.09% 0.07% 0.01%

1.91%

1.45%

0.30% 0.23% 0.24% 0.19%

1.89%

0.72% 0.64% 0.71%

0.93%

1.82%

30-year PMMS SOFR

3-month LIBOR 10-year LIBOR

12/31/19 03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

(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 the 10-year LIBOR interest rate and other 

benchmark rates can significantly affect 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.

n Changes in the 3-month LIBOR rate affect interest 

expense on our short-term funding.

n SOFR is a benchmark rate for secured overnight 

dollar-denominated financing identified by certain 

banking regulators and market participants as a 

potential replacement for LIBOR. SOFR affects the 

interest earned on our short-term investments.

n	 The yield curve steepened during 1Q 2021, as shortterm rates remained near zero while longer-term rates 

increased significantly during the quarter.

Unemployment Rate and Monthly Net New Jobs 

(360,000)

(4,333,000)

1,342,000

213,000 539,000

4.4% 11.1% 7.8% 6.7% 6.0%

Average monthly net new jobs

(non-farm)

National unemployment rate

(as of the last month in each quarter)

1Q20 2Q20 3Q20 4Q20 1Q21

Source: U.S. Bureau of Labor Statistics.

n	 Changes in the national unemployment rate can affect 

several market factors, including the demand for both 

single-family and multifamily housing and loan 

delinquency rates.

n In response to the COVID-19 pandemic, many state 

and local governments enacted measures designed to 

curb the spread of COVID-19 that have severely 

curtailed economic activity and significantly increased 

unemployment levels. While the labor market has 

improved, it has yet to make a full recovery from the 

effects of the pandemic. The improved availability of a 

COVID-19 vaccine and its widespread distribution are 

contributing to the easing of government restrictions 

and driving economic growth, which may help reduce 

unemployment levels.

Management's Discussion and Analysis Market Conditions and Economic Indicators 

Freddie Mac 1Q 2021 Form 10-Q 8
Single-Family Housing and Mortgage Market Conditions

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

6,188

5,086

7,077

7,581 7,262

5,487

4,383

6,103 6,657 6,303

701

703

974

924

959

2.4% 2.2%

3.8%

2.5%

3.8%

Sales of existing homes (units in thousands)

Sales of new homes (units in thousands)

Single-family house price growth rate

1Q20 2Q20 3Q20 4Q20 1Q21

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

House Price Index.

U.S. Single-Family Mortgage Originations

(UPB in billions)

$725 $675

$975

$1,140

$1,250

4Q19 1Q20 2Q20 3Q20 4Q20

Source: Inside Mortgage Finance. 1Q 2021 U.S. single-family mortgage 

originations data is not yet available.

n Low interest rates and increased time at home as a 

result of the COVID-19 pandemic (such as for health 

and safety reasons, remote work, or virtual learning) 

drove significant increases in home sales in 2020. 

Mortgage rates increased in 1Q 2021, and we expect 

them to continue to increase through the end of 2022. 

In addition, there is a supply shortage of single family 

homes for sale. Both of these factors could lead to 

lower purchase volumes. Freddie Mac's single-family 

loan purchase volumes typically follow a similar trend.

n	 Changes in house prices affect the amount of equity 

that borrowers have in their homes. Borrowers with 

less equity typically have higher delinquency rates. 

n	 Single-family house prices increased 3.8% during 1Q 

2021, compared to an increase of 2.4% during 1Q 

2020. We expect house price growth to moderate in 

2021.

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

to $1,250 billion in 4Q 2020 from $725 billion in 4Q 

2019 as a result of low average mortgage interest 

rates, higher home sales, and increasing house prices.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 1Q 2021 Form 10-Q 9
Multifamily Housing and Mortgage Market Conditions 

Apartment Vacancy Rates and Change in Effective Rents

4.8% 4.9% 5.1% 5.3% 5.3%

0.5%

(0.3)%

(1.7)% (1.3)%

(0.2)%

Apartment vacancy rates

Change in effective rents

1Q20 2Q20 3Q20 4Q20 1Q21

Source: Reis. 

Apartment Completions and Net Absorption

(Units in thousands)

48 48

53 51

28

39

31

26 25

Completions Net absorption

1Q20 2Q20 3Q20 4Q20 1Q21

Source: Reis. 1Q 2021 net absorption data is not yet available.

n	 Vacancy rates remained flat during 1Q 2021 and 

slightly below the long-term average (between 2000 

and 1Q 2021) of 5.4% as new completions were near 

historic lows over the past year due to the lingering 

effects of the COVID-19 pandemic on construction. 

However, vacancy rates may increase in the future 

when the COVID-19 relief programs expire in the 

second half of 2021.

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

renter over the term of the lease, adjusted for 

concessions by the landlord and costs borne by the 

renter) was negative at a national level in 1Q 2021; 

however, positive rent growth was seen in over 60% of 

the geographic markets. While negative, the national 

rent growth rate improved relative to its low point in 

3Q 2020, a trend we expect to continue for the 

remainder of 2021.

n	 Despite slightly negative effective rent growth and flat 

vacancy rates, multifamily property prices grew 2.1% 

in 1Q 2021, as investors continued to believe there 

was a need for additional rental housing in the U.S. 

and the overall investment environment remained 

attractive given low interest rates and continued stress 

in other commercial property types (e.g., office, retail, 

hotel).

n	 We expect that both supply and demand for rental 

housing will be affected over the next year or two due 

to the COVID-19 pandemic, which will flow through to 

multifamily market fundamentals. 

n	 Although we expect the increase in demand observed 

in late 2020 to continue into 2021, new completions 

are expected to be elevated and are likely to outpace 

absorptions.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 1Q 2021 Form 10-Q 10
Mortgage Debt Outstanding 

Single-Family Mortgage Debt Outstanding

(UPB in billions) 

$11,189 $11,255 $11,341 $11,509 $11,666

18% 18% 18%

19%

20%

U.S. single-family mortgage debt outstanding

Freddie Mac share

4Q19 1Q20 2Q20 3Q20 4Q20

Source: Federal Reserve Financial Accounts of the United States of America. 1Q 

2021 U.S. single-family mortgage debt outstanding data is not yet available.

 Multifamily Mortgage Debt Outstanding 

 (UPB in billions)

$1,623 $1,645 $1,680 $1,711 $1,754

18% 18% 18% 18%

19%

U.S. multifamily mortgage debt outstanding

Freddie Mac share

4Q19 1Q20 2Q20 3Q20 4Q20

Source: Federal Reserve Financial Accounts of the United States of America. 1Q 

2021 U.S. multifamily mortgage debt outstanding data is not yet available.

n	 U.S. single-family mortgage debt outstanding is 

expected to increase year-over-year, primarily driven 

by house price appreciation. 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 total multifamily mortgage debt 

outstanding increased in 4Q 2020 as we accounted for 

a larger share of total multifamily mortgage debt 

origination volume. This growth in our share of debt 

origination volume was driven by our efforts during 

2020 to serve a countercyclical role while other market 

participants reduced their presence.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 1Q 2021 Form 10-Q 11
Delinquency Rates

Single-Family Serious Delinquency Rates

1.67%

4.26%

5.16% 5.03%

0.60%

2.48%

3.04%

2.64% 2.34%

Total mortgage market

Freddie Mac

1Q20 2Q20 3Q20 4Q20 1Q21

Source: National Delinquency Survey from the Mortgage Bankers Association. 

1Q 2021 total mortgage market rate is not yet available.

Multifamily Delinquency Rates 

0.08%

0.10%

0.13%

0.16% 0.17%

1.05%

1.56%

1.76%

1.95%

1.48%

0.12%

0.19%

0.22%

0.26%

0.08% 0.10% 0.10% 0.10%

Freddie Mac

Multifamily CMBS market

FDIC insured institutions

ACLI investment bulletin

1Q20 2Q20 3Q20 4Q20 1Q21

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 1Q 2021 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. We report singlefamily loans in forbearance as delinquent during the 

forbearance period to the extent that payments are 

past due based on the loans' original contractual 

terms, irrespective of the forbearance plan. 

n	 Our single-family serious delinquency rate increased 

year-over-year, driven by loans in forbearance due to 

the effects of the COVID-19 pandemic, but declined 

quarter-over-quarter, due primarily to forbearance 

exits. 56% of the seriously delinquent loans at March 

31, 2021 were covered by credit enhancements that 

may partially reduce our credit risk exposure to these 

loans.

n	 We expect our single-family serious delinquency rate 

to remain elevated as a result of the COVID-19 

pandemic and the forbearance programs we are 

offering in response.

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. We report multifamily loans in 

forbearance as current as long as the borrowers are in 

compliance with their forbearance agreement, 

including the agreed upon repayment plan. 

n	 Our multifamily delinquency rate was higher as of 

March 31, 2021 compared to March 31, 2020, due to 

the effects of the COVID-19 pandemic, but remains 

low compared to many other market participants. See 

MD&A - Risk Management - Credit Risk - 

Multifamily Mortgage Credit Risk for additional 

information on our delinquency and forbearance rates.

n	 Multifamily delinquency rates could increase further in 

the near term due to the continuing effects of the 

COVID-19 pandemic. However, our credit 

enhancement coverage will partially reduce our credit 

risk exposure from these loans. See MD&A - Risk 

Management - Credit Risk - Multifamily 

Mortgage Credit Risk for additional information.

Management's Discussion and Analysis Market Conditions and Economic Indicators

Freddie Mac 1Q 2021 Form 10-Q 12
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.

Table 1 - Summary of Condensed Consolidated Statements of Comprehensive Income (Loss)

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Net interest income $3,639 $2,785 $854 31 %

Guarantee fee income 248 377 (129) (34) 

Investment gains (losses), net 1,208 (835) 2,043 245 

Other income (loss) 178 95 83 87 

Net revenues 5,273 2,422 2,851 118 

Benefit (provision) for credit losses 196 (1,233) 1,429 116 

Credit enhancement expense (335) (231) (104) (45) 

Benefit for (decrease in) credit enhancement recoveries (257) 467 (724) (155) 

REO operations expense (8) (85) 77 91 

Credit-related expense (404) (1,082) 678 63 

Administrative expense (639) (587) (52) (9) 

Temporary Payroll Tax Cut Continuation Act of 2011 expense (534) (432) (102) (24) 

Other expense (215) (103) (112) (109) 

Operating expense (1,388) (1,122) (266) (24) 

Income (loss) before income tax (expense) benefit 3,481 218 3,263 1,497 

Income tax (expense) benefit (714) (45) (669) (1,487) 

Net income (loss) 2,767 173 2,594 1,499 

Total other comprehensive income (loss), net of taxes and 

reclassification adjustments (389) 449 (838) (187) 

Comprehensive income (loss) $2,378 $622 $1,756 282 %

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 1Q 2021 Form 10-Q 13
Net Revenues

Net Interest Income

The table below presents the components of net interest income.

Table 2 - Components of Net Interest Income

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Guarantee net interest income:

Contractual net interest income $1,825 $1,184 $641 54 %

Net interest income related to the Temporary Payroll Tax Cut Continuation Act of 2011 555 429 126 29 

Deferred fee income 1,019 552 467 85 

Total guarantee net interest income 3,399 2,165 1,234 57 

Investments net interest income:

Contractual net interest income and amortization 1,096 1,210 (114) (9) 

Interest expense related to CRT debt (147) (240) 93 39 

Total investments net interest income 949 970 (21) (2) 

Income (expense) from hedge accounting (709) (350) (359) (103) 

Net interest income $3,639 $2,785 $854 31 %

Key Drivers:

n Guarantee contractual net interest income and deferred fee income 

l	 1Q 2021 vs. 1Q 2020 - Increased primarily due to the continued growth in the single-family mortgage portfolio, a 

higher deferred fee balance, and faster loan prepayments as a result of the low mortgage interest rate environment.

n Investments contractual net interest income and amortization

l	 1Q 2021 vs. 1Q 2020 - Decreased primarily due to a change in our investment mix as the lower-yielding other 

investments portfolio represented a larger percentage of our total investments portfolio, partially offset by lower 

funding costs.

n Interest expense related to CRT debt

l	 1Q 2021 vs. 1Q 2020 - Decreased primarily due to a decline in volume as we no longer issue STACR debt notes on a 

regular basis.

n Income (expense) from hedge accounting

l	 1Q 2021 vs. 1Q 2020 - Expense increased primarily due to amortization of hedge accounting-related basis 

adjustments driven by faster prepayments, partially offset by higher income related to accruals of periodic cash 

settlements on derivatives in hedging relationships.

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 1Q 2021 Form 10-Q 14
Net Interest Yield Analysis

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

Table 3 - Analysis of Net Interest Yield

1Q 2021 1Q 2020

(Dollars in millions)

Average

Balance

Interest

Income

(Expense)

Average

Rate

Average

Balance

Interest

Income

(Expense)

Average

Rate

Interest-earning assets:

Cash and cash equivalents $65,143 $3 0.02 % $12,232 $21 0.68 %

Securities purchased under agreements to resell 80,281 17 0.08 72,291 261 1.44 

Secured lending 5,601 17 1.27 3,680 26 2.72 

 Mortgage-related securities, net 29,089 574 7.89 45,001 529 4.71 

Non-mortgage-related securities 27,592 36 0.53 28,616 123 1.71 

Loans held by consolidated trusts(1) 2,349,324 12,526 2.13 1,964,613 15,857 3.23 

Loans held by Freddie Mac(1) 104,001 729 2.80 78,406 775 3.95 

Total interest-earning assets 2,661,031 13,902 2.09 2,204,839 17,592 3.19 

Interest-bearing liabilities:

Debt securities of consolidated trusts held by third parties 2,342,060 (9,756) (1.67) 1,901,467 (13,447) (2.83) 

Debt of Freddie Mac:

Short-term debt 13,491 (2) (0.06) 119,222 (430) (1.43) 

Long-term debt 261,382 (505) (0.77) 170,471 (930) (2.18) 

Total debt of Freddie Mac 274,873 (507) (0.74) 289,693 (1,360) (1.87) 

Total interest-bearing liabilities 2,616,933 (10,263) (1.57) 2,191,160 (14,807) (2.70) 

Impact of net non-interest-bearing funding 44,098 — 0.03 13,679 — 0.02 

Total funding of interest-earning assets 2,661,031 (10,263) (1.54) 2,204,839 (14,807) (2.68) 

Net interest income/yield $3,639 0.55 % $2,785 0.51 %

(1) Loan fees, primarily consisting of amortization of upfront fees, included in interest income were $983 million and $838 million for loans held by consolidated trusts 

and $23 million and $21 million for loans held by Freddie Mac during 1Q 2021 and 1Q 2020, respectively.

Guarantee Fee Income

The table below presents the components of guarantee fee income. 

Table 4 - Components of Guarantee Fee Income

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Contractual guarantee fees $285 $240 $45 19 %

Guarantee obligation amortization 272 220 52 24 

Guarantee asset fair value changes (309) (83) (226) (272) 

Guarantee fee income $248 $377 ($129) (34) %

Key Drivers:

n 1Q 2021 vs. 1Q 2020 - Decreased as continued growth in our multifamily guarantee portfolio was more than offset by 

higher fair value losses on our multifamily guarantee assets as a result of an increase in long-term interest rates. As most 

multifamily loans are not prepayable without penalty, increases in interest rates generally result in lower multifamily 

guarantee asset fair values.

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 1Q 2021 Form 10-Q 15
Investment Gains (Losses), Net

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

Table 5 - Components of Investment Gains (Losses), Net

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Mortgage loans gains (losses) $206 $1,172 ($966) (82) %

Investment securities gains (losses) (507) 1,055 (1,562) (148) 

Debt gains (losses) 138 700 (562) (80) 

Derivative gains (losses) 1,371 (3,762) 5,133 136 

Investment gains (losses), net $1,208 ($835) $2,043 245 %

Mortgage Loans Gains (Losses)

The table below presents the components of mortgage loans gains (losses).

Table 6 - Components of Mortgage Loans Gains (Losses)

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Single-family:

 Gains (losses) on mortgage loans $44 ($22) $66 300 %

Multifamily:

Gains (losses) on certain loan purchase commitments 195 532 (337) (63) 

 Gains (losses) on mortgage loans (33) 662 (695) (105) 

Total Multifamily 162 1,194 (1,032) (86) 

Mortgage loans gains (losses) $206 $1,172 ($966) (82) %

Key Drivers:

n	 1Q 2021 vs. 1Q 2020 - Decreased as tighter spreads and higher margins on multifamily loan commitments were more than 

offset by interest-rate related fair value losses due to the increase in long-term interest rates in 1Q 2021. We economically 

hedge our interest rate exposure on loan commitments and mortgage loans using interest-rate risk management 

derivatives. The offsetting effects of these derivatives are recognized in derivative gains (losses). 1Q 2020 included interest 

rate-related gains due to the significant decrease in interest rates during 1Q 2020, partially offset by significant spreadrelated losses as a result of the market volatility caused by the COVID-19 pandemic. 

Investment Securities Gains (Losses)

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

Table 7 - Components of Investment Securities Gains (Losses)

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Realized gains (losses) on sales of available-for-sale securities $368 $10 $358 3,580 %

Realized and unrealized gains (losses) on trading securities (854) 1,069 (1,923) (180) 

Other (21) (24) 3 13 

Investment securities gains (losses) ($507) $1,055 ($1,562) (148) %

Key Drivers:

n	 1Q 2021 vs. 1Q 2020 - Decreased primarily due to losses on trading securities driven by the increase in long-term interest 

rates in 1Q 2021 compared to gains in 1Q 2020 due to a decrease in interest rates, partially offset by gains on sales of 

agency mortgage-related securities. We economically hedge our interest rate exposure on investment securities using 

interest rate-risk management derivatives. The offsetting effects of these derivatives are recognized in derivative gains 

(losses).

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 1Q 2021 Form 10-Q 16
Debt Gains (Losses)

The table below presents the components of debt gains (losses).

Table 8 - Components of Debt Gains (Losses)

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Fair value changes:

Debt securities of consolidated trusts ($1) $4 ($5) (125) %

Debt of Freddie Mac 8 548 (540) (99) 

Total fair value changes 7 552 (545) (99) 

Gains (losses) on extinguishment of debt:

Debt securities of consolidated trusts 141 4 137 3,425 

Debt of Freddie Mac (10) 144 (154) (107) 

Total gains (losses) on extinguishment of debt 131 148 (17) (11) 

Debt gains (losses) $138 $700 ($562) (80) %

Key Drivers:

n 1Q 2021 vs. 1Q 2020 - Decreased primarily due to lower fair value gains on STACR debt notes for which we elected the 

fair value option. Fair value gains in 1Q 2020 were driven by spread widening caused by the significant market volatility 

related to the COVID-19 pandemic.

Derivative Gains (Losses)

The table below presents the components of derivative gains (losses).

Table 9 - Components of Derivative Gains (Losses)

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Fair value gains (losses):

Interest-rate risk management derivatives $392 ($2,969) $3,361 113 %

Mortgage commitment derivatives 1,476 (726) 2,202 303 

CRT-related derivatives (42) 78 (120) (154) 

Other (3) 31 (34) (110) 

Total fair value gains (losses) 1,823 (3,586) 5,409 151 

Accrual of periodic cash settlements (452) (176) (276) (157) 

Derivative gains (losses) $1,371 ($3,762) $5,133 136 %

Key Drivers:

n 1Q 2021 vs. 1Q 2020 - Derivative gains in 1Q 2021 primarily related to mortgage commitment derivatives, driven by the 

increase in long-term interest rates, compared to derivative losses in 1Q 2020 due to a decrease in long-term interest rates. 

Certain of our interest-rate related derivative gains (losses) have offsetting effects recognized in mortgage loans gains 

(losses), investment securities gains (losses), debt gains (losses), or other comprehensive income (loss).

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 1Q 2021 Form 10-Q 17
Credit-Related Expense

Benefit (Provision) for Credit Losses

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

Table 10 - Components of Benefit (Provision) for Credit Losses 

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Benefit (provision) for credit losses:

 Single-family $146 ($1,166) $1,312 113 %

 Multifamily 50 (67) 117 175 

Benefit (provision) for credit losses $196 ($1,233) $1,429 116 %

Key Drivers:

n Single-family

l	 1Q 2021 vs. 1Q 2020 - A benefit for credit losses in 1Q 2021 compared to a provision for credit losses in 1Q 2020 

primarily driven by the following factors:

– Expected credit losses related to COVID-19 - Our provision for credit losses increased significantly in 1Q 2020 

due to the increase in expected credit losses related to the economic effects of the COVID-19 pandemic. Our 

estimate of expected credit losses related to the pandemic decreased in 1Q 2021 as economic conditions 

improved. 

– Portfolio growth - We recognize expected credit losses over the entire contractual term of the loan at the time of 

loan acquisition. Our single-family mortgage portfolio grew $438 billion, or 22%, year-over-year, which partially 

offset the benefit for credit losses.

– Changes in house prices and interest rates - The effect of changes in forecasted interest rates and changes 

related to house price growth rates had largely offsetting impacts in both periods.

n Multifamily 

l	 1Q 2021 vs. 1Q 2020 - A benefit for credit losses in 1Q 2021 compared to a provision for credit losses in 1Q 2020 

driven by improved economic forecasts. 

The decline in economic activity caused by the COVID-19 pandemic, and the corresponding government response, is 

unprecedented, and as a result, our estimate of expected credit losses is subject to significant uncertainty. See MD&A - Risk 

Management - Credit Risk for additional information.

Credit Enhancement Expense

Key Drivers: 

n 1Q 2021 vs. 1Q 2020 - Increased $104 million year-over-year, primarily due to higher outstanding cumulative volumes of 

CRT transactions.

Benefit for (Decrease in) Credit Enhancement Recoveries

Key Drivers:

n 1Q 2021 vs. 1Q 2020 - Decreased $724 million year-over-year as a result of the corresponding decrease in expected credit 

losses.

Other Comprehensive Income (Loss)

Key Drivers:

n	 1Q 2021 vs. 1Q 2020 - Decreased $838 million year-over-year, primarily due to fair value losses on available-for-sale 

securities as long-term interest rates increased in 1Q 2021 compared to fair value gains in 1Q 2020 due to a decrease in 

long-term interest rates. We economically hedge our interest rate exposure on investment securities using interest-rate risk 

management derivatives. The offsetting effects of these derivatives are recognized in derivative gains (losses).

Management's Discussion and Analysis Consolidated Results of Operations

Freddie Mac 1Q 2021 Form 10-Q 18
CONSOLIDATED BALANCE SHEETS ANALYSIS

The table below compares our summarized condensed consolidated balance sheets.

Table 11 - Summarized Condensed Consolidated Balance Sheets

Change

(Dollars in millions) March 31, 2021 December 31, 2020 $ %

Assets:

Cash and cash equivalents $100,979 $23,889 $77,090 323 %

Securities purchased under agreements to resell 15,140 105,003 (89,863) (86) 

Subtotal 116,119 128,892 (12,773) (10) 

Investment securities, at fair value 61,880 59,825 2,055 3 

Mortgage loans, net 2,507,887 2,383,888 123,999 5 

Accrued interest receivable, net 7,662 7,754 (92) (1) 

Derivative assets, net 2,085 1,205 880 73 

Deferred tax assets, net 6,826 6,557 269 4 

Other assets 39,415 39,294 121 — 

Total assets $2,741,874 $2,627,415 $114,459 4 %

Liabilities and Equity:

Liabilities:

Accrued interest payable $5,954 $6,210 ($256) (4) %

Debt 2,704,270 2,592,546 111,724 4 

Derivative liabilities, net 950 954 (4) — 

Other liabilities 11,909 11,292 617 5 

Total liabilities 2,723,083 2,611,002 112,081 4 

Total equity 18,791 16,413 2,378 14 

Total liabilities and equity $2,741,874 $2,627,415 $114,459 4 %

Key Drivers:

As of March 31, 2021 compared to December 31, 2020:

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

primarily due to lower near-term cash needs for debt maturities and calls of debt of Freddie Mac. Cash and cash 

equivalents increased significantly quarter-over-quarter, primarily due to higher uninvested trust and operating cash as 

Treasury bills and securities purchased under agreements to resell continued to earn near zero returns.

n	 Derivative assets, net increased primarily due to changes in the fair value of forward commitments to sell mortgagerelated securities.

n	 Total equity increased primarily due to our net income for 1Q 2021 combined with our continued ability to retain earnings 

as a result of the increases in the applicable Capital Reserve Amount and the resulting changes in our dividend requirement 

pursuant to the Letter Agreements.

Management's Discussion and Analysis Consolidated Balance Sheets Analysis 

Freddie Mac 1Q 2021 Form 10-Q 19
OUR PORTFOLIOS

In connection with the change in our reportable segments implemented in 1Q 2021, we have updated the definitions of our 

portfolio balances and aligned the definitions across our two reportable segments. Prior periods have been revised to conform 

to the current period presentation.

Mortgage Portfolio

Our mortgage portfolio includes assets held by both business segments and consists of:

n Securitized mortgage loans - Loans held by securitization trusts that issue securities that we guarantee.

n Unsecuritized mortgage loans

l Securitization pipeline loans - Single-family and multifamily loans that we have purchased for cash and aggregate 

prior to securitization.

l Loss mitigation loans - Delinquent and modified single-family loans that we have purchased from securitization trusts 

to facilitate loss mitigation. Certain of these loans have re-performed, either on their own or through modification or 

other loss mitigation activity.

l Other loans - Unsecuritized mortgage loans that do not fit in either of the prior two categories, primarily multifamily 

loans we acquire as part of a buy-and-hold investment strategy.

n Other - Primarily consists of other mortgage-related guarantees.

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

Table 12 - Mortgage Portfolio

March 31, 2021 December 31, 2020

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

Securitized mortgage loans:

Held by consolidated trusts $2,324,786 $13,782 $2,338,568 $2,204,936 $12,305 $2,217,241

Held by nonconsolidated trusts 33,697 345,192 378,889 34,932 331,860 366,792

Total securitized mortgage loans 2,358,483 358,974 2,717,457 2,239,868 344,165 2,584,033 

Unsecuritized mortgage loans:

Securitization pipeline loans 63,516 20,281 83,797 51,040 29,183 80,223 

Loss mitigation loans 26,529 — 26,529 26,303 — 26,303 

Other loans — 4,125 4,125 — 4,224 4,224 

Total unsecuritized mortgage loans 90,045 24,406 114,451 77,343 33,407 110,750 

Other 9,584 10,297 19,881 9,215 10,775 19,990 

Total mortgage portfolio $2,458,112 $393,677 $2,851,789 $2,326,426 $388,347 $2,714,773 

Guarantee Portfolio

Our guarantee portfolio primarily consists of mortgage-related securities guaranteed by Freddie Mac in exchange for guarantee 

fee income. This amount differs from the securitized mortgage loans amount included in the mortgage portfolio because of two 

primary factors: (1) it includes only the UPB of securities guaranteed by Freddie Mac and excludes the UPB of any 

unguaranteed subordinated securities issued by securitization trusts and (2) it reflects timing differences between the receipt of 

mortgage payments and the pass-through of those payments to security holders. The other category primarily consists of other 

mortgage-related guarantees.

Management's Discussion and Analysis Our Portfolios

Freddie Mac 1Q 2021 Form 10-Q 20
The table below presents the guarantee portfolio by segment.

Table 13 - Guarantee Portfolio 

March 31, 2021 December 31, 2020

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

Guaranteed mortgage-related securities:

Issued by consolidated trusts $2,398,852 $13,776 $2,412,628 $2,273,736 $12,305 $2,286,041 

Issued by nonconsolidated trusts 28,095 301,593 329,688 29,300 289,056 318,356 

Total guaranteed mortgage-related securities 2,426,947 315,369 2,742,316 2,303,036 301,361 2,604,397 

Other 9,584 10,297 19,881 9,215 10,775 19,990 

Total guarantee portfolio $2,436,531 $325,666 $2,762,197 $2,312,251 $312,136 $2,624,387 

Our guarantee portfolio excludes guarantees of Fannie Mae securities and other similar transactions in which we do not directly 

guarantee mortgage credit risk in exchange for guarantee fees. See Note 5 for additional information on our guarantee 

activities.

Investments Portfolio

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

Mortgage-Related Investments Portfolio

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

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

of:

n Unsecuritized mortgage loans - Single-family and multifamily unsecuritized loans as discussed above.

n Agency mortgage-related securities - Primarily includes Freddie Mac mortgage-related securities, both single-family and 

multifamily, although we may also invest in Fannie Mae and Ginnie Mae mortgage-related securities.

n Non-agency mortgage-related securities - We continue to own certain non-agency mortgage-related securities that we 

acquired in prior years. We generally no longer purchase non-agency mortgage-related securities, although we may 

acquire such securities in connection with our senior subordinate securitization structures backed by seasoned loans.

The table below presents the UPB of our mortgage-related investments portfolio. For purposes of the limit imposed by the 

Purchase Agreement and FHFA, our mortgage-related investments portfolio was $181.5 billion as of March 31, 2021, including 

$7.0 billion representing 10% of the notional amount of the interest-only securities we held as of March 31, 2021. 

With respect to the composition of our mortgage-related investments portfolio, in August 2020, FHFA instructed us to: (1) 

reduce the amount of agency MBS to no more than $50 billion by June 30, 2021 and no more than $20 billion by June 30, 

2022, with all dollar caps to be based on UPB; and (2) reduce the UPB of our existing portfolio of collateralized mortgage 

obligations (CMOs), which are also sometimes referred to as REMICs, to zero by June 30, 2021. We will have a holding period 

limit to sell any new CMO tranches created but not sold at issuance. CMOs do not include tranches initially retained from 

reperforming loans senior subordinate securitization structures.

Table 14 - Mortgage-Related Investments Portfolio

March 31, 2021 December 31, 2020

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

Unsecuritized mortgage loans:

Securitization pipeline loans $63,516 $20,281 $83,797 $51,040 $29,183 $80,223 

Loss mitigation loans 26,529 — 26,529 26,303 — 26,303 

Other loans — 4,125 4,125 — 4,224 4,224 

Total unsecuritized mortgage loans 90,045 24,406 114,451 77,343 33,407 110,750 

Mortgage-related securities:

Agency mortgage-related securities 55,115 3,511 58,626 65,954 4,066 70,020 

Non-agency mortgage-related securities 1,266 113 1,379 1,300 114 1,414 

Total mortgage-related securities 56,381 3,624 60,005 67,254 4,180 71,434 

Mortgage-related investments portfolio $146,426 $28,030 $174,456 $144,597 $37,587 $182,184 

Management's Discussion and Analysis Our Portfolios

Freddie Mac 1Q 2021 Form 10-Q 21
Other Investments Portfolio

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

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

are primarily allocated to the Single-family segment.

Management's Discussion and Analysis Our Portfolios

Freddie Mac 1Q 2021 Form 10-Q 22
OUR BUSINESS SEGMENTS

As shown in the table below, we have two reportable segments, which are based on the way our chief operating decision 

maker manages our business.

During 1Q 2021, our chief operating decision maker began making decisions about allocating resources and assessing 

segment performance based on two reportable segments, Single-family and Multifamily. In prior periods, we managed our 

business based on three reportable segments, Single-family Guarantee, Multifamily, and Capital Markets. As our mortgagerelated investments portfolio has declined over time, our capital markets activities have become increasingly focused on 

supporting our single-family and multifamily businesses. As a result, we have determined that, effective in 1Q 2021, our Capital 

Markets segment should no longer be considered a separate reportable segment, and our chief operating decision maker no 

longer reviews separate financial results or discrete financial information for our capital markets activities. Substantially all of the 

revenues and expenses that were previously directly attributable to our Capital Markets segment are now included in our 

Single-family segment, while certain administrative expenses and other centrally-incurred costs previously allocated to the 

Capital Markets segment are now allocated between the Single-family and Multifamily segments using various methodologies 

depending on the nature of the expense.

In connection with this change, we have also changed the measure of segment profit and loss for each segment to be based on 

net income and comprehensive income calculated using the same accounting policies we use to prepare our general purpose 

financial statements in conformity with generally accepted accounting principles. The financial results of each reportable 

segment include directly attributable revenue and expenses. We allocate interest expense and other debt funding and hedgingrelated costs to each reportable segment using a funds transfer pricing process. We fully allocate to each reportable segment 

the 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. We have discontinued 

the reclassifications of certain activities between various line items that were included in our previous measure of segment 

profit and loss. Prior period information has been revised to conform to the current period presentation. See Note 15 for 

additional information on the change in our segment reporting presentation.

Segment Description

Single-family 

Reflects results from our purchase, sale, securitization, and guarantee of single-family loans and securities, our 

investments in those loans and 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, sale, securitization, and guarantee of multifamily loans and securities, our 

investments in those loans and securities, and the management of multifamily mortgage credit risk and market 

risk.

Segment Net Income (Loss) and Comprehensive Income (Loss)

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

Segment Net Income (Loss)

(In millions)

$173

$1,777

$2,463

$2,913 $2,767

$411

$772

$1,282

$1,747 $1,738

$(238)

$1,005

$1,181

$1,166 $1,029

Single-family Multifamily

1Q20 2Q20 3Q20 4Q20 1Q21

Segment Comprehensive Income (Loss)

(In millions)

$622

$1,938

$2,449 $2,522 $2,378

$796 $875

$1,272 $1,373 $1,410

$(174)

$1,063

$1,177 $1,149 $968

Single-family Multifamily

1Q20 2Q20 3Q20 4Q20 1Q21

Management's Discussion and Analysis Our Business Segments

Freddie Mac 1Q 2021 Form 10-Q 23
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) 

$55 $60

$101 $109 $89

$83

$172

$236

$274 $273

49 48 46 47 50

$138

$232

$337

$383 $362

Home purchase

Refinance

Average guarantee fee rate charged

on new acquisitions

1Q20 2Q20 3Q20 4Q20 1Q21

(1) Guarantee fee excludes the legislated 10 basis point increase and 

includes deferred fees recognized over the estimated life of the related 

loans. 

Number of Families Helped to Own a Home 

(In thousands)

526

827

1,153

1,292 1,231

217 218

340 356 291

309

609

813

936

940

Home purchase borrowers

Refinance borrowers

1Q20 2Q20 3Q20 4Q20 1Q21

n	 1Q 2021 vs. 1Q 2020 

l Our loan purchase and guarantee activity increased primarily due to higher refinance activity driven by the low 

mortgage interest rate environment. We expect the low mortgage rate environment to continue through 2021 and 2022 

as the Federal Reserve has stated that it intends to keep interest rates low for an extended period of time. 

l The average guarantee fee rate charged on new acquisitions increased primarily due to the adverse market refinance 

fee we began to charge in December 2020 in response to projected costs related to the COVID-19 pandemic.

l Home purchase volume was also higher, as home sales increased primarily driven by continued low mortgage rates. 

l We continue to monitor our compliance with the Purchase Agreement covenants added pursuant to the January 2021 

Letter Agreement that place additional restrictions on our secondary market activities, including our single-family loan 

acquisitions and cash window activities, and we have changed, and may further change, our loan acquisition and cash 

window programs to maintain compliance. During 1Q 2021, we announced changes to our requirements for 

purchasing single-family mortgage loans secured by either second homes or investment properties to manage 

compliance with the restrictions in the January 2021 Letter Agreement. In April 2021, we announced requirements 

related to loans originated under the CFPB's temporary GSE qualified mortgage rule as required by the January 2021 

Letter Agreement, and FHFA instructed us to apply the $1.5 billion limit on the volume of loans purchased through the 

cash window program per lender during any period comprising four calendar quarters to certain lenders beginning on 

July 1, 2021, rather than January 1, 2022. 

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

Freddie Mac 1Q 2021 Form 10-Q 24
 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) 

$2,020 $2,061 $2,179 $2,326 $2,458

41 42 43 44 45

Single-family mortgage portfolio

Average guarantee fee rate charged

on mortgage portfolio

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

(1) Guarantee fee rate calculation excludes the legislated 10 basis point 

increase. As of March 31, 2021, excludes $47 billion in UPB of loans in 

certain securitization products that we do not consolidate and loans that 

we acquired in 2000 and prior years for which average guarantee fee 

charged information is not available.

 

 Single-Family Loans

(Loan count in millions)

11.3 11.4 11.6 12.0 12.3

$179,000 $181,000

$187,000

$194,000

$200,000

Single-family mortgage portfolio

Average loan UPB

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

n	 The single-family mortgage portfolio grew $438 billion, or 22%, year-over-year, driven by higher new business activity. 

Additionally, continued house price appreciation contributed to new business acquisitions having a higher average loan 

size compared to older vintages that continued to run off. 

n	 The average guarantee fee rate charged on the 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 

due to faster loan prepayments as a result of the low mortgage interest rate environment.

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

Freddie Mac 1Q 2021 Form 10-Q 25
Net Interest Yield and Average Investments Portfolio Balances

Net Interest Yield & Average Investments Portfolio Balances

(Weighted average balance in billions)

 

$49 $59 $69 $77 $73

$122 $107 $93 $83 $67

$115 $148 $162 $182 $177

0.97% 0.99% 1.03%

0.88% 0.84%

$286

$314 $324 $342

$317

Unsecuritized mortgage loans Mortgage-related securities

Other investments portfolio Net interest yield

1Q20 2Q20 3Q20 4Q20 1Q21

n	 1Q 2021 vs. 1Q 2020 

l Net interest yield on our investments portfolio decreased primarily due to faster loan prepayments as a result of the 

low mortgage interest rate environment, combined with a change in investment mix as the lower-yielding other 

investments portfolio represented a larger percentage of the total investments portfolio. Net interest yield on our 

investments portfolio is calculated as net interest income related to our investments portfolio divided by the weighted 

average investments portfolio balance during the period. 

l The weighted average investments portfolio balance increased primarily due to higher near-term cash needs driven by 

a higher expected single-family cash window loan purchase forecast, coupled with a larger liquidity and contingency 

operating portfolio as we transitioned to comply with the updated minimum liquidity requirements established by 

FHFA. The increase in the portfolio balance was partially offset by the decrease in the mortgage-related investments 

portfolio primarily due to constraints imposed by the Purchase Agreement and FHFA.

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

Freddie Mac 1Q 2021 Form 10-Q 26
CRT Activities

We transfer credit risk on a portion of our single-family mortgage portfolio to the private market, which reduces 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. We evaluate and update our CRT strategy as needed depending on our overall business 

strategy, regulatory requirements such as the ERCF, and market conditions, including the significant market volatility caused by 

the COVID-19 pandemic. The ERCF specifies substantial capital requirements and could affect our CRT strategy, perhaps 

significantly. Our risk appetite limits are also governed by FHFA, and we may take actions to comply with these limits, including 

continued execution of CRT transactions. 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. 

 CRT Issuance Protected UPB CRT Issuance Maximum Coverage 

 (In billions) (In billions)

$141

$1

$167 $167

$245

1Q20 2Q20 3Q20 4Q20 1Q21

 

$5

$1

$6

$5

$6

1Q20 2Q20 3Q20 4Q20 1Q21

n	 During 1Q 2021 and 1Q 2020, 61% and 70%, respectively, of our single-family acquisitions were loans in the targeted 

population for our CRT transactions (primarily 30-year fixed rate loans with LTV ratios between 60% and 97%). The yearover-year decline was primarily driven by an increase in the proportion of recently acquired loans with lower LTV ratios.

n	 Our CRT issuance amounts increased significantly year-over-year due to the increase in loan acquisition activity in recent 

quarters as well as our ability to shorten the loan acquisition to ACIS issuance timeline in 1Q 2021.

n	 Our CRT issuance maximum coverage increased slightly year-over-year and was proportionally lower than the increase in 

protected UPB due to the improved credit quality of the covered loans, which reduced the amount of credit coverage we 

required on those loans.

n	 The calculation of maximum coverage varies across CRT programs. For STACR transactions, maximum coverage 

represents the balance held by third parties at issuance. For insurance/reinsurance transactions, maximum coverage 

represents the aggregate limit of insurance purchased from third parties at issuance. For subordination, maximum 

coverage represents the UPB of the securities that are subordinate to Freddie Mac guaranteed securities and held by third 

parties.

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

Freddie Mac 1Q 2021 Form 10-Q 27
Loss Mitigation Activities 

The following graph provides details about our completed single-family loan workout activities. The forbearance data 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)

11

89

193

133

94

$2

$18

$42

$28

$20

Total single-family loan workouts

Number of loan workouts

1Q20 2Q20 3Q20 4Q20 1Q21

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 deferrals, 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 230,000 loans in active forbearance plans and 

10,000 loans in other active loss mitigation activity as of March 31, 2021.

n Pursuant to FHFA guidance and the CARES Act, we offer mortgage relief options for borrowers affected by the COVID-19 

pandemic. Among other things, we are offering forbearance of up to 18 months to single-family borrowers experiencing a 

financial hardship, either directly or indirectly, related to the COVID-19 pandemic. We are also offering a payment deferral 

option that allows a borrower to defer up to 18 months of payments for eligible homeowners who have the financial 

capacity to resume making their monthly payments, but who are unable to afford the additional monthly contributions 

required by a repayment plan. The length of available forbearance or payment deferral may be extended or the terms of 

forbearance or payment deferral revised by further FHFA guidance or federal government regulation.

n 1Q 2021 vs. 1Q 2020 - Our loan workout activity increased significantly, primarily driven by the increase in completed 

forbearance plans and payment deferrals related to the COVID-19 pandemic.

See MD&A - Risk Management for additional information on our loan workout activities.

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

Freddie Mac 1Q 2021 Form 10-Q 28
Financial Results

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

Table 15 - Single-Family Segment Financial Results 

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

 Guarantee net interest income $3,346 $2,140 $1,206 56 %

 Investments net interest income 671 695 (24) (3) 

 Income (expense) from hedge accounting (709) (350) (359) (103) 

 Net interest income 3,308 2,485 823 33 

Guarantee fee income 89 (13) 102 785 

Investment gains (losses), net 300 24 276 1,150 

Other income (loss) 152 58 94 162 

Net revenues 3,849 2,554 1,295 51 

Benefit (provision) for credit losses 146 (1,166) 1,312 113 

Credit enhancement expense (325) (227) (98) (43) 

Benefit for (decrease in) credit enhancement recoveries (245) 439 (684) (156) 

REO operations expense (8) (85) 77 91 

Credit-related expense (432) (1,039) 607 58 

Administrative expense (488) (467) (21) (4) 

Temporary Payroll Tax Cut Continuation Act of 2011 expense (534) (432) (102) (24) 

Other expense (209) (98) (111) (113) 

Operating expense (1,231) (997) (234) (23) 

Income (loss) before income tax (expense) benefit 2,186 518 1,668 322 

Income tax (expense) benefit (448) (107) (341) (319) 

Net income (loss) 1,738 411 1,327 323 

Total other comprehensive income (loss), net of taxes (328) 385 (713) (185) 

Total comprehensive income (loss) $1,410 $796 $614 77 %

Key Business Drivers: 

n	1Q 2021 vs. 1Q 2020 

l Higher net interest income primarily due to mortgage portfolio growth and higher deferred fee income recognition, 

which was driven by a higher deferred fee balance and faster loan prepayments as a result of the low mortgage 

interest rate environment.

l	 Lower credit-related expense primarily driven by a benefit for credit losses as a result of improving economic 

conditions in 1Q 2021, partially offset by a decrease in credit enhancement recoveries. Credit-related expense in 1Q 

2020 was primarily driven by the negative economic effects of the COVID-19 pandemic.

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

Freddie Mac 1Q 2021 Form 10-Q 29
Multifamily 

Business Results

The graphs, tables, and related discussion below present the business results of our Multifamily segment.

New Business Activity

New Business Activity(1)

(UPB in billions)

$10

$20

$18

$35

$14

111

201 185

306

134

New business activity

Total number of units financed (in thousands)

1Q20 2Q20 3Q20 4Q20 1Q21

(1) Includes LIHTC new business activity

n	 In November 2020, FHFA announced that the 2021 loan purchase cap for the multifamily business will be $70 billion. At 

least 50% of the multifamily new business activity must be mission-driven, affordable housing, generally defined as 

affordable to renters at 80% of AMI or below, with at least 20% being affordable to renters at 60% of AMI or below. While 

the loan purchase cap is subject to reassessment throughout the year by FHFA to determine whether an increase in the 

cap is appropriate based on a stronger than expected overall market, we are also subject to an $80 billion multifamily loan 

purchase limit in the Purchase Agreement that is not subject to such adjustment by FHFA. 

l As of March 31, 2021, the total multifamily new business activity counting toward this FHFA cap was $13.9 billion. 

Approximately 65% of this activity, based on UPB, was mission-driven, affordable housing, with 32% being affordable 

to renters at 60% of AMI or below.

n	 While our new business activity was higher year-over-year due to the low interest rate environment, we have observed 

increased competition from other market participants, which we expect to continue for the remainder of 2021.

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

assets, were $17.7 billion and $22.7 billion as of March 31, 2021 and March 31, 2020, respectively. 

n	 The percentage of our new mortgage loan purchase activity that was classified as held-for-sale and intended for our 

securitization pipeline increased to 88% from 87% year-over-year. The loan purchase activity in 1Q 2021, combined with 

market demand for our securities, will be a driver for our securitizations in the next two quarters of 2021.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 1Q 2021 Form 10-Q 30
Securitization, Guarantee, and Risk Transfer Activities

Securitization and Guarantee Activities

(UPB in billions)

$12 $12

$21

$26

$21

$1 $1

$2

$2

$2

46

58

51 51 49

$13 $13

$23

$28

$23

Guaranteed securities and other mortgage-related guarantees

Unguaranteed subordinated securities issued by our securitizations

Average guarantee fee rate charged (in bps)

1Q20 2Q20 3Q20 4Q20 1Q21

n	 Total securitization UPB increased year-over-year primarily due to the securitization of the significant loan purchase activity 

from 4Q 2020. 

n	 The average guarantee fee rate on new guarantees increased slightly year-over-year primarily due to the issuance of 

certain new K Certificate securitizations with lower subordination levels. The lower subordination levels are still expected to 

absorb a substantial amount of expected and stressed credit losses.

n	 In addition to the credit risk we transferred to third parties through our securitizations, we obtained credit protection of up 

to $0.3 billion on $4.9 billion of UPB through our other CRT products and loss sharing arrangements during 1Q 2021. There 

were no such activities during 1Q 2020.

We evaluate our risk transfer strategy and make changes depending on market conditions and our business strategy. 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 1Q 2021 Form 10-Q 31
Multifamily Mortgage Portfolio and Guarantee Portfolio

 Mortgage Portfolio

 (In billions) 

 

 

$342 $354 $366

$388 $394

4,286

4,371

4,450

4,598 4,613

UPB of mortgage portfolio

Total units financed (In thousands)

1Q20 2Q20 3Q20 4Q20 1Q21

 

 Guarantee Portfolio

 (In billions) 

 

 

$274 $280

$296

$312

$326

37 37

38

39

41

UPB of guarantee portfolio

Average guarantee fee rate charged (bps)

1Q20 2Q20 3Q20 4Q20 1Q21

n	 Our multifamily mortgage portfolio increased year-over-year primarily due to ongoing loan purchase and securitization 

activities. We expect continued growth in our mortgage portfolio during 2021 as purchase and securitization activities 

should outpace loan payoffs.

n	 At March 31, 2021, approximately 63% of the unsecuritized mortgage loans in our mortgage portfolio were classified as 

held-for-sale, while the remaining 37% were classified as held-for-investment and generally intended to be used as 

collateral for our PC securitizations.

n	 Our guarantee portfolio increased year-over-year primarily due to the securitization of the significant purchase volume from 

4Q 2020.

n	 As of March 31, 2021, we had cumulatively transferred a substantial amount of the expected and stressed credit risk on 

the multifamily guarantee portfolio primarily through subordination in our securitizations. In addition, nearly all of our 

securitization activities shifted substantially all of the interest-rate and liquidity risk associated with the underlying collateral 

away from Freddie Mac to third-party investors.

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

totaling $1.5 billion and $1.4 billion as of March 31, 2021 and December 31, 2020, respectively.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 1Q 2021 Form 10-Q 32
 Net Interest Yield and Average Investments Portfolio Balances

Net Interest Yield & Average Investments Portfolio Balances

(Weighted average balance in billions)

$29 $29 $31

$27

$31

$7 $7 $6

$6

$6

$2 $1 $1

$1

$1

2.92%

2.70% 2.61%

2.96% 2.94%

$38 $37$38

$34

$38

Unsecuritized mortgage loans

Mortgage-related securities

Other investments portfolio (excludes LIHTC)

Net interest yield

1Q20 2Q20 3Q20 4Q20 1Q21

n	 1Q 2021 vs. 1Q 2020 

l Net interest yield increased slightly year-over-year.

l The weighted average investments portfolio balance remained unchanged as the increase in the average unsecuritized 

mortgage loans balance attributable to the 4Q 2020 significant loan purchase activity was offset by a decrease in the 

average balance of mortgage-related securities.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 1Q 2021 Form 10-Q 33
Mortgage Loans Gains (Losses), Net and Initial Pricing Margin on Commitments

 Multifamily Segment Mortgage Loans Gains (Losses), Net

 (In millions)

$807

$1,042

$1,196

($636)

$198

$430

$631 $666

$309

($528)

$220

$220 $172

$236

($306)

$157

$191 $358

$445

75

45 39 28

18

70

45 29 26

23

$990

Initial pricing margin on commitments

Spread-related fair value changes

Other

10-year fixed-rate spread (in bps)

7-year ARM spread (in bps)

1Q20 2Q20 3Q20 4Q20 1Q21

Source of spread data in basis points: Independent dealers

 Initial Pricing Margin on Commitments 

 (In millions)

$198

$430

$631

$666

$309

2.65%

3.97%

5.84%

5.07%

6.38%

Initial pricing margin on commitments

Initial pricing margin on commitments (in %)

1Q20 2Q20 3Q20 4Q20 1Q21

(Notional in millions) 1Q20 2Q20 3Q20 4Q20 1Q21

New loan commitments for $7,475 $10,821 $10,804 $13,127 $4,850 

which we have elected

the fair value option

n	 We primarily recognize revenue from our mortgage loans as mortgage loans gains (losses), net, which is a component of 

investment gains (losses), net. The amount of mortgage loans gains (losses), net, shown above is net of gains and losses 

on derivative instruments we use to economically hedge the interest-rate risk of the loan commitments and mortgage 

loans.

n	 Mortgage loans gains (losses), net, consists of three components: (1) the initial pricing margin on new loan commitments 

for which we have elected the fair value option, (2) spread-related fair value changes during the commitment and loan 

holding periods for loan commitments and mortgage loans we measure at fair value, which are primarily driven by changes 

in benchmark spreads after the commitment date, and (3) other items, including realized gains on sales of mortgage loans 

for which we do not elect the fair value option.

n	 We recognized net mortgage loans gains in 1Q 2021 compared to net mortgage loans losses in 1Q 2020 primarily due to 

loan pricing decisions resulting in higher initial pricing margins on new loan commitments, spread-related fair value gains 

due to spread tightening, and realized gains from sales of mortgage loans for which we have not elected the fair value 

option.

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 1Q 2021 Form 10-Q 34
Financial Results

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

Table 16 - Multifamily Segment Financial Results

Change

(Dollars in millions) 1Q 2021 1Q 2020 $ %

Guarantee net interest income $53 $25 $28 112 %

Investments net interest income 278 275 3 1 

Net interest income 331 300 31 10 

Guarantee fee income 159 390 (231) (59) 

Mortgage loans gains (losses), net 990 (636) 1,626 256 

Other investment gains (losses), net (82) (223) 141 63 

Investment gains (losses), net 908 (859) 1,767 206 

Other income (loss) 26 37 (11) (30) 

Net revenues 1,424 (132) 1,556 1,179 

Credit-related expense 28 (43) 71 165 

Administrative expense (151) (120) (31) (26) 

Other expense (6) (5) (1) (20) 

Operating expense (157) (125) (32) (26) 

Income (loss) before income tax (expense) benefit 1,295 (300) 1,595 532 

Income tax (expense) benefit (266) 62 (328) (529) 

Net income (loss) 1,029 (238) 1,267 532 

Total other comprehensive income (loss), net of taxes (61) 64 (125) (195) 

Total comprehensive income (loss) $968 ($174) $1,142 656 %

Key Business Drivers:

n	 1Q 2021 vs. 1Q 2020

l Lower guarantee fee income as the continued growth in our multifamily guarantee portfolio was more than offset by 

higher fair value losses on the guarantee assets as a result of an increase in long-term interest rates in 1Q 2021.

l Net investment gains compared to net investment losses in 1Q 2020, primarily due to tighter spreads and higher 

margins on multifamily loan commitments in 1Q 2021, while 1Q 2020 included significant spread-related losses as a 

result of the market volatility caused by the COVID-19 pandemic. 

Management's Discussion and Analysis Our Business Segments | Multifamily

Freddie Mac 1Q 2021 Form 10-Q 35
RISK MANAGEMENT

Risk is an inherent part of our business activities. We are exposed to the following key types of risk: credit risk, operational risk, 

market risk, liquidity risk, strategic risk, and reputation risk.

Credit Risk

Overview

Credit risk is the risk associated with the inability or failure of a borrower, issuer, or counterparty to meet its financial and/or 

contractual obligations. We are exposed to both mortgage credit risk and counterparty credit risk. 

Mortgage credit risk is the risk associated with the inability or failure of a borrower to meet its financial and/or contractual 

obligations. We are exposed to two types of mortgage credit risk:

n	 Single-family mortgage credit risk, through our ownership or guarantee of loans in the single-family mortgage portfolio 

and

n	 Multifamily mortgage credit risk, through our ownership or guarantee of loans in the multifamily mortgage portfolio.

In the section below, we provide a discussion of the current risk environment for our mortgage credit risk.

Single-Family Mortgage Credit Risk

Maintaining Prudent Underwriting Standards and Quality Control Practices and 

Managing Seller/Servicer Performance 

Temporary Underwriting Changes Due to COVID-19 Pandemic

We have announced temporary changes in our underwriting standards due to the COVID-19 pandemic, which may negatively 

affect the expected performance of purchased loans that were underwritten under these temporary changes.

In March and May 2020, we introduced a number of temporary measures to help provide sellers with the clarity and flexibility to 

continue to lend in a prudent and responsible manner during the COVID-19 pandemic. We are allowing flexibility in 

demonstrating a borrower's current employment status for applications received through April 30, 2021. This flexibility will not 

be extended again; however, the option to verify the borrower’s employment via email was included permanently in our Guide 

on April 7, 2021.

In March and April 2020, we announced loan processing flexibilities to expedite loan closings and help keep homebuyers, 

sellers, and appraisers safe during the COVID-19 pandemic. These flexibilities have also been extended to include loans with 

applications dated on or before May 31, 2021, and will not be further extended. They include:

n Allowing desktop appraisals or exterior-only inspection appraisals for certain purchase transactions;

n Allowing exterior-only appraisals for certain no cash-out refinances;

n Allowing desktop appraisals on new construction properties (purchase transactions);

n Allowing flexibility on demonstrating that construction has been completed; and

n Allowing flexibility for borrowers to provide documentation (rather than requiring an inspection) to allow renovation 

disbursements (draws).

The following temporary flexibilities were extended for the final time, to include loans with application dates dated on or before 

April 30, 2021:

n Offering flexibility in condominium project reviews and

n Expanding the use of powers of attorney and remote online notarizations. Permanent updates to our requirements for the 

use of powers of attorney were included in our Guide and are effective for applications dated on or after June 30, 2021.

Appraisal Waivers

In March 2020, we introduced expanded eligibility of Automated Collateral Evaluation (ACE) waivers to include no cash-out 

refinances with LTVs up to 90% and cash-out refinances for primary residences with LTVs up to 70% and second homes with 

LTVs up to 60%. As a result of this expansion, combined with a historically high refinance market (ACE waivers are granted 

more often for refinanced loans), ACE waiver usage increased from approximately 19% in 1Q 2020 to approximately 47% of 

loan purchases in 1Q 2021. 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 36
Loan Purchase Credit Characteristics

We monitor and evaluate market conditions that could affect the credit quality of our single-family loan purchases. The graphs 

below show the credit profile of the single-family loans we purchased or guaranteed.

Weighted Average Original LTV Ratio 

74% 72% 71% 70% 69%

1Q20 2Q20 3Q20 4Q20 1Q21

 Weighted Average Original Credit Score (1)

752 758 761 761 759

1Q20 2Q20 3Q20 4Q20 1Q21

(1) Original credit score is based on three credit bureaus (Equifax, Experian, 

and TransUnion). 

The table below contains additional information about the single-family loans we purchased or guaranteed.

Table 17 - Single-Family New Business Activity

1Q 2021 1Q 2020

(Dollars in billions) Amount % of Total Amount % of Total

30-year or more amortizing fixed-rate $293 81 % $114 83 %

20-year amortizing fixed-rate 18 5 6 4 

15-year amortizing fixed-rate 51 14 17 13 

Adjustable-rate — — 1 — 

Total $362 100 % $138 100 %

Percentage of purchases

DTI ratio > 45% 10 % 14 %

Original LTV ratio > 90% 8 15 

Original credit score < 680 4 6 

Transaction type:

Cash window 62 48 

Guarantor swap 38 52 

Property type:

Detached single-family houses and townhouses 93 92 

Condominium or co-op 7 8 

Occupancy type:

Primary residence 93 91 

Second home 3 4 

Investment property 4 5 

Loan purpose:

Purchase 25 40 

Cash-out refinance 20 21 

Other refinance 55 39 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 37
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 issuance amounts during the applicable periods, including the protected UPB and maximum 

coverage, associated with CRT transactions for loans in our single-family mortgage portfolio.

Table 18 - Single-Family Mortgage Portfolio CRT Issuance

1Q 2021 1Q 2020

(In millions) Protected UPB(1)

Maximum 

Coverage(2) Protected UPB(1)

Maximum 

Coverage(2)

STACR $176,707 $3,544 $132,571 $3,707 

Insurance/reinsurance 228,307 2,714 97,758 854 

Subordination — — 1,688 177 

Lender risk-sharing 171 171 6,207 391 

Less: UPB with more than one type of CRT activity (159,835) — (97,505) — 

Total CRT Activities $245,350 $6,429 $140,719 $5,129 

(1) For STACR and certain insurance/reinsurance transactions (e.g., ACIS), represents the UPB of the assets included in the reference pool of the transactions. For other 

insurance/reinsurance transactions, represents the UPB of the assets covered by the insurance policy. For subordination, represents the UPB of the guaranteed 

securities, which represents the UPB of the assets included in the trust net of the protection provided by the subordinated securities.

(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. For subordination, represents the UPB of the securities that are subordinate to Freddie Mac guaranteed 

securities and held by third parties.

Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding

The table below provides information on the total protected UPB and maximum coverage associated with credit enhanced 

loans in our single-family mortgage portfolio as of March 31, 2021 and December 31, 2020, respectively. 

Table 19 - Single-Family Mortgage Portfolio Credit Enhancement Coverage Outstanding 

March 31, 2021

(Dollars in millions) Protected UPB(1)

% of Single-Family 

Mortgage Portfolio

Maximum 

Coverage(2)

Primary mortgage insurance $485,593 20% $119,111 

STACR 905,528 37 31,682 

Insurance/reinsurance 975,289 40 13,645 

Subordination 34,977 1 6,090 

Lender risk-sharing 5,177 — 4,587 

Other 314 — 311 

Less: UPB with multiple CRT and/or other credit enhancements (1,148,738) (47) — 

Single-family mortgage portfolio - covered by credit enhancement 1,258,140 51 175,426 

Single-family mortgage portfolio - other 1,199,972 49 — 

Total $2,458,112 100% $175,426 

Referenced footnotes are included after the prior period table.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 38
December 31, 2020

(Dollars in millions) Protected UPB(1)

% of Single-Family 

Mortgage Portfolio

Maximum 

Coverage(2)

Primary mortgage insurance $472,881 20% $116,973 

STACR 853,733 37 29,665 

Insurance/reinsurance 876,815 38 11,586 

Subordination 38,074 2 6,182 

Lender risk sharing 5,731 — 4,831 

Other 374 — 371 

Less: UPB with multiple CRT and/or other credit enhancements (1,069,281) (46) — 

Single-family mortgage portfolio - covered by credit enhancement 1,178,327 51 169,608 

Single-family mortgage portfolio - other 1,148,099 49 — 

Total $2,326,426 100% $169,608 

(1) For STACR and certain insurance/reinsurance transactions (e.g., ACIS), represents the UPB of the assets included in the reference pool of the transactions. For other 

insurance/reinsurance transactions, represents the UPB of the assets covered by the insurance policy. For subordination, represents the UPB of the guaranteed 

securities, which represents the UPB of the assets included in the trust net of the protection provided by the subordinated securities. For certain transactions, 

protected UPB may be different from the UPB of the underlying loans due to timing differences in reporting cycles between the transactions and the loans. 

(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. For subordination, represents the outstanding UPB of the securities that are subordinate to Freddie Mac guaranteed 

securities and held by third parties.

Credit Enhancement Coverage Characteristics

The table below provides information on the credit-enhanced and non-credit-enhanced loans in our single-family mortgage 

portfolio. The credit-enhanced categories are not mutually exclusive as a single loan may be covered by both primary mortgage 

insurance and other credit enhancements.

Table 20 - Credit-Enhanced and Non-Credit-Enhanced Loans in Our Single-Family Mortgage Portfolio

March 31, 2021 December 31, 2020

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

Credit-enhanced

 Primary mortgage insurance 20 % 3.42 % 21 % 3.77 %

 CRT and other 43 2.79 41 3.22 

Non-credit-enhanced 50 1.89 50 2.13 

Total N/A 2.34 N/A 2.64 

(1) Excludes loans underlying certain securitization products for which loan-level data is not available.

(2) Based on loan UPB, which may be different from the protected UPB of the associated credit enhancement transaction due to timing differences in reporting cycles 

between the transactions and the loans.

The table below provides information on the amount of credit enhancement coverage by year of origination associated with 

loans in our single-family mortgage portfolio.

Table 21 - Credit Enhancement Coverage by Year of Origination

March 31, 2021 December 31, 2020

(Dollars in millions) UPB(1)(2)

% of UPB with 

Credit 

Enhancement UPB(1)(2)

% of UPB with 

Credit 

Enhancement

Year of Loan Origination

 2021 $249,721 18 % N/A N/A

 2020 1,022,146 48 $971,136 36 %

 2019 231,493 73 276,315 73 

 2018 100,324 79 118,673 80 

 2017 127,073 75 147,863 75 

 2016 and prior 726,967 48 812,041 49 

Total $2,457,724 50 $2,326,028 50 

(1) Excludes loans underlying certain securitization products for which loan-level data was not available.

(2) Based on loan UPB, which may be different from the protected UPB of the associated credit enhancement transaction due to timing differences in reporting cycles 

between the transactions and the loans.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 39
The following table provides information on the characteristics of the loans in our single-family mortgage portfolio without credit 

enhancement. 

Table 22 - Single-Family Mortgage Portfolio Without Credit Enhancement(1) 

March 31, 2021 December 31, 2020

(Dollars in millions) UPB % of Total UPB % of Total

Low current LTV ratio(1)(2) $837,533 68 % $784,150 66 %

Short-term(1)(3) 96,968 8 81,681 7 

Pre-CRT program inception(1)(4) 9,347 1 11,327 1 

CRT pipeline(1)(5) 264,843 21 276,611 24 

Other(1)(6) 19,356 2 20,414 2 

Total $1,228,047 100 % $1,174,183 100 %

(1) Loans with multiple characteristics are assigned to categories in this table based on the following order: low current LTV ratio, short-term, pre-CRT program 

inception, and CRT pipeline. 

(2) Represents loans with a current LTV ratio less than or equal to 60%.

(3) Represents loans with an original maturity of 20 years or less. 

(4) Represents relief refinance loans and loans that were acquired before the inception of our CRT programs in 2013.

(5) Represents recently acquired loans that are targeted to be included in the on-the-run CRT transactions and have not yet been included in a reference pool. 

(6) Primarily includes government guaranteed loans, ARM loans, loans with a current LTV ratio greater than 97%, and loans that fail the delinquency requirements for 

CRT transactions.

Credit Enhancement Expenses and Recoveries

The recognition of expenses and expected recoveries associated with credit enhancements in our condensed consolidated 

financial statements depends on the type of credit enhancement. See Note 8 for additional information on our credit 

enhancements. The table below contains details on the costs, investment gains (losses), and recoveries associated with our 

single-family credit enhancements.

Table 23 - Details of Single-Family Credit Enhancement Costs, Investment Gains (Losses), and Recoveries 

(In millions) 1Q 2021 1Q 2020

Credit enhancement costs:

Credit enhancement expense ($325) ($227) 

Interest expense related to CRT debt (139) (232) 

 Less: estimated reinvestment income from proceeds of CRT debt issuance 11 46 

Single-family credit enhancement costs ($453) ($413) 

Credit enhancement investment gains (losses):

 CRT derivatives gains (losses) $6 $92 

 CRT debt gains (losses) 37 549 

Single-family credit enhancement investment gains (losses)(1) $43 $641 

Single-family benefit for (decrease in) credit enhancement recoveries(1) ($245) $439 

(1) Recoveries collected under freestanding CE and write-offs of CRT debt were $3 million during both 1Q 2021 and 1Q 2020. 

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

our condensed consolidated balance sheet.

Table 24 - Single-Family Credit Enhancement Receivables

(In millions) March 31, 2021 December 31, 2020

Freestanding credit enhancement expected recovery receivables, net of allowance $395 $653 

Primary mortgage insurance receivables(1), net of allowance 82 74 

Total credit enhancement receivables $477 $727 

(1) Excludes $433 million and $444 million of deferred payment obligations associated with unpaid claim amounts as of March 31, 2021 and December 31, 2020, 

respectively. We have reserved for substantially all of these unpaid amounts as collectability is uncertain.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 40
Monitoring Loan Performance and Characteristics 

We review loan performance, including delinquency statistics and related loan characteristics, in conjunction with housing 

market and economic conditions, including the economic effects associated with the COVID-19 pandemic, to assess credit risk 

when estimating our allowance for credit losses and to determine if our pricing and eligibility standards reflect the risk 

associated with the loans we purchase and guarantee. 

Loans in COVID-19 Related Forbearance Plans 

The table below contains details on the characteristics of our single-family loans in forbearance that are past due based on the 

loan's original contractual terms. 

Table 25 - Credit Quality Characteristics of Our Single-Family Loans in Forbearance(1)

March 31, 2021 December 31, 2020

(Dollars in billions) UPB As a % of Total UPB As a % of Total 

Current LTV ratio:

 ≤ 60 $25.5 51 % $29.4 49 %

 > 60 to 80 19.5 39 23.7 39 

 > 80 to 100 4.7 10 6.9 11 

 > 100 0.1 — 0.3 1 

Total $49.8 100 % $60.3 100 %

(1) Excludes certain loans for which we do not control servicing and loans underlying certain legacy transactions, as the forbearance information for these loans is 

either not reported to us by servicers or not readily available to us. These loans represented approximately 2% of the single-family mortgage portfolio as of both 

March 31, 2021 and December 31, 2020. 

The table below presents payment status information of our single-family loans in forbearance based on the loans' original 

contractual terms.

Table 26 - Single-Family Loans in Forbearance Plans by Payment Status(1)

March 31, 2021

(Dollars in millions) Current

One Month 

Past Due

Two

Months

Past Due

Three 

Months to Six 

Months Past Due(2)

Greater Than Six 

Months Past Due(2) Total

UPB $7,725 $3,149 $2,947 $10,425 $33,293 $57,539 

Number of loans (in thousands) 39 16 15 51 149 270

As a percentage of our single-family 

mortgage portfolio(3) 0.32 % 0.13 % 0.12 % 0.41 % 1.21 % 2.19 %

December 31, 2020

(Dollars in millions) Current

One Month 

Past Due

Two

Months

Past Due

Three 

Months to Six 

Months Past Due(2)

Greater Than Six 

Months Past Due(2) Total

UPB $8,907 $5,443 $4,372 $15,366 $35,144 $69,232 

Number of loans (in thousands) 44 28 22 75 155 324

As a percentage of our single-family 

mortgage portfolio(3) 0.37 % 0.23 % 0.18 % 0.63 % 1.29 % 2.70 %

(1) Excludes certain loans for which we do not control servicing and loans underlying certain legacy transactions, as the forbearance information for these loans is 

either not reported to us by servicers or not readily available to us. These loans represented approximately 2% of the single-family mortgage portfolio as of both 

March 31, 2021 and December 31, 2020. 

(2) The UPB of loans in forbearance that were three months or more past due and accruing was $27.7 billion and $42.2 billion as of March 31, 2021 and December 31, 

2020, respectively.

(3) Based on loan count.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 41
We generally place single-family loans on non-accrual status when the loan becomes three monthly payments past due. For 

loans in active forbearance plans that were current prior to receiving forbearance, we continue to accrue interest income while 

the loan is in forbearance and is three or more monthly payments past due when we believe the available evidence indicates 

that collectability of principal and interest is reasonably assured based on management judgment, taking into consideration 

additional factors, the most important of which is the current LTV ratio. We ceased accruing interest income on certain loans 

that were more than nine months past due and in forbearance based on this analysis during 1Q 2021. When we accrue interest 

on loans that are three or more monthly payments past due, we measure an allowance for expected credit losses on unpaid 

accrued interest receivable balances such that the balance sheet reflects the net amount of interest we expect to collect. 

The table below provides the amount of accrued interest receivable, net of the allowance for credit losses, related to our singlefamily loans in forbearance. 

Table 27 - Single-Family Loans in Forbearance(1)

(In millions) March 31, 2021 December 31, 2020

Accrued interest receivable:

Less than three months past due $40 $74 

Three months to six months past due 144 235 

Greater than six months past due(2) 930 911 

Accrued interest receivable, gross 1,114 1,220 

Allowance for credit losses (213) (138) 

Accrued interest receivable, net $901 $1,082 

(1) Excludes certain loans for which we do not control servicing and loans underlying certain legacy transactions, as the forbearance information for these loans is 

either not reported to us by servicers or not readily available to us. These loans represented approximately 2% of the single-family mortgage portfolio as of both 

March 31, 2021 and December 31, 2020. 

(2) 94% and 90% of the accrued interest receivable greater than six months past due is related to loans with current LTV ratios that are less than or equal to 80% as of 

March 31, 2021 and December 31, 2020, respectively. 

Prior to expiration of a borrower's forbearance plan, servicers are required to contact the borrower to determine how the 

payments missed during the forbearance period will be repaid. We require servicers to follow a defined loss mitigation hierarchy 

to determine which options to offer to borrowers. This hierarchy is based on certain factors, such as the borrowers’ delinquency 

status, reasons for delinquency, loan types, and types of hardships. Borrowers are not required to repay all past due amounts 

in a single lump sum. Upon expiration of the forbearance plan, borrowers may reinstate the loan or enter into either a 

repayment plan, a payment deferral, or a trial period plan related to a loan modification. If the borrower is not eligible for any of 

the home retention options, we may seek to pursue a foreclosure alternative or foreclosure. As a result of loans exiting 

COVID-19 related forbearance plans through payment deferrals or loan modifications during 1Q 2021, we deferred $250 million

of delinquent interest into non-interest-bearing principal balances that are due at the earlier of the payoff date, maturity date, or 

sale of the property. 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 42
The table below presents a summary of single-family loans that received forbearance and were past due based on the loans' 

original contractual terms at some point during the forbearance period. 

Table 28 - Status of Single-Family Loans That Received Forbearance(1)

(Loan count in thousands) March 31, 2021 December 31, 2020

Active forbearance at end of period 230 280

Forbearance plan exits(2) (from January 1, 2020 to end of period)

 Reinstatement(3) 219 189

Pay-off 48 39

 Payment deferral 219 166

 Other(4) 52 43

Total forbearance plan exits(5) 538 437

Total single-family loans that received forbearance(6) (from January 1, 2020 to end of period) 768 717

(1) Excludes certain loans for which we do not control servicing and loans underlying certain legacy transactions, as the forbearance information for these loans is either 

not reported to us by servicers or not readily available to us. These loans represented approximately 2% of the single-family mortgage portfolio as of both March 31, 

2021 and December 31, 2020. 

(2) Represents the exit path the borrower took upon exit from the forbearance plan, which could be at the end of or during the forbearance period.

(3) Includes forbearance plans where the borrower brought the mortgage current during forbearance. 

(4) Primarily includes forbearance plans where the borrowers remained delinquent and the exit paths were not determined at the end of the forbearance periods. Also 

includes other exit paths such as repayment plans, modifications, and foreclosure alternatives.

(5) 85% and 83% of loans that received forbearance and subsequently exited were current or paid off as of March 31, 2021 and December 31, 2020, respectively.

(6) Based on number of forbearance plans. A loan may have received more than one forbearance plan during the period.

Allowance for Credit Losses

The table below summarizes our single-family allowance for credit losses activity. 

Table 29 - Single-Family Allowance for Credit Losses Activity

 (Dollars In millions) 1Q 2021 1Q 2020

Beginning balance $6,353 $5,233 

Provision (benefit) for credit losses (146) 1,166 

Charge-offs (238) (164) 

Recoveries collected 46 88 

Other 115 24 

Ending balance $6,130 $6,347 

Components of ending balance of allowance for credit losses:

Mortgage loans held-for-investment $5,253 $6,044 

Advances of pre-foreclosure costs 615 254 

Accrued interest receivable on mortgage loans 213 — 

Off-balance-sheet credit exposures 49 49 

Total $6,130 $6,347 

As a percentage of our single-family mortgage portfolio 0.25 % 0.31 %

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 43
Credit Losses and Recoveries

The table below contains certain credit performance metrics for our single-family mortgage portfolio. Credit losses increased 

year-over-year as charge-offs of accrued interest receivable when we placed the related loans on non-accrual status increased. 

Other credit losses declined as a result of the foreclosure moratorium that will remain in effect through June 30, 2021. It is likely 

that we will incur additional costs in future periods, such as higher property preservation and maintenance expenses, due to 

this foreclosure moratorium as the borrowers may remain delinquent for an extended period of time. 

Table 30 - Single-Family Mortgage Portfolio Credit Performance Metrics

(Dollars in millions) 1Q 2021 1Q 2020

Charge-offs $238 $164 

Recoveries collected(1) (46) (88) 

Charge-offs, net 192 76 

REO operations expense 8 85 

Total credit losses $200 $161 

Total credit losses (in bps) 3.3 4.6 

(1) Includes cash, REO, or other assets such as receivables from primary mortgage insurance.

TDRs and Non-Accrual Loan Activity

Single-family loans that have been modified or placed on non-accrual status generally have a higher associated allowance for 

credit losses. 

The table below presents information about the UPB of single-family TDR loans and non-accrual loans on our condensed 

consolidated balance sheets.

Table 31 - Single-Family TDR and Non-Accrual Loans

March 31, 2021 December 31, 2020

(Dollars in millions) 

Mortgage Loans 

Held-forInvestment

Mortgage 

Loans Heldfor-Sale Total

Mortgage Loans 

Held-forinvestment

Mortgage 

Loans Heldfor-Sale Total

UPB:

 TDRs on accrual status $26,797 $4,566 $31,363 $28,547 $4,293 $32,840 

 Non-accrual loans 22,974 4,880 27,854 13,679 5,020 18,699 

Total TDRs and non-accrual loans $49,771 $9,446 $59,217 $42,226 $9,313 $51,539 

Non-accrual loans as a percentage of total 

loans outstanding(1) 1.13 % 0.80 %

Allowance for credit losses as a percentage 

of non-accrual loans(2) 22.01 33.98 

(1) Represents the total UPB of single-family non-accrual loans as a percentage of the total UPB of the single-family mortgage portfolio as of period end. 

(2) Represents the total allowance for credit losses as a percentage of the total UPB of single-family non-accrual loans as of period end.

The table below presents information about the foregone interest income of single-family TDR loans and non-accrual loans. 

Table 32 - Foregone Interest Income on Single-Family TDRs and Non-Accrual Loans

1Q 2021(1) 1Q 2020(1)

(In millions)

Mortgage Loans 

Held-forInvestment

Mortgage 

Loans Heldfor-Sale Total

Mortgage Loans 

Held-forInvestment

Mortgage 

Loans Heldfor-Sale Total

Interest on TDRs and non-accrual loans:

 At original contractual rates $622 $134 $756 $464 $223 $687 

 Recognized (332) (58) (390) (331) (129) (460) 

Foregone interest income on TDRs and 

non-accrual loans(2) $290 $76 $366 $133 $94 $227 

(1) Represents interest income at the original contractual rates, interest income recognized, and foregone interest income based on TDRs and non-accrual loans at the 

end of each period. 

(2) Represents the amount of interest income that we did not recognize but would have recognized during the period for the loans outstanding at the end of each period 

had the loans performed according to their original contractual terms. 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 44
The table below summarizes the UPB of single-family held-for-investment TDR loan activity.

Table 33 - Single-Family TDR Loan Activity 

March 31, 2021 March 31, 2020

(Dollars in millions) Loan Count Amount Loan Count Amount

Beginning balance, as of January 1 229,277 $32,676 249,182 $35,623 

New additions(1) 4,453 731 7,424 1,215 

Repayments and reclassifications to held-for-sale (10,783) (1,838) (19,741) (3,223) 

Foreclosure sales and foreclosure alternatives (510) (96) (864) (127) 

Ending balance, as of March 31 222,437 $31,473 236,001 $33,488 

(1) Includes certain bankruptcy events and forbearance plans, repayment plans, payment deferrals, and modification activities that do not qualify for the temporary relief 

related to TDR provided by the CARES Act, based on servicer reporting at the time of the TDR event.

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

1.26%

1.47%

1.08% 1.01%

0.73%

0.30%

1.66%

0.50% 0.38% 0.27%

0.60%

2.48%

3.04%

2.64%

2.34%

One month past due Two months past due Seriously delinquent

03/31/20 06/30/20 09/30/20 12/31/20 03/31/21

The percentages of loans that were one month past due and two months past due increased in early 2020 due to the COVID-19 

pandemic but have trended back toward pre-pandemic levels as the impact of the pandemic on early-stage delinquencies has 

started to stabilize. The percentage of loans one month past due can be volatile due to servicer reporting methodologies, 

seasonality, and other factors that may not be indicative of default. As a result, the percentage of loans two months past due 

tends to be a better early performance indicator than the percentage of loans one month past due. The percentage of loans two 

months past due was down slightly year-over-year. 

Our single-family serious delinquency rate increased to 2.34% as of March 31, 2021, compared to 0.60% as of March 31, 2020, 

driven by an increase in the number of loans in forbearance related to the COVID-19 pandemic. However, 56% of the seriously 

delinquent loans at March 31, 2021 were covered by credit enhancements that may partially reduce our credit risk exposure to 

these loans. See Note 4 for additional information on the payment status of our single-family mortgage loans.

The COVID-19 pandemic has caused mortgage delinquencies to increase significantly. We expect our single-family serious 

delinquency rates to remain elevated as a result of the pandemic and the forbearance programs we are offering in response.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 45
Loan Characteristics 

The table below contains details on characteristics of the loans in our single-family mortgage portfolio.

Table 34 - Credit Quality Characteristics of Our Single-Family Mortgage Portfolio

March 31, 2021

(Dollars in billions) UPB

Original 

Credit

Score (1)

Current 

Credit

Score(1)(2)

Original

LTV Ratio

Current

LTV

Ratio

Current

LTV Ratio

>100% Alt-A %

Single-family mortgage portfolio year of origination:

 2021 $250 758 758 69 % 69 % — % — %

 2020 1,022 759 759 71 66 — — 

 2019 232 746 752 77 64 — — 

 2018 100 738 737 77 60 — — 

 2017 127 741 746 75 54 — — 

 2016 and prior 727 739 751 75 42 — 2 

Total $2,458 750 754 73 58 — 1 

December 31, 2020

(Dollars in billions) UPB

Original 

Credit

Score (1)

Current 

Credit

Score(1)(2)

Original

LTV Ratio

Current

LTV

Ratio

Current

LTV Ratio

>100% Alt-A %

Single-family mortgage portfolio year of origination:

 2020 $971 760 758 71 % 68 % — % — %

 2019 276 747 754 77 67 — — 

 2018 119 739 739 77 62 — — 

 2017 148 742 747 75 56 — — 

 2016 187 748 758 73 49 — — 

 2015 and prior 625 737 750 75 41 — 3 

Total $2,326 749 754 74 58 — 1 

(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 represented the current credit scores.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 46
Higher Risk Loan Attributes and Attribute Combinations

Certain combinations of loan attributes can indicate a higher degree of credit risk, such as loans with both higher LTV ratios 

and lower credit scores. The following table presents the combination of credit score and CLTV ratio attributes of loans in our 

single-family mortgage portfolio. 

Table 35 - Single-Family Mortgage Portfolio Attribute Combinations

March 31, 2021

CLTV ≤ 60 CLTV > 60 to 80 CLTV > 80 to 100 CLTV > 100 All Loans

(Original credit score)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Modified(2)

< 620 0.8 % 9.30 % 0.3 % 15.15 % 0.1 % 20.75% — % NM 1.2 % 10.93 % 10.1 %

620 to 659 2.1 6.31 1.1 8.25 0.2 8.97 — NM 3.4 6.97 6.1

≥ 660 47.2 1.85 37.1 2.09 10.9 1.70 0.1 14.01% 95.3 1.92 0.9

Not available 0.1 8.33 — NM — NM — NM 0.1 9.06 17.5

Total 50.2 % 2.29 38.5 % 2.47 11.2 % 2.08 0.1 % 18.27 100.0 % 2.34 1.3

December 31, 2020

CLTV ≤ 60 CLTV > 60 to 80 CLTV > 80 to 100 CLTV > 100 All Loans

(Original credit score)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Portfolio

SDQ 

Rate(1)

% 

Modified(2)

< 620 0.9 % 9.27% 0.3 % 14.96% 0.1 % 19.62% — % NM 1.3 % 11.00% 10.2%

620 to 659 2.0 6.56 1.2 9.08 0.3 10.08 — NM 3.5 7.45 6.3

≥ 660 47.6 2.01 35.8 2.50 11.6 2.22 0.1 13.99% 95.1 2.18 0.9

Not available 0.1 7.96 — NM — NM — NM 0.1 8.79 16.9

Total 50.6 % 2.46 37.3 % 2.94 12.0 % 2.65 0.1 % 18.11 100.0 % 2.64 1.4

(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.

Alt-A and Subprime Loans

While we have referred to certain loans as subprime or Alt-A for purposes of the discussion below and elsewhere in this Form 

10-Q, there is no universally accepted definition of subprime or Alt-A, and the classification of such loans may differ from 

company to company. We do not rely on these loan classifications to evaluate the credit risk exposure relating to such loans in 

our single-family mortgage portfolio.

Participants in the mortgage market have characterized single-family loans based upon their overall credit quality at the time of 

origination, including as prime or subprime. While we have not historically characterized the loans in our single-family mortgage 

portfolio as either prime or subprime, we monitor the amount of loans we have guaranteed with characteristics that indicate a 

higher degree of credit risk. In addition, we estimate that approximately $0.7 billion of security collateral underlying our other 

securitization products at both March 31, 2021 and December 31, 2020, were identified as subprime based on information 

provided to us when we entered into these transactions.

Mortgage market participants have classified single-family loans as Alt-A if these loans have credit characteristics that range 

between their prime and subprime categories, if they are underwritten with lower or alternative income or asset documentation 

requirements compared to a full documentation loan, or both. Although we have discontinued new purchases of loans with 

lower documentation standards, we continue to purchase certain amounts of such loans in cases where the loan was either 

purchased pursuant to a previously issued guarantee, part of our relief refinance initiative or part of another refinance loan 

initiative and the pre-existing loan was originated under less than full documentation standards. In the event we purchase a 

refinance loan and the original loan had been previously identified as Alt-A, such refinance loan may no longer be categorized 

or reported as an Alt-A loan in this Form 10-Q and our other financial reports because the new refinance loan replacing the 

original loan would not be identified by the seller or servicer as an Alt-A loan. As a result, our reported Alt-A balances may be 

lower than would otherwise be the case had such refinancing not occurred. From the time the relief refinance initiative began in 

2009 to March 31, 2021, we have purchased approximately $36.4 billion of relief refinance loans that were previously 

categorized as Alt-A loans in our portfolio.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 47
The table below contains information on Alt-A loans in our single-family mortgage portfolio.

Table 36 - Alt-A Loans in Our Single-Family Mortgage Portfolio

March 31, 2021 December 31, 2020

(Dollars in billions) UPB CLTV % Modified(1) SDQ Rate UPB CLTV % Modified(1) SDQ Rate

Alt-A $17.6 54 % 14.7 % 10.49 % $18.4 55 % 14.7 % 10.66 %

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

The UPB of Alt-A loans in our single-family mortgage portfolio is continuing to decline due to borrowers refinancing into other 

mortgage products, foreclosure sales, and other liquidation events.

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 may pass laws that limit our ability to foreclose or evict and make it more difficult and costly to 

manage our risk.

The table below summarizes the concentration by geographic area of our single-family mortgage portfolio as of March 31, 2021

and December 31, 2020. While our portfolio is diversified geographically, the economic effects of the COVID-19 pandemic may 

be disproportionately concentrated in certain geographic regions or areas. See Note 16 for more information about credit risk 

associated with loans that we hold or guarantee. 

Table 37 - Concentration of Credit Risk of Our Single-Family Mortgage Portfolio

March 31, 2021 December 31, 2020 1Q 2021(1) 1Q 2020(1)

(Dollars in billions)

Portfolio 

UPB

% of

Portfolio SDQ Rate

Portfolio 

UPB

% of

Portfolio SDQ Rate

Credit 

Losses 

Amount

% of 

Credit 

Losses(2)

Credit 

Losses 

Amount

% of 

Credit 

Losses

Region:(3)

West $770 31 % 2.11 % $720 31 % 2.41 % $— NM $— 8 %

Northeast 581 24 2.82 549 24 3.16 — NM 0.1 36 

North Central 371 15 1.88 357 15 2.06 — NM 0.1 29 

Southeast 393 16 2.58 375 16 2.95 — NM — 18 

Southwest 343 14 2.33 325 14 2.59 — NM — 9 

Total $2,458 100 % 2.34 $2,326 100 % 2.64 $— NM $0.2 100 %

State:

California $455 19 % 2.29 $424 18 % 2.64 $— NM $— 5 %

Texas 152 6 2.75 145 6 3.11 — NM — 3 

Florida 142 6 3.14 135 6 3.70 — NM — 9 

New York 108 4 4.07 103 4 4.56 — NM — 9 

Illinois 99 4 2.83 96 4 2.96 — NM 0.1 16 

All other 1,502 61 2.09 1,423 62 2.34 — NM 0.1 58 

Total $2,458 100 % 2.34 $2,326 100 % 2.64 $— NM $0.2 100 %

(1) Excludes credit losses related to charge-offs of accrued interest receivables.

(2) NM - not meaningful due to the credit losses amount rounding to zero.

(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).

Engaging in Loss Mitigation Activities

We offer a variety of borrower assistance programs, including refinance programs for certain eligible loans and loan workout 

activities for struggling borrowers. Our loan workouts include both home retention options and foreclosure alternatives. We also 

engage in transfers of servicing for and sales of certain seriously delinquent and reperforming loans. 

Loan Workout Activities

Pursuant to FHFA guidance and the CARES Act, we have offered mortgage payment relief options to borrowers affected by the 

COVID-19 pandemic. Among other things, we are offering forbearance of up to 18 months to single-family borrowers 

experiencing a financial hardship and a payment deferral option that allows a borrower to defer up to 18 months of payments 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 48
for eligible homeowners who have the financial capacity to resume making their monthly payments, but who are unable to 

afford the additional monthly contributions required by a repayment plan. The types of loss mitigation options available to 

borrowers impacted by the COVID-19 pandemic may be revised by further FHFA guidance or federal government regulation. 

The volume of foreclosures declined significantly, year-over-year, primarily due to the foreclosure moratorium that will remain in 

effect through June 30, 2021. The volume of our foreclosure alternatives remained insignificant in recent periods. 

The following graphs provide details about our single-family loan workout activities and foreclosure sales. In prior periods, 

payment deferrals were included in the loan modification category, as such amounts were not significant. Prior periods have 

been revised to conform to the current period presentation.

Home Retention Actions(1)

(In thousands)

1

81

94

52

38

2 1 2 — 2 3 2

94

74

50

6 5 4 4 4

10

88

194

133

94

Forbearance plans

Repayment plans

Payment deferrals

Loan modifications

Total

1Q20 2Q20 3Q20 4Q20 1Q21

(1) Forbearance plans in this graph only include those where borrowers fully 

reinstated the loan to current status during or at the end of forbearance 

period.

Foreclosure Alternatives and Foreclosure Sales

(In thousands)

0.4 0.3 0.3 0.3 0.2

2.4

0.5

0.6 0.7 0.6

Foreclosure alternatives

Foreclosure sales

1Q20 2Q20 3Q20 4Q20 1Q21

Sales and Securitization of Certain Seasoned Loans

We pursue sales of certain seriously delinquent loans when we believe the sale of these loans provides better economic returns 

than continuing to hold them. The FHFA requirements guiding these transactions include bidder qualifications, loan 

modifications, and performance reporting. In addition to other requirements, in February 2021, in response to the COVID-19 

pandemic, FHFA required that future transactions include requirements that the loans (i) be serviced in a manner that is 

consistent with any requirements that would apply under Section 4022 of the CARES Act as if the loans were still owned or 

securitized by Freddie Mac and (ii) adhere to any existing and future foreclosure or eviction moratoria related to the COVID-19 

pandemic that have been imposed by FHFA or by federal legislation applicable to single-family loans that are owned or 

securitized by Freddie Mac. 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 49
Certain seriously delinquent loans may reperform, either on their own or through modification. In addition to sales of seriously 

delinquent loans, we sell certain reperforming loans, which typically involves securitization of the loans using our senior 

subordinate securitization structures or Level 1 Securitization Products, depending on market conditions, business strategy, 

credit risk considerations, and operational efficiency. As with sales of seriously delinquent loans, FHFA required that future 

securitizations of such reperforming loans include requirements regarding compliance with Section 4022 of the CARES Act 

(which is applicable for loans purchased or securitized by Freddie Mac) and that the servicers adhere to any existing and future 

foreclosure or eviction moratoria related to the COVID-19 pandemic that have been imposed by FHFA or by federal legislation 

applicable to single-family loans that are owned or securitized by Freddie Mac. Of the $10.9 billion in UPB of single-family loans 

classified as held-for-sale at March 31, 2021, $4.7 billion related to loans that were seriously delinquent.

We did not sell any reperforming loans or seriously delinquent loans during 1Q 2021, compared to sales of $2.2 billion in UPB 

of such loans during 1Q 2020.

Managing Foreclosure and REO Activities

Pursuant to FHFA guidance and the CARES Act, we are required to suspend foreclosures, other than for vacant or abandoned 

properties, and evictions due to the COVID-19 pandemic until June 30, 2021, and this suspension period may be extended by 

FHFA or other actions by the federal government, if necessary. As a result of this suspension, our REO ending inventory 

declined year-over-year.

The table below shows our single-family REO activity.

Table 38 - Single-Family REO Activity 

1Q 2021 1Q 2020

(Dollars in millions)

Number of 

Properties Amount

Number of 

Properties Amount

Beginning balance — REO 1,766 $199 4,989 $565 

Additions 354 30 1,441 136 

Dispositions (516) (54) (2,262) (227) 

Ending balance — REO 1,604 175 4,168 474 

Beginning balance, valuation allowance (1) (10) 

Change in valuation allowance — (7) 

Ending balance, valuation allowance (1) (17) 

Ending balance — REO, net $174 $457 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 50
Multifamily Mortgage Credit Risk

Maintaining Prudent Underwriting Standards 

We use a prior approval underwriting approach for multifamily loans in which we maintain credit discipline by completing our 

own underwriting and credit review for each new loan prior to purchase. 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. Our 

standards require maximum LTV ratios and minimum DSCRs that vary based on the characteristics and features of the loan. 

Changes in market conditions can affect the credit quality of our multifamily loan purchases and/or guarantees. 

Notwithstanding the effects of the COVID-19 pandemic on the multifamily market and broader economic environment, the 

credit quality of our multifamily loan purchases and guarantees remained consistent with prior periods.

The graphs below show the credit profile of the multifamily loans we purchased or guaranteed.

Weighted Average Original LTV Ratio 

69% 69% 66%

70% 69%

1Q20 2Q20 3Q20 4Q20 1Q21

 Weighted Average Original Debt Service Coverage Ratio

1.42 1.36 1.42 1.38 1.38

1Q20 2Q20 3Q20 4Q20 1Q21

Managing Our Portfolio, Including Loss Mitigation Activities

Loans in COVID-19 Related Forbearance Plans

Pursuant to FHFA guidance and the CARES Act, beginning in March 2020, we have offered multifamily borrowers mortgage 

forbearance with the condition that they suspend all evictions during the forbearance period for renters unable to pay rent. 

Under our forbearance program, through December 31, 2020, multifamily borrowers with a fully performing loan as of February 

1, 2020 were able to defer their loan payments for up to 90 days by showing hardship as a consequence of the COVID-19 

pandemic and by gaining lender approval. After the forbearance period, the borrower was required to repay the forborne loan 

amounts in no more than 12 equal monthly installments.

In June 2020, in coordination with FHFA, we announced several supplemental forbearance relief options that servicers may use 

to assist borrowers who have a forbearance plan in place and continue to be materially affected by the COVID-19 pandemic. 

These supplemental relief options extend most of the original tenant protections and provide increased flexibility to tenants, 

including allowing the repayment of past due rent over time and not in a lump sum. In December 2020, we extended the 

deadline for borrowers whose loans have not been more than 30 days past due to request a new COVID-19 forbearance 

agreement or supplemental relief to March 31, 2021, and in March 2021 we further extended this deadline to June 30, 2021.

We report multifamily delinquency rates based on the UPB of loans in our multifamily mortgage portfolio that are two monthly 

payments or more past due based on the loan's current contractual terms or in the process of foreclosure, as reported by our 

servicers. Loans in forbearance are not considered delinquent as long as the borrower is in compliance with the forbearance 

agreement, including the agreed upon repayment plan.

The following table summarizes the current credit quality of loans under a forbearance program, which includes both the 

forbearance period and the repayment period.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 51
Table 39 - Current Credit Quality of Multifamily Loans Under a Forbearance Program

March 31, 2021

(Dollars in millions) UPB LTV > 80%(1) DSCR < 1.25(1)

Forbearance period $240 $67 $217 

Repayment period 6,522 362 3,821 

Credit-enhanced 6,762 429 4,038 

Forbearance period — — — 

Repayment period 654 81 200 

Non-credit-enhanced 654 81 200 

Total $7,416 $510 $4,238 

Weighted average LTV(1) 64% 

Weighted average DSCR(1) 1.36 

(1) Based on the most recent borrower financial information submissions received from the servicers.

Of the loans in forbearance, 84.5% based on UPB are in securitizations with first loss credit protection provided by 

subordination. The weighted average subordination level of securitizations with subordination that have loans in forbearance 

was 14.6% as of March 31, 2021. 10.6% of loans in forbearance are scheduled to mature prior to 2023. 

Allowance for Credit Losses

The following table summarizes the allowance for credit losses recorded on our multifamily mortgage loans held-for-investment 

and our off-balance sheet credit exposures. 

Table 40 - Multifamily Allowance for Credit Losses Activity

 (In millions) 1Q 2021 1Q 2020

Beginning balance $200 $69 

(Benefit) provision for credit losses (50) 67 

Charge-offs, net — — 

Ending balance $150 $136 

Components of ending balance of allowance for credit losses:

Mortgage loans held-for-investment $77 $77 

Off-balance sheet credit exposures 73 59 

 Total $150 $136 

Our multifamily credit losses remain low due to the property performance of the loans underlying our multifamily mortgage 

portfolio. See Note 7 for additional information regarding multifamily credit losses and allowance for credit losses.

Transferring Credit Risk to Third-Party Investors 

To reduce our credit risk exposure, we engage in various credit enhancement arrangements, which include securitizations and 

other credit enhancements. Our securitizations remain our principal risk transfer mechanism. Through these securitizations, we 

have transferred a substantial amount of the expected and stressed credit risk on the multifamily guarantee portfolio, thereby 

reducing our overall credit risk exposure.

The table below presents the UPB, delinquency rates, and forbearance rates for both credit-enhanced and non-credit 

enhanced loans underlying our multifamily mortgage portfolio.

Table 41 - Credit-Enhanced and Non-Credit-Enhanced Loans Underlying Our Multifamily Mortgage Portfolio

March 31, 2021 December 31, 2020

(Dollars in millions) UPB

Delinquency 

Rate

Forbearance 

Rate(1) UPB

Delinquency 

Rate

Forbearance 

Rate(1)

Credit-enhanced:

Subordination $342,425 0.19 % 1.83 % $328,897 0.18 % 1.99 %

Other(2) 19,891 0.03 2.47 17,352 0.17 2.73 

Total credit-enhanced 362,316 0.18 1.87 346,249 0.18 2.03 

Non-credit-enhanced 31,361 0.03 2.09 42,098 0.02 1.83 

Total $393,677 0.17 1.88 $388,347 0.16 2.01 

(1) Forbearance rate includes loans in a forbearance program including loans in their repayment period. 

(2) Includes lender risk-sharing agreements related to certain securitizations, insurance/reinsurance contracts, SCR, and other credit enhancements.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 52
The following table provides information on the level of subordination outstanding for our securitizations with subordination.

Table 42 - Level of Subordination Outstanding 

March 31, 2021 December 31, 2020

(Dollars in millions) UPB

Delinquency 

Rate

Forbearance 

Rate UPB

Delinquency 

Rate

Forbearance 

Rate

Less than 10% $72,364 0.03 % 0.11 % $53,220 0.04 % 0.15 %

10% or greater 270,061 0.23 2.29 275,677 0.20 2.35 

Total $342,425 0.19 1.83 $328,897 0.18 1.99 

Weighted average subordination level 13% 13% 

The table below contains details on the loans underlying our multifamily mortgage portfolio that are not credit-enhanced.

Table 43 - Credit Quality of Our Multifamily Mortgage Portfolio Without Credit Enhancement

March 31, 2021 December 31, 2020

(Dollars in millions) UPB

Delinquency 

Rate

Forbearance 

Rate UPB

Delinquency 

Rate

Forbearance 

Rate

Unsecuritized loans:

Held-for-sale $13,341 0.07 % 1.38 % $21,794 0.04 % 0.85 %

Held-for-investment 7,938 — 0.08 8,655 — 1.40 

Securitization products 5,147 — 8.92 6,711 — 6.84 

Other mortgage-related guarantees 4,935 — 0.07 4,938 — 0.07 

Total $31,361 0.03 2.09 $42,098 0.02 1.83 

Counterparty Credit Risk

We are exposed to counterparty credit risk, which is a type of institutional credit risk, as a result of our contracts with sellers 

and servicers, credit enhancement providers (mortgage insurers, investors, etc.), financial intermediaries, clearinghouses, and 

other counterparties, as well as through our guarantees of Fannie Mae securities underlying commingled resecuritization 

transactions. 

Sellers and Servicers 

Single-Family

We perform ongoing monitoring and review of our exposure to individual sellers or servicers in accordance with our institutional 

credit risk management framework, including requiring our counterparties to provide regular financial reporting to us. We have 

significant exposure to non-depository and smaller depository financial institutions in our single-family business. We monitor 

and review the financial stability of our non-depository institutional counterparties. 

Our top five non-depository sellers provided approximately 30% and 27% of our single-family purchase volume during 1Q 2021 

and 1Q 2020, respectively. The table below summarizes the concentration of non-depository servicers of our single-family 

mortgage portfolio.

Table 44 - Single-Family Mortgage Portfolio Non-Depository Servicers 

March 31, 2021 December 31, 2020

% of Portfolio(1)

% of Seriously Delinquent 

Single-Family Loans % of Portfolio(1)

% of Seriously Delinquent 

Single-Family Loans

Top five non-depository servicers 18 % 17 % 18 % 17 %

Other non-depository servicers 33 32 30 28 

Total 51 % 49 % 48 % 45 %

(1) Excludes loans where we do not exercise control over the associated servicing.

Multifamily

The majority of our multifamily loans are securitized using trusts that are administered by master servicers who bear 

responsibility to advance funds in the event of payment shortfalls, including principal and interest payments related to loans in 

forbearance. For the majority of our K Certificate securitizations, we utilize one of three large financial depository institutions as 

master servicer. For SB Certificate securitizations and a smaller number of K Certificate securitizations, we serve as master 

servicer. In instances where payment shortfalls occur, the master servicer is required to make advances as long as such 

advances have not been deemed non-recoverable. For loans purchased and held in our mortgage-related investment portfolio, 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 53
the primary servicers are not required to advance funds in the event of payment shortfalls and therefore do not present 

significant counterparty credit risk.

Credit Enhancement Providers

We perform periodic analysis of the financial capacity of individual insurers under various adverse economic conditions and 

have continued our close monitoring and active communication with them to assess potential risk impacts. 

The table below summarizes our exposure to single-family mortgage insurers as of March 31, 2021. In the event a mortgage 

insurer fails to perform, the coverage amounts represent our maximum exposure to credit losses resulting from such a failure.

Table 45 - Single-Family Mortgage Insurers

March 31, 2021

(In millions) Credit Rating(1)

Credit Rating

Outlook(1) UPB Coverage(2)

Arch Mortgage Insurance Company A- Negative $96,012 $23,852 

Radian Guaranty Inc. (Radian) BBB+ Negative 92,428 22,097 

Mortgage Guaranty Insurance Corporation (MGIC) BBB+ Negative 88,879 21,743 

Essent Guaranty, Inc. BBB+ Negative 76,693 18,724 

Genworth Mortgage Insurance Corporation BB+ Negative 74,611 18,495 

National Mortgage Insurance (NMI) BBB Negative 52,487 13,112 

PMI Mortgage Insurance Co. (PMI) Not Rated N/A 1,793 449 

Republic Mortgage Insurance Company (RMIC) Not Rated N/A 1,331 329 

Triad Guaranty Insurance Corporation (Triad) Not Rated N/A 836 209 

Others N/A N/A 523 101 

Total $485,593 $119,111 

(1) Ratings and outlooks are for the corporate entity to which we have the greatest exposure. Latest rating available as of March 31, 2021. Represents the lower of S&P 

and Moody's credit ratings and outlooks stated in terms of the S&P equivalent. 

(2) Coverage amounts exclude coverage related to IMAGIN and may include coverage provided by consolidated affiliates and subsidiaries of the counterparty.

The table below displays the concentration of our single-family credit risk exposure to our ACIS counterparties.

Table 46 - Single-Family ACIS Counterparties 

March 31, 2021 December 31, 2020

(Dollars in billions) Maximum Coverage(1) % of Total Maximum Coverage(1) % of Total

Top five ACIS counterparties $6.0 46 % $5.3 48 %

All other ACIS counterparties 7.1 54 5.8 52 

Total $13.1 100 % $11.1 100 %

(1) Represents maximum coverage exclusive of the collateral posted to secure the counterparties' obligations.

As of March 31, 2021 and December 31, 2020, our ACIS counterparties posted collateral of $2.9 billion and $2.4 billion, 

respectively. 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 54
Market Risk

Overview

Our business has 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.

A significant source of interest-rate risk is from our investments in mortgage-related assets (securities and loans) and the debt 

we issue to fund our assets. Another source of interest-rate risk comes from our single-family guarantee portfolio, which 

includes upfront fees (including buy-downs), buy-ups, and float. Our primary goal in managing interest-rate risk is to reduce the 

amount of change in the value of our future cash flows due to future changes in interest rates. We use models to analyze 

possible future interest-rate scenarios, along with the cash flows of our assets and liabilities over those scenarios. Our models 

include the possibility of future negative interest rate scenarios and such risk is included in our hedging framework.

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 the LIBOR yield curve (PVS-L) and the other to a non-parallel movement resulting from a 25 basis point 

change in the slope of the LIBOR 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 LIBOR yield curve. The interest-rate sensitivity of a mortgage portfolio varies across a 

wide range of interest rates.

Table 47 - PVS-YC and PVS-L Results Assuming Shifts of the LIBOR Yield Curve 

March 31, 2021 December 31, 2020

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 LIBOR yield curve, 

(gains) losses on:(1)

Assets:

Investments $358 ($3,549) ($6,976) ($286) $3,700 $7,670 

Guarantees(2) (103) 1,289 3,094 165 (1,691) (3,250) 

Total Assets 255 (2,260) (3,882) (121) 2,009 4,420 

Liabilities 9 2,869 5,436 (54) (3,237) (7,503) 

Derivatives (262) (633) (1,676) 185 1,180 2,839 

Total 2 (24) (122) $10 ($48) ($244) 

PVS 2 — — $10 $— $— 

(1) The categorization of the PVS impact between assets, liabilities, and derivatives on this table is based upon the economic characteristics of those assets and 

liabilities, not their accounting classification. For example, purchase and sale commitments of mortgage-related securities and debt securities of consolidated trusts 

held by the mortgage-related investments portfolio are both categorized as assets on this table.

(2) Represents the interest-rate risk from our single-family portfolio, which includes buy-ups, float, and upfront fees (including buy-downs). 

Table 48 - Duration Gap and PVS Results 

1Q 2021 1Q 2020

(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 0.4 $7 $62 0.4 $10 $62 

Minimum (0.2) — — (0.1) — — 

Maximum 1.0 20 200 1.5 28 236 

Standard deviation 0.3 6 58 0.4 7 73 

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 55
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 LIBOR yield curve for the periods presented, would have been higher if we had not used 

derivatives.

Table 49 - PVS-L Results Before Derivatives and After Derivatives 

PVS-L (50 bps)

(In millions)

Before

Derivatives

After

Derivatives

Effect of

Derivatives

March 31, 2021 $610 $— ($610) 

December 31, 2020 (1) 601 — (601) 

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

Earnings Sensitivity to Market Risk

The accounting treatment for our financial assets and liabilities (e.g. some are measured at amortized cost, while others are 

measured at fair value) creates variability in our earnings when interest rates and spreads change. We have elected fair value 

hedge accounting for certain assets and liabilities in an effort to reduce this earnings variability and better align our financial 

results with the economics of our business. 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. Based upon the composition of our financial 

assets and liabilities, including derivatives, at March 31, 2021, we would generally recognize fair value losses when interest 

rates decline if we did not apply fair value hedge accounting.

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 10 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 

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 50 - Earnings Sensitivity to Changes in Interest Rates 

(In millions) March 31, 2021 March 31, 2020

Interest Rate Scenarios(1)

Parallel yield curve shifts: 

 +100 basis points $582 $265 

 -100 basis points (582) (265) 

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

 +100 basis points 743 110 

 -100 basis points (743) (110) 

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

 +100 basis points (161) 155 

 -100 basis points 161 (155) 

(1) The earnings sensitivity presented is calculated using the change in interest rates and net effective duration exposure.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 56
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.

Spread-Related Earnings Sensitivity

We have limited ability to manage our spread risk exposure, and therefore, the volatility of market spreads may contribute to 

significant GAAP earnings variability. For financial assets measured at fair value, we generally recognize fair value losses when 

market spreads widen. Conversely, for financial liabilities measured at fair value, we generally recognize fair value gains when 

market spreads widen. See MD&A - Our Business Segments for additional information on the impact of market spreads on 

our results of operations.

Management's Discussion and Analysis Risk Management

Freddie Mac 1Q 2021 Form 10-Q 57
LIQUIDITY AND CAPITAL RESOURCES

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

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

requirements established by FHFA, and we must 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 March 31, 2021, and a brief description of their 

importance to Freddie Mac.

Table 51 - Liquidity Sources 

Source Balance(1)

 (In millions)

Description

Liquidity

• Other Investments Portfolio - 

Liquidity and Contingency 

Operating Portfolio

 $89,151 • The liquidity and contingency operating portfolio, included within our other 

investments portfolio, is primarily used for short-term liquidity management.

• Liquid Portion of the MortgageRelated Investments Portfolio $56,301 • 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

The investments in our other investments portfolio are important to our cash flow, collateral management, asset and liability 

management, and ability to provide liquidity and stability to the mortgage market. The table below summarizes the balances in 

our other investments portfolio, which includes the liquidity and contingency operating portfolio.

Table 52 - Other Investments Portfolio 

March 31, 2021 December 31, 2020

(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 $39,017 $61,951 $11 $100,979 $6,509 $17,380 $— $23,889 

Securities purchased under 

agreements to resell 22,323 — 747 23,070 65,753 38,487 763 105,003 

Non-mortgage related securities 27,811 — 3,462 31,273 23,632 — 3,321 26,953 

Advances to lenders — — 6,401 6,401 — — 4,162 4,162 

LIHTC equity investment — — 1,488 1,488 — — 1,410 1,410 

Secured lending — — 1,632 1,632 — — 1,680 1,680 

Total $89,151 $61,951 $13,741 $164,843 $95,894 $55,867 $11,336 $163,097 

(1) Represents carrying value.

Our non-mortgage-related investments in the liquidity and contingency operating portfolio 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-interest-bearing deposits at the Federal Reserve Bank of New York and interest-bearing deposits at 

commercial banks. Our interest-bearing deposits at commercial banks totaled $3.1 billion as of both March 31, 2021 and 

December 31, 2020.

The liquidity and contingency operating portfolio also included cash collateral posted to us primarily by derivatives 

counterparties of $1.9 billion and $2.8 billion as of March 31, 2021 and December 31, 2020, respectively. We have invested this 

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

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 1Q 2021 Form 10-Q 58
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. 

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 single-class and multiclass agency 

securities, excluding certain structured agency securities collateralized by non-agency mortgage-related securities. Our ability 

to pledge certain of these assets as collateral or sell them enhances our liquidity profile, although the amount of cash we may 

be able to raise successfully in the event of a liquidity crisis or significant market disruption may be substantially less than the 

amount of mortgage-related assets we hold. 

We hold other mortgage assets, but given their characteristics, they may not be available for immediate sale or for use as 

collateral for repurchase agreements. These assets consist of certain structured agency securities collateralized by non-agency 

mortgage-related securities, non-agency CMBS, non-agency RMBS, and unsecuritized seriously delinquent and modified 

single-family loans.

Primary Sources of Funding 

The following table lists the sources and balances of our funding as of March 31, 2021 and a brief description of their 

importance to Freddie Mac.

Table 53 - Funding Sources 

Source Balance(1)

 (In millions)

Description

Funding

• Debt of Freddie Mac $258,441 • Debt of Freddie Mac is used to fund our business activities.

• Debt Securities of Consolidated 

Trusts

 $2,445,829 • Debt securities of consolidated trusts are used primarily to fund our single-family 

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 purchasing 

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 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.

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 1Q 2021 Form 10-Q 59
Table 54 - Debt of Freddie Mac Activity 

1Q 2021 1Q 2020

(Dollars in millions) Short-term

Average 

Rate(1) Long-term

Average 

Rate(1) Short-term

Average 

Rate(1) Long-term

Average 

Rate(1)

Discount notes and Reference Bills®

Beginning balance $11 0.69 % $— — % $60,830 1.67% $— —% 

Issuances — — — — 99,376 1.34 — — 

Repurchases — — — — — — — — 

Maturities (11) 0.69 — — (102,384) 1.62 — — 

Ending Balance — — — — 57,822 1.33 — — 

Securities sold under 

agreements to repurchase

Beginning balance — — — — 9,843 1.46 — — 

Additions 133,828 (0.05) — — 299,679 1.10 — — 

Repayments (125,898) (0.05) — — (295,217) 1.16 — — 

Ending Balance 7,930 (0.05) — — 14,305 0.16 — — 

Callable debt

Beginning balance 685 0.10 123,338 0.71 1,000 2.36 94,152 2.03 

Issuances 22,050 0.04 1,090 0.60 — — 29,089 1.78 

Repurchases — — — — — — — — 

Calls (11,825) 0.04 (22,389) 0.71 (1,000) 2.36 (36,102) 2.09 

Maturities — — (525) 1.90 — — (2,270) 1.48 

Ending Balance 10,910 0.03 101,514 0.71 — — 84,869 1.92 

Non-callable debt

Beginning balance 4,259 1.51 145,560 1.21 39,407 2.31 62,228 2.86 

Issuances — — — — 14,356 1.57 31,656 0.85 

Repurchases (1,835) 1.53 (2,821) 1.93 — — — — 

Maturities (2,424) 1.49 (4,766) 2.13 (13,450) 2.24 (3,589) 1.57 

Ending Balance — — 137,973 1.17 40,313 2.07 90,295 2.21 

STACR and SCR Debt(2)

Beginning balance — — 12,488 4.09 — — 15,497 5.55 

Issuances — — — — — — — — 

Repurchases — — — — — — — — 

Maturities — — (427) 4.27 — — (843) 3.83 

Ending Balance — — 12,061 4.13 — — 14,654 5.57 

 Total debt of Freddie Mac 18,840 — % 251,548 1.12 % 112,440 1.45% 189,818 2.34% 

Offsetting arrangements (7,930) (14,305) 

Total debt of Freddie Mac, net $10,910 $251,548 $98,135 $189,818 

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

(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. 

As of March 31, 2021, our aggregate indebtedness, calculated as the par value of debt of Freddie Mac, was $262.7 billion, 

which was below the current $300.0 billion debt cap limit imposed by the Purchase Agreement. 

Our total outstanding debt of Freddie Mac balance decreased year-over-year driven by the decline in the mortgage-related 

investments portfolio, partially offset by an increase in cash needs to comply with the updated minimum liquidity requirements 

established by FHFA. 

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 1Q 2021 Form 10-Q 60
Maturity and Redemption Dates

The following graphs present 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.

Contractual Maturity Date as of March 31, 2021 (1)

(Par value in billions)

$70

$45

$55

$19

$33

$36

$12

Due in 1 year or less

Due after 1 year through 2 years

Due after 2 years through 3 yearsDue after 3 years through 4 years

Due after 4 years through 5 years

Thereafter

STACR and SCR debt

Earliest Redemption Date as of March 31, 2021 (1)

(Par value in billions)

$155

$44

$35

$4 $8 $12 $12

1 year or less

After 1 year through 2 years

After 2 years through 3 years

After 3 years through 4 yearsAfter 4 years through 5 years

Thereafter

STACR and SCR debt

(1) 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 graphs.

Debt Securities of Consolidated Trusts

The largest component of debt on our condensed consolidated balance sheets is debt securities of consolidated trusts. We 

issue this type of debt by securitizing mortgage loans primarily to fund the majority of our single-family guarantee activities. 

When we consolidate securitization trusts, we recognize the following on our condensed consolidated balance sheets:

n	 The assets held by the securitization trusts, the majority of which are mortgage loans. We recognized $2,395.7 billion and 

$2,273.3 billion of mortgage loans, which represented 87.4% and 86.5% of our total assets, as of March 31, 2021 and 

December 31, 2020, respectively.

n	 The debt securities issued by the securitization trusts, the majority of which are Level 1 Securitization Products and are 

pass-through securities, where the cash flows of the mortgage loans held by the securitization trust are passed through to 

the holders of the securities. We recognized $2,445.8 billion and $2,308.2 billion of debt securities of consolidated trusts, 

which represented 90.4% and 89.0% of our total debt, as of March 31, 2021 and December 31, 2020, respectively.

Debt securities of consolidated trusts represent our liability to third parties that hold beneficial interests in our consolidated 

securitization trusts. Debt securities of consolidated trusts are principally repaid from the cash flows of the mortgage loans held 

by the securitization trusts that issued the debt securities. In circumstances when the cash flows of the mortgage loans are not 

sufficient to repay the debt, we make up the shortfall because we have guaranteed the payment of principal and interest on the 

debt. In certain circumstances, we have the right and/or obligation to purchase the loan from the trust prior to its contractual 

maturity. 

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 1Q 2021 Form 10-Q 61
The table below shows the issuance and extinguishment activity for the debt securities of our consolidated trusts.

Table 55 - Activity for Debt Securities of Consolidated Trusts Held by Third Parties 

(In millions) 1Q 2021 1Q 2020

Beginning balance $2,240,602 $1,854,802 

Issuances:

New issuances to third parties 230,200 103,769 

Additional issuances of securities 179,923 42,652 

Total issuances 410,123 146,421 

Extinguishments:

Purchases of debt securities from third parties (2,565) (4,017) 

Debt securities received in settlement of secured lending (50,692) (14,765) 

Repayments of debt securities (220,777) (96,670) 

Total extinguishments (274,034) (115,452) 

Ending balance 2,376,691 1,885,771

Unamortized premiums and discounts 69,138 44,234 

Debt securities of consolidated trusts held by third parties $2,445,829 $1,930,005 

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. 

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 March 31, 2021 and December 31, 2020, the outstanding 

UPB of the guaranteed securities was $348.2 billion and $337.0 billion, respectively. In addition to our securitization and other 

mortgage-related guarantees, we have certain other guarantees that are accounted for as derivative instruments and are 

recognized on our condensed consolidated balance sheets at fair value. See Note 10 for additional information on these 

guarantees, which are not included in the totals above.

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 March 31, 

2021 and December 31, 2020, the total amount of our off-balance sheet exposure related to Fannie Mae securities backing 

Freddie Mac resecuritization products was approximately $93.7 billion and $85.8 billion, respectively.

Cash Flows 

Cash and cash equivalents (including restricted cash and cash equivalents) increased by $76.7 billion from $24.3 billion in 

March 31, 2020 to $101.0 billion in March 31, 2021, primarily due to higher uninvested trust and operating cash as Treasury 

bills and securities purchased under agreements to resell continued to earn near zero returns.

Management's Discussion and Analysis Liquidity and Capital Resources 

Freddie Mac 1Q 2021 Form 10-Q 62
Capital Resources

Primary Sources of Capital 

Our entry into conservatorship resulted in significant changes to the assessment of our capital adequacy and our management 

of capital. Under the Purchase Agreement, Treasury made a commitment to provide us with funding, under certain conditions, 

to eliminate deficits in our net worth. Pursuant to the January 2021 Letter Agreement, we will not be required to pay a dividend 

on the senior preferred stock to Treasury until our Net Worth Amount exceeds the amount of adjusted total capital necessary to 

meet capital requirements and buffers set forth in the ERCF. Based on our Net Worth Amount of $18.8 billion as of March 31, 

2021, no dividend is payable to Treasury for the quarter ended March 31, 2021. See Note 2 for details of the support we 

receive from Treasury.

In May 2017, FHFA, as Conservator, issued guidance to us to evaluate and manage our financial risk and to make business 

decisions, while in conservatorship, utilizing a risk-based CCF, a capital system with detailed formulae provided by FHFA. In 

November 2020, FHFA released a final rule that establishes the ERCF as a new regulatory capital framework for Freddie Mac 

and Fannie Mae. The ERCF, which went into effect in February 2021, has a transition period for compliance. 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 consent order or other transition order; however, we may begin implementing the ERCF 

sooner, upon the direction of FHFA or otherwise. We will be required to report our regulatory capital under the ERCF beginning 

on January 1, 2022, and expect to continue capital reporting that is required by FHFA. The ERCF specifies substantial capital 

requirements and could affect our business strategies, perhaps significantly. While we have not finalized our procedures or 

governance process for complying with the ERCF, we estimate that, had the ERCF been applicable to us as of March 31, 2021, 

we would have been required to hold approximately $130 billion in adjusted total capital based on the leverage ratio 

requirements specified in the ERCF.

We invest our Net Worth Amount primarily in short-term investments. The table below presents activity related to our net worth 

during 1Q 2021 and 1Q 2020. 

Table 56 - Net Worth Activity 

(In millions) 1Q 2021 1Q 2020 

Beginning balance $16,413 $8,882 

Comprehensive income (loss) 2,378 622 

Capital draw from Treasury — — 

Senior preferred stock dividends declared — — 

Total equity / net worth $18,791 $9,504 

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

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

Liquidation preference of the senior preferred stock 89,061 81,770 

Management's Discussion and Analysis Liquidity and Capital Resources

Freddie Mac 1Q 2021 Form 10-Q 63
CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with GAAP requires us to make a number of judgments, estimates, and 

assumptions that affect the reported amounts within our condensed consolidated financial statements. Certain of our 

accounting policies, as well as estimates we make, are critical, as they are both important to the presentation of our financial 

condition and results of operations and require management to make difficult, complex, or subjective judgments and estimates, 

often regarding matters that are inherently uncertain. Actual results could differ from our estimates, and the use of different 

judgments and assumptions related to these policies and estimates could have a material impact on our condensed 

consolidated financial statements.

Our critical accounting policies and estimates relate to the single-family allowance for credit losses and fair value 

measurements. For additional information about our critical accounting policies and estimates and other significant accounting 

policies, as well as recently issued accounting guidance, see Note 1.

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.

Changes in forecasted house price growth rates can have a significant effect on our allowance for credit losses. Our estimate of 

expected credit losses leverages an internally based model that uses a Monte Carlo simulation which generates many possible 

house price scenarios for up to 40 years for each metropolitan statistical area (MSA). These scenarios are used to estimate 

loan-level expected future cash flows and credit losses based on each loan’s individual characteristics. The COVID-19 

pandemic initially resulted in a decline in our near-term forecasted house price growth rates compared to pre-pandemic 

estimates, but our forecast has since improved. The table below summarizes our nationwide forecasted house price growth 

rates for both full-year 2021 and 2022 that were used in determining our allowance for credit losses as of March 31, 2021 and 

as of December 31, 2020. These growth rates are used as inputs to our models to develop the detailed forecasted life-of-loan 

house price growth rates for each MSA.

Table 57 - Forecasted House Price Growth Rates

2021 2022

March 31, 2021 6.6 % 4.4 %

December 31, 2020 5.4 % 3.0 %

Management's Discussion and Analysis Critical Accounting Policies and Estimates

Freddie Mac 1Q 2021 Form 10-Q 64
REGULATION AND SUPERVISION

In addition to our oversight by FHFA as our Conservator, we are subject to regulation and oversight by FHFA under our Charter 

and the GSE Act and to certain regulation by other government agencies. Furthermore, regulatory activities by other 

government agencies can affect us indirectly, even if we are not directly subject to such agencies' regulation or oversight. For 

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

Federal Housing Finance Agency

Affordable Housing Fund Allocations

The GSE Act requires us to set aside in each fiscal year an amount equal to 4.2 basis points of each dollar of total new 

business purchases, and pay this amount to certain housing funds. During 1Q 2021, we completed $374.5 billion of new 

business purchases subject to this requirement and accrued $157 million of related expense. We are prohibited from passing 

through these costs to the originators of the loans that we purchase.

Legislative and Regulatory Developments

Final Rule Extending a Category of Qualified Mortgages

In April 2021, the CFPB formally delayed the mandatory compliance date of its final rule that revises the general definition of 

qualified mortgage under the CFPB's Truth in Lending Act regulations. The CFPB's action extends the category of qualified 

mortgages that consists of loans that are eligible for purchase or guarantee by either Freddie Mac or Fannie Mae until October 

1, 2022. However, FHFA has indicated that we may only purchase this category of qualified mortgages that have both 

application received dates before July 1, 2021 and settlement dates on or before August 31, 2021.

Management's Discussion and Analysis Regulation and Supervision

Freddie Mac 1Q 2021 Form 10-Q 65
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, the 

effects of the COVID-19 pandemic and actions taken in response thereto on our business, financial condition, and liquidity, 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, 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 2020 Annual Report, and including, without 

limitation, the following:

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 actions the U.S. government (including FHFA, Treasury, and Congress) may take, require us to take, or restrict us from 

taking, including actions to support the housing markets (such as programs implemented in response to the COVID-19 

pandemic or to implement the recommendations in FHFA's Conservatorship Scorecards and other objectives for us);

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

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

status of our company);

n Changes to our capital requirements and potential effects of the ERCF on our business strategies;

n Changes in the fiscal and monetary policies of the Federal Reserve (including purchasing agency MBS and agency CMBS 

in amounts needed to support the market during the COVID-19 pandemic);

n Changes in tax laws;

n Changes in accounting policies, practices, or guidance;

n Changes in economic and market conditions generally, and as a result of the COVID-19 pandemic, including changes in 

employment rates, 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 debt note, STACR Trust note, 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;

n Our ability to effectively execute our business strategies, implement new initiatives, and improve efficiency;

n The adequacy of our risk management framework, including the adequacy of the CCF 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, our limited 

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

CSS;

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 continue to align the prepayment speeds of 

our and Fannie Mae's respective UMBS;

Management's Discussion and Analysis Forward-Looking Statements

Freddie Mac 1Q 2021 Form 10-Q 66
n Changes in the practices of loan originators, servicers, investors, and other participants in the secondary mortgage market; 

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

business and operations;

n The occurrence of a major natural disaster or other catastrophic event in areas in which our offices or significant portions 

of our total mortgage portfolio are located; and 

n	 Other factors and assumptions described in this Form 10-Q and our 2020 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 1Q 2021 Form 10-Q 67
Financial Statements

Financial Statements

Freddie Mac 1Q 2021 Form 10-Q 68
FREDDIE MAC 

Condensed Consolidated Statements of Comprehensive Income 

(Loss) (Unaudited)

(In millions, except share-related amounts) 1Q 2021 1Q 2020

Net interest income

Interest income $13,902 $17,592 

Interest expense (10,263) (14,807) 

Net interest income 3,639 2,785 

Non-interest income (loss)

Guarantee fee income 248 377 

Investment gains (losses), net 1,208 (835) 

Other income (loss) 178 95 

Non-interest income (loss) 1,634 (363) 

Net revenues 5,273 2,422 

Benefit (provision) for credit losses 196 (1,233) 

Non-interest expense

Salaries and employee benefits (344) (341) 

Professional services (87) (76) 

Other administrative expense (208) (170) 

Total administrative expense (639) (587) 

Credit enhancement expense (335) (231) 

Benefit for (decrease in) credit enhancement recoveries (257) 467 

REO operations expense (8) (85) 

Temporary Payroll Tax Cut Continuation Act of 2011 expense (534) (432) 

Other expense (215) (103) 

Non-interest expense (1,988) (971) 

Income (loss) before income tax (expense) benefit 3,481 218 

Income tax (expense) benefit (714) (45) 

Net income (loss) 2,767 173 

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

Changes in unrealized gains (losses) related to available-for-sale securities (395) 438 

Changes in unrealized gains (losses) related to cash flow hedge relationships 10 13 

Changes in defined benefit plans (4) (2) 

Total other comprehensive income (loss), net of taxes and reclassification adjustments (389) 449 

Comprehensive income (loss) $2,378 $622 

Net income (loss) $2,767 $173 

Future increase in senior preferred stock liquidation preference (2,378) (382) 

Net income (loss) attributable to common stockholders $389 ($209) 

Net income (loss) per common share — basic and diluted $0.12 ($0.06) 

Weighted average common shares outstanding (in millions) — basic and diluted 3,234 3,234 

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

Financial Statements Condensed Consolidated Statements of Comprehensive Income

Freddie Mac 1Q 2021 Form 10-Q 69
FREDDIE MAC

Condensed Consolidated Balance Sheets (Unaudited) 

March 31, December 31,

(In millions, except share-related amounts) 2021 2020

Assets

Cash and cash equivalents (Notes 3, 16) (includes $61,962 and $17,379 of restricted cash and cash 

equivalents) $100,979 $23,889 

Securities purchased under agreements to resell (Notes 3, 11, 16) 15,140 105,003 

Investment securities, at fair value (Note 3, 6) 61,880 59,825 

Mortgage loans held-for-sale (Notes 3, 4) (includes $8,093 and $14,199 at fair value) 24,915 33,652 

Mortgage loans held-for-investment (Notes 3, 4) (net of allowance for credit losses of $5,330 and $5,732) 2,482,972 2,350,236 

Accrued interest receivable (Notes 3, 4, 6, 11) (net of allowance of $213 and $140) 7,662 7,754 

Derivative assets, net (Notes 10, 11) 2,085 1,205 

Deferred tax assets, net 6,826 6,557 

Other assets (Notes 3) (includes $5,894 and $5,775, at fair value) 39,415 39,294 

Total assets $2,741,874 $2,627,415 

Liabilities and equity

Liabilities

Accrued interest payable (Note 3) $5,954 $6,210 

Debt (Notes 3, 9) (includes $2,364 and $2,592 at fair value) 2,704,270 2,592,546 

Derivative liabilities, net (Notes 10, 11) 950 954 

Other liabilities (Notes 3) 11,909 11,292 

Total liabilities 2,723,083 2,611,002 

Commitments and contingencies (Notes 5, 10, 18)

Equity (Note 12)

Senior preferred stock (liquidation preference of $89,061 and $86,539) 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 and 650,059,292 shares outstanding — — 

Additional paid-in capital — — 

Retained earnings (accumulated deficit) (64,335) (67,102) 

AOCI, net of taxes, related to:

Available-for-sale securities 415 810 

Cash flow hedge relationships (196) (206) 

Defined benefit plans 35 39 

Total AOCI, net of taxes 254 643 

Treasury stock, at cost, 75,804,333 shares and 75,804,594 shares (3,885) (3,885) 

Total equity 18,791 16,413 

Total liabilities and equity $2,741,874 $2,627,415 

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

sheets.

March 31, December 31, 

(In millions) 2021 2020

Condensed Consolidated Balance Sheet Line Item (Note 3)

Assets:

Mortgage loans held-for-investment $2,395,707 $2,273,347 

All other assets 90,128 83,982 

Total assets of consolidated VIEs $2,485,835 $2,357,329 

Liabilities:

Debt $2,445,829 $2,308,176 

All other liabilities 5,592 5,610 

Total liabilities of consolidated VIEs $2,451,421 $2,313,786 

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

Financial Statements Condensed Consolidated Balance Sheets

Freddie Mac 1Q 2021 Form 10-Q 70
FREDDIE MAC

Condensed Consolidated Statements of Equity (Unaudited)

Shares Outstanding

Senior

Preferred

Stock

Preferred

Stock, at

Redemption

Value

Common

Stock, at

Par Value

Additional

Paid-In

Capital

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

Comprehensive income (loss):

Net income (loss) — — — — — — — 2,767 — — 2,767 

Other comprehensive income (loss), net of 

taxes — — — — — — — — (389) — (389) 

Comprehensive income (loss) — — — — — — — 2,767 (389) — 2,378 

Ending balance at March 31, 2021 1 464 650 $72,648 $14,109 $— $— ($64,335) $254 ($3,885) $18,791 

Balance at December 31, 2019 1 464 650 $72,648 $14,109 $— $— ($74,188) $438 ($3,885) $9,122 

Comprehensive income (loss):

Net income (loss) — — — — — — — 173 — — 173 

Other comprehensive income (loss), net of 

taxes — — — — — — — — 449 — 449 

Comprehensive income (loss) — — — — — — — 173 449 — 622 

Cumulative effect from adoption of CECL — — — — — — — (240) — — (240) 

Ending balance at March 31, 2020 1 464 650 $72,648 $14,109 $— $— ($74,255) $887 ($3,885) $9,504 

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

Financial Statements Condensed Consolidated Statements of Equity

Freddie Mac 1Q 2021 Form 10-Q 71
FREDDIE MAC

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions) 1Q 2021 1Q 2020

Net cash provided by (used in) operating activities $10,382 $2,791 

Cash flows from investing activities

Purchases of trading securities (34,301) (29,067) 

Proceeds from sales of trading securities 31,425 24,252 

Proceeds from maturities and repayments of trading securities 2,487 4,992 

Purchases of available-for-sale securities (4,407) (1,375) 

Proceeds from sales of available-for-sale securities 14,571 2,072 

Proceeds from maturities and repayments of available-for-sale securities 502 865 

Purchases of mortgage loans acquired as held-for-investment (229,709) (68,834) 

Proceeds from sales of mortgage loans acquired as held-for-investment 1,019 2,464 

Proceeds from repayments of mortgage loans acquired as held-for-investment 229,285 107,876 

Advances under secured lending arrangements (54,777) (17,047) 

Repayments of secured lending arrangements 52 591 

Net proceeds from dispositions of real estate owned and other recoveries 71 260 

Net (increase) decrease in securities purchased under agreements to resell 81,933 5,688 

Derivative premiums and terminations, swap collateral, and exchange settlement payments, net 990 (8,357) 

Other, net (155) (138) 

Net cash provided by (used in) investing activities 38,986 24,242 

Cash flows from financing activities

Proceeds from issuance of debt securities of consolidated trusts held by third parties 267,096 73,626 

Repayments and redemptions of debt securities of consolidated trusts held by third parties (223,437) (100,829) 

Proceeds from issuance of debt of Freddie Mac 23,153 174,258 

Repayments of debt of Freddie Mac (47,019) (159,391) 

Net increase (decrease) in securities sold under agreements to repurchase 7,930 4,463 

Other, net (1) (25) 

Net cash provided by (used in) financing activities 27,722 (7,898) 

Net increase (decrease) in cash and cash equivalents (includes restricted cash and cash equivalents) 77,090 19,135 

Cash and cash equivalents (includes restricted cash and cash equivalents) at beginning of year 23,889 5,189 

Cash and cash equivalents (includes restricted cash and cash equivalents) at end of period $100,979 $24,324 

Supplemental cash flow information

Cash paid for:

Debt interest $17,373 $17,962 

Income taxes — — 

Non-cash investing and financing activities (Note 4, 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 1Q 2021 Form 10-Q 72
Notes to Condensed Consolidated Financial 

Statements

NOTE 1

Summary of Significant Accounting Policies

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

U.S. housing market. We are regulated by FHFA, the SEC, HUD, and Treasury, and are currently operating under the 

conservatorship of FHFA. For more information on the roles of FHFA and Treasury, see Note 2 in this Form 10-Q and in our 

Annual Report on Form 10-K for the year ended December 31, 2020, or 2020 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 2020 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 2020 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 condensed consolidated financial statements contain all 

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

During 1Q 2021, our chief operating decision maker began making decisions about allocating resources and assessing 

segment performance based on two reportable segments, Single-family and Multifamily. See Note 15 for additional 

information on the change in our segment reporting presentation.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of 

assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported 

amounts of revenues, expenses, gains, and losses during the reporting period. Management has made significant estimates in 

preparing the financial statements for establishing the allowance for credit losses and valuing financial instruments and other 

assets and liabilities. Actual results could be different from these estimates.

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

Freddie Mac 1Q 2021 Form 10-Q 73
 Recently Issued Accounting Guidance

ASU 2020-06, Debt - Debt with 

Conversion and Other Options 

(Subtopic 470-20) and 

Derivatives and Hedging -

Contracts in Entity’s Own Equity 

(Subtopic 815-40): Accounting 

for Convertible Instruments and 

Contracts in an Entity’s Own 

Equity

The amendments in this Update simplify an issuer's

accounting for certain financial instruments with

characteristics of liabilities and equity, primarily by

eliminating many of the current separation models

used to account for convertible debt and convertible

preferred stock.

January 1, 2021 The adoption of the amendments did not 

have a material effect on our condensed 

consolidated financial statements or on our 

disclosures.

ASU 2020-08, Codification 

Improvements to Subtopic 

310-20, Receivables -

Nonrefundable Fees and Other 

Costs

The amendments in this Update clarify the guidance

for the reevaluation of whether a callable debt

security’s amortized cost basis exceeds the amount

repayable by the issuer at the next call date.

January 1, 2021 The adoption of the amendments did not 

have a material effect on our condensed 

consolidated financial statements or on our 

disclosures.

Recently Adopted Accounting Guidance

Standard Description Date of 

Adoption

Effect on Condensed Consolidated 

Financial Statements

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

Freddie Mac 1Q 2021 Form 10-Q 74
NOTE 2

Conservatorship and Related Matters

Business Objectives

We operate under the conservatorship that commenced on September 6, 2008, conducting our business under the direction of 

FHFA, as our Conservator. The conservatorship and related matters significantly affect our management, business activities, 

financial condition, and results of operations. Upon its appointment, FHFA, as Conservator, immediately succeeded to all 

rights, titles, powers, and privileges of Freddie Mac, and of any stockholder, officer, or director thereof, with respect to the 

company and its assets. The Conservator also succeeded to the title to all books, records, and assets of Freddie Mac held by 

any other legal custodian or third party. The Conservator provided for the Board of Directors to perform certain functions and to 

oversee management, and the Board of Directors delegated to management authority to conduct business operations so that 

the company can continue to operate in the ordinary course. The directors serve on behalf of, and perform such functions as 

provided by, the Conservator.

We are subject to certain constraints on our business activities under the Purchase Agreement. However, the support provided 

by Treasury pursuant to the Purchase Agreement currently enables us to maintain our access to the debt markets and to have 

adequate liquidity to conduct our normal business activities, although the costs of our debt funding could vary. Our ability to 

access funds from Treasury under the Purchase Agreement is critical to keeping us solvent. 

Purchase Agreement 

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

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

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

Under the August 2012 amendment to the Purchase Agreement, for each quarter from January 1, 2013 and thereafter, the 

dividend payment will be the amount, if any, by which our Net Worth Amount at the end of the immediately preceding fiscal 

quarter, less the applicable Capital Reserve Amount, exceeds zero. Pursuant to the January 2021 Letter Agreement, the 

applicable Capital Reserve Amount from October 1, 2020 is the amount of adjusted total capital necessary to meet capital 

requirements and buffers set forth in the ERCF. This increased Capital Reserve Amount will remain in effect until the last day of 

the second fiscal quarter during which we have reached and maintained such level of capital (the Capital Reserve End Date). As 

a result, the company was not required to pay a dividend to Treasury on the senior preferred stock in March 2021, and we will 

not be required to pay a dividend on the senior preferred stock to Treasury until we have built sufficient capital to meet the 

capital requirements and buffers set forth in the ERCF. If for any reason we were not to pay our dividend requirements on the 

senior preferred stock in full in any future period until the Capital Reserve End Date, the unpaid amount would be added to the 

liquidation preference and the applicable Capital Reserve Amount would thereafter be zero.

As the company builds capital during this period, the quarterly increases in our Net Worth Amount have been, and will continue 

to be, added to the liquidation preference of the senior preferred stock. As a result, the liquidation preference of the senior 

preferred stock increased from $86.5 billion as of December 31, 2020 to $89.1 billion on March 31, 2021 based on the $2.5 

billion increase in our Net Worth Amount during 4Q 2020, and will increase to $91.4 billion on June 30, 2021 based on the $2.4 

billion increase in our Net Worth Amount during 1Q 2021. 

The Purchase Agreement, as amended by the January 2021 Letter Agreement, includes significant restrictions on our ability to 

manage our business, including limits on our secondary market activities; the amount and type of single-family and multifamily 

loans we can acquire; the amount of indebtedness we can incur; the size of our mortgage-related investments portfolio; and 

our ability to pay dividends, transfer certain assets, raise capital, pay down the liquidation preference of the senior preferred 

stock, and exit conservatorship. We have accounted for the January 2021 Letter Agreement as a modification of the senior 

preferred stock recognized on our condensed consolidated balance sheet.

The Purchase Agreement has an indefinite term and can terminate only in limited circumstances, which do not include the end 

of the conservatorship. The Purchase Agreement therefore could continue after the conservatorship ends. However, Treasury's 

consent is required for a termination of conservatorship other than in connection with receivership or under the limited 

circumstances specified in the Purchase Agreement as amended by the January 2021 Letter Agreement involving maintenance 

of certain capital and resolution of currently pending material litigation related to our conservatorship and the Purchase 

Agreement. Treasury has the right to exercise the warrant, in whole or in part, at any time on or before September 7, 2028.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 2

Freddie Mac 1Q 2021 Form 10-Q 75
Impact of Conservatorship and Related Developments on the MortgageRelated Investments Portfolio

In February 2019, FHFA directed us to maintain our mortgage-related investments portfolio at or below $225 billion at all times. 

The amount of mortgage assets that we may own in this portfolio is also currently capped under the Purchase Agreement at 

$250 billion. The Purchase Agreement cap will be lowered from $250 billion to $225 billion at the end of 2022. In addition to 

UPB, the calculation of mortgage assets subject to the FHFA and Purchase Agreement caps includes 10% of the notional 

value of interest-only securities. The balance of the mortgage-related investments portfolio for the purposes of the FHFA and 

Purchase Agreement limits was $181.5 billion at March 31, 2021, including $7.0 billion representing 10% of the notional amount 

of the interest-only securities we held as of March 31, 2021. Our ability to acquire and sell mortgage assets continues to be 

significantly constrained by limitations imposed by the Purchase Agreement and FHFA. 

With respect to the composition of our mortgage-related investments portfolio, in August 2020, FHFA instructed us to: (1) 

reduce the amount of agency MBS to no more than $50 billion by June 30, 2021 and no more than $20 billion by June 30, 

2022, with all dollar caps to be based on UPB; and (2) reduce the UPB of our existing portfolio of CMOs, which are also 

sometimes referred to as REMICs, to zero by June 30, 2021. We will have a holding period limit to sell any new CMO tranches 

created but not sold at issuance. CMOs do not include tranches initially retained from reperforming loans senior subordinate 

securitization structures.

Government Support for Our Business

We receive substantial support from Treasury and are dependent upon its continued support to continue operating our 

business. Our ability to access funds from Treasury under the Purchase Agreement is critical to: 

n	 Keeping us solvent;

n	 Allowing us to focus on our primary business objectives under conservatorship; and

n	 Avoiding the appointment of a receiver by FHFA under statutory mandatory receivership provisions. 

At December 31, 2020, our assets exceeded our liabilities under GAAP; therefore, FHFA did not request a draw on our behalf 

and, as a result, we did not receive any funding from Treasury under the Purchase Agreement during 1Q 2021. The amount of 

available funding remaining under the Purchase Agreement is $140.2 billion and will be reduced by any future draws.

See Note 9 and Note 12 for more information on the conservatorship and the Purchase Agreement.

Related Parties As a Result of Conservatorship

We are deemed related parties with Fannie Mae as both we and Fannie Mae have the same relationships with FHFA and 

Treasury. CSS was formed in 2013 as a limited liability company equally owned by Freddie Mac and Fannie Mae and is also 

deemed a related party. In connection with the formation of CSS, we entered into a limited liability company agreement with 

Fannie Mae. We and Fannie Mae have each appointed two executives to the CSS Board of Managers and signed governance 

and operating agreements for CSS, including an updated customer services agreement with Fannie Mae and CSS in May 2019. 

In June 2019, we entered into an agreement with Fannie Mae regarding the commingling of certain of our mortgage securities 

under the Single Security Initiative and related indemnification obligations. 

In January 2020, FHFA directed Freddie Mac and Fannie Mae to amend the LLC agreement for CSS to change the structure of 

the Board of Managers (CSS Board). The revised LLC agreement also removed the requirement that any CSS Board decision 

must be approved by at least one of the CSS Board members appointed by Freddie Mac and one appointed by Fannie Mae. 

These amendments reduce Freddie Mac’s and Fannie Mae’s ability to control CSS Board decisions, even after conservatorship, 

including decisions about strategy, business operations, and funding. 

Under the revised CSS LLC agreement, the CSS Board will continue to include two Freddie Mac and two Fannie Mae 

representatives, and it will also include two additional members: the Chief Executive Officer of CSS and an independent, nonExecutive Chair. During conservatorship, the CSS Board Chair shall be designated by FHFA, and all CSS Board decisions will 

require the affirmative vote of the Board Chair. During conservatorship, FHFA also may appoint up to three additional 

independent members to the CSS Board, who along with the Board Chair and the Chief Executive Officer of CSS may continue 

to serve on the CSS Board after conservatorship. FHFA appointed a CSS Board member to serve as Chair in January 2020, 

and FHFA subsequently appointed three additional CSS Board members, one in June 2020 and two in January 2021. As a 

result, the CSS Board members we and Fannie Mae appoint could be outvoted by non-GSE designated Board members on any 

matter during conservatorship and on a number of significant matters, including approval of the annual budget and strategic 

plan for CSS, if either we or Fannie Mae exits from conservatorship. Certain material post-conservatorship decisions, however, 

would require approval of at least one Board member designated by us and one designated by Fannie Mae, including those 

decisions involving a material change in CSS’s functionality, such as the addition of a new business line or reduction in CSS’s 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 2

Freddie Mac 1Q 2021 Form 10-Q 76
support of the UMBS, capital contributions beyond those necessary to support CSS’s ordinary business operations, 

appointment or removal of the Chief Executive Officer of CSS, and admission of new members.

We account for our investment in CSS using the equity method. We increase the carrying value of our investment in CSS when 

we contribute capital to CSS. We recognize our equity in the net earnings of CSS each period as a component of investment 

gains (losses), net on our condensed consolidated statements of comprehensive income (loss). During 1Q 2021, we contributed 

$27 million of capital to CSS, and we have contributed $685 million since we began making contributions in the fourth quarter 

of 2014. The carrying value of our investment in CSS was $20 million and $16 million as of March 31, 2021 and December 31, 

2020, respectively, and was included in other assets on our condensed consolidated balance sheets.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 2

Freddie Mac 1Q 2021 Form 10-Q 77
NOTE 3

Securitization Activities and Consolidation

Our primary business activities in our Single-family and Multifamily segments involve the securitization of loans or other 

mortgage-related assets using trusts that are VIEs. These trusts issue beneficial interests in the loans or other mortgage-related 

assets that they own. We guarantee the principal and interest payments on some or all of the issued beneficial interests in 

substantially all of our securitization transactions. We consolidate VIEs when we have a controlling financial interest in the VIE 

and are therefore considered the primary beneficiary of the VIE. See Note 5 for additional information on our guarantee 

activities.

We do not believe the maximum exposure to loss from our involvement with VIEs for which we are not the primary beneficiary 

discussed below 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. See 

Note 8 for additional information on 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 5 and generally reduce our exposure to these guarantees with unlimited 

interest rate exposure through separate derivative contracts with third parties. See Note 10 for additional information on 

derivatives.

Securitization Activities

Single-family

Resecuritization Products

With the exception of commingled securities, our investments in and guarantees of securities issued by resecuritization trusts 

for which we are not the primary beneficiary typically do not create any incremental exposure to loss because we already 

guarantee and consolidate the underlying collateral. The fair value of these investments in our resecuritization trusts for which 

we are not the primary beneficiary was $24.9 billion and $28.5 billion as of March 31, 2021 and December 31, 2020, 

respectively. While our guarantee of Fannie Mae securities underlying commingled resecuritization products creates 

incremental exposure to loss, we view the likelihood of being required to perform on our guarantee as remote due to Fannie 

Mae’s status as a GSE and the funding commitment available to it through its senior preferred stock purchase agreement with 

Treasury. The UPB of Fannie Mae securities underlying commingled Freddie Mac resecuritization trusts for which we are not 

the primary beneficiary totaled $92.3 billion and $85.3 billion as of March 31, 2021 and December 31, 2020, respectively. See 

Note 5 for additional information on our guarantee of Fannie Mae securities.

Senior Subordinate Securitization Structures

We do not consolidate our single-family senior subordinate securitization structures backed by seasoned loans because we do 

not have the ability to direct the loss mitigation activities of the underlying loans, which is the most significant activity affecting 

the economic performance of the VIE. The maximum exposure to loss for our single-family senior subordinate securitization 

structures for which we are not the primary beneficiary totaled $26.9 billion and $28.1 billion at March 31, 2021 and December 

31, 2020, respectively, and represents the guaranteed UPB of the assets held by these unconsolidated VIEs. The total assets of 

these unconsolidated VIEs totaled $32.5 billion and $33.7 billion at March 31, 2021 and December 31, 2020, respectively.

Other Securitization Products

We do not consolidate the trusts used to issue our single-family other securitization products when we are not the primary 

beneficiary. The maximum exposure to loss for these single-family securitizations for which we are not the primary beneficiary 

totaled $1.6 billion and $1.7 billion at March 31, 2021 and December 31, 2020, respectively. The total assets of these 

unconsolidated VIEs totaled $1.6 billion and $1.8 billion at March 31, 2021 and December 31, 2020, respectively. 

Multifamily

K Certificates

We do not consolidate our K Certificate securitization trusts that have subordination because we do not have the ability to 

direct the loss mitigation activities of the underlying loans, which is the most significant activity affecting the economic 

performance of the VIE. The maximum exposure to loss for our K Certificate securitizations for which we are not the primary 

beneficiary totaled $265.2 billion and $253.0 billion at March 31, 2021 and December 31, 2020, respectively, and primarily 

represents the UPB of the beneficial interests that we have guaranteed. The total assets of these nonconsolidated VIEs totaled 

$304.3 billion and $291.3 billion at March 31, 2021 and December 31, 2020, respectively. 

SB Certificates

Similar to K Certificate transactions, we are not the primary beneficiary of and, therefore, do not consolidate SB Certificate 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 1Q 2021 Form 10-Q 78
trusts, as we do not have the ability to direct loss mitigation activities of the underlying loans, which is the most significant 

activity affecting the economic performance of the VIE. The maximum exposure to loss for our SB Certificate securitizations for 

which we are not the primary beneficiary totaled $21.8 billion and $21.5 billion at March 31, 2021 and December 31, 2020, 

respectively, and primarily represents the UPB of the beneficial interests that we have guaranteed. The total assets of these 

nonconsolidated VIEs totaled $24.2 billion and $23.9 billion at March 31, 2021 and December 31, 2020, respectively.

Other Securitization Products

We do not consolidate the trusts used to issue our other securitization products when we are not the primary beneficiary. The 

maximum exposure to loss for our other securitization products for which we are not the primary beneficiary totaled 

$15.0 billion and $14.9 billion at March 31, 2021 and December 31, 2020, respectively, and primarily represents the UPB of the 

beneficial interests that we have guaranteed. The total assets of these nonconsolidated VIEs totaled $17.0 billion and 

$16.9 billion at March 31, 2021 and December 31, 2020, respectively.

CRT Activities

STACR Trust Notes

We are not the primary beneficiary of and, therefore, do not consolidate the STACR Trusts used in the STACR Trust Note 

transactions. The maximum exposure to loss for our STACR Trust Notes for which we are not the primary beneficiary 

represents our recorded expected recovery receivable and totaled $350 million and $420 million at March 31, 2021 and 

December 31, 2020, respectively. The total assets of these nonconsolidated VIEs totaled $19.7 billion and $17.3 billion at 

March 31, 2021 and December 31, 2020, respectively. See Note 8 for additional information on the amount of available 

coverage.

Consolidated VIEs 

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

condensed consolidated balance sheets.

Table 3.1 - Consolidated VIEs

(In millions) March 31, 2021 December 31, 2020

Condensed Consolidated Balance Sheet Line Item

Assets:

Cash and cash equivalents (includes $61,856 and $17,289 of restricted cash and cash 

equivalents) $61,857 $17,290 

Securities purchased under agreements to resell — 38,487 

Investment securities, at fair value 1,383 591 

Mortgage loans held-for-investment, net 2,395,707 2,273,347 

Accrued interest receivable, net 7,056 7,134 

Other assets 19,832 20,480 

Total assets of consolidated VIEs $2,485,835 $2,357,329 

Liabilities:

Accrued interest payable $5,591 $5,610 

Debt 2,445,829 2,308,176 

Other liabilities 1 — 

Total liabilities of consolidated VIEs $2,451,421 $2,313,786 

Non-Consolidated 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.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 1Q 2021 Form 10-Q 79
Table 3.2 - Non-Consolidated VIEs

(In millions) March 31, 2021 December 31, 2020

Assets and Liabilities Recorded on our Condensed Consolidated Balance Sheets(1)

Assets:

Investment securities, at fair value $24,898 $28,459 

Accrued interest receivable, net 232 239 

Derivative assets, net 29 61 

Other assets 5,651 5,553 

 Liabilities:

Debt 89 — 

Derivative liabilities, net 72 47 

Other liabilities 4,739 4,515 

(1) Includes our variable interests in REMICs and Strips, commingled Supers, K Certificates, SB Certificates, certain senior subordinate securitization structures, and 

other securitization products that we do not consolidate. 

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 table above. Our interests in these VIEs 

are generally passive in nature and are not expected to result in us obtaining a controlling financial interest in these VIEs in the 

future. As a result, we do not consolidate these VIEs and we account for our interests in these VIEs in the same manner that we 

account for our interests in other third-party transactions. See Note 6 for additional information regarding our investments in 

non-Freddie Mac mortgage-related securities. See Note 4 for more information regarding multifamily loans.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 3

Freddie Mac 1Q 2021 Form 10-Q 80
NOTE 4

Mortgage Loans 

The table below provides details of the loans on our condensed consolidated balance sheets.

Table 4.1 - Mortgage Loans

March 31, 2021 December 31, 2020

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

Held-for-sale UPB $10,850 $15,450 $26,300 $10,702 $23,789 $34,491 

Cost basis and fair value adjustments, net (1,592) 207 (1,385) (1,637) 798 (839) 

Total held-for-sale loans, net 9,258 15,657 24,915 9,065 24,587 33,652 

Held-for-investment UPB 2,403,981 22,738 2,426,719 2,271,576 21,923 2,293,499 

Cost basis adjustments 61,527 56 61,583 62,415 54 62,469 

Allowance for credit losses (5,253) (77) (5,330) (5,628) (104) (5,732) 

Total held-for-investment loans, net 2,460,255 22,717 2,482,972 2,328,363 21,873 2,350,236 

Total mortgage loans, net $2,469,513 $38,374 $2,507,887 $2,337,428 $46,460 $2,383,888 

The table below provides details of the UPB of loans we purchased and sold during the periods presented. 

Table 4.2 - Loans Purchased and Sold

(In billions) 1Q 2021 1Q 2020

Single-family:

Purchases

 Held-for-investment loans $360.6 $137.7 

Sale of held-for-sale loans(1) — 2.2 

Multifamily:

Purchases

 Held-for-investment loans 1.6 1.2 

 Held-for-sale loans 12.3 8.2 

Sale of held-for-sale loans(2) 21.1 10.7 

(1) Our sales of single-family loans reflect the sale of seasoned single-family mortgage loans. 

(2) Our sales of multifamily loans occur primarily through the issuance of multifamily K Certificates and SB Certificates. See Note 3 for more information on our K 

Certificates and SB Certificates.

Reclassifications 

We reclassify loans between held-for-investment and held-for-sale depending on our intent and ability to hold the loan for the 

foreseeable future. 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 period presented.

Table 4.3 - Loan Reclassifications

1Q 2021 1Q 2020

(In millions) UPB

Allowance for 

Credit Losses 

Reversed or 

(Established)

Valuation 

Allowance 

(Established) 

or Reversed UPB

Allowance for 

Credit Losses 

Reversed or 

(Established)

Valuation 

Allowance 

(Established) 

or Reversed

Single-family reclassifications from:

Held-for-investment to held-for-sale(1) $501 $7 $— $2,637 $214 $— 

Held-for-sale to held-for-investment(2) 35 3 — 1 — — 

Multifamily reclassifications from:

Held-for-investment to held-for-sale 528 1 — 32 — — 

 Held-for-sale to held-for-investment 9 — — 482 (1) — 

 Referenced footnotes are on the next page.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 1Q 2021 Form 10-Q 81
(1) Prior to reclassification from held-for-investment to held-for-sale, we charged-off $27 million and $79 million against the allowance for credit losses during 1Q 2021 

and 1Q 2020, respectively.

(2) Allowance for credit losses reversed upon reclassifications from held-for-sale to held-for-investment for loans that were previously charged off and the present 

values of expected future cash flows were in excess of the amortized cost basis upon reclassification.

Interest Income

The table below provides the amortized cost basis of non-accrual loans as of the beginning and the end of the periods 

presented, including the interest income recognized for the period that is related to the loans on non-accrual status as of the 

period end. 

Table 4.4 - Amortized Cost Basis of Held-for-Investment Loans on Non-accrual 

Non-accrual Amortized Cost Basis

Interest Income 

Recognized(1)

(In millions) January 1, 2021 March 31, 2021 1Q 2021

Single-family:

20- and 30-year or more, amortizing fixed-rate $12,151 $21,137 $36 

15-year amortizing fixed-rate 696 1,031 1 

Adjustable-rate 193 296 — 

Alt-A, interest-only, and option ARM 637 700 1 

Total single-family 13,677 23,164 38 

Total multifamily — — — 

Total single-family and multifamily $13,677 $23,164 $38 

Non-accrual Amortized Cost Basis

Interest Income 

Recognized(1)

(In millions) January 1, 2020 March 31, 2020 1Q 2020

Single-family:

20- and 30-year or more, amortizing fixed-rate $5,598 $5,494 $4 

15-year amortizing fixed-rate 242 241 — 

Adjustable-rate 91 83 — 

Alt-A, interest-only, and option ARM 439 389 2 

Total single-family 6,370 6,207 6 

Total multifamily 13 13 — 

Total single-family and multifamily $6,383 $6,220 $6 

(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 the 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 is 

charged off.

Table 4.5 - Accrued Interest Receivable, Net and Related Charge-offs

Accrued Interest Receivable, Net Accrued Interest Receivable Related Charge-offs

(In millions) March 31, 2021 December 31, 2020 1Q 2021 1Q 2020

Single-family loans $7,229 $7,292 ($166) ($29) 

Multifamily loans 120 139 — — 

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 the Enhanced Relief Refinance program) or to sell the property for an amount at or above the balance of 

the outstanding loan.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 1Q 2021 Form 10-Q 82
A second-lien loan also reduces the borrower's equity in the home and has a similar negative effect on the borrower's ability to 

refinance or sell the property for an amount at or above the combined balances of the first and second loans. However, 

borrowers are free to obtain second-lien financing after origination, and we are not entitled to receive notification when a 

borrower does so. For further information about concentrations of risk associated with our single-family and multifamily loans, 

see Note 16. 

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	 Loans within the Alt-A category continue to be presented in that category following modification, even though the borrower 

may have provided full documentation of assets and income to complete the modification and

n Loans within the option ARM category continue to be presented in that category following modification, even though the 

modified loan no longer provides for optional payment provisions.

Table 4.6 - Amortized Cost Basis of Single-Family Held-for-Investment Loans by Current LTV Ratio and Vintage

March 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 $51,100 $243,582 $53,075 $33,730 $63,245 $498,835 $943,567 

> 60 to 80 112,096 466,621 125,253 51,535 43,041 61,433 859,979 

> 80 to 100 52,066 182,963 28,503 4,226 1,292 3,529 272,579 

> 100(1) 92 93 5 20 49 812 1,071 

 Total 20- and 30-year or more, amortizing fixed-rate 215,354 893,259 206,836 89,511 107,627 564,609 2,077,196 

 15-year amortizing fixed-rate

≤ 60 18,098 90,471 17,571 9,263 17,916 103,499 256,818 

> 60 to 80 16,388 64,103 8,417 1,237 506 211 90,862 

> 80 to 100 2,650 5,156 135 10 9 20 7,980 

> 100(1) 9 7 — 2 3 8 29 

 Total 15-year amortizing fixed-rate 37,145 159,737 26,123 10,512 18,434 103,738 355,689 

 Adjustable-rate 

≤ 60 29 1,422 772 655 2,205 13,493 18,576 

> 60 to 80 34 1,221 692 382 715 597 3,641 

> 80 to 100 7 146 56 14 17 7 247 

> 100(1) — — — — — 1 1 

 Total adjustable-rate 70 2,789 1,520 1,051 2,937 14,098 22,465 

 Alt-A, Interest-only, and option ARM

≤ 60 — — — — — 8,361 8,361 

> 60 to 80 — — — — — 1,497 1,497 

> 80 to 100 — — — — — 252 252 

> 100(1) — — — — — 48 48 

 Total Alt-A, interest-only, and option ARM — — — — — 10,158 10,158 

Total single-family loans $252,569 $1,055,785 $234,479 $101,074 $128,998 $692,603 $2,465,508 

Total for all loan product types by current LTV ratio:

≤ 60 $69,227 $335,475 $71,418 $43,648 $83,366 $624,188 $1,227,322 

> 60 to 80 128,518 531,945 134,362 53,154 44,262 63,738 955,979 

> 80 to 100 54,723 188,265 28,694 4,250 1,318 3,808 281,058 

> 100(1) 101 100 5 22 52 869 1,149 

Total single-family loans $252,569 $1,055,785 $234,479 $101,074 $128,998 $692,603 $2,465,508 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 1Q 2021 Form 10-Q 83
December 31, 2020

Year of Origination 

Total

(In millions) 2020 2019 2018 2017 2016 Prior

Current LTV Ratio:

 20- and 30-year or more, amortizing fixed-rate

≤ 60 $203,333 $52,820 $33,139 $64,834 $115,978 $431,406 $901,510 

> 60 to 80 437,107 141,094 64,236 59,110 40,614 44,636 786,797 

> 80 to 100 206,457 53,926 8,822 2,117 654 3,983 275,959 

> 100(1) 202 7 25 64 61 948 1,307 

 Total 20- and 30-year or more, amortizing fixed-rate 847,099 247,847 106,222 126,125 157,307 480,973 1,965,573 

 15-year amortizing fixed-rate

≤ 60 78,269 17,753 9,914 19,650 29,916 83,842 239,344 

> 60 to 80 67,904 12,169 2,195 961 215 135 83,579 

> 80 to 100 8,553 400 17 12 9 17 9,008 

> 100(1) 21 — 3 5 3 7 39 

 Total 15-year amortizing fixed-rate 154,747 30,322 12,129 20,628 30,143 84,001 331,970 

 Adjustable-rate 

≤ 60 1,427 850 731 2,429 2,042 12,993 20,472 

> 60 to 80 1,403 877 537 1,061 329 528 4,735 

> 80 to 100 232 125 34 29 2 8 430 

> 100(1) — — — — — 1 1 

 Total adjustable-rate 3,062 1,852 1,302 3,519 2,373 13,530 25,638 

 Alt-A, Interest-only, and option ARM

≤ 60 — — — — — 8,620 8,620 

> 60 to 80 — — — — — 1,818 1,818 

> 80 to 100 — — — — — 314 314 

> 100(1) — — — — — 58 58 

 Total Alt-A, interest-only, and option ARM — — — — — 10,810 10,810 

Total single-family loans $1,004,908 $280,021 $119,653 $150,272 $189,823 $589,314 $2,333,991 

Total for all loan product types by Current LTV ratio:

≤ 60 $283,029 $71,423 $43,784 $86,913 $147,936 $536,861 $1,169,946 

> 60 to 80 506,414 154,140 66,968 61,132 41,158 47,117 876,929 

> 80 to 100 215,242 54,451 8,873 2,158 665 4,322 285,711 

> 100(1) 223 7 28 69 64 1,014 1,405 

Total single-family loans $1,004,908 $280,021 $119,653 $150,272 $189,823 $589,314 $2,333,991 

(1) The serious delinquency rate for the single-family held-for-investment mortgage loans with current LTV ratios in excess of 100% was 10.75% and 11.17% as of 

March 31, 2021 and December 31, 2020, respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 1Q 2021 Form 10-Q 84
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 current financial strength and debt service capacity of the borrower; 

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. 

Table 4.7 - Amortized Cost Basis of Multifamily Held-for-Investment Loans by Credit Quality Indicator by Vintage

March 31, 2021

Year of Origination

(In millions) 2021 2020 2019 2018 2017 Prior Total

Revolving 

Loans

Category:

Pass $438 $8,169 $6,258 $1,160 $656 $3,191 $2,215 $22,087 

Special mention — — 500 — — 107 — 607 

Substandard — — 23 — 13 64 — 100 

Doubtful — — — — — — — — 

Total $438 $8,169 $6,781 $1,160 $669 $3,362 $2,215 $22,794 

December 31, 2020

Year of Origination

(In millions) 2020 2019 2018 2017 2016 Prior Total

Revolving 

Loans

Category:

Pass $7,486 $6,491 $1,075 $722 $590 $2,715 $2,024 $21,103 

Special mention — 524 115 — 8 108 — 755 

Substandard — — 6 41 — 72 — 119 

Doubtful — — — — — — — — 

Total $7,486 $7,015 $1,196 $763 $598 $2,895 $2,024 $21,977 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 1Q 2021 Form 10-Q 85
Past Due Status

The table below presents the amortized cost basis of our single-family and multifamily loans, held-for-investment, by payment 

status. 

Table 4.8 - Amortized Cost Basis of Held-for-Investment Loans by Payment Status 

March 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

Non-accrual 

With No 

Allowance(2)

Single-family:

20- and 30-year or more, amortizing 

fixed-rate $2,015,453 $11,184 $4,152 $46,407 $2,077,196 $25,654 $791 

15-year amortizing fixed-rate 351,388 1,024 309 2,968 355,689 1,907 11 

Adjustable-rate 21,474 151 80 760 22,465 464 10 

Alt-A, interest-only, and option ARM 8,725 243 129 1,061 10,158 376 139 

Total single-family 2,397,040 12,602 4,670 51,196 2,465,508 28,401 951 

Total multifamily(3) 22,788 6 — — 22,794 — — 

Total single-family and multifamily $2,419,828 $12,608 $4,670 $51,196 $2,488,302 $28,401 $951 

December 31, 2020

(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

Non-accrual 

with No 

Allowance(2)

Single-family:

20- and 30-year or more, amortizing 

fixed-rate $1,891,981 $15,798 $5,941 $51,853 $1,965,573 $40,162 $648 

15-year amortizing fixed-rate 326,651 1,439 429 3,451 331,970 2,723 11 

Adjustable-rate 24,483 192 79 884 25,638 690 5 

Alt-A, interest-only, and option ARM 9,227 292 130 1,161 10,810 538 115 

Total single-family 2,252,342 17,721 6,579 57,349 2,333,991 44,113 779 

Total multifamily(3) 21,977 — — — 21,977 — — 

Total single-family and multifamily $2,274,319 $17,721 $6,579 $57,349 $2,355,968 $44,113 $779 

(1) Includes $0.9 billion and $1.0 billion of single-family loans that were in the process of foreclosure as of March 31, 2021 and December 31, 2020, 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. The amounts of 

allowance for credit losses on accrued interest receivable and advances of pre-foreclosure costs related to these loans are excluded.

(3) As of March 31, 2021 and December 31, 2020, includes $0.6 billion and $0.7 billion of multifamily loans in forbearance that are reported as current.

Troubled Debt Restructurings 

The table below provides details of our single-family loan modifications that were classified as TDRs during the periods 

presented. 

Table 4.9 - Single-Family TDR Modification Metrics

1Q 2021 1Q 2020

Percentage of single-family loan modifications that were classified as TDRs with:

 Interest rate reductions and related term extensions 15% 14% 

 Principal forbearance and related interest rate reductions and term extensions 34 19 

Average coupon interest rate reduction 0.4 % 0.3 %

Average months of term extension 153 187

Substantially all of our completed single-family loan modifications classified as a TDR during 1Q 2021 and 1Q 2020 resulted in 

a modified loan with a fixed interest rate.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 4

Freddie Mac 1Q 2021 Form 10-Q 86
The table below presents the volume of single-family and multifamily loans that were newly classified as TDRs. Loans classified 

as a TDR in one period may be subject to further action (such as a modification or remodification) in a subsequent period. In 

such cases, the subsequent action would not be reflected in the table below since the loan would already have been classified 

as a TDR.

Table 4.10 - TDR Activity

1Q 2021 1Q 2020

(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 3,782 $671 6,432 $1,127 

15-year amortizing fixed-rate 472 47 729 72 

Adjustable-rate 48 9 97 17 

Alt-A, interest-only, and option ARM 151 19 166 24 

Total single-family 4,453 746 7,424 1,240 

Multifamily — — — — 

(1) The pre-TDR amortized cost basis for single-family loans initially classified as TDR during 1Q 2021 and 1Q 2020 was $0.7 billion and $1.2 billion, respectively.

(2) Includes certain bankruptcy events and forbearance plans, repayment plans, payment deferrals, and modification activities that do not qualify for the temporary relief 

related to TDR provided by the CARES Act based on servicer reporting at the time of the TDR event.

The table below presents the volume of our TDR modifications that experienced payment defaults (i.e., loans that became two 

months delinquent or completed a loss event) during the applicable periods and had completed a modification during the year 

preceding the payment default.

Table 4.11 - Payment Defaults of Completed TDR Modifications

1Q 2021 1Q 2020

(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 1,131 $198 2,504 $427 

15-year amortizing fixed-rate 62 7 119 14 

Adjustable-rate 15 3 29 4 

Alt-A, interest-only, and option ARM 127 21 164 32 

Total single-family 1,335 229 2,816 477 

Multifamily — — — — 

In addition to modifications, loans may be classified as TDRs as a result of other loss mitigation activities (i.e., repayment plans, 

forbearance plans, or loans in modification trial periods). During 1Q 2021 and 1Q 2020, 831 and 1,026, respectively, of such 

loans (with a post-TDR amortized cost basis of $0.1 billion during both periods) experienced a payment default within a year 

after the loss mitigation activity occurred.

Non-Cash Investing and Financing Activities 

During 1Q 2021 and 1Q 2020, we acquired $139.5 billion and $73.2 billion, respectively, of loans held-for-investment in 

exchange for the issuance of debt securities of consolidated trusts in guarantor swap transactions. We received approximately 

$52.5 billion and $15.6 billion of loans held-for-investment from sellers during 1Q 2021 and 1Q 2020, 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 4

Freddie Mac 1Q 2021 Form 10-Q 87
NOTE 5 

Guarantees and Other Off-Balance Sheet Credit Exposures

We generate revenue through our guarantee activities by agreeing to absorb the credit risk associated with certain financial 

instruments that are owned or held by third parties. In exchange for providing this guarantee, we generally receive an ongoing 

guarantee fee that is commensurate with the risks assumed and that will, over the long-term, provide us with cash flows that 

are expected to exceed the credit-related and administrative expenses of the underlying financial instruments. The profitability 

of our guarantee activities may vary and will be dependent on our guarantee fee and the actual credit performance of the 

underlying financial instruments that we have guaranteed.

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 related collateral liquidation, including possible recoveries under credit 

enhancements. See Note 8 for additional information on our credit enhancements.

Table 5.1 - Financial Guarantees 

March 31, 2021 December 31, 2020

(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 $28,466 $387 39 $29,739 $401 39

Other mortgage-related guarantees 9,584 214 30 9,215 193 30

Total single-family $38,050 $601 $38,954 $594 

Multifamily:

Securitization activity guarantees $299,878 $4,267 39 $287,334 $4,031 39

Other mortgage-related guarantees 10,243 407 33 10,721 425 33

Total multifamily $310,121 $4,674 $298,055 $4,456 

Other guarantees $62,729 $1,796 30 $47,703 $794 30

Fannie Mae securities backing Freddie Mac 

resecuritization products 93,726 — 40 85,841 — 41

(1) The maximum exposure 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 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 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.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 5

Freddie Mac 1Q 2021 Form 10-Q 88
The table below shows the payment status of the mortgage loans underlying our guarantees that are not measured at fair value.

Table 5.2 – UPB of Loans Underlying Our Guarantees by Payment Status 

March 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 $36,577 $2,123 $811 $3,878 $43,389 

Multifamily(2) 352,559 55 63 592 353,269 

Total $389,136 $2,178 $874 $4,470 $396,658 

December 31, 2020

(In millions) Current

One

Month

Past Due

Two

Months

Past Due

Three Months or

More Past Due,

or in Foreclosure Total(1)

Single-family $37,187 $2,204 $945 $3,922 $44,258 

Multifamily 339,614 87 62 557 340,320 

Total $376,801 $2,291 $1,007 $4,479 $384,578 

(1) Loan-level payment status is not available for certain guarantees totaling $0.6 billion and $0.7 billion as of March 31, 2021 and December 31, 2020, respectively, 

and therefore is not included in the table above.

(2) As of March 31, 2021, includes $6.6 billion of multifamily loans in forbearance that are reported as current.

Other Off-Balance Sheet Credit Exposures

In addition to our guarantees, we enter into other agreements that expose us to off-balance sheet credit risk, primarily related to 

our multifamily business, including certain purchase commitments that are not accounted for as derivative instruments, liquidity 

guarantees, unfunded lending arrangements and other similar commitments. These agreements may require us to transfer cash 

before or upon settlement of our contractual obligation. We recognize an allowance for credit losses for those agreements not 

measured at fair value or otherwise recognized in the financial statements. The total notional value of off-balance sheet credit 

exposures was $14.8 billion and $15.4 billion at March 31, 2021 and December 31, 2020, respectively. See Note 7 for 

additional discussion of our allowance for credit losses on our off-balance sheet credit exposures. 

We also have certain multifamily purchase commitments totaling $5.2 billion and $5.5 billion at March 31, 2021 and 

December 31, 2020, respectively, that are excluded from the amounts above as they are not included in our allowance for 

credit losses. We have elected the fair value option for certain of these commitments.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 5

Freddie Mac 1Q 2021 Form 10-Q 89
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) March 31, 2021 December 31, 2020

Trading securities $54,289 $44,458 

Available-for-sale securities 7,591 15,367 

Total fair value of investment securities $61,880 $59,825 

As of March 31, 2021 and December 31, 2020, we did not classify any securities as held-to-maturity, although we may elect to 

do so in the future.

Trading Securities 

The table below presents the estimated 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) March 31, 2021 December 31, 2020

Mortgage-related securities:

Agency $23,015 $17,504 

Non-agency 1 1 

Total mortgage-related securities 23,016 17,505 

Non-mortgage-related securities 31,273 26,953 

Total fair value of trading securities $54,289 $44,458 

For trading securities held at March 31, 2021 and 2020, we recorded net unrealized gains (losses) of ($506) million and 

$723 million during 1Q 2021 and 1Q 2020, respectively. 

Available-for-Sale Securities 

At March 31, 2021 and December 31, 2020, all available-for-sale securities were mortgage-related securities. We had no

allowance for credit losses on our available-for-sale securities as of March 31, 2021 and December 31, 2020. 

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 

March 31, 2021

Amortized

Cost

Basis

Gross Unrealized 

Gains in Other 

Comprehensive 

Income

Gross Unrealized

Losses in Other 

Comprehensive 

Income Fair Value

Accrued Interest 

(In millions) Receivable

Available-for-sale securities:

Agency $6,267 $294 ($6) $6,555 $16 

Non-agency and other 802 234 — 1,036 4 

Total available-for-sale securities $7,069 $528 ($6) $7,591 $20 

 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 6

Freddie Mac 1Q 2021 Form 10-Q 90
December 31, 2020

Amortized

Cost

Basis

Gross Unrealized

Gains in Other 

Comprehensive 

Income

Gross Unrealized

Losses in Other 

Comprehensive 

Income Fair Value

Accrued Interest 

(In millions) Receivable

Available-for-sale securities:

Agency $13,514 $794 ($4) $14,304 $36 

Non-agency and other 830 233 — 1,063 4 

Total available-for-sale securities $14,344 $1,027 ($4) $15,367 $40 

The fair value of our available-for-sale securities held at March 31, 2021 scheduled to contractually mature after ten years was 

$4.8 billion, with an additional $1.7 billion scheduled to contractually mature after five years through ten years. 

Available-for-Sale Securities in a Gross Unrealized Loss Position

The table below presents available-for-sale securities in a gross unrealized loss position and whether such securities have been 

in an unrealized loss position for less than 12 months, or 12 months or greater. 

Table 6.4 - Available-for-Sale Securities in a Gross Unrealized Loss Position 

March 31, 2021

Less than 12 Months 12 Months or Greater

(In millions)

Fair

Value

Gross 

Unrealized 

Losses

Fair

Value

Gross 

Unrealized 

Losses

Available-for-sale securities:

Agency $617 ($3) $117 ($3) 

Non-agency and other 1 — 16 — 

Total available-for-sale securities in a gross unrealized loss position $618 ($3) $133 ($3) 

December 31, 2020

Less than 12 Months 12 Months or Greater

(In millions)

Fair

Value

Gross 

Unrealized 

Losses

Fair

Value

Gross 

Unrealized 

Losses

Available-for-sale securities:

Agency $223 ($2) $144 ($2) 

Non-agency and other 17 — — — 

Total available-for-sale securities in a gross unrealized loss position $240 ($2) $144 ($2) 

At March 31, 2021, the gross unrealized losses relate to 43 securities.

Realized Gains and Losses on Sales of Available-for-Sale Securities

The table below summarizes the gross realized gains and gross realized losses from the sale of available-for-sale securities. 

Table 6.5 - Gross Realized Gains and Gross Realized Losses from Sales of Available-for-Sale Securities 

(In millions) 1Q 2021 1Q 2020

Gross realized gains $399 $33 

Gross realized losses (31) (23) 

Net realized gains (losses) $368 $10 

Non-Cash Investing and Financing Activities

During 1Q 2021 and 1Q 2020, we recognized $13.3 billion and $3.5 billion, respectively, of investment securities in exchange 

for the issuance of debt securities of consolidated trusts through partial sales of commingled single-class securities that were 

previously consolidated.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 6

Freddie Mac 1Q 2021 Form 10-Q 91
NOTE 7

Allowance for Credit Losses

The table below summarizes changes in our allowance for credit losses.

Table 7.1 - Details of the Allowance for Credit Losses 

1Q 2021 1Q 2020

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

Beginning balance $6,353 $200 $6,553 $5,233 $69 $5,302 

Provision (benefit) for credit losses (146) (50) (196) 1,166 67 1,233 

Charge-offs (238) — (238) (164) — (164) 

Recoveries collected 46 — 46 88 — 88 

Other 115 — 115 24 — 24 

Ending balance $6,130 $150 $6,280 $6,347 $136 $6,483 

Components of ending balance of allowance for credit losses:

Mortgage loans held-for-investment $5,253 $77 $5,330 $6,044 $77 $6,121 

Advances of pre-foreclosure costs 615 — 615 254 — 254 

Accrued interest receivable on mortgage loans 213 — 213 — — — 

Off-balance sheet credit exposures 49 73 122 49 59 108 

 Total $6,130 $150 $6,280 $6,347 $136 $6,483 

Current Period Changes

The change to a benefit for credit losses in 1Q 2021 from a provision for credit losses in 1Q 2020 was primarily driven by the 

following factors:

n	 Expected credit losses related to COVID-19 - Our provision for credit losses increased significantly in 1Q 2020 due to 

the increase in expected credit losses related to the economic effects of the COVID-19 pandemic. Our estimate of 

expected credit losses related to the pandemic decreased in 1Q 2021 as economic conditions improved.

n	 Portfolio growth - We recognize expected credit losses over the entire contractual term of the loan at the time of loan 

acquisition. Our single-family mortgage portfolio grew by $438 billion, or 22%, year-over-year, which partially offset the 

benefit for credit losses.

n	 Changes in house prices and interest rates - The effect of changes in forecasted interest rates and changes related to 

house price growth rates had largely offsetting impacts in both periods.

In addition, charge-offs increased year-over-year due to an increase in the number of loans we placed on non-accrual status 

and the related accrued interest receivable that was charged off. The decline in economic activity caused by the COVID-19 

pandemic, and the corresponding government response, is unprecedented, and as a result, our estimate of expected credit 

losses is subject to significant uncertainty.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 7

Freddie Mac 1Q 2021 Form 10-Q 92
NOTE 8

Credit Enhancements

We obtain various forms of credit enhancements that reduce our exposure to credit losses. These credit enhancements may be 

associated with mortgage loans or guarantees recognized on our condensed consolidated balance sheets or embedded in debt 

recognized on our condensed consolidated balance sheets. 

The table below presents details of our credit enhancement receivables. These amounts are recognized in other assets on our 

condensed consolidated balance sheets.

Table 8.1 - Credit Enhancement Receivables

(In millions) March 31, 2021 December 31, 2020

Freestanding credit enhancement expected recovery receivables, net of allowance $406 $677 

Primary mortgage insurance receivables(1), net of allowance 82 74 

Total credit enhancement receivables $488 $751 

(1) Excludes $433 million and $444 million of deferred payment obligations associated with unpaid claim amounts as of March 31, 2021 and December 31, 2020, 

respectively. We have reserved for substantially all these unpaid amounts as collectability is uncertain.

For information about counterparty credit risk associated with mortgage insurers and other credit enhancement providers, see 

Note 16.

Single-Family Credit Enhancements 

The table below presents the total current and protected UPB and maximum amounts of potential loss recovery related to our 

single-family credit enhancements.

Table 8.2 - Single-Family Credit Enhancements 

March 31, 2021 December 31, 2020

(In millions) 

Credit Enhancement 

Accounting Treatment

Total Current and 

Protected UPB(1)

Maximum 

Coverage

Total Current and 

Protected UPB(1)

Maximum 

Coverage

Primary mortgage insurance Attached $485,593 $119,111 $472,881 $116,973 

STACR:(2)

 Trust notes Freestanding 589,150 19,728 488,251 17,288 

 Debt notes Debt 316,378 11,954 365,482 12,377 

Insurance/reinsurance(3) Freestanding 975,289 13,645 876,815 11,586 

Subordination:(4)

 Non-consolidated VIEs Guarantee 27,774 5,686 29,039 5,718 

 Consolidated VIEs Debt 7,203 404 9,035 464 

Lender risk-sharing Freestanding 5,177 4,587 5,731 4,831 

Other Primarily attached 314 311 374 371 

Total single-family credit enhancements $175,426 $169,608 

(1) Underlying loans may be covered by more than one form of credit enhancement. For certain transactions, protected UPB may be different from the UPB of the 

underlying loans due to timing differences in reporting cycles between the transactions and the loans.

(2) Total current and protected UPB represents the UPB of the assets included in the reference pool. Maximum coverage amount represents the outstanding balance 

held by third parties. 

(3) As of March 31, 2021 and December 31, 2020, substantially all of our counterparties posted sufficient collateral on our ACIS transactions to meet the minimum 

collateral requirements of the ACIS program. Minimum collateral requirements are assessed on each deal based on a combination of factors, including counterparty 

credit risk of the reinsurer, as well as the structure and risk profile of the transaction. Other insurance/reinsurance transactions have similar collateral requirements.

(4) Total current and protected UPB includes the UPB of the guaranteed securities, which represents the UPB of the assets included in the trust net of the protection 

provided by the subordinated securities. For non-consolidated VIEs, the total current and protected UPB also includes the UPB of guarantor advances made to the 

holders of the guaranteed securities. Maximum coverage represents the outstanding UPB of the securities that are subordinate to Freddie Mac guaranteed securities 

and held by third parties.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 8

Freddie Mac 1Q 2021 Form 10-Q 93
Multifamily Credit Enhancements

The table below presents the total current and protected UPB and maximum amounts of potential loss recovery related to our 

multifamily credit enhancements.

Table 8.3 - Multifamily Credit Enhancements

March 31, 2021 December 31, 2020

(In millions)

Credit Enhancement 

Accounting Treatment 

Total Current and 

Protected UPB(1)

Maximum 

Coverage

Total Current and 

Protected UPB(1)

Maximum 

Coverage

Subordination:(2)

Non-consolidated VIEs Guarantee $298,965 $43,450 $286,199 $42,712 

Consolidated VIEs Debt 1,800 200 1,800 200 

Lender risk-sharing(3) Freestanding 3,127 597 3,321 598 

Insurance/reinsurance(4) Freestanding 5,366 190 5,383 190 

SCR:(5)

 Trust notes Freestanding 4,801 273 — — 

 Debt notes Debt 2,149 107 2,217 111 

Other(3) Attached 251 251 253 253 

Total multifamily credit enhancements $45,068 $44,064 

(1) Underlying loans may be covered by more than one form of credit enhancement.

(2) Total current and protected UPB includes the UPB of the guaranteed securities, which represents the UPB of the assets included in the trust net of the protection 

provided by the subordinated securities, and the UPB of master servicer advances made to the holders of the guaranteed and unguaranteed securities. For nonconsolidated VIEs, the total current and protected UPB also includes the UPB of guarantor advances made to the holders of the guaranteed securities. Maximum 

coverage represents the outstanding UPB of the securities that are subordinate to Freddie Mac guaranteed securities and held by third parties.

(3) Maximum coverage represents the remaining amount of loss recovery that is available subject to the terms of counterparty agreements.

(4) As of March 31, 2021 and December 31, 2020, the counterparties to our insurance/reinsurance transactions have complied with the minimum collateral 

requirements. Minimum collateral requirements are assessed on each deal based on a combination of factors, including counterparty credit risk of the reinsurer, as 

well as the structure and risk profile of the transaction.

(5) Total current and protected UPB represents the UPB of the assets included in the reference pool. Maximum coverage amount represents the outstanding balance of 

the SCR notes held by third parties.

We have other multifamily credit enhancements in the form of collateral posting requirements, indemnification, pool insurance, 

bond insurance, recourse, and other similar arrangements. These credit enhancements, along with the proceeds received from 

the sale of the underlying mortgage collateral, are designed to recover all or a portion of our losses on our mortgage loans or 

the amounts paid under our financial guarantee contracts. Our historical losses and related recoveries pursuant to these 

agreements have not been significant and therefore these other types of multifamily credit enhancements are excluded from the 

table above.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 8

Freddie Mac 1Q 2021 Form 10-Q 94
NOTE 9

Debt

The table below summarizes the balances of total debt per our condensed consolidated balance sheets.

Table 9.1 - Total Debt 

(In millions) March 31, 2021 December 31, 2020

Debt securities of consolidated trusts held by third parties $2,445,829 $2,308,176 

Debt of Freddie Mac:

Short-term debt 10,910 4,955 

Long-term debt 247,531 279,415 

Total Debt of Freddie Mac 258,441 284,370 

Total debt $2,704,270 $2,592,546 

As of March 31, 2021, our aggregate indebtedness was $262.7 billion, which was below the current $300.0 billion debt cap limit 

imposed by the Purchase Agreement. Our aggregate indebtedness calculation primarily includes the par value of short- and 

long-term debt.

Debt Securities of Consolidated Trusts Held by Third Parties

The table below summarizes the debt securities of consolidated trusts held by third parties based on underlying loan product 

type.

Table 9.2 - Debt Securities of Consolidated Trusts Held by Third Parties 

March 31, 2021 December 31, 2020

(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:

30-year or more, fixed-rate 2021 - 2060 $1,896,894 $1,953,618 2.89 % 2021 - 2060 $1,799,065 $1,855,438 3.07 %

20-year fixed-rate 2021 - 2041 107,510 110,680 2.67 2021 - 2041 97,520 100,498 2.84 

15-year fixed-rate 2021 - 2036 332,355 340,820 2.34 2021 - 2036 303,142 310,612 2.46 

Adjustable-rate 2021 - 2051 21,801 22,280 2.64 2021 - 2051 23,964 24,484 2.76 

Interest-only 2026 - 2048 3,404 3,520 2.85 2026 - 2041 3,671 3,736 3.15 

FHA/VA 2021 - 2050 759 774 4.02 2021 - 2050 752 769 4.04 

Total single-family 2,362,723 2,431,692 2,228,114 2,295,537 

Multifamily 2021-2050 13,968 14,137 2.34 2021-2050 12,488 12,639 2.43 

Total debt of consolidated trusts 

held by third parties $2,376,691 $2,445,829 $2,240,602 $2,308,176 

(1) Includes $262 million and $205 million at March 31, 2021 and December 31, 2020, respectively, of debt securities 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 securities of consolidated trusts held by third parties was 1.58% and 1.76% as of March 31, 2021 and December 31, 2020, 

respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 9

Freddie Mac 1Q 2021 Form 10-Q 95
Debt of Freddie Mac

The table below summarizes the balances and effective interest rates for debt of Freddie Mac.

Table 9.3 - Total Debt of Freddie Mac 

March 31, 2021 December 31, 2020

(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 $11 0.69 %

Medium-term notes 10,910 10,910 0.03 4,944 4,944 1.31 

Securities sold under agreements to repurchase (3) 7,930 7,930 (0.05) — — — 

Total short-term debt 18,840 18,840 — 4,955 4,955 1.31 

Long-term debt:

Original maturities on or before December 31,

2021 35,488 35,484 0.71 43,422 43,417 0.95 

2022 59,002 59,022 0.69 61,071 61,092 0.68 

2023 54,049 53,980 0.45 61,998 61,920 0.45 

2024 17,744 17,719 0.55 21,679 21,651 0.61 

2025 36,587 36,207 0.83 44,342 43,944 0.84 

Thereafter 36,617 34,881 2.62 36,386 34,583 2.64 

STACR and SCR debt(4) 12,061 11,888 4.23 12,488 12,342 4.18 

Hedging-related basis adjustments N/A (1,650) N/A 466 

Total long-term debt 251,548 247,531 1.09 281,386 279,415 1.09 

Total debt of Freddie Mac(5) $270,388 $266,371 $286,341 $284,370 

(1) Represents par value, net of associated discounts or premiums and issuance cost. Includes $2.1 billion and $2.4 billion at March 31, 2021 and December 31, 2020, 

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 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 $112.4 billion and $124.0 billion at March 31, 2021 and December 31, 2020, respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 9

Freddie Mac 1Q 2021 Form 10-Q 96
NOTE 10

Derivatives

Use of 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 classify derivatives into three categories: 

n	 Exchange-traded derivatives; 

n	 Cleared derivatives; and 

n	 OTC derivatives.

Exchange-traded derivatives include standardized interest-rate futures contracts and options on futures contracts. Cleared 

derivatives refer to those interest-rate swaps that the CFTC has determined are subject to the central clearing requirement of 

the Dodd-Frank Act. OTC derivatives refer to those derivatives that are neither exchange-traded derivatives nor cleared 

derivatives.

Types of Derivatives

We principally use the following types of derivatives:

n	 LIBOR- and SOFR-based interest-rate swaps;

n	 LIBOR-, Treasury-, and SOFR-based purchased options (including swaptions); and

n	 LIBOR-, Treasury-, and SOFR-based exchange-traded futures.

We also purchase swaptions on credit indices in order to obtain protection against adverse movements in multifamily spreads 

which may affect the profitability of our K Certificate or SB Certificate transactions.

In addition to swaps, futures, and purchased options, our derivative positions include written options and swaptions, and 

commitments.

Hedge Accounting

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 (i.e., LIBOR), using LIBOR-based 

interest-rate swaps.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 10 

Freddie Mac 1Q 2021 Form 10-Q 97
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 10.1 - Derivative Assets and Liabilities at Fair Value

March 31, 2021 December 31, 2020

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 $534,976 $1,947 ($4,140) $559,596 $2,639 ($7,091) 

Written options 30,830 — (1,714) 18,259 — (735) 

Purchased options (1) 242,260 5,107 — 169,995 5,265 — 

Futures 157,628 — — 181,702 — — 

Total interest-rate management derivatives 965,694 7,054 (5,854) 929,552 7,904 (7,826) 

Mortgage commitment derivatives:

Forward contracts to purchase mortgage loans 38,152 5 (337) 37,122 183 — 

Forward contracts to purchase mortgage-related securities 55,805 19 (316) 45,185 203 — 

Forward contracts to sell mortgage-related securities 171,285 1,483 (34) 136,802 2 (759) 

Total mortgage commitment derivatives 265,242 1,507 (687) 219,109 388 (759) 

CRT-related derivatives 30,513 29 (57) 28,949 61 (47) 

Other 9,190 1 (30) 4,029 2 (16) 

Total derivatives not designated as hedges 1,270,639 8,591 (6,628) 1,181,639 8,355 (8,648) 

Designated as fair value hedges

Interest-rate risk management derivatives:

Swaps 238,120 149 (2,521) 180,686 224 (500) 

Total derivatives designated as fair value hedges 238,120 149 (2,521) 180,686 224 (500) 

Derivative interest receivable (payable)(2) 480 (485) 455 (523) 

Netting adjustments(3) (7,135) 8,684 (7,829) 8,717 

Total derivative portfolio, net $1,508,759 $2,085 ($950) $1,362,325 $1,205 ($954) 

(1) Includes swaptions on credit indices with a notional or contractual amount of $14.3 billion and $16.8 billion at March 31, 2021 and December 31, 2020, 

respectively, and a fair value of $5.0 million and $9.0 million at March 31, 2021 and December 31, 2020, respectively. 

(2) Includes other derivative receivables and payables.

(3) Represents counterparty netting and cash collateral netting.

See Note 11 for information related to our derivative counterparties and collateral held and posted.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 10 

Freddie Mac 1Q 2021 Form 10-Q 98
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 comprehensive 

income (loss) as investment gains (losses), net.

Table 10.2 - Gains and Losses on Derivatives 

(In millions) 1Q 2021 1Q 2020

Not designated as hedges

Interest-rate risk management derivatives:

Swaps $615 ($4,863) 

Written options (461) (320) 

Purchased options (48) 4,542 

Futures 286 (2,328) 

Total interest-rate risk management derivatives fair value gains (losses) 392 (2,969) 

Mortgage commitment derivatives 1,476 (726) 

CRT-related derivatives (42) 78 

Other (3) 31 

Total derivatives not designated as hedges fair value gains (losses) 1,823 (3,586) 

 Accrual of periodic cash settlements(1) (452) (176) 

Total $1,371 ($3,762) 

(1) Includes interest on variation margin on cleared interest-rate swaps.

Fair Value Hedges 

The table below presents the effects of fair value hedge accounting by condensed consolidated statements of 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 10.3 - Gains and Losses on Fair Value Hedges 

1Q 2021 1Q 2020

(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 comprehensive 

income in which the effects of fair value hedges are recorded: $13,902 ($10,263) $17,592 ($14,807) 

Interest contracts on mortgage loans held-for-investment:

Gain (loss) on fair value hedging relationships:

Hedged items (1,523) — 4,893 — 

Derivatives designated as hedging instruments 1,534 — (5,080) — 

Interest accruals on hedging instruments (114) — (63) — 

Discontinued hedge-related basis adjustments amortization (781) — (253) — 

Interest contracts on debt:

Gain (loss) on fair value hedging relationships:

Hedged items — 2,114 — (505) 

Derivatives designated as hedging instruments — (2,188) — 554 

Interest accruals on hedging instruments — 255 — 100 

Discontinued hedge-related basis adjustments amortization — 5 — 20 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 10 

Freddie Mac 1Q 2021 Form 10-Q 99
Cumulative Basis Adjustments Due to Fair Value Hedging

The table below presents the cumulative basis adjustments and the carrying amounts of the hedged item by its respective 

balance sheet line item.

Table 10.4 - Cumulative Basis Adjustments Due to Fair Value Hedging 

March 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 $417,644 $2,813 ($1,152) $3,965 $192,912 $9,507 

Debt (158,646) 1,650 — (33) — — 

December 31, 2020

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 $478,077 $5,117 ($318) $5,435 $220,301 $9,112 

Debt (176,512) (466) — (38) — — 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 10 

Freddie Mac 1Q 2021 Form 10-Q 100
NOTE 11

Collateralized Agreements and Offsetting Arrangements

Offsetting of Financial Assets and Liabilities

We offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral against 

fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting and 

collateral agreement. We also offset payables related to securities sold under agreements to repurchase against receivables 

related to securities purchased under agreements to resell when such amounts meet the conditions for balance sheet 

offsetting. 

The table below presents offsetting and collateral information related to 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.

Table 11.1 - Offsetting and Collateral Information of Financial Assets and Liabilities

March 31, 2021

Gross

Amount

Recognized

Amount 

Offset in the

Consolidated

Balance Sheets Net Amount

Presented in the 

Consolidated

Balance Sheets

Gross Amount

Not Offset in the  

Consolidated

Balance 

Sheets(2)

Net

(In millions) Amount

Counterparty 

Netting

Cash 

Collateral 

Netting(1)

Assets:

Derivatives:

OTC derivatives $7,614 ($5,681) ($1,497) $436 ($392) $44 

Cleared and exchange-traded derivatives 69 — 43 112 — 112 

Mortgage commitment derivatives 1,507 — — 1,507 — 1,507 

Other 30 — — 30 — 30 

Total derivatives 9,220 (5,681) (1,454) 2,085 (392) 1,693 

Securities purchased under agreements to resell 23,070 (7,930) — 15,140 (15,140) — 

Total $32,290 ($13,611) ($1,454) $17,225 ($15,532) $1,693 

Liabilities:

Derivatives:

OTC derivatives ($8,828) $5,681 $2,975 ($172) $— ($172) 

Cleared and exchange-traded derivatives (32) — 28 (4) 4 — 

Mortgage commitment derivatives (687) — — (687) — (687) 

Other (87) — — (87) — (87) 

Total derivatives (9,634) 5,681 3,003 (950) 4 (946) 

Securities sold under agreements to repurchase (7,930) 7,930 — — — — 

Total ($17,564) $13,611 $3,003 ($950) $4 ($946) 

 Referenced footnotes are included after the next table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 11

Freddie Mac 1Q 2021 Form 10-Q 101
December 31, 2020

Gross

Amount

Recognized

Amount 

Offset in the

Consolidated

Balance Sheets Net Amount

Presented in the 

Consolidated

Balance Sheets

Gross Amount

Not Offset in the  

Consolidated

Balance 

Sheets(2)

Net

(In millions) Amount

Counterparty 

Netting

Cash 

Collateral 

Netting(1)

Assets:

Derivatives:

OTC derivatives $8,566 ($5,932) ($1,957) $677 ($648) $29 

Cleared and exchange-traded derivatives 17 — 60 77 — 77 

Mortgage commitment derivatives 388 — — 388 — 388 

Other 63 — — 63 — 63 

Total derivatives 9,034 (5,932) (1,897) 1,205 (648) 557 

Securities purchased under agreements to resell 105,003 — — 105,003 (105,003) — 

Total $114,037 ($5,932) ($1,897) $106,208 ($105,651) $557 

Liabilities:

Derivatives:

OTC derivatives ($8,812) $5,932 $2,759 ($121) $— ($121) 

Cleared and exchange-traded derivatives (37) — 26 (11) — (11) 

Mortgage commitment derivatives (759) — — (759) — (759) 

Other (63) — — (63) — (63) 

Total derivatives (9,671) 5,932 2,785 (954) — (954) 

Securities sold under agreements to repurchase — — — — — — 

Total ($9,671) $5,932 $2,785 ($954) $— ($954) 

(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. 

Collateral Pledged

Collateral Pledged to Freddie Mac

We have cash pledged to us as collateral primarily related to OTC derivative transactions. We had $1.9 billion and $2.8 billion

pledged to us as collateral that was invested as part of our liquidity and contingency operating portfolio as of March 31, 2021

and December 31, 2020, respectively.

We primarily 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, either with the central clearing organization or with other 

counterparties. At March 31, 2021, and December 31, 2020, we had $22.3 billion and $85.8 billion, respectively, of securities 

pledged to us in these transactions. In addition, at March 31, 2021 and December 31, 2020, we had $0.7 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. 

Collateral Pledged by Freddie Mac

We posted cash collateral totaling $0.2 billion and $1.3 billion as of March 31, 2021 and December 31, 2020, respectively, 

related to commitments and securities purchased under agreements to resell transactions primarily with central clearing 

organizations. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 11

Freddie Mac 1Q 2021 Form 10-Q 102
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 11.2 - Collateral in the Form of Securities Pledged 

March 31, 2021

(In millions) Derivatives

Securities Sold 

Under 

Agreements to 

Repurchase Other(3) Total

Cash equivalents(1) $— $2,671 $— $2,671 

Debt securities of consolidated trusts(2) — — 348 348 

Trading securities 1,555 5,230 1,442 8,227 

Total securities pledged $1,555 $7,901 $1,790 $11,246 

December 31, 2020

(In millions) Derivatives

Securities Sold 

Under 

Agreements to 

Repurchase Other(3) Total

Debt securities of consolidated trusts(2) $121 $— $345 $466 

Trading securities 1,920 — 1,163 3,083 

Total securities pledged $2,041 $— $1,508 $3,549 

(1) Represents U.S. Treasury securities accounted for as cash equivalents.

(2) Represents debt securities of consolidated trusts held by us in our mortgage-related investments portfolio which are recorded as a reduction to debt securities of 

consolidated trusts held by third parties on our condensed consolidated balance sheets.

(3) Includes other collateralized borrowings and collateral related to transactions with certain clearinghouses.

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 11.3 - Underlying Collateral Pledged 

March 31, 2021

(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 $2,453 $5,448 $— $— $7,901 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 11

Freddie Mac 1Q 2021 Form 10-Q 103
NOTE 12

Stockholders' Equity and Earnings Per Share

Accumulated Other Comprehensive Income

The table below presents changes in AOCI after the effects of our federal statutory tax rate of 21% for the periods presented, 

related to available-for-sale securities, cash flow hedges, and our defined benefit plans.

Table 12.1 - Changes in AOCI by Component, Net of Taxes 

1Q 2021

(In millions)

AOCI Related

to Availablefor-Sale

Securities

AOCI Related

to Cash Flow

Hedge

Relationships

AOCI Related

to Defined

Benefit Plans Total

Beginning balance $810 ($206) $39 $643 

Other comprehensive income before reclassifications (105) — (1) (106) 

Amounts reclassified from accumulated other comprehensive income (290) 10 (3) (283) 

Changes in AOCI by component (395) 10 (4) (389) 

Ending balance $415 ($196) $35 $254 

1Q 2020

(In millions)

AOCI Related

to Availablefor-Sale

Securities

AOCI Related

to Cash Flow

Hedge

Relationships

AOCI Related

to Defined

Benefit Plans Total

Beginning balance $618 ($244) $64 $438 

Other comprehensive income before reclassifications 446 — 2 448 

Amounts reclassified from accumulated other comprehensive income (8) 13 (4) 1 

Changes in AOCI by component 438 13 (2) 449 

Ending balance $1,056 ($231) $62 $887 

Reclassifications from AOCI to Net Income

The table below presents reclassifications from AOCI to net income, including the affected line items in our condensed 

consolidated statements of comprehensive income (loss). 

Table 12.2 - Reclassifications from AOCI to Net Income 

(In millions) 1Q 2021 1Q 2020

AOCI related to available-for-sale securities

Affected line items on the condensed consolidated statements of comprehensive income (loss):

Investment gains (losses), net $368 $10 

Income tax (expense) benefit (78) (2) 

Net of tax 290 8 

AOCI related to cash flow hedge relationships

Affected line items on the condensed consolidated statements of comprehensive income (loss):

Interest expense (11) (16) 

Income tax (expense) benefit 1 3 

Net of tax (10) (13) 

AOCI related to defined benefit plans

Affected line items on the condensed consolidated statements of comprehensive income (loss):

Salaries and employee benefits 4 5 

Income tax (expense) benefit (1) (1) 

Net of tax 3 4 

Total reclassifications in the period net of tax $283 ($1) 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 12

Freddie Mac 1Q 2021 Form 10-Q 104
Senior Preferred Stock

As a result of changes to the terms of the senior preferred stock pursuant to the January 2021 Letter Agreement, the company 

will not be required to pay a dividend to Treasury until we have built sufficient capital to meet the capital requirements and 

buffers set forth in the ERCF. Accordingly, the company was not required to pay a dividend to Treasury on the senior preferred 

stock in March 2021. As the company builds capital during this period, the quarterly increases in our Net Worth Amount have 

been, and will continue to be, added to the aggregate liquidation preference of the senior preferred stock. As a result, the 

liquidation preference of the senior preferred stock increased from $86.5 billion as of December 31, 2020 to $89.1 billion on 

March 31, 2021 based on the $2.5 billion increase in the Net Worth Amount during 4Q 2020. The liquidation preference will 

increase to $91.4 billion on June 30, 2021 based on the $2.4 billion increase in our Net Worth Amount during 1Q 2021. See 

Note 2 for additional information.

As of March 31, 2021, our assets exceeded our liabilities under GAAP; therefore, no draw is being requested from Treasury 

under the Purchase Agreement. 

The table below provides a summary of our senior preferred stock outstanding at March 31, 2021.

Table 12.3 - Senior Preferred Stock

(In millions, except initial liquidation 

preference price per share)

Shares

Authorized

Shares

Outstanding

Total

Par Value

Initial

Liquidation

Preference

Price per Share

Total

Liquidation

Preference

Non-draw Adjustment Dates:

September 8, 2008 1.00 1.00 $1.00 $1,000 $1,000 

December 31, 2017 — — — N/A 3,000 

September 30, 2019 — — — N/A 1,826 

December 31, 2019 — — — N/A 1,848 

March 31, 2020 — — — N/A 2,448 

June 30, 2020 — — — N/A 382 

September 30, 2020 — — — N/A 1,938 

December 31, 2020 — — — N/A 2,449 

March 31, 2021 — — — N/A 2,522 

Total non-draw adjustments 1.00 1.00 1.00 17,413 

Draw Dates:

November 24, 2008 — — — N/A 13,800 

March 31, 2009 — — — N/A 30,800 

June 30, 2009 — — — N/A 6,100 

June 30, 2010 — — — N/A 10,600 

September 30, 2010 — — — N/A 1,800 

December 30, 2010 — — — N/A 100 

March 31, 2011 — — — N/A 500 

September 30, 2011 — — — N/A 1,479 

December 30, 2011 — — — N/A 5,992 

March 30, 2012 — — — N/A 146 

June 29, 2012 — — — N/A 19 

March 30, 2018 — — — N/A 312 

Total draw adjustments — — — 71,648 

Total senior preferred stock 1.00 1.00 $1.00 $89,061 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 12 

Freddie Mac 1Q 2021 Form 10-Q 105
Stock Issuances and Repurchases

We did not repurchase or issue any of our common shares or non-cumulative preferred stock during 1Q 2021, except for 

issuances of treasury stock relating to stock-based compensation granted prior to conservatorship. During 1Q 2021, the 

deferral period lapsed on 351 RSUs. At March 31, 2021, there were no RSUs outstanding.

Dividends and Dividend Restrictions

No common dividends were declared during 1Q 2021. As a result of the increase in the applicable Capital Reserve Amount 

pursuant to the January 2021 Letter Agreement, we did not declare or pay a dividend on the senior preferred stock during 1Q 

2021. We also did not declare or pay dividends on any other series of Freddie Mac preferred stock outstanding during 1Q 2021.

Our payment of dividends on Freddie Mac common stock or any series of Freddie Mac preferred stock (other than senior 

preferred stock) is subject to certain restrictions.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 12 

Freddie Mac 1Q 2021 Form 10-Q 106
NOTE 13

Net Interest Income

The table below presents the components of net interest income per our condensed consolidated statements of 

comprehensive income (loss).

Table 13.1 - Components of Net Interest Income

(In millions) March 31, 2021 March 31, 2020

Interest income

Mortgage loans $13,255 $16,632 

Investment securities 610 652 

Other 37 308 

Total interest income 13,902 17,592 

Interest expense

Debt securities of consolidated trusts held by third parties (9,756) (13,447) 

Debt of Freddie Mac:

Short-term debt (2) (430) 

Long-term debt (505) (930) 

Total interest expense (10,263) (14,807) 

Net interest income 3,639 2,785 

Benefit (provision) for credit losses 196 (1,233) 

Net interest income after benefit (provision) for credit losses $3,835 $1,552 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 13

Freddie Mac 1Q 2021 Form 10-Q 107
NOTE 14

Investment Gains (Losses), Net

The table below presents the components of investment gains (losses), net on our condensed consolidated statements of 

comprehensive income (loss).

Table 14.1 - Components of Investment Gains (Losses), Net

(In millions) 1Q 2021 1Q 2020

Investment gains (losses), net:

Mortgage loans gains (losses) $206 $1,172 

Investment securities gains (losses) (507) 1,055 

Debt gains (losses) 138 700 

Derivative gains (losses) 1,371 (3,762) 

Investment gains (losses), net $1,208 ($835) 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 14

Freddie Mac 1Q 2021 Form 10-Q 108
NOTE 15

Segment Reporting

During 1Q 2021, our chief operating decision maker began making decisions about allocating resources and assessing 

segment performance based on two reportable segments, Single-family and Multifamily. In prior periods, we managed our 

business based on three reportable segments, Single-family Guarantee, Multifamily, and Capital Markets. As our mortgagerelated investments portfolio has declined over time, our capital markets activities have become increasingly focused on 

supporting our single-family and multifamily businesses. As a result, we have determined that, effective in 1Q 2021, our Capital 

Markets segment should no longer be considered a separate reportable segment, and our chief operating decision maker no 

longer reviews separate financial results or discrete financial information for our capital markets activities. Substantially all of the 

revenues and expenses that were previously directly attributable to our Capital Markets segment are now included in our 

Single-family segment, while certain administrative expenses and other centrally-incurred costs previously allocated to the 

Capital Markets segment are now allocated between the Single-family and Multifamily segments using various methodologies 

depending on the nature of the expense.

In connection with this change, we have also changed the measure of segment profit and loss for each segment to be based on 

net income and comprehensive income calculated using the same accounting policies we use to prepare our general purpose 

financial statements in conformity with generally accepted accounting principles. The financial results of each reportable 

segment include directly attributable revenue and expenses. We allocate interest expense and other debt funding and hedgingrelated costs to each reportable segment using a funds transfer pricing process. We fully allocate to each reportable segment 

the 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. We have discontinued 

the reclassifications of certain activities between various line items that were included in our previous measure of segment 

profit and loss. Prior period information has been revised to conform to the current period presentation. 

Segment Description

Single-family 

Reflects results from our purchase, sale, securitization, and guarantee of single-family loans and securities, our 

investments in those loans and 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, sale, securitization, and guarantee of multifamily loans and securities, our 

investments in those loans and 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 debt funding and hedging-related costs to each reportable segment using a funds transfer pricing process. We fully 

allocate to each reportable segment administrative expenses and other centrally-incurred costs that are not directly attributable 

to a particular segment using various methodologies depending on the nature of the expense.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 15

Freddie Mac 1Q 2021 Form 10-Q 109
The table below presents the financial results for our Single-family and Multifamily segments.

Table 15.1 - Segment Financial Results

1Q 2021

(In millions) Single-family Multifamily Total

Net interest income $3,308 $331 $3,639 

Non-interest income (loss)

Guarantee fee income 89 159 248 

Investment gains (losses), net 300 908 1,208 

Other income (loss) 152 26 178 

Non-interest income (loss) 541 1,093 1,634 

Net revenues 3,849 1,424 5,273 

Benefit (provision) for credit losses 146 50 196 

Non-interest expense

Administrative expense (488) (151) (639) 

Credit enhancement expense (325) (10) (335) 

Benefit for (decrease in) credit enhancement recoveries (245) (12) (257) 

REO operations expense (8) — (8) 

Temporary Payroll Tax Cut Continuation Act of 2011 expense (534) — (534) 

Other expense (209) (6) (215) 

Non-interest expense (1,809) (179) (1,988) 

Income (loss) before income tax (expense) benefit 2,186 1,295 3,481 

Income tax (expense) benefit (448) (266) (714) 

Net income (loss) 1,738 1,029 2,767 

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

adjustments

Changes in unrealized gains (losses) related to available-for-sale 

securities (335) (60) (395) 

Changes in unrealized gains (losses) related to cash flow hedge 

relationships 10 — 10 

Changes in defined benefit plans (3) (1) (4) 

Total other comprehensive income (loss), net of taxes and 

reclassification adjustments (328) (61) (389) 

Comprehensive income (loss) $1,410 $968 $2,378 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 15

Freddie Mac 1Q 2021 Form 10-Q 110
1Q 2020

(In millions) Single-family Multifamily Total

Net interest income $2,485 $300 $2,785 

Non-interest income (loss)

Guarantee fee income (13) 390 377 

Investment gains (losses), net 24 (859) (835) 

Other income (loss) 58 37 95 

Non-interest income (loss) 69 (432) (363) 

Net revenues 2,554 (132) 2,422 

Benefit (provision) for credit losses (1,166) (67) (1,233) 

Non-interest expense

Administrative expense (467) (120) (587) 

Credit enhancement expense (227) (4) (231) 

Benefit for (decrease in) credit enhancement recoveries 439 28 467 

REO operations expense (85) — (85) 

Temporary Payroll Tax Cut Continuation Act of 2011 expense (432) — (432) 

Other expense (98) (5) (103) 

Non-interest expense (870) (101) (971) 

Income (loss) before income tax (expense) benefit 518 (300) 218 

Income tax (expense) benefit (107) 62 (45) 

Net income (loss) 411 (238) 173 

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

adjustments

Changes in unrealized gains (losses) related to available-for-sale 

securities 374 64 438 

Changes in unrealized gains (losses) related to cash flow hedge 

relationships 13 — 13 

Changes in defined benefit plans (2) — (2) 

Total other comprehensive income (loss), net of taxes and 

reclassification adjustments 385 64 449 

Comprehensive income (loss) $796 ($174) $622 

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 15.2 - Segment Assets

(In millions) March 31, 2021 December 31, 2020

Single-family $2,458,112 $2,326,426 

Multifamily 393,677 388,347 

Total segment assets 2,851,789 2,714,773 

Reconciling items(1) (109,915) (87,358) 

Total assets per condensed consolidated balance sheets $2,741,874 $2,627,415 

(1) Reconciling items include assets included 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 15

Freddie Mac 1Q 2021 Form 10-Q 111
NOTE 16

Concentration of Credit and Other Risks

Single-Family Mortgage Portfolio

The table below summarizes the concentration by loan portfolio and geographic area of the approximately $2.5 trillion and $2.3 

trillion UPB of our single-family mortgage portfolio as of March 31, 2021 and December 31, 2020, respectively. See Note 4, 

Note 6, and Note 7 for more information about credit risk associated with loans and mortgage-related securities that we hold 

or guarantee. 

Table 16.1 - Concentration of Credit Risk of Our Single-Family Mortgage Portfolio 

March 31, 2021 December 31, 2020 1Q 2021(1) 1Q 2020(1)

(Dollars in billions)

Portfolio 

UPB

% of

Portfolio SDQ Rate

Portfolio 

UPB

% of

Portfolio SDQ Rate

Credit 

Losses 

Amount

% of 

Credit 

Losses(2)

Credit 

Losses 

Amount

% of 

Credit 

Losses

Region:(3)

West $770 31 % 2.11 % $720 31 % 2.41 % $— NM $— 8 %

Northeast 581 24 2.82 549 24 3.16 — NM 0.1 36 

North Central 371 15 1.88 357 15 2.06 — NM 0.1 29 

Southeast 393 16 2.58 375 16 2.95 — NM — 18 

Southwest 343 14 2.33 325 14 2.59 — NM — 9 

Total $2,458 100 % 2.34 $2,326 100 % 2.64 $— NM $0.2 100 %

State:

California $455 19 % 2.29 $424 18 % 2.64 $— NM $— 5 %

Texas 152 6 2.75 145 6 3.11 — NM — 3 

Florida 142 6 3.14 135 6 3.70 — NM — 9 

New York 108 4 4.07 103 4 4.56 — NM — 9 

Illinois 99 4 2.83 96 4 2.96 — NM 0.1 16 

All other 1,502 61 2.09 1,423 62 2.34 — NM 0.1 58 

Total $2,458 100 % 2.34 $2,326 100 % 2.64 $— NM $0.2 100 %

(1) Excludes credit losses related to charge-offs of accrued interest receivables.

(2) NM - not meaningful due to the credit losses amount rounding to zero.

(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).

Credit Performance of Certain Higher Risk Single-Family Loan Categories

Participants in the mortgage market have characterized single-family loans based upon their overall credit quality at the time of 

origination, including as prime or subprime. Mortgage market participants have classified single-family loans as Alt-A if these 

loans have credit characteristics that range between their prime and subprime categories, if they are underwritten with lower or 

alternative income or asset documentation requirements compared to a full documentation loan, or both. Although we 

discontinued new purchases of loans with lower documentation standards beginning March 1, 2009, we continued to purchase 

certain amounts of these loans in cases where the loan was either: 

n	Purchased pursuant to a previously issued other mortgage-related guarantee;

n	Part of our relief refinance initiative; or 

n	In another refinance loan initiative and the pre-existing loan (including Alt-A loans) was originated under less than full 

documentation standards. 

In the event we purchase a refinance loan and the original loan had been previously identified as Alt-A, such refinance loan may 

no longer be categorized or reported as Alt-A in the table below because the new refinance loan replacing the original loan 

would not be identified by the seller/servicer as an Alt-A loan. As a result, our reported Alt-A balances may be lower than would 

otherwise be the case had such refinancing not occurred.

Although we do not categorize single-family loans we purchase or guarantee as prime or subprime, we recognize that there are 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 16

Freddie Mac 1Q 2021 Form 10-Q 112
a number of loan types with certain characteristics that indicate a higher degree of credit risk.

For example, a borrower's credit score is a useful measure for assessing the credit quality of the borrower. Statistically, 

borrowers with higher credit scores are more likely to repay or have the ability to refinance than those with lower scores.

Presented below is a summary of the serious delinquency rates of certain higher-risk categories (based on characteristics of the 

loan at origination) of loans in our single-family mortgage portfolio. The table presents each higher-risk category in isolation. A 

single loan may fall within more than one category (for example, an interest-only loan may also have an original LTV ratio 

greater than 90%). Loans with a combination of these attributes will have an even higher risk of delinquency than those with an 

individual attribute.

Table 16.2 - Certain Higher Risk Categories in Our Single-Family Mortgage Portfolio

% of Portfolio(1) SDQ Rate(1)

(% of portfolio based on UPB) March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

Interest-only — % — % NM NM

Alt-A 1 1 10.49 % 10.66 %

Original LTV ratio greater than 90%(2) 14 15 4.01 4.25 

Lower credit scores at origination (less than 620) 1 1 10.93 11.00 

(1) Excludes $493 million and $505 million UPB of loans underlying certain other securitization products for which data was not available as of March 31, 2021 and 

December 31, 2020, respectively. 

(2) Includes HARP loans, which we purchased as part of our participation in the MHA Program. 

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

Sellers and Servicers

We acquire a significant portion of our single-family and multifamily loan purchase and guarantee volume from several large 

sellers. The table below summarizes the concentration of single-family and multifamily sellers who provided 10% or more of our 

purchase and guarantee volume.

Table 16.3 - Seller Concentration 

Single-family Sellers  1Q 2021 1Q 2020

JPMorgan Chase Bank, N.A. 4 % 12 %

United Wholesale Mortgage, LLC(1) 5 10 

Other top 10 sellers 39 33 

Top 10 single-family sellers 48 % 55 %

Multifamily Sellers 1Q 2021 1Q 2020

Berkadia Commercial Mortgage LLC 14 % 14 %

CBRE Capital Markets, Inc. 14 17 

JLL Real Estate Capital, LLC 10 4 

Other top 10 sellers 43 43 

Top 10 multifamily sellers 81 % 78 %

(1) United Wholesale Mortgage, LLC was previously known as United Shore Financial Services, LLC.

We purchase single-family loans from both depository and non-depository sellers. Non-depository institutions may not have the 

same financial strength or operational capacity, or be subject to the same level of regulatory oversight, as large depository 

institutions. Our top five non-depository sellers provided approximately 30% and 27% of our single-family purchase volume 

during 1Q 2021 and 1Q 2020, respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 16

Freddie Mac 1Q 2021 Form 10-Q 113
Significant portions of our single-family and multifamily loans are serviced by several large servicers. The table below 

summarizes the concentration of single-family and multifamily servicers who serviced 10% or more of our single-family 

mortgage portfolio and multifamily mortgage portfolio as of March 31, 2021 or December 31, 2020. 

Table 16.4 - Servicer Concentration

Single-family Servicers March 31, 2021(1) December 31, 2020(1)

Wells Fargo Bank, N.A. 10 % 11 %

Other top 10 servicers 37 38 

Top 10 single-family servicers 47 % 49 %

Multifamily Servicers(2) March 31, 2021 December 31, 2020

CBRE Capital Markets, Inc. 17 % 17 %

Berkadia Commercial Mortgage LLC 13 13 

JLL Real Estate Capital LLC 11 11 

Other top 10 servicers 40 39 

Top 10 multifamily servicers 81 % 80 %

(1) Percentage of servicing volume is based on the total single-family mortgage portfolio, which includes loans where we do not exercise servicing control. However, 

loans where we do not exercise servicing control are not included for purposes of determining the concentration of servicers who serviced more than 10% of our 

single-family mortgage portfolio.

(2) Represents multifamily primary servicers.

Single-family loans utilize both depository and non-depository servicers. Some of these non-depository servicers have grown in 

recent years and now service a large share of our loans. As of both March 31, 2021 and December 31, 2020, approximately 

18% of our single-family mortgage portfolio, excluding loans for which we do not exercise control over the associated 

servicing, was serviced by our five largest non-depository servicers, on a combined basis. We routinely monitor the 

performance of our largest non-depository servicers.

Multifamily loans utilize both primary and master servicers. Primary servicers service unsecuritized mortgage loans and are also 

typically engaged by master servicers to service on their behalf the mortgage loans underlying securitizations. For a majority of 

our K Certificate securitizations, we utilize one of three large financial depository institutions as master servicer. For SB 

Certificate securitizations and a smaller number of K Certificate securitizations, we serve as master servicer. Multifamily primary 

servicers included in the table above present potential operational risk and impact to the borrowers if the servicing needs to be 

transferred to another servicer. We also have exposure to the master servicers of our multifamily securitization transactions who 

bear responsibility to advance funds in the event of payment shortfalls, including principal and interest payments related to 

loans in forbearance. In instances where payment shortfalls occur, the master servicer is required to make advances as long as 

such advances have not been deemed unrecoverable. For multifamily loans purchased and held in our mortgage-related 

investments portfolio, the primary servicers are not required to advance funds in the event of payment shortfalls and therefore 

do not present significant counterparty credit risk.

Credit Enhancement Providers

We have counterparty credit risk relating to the potential insolvency of, or non-performance by, mortgage insurers that insure 

single-family loans we purchase or guarantee. We also have similar exposure to insurers and reinsurers through our ACIS and 

other insurance transactions where we purchase insurance policies as part of our CRT activities. See Note 8 for additional 

information on our credit enhancements.

We evaluate the recovery and collectability from mortgage insurers as part of the estimate of our allowance for credit losses. 

See Note 7 for additional information. As of March 31, 2021, mortgage insurers provided coverage with maximum loss limits of 

$119.1 billion, for $485.6 billion of UPB, in connection with our single-family mortgage portfolio. These amounts are based on 

gross coverage without regard to netting of coverage that may exist to the extent an affected loan is covered under other types 

of insurance. Changes in our expectations related to recovery and collectability from our credit enhancement providers may 

affect our estimates of expected credit losses, perhaps significantly.

The table below summarizes the concentration of mortgage insurer counterparties who provided 10% or more of our overall 

mortgage insurance coverage. On October 23, 2016, Genworth Financial, Inc. ("Genworth") announced that it had entered into 

an agreement to be acquired by China Oceanwide Holdings Group Co., Ltd. ("Oceanwide"). Because Genworth Mortgage 

Insurance Corporation, a subsidiary of Genworth, is an approved mortgage insurer, Freddie Mac evaluated the planned 

acquisition and approved Oceanwide's control of Genworth Mortgage Insurance Corporation. On April 6, 2021, Genworth 

announced that it had terminated its merger agreement with Oceanwide.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 16

Freddie Mac 1Q 2021 Form 10-Q 114
Table 16.5 - Mortgage Insurer Concentration

Mortgage Insurance Coverage(2)

Mortgage Insurer Credit Rating(1) March 31, 2021 December 31, 2020

Arch Mortgage Insurance Company A- 20 % 20 %

Radian Guaranty Inc. BBB+ 19 19 

Mortgage Guaranty Insurance Corporation BBB+ 18 18 

Essent Guaranty, Inc. BBB+ 16 16 

Genworth Mortgage Insurance Corporation BB+ 15 15 

National Mortgage Insurance Corporation BBB 11 10 

Total 99 % 98 %

(1) Ratings are for the corporate entity to which we have the greatest exposure. Latest rating available as of March 31, 2021. Represents the lower of S&P and Moody’s 

credit ratings stated in terms of the S&P equivalent.

(2) Coverage amounts exclude coverage related to IMAGIN and may include coverage provided by affiliates and subsidiaries of the counterparty. 

PMI Mortgage Insurance Co. and Triad Guaranty Insurance Corp. are both under the control of their state regulators and are in 

run-off. A substantial portion of their claims is recorded by us as deferred payment obligations. As of both March 31, 2021 and 

December 31, 2020, we had cumulative unpaid deferred payment obligations of $0.4 billion from these insurers. We have 

reserved substantially all of these unpaid amounts as collectability is uncertain. It is not clear how the regulators of these 

companies will administer their respective deferred payment plans in the future, nor when or if those obligations will be paid.

As part of our insurance/reinsurance CRT transactions, we regularly obtain insurance coverage from insurers and reinsurers. 

These transactions incorporate several features designed to increase the likelihood that we will recover on the claims we file 

with the insurers and reinsurers, including the following:

n	In each transaction, we require the individual insurers and reinsurers to post collateral to cover portions of their exposure, 

which helps to promote certainty and timeliness of claim payment and 

n	While private mortgage insurance companies are required to be monoline (i.e., to participate solely in the mortgage 

insurance business, although the holding company may be a diversified insurer), many of our insurers and reinsurers in 

these transactions participate in multiple types of insurance business, which helps diversify their risk exposure.

Other Investments Counterparties

We are exposed to the non-performance of counterparties relating to other investments (including non-mortgage-related 

securities and cash equivalents) transactions, including those entered into on behalf of our securitization trusts. Our policies 

require that the counterparty be evaluated using our internal counterparty rating model prior to our entering into such 

transactions. We monitor the financial strength of our counterparties to these transactions and may use collateral maintenance 

requirements to manage our exposure to individual counterparties. The permitted term and dollar limits for each of these 

transactions are also based on the counterparty's financial strength.

Our other investments (including non-mortgage-related securities and cash equivalents) counterparties are primarily major 

financial institutions, including other GSEs, Treasury, the Federal Reserve Bank of New York, GSD/FICC, highly-rated 

supranational institutions, depository and non-depository institutions, brokers and dealers, and government money market 

funds. As of March 31, 2021 and December 31, 2020, including amounts related to our consolidated VIEs, the balance in our 

other investments portfolio was $164.8 billion and $163.1 billion, respectively. The balances consist primarily of cash, securities 

purchased under agreements to resell invested with counterparties, U.S. Treasury securities, cash deposited with the Federal 

Reserve Bank of New York, and secured lending activities. As of March 31, 2021, all of our securities purchased under 

agreements to resell were fully collateralized. As of March 31, 2021 and December 31, 2020, $0.7 billion and $0.8 billion, 

respectively, of our securities purchased under agreements to resell were used to provide financing to investors in Freddie Mac 

securities to increase liquidity and expand the investor base for those securities. These transactions differ from the securities 

purchased under agreements to resell that we use for liquidity purposes as the counterparties we face may not be major 

financial institutions and we are exposed to the counterparty risk of these institutions.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 16

Freddie Mac 1Q 2021 Form 10-Q 115
NOTE 17

Fair Value Disclosures

The accounting guidance for fair value measurements and disclosures defines fair value, establishes a framework for measuring 

fair value, and sets forth disclosure requirements regarding fair value measurements. This guidance applies whenever other 

accounting guidance requires or permits assets or liabilities to be measured at fair value. Fair value represents the price that 

would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the 

measurement date. Fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place 

either in the principal market for the asset or liability, or, in the absence of a principal market, in the most advantageous market 

for the asset or liability.

We use fair value measurements for the initial recording of certain assets and liabilities and periodic remeasurement of certain 

assets and liabilities on a recurring or non-recurring basis.

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy that 

prioritizes the inputs into the valuation techniques used to measure fair value. The levels of the fair value hierarchy are defined 

as follows in priority order:

n	 Level 1 - inputs to the valuation techniques are based on quoted prices in active markets for identical assets or liabilities. 

n	 Level 2 - inputs to the valuation techniques are based on observable inputs other than quoted prices in active markets for 

identical assets or liabilities. 

n	 Level 3 - one or more inputs to the valuation technique are unobservable and significant to the fair value measurement.

We use quoted market prices and valuation techniques that seek to maximize the use of observable inputs, where available, 

and minimize the use of unobservable inputs. Our inputs are based on the assumptions a market participant would use in 

valuing the asset or liability. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the 

lowest level input that is significant to the fair value measurement.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 116
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 17.1 - Assets and Liabilities Measured at Fair Value on a Recurring Basis 

March 31, 2021

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustment(1) Total

Assets:

Investment securities:

Available-for-sale, at fair value:

Mortgage-related securities:

Agency $— $5,754 $801 $— $6,555 

Non-agency and other — 1 1,035 — 1,036 

Total available-for-sale securities, at fair value — 5,755 1,836 — 7,591 

Trading, at fair value:

Mortgage-related securities:

Agency — 19,954 3,061 — 23,015 

Non-agency — — 1 — 1 

Total mortgage-related securities — 19,954 3,062 — 23,016 

Non-mortgage-related securities 30,208 1,065 — — 31,273 

Total trading securities, at fair value 30,208 21,019 3,062 — 54,289 

Total investments in securities 30,208 26,774 4,898 — 61,880 

Mortgage loans:

Held-for-sale, at fair value — 8,093 — — 8,093 

 Derivative assets, net 30 8,680 30 — 8,740 

 Netting adjustments(1) — — — (6,655) (6,655) 

Total derivative assets, net 30 8,680 30 (6,655) 2,085 

Other assets:

 Guarantee assets, at fair value — — 5,688 — 5,688 

 Non-derivative held-for-sale purchase commitments, at fair value — 91 — — 91 

 All other, at fair value — — 115 — 115 

Total other assets — 91 5,803 — 5,894 

Total assets carried at fair value on a recurring basis $30,238 $43,638 $10,731 ($6,655) $77,952 

Liabilities:

Debt securities of consolidated trusts held by third parties, at fair 

value $— $2 $260 $— $262 

Debt of Freddie Mac, at fair value — 1,982 120 — 2,102 

 Derivative liabilities, net — 9,115 34 — 9,149 

 Netting adjustments(1) — — — (8,199) (8,199) 

Total derivative liabilities, net — 9,115 34 (8,199) 950 

Other liabilities:

 Non-derivative held-for-sale purchase commitments, at fair value — 5 — — 5 

 All other, at fair value — — — — — 

Total other liabilities — 5 — — 5 

Total liabilities carried at fair value on a recurring basis $— $11,104 $414 ($8,199) $3,319 

Referenced footnote is included after the next table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 117
December 31, 2020

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustment(1) Total

Assets:

Investment securities:

Available-for-sale, at fair value:

Mortgage-related securities:

Agency $— $13,778 $526 $— $14,304 

Non-agency and other — 1 1,062 — 1,063 

Total available-for-sale securities, at fair value — 13,779 1,588 — 15,367 

Trading, at fair value:

Mortgage-related securities:

Agency — 14,246 3,258 — 17,504 

Non-agency — — 1 — 1 

Total mortgage-related securities — 14,246 3,259 — 17,505 

Non-mortgage-related securities 26,255 698 — — 26,953 

Total trading securities, at fair value 26,255 14,944 3,259 — 44,458 

Total investments in securities 26,255 28,723 4,847 — 59,825 

Mortgage loans:

Held-for-sale, at fair value — 14,199 — — 14,199 

 Derivative assets, net — 8,516 63 — 8,579 

 Netting adjustments(1) — — — (7,374) (7,374) 

Total derivative assets, net — 8,516 63 (7,374) 1,205 

Other assets:

Guarantee assets, at fair value — — 5,509 — 5,509 

Non-derivative held-for-sale purchase commitments, at fair value — 158 — — 158 

All other, at fair value — — 108 — 108 

Total other assets — 158 5,617 — 5,775 

Total assets carried at fair value on a recurring basis $26,255 $51,596 $10,527 ($7,374) $81,004 

Liabilities:

Debt securities of consolidated trusts held by third parties, at fair 

value $— $2 $203 $— $205 

 Debt of Freddie Mac, at fair value — 2,267 120 — 2,387 

 Derivative liabilities, net — 9,132 16 — 9,148 

Netting adjustments(1) — — — (8,194) (8,194) 

Total derivative liabilities, net — 9,132 16 (8,194) 954 

Other liabilities:

 Non-derivative held-for-sale purchase commitments, at fair value — 1 — — 1 

 All other, at fair value — — 3 — 3 

 Total other liabilities — 1 3 — 4 

 Total liabilities carried at fair value on a recurring basis $— $11,402 $342 ($8,194) $3,550 

(1) Represents counterparty netting, cash collateral netting, and net derivative interest receivable or payable.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 118
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 comprehensive income (loss) for Level 3 assets and liabilities. 

Table 17.2 - Fair Value Measurements of Assets and Liabilities Using Significant Unobservable Inputs

1Q 2021

Balance,

January 1,

2021

Total Realized/Unrealized 

Gains (Losses)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3(1)

Transfers

out of

Level 3(1)

Balance,

March 31,

2021

Change in 

Unrealized Gains 

(Losses) 

Included in Net 

Income Related 

to Assets and 

Liabilities Still 

Held as of March 

31, 2021(2)

Change in 

Unrealized 

Gains (Losses), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

(In millions) March 31, 2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale, at 

fair value:

Mortgage-related 

securities:

Agency $526 $— ($6) $432 $— ($130) ($21) $— $— $801 $— ($4) 

Non-agency and 

other 1,062 6 — — — — (33) — — 1,035 6 — 

Total available-forsale mortgagerelated securities 1,588 6 (6) 432 — (130) (54) — — 1,836 6 (4) 

Trading, at fair value:

Mortgage-related 

securities:

Agency 3,258 (174) — 445 — (269) (19) — (180) 3,061 (183) — 

Non-agency 1 — — — — — — — — 1 — — 

Total trading 

mortgage-related 

securities 3,259 (174) — 445 — (269) (19) — (180) 3,062 (183) — 

Derivative assets 63 (33) — — — — — — — 30 (33) — 

Other assets:

Guarantee assets 5,509 (86) — — 488 — (223) — — 5,688 (86) — 

All other, at fair 

value 108 10 — (4) 6 — (5) — — 115 11 — 

Total other 

assets 5,617 (76) — (4) 494 — (228) — — 5,803 (75) — 

Balance,

January 1,

2021

Total Realized/Unrealized 

(Gains) Losses

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3(1)

Transfers

out of

Level 3(1)

Balance,

March 31,

2021

Change in 

Unrealized 

(Gains) Losses 

Included in Net 

Income Related 

to Assets and 

Liabilities Still 

Held as of March 

31, 2021(2)

Change in 

Unrealized 

(Gains) Losses, 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

March 31, 2021

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Liabilities

Debt securities of 

consolidated trusts 

held by third parties, at 

fair value $203 $4 $— $— $53 $— $— $— $— $260 $4 $— 

Debt of Freddie Mac, at 

fair value 120 2 — — 1 — (3) — — 120 2 — 

Derivative liabilities 16 19 — — 2 — (3) — — 34 16 — 

All other, at fair value 3 (5) — 2 — — — — — — (4) — 

Referenced footnotes are included after the prior period table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 119
1Q 2020

Balance,

January 1,

2020

Total Realized/Unrealized 

Gains (Losses)

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3(1)

Transfers

out of

Level 3(1)

Balance,

March 31,

2020

Change in 

Unrealized Gains 

(Losses) 

Included in Net 

Income Related 

to Assets and 

Liabilities Still 

Held as of March 

31, 2020(2)

Change in 

Unrealized 

Gains (Losses), 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

(In millions) March 31, 2020

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Assets

Investment securities:

Available-for-sale, at 

fair value:

Mortgage-related 

securities:

Agency $1,960 $12 $38 $— $— ($208) ($57) $— ($1,095) $650 $— ($2) 

Non-agency and 

other 1,267 3 (126) — — — (43) — — 1,101 3 (100) 

Total available-forsale mortgagerelated securities 3,227 15 (88) — — (208) (100) — (1,095) 1,751 3 (102) 

Trading, at fair value:

Mortgage-related 

securities:

Agency 2,709 15 — 352 — (105) (31) — (396) 2,544 1 — 

Non-agency 1 — — — — — — — — 1 — — 

Total trading 

mortgage-related 

securities 2,710 15 — 352 — (105) (31) — (396) 2,545 1 — 

Derivative assets 16 47 — — — — — — — 63 47 — 

Other assets:

Guarantee assets 4,426 99 — — 223 — (183) — — 4,565 99 — 

All other, at fair 

value 120 (7) — (1) 6 (8) (4) — — 106 (8) — 

Total other assets 4,546 92 — (1) 229 (8) (187) — — 4,671 91 — 

Balance,

January 1,

2020

Total Realized/Unrealized 

(Gains) Losses

Purchases Issues Sales

Settlements,

Net

Transfers

into

Level 3(1)

Transfers

out of

Level 3(1)

Balance,

March 31,

2020

Change in 

Unrealized 

(Gains) Losses 

Included in Net 

Income Related 

to Assets and 

Liabilities Still 

Held as of March 

31, 2020(2)

Change in 

Unrealized 

(Gains) Losses, 

Net of Tax, 

Included in OCI 

Related to 

Assets and 

Liabilities Still 

Held as of 

March 31, 2020

Included 

in

Earnings

Included in 

Other

Comprehensive

Income

Liabilities

Debt securities of 

consolidated trusts 

held by third parties, at 

fair value $203 ($4) $— $— $— $— $— $— $— $199 ($4) $— 

Debt of Freddie Mac, at 

fair value 129 (11) — — 1 — (1) 33 — 151 (11) — 

Derivative liabilities 37 (10) — — 1 — (4) — — 24 (14) — 

All other, at fair value 1 — — — — — — — — 1 — — 

B

(1) Transfers out of Level 3 during 1Q 2021 and 1Q 2020 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 Freddie Mac securities are classified as Level 3 at issuance and 

generally are classified as Level 2 when they begin trading. Transfers into Level 3 during 1Q 2020 consisted primarily of certain mortgage-related securities due to a 

decrease in market activity and the availability of relevant price quotes from dealers and third-party pricing services.

(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 March 31, 2021 and March 31, 2020, respectively. This amount includes any allowance for credit losses 

recorded on available-for-sale securities and amortization of basis adjustments.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 120
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 17.3 - Quantitative Information about Recurring Level 3 Fair Value Measurements 

March 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(2)

Assets

Available-for-sale, at fair value

Mortgage-related securities

Agency $690 Discounted cash flows OAS 36 - 89 bps 66 bps

 111 Other

Non-agency and other 879 

Median of external 

sources

External pricing 

sources $66.2 - $79.3 $72.0 

 156 Other

Trading, at fair value

Mortgage-related securities

Agency 2,360 Single external source

External pricing 

sources $0.0 - $8,257.7 $970.5 

 364 Discounted cash flows OAS (811) - 56,028 bps 596 bps

 337 Other

Guarantee assets, at fair value 5,300 Discounted cash flows OAS 17 - 186 bps 45 bps

 388 Other

Insignificant Level 3 assets(1) 146 

Total level 3 assets $10,731 

Liabilities

Debt securities of consolidated trusts held by third 

parties, at fair value $204 Single external source

External pricing 

sources $99.8 - $106.9 $102.2 

 56 Other

Insignificant Level 3 liabilities(1) 154 

Total level 3 liabilities $414 

Referenced footnote is included after the next table.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 121
December 31, 2020

Level 3

Fair

Value

Predominant

Valuation

Technique(s)

Unobservable Inputs

(Dollars in millions, except for certain unobservable 

inputs as shown) Type Range

Weighted

Average(2)

Assets

Available-for-sale, at fair value

Mortgage-related securities

Agency $410 Discounted cash flows OAS 90 - 90 bps 90 bps

 116 Other

Non-agency and other 875 

Median of external 

sources

External pricing 

sources $67.1 - $79.1 $72.8 

 187 Other

Trading, at fair value

Mortgage-related securities

Agency 2,204 Single external source

External pricing 

sources $0.0 - $8,894.6 $947.8 

 472 Discounted cash flows OAS (951) - 2,910 bps 834 bps

 583 Other

 Guarantee assets, at fair value 5,195 Discounted cash flows OAS 15 - 186 bps 38 bps

 314 Other

 Insignificant Level 3 assets(1) 171 

Total level 3 assets $10,527 

Liabilities

Debt securities of consolidated trusts held by third 

parties, at fair value $203 Single external source

External pricing 

sources $97.3 - $ 107.0 $101.7 

Insignificant Level 3 liabilities(1) 139 

Total level 3 liabilities $342 

(1) Represents the aggregate amount of Level 3 assets or liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant.

(2) Unobservable inputs were weighted primarily by the relative fair value of the financial instruments.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 122
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 the 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 17.4 - Assets Measured at Fair Value on a Non-Recurring Basis 

March 31, 2021 December 31, 2020

(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) $— $11 $1,731 $1,742 $— $6 $2,241 $2,247 

(1) Includes loans that are classified as held-for-investment and have been measured for impairment based on the fair value of the underlying collateral and held-forsale 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 17.5 - Quantitative Information About Non-Recurring Level 3 Fair Value Measurements 

March 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)

Non-recurring fair value 

measurements

Mortgage loans $1,731 

Internal model Historical sales proceeds $3,431 - $595,000 $209,549

Internal model Housing sales index 69 - 640 bps 122 bps

Median of external sources External pricing sources $60.2 - $106.0 $94.5

December 31, 2020

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)

Non-recurring fair value 

measurements

Mortgage loans $2,241 

Internal model Historical sales proceeds $3,001 - $696,004 $202,539

Internal model Housing sales index 66 - 345 bps 119 bps

Median of external sources External pricing sources $59.5 - $104.0 $92.1

(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 17

Freddie Mac 1Q 2021 Form 10-Q 123
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 other, 

and certain debt, the carrying value on our GAAP balance sheets approximates fair value, as these assets and liabilities are 

short-term in nature and have limited fair value volatility. 

Table 17.6 - Fair Value of Financial Instruments

March 31, 2021

GAAP 

Measurement 

Category(1)

GAAP 

Carrying  

Amount

Fair Value

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustments(2) Total

Financial Assets

Cash and cash equivalents Amortized cost $100,979 $100,979 $— $— $— $100,979 

Securities purchased under agreements 

to resell Amortized cost 15,140 — 23,070 — (7,930) 15,140 

Investment securities:

Available-for-sale, at fair value FV - OCI 7,591 — 5,755 1,836 — 7,591 

Trading, at fair value FV - NI 54,289 30,208 21,019 3,062 — 54,289 

Total investment securities 61,880 30,208 26,774 4,898 — 61,880 

Mortgage loans:

Loans held by consolidated trusts 2,395,707 — 2,174,999 258,491 — 2,433,490 

Loans held by Freddie Mac 112,180 — 77,983 37,537 — 115,520 

Total mortgage loans Various(3) 2,507,887 — 2,252,982 296,028 — 2,549,010 

Derivative assets, net FV - NI 2,085 30 8,680 30 (6,655) 2,085 

Guarantee assets FV - NI 5,688 — — 5,694 — 5,694 

Non-derivative purchase commitments, 

at fair value FV - NI 91 — 192 — — 192 

Advances to lenders Amortized cost 6,401 — — 6,401 — 6,401 

Secured lending Amortized cost 1,632 — 1,430 49 — 1,479 

Total financial assets $2,701,783 $131,217 $2,313,128 $313,100 ($14,585) $2,742,860 

Financial Liabilities

Debt:

Debt securities of consolidated trusts 

held by third parties $2,445,829 $— $2,472,078 $855 $— $2,472,933 

Debt of Freddie Mac 258,441 — 268,093 3,813 (7,930) 263,976 

Total debt Various(4) 2,704,270 — 2,740,171 4,668 (7,930) 2,736,909 

Derivative liabilities, net FV - NI 950 — 9,115 34 (8,199) 950 

Guarantee obligations Amortized cost 5,275 — — 6,100 — 6,100 

Non-derivative purchase commitments, 

at fair value FV - NI 29 — 5 167 — 172 

Total financial liabilities $2,710,524 $— $2,749,291 $10,969 ($16,129) $2,744,131 

(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 March 31, 2021, the GAAP carrying amounts measured at amortized cost, lower-of-cost-or-fair-value, and FV - NI were $2.5 trillion, $16.8 billion, and $8.1 

billion, respectively. 

(4) As of March 31, 2021, the GAAP carrying amounts measured at amortized cost and FV - NI were $2.7 trillion and $2.4 billion, respectively. 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 124
December 31, 2020

GAAP 

Measurement 

Category(1)

GAAP 

Carrying  

Amount

Fair Value

(In millions) Level 1 Level 2 Level 3

Netting 

Adjustments(2) Total

Financial Assets

Cash and cash equivalents Amortized cost $23,889 $23,889 $— $— $— $23,889 

Securities purchased under agreements 

to resell Amortized cost 105,003 — 105,003 — — 105,003 

Investment securities:

Available-for-sale, at fair value FV - OCI 15,367 — 13,779 1,588 — 15,367 

Trading, at fair value FV - NI 44,458 26,255 14,944 3,259 — 44,458 

Total investment securities 59,825 26,255 28,723 4,847 — 59,825 

Mortgage loans:

Loans held by consolidated trusts 2,273,347 — 2,080,687 262,309 — 2,342,996 

Loans held by Freddie Mac 110,541 — 76,917 36,578 — 113,495 

Total mortgage loans Various(3) 2,383,888 — 2,157,604 298,887 — 2,456,491 

Derivative assets, net FV - NI 1,205 — 8,516 63 (7,374) 1,205 

Guarantee assets FV - NI 5,509 — — 5,515 — 5,515 

Non-derivative purchase commitments, 

at fair value FV - NI 158 — 246 — — 246 

Advances to lenders Amortized cost 4,162 — — 4,162 — 4,162 

Secured lending Amortized cost 1,680 — 1,427 89 — 1,516 

Total financial assets $2,585,319 $50,144 $2,301,519 $313,563 ($7,374) $2,657,852 

Financial Liabilities

Debt:

Debt securities of consolidated trusts 

held by third parties $2,308,176 $— $2,382,157 $852 $— $2,383,009 

Debt of Freddie Mac 284,370 — 286,634 4,088 — 290,722 

Total debt Various(4) 2,592,546 — 2,668,791 4,940 — 2,673,731 

Derivative liabilities, net FV - NI 954 — 9,132 16 (8,194) 954 

Guarantee obligations Amortized cost 5,050 — — 5,378 — 5,378 

Non-derivative purchase commitments, 

at fair value FV - NI 20 — 1 143 — 144 

Total financial liabilities $2,598,570 $— $2,677,924 $10,477 ($8,194) $2,680,207 

(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 December 31, 2020, the GAAP carrying amounts measured at amortized cost, lower-of-cost-or-fair-value, and FV - NI were $2.4 trillion, $19.5 billion, and 

$14.2 billion, respectively. 

(4) As of December 31, 2020, the GAAP carrying amounts measured at amortized cost and FV - NI were $2.6 trillion and $2.6 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 long-term debt.

The table below presents the fair value and UPB related to certain loans and long-term debt for which we have elected the fair 

value option. This table does not include interest-only securities related to debt securities of consolidated trusts and debt of 

Freddie Mac held by third parties with a fair value of $245 million and $173 million and multifamily held-for-sale loan purchase 

commitments with a net fair value of $86 million and $157 million, as of March 31, 2021 and December 31, 2020, respectively.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 125
Table 17.7 - Difference between Fair Value and UPB for Certain Financial Instruments with Fair Value Option Elected 

March 31, 2021 December 31, 2020

(In millions)

Multifamily

Held-For-Sale

 Loans

Debt of Freddie 

Mac -

Long Term

Debt Securities of 

Consolidated 

Trusts Held by 

Third Parties

Multifamily

Held-For-Sale

 Loans

Debt of Freddie 

Mac -

Long Term

Debt Securities of 

Consolidated 

Trusts Held by 

Third Parties

Fair value $8,093 $1,915 $204 $14,199 $2,216 $203 

UPB 7,884 1,896 200 13,400 2,189 200 

Difference $209 $19 $4 $799 $27 $3 

Changes in Fair Value Under the Fair Value Option Election

The table below presents the changes in fair value included in non-interest income (loss) in our condensed consolidated 

statements of comprehensive income (loss), related to items for which we have elected the fair value option. 

Table 17.8 - Changes in Fair Value Under the Fair Value Option Election

1Q 2021 1Q 2020

(In millions) Gains (Losses) 

Multifamily held-for-sale loans ($451) $638 

Multifamily held-for-sale loan purchase commitments 195 532 

Debt of Freddie Mac - long term 8 548 

Debt securities of consolidated trusts held by third parties (4) 4 

Changes in fair value attributable to instrument-specific credit risk were not material for 1Q 2021 and 1Q 2020 for any assets or 

liabilities for which we elected the fair value option.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 17

Freddie Mac 1Q 2021 Form 10-Q 126
NOTE 18

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. On July 20, 2016, the Sixth Circuit reversed the District Court's 

dismissal and remanded the case to the District Court for further proceedings. On August 14, 2018, the District Court denied 

the plaintiff's motion for class certification. On January 23, 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 with 

the Sixth Circuit. On January 27, 2021, Freddie Mac filed a motion to dismiss the appeal.

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. On 

March 31, 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. Subsequently, 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 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 18

Freddie Mac 1Q 2021 Form 10-Q 127
remanded the case to the District Court for consideration of whether, among other things, the plaintiffs are "efficient enforcers" 

of the antitrust laws. 

On December 20, 2016, after briefing and argument on the defendants' renewed motions to dismiss on personal jurisdiction 

and efficient enforcer grounds, the District Court denied defendants' motions in part and granted them in part. 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. Then, in an order issued February 2, 2017, the District 

Court effectively dismissed Freddie Mac's remaining antitrust claim against HSBC USA, N.A. At present, Freddie Mac's breach 

of contract actions against Bank of America, N.A., Barclays Bank, Citibank, N.A., Credit Suisse, Deutsche Bank, Royal Bank of 

Scotland, and UBS AG are its only claims remaining in the District Court.

On February 23, 2018, the Second Circuit reversed the District Court's dismissal of certain plaintiffs' state law fraud and unjust 

enrichment claims on statutes of limitations grounds. While Freddie Mac was not a party to the appeal, this decision could have 

the effect of reinstating Freddie Mac's fraud claims against the above-named defendants. 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 amended its complaint on April 16, 2019.

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 case is 

the result of the consolidation of three putative class action lawsuits: Cacciapelle and Bareiss vs. Federal National Mortgage 

Association, Federal Home Loan Mortgage Corporation and FHFA, filed on July 29, 2013; American European Insurance 

Company vs. Federal National Mortgage Association, Federal Home Loan Mortgage Corporation and FHFA, filed on July 30, 

2013; and Marneu Holdings, Co. vs. FHFA, Treasury, Federal National Mortgage Association and Federal Home Loan Mortgage 

Corporation, filed on September 18, 2013. (The Marneu case was also filed as a shareholder derivative lawsuit.) A consolidated 

amended complaint was filed in December 2013. In the consolidated amended complaint, plaintiffs alleged, among other items, 

that the August 2012 amendment to the Purchase Agreement breached Freddie Mac's and Fannie Mae's respective contracts 

with the holders of junior preferred stock and common stock and the covenant of good faith and fair dealing inherent in such 

contracts. Plaintiffs sought unspecified damages, equitable and injunctive relief, and costs and expenses, including attorney 

and expert fees. 

The Cacciapelle and American European Insurance Company lawsuits were filed purportedly on behalf of a class of purchasers 

of junior preferred stock issued by Freddie Mac or Fannie Mae who held stock prior to, and as of, August 17, 2012. The Marneu 

lawsuit was filed purportedly on behalf of a class of purchasers of junior preferred stock and purchasers of common stock 

issued by Freddie Mac or Fannie Mae over a not-yet-defined period of time. 

Arrowood Indemnity Company vs. Federal National Mortgage Association, Federal Home Loan Mortgage 

Corporation, FHFA, and Treasury. This case was filed on September 20, 2013. The allegations and demands made by 

plaintiffs in this case were generally similar to those made by the plaintiffs in the In re Fannie Mae/Freddie Mac Senior Preferred 

Stock Purchase Agreement Class Action Litigations case described above. Plaintiffs in the Arrowood lawsuit also requested 

that, if injunctive relief were not granted, the Arrowood plaintiffs be awarded damages against the defendants in an amount to 

be determined including, but not limited to, the aggregate par value of their junior preferred stock, the total of which they stated 

to be approximately $42 million. 

American European Insurance Company, Cacciapelle, and Miller vs. Treasury and FHFA. This case was filed as a 

shareholder derivative lawsuit, purportedly on behalf of Freddie Mac as a nominal defendant, on July 30, 2014. The complaint 

alleged that, through the August 2012 amendment to the Purchase Agreement, Treasury and FHFA breached their respective 

fiduciary duties to Freddie Mac, causing Freddie Mac to suffer damages. The plaintiffs asked that Freddie Mac be awarded 

compensatory damages and disgorgement, as well as attorneys' fees, costs, and other expenses. 

FHFA, joined by Freddie Mac and Fannie Mae, moved to dismiss the In re Fannie Mae/Freddie Mac Senior Preferred Stock 

Purchase Agreement Class Action Litigations case and the other related cases in January 2014. Treasury filed a motion to 

dismiss the same day. In September 2014, the District Court granted the motions and dismissed the plaintiffs' claims. All 

plaintiffs appealed that decision, and on February 21, 2017, the U.S. Court of Appeals for the District of Columbia Circuit 

affirmed in part and remanded in part the decision granting the motions to dismiss. The DC Circuit affirmed dismissal of all 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 18

Freddie Mac 1Q 2021 Form 10-Q 128
claims except certain claims seeking monetary damages for breach of contract and breach of implied duty of good faith and 

fair dealing. In March 2017, certain institutional and class plaintiffs filed petitions for panel rehearing with respect to certain 

claims. On July 17, 2017, the DC Circuit granted the petitions for rehearing and issued a modified decision, which permitted the 

institutional plaintiffs to pursue the breach of contract and breach of implied duty of good faith and fair dealing claims that had 

been remanded. The DC Circuit also removed language related to the standard to be applied to the implied duty claims, leaving 

that issue for the District Court to determine on remand. On October 16, 2017, certain institutional and class plaintiffs filed 

petitions for a writ of certiorari in the U.S. Supreme Court challenging whether HERA's prohibition on injunctive relief against 

FHFA bars judicial review of the net worth sweep dividend provisions of the August 2012 amendment to the Purchase 

Agreement, as well as whether HERA bars shareholders from pursuing derivative litigation where they allege the conservator 

faces a conflict of interest. The Supreme Court denied the petitions on February 20, 2018. On November 1, 2017, certain 

institutional and class plaintiffs and plaintiffs in another case in which Freddie Mac was not originally a defendant, Fairholme 

Funds, Inc. v. FHFA, Treasury, and Federal National Mortgage Association, filed proposed amended complaints in the District 

Court. Each of the proposed amended complaints names Freddie Mac as a defendant for breach of contract and breach of the 

covenant of good faith and fair dealing claims as well as for new claims alleging breach of fiduciary duty and breach of Virginia 

corporate law. On January 10, 2018, FHFA, Freddie Mac, and Fannie Mae moved to dismiss the amended complaints. On 

September 28, 2018, the District Court dismissed all of the claims except those alleging breach of the implied covenant of good 

faith and fair dealing. Discovery is ongoing.

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 a ruling on the Fairholme Funds appeals.

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 remain. 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 on June 18, 

2020.

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 a ruling on the Fairholme Funds appeals.

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 outcome of any appeal) 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 

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 18

Freddie Mac 1Q 2021 Form 10-Q 129
possible loss in the event of an adverse judgment in the foregoing matters due to a number of factors, including the inherent 

uncertainty of pre-trial litigation. In addition, with respect to the In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase 

Agreement Class Action Litigations case, the plaintiffs have not demanded a stated amount of damages they believe are due, 

and the Court has not certified a class.

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 18

Freddie Mac 1Q 2021 Form 10-Q 130
NOTE 19

Regulatory Capital

In October 2008, FHFA announced that it was suspending capital classification of us during conservatorship in light of the 

Purchase Agreement. FHFA continues to monitor our capital levels, but the existing statutory and FHFA regulatory capital 

requirements are not binding during conservatorship.

We continue to provide quarterly submissions to FHFA on minimum capital as required by FHFA. The table below summarizes 

our net worth and estimated core capital and minimum capital levels reported to FHFA. 

Table 19.1 - Net Worth and Minimum Capital

(In millions) March 31, 2021 December 31, 2020

GAAP net worth (deficit) $18,791 $16,413 

Core capital (deficit)(1)(2) (54,111) (56,878) 

Less: Minimum capital(1) 23,068 22,694 

Minimum capital surplus (deficit)(1) ($77,179) ($79,572) 

(1) Core capital and minimum capital figures are estimates and represent amounts submitted to FHFA. FHFA is the authoritative source for our regulatory capital.

(2) 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.

In May 2017, FHFA, as Conservator, issued guidance to us to evaluate and manage our financial risk and to make economic 

business decisions, while in conservatorship, utilizing a risk-based CCF, a capital system with detailed formulae provided by 

FHFA. In November 2020, FHFA released a final rule that establishes the ERCF as a new regulatory capital framework for 

Freddie Mac and Fannie Mae. The ERCF, which went into effect in February 2021, has a transition period for compliance. 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 consent order or other transition order; however, we may begin 

implementing the ERCF sooner, upon the direction of FHFA or otherwise. We will be required to report our regulatory capital 

under the ERCF beginning on January 1, 2022, and expect to continue capital reporting that is required by FHFA. The ERCF 

specifies substantial capital requirements and could affect our business strategies, perhaps significantly.

END OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND ACCOMPANYING NOTES

Financial Statements Notes to the Condensed Consolidated Financial Statements | Note 19

Freddie Mac 1Q 2021 Form 10-Q 131
Other Information

LEGAL PROCEEDINGS

We are involved as a party to a variety of legal proceedings. For more information, see Note 18 in this Form 10-Q and Note 

20 in our 2020 Annual Report.

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 2020 Annual Report. Freddie Mac is not a party to any of these lawsuits.

RISK FACTORS 

This Form 10-Q should be read together with the Risk Factors section in our 2020 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. However, grants outstanding as of the date of the Purchase Agreement 

remain in effect in accordance with their terms.

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 www.freddiemac.com/capital-markets.

EXHIBITS

The exhibits are listed in the Exhibit Index of this Form 10-Q.

Other Information

Freddie Mac 1Q 2021 Form 10-Q 132
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 Interim 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 Interim Chief Executive Officer and Chief Financial Officer, conducted an evaluation of 

the effectiveness of our disclosure controls and procedures as of March 31, 2021. As a result of management's evaluation, our 

Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not 

effective as of March 31, 2021, 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 1Q 2021

We evaluated the changes in our internal control over financial reporting that occurred during 1Q 2021 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 March 31, 2021 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 Resolutions, 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 (or if that office is vacant, with our 

President), 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 1Q 2021 have been prepared in conformity with GAAP.

Controls and Procedures

Freddie Mac 1Q 2021 Form 10-Q 133
Exhibit Index

Exhibit Description*

4.1

Fourth Amended and Restated Certificate of Creation, Designation, Powers, Preferences, Rights, Privileges, Qualifications, Limitations, 

Restrictions, Terms and Conditions of Variable Liquidation Preference Senior Preferred Stock (par value $1.00 per share), dated April 13, 

2021

4.2 Federal Home Loan Mortgage Corporate Global Debt Facility Agreement, dated February 11, 2021

10.1 Agreement, dated February 9, 2021, between Freddie Mac and David M. Brickman†

10.2 Memorandum Agreement, dated February 9, 2021, between Freddie Mac and David M. Brickman†

31.1 Certification of Interim 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 Interim 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 1Q 2021 Form 10-Q 134
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/ Mark B. Grier

Mark B. Grier

Interim Chief Executive Officer

(Principal Executive Officer)

Date: April 29, 2021

By: /s/ Christian M. Lown

Christian M. Lown

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: April 29, 2021

Signatures

Freddie Mac 1Q 2021 Form 10-Q 135
Form 10-Q Index

Item Number Page(s)

PART I FINANCIAL INFORMATION

Item 1. Financial Statements 68 - 131

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 1 - 67

Item 3. Quantitative and Qualitative Disclosures About Market Risk 55 - 57

Item 4. Controls and Procedures 133

PART II OTHER INFORMATION

Item 1. Legal Proceedings 132

Item 1A. Risk Factors 132

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 132

Item 6. Exhibits 132

Exhibit Index 134

Signatures 135

Form 10-Q Index

Freddie Mac 1Q 2021 Form 10-Q 136
Exhibit	4.1

EXECUTION	VERSION

FREDDIE	MAC	

FOURTH	AMENDED	AND	RESTATED	CERTIFICATE	OF	CREATION,	

DESIGNATION,	POWERS,	PREFERENCES,	RIGHTS,	

PRIVILEGES,	QUALIFICATIONS,	LIMITATIONS,	

RESTRICTIONS,	TERMS	AND	CONDITIONS	OF	

VARIABLE	LIQUIDATION	PREFERENCE	SENIOR	PREFERRED	STOCK	

(PAR	VALUE	$1.00	PER	SHARE)	

The	Federal	Housing	Finance	Agency,	as	Conservator	of	the	Federal	Home	Loan	Mortgage	

Corporation,	a	government-sponsored	enterprise	of	the	United	States	of	America	(the	“Company”),	does	

hereby	certify	that,	pursuant	to	authority	vested	in	the	Board	of	Directors	of	the	Company	by	Section	

306(f)	of	the	Federal	Home	Loan	Mortgage	Corporation	Act,	and	pursuant	to	the	authority	vested	in	the	

Conservator	of	the	Company	by	Section	1367(b)	of	the	Federal	Housing	Enterprises	Financial	Safety	and	

Soundness	Act	of	1992	(12	U.S.C.	§4617),	as	amended,	the	Conservator	adopted	Resolution	FHLMC	

2008-24	on	September	7,	2008,	which	resolution	is	now,	and	at	all	times	since	such	date	has	been,	in	full	

force	and	effect,	and	that	the	Conservator	approved	the	final	terms	of	the	issuance	and	sale	of	the	

preferred	stock	of	the	Company	designated	above.	

As	amended	and	restated,	effective	December	31,	2020,	in	accordance	with	the	Letter	Agreement	

dated	January	14,	2021,	and	the	Third	Amendment	dated	as	of	August	17,	2012,	to	the	Amended	and	

Restated	Senior	Preferred	Stock	Purchase	Agreement	dated	as	of	September	26,	2008,	as	amended,	the	

Senior	Preferred	Stock	shall	have	the	following	designation,	powers,	preferences,	rights,	privileges,	

qualifications,	limitations,	restrictions,	terms	and	conditions:	

1.				Designation,	Par	Value,	Number	of	Shares	and	Seniority	

The	class	of	preferred	stock	of	the	Company	created	hereby	(the	“Senior	Preferred	Stock”)	shall	be	

designated	“Variable	Liquidation	Preference	Senior	Preferred	Stock,”	shall	have	a	par	value	of	$1.00	per	

share	and	shall	consist	of	1,000,000	shares.	The	Senior	Preferred	Stock	shall	rank	prior	to	the	common	

stock	of	the	Company	as	provided	in	this	Certificate	and	shall	rank,	as	to	both	dividends	and	distributions	

upon	liquidation,	prior	to	(a)	the	Fixed-to-Floating	Rate	Non-Cumulative	Perpetual	Preferred	Stock	

issued	on	December	4,	2007,	(b)	the	6.55%	Non-Cumulative	Preferred	Stock	issued	on	September	28,	

2007,	(c)	the	6.02%	Non-Cumulative	Preferred	Stock	issued	on	July	24,	2007,	(d)	the	5.66%	NonCumulative	Preferred	Stock	issued	on	April	16,	2007,	(e)	the	5.57%	Non-Cumulative	Preferred	Stock	

issued	on	January	16,	2007,	(f)	the	5.9%	Non-Cumulative	Preferred	Stock	issued	on	October	16,	2006,	(g)	

the	6.42%	Non-Cumulative	Preferred	Stock	issued	on	July	17,	2006,	(h)	the	Variable	Rate,	NonCumulative	Preferred	Stock	issued	on	July	17,	2006,	(i)	the	5.81%	Non-Cumulative	Preferred	Stock	issued	

on	January	29,	2002,	(j)	the	5.7%	Non-Cumulative	Preferred	Stock	issued	on	October	30,	2001,	(k)	the	6%	

Non-Cumulative	Preferred	Stock	issued	on	May	30,	2001,	(l)	the	Variable	Rate,	Non-Cumulative	

Preferred	Stock	issued	on	May	30,	2001	and	June	1,	2001,	(m)	the	5.81%	Non-Cumulative	Preferred	

Stock	issued	on	March	23,	2001,	(n)	the	Variable	Rate,	Non-Cumulative	Preferred	Stock	issued	on	March	

23,	2001,	(o)	the	Variable	Rate,	Non-Cumulative	Preferred	Stock	issued	on	January	26,	2001,	(p)	the	

Variable	Rate,	Non-Cumulative	Preferred	Stock	issued	on	November	5,	1999,	(q)	the	5.79%	NonCumulative	Preferred	Stock	issued	on	July	21,	1999,	(r)	the	5.1%	Non-Cumulative	Preferred	Stock	issued	

on	March	19,	1999,	(s)	the	5.3%	Non-Cumulative	Preferred	Stock	issued	on	October	28,	1998,	(t)	the	

5.1%		Non-Cumulative	Preferred	Stock	issued	on	September	23,	1998,	(u)	the	Variable	Rate,	NonCumulative	Preferred	Stock	issued	on	September	23,	1998	and	September	29,	1998,	

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(v)	the	5%	Non-Cumulative	Preferred	Stock	issued	on	March	23,	1998,	(w)	the	5.81%	Non-Cumulative	

Preferred	Stock	issued	on	October	27,	1997,	(x)	the	Variable	Rate,	Non-Cumulative	Preferred	Stock	

issued	on	April	26,	1996,	(y)	any	other	capital	stock	of	the	Company	outstanding	on	the	date	of	the	initial	

issuance	of	the	Senior	Preferred	Stock,	and	(z)	any	capital	stock	of	the	Company	that	may	be	issued	after	

the	date	of	initial	issuance	of	the	Senior	Preferred	Stock.	

2.				Dividends	

(a)		For	each	Dividend	Period	from	the	date	of	the	initial	issuance	of	the	Senior	Preferred	Stock	

through	and	including	December	31,	2012,	holders	of	outstanding	shares	of	Senior	Preferred	Stock	shall	

be	entitled	to	receive,	ratably,	when,	as	and	if	declared	by	the	Board	of	Directors,	in	its	sole	discretion,	

out	of	funds	legally	available	therefor,	cumulative	cash	dividends	at	the	annual	rate	per	share	equal	to	

the	then-current	Dividend	Rate	on	the	then-current	Liquidation	Preference.	For	each	Dividend	Period	

from	January	1,	2013	through	and	including	the	Capital	Reserve	End	Date,	holders	of	outstanding	shares	

of	Senior	Preferred	Stock	shall	be	entitled	to	receive,	ratably,	when,	as	and	if	declared	by	the	Board	of	

Directors,	in	its	sole	discretion,	out	of	funds	legally	available	therefor,	cumulative	cash	dividends	in	an	

amount	equal	to	the	then-current	Dividend	Amount.	For	each	Dividend	Period	after	the	Capital	Reserve	

End	Date,	holders	of	outstanding	shares	of	Senior	Preferred	Stock	shall	be	entitled	to	receive,	ratably,	

when,	as	and	if	declared	by	the	Board	of	Directors,	in	its	sole	discretion,	out	of	funds	legally	available	

therefor,	cumulative	cash	dividends	in	an	amount	equal	to	the	then-current	Dividend	Amount.	Dividends	

on	the	Senior	Preferred	Stock	shall	accrue	from	but	not	including	the	date	of	the	initial	issuance	of	the	

Senior	Preferred	Stock	and	will	be	payable	in	arrears	when,	as	and	if	declared	by	the	Board	of	Directors	

quarterly	on	March	31,	June	30,	September	30	and	December	31	of	each	year	(each,	a	“Dividend	

Payment	Date”),	commencing	on	December	31,	2008.	If	a	Dividend	Payment	Date	is	not	a	“Business	

Day,”	the	related	dividend	will	be	paid	not	later	than	the	next	Business	Day	with	the	same	force	and	

effect	as	though	paid	on	the	Dividend	Payment	Date,	without	any	increase	to	account	for	the	period	

from	such	Dividend	Payment	Date	through	the	date	of	actual	payment.	“Business	Day”	means	a	day	

other	than	(i)	a	Saturday	or	Sunday,	(ii)	a	day	on	which	New	York	City	banks	are	closed,	or	(iii)	a	day	on	

which	the	offices	of	the	Company	are	closed.	

If	declared,	the	initial	dividend	will	be	for	the	period	from	but	not	including	the	date	of	the	initial	

issuance	of	the	Senior	Preferred	Stock	through	and	including	December	31,	2008.	Except	for	the	initial	

Dividend	Payment	Date,	the	“Dividend	Period”	relating	to	a	Dividend	Payment	Date	will	be	the	period	

from	but	not	including	the	preceding	Dividend	Payment	Date	through	and	including	the	related	Dividend	

Payment	Date.	For	each	Dividend	Period	from	the	date	of	the	initial	issuance	of	the	Senior	Preferred	

Stock	(other	than	a	Dividend	Period	from	January	1,	2013	through	and	including	the	Capital	Reserve	End	

Date),	the	amount	of	dividends	payable	on	the	initial	Dividend	Payment	Date	or	for	any	Dividend	Period	

(other	than	a	Dividend	Period	from	January	1,	2013	through	and	including	the	Capital	Reserve	End	Date),	

that	is	not	a	full	calendar	quarter	shall	be	computed	on	the	basis	of	30-day	months,	a	360-day	year	and	

the	actual	number	of	days	elapsed	in	any	period	of	less	than	one	month.	For	the	avoidance	of	doubt,	for	

each	Dividend	Period	from	the	date	of	the	initial	issuance	of	the	Senior	Preferred	Stock	(other	than	a	

Dividend	Period	from	January	1,	2013	through	and	including	the	Capital	Reserve	End	Date),	in	the	event	

that	the	Liquidation	Preference	changes	in	the	middle	of	a	Dividend	Period,	the	amount	of	dividends	

payable	on	the	Dividend	Payment	Date	at	the	end	of	such	Dividend	Period	shall	take	into	account	such	

change	in	Liquidation	Preference	and	shall	be	computed	at	the	Dividend	Rate	on	each	Liquidation	

Preference	based	on	the	portion	of	the	Dividend	Period	that	each	Liquidation	Preference	was	in	effect.	

(b)		To	the	extent	not	paid	pursuant	to	Section	2(a)	above,	dividends	on	the	Senior	Preferred	Stock	

shall	accrue	and	shall	be	added	to	the	Liquidation	Preference	pursuant	to	Section	8,	whether	or	not	

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there	are	funds	legally	available	for	the	payment	of	such	dividends	and	whether	or	not	dividends	are	

declared.	

(c)		For	each	Dividend	Period	from	the	date	of	the	initial	issuance	of	the	Senior	Preferred	Stock	

through	and	including	December	31,	2012,	“Dividend	Rate”	means	10.0	percent;	provided,	however,	

that	if	at	any	time	the	Company	shall	have	for	any	reason	failed	to	pay	dividends	in	cash	in	a	timely	

manner	as	required	by	this	Certificate,	then	immediately	following	such	failure	and	for	all	Dividend	

Periods	thereafter	until	the	Dividend	Period	following	the	date	on	which	the	Company	shall	have	paid	in	

cash	full	cumulative	dividends	(including	any	unpaid	dividends	added	to	the	Liquidation	Preference	

pursuant	to	Section	8),	the	“Dividend	Rate”	shall	mean	12.0	percent.	

For	each	Dividend	Period	from	January	1,	2013,	through	and	including	the	Capital	Reserve	End	

Date,	the	“Dividend	Amount”	for	a	Dividend	Period	means	the	amount,	if	any,	by	which	the	Net	Worth	

Amount	at	the	end	of	the	immediately	preceding	fiscal	quarter,	less	the	Applicable	Capital	Reserve	

Amount	for	such	Dividend	Period,	exceeds	zero.	In	each	case,	“Net	Worth	Amount”	means	(i)	the	total	

assets	of	the	Company	(such	assets	excluding	the	Commitment	and	any	unfunded	amounts	thereof)	as	

reflected	on	the	balance	sheet	of	the	Company	as	of	the	applicable	date	set	forth	in	this	Certificate,	

prepared	in	accordance	with	GAAP,	less	(ii)	the	total	liabilities	of	the	Company	(such	liabilities	excluding	

any	obligation	in	respect	of	any	capital	stock	of	the	Company,	including	this	Certificate),	as	reflected	on	

the	balance	sheet	of	the	Company	as	of	the	applicable	date	set	forth	in	this	Certificate,	prepared	in	

accordance	with	GAAP.	“Applicable	Capital	Reserve	Amount”	means,	as	of	any	date	of	determination,	

(A)	for	each	Dividend	Period	from	January	1,	2013,	through	and	including	December	31,	2013,	

$3,000,000,000;		(B)	for	each	Dividend	Period	occurring	within	each	12-month	period	thereafter,	

through	and	including	December	31,	2017,	$3,000,000,000	reduced	by	$600,000,000	for	each	such	12-

month	period,	so	that	for	each	Dividend	Period	from	January	1,	2017,	through	and	including	December	

31,	2017,	the	Applicable	Capital	Reserve	Amount	shall	be	$600,000,000;	(C)	for	each	Dividend	Period	

from	January	1,	2018,	through	and	including	June	30,	2019,	$3,000,000,000;	(D)	for	each	Dividend	Period	

from	July	1,	2019,	through	and	including	September	30,	2020,	$20,000,000,000;	and	(E)	for	each	

Dividend	Period	from	October	1,	2020,	through	and	including	the	Capital	Reserve	End	Date,	the	amount	

of	adjusted	total	capital	necessary	to	meet	the	capital	requirements	and	buffers	set	forth	in	the	

Enterprise	Regulatory	Capital	Framework	(as	defined	in	the	Preferred	Stock	Purchase	Agreement,	as	

amended).	Notwithstanding	the	foregoing,	for	each	Dividend	Period	from	January	1,	2018,	and	

thereafter,	following	any	Dividend	Payment	Date	with	respect	to	which	the	Board	of	Directors	does	not	

declare	and	pay	a	dividend	or	declares	and	pays	a	dividend	in	an	amount	less	than	the	Dividend	Amount,	

the	Applicable	Capital	Reserve	Amount	shall	thereafter	be	zero.	For	the	avoidance	of	doubt,	if	the	

calculation	of	the	Dividend	Amount	for	a	Dividend	Period	does	not	exceed	zero,	then	no	Dividend	

Amount	shall	accrue	or	be	payable	for	such	Dividend	Period	and	no	reduction	in	the	Applicable	Capital	

Reserve	Amount	shall	be	made.

For	each	Dividend	Period	after	the	Capital	Reserve	End	Date	(as	defined	in	the	Preferred	Stock	

Purchase	Agreement,	as	amended),	“Dividend	Amount”	means	an	amount	equal	to	the	lesser	of	10.0	

percent	per	annum	on	the	then-current	Liquidation	Preference	and	a	quarterly	amount	equal	to	the	

increase	in	the	Net	Worth	Amount,	if	any,	during	the	immediately	prior	fiscal	quarter;	provided,	

however,	that	if	at	any	time	the	Company	shall	have	for	any	reason	failed	to	pay	dividends	in	cash	in	a	

timely	manner	as	required	by	this	Certificate,	then	immediately	following	such	failure	and	for	all	

Dividend	Periods	thereafter	until	the	Dividend	Period	following	the	date	on	which	the	Company	shall	

have	paid	in	cash	full	cumulative	dividends	(including	any	unpaid	dividends	added	to	the	Liquidation	

Preference	pursuant	to	Section	8),	the	“Dividend	Amount”	shall	mean	an	amount	equal	to	12.0	percent	

per	annum	on	the	then-current	Liquidation	Preference.

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(d)		Each	such	dividend	shall	be	paid	to	the	holders	of	record	of	outstanding	shares	of	the	Senior	

Preferred	Stock	as	they	appear	in	the	books	and	records	of	the	Company	on	such	record	date	as	shall	be	

fixed	in	advance	by	the	Board	of	Directors,	not	to	be	earlier	than	45	days	nor	later	than	10	days	

preceding	the	applicable	Dividend	Payment	Date.	The	Company	may	not,	at	any	time,	declare	or	pay	

dividends	on,	make	distributions	with	respect	to,	or	redeem,	purchase	or	acquire,	or	make	a	liquidation	

payment	with	respect	to,	any	common	stock	or	other	securities	ranking	junior	to	the	Senior	Preferred	

Stock	unless	(i)	full	cumulative	dividends	on	the	outstanding	Senior	Preferred	Stock	in	respect	of	the	

then-current	Dividend	Period	and	all	past	Dividend	Periods	(including	any	unpaid	dividends	added	to	the	

Liquidation	Preference	pursuant	to	Section	8)	have	been	declared	and	paid	in	cash	(including	through	

any	pay	down	of	Liquidation	Preference	pursuant	to	Section	3)	and	(ii)	all	amounts	required	to	be	paid	

pursuant	to	Section	4	(without	giving	effect	to	any	prohibition	on	such	payment	under	any	applicable	

law)	have	been	paid	in	cash.	

(e)		Notwithstanding	any	other	provision	of	this	Certificate,	the	Board	of	Directors,	in	its	discretion,	

may	choose	to	pay	dividends	on	the	Senior	Preferred	Stock	without	the	payment	of	any	dividends	on	the	

common	stock,	preferred	stock	or	any	other	class	or	series	of	stock	from	time	to	time	outstanding	

ranking	junior	to	the	Senior	Preferred	Stock	with	respect	to	the	payment	of	dividends.	

(f)		If	and	whenever	dividends,	having	been	declared,	shall	not	have	been	paid	in	full,	as	aforesaid,	

on	shares	of	the	Senior	Preferred	Stock,	all	such	dividends	that	have	been	declared	on	shares	of	the	

Senior	Preferred	Stock	shall	be	paid	to	the	holders	pro	rata	based	on	the	aggregate	Liquidation	

Preference	of	the	shares	of	Senior	Preferred	Stock	held	by	each	holder,	and	any	amounts	due	but	not	

paid	in	cash	shall	be	added	to	the	Liquidation	Preference	pursuant	to	Section	8.	

3.				Optional	Pay	Down	of	Liquidation	Preference	

(a)		Following	termination	of	the	Commitment	(as	defined	in	the	Preferred	Stock	Purchase	

Agreement	referred	to	in	Section	8	below),	and	subject	to	any	limitations	which	may	be	imposed	by	law	

and	the	provisions	below,	the	Company	may	pay	down	the	Liquidation	Preference	of	all	outstanding	

shares	of	the	Senior	Preferred	Stock	pro	rata,	at	any	time,	in	whole	or	in	part,	out	of	funds	legally	

available	therefor,	with	such	payment	first	being	used	to	reduce	any	accrued	and	unpaid	dividends	

previously	added	to	the	Liquidation	Preference	pursuant	to	Section	8	below	and,	to	the	extent	all	such	

accrued	and	unpaid	dividends	have	been	paid,	next	being	used	to	reduce	any	Periodic	Commitment	Fees	

(as	defined	in	the	Preferred	Stock	Purchase	Agreement	referred	to	in	Section	8	below)	previously	added	

to	the	Liquidation	Preference	pursuant	to	Section	8	below.	Prior	to	termination	of	the	Commitment,	and	

subject	to	any	limitations	which	may	be	imposed	by	law	and	the	provisions	below,	the	Company	may	

pay	down	the	Liquidation	Preference	of	all	outstanding	shares	of	the	Senior	Preferred	Stock	pro	rata,	at	

any	time,	out	of	funds	legally	available	therefor,	but	only	to	the	extent	of	(i)	accrued	and	unpaid	

dividends	previously	added	to	the	Liquidation	Preference	pursuant	to	Section	8	below	and	not	repaid	by	

any	prior	pay	down	of	Liquidation	Preference	and	(ii)	Periodic	Commitment	Fees	previously	added	to	the	

Liquidation	Preference	pursuant	to	Section	8	below	and	not	repaid	by	any	prior	pay	down	of	Liquidation	

Preference.	Any	pay	down	of	Liquidation	Preference	permitted	by	this	Section	3	shall	be	paid	by	making	

a	payment	in	cash	to	the	holders	of	record	of	outstanding	shares	of	the	Senior	Preferred	Stock	as	they	

appear	in	the	books	and	records	of	the	Company	on	such	record	date	as	shall	be	fixed	in	advance	by	the	

Board	of	Directors,	not	to	be	earlier	than	45	days	nor	later	than	10	days	preceding	the	date	fixed	for	the	

payment.	

(b)		In	the	event	the	Company	shall	pay	down	of	the	Liquidation	Preference	of	the	Senior	Preferred	

Stock	as	aforesaid,	notice	of	such	pay	down	shall	be	given	by	the	Company	by	first	class	mail,	postage	

prepaid,	mailed	neither	less	than	10	nor	more	than	45	days	preceding	the	date	fixed	for	the	payment,	to	

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each	holder	of	record	of	the	shares	of	the	Senior	Preferred	Stock,	at	such	holder’s	address	as	the	same	

appears	in	the	books	and	records	of	the	Company.	Each	such	notice	shall	state	the	amount	by	which	the	

Liquidation	Preference	of	each	share	shall	be	reduced	and	the	pay	down	date.		

(c)		If	after	termination	of	the	Commitment	the	Company	pays	down	the	Liquidation	Preference	of	

each	outstanding	share	of	Senior	Preferred	Stock	in	full,	such	shares	shall	be	deemed	to	have	been	

redeemed	as	of	the	date	of	such	payment,	and	the	dividend	that	would	otherwise	be	payable	for	the	

Dividend	Period	ending	on	the	pay	down	date	will	be	paid	on	such	date.	Following	such	deemed	

redemption,	the	shares	of	the	Senior	Preferred	Stock	shall	no	longer	be	deemed	to	be	outstanding,	and	

all	rights	of	the	holders	thereof	as	holders	of	the	Senior	Preferred	Stock	shall	cease,	with	respect	to	

shares	so	redeemed,	other	than	the	right	to	receive	the	pay	down	amount	(which	shall	include	the	final	

dividend	for	such	shares).	Any	shares	of	the	Senior	Preferred	Stock	which	shall	have	been	so	redeemed,	

after	such	redemption,	shall	no	longer	have	the	status	of	authorized,	issued	or	outstanding	shares.	

4.				Mandatory	Pay	Down	of	Liquidation	Preference	Upon	Issuance	of	Capital	Stock	

(a)		If	the	Company	shall	issue	any	shares	of	capital	stock	(including	without	limitation	common	

stock	or	any	series	of	preferred	stock)	other	than	issuances	of	common	stock	with	aggregate	gross	

proceeds	of	up	to	$70	billion	in	exchange	for	cash	at	any	time	while	the	Senior	Preferred	Stock	is	

outstanding,	then	the	Company	shall,	within	10	Business	Days,	use	the	proceeds	of	such	issuance	net	of	

the	direct	costs	relating	to	the	issuance	of	such	securities	(including,	without	limitation,	legal,	accounting	

and	investment	banking	fees)	to	pay	down	the	Liquidation	Preference	of	all	outstanding	shares	of	Senior	

Preferred	Stock	pro	rata,	out	of	funds	legally	available	therefor,	by	making	a	payment	in	cash	to	the	

holders	of	record	of	outstanding	shares	of	the	Senior	Preferred	Stock	as	they	appear	in	the	books	and	

records	of	the	Company	on	such	record	date	as	shall	be	fixed	in	advance	by	the	Board	of	Directors,	not	

to	be	earlier	than	45	days	nor	later	than	10	days	preceding	the	date	fixed	for	the	payment,	with	such	

payment	first	being	used	to	reduce	any	accrued	and	unpaid	dividends	previously	added	to	the	

Liquidation	Preference	pursuant	to	Section	8	below	and,	to	the	extent	all	such	accrued	and	unpaid	

dividends	have	been	paid,	next	being	used	to	reduce	any	Periodic	Commitment	Fees	(as	defined	in	the	

Preferred	Stock	Purchase	Agreement	referred	to	in	Section	8	below)	previously	added	to	the	Liquidation	

Preference	pursuant	to	Section	8	below;	provided	that,	prior	to	the	termination	of	the	Commitment	(as	

defined	in	the	Preferred	Stock	Purchase	Agreement	referred	to	in	Section	8	below),	the	Liquidation	

Preference	of	each	share	of	Senior	Preferred	Stock	shall	not	be	paid	down	below	$1,000	per	share.	

(b)	If	the	Company	shall	not	have	sufficient	assets	legally	available	for	the	pay	down	of	the	

Liquidation	Preference	of	the	shares	of	Senior	Preferred	Stock	required	under	Section	4(a),	the	Company	

shall	pay	down	the	Liquidation	Preference	per	share	to	the	extent	permitted	by	law,	and	shall	pay	down	

any	Liquidation	Preference	not	so	paid	down	because	of	the	unavailability	of	legally	available	assets	or	

other	prohibition	as	soon	as	practicable	to	the	extent	it	is	thereafter	able	to	make	such	pay	down	legally.	

The	inability	of	the	Company	to	make	such	payment	for	any	reason	shall	not	relieve	the	Company	from	

its	obligation	to	effect	any	required	pay	down	of	the	Liquidation	Preference	when,	as	and	if	permitted	by	

law.	

(c)		If	after	the	termination	of	the	Commitment	the	Company	pays	down	the	Liquidation	

Preference	of	each	outstanding	share	of	Senior	Preferred	Stock	in	full,	such	shares	shall	be	deemed	to	

have	been	redeemed	as	of	the	date	of	such	payment,	and	the	dividend	that	would	otherwise	be	payable	

for	the	Dividend	Period	ending	on	the	pay	down	date	will	be	paid	on	such	date.	Following	such	deemed	

redemption,	the	shares	of	the	Senior	Preferred	Stock	shall	no	longer	be	deemed	to	be	outstanding,	and	

all	rights	of	the	holders	thereof	as	holders	of	the	Senior	Preferred	Stock	shall	cease,	with	respect	to	

shares	so	redeemed,	other	than	the	right	to	receive	the	pay	down	amount	(which	shall	include	the	final	

dividend	for	such	redeemed	shares).	Any	shares	of	the	Senior	Preferred	Stock	which	shall	have	been	so	

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redeemed,	after	such	redemption,	shall	no	longer	have	the	status	of	authorized,	issued	or	outstanding	

shares.	

5.				No	Voting	Rights

Except	as	set	forth	in	this	Certificate	or	otherwise	required	by	law,	the	shares	of	the	Senior	

Preferred	Stock	shall	not	have	any	voting	powers,	either	general	or	special.	

6.				No	Conversion	or	Exchange	Rights

The	holders	of	shares	of	the	Senior	Preferred	Stock	shall	not	have	any	right	to	convert	such	shares	

into	or	exchange	such	shares	for	any	other	class	or	series	of	stock	or	obligations	of	the	Company.	

7.				No	Preemptive	Rights	

No	holder	of	the	Senior	Preferred	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	

Company	which	at	any	time	may	be	sold	or	offered	for	sale	by	the	Company.	

8.				Liquidation	Rights	and	Preference

(a)		Except	as	otherwise	set	forth	herein,	upon	the	voluntary	or	involuntary	dissolution,	liquidation	

or	winding	up	of	the	Company,	the	holders	of	the	outstanding	shares	of	the	Senior	Preferred	Stock	shall	

be	entitled	to	receive	out	of	the	assets	of	the	Company	available	for	distribution	to	stockholders,	before	

any	payment	or	distribution	shall	be	made	on	the	common	stock	or	any	other	class	or	series	of	stock	of	

the	Company	ranking	junior	to	the	Senior	Preferred	Stock	upon	liquidation,	the	amount	per	share	equal	

to	the	Liquidation	Preference	plus	an	amount,	determined	in	accordance	with	Section	2(a)	above,	equal	

to	the	dividend	otherwise	payable	for	the	then-current	Dividend	Period	accrued	through	and	including	

the	date	of	payment	in	respect	of	such	dissolution,	liquidation	or	winding	up;	provided,	however,	that	if	

the	assets	of	the	Company	available	for	distribution	to	stockholders	shall	be	insufficient	for	the	payment	

of	the	amount	which	the	holders	of	the	outstanding	shares	of	the	Senior	Preferred	Stock	shall	be	

entitled	to	receive	upon	such	dissolution,	liquidation	or	winding	up	of	the	Company	as	aforesaid,	then,	

all	of	the	assets	of	the	Company	available	for	distribution	to	stockholders	shall	be	distributed	to	the	

holders	of	outstanding	shares	of	the	Senior	Preferred	Stock	pro	rata	based	on	the	aggregate	Liquidation	

Preference	of	the	shares	of	Senior	Preferred	Stock	held	by	each	holder.	

(b)		“Liquidation	Preference”	shall	initially	mean	$1,000	per	share	and	shall	be:	

(i)		increased	each	time	a	Deficiency	Amount	(as	defined	in	the	Preferred	Stock	Purchase	

Agreement)	is	paid	to	the	Company	by	an	amount	per	share	equal	to	the	aggregate	amount	so	

paid	to	the	Company	divided	by	the	number	of	shares	of	Senior	Preferred	Stock	outstanding	at	the	

time	of	such	payment;	

(ii)		increased	each	time	the	Company	does	not	pay	the	full	Periodic	Commitment	Fee	(as	

defined	in	the	Preferred	Stock	Purchase	Agreement)	in	cash	by	an	amount	per	share	equal	to	the	

amount	of	the	Periodic	Commitment	Fee	that	is	not	paid	in	cash	divided	by	the	number	of	shares	

of	Senior	Preferred	Stock	outstanding	at	the	time	such	payment	is	due;	

(iii)		increased	on	the	Dividend	Payment	Date	if	the	Company	fails	to	pay	in	full	the	dividend	

payable	for	the	Dividend	Period	ending	on	such	date	by	an	amount	per	share	equal	to	the	

aggregate	amount	of	unpaid	dividends	divided	by	the	number	of	shares	of	Senior	Preferred	Stock	

outstanding	on	such	date;	and	

(iv)		decreased	each	time	the	Company	pays	down	the	Liquidation	Preference	pursuant	to	

Section	3	or	Section	4	of	this	Certificate	by	an	amount	per	share	equal	to	the	aggregate	amount	of	

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the	pay	down	divided	by	the	number	of	shares	of	Senior	Preferred	Stock	outstanding	at	the	time	

of	such	pay	down.	

(c)		“Preferred	Stock	Purchase	Agreement”	means	the	Preferred	Stock	Purchase	Agreement,	dated	

September	7,	2008,	between	the	Company	and	the	United	States	Department	of	the	Treasury.	

(d)		Neither	the	sale	of	all	or	substantially	all	of	the	property	or	business	of	the	Company,	nor	the	

merger,	consolidation	or	combination	of	the	Company	into	or	with	any	other	corporation	or	entity,	shall	

be	deemed	to	be	a	dissolution,	liquidation	or	winding	up	for	the	purpose	of	this	Section	8.	

9.				Additional	Classes	or	Series	of	Stock

The	Board	of	Directors	shall	have	the	right	at	any	time	in	the	future	to	authorize,	create	and	issue,	

by	resolution	or	resolutions,	one	or	more	additional	classes	or	series	of	stock	of	the	Company,	and	to	

determine	and	fix	the	distinguishing	characteristics	and	the	relative	rights,	preferences,	privileges	and	

other	terms	of	the	shares	thereof;	provided	that,	any	such	class	or	series	of	stock	may	not	rank	prior	to	

or	on	parity	with	the	Senior	Preferred	Stock	without	the	prior	written	consent	of	the	holders	of	at	least	

two-thirds	of	all	the	shares	of	Senior	Preferred	Stock	at	the	time	outstanding.	

10.				Miscellaneous	

(a)		The	Company	and	any	agent	of	the	Company	may	deem	and	treat	the	holder	of	a	share	or	

shares	of	Senior	Preferred	Stock,	as	shown	in	the	Company’s	books	and	records,	as	the	absolute	owner	

of	such	share	or	shares	of	Senior	Preferred	Stock	for	the	purpose	of	receiving	payment	of	dividends	in	

respect	of	such	share	or	shares	of	Senior	Preferred	Stock	and	for	all	other	purposes	whatsoever,	and	

neither	the	Company	nor	any	agent	of	the	Company	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	Company	on	or	with	

respect	to	any	such	share	or	shares	of	Senior	Preferred	Stock.	

(b)		The	shares	of	the	Senior	Preferred	Stock,	when	duly	issued,	shall	be	fully	paid	and	nonassessable.	

(c)		The	Senior	Preferred	Stock	may	be	issued,	and	shall	be	transferable	on	the	books	of	the	

Company,	only	in	whole	shares.	

(d)		For	purposes	of	this	Certificate,	the	term	“the	Company”	means	the	Federal	Home	Loan	

Mortgage	Corporation	and	any	successor	thereto	by	operation	of	law	or	by	reason	of	a	merger,	

consolidation,	combination	or	similar	transaction.	

(e)		This	Certificate	and	the	respective	rights	and	obligations	of	the	Company	and	the	holders	of	

the	Senior	Preferred	Stock	with	respect	to	such	Senior	Preferred	Stock	shall	be	construed	in	accordance	

with	and	governed	by	the	laws	of	the	United	States,	provided	that	the	law	of	the	Commonwealth	of	

Virginia	shall	serve	as	the	federal	rule	of	decision	in	all	instances	except	where	such	law	is	inconsistent	

with	the	Company’s	enabling	legislation,	its	public	purposes	or	any	provision	of	this	Certificate.	

(f)		Any	notice,	demand	or	other	communication	which	by	any	provision	of	this	Certificate	is	

required	or	permitted	to	be	given	or	served	to	or	upon	the	Company	shall	be	given	or	served	in	writing	

addressed	(unless	and	until	another	address	shall	be	published	by	the	Company)	to	Freddie	Mac,	8200	

Jones	Branch	Drive,	McLean,	Virginia	22102,	Attn:	Executive	Vice	President	and	General	Counsel.	Such	

notice,	demand	or	other	communication	to	or	upon	the	Company	shall	be	deemed	to	have	been	

sufficiently	given	or	made	only	upon	actual	receipt	of	a	writing	by	the	Company.	Any	notice,	demand	or	

other	communication	which	by	any	provision	of	this	Certificate	is	required	or	permitted	to	be	given	or	

served	by	the	Company	hereunder	may	be	given	or	served	by	being	deposited	first	class,	postage	

7
prepaid,	in	the	United	States	mail	addressed	(i)	to	the	holder	as	such	holder’s	name	and	address	may	

appear	at	such	time	in	the	books	and	records	of	the	Company	or	(ii)	if	to	a	person	or	entity	other	than	a	

holder	of	record	of	the	Senior	Preferred	Stock,	to	such	person	or	entity	at	such	address	as	reasonably	

appears	to	the	Company	to	be	appropriate	at	such	time.	Such	notice,	demand	or	other	communication	

shall	be	deemed	to	have	been	sufficiently	given	or	made,	for	all	purposes,	upon	mailing.	

(g)		The	Company,	by	or	under	the	authority	of	the	Board	of	Directors,	may	amend,	alter,	

supplement	or	repeal	any	provision	of	this	Certificate	pursuant	to	the	following	terms	and	conditions:	

(i)		Without	the	consent	of	the	holders	of	the	Senior	Preferred	Stock,	the	Company	may	

amend,	alter,	supplement	or	repeal	any	provision	of	this	Certificate	to	cure	any	ambiguity,	to	

correct	or	supplement	any	provision	herein	which	may	be	defective	or	inconsistent	with	any	other	

provision	herein,	or	to	make	any	other	provisions	with	respect	to	matters	or	questions	arising	

under	this	Certificate,	provided	that	such	action	shall	not	adversely	affect	the	interests	of	the	

holders	of	the	Senior	Preferred	Stock.	

(ii)		The	consent	of	the	holders	of	at	least	two-thirds	of	all	of	the	shares	of	the	Senior	Preferred	

Stock	at	the	time	outstanding,	given	in	person	or	by	proxy,	either	in	writing	or	by	a	vote	at	a	

meeting	called	for	the	purpose	at	which	the	holders	of	shares	of	the	Senior	Preferred	Stock	shall	

vote	together	as	a	class,	shall	be	necessary	for	authorizing,	effecting	or	validating	the	amendment,	

alteration,	supplementation	or	repeal	(whether	by	merger,	consolidation	or	otherwise)	of	the	

provisions	of	this	Certificate	other	than	as	set	forth	in	subparagraph	(i)	of	this	paragraph	(g).	The	

creation	and	issuance	of	any	other	class	or	series	of	stock,	or	the	issuance	of	additional	shares	of	

any	existing	class	or	series	of	stock,	of	the	Company	ranking	junior	to	the	Senior	Preferred	Stock	

shall	not	be	deemed	to	constitute	such	an	amendment,	alteration,	supplementation	or	repeal.	

(iii)		Holders	of	the	Senior	Preferred	Stock	shall	be	entitled	to	one	vote	per	share	on	matters	

on	which	their	consent	is	required	pursuant	to	subparagraph	(ii)	of	this	paragraph	(g).	In	

connection	with	any	meeting	of	such	holders,	the	Board	of	Directors	shall	fix	a	record	date,	neither	

earlier	than	60	days	nor	later	than	10	days	prior	to	the	date	of	such	meeting,	and	holders	of	record	

of	shares	of	the	Senior	Preferred	Stock	on	such	record	date	shall	be	entitled	to	notice	of	and	to	

vote	at	any	such	meeting	and	any	adjournment.	The	Board	of	Directors,	or	such	person	or	persons	

as	it	may	designate,	may	establish	reasonable	rules	and	procedures	as	to	the	solicitation	of	the	

consent	of	holders	of	the	Senior	Preferred	Stock	at	any	such	meeting	or	otherwise,	which	rules	

and	procedures	shall	conform	to	the	requirements	of	any	national	securities	exchange	on	which	

the	Senior	Preferred	Stock	may	be	listed	at	such	time.	

(h)		RECEIPT	AND	ACCEPTANCE	OF	A	SHARE	OR	SHARES	OF	THE	SENIOR	PREFERRED	STOCK	BY	

OR	ON	BEHALF	OF	A	HOLDER	SHALL	CONSTITUTE	THE	UNCONDITIONAL	ACCEPTANCE	BY	THE	HOLDER	

(AND	ALL	OTHERS	HAVING	BENEFICIAL	OWNERSHIP	OF	SUCH	SHARE	OR	SHARES)	OF	ALL	OF	THE	

TERMS	AND	PROVISIONS	OF	THIS	CERTIFICATE.	NO	SIGNATURE	OR	OTHER	FURTHER	MANIFESTATION	

OF	ASSENT	TO	THE	TERMS	AND	PROVISIONS	OF	THIS	CERTIFICATE	SHALL	BE	NECESSARY	FOR	ITS	

OPERATION	OR	EFFECT	AS	BETWEEN	THE	COMPANY	AND	THE	HOLDER	(AND	ALL	SUCH	OTHERS).	

																																																						

8
IN	WITNESS	WHEREOF,	I	have	hereunto	set	my	hand	and	the	seal	of	the	Company	this	13	day	of	

April,	2021.		

FEDERAL	HOME	LOAN	MORTGAGE	CORPORATION,

by

The	Federal	Housing	Finance	Agency,	its	

Conservator

By:		/s/	Mark	A.	Calabria

Mark	A.	Calabria	

Director

Signature	Page	to	April	2021	Fourth	Amended	and	Restated	Certificate

9
Exhibit 4.2

FEDERAL HOME LOAN MORTGAGE CORPORATION 

GLOBAL DEBT FACILITY AGREEMENT 

AGREEMENT, dated as of February 11, 2021, among the Federal Home Loan Mortgage Corporation (“Freddie 

Mac”) and Holders of Debt Securities (each as hereinafter defined). 

Whereas: 

(a) Freddie Mac is a corporation duly organized and existing under and by virtue of the laws of the United States 

(Title III of the Emergency Home Finance Act of 1970, as amended (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; 

(b) Pursuant to Section 306(a) of the Freddie Mac Act, Freddie Mac is authorized, upon such terms and conditions 

as it may prescribe, to borrow, to pay interest or other return, and to issue notes, bonds or other obligations or securities; 

and 

(c) To provide funds to permit Freddie Mac to engage in activities consistent with its statutory purposes, Freddie 

Mac has established a Global Debt Facility (the “Facility”) and authorized the issuance, from time to time, pursuant to this 

Agreement, of unsecured general obligations of Freddie Mac or, if so provided in the applicable Supplemental Agreement 

(as hereinafter defined), secured obligations of Freddie Mac (“Debt Securities”). 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is hereby agreed 

that the following terms and conditions of this Agreement (including, as to each issue of the Debt Securities, the applicable 

Supplemental Agreement) shall govern the Debt Securities and the rights and obligations of Freddie Mac and Holders with 

respect to the Debt Securities. 

ARTICLE I 

Definitions 

Whenever used in this Agreement, the following words and phrases shall have the following meanings, unless the 

context otherwise requires. 

Additional Debt Securities: Debt Securities issued by Freddie Mac with the same terms (other than Issue Date, 

interest commencement date and issue price) and conditions as Debt Securities for which settlement has previously 

occurred so as to form a single series of Debt Securities as specified in the applicable Supplemental Agreement. 

Agreement: This Global Debt Facility Agreement dated as of February 11, 2021, as it may be amended or 

supplemented from time to time, and successors thereto pursuant to which Freddie Mac issues the Debt Securities. 

Amortizing Debt Securities: Debt Securities on which Freddie Mac makes periodic payments of principal during 

the terms of such Debt Securities as described in the related Supplemental Agreement. 

Beneficial Owner: The entity or individual that beneficially owns a Debt Security. 

Bonds: Callable or non-callable, puttable or non-puttable Debt Securities with maturities of more than ten years. 

Book-Entry Rules: FHFA regulations, 12 C.F.R. Part 1249, applicable to the Fed Book-Entry Debt Securities, and 

such procedures as to which Freddie Mac and the FRBNY may agree. 

 
Business Day: (i) With respect to Fed Book-Entry Debt Securities, any day other than (a) a Saturday, (b) a 

Sunday, (c) a day on which the FRBNY is closed, (d) as to any Holder of a Fed Book-Entry Debt Security, a day on which 

the Federal Reserve Bank that maintains the Holder’s account is closed, or (e) a day on which Freddie Mac’s offices are 

closed; and (ii) with respect to Registered Debt Securities, any day other than (a) a Saturday, (b) a Sunday, (c) a day on 

which banking institutions are closed in (i) the City of New York, if the Specified Payment Currency is U.S. dollars or (2) 

the Principal Financial Center of the country of such Specified Payment Currency, if the Specified Payment Currency is 

other than U.S. dollars or euro, (d) if the Specified Payment Currency is euro, a day on which the TARGET2 system is not 

open for settlements, or a day on which payments in euro cannot be settled in the international interbank market as 

determined by the Global Agent, (e) for any required payment, a day on which banking institutions are closed in the place 

of payment, or (f) a day on which Freddie Mac’s offices are closed. 

Calculation Agent: Freddie Mac or a bank or broker-dealer designated by Freddie Mac in the applicable 

Supplemental Agreement as the entity responsible for determining the interest rate on a Variable Rate Debt Security. 

Calculation Date: In each year, each of those days in the calendar year that are specified in the applicable 

Supplemental Agreement as being the scheduled Interest Payment Dates regardless, for this purpose, of whether any such 

date is in fact an Interest Payment Date and, for the avoidance of doubt, a “Calculation Date” may occur prior to the Issue 

Date or after the last Principal Payment Date.

Cap: A maximum interest rate at which interest may accrue on a Variable Rate Debt Security during any Interest 

Reset Period. 

Citibank — London: Citibank, N.A., London office, the Global Agent for Registered Debt Securities. 

Citigroup — Frankfurt: Citigroup Global Markets Europe AG, the Registrar for Registered Debt Securities. 

Clearstream, Luxembourg: Clearstream Banking, société anonyme, which holds securities for its participants and 

facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry 

changes in accounts of its participants. 

CMT Determination Date: The second New York Banking Day preceding the applicable Reset Date. 

CMT Rate: The rate determined by the Calculation Agent in accordance with Section 2.07(i)(M). 

Code: The Internal Revenue Code of 1986, as amended. 

Common Depositary: The common depositary for Euroclear, Clearstream, Luxembourg and/or any other 

applicable clearing system, which will hold Other Registered Debt Securities on behalf of Euroclear, Clearstream, 

Luxembourg and/or any such other applicable clearing system. 

Convertible Debt Securities: An issue of Debt Securities that may be convertible to a new security, which may or 

may not be a debt security of Freddie Mac, as described in the related Supplemental Agreement. 

 

2
CUSIP Number: A unique nine-character designation assigned to each Debt Security by the CUSIP Service 

Bureau and used to identify each issuance of Debt Securities on the records of the Federal Reserve Banks or DTC, as 

applicable. 

Dealers: Firms that engage in the business of dealing or trading in debt securities as agents, brokers or principals. 

Debt Securities: Unsecured subordinated or unsubordinated notes, bonds and other debt securities issued from 

time to time by Freddie Mac under the Facility, or if so provided in the applicable Supplemental Agreement, secured 

obligation issued from time to time by Freddie Mac under the Facility. 

Deleverage Factor: A Multiplier of less than one by which an applicable Index is multiplied. 

Depository: DTC or any successor. 

Deposits: Deposits commencing on the applicable Reset Date. 

Determination Date: The date as of which the rate of interest applicable to an Interest Reset Period is determined. 

Determination Period: The period from, and including, one Calculation Date to, but excluding, the next 

Calculation Date. 

DTC: The Depository Trust Company, a limited-purpose trust company, which holds securities for DTC 

participants and facilitates the clearance and settlement of transactions between DTC participants through electronic bookentry changes in accounts of DTC participants. 

DTC Registered Debt Securities: Registered Debt Securities registered in the name of a nominee of DTC, which 

will clear and settle through the system operated by DTC. 

Euroclear: Euroclear System, a depositary that holds securities for its participants and clears and settles 

transactions between its participants through simultaneous electronic book-entry delivery against payment. 

Event of Default: As defined in Section 7.01(a). 

Extendible Variable Rate Securities: Variable Rate Debt Securities, the maturity of which may be extended at a 

Beneficial Owner’s option effective as of certain specified dates, subject to a final maturity date, and that bear interest at 

variable rates subject to different Spreads for different specified periods. 

Facility: The Global Debt Facility described in the Offering Circular dated February 11, 2021 under which 

Freddie Mac issues the Debt Securities. 

Fed Book-Entry Debt Securities: U.S. dollar denominated Debt Securities issued and maintained in book-entry 

form on the Fed Book-Entry System. 

Fed Book-Entry System: The book-entry system of the Federal Reserve Banks which provides book-entry holding 

and settlement for U.S. dollar denominated securities issued by the U.S. Government, certain of its agencies, 

instrumentalities, government-sponsored enterprises and international organizations of which the United States is a 

member. 

Federal Funds Rate (Daily): The rate determined by the Calculation Agent in accordance with Section 2.07(i)(N). 

 

3
Federal Funds Rate (Daily) Determination Date: The applicable Reset Date; provided, however, that if the Reset 

Date is not a Business Day, then the Federal Funds Rate (Daily) Determination Date means the Business Day immediately 

following the applicable Reset Date. 

Federal Reserve: The Board of Governors of the Federal Reserve System. 

Federal Reserve Bank: Each U.S. Federal Reserve Bank that maintains Debt Securities in book-entry form. 

Federal Reserve Banks: Collectively, the Federal Reserve Banks. 

Fiscal Agency Agreement: The Uniform Fiscal Agency Agreement between Freddie Mac and the FRBNY. 

Fiscal Agent: The FRBNY is fiscal agent for Fed Book-Entry Debt Securities. 

Fixed Principal Repayment Amount: An amount equal to 100% of the principal amount of a Debt Security, 

payable on the applicable Maturity Date or earlier date of redemption or repayment or a specified amount above or below 

such principal amount, as provided in the applicable Supplemental Agreement. 

Fixed Rate Debt Securities: Debt Securities that bear interest at a single fixed rate. 

Fixed/Variable Rate Debt Securities: Debt Securities that bear interest at a single fixed rate during one or more 

specified periods and at a variable rate determined by reference to one or more Indices, or otherwise, during one or more 

other periods. As to any such fixed rate period, the provisions of this Agreement relating to Fixed Rate Debt Securities 

shall apply, and, as to any such variable rate period, the provisions of this Agreement relating to Variable Rate Debt 

Securities shall apply. 

Floor: A minimum interest rate at which interest may accrue on a Debt Security during any Interest Reset Period. 

Freddie Mac: Federal Home Loan Mortgage Corporation, a government-sponsored enterprise chartered by 

Congress pursuant to the Freddie Mac Act. 

Freddie Mac Act: Title III of the Emergency Home Finance Act of 1970, as amended, 12 U.S.C. § 1451-1459. 

FRB: The Board of Governors of the Federal Reserve System. 

FRBNY: The Federal Reserve Bank of New York. 

FRBNY’s Website: The website of the FRBNY, currently at http://www.newyorkfed.org, or any successor source. 

Global Agency Agreement: The agreement between Freddie Mac, the Global Agent and the Registrar. 

Global Agent: The entity selected by Freddie Mac to act as its fiscal, transfer and paying agent for Registered 

Debt Securities. 

H.15: The statistical release entitled “Statistical Release H.15, Selected Interest Rates” as published by the 

Federal Reserve, or any successor publication of the Federal Reserve available on its website at http://

www.federalreserve.gov/releases/h15/or any successor site. 

 

4
Holder: In the case of Fed Book-Entry Debt Securities, the entity whose name appears on the book-entry records 

of a Federal Reserve Bank as Holder; in the case of Registered Debt Securities in global registered form, the depository, or 

its nominee, in whose name the Registered Debt Securities are registered on behalf of a related clearing system; and, in the 

case of Registered Debt Securities in definitive registered form, the person or entity in whose name such Debt Securities 

are registered in the Register. 

Holding Institutions: Entities eligible to maintain book-entry accounts with a Federal Reserve Bank. 

Index: SOFR, Prime Rate, Treasury Rate, CMT Rate, or Federal Funds Rate (Daily) or other specified interest 

rate, exchange rate or other index, as the case may be. 

Index Currency: The currency or currency unit specified in the applicable Supplemental Agreement with respect 

to which an Index will be calculated for a Variable Rate Debt Security. If no such currency or currency unit is specified in 

the applicable Supplemental Agreement, the Index Currency will be U.S. dollars. 

Index Maturity: The period with respect to which an Index will be calculated for a Variable Rate Debt Security 

that is specified in the applicable Supplemental Agreement. 

Interest Component: Each future interest payment, or portion thereof, due on or prior to the Maturity Date, or if 

the Debt Security is subject to redemption or repayment prior to the Maturity Date, the first date on which such Debt 

Security is subject to redemption or repayment. 

Interest Payment Date: The date or dates on which interest on Debt Securities will be payable in arrears. 

Interest Payment Period: Unless otherwise provided in the applicable Supplemental Agreement, the period 

beginning on (and including) the Issue Date or the most recent Interest Payment Date, as the case may be, and ending on 

(but excluding) the earlier of the next Interest Payment Date or the Principal Payment Date. 

Interest Reset Period: The period beginning on the applicable Reset Date and ending on the calendar day 

preceding the next Reset Date. 

Issue Date: The date on which Freddie Mac wires an issue of Debt Securities to Holders or other date specified in 

the applicable Supplemental Agreement. 

Leverage Factor: A Multiplier of greater than one by which an applicable Index is multiplied. 

London Banking Day: Any day on which commercial banks are open for business (including dealings in foreign 

exchange and deposits in the Index Currency) in London. 

Maturity Date: The date, one day or longer from the Issue Date, on which a Debt Security will mature unless 

extended, redeemed or repaid prior thereto. 

Mortgage Linked Amortizing Debt Securities: Amortizing Debt Securities on which Freddie Mac makes periodic 

payments of principal based on the rate of payments on referenced mortgage or mortgage-related assets, as described in the 

related Supplemental Agreement. 

Multiplier: A constant or variable number (which may be greater than or less than one) to be multiplied by the 

relevant Index for a Variable Rate Debt Security. 

 

5
Notes: Callable or non-callable, puttable or non-puttable Debt Securities with maturities of more than one day. 

New York Banking Day: Any day other than (a) a Saturday, (b) a Sunday, (c) a day on which banking institutions 

in the City of New York are required or permitted by law or executive order to close, or (d) a day on which the FRBNY is 

closed. 

Offering Circular: The Freddie Mac Global Debt Facility Offering Circular dated February 11, 2021 (including 

any related Offering Circular Supplement) and successors thereto. 

OID Determination Date: The last day of the last accrual period ending prior to the date of the meeting of 

Holders (or, for consents not at a meeting, prior to a date established by Freddie Mac). The accrual period will be the same 

as the accrual period used by Freddie Mac to determine its deduction for accrued original issue discount under section 163 

(e) of the Code. 

Other Registered Debt Securities: Registered Debt Securities that are not DTC Registered Debt Securities, that 

are deposited with a Common Depositary and that will clear and settle through the systems operated by Euroclear, 

Clearstream, Luxembourg and/or any such other applicable clearing system other than DTC. 

Pricing Supplement: A supplement to the Offering Circular that describes the specific terms of, and provides 

pricing information and other information for, an issue of Debt Securities or which otherwise amends, modifies or 

supplements the terms of the Offering Circular. 

Prime Rate: The rate determined by the Calculation Agent in accordance with Section 2.07(i)(K). 

Prime Rate Determination Date: The New York Banking Day preceding the applicable Reset Date. 

Principal Component: The principal payment plus any interest payments that are either due after the date 

specified in, or are specified as ineligible for stripping in, the applicable Supplemental Agreement. 

Principal Financial Center: (1) with respect to U.S. dollars, Sterling, Yen and Swiss francs, the City of New 

York, London, Tokyo and Zurich, respectively; or (2) with respect to any other Index Currency, the city specified in the 

related Pricing Supplement. 

Principal Payment Date: The Maturity Date, or the earlier date of redemption or repayment, if any (whether such 

redemption or repayment is in whole or in part). 

Range Accrual Debt Securities: Variable Rate Debt Securities on which no interest may accrue during periods 

when the applicable Index is outside a specified range as described in the related Supplemental Agreement. 

Record Date: As to Registered Debt Securities issued in global form, the close of business on the Business Day 

immediately preceding such Interest Payment Date. As to Registered Debt Securities issued in definitive form, the fifteenth 

calendar day preceding an Interest Payment Date. Interest on a Registered Debt Security will be paid to the Holder of such 

Registered Debt Security as of the close of business on the Record Date. 

Reference Bonds: U.S. dollar denominated non-callable and non-puttable Reference Securities with maturities of 

more than ten years. 

 

6
Reference Notes: U.S. dollar denominated non-callable and non-puttable Reference Securities with maturities of 

more than one year. 

Reference Securities: Scheduled U.S. dollar denominated issues of Debt Securities in large principal amounts, 

which may be either Reference Bonds or Reference Notes. 

Register: A register of the Holders of Registered Debt Securities maintained by the Registrar.

Registered Debt Securities: Debt Securities issued and maintained in global registered or definitive registered 

form on the books and records of the Registrar. 

Registrar: The entity selected by Freddie Mac to maintain the Register. 

Representative Amount: A principal amount of not less than U.S. $1,000,000 that, in the Calculation Agent’s sole 

judgment, is representative for a single transaction in the relevant market at the relevant time. 

Reset Date: The date on which a new rate of interest on a Debt Security becomes effective. 

Reuters: Reuters Group PLC or any successor service. 

Reuters USAUCTION10 Page: The display designated as “USAUCTION10” (or any successor page) provided by 

Reuters. 

Reuters USAUCTION11 Page: The display designated as “USAUCTION11” (or any successor page) provided by 

Reuters. 

Reuters US PRIME1 Page: The display designated as page “USPRIME1”’ (or any successor page) provided by 

Reuters 

Secured Overnight Financing Rate: The secured overnight financing rate published by the FRBNY on the 

FRBNY’s Website. 

SOFR: The rate determined by the Calculation Agent in accordance with Section 2.07(i)(H). 

Specified Currency: The currency or currency unit in which a Debt Security may be denominated and in which 

payments of principal of and interest on a Debt Security may be made. 

Specified Interest Currency: The Specified Currency provided for the payment of interest on Debt Securities. 

Specified Payment Currency: The term to which the Specified Interest Currency and Specified Principal Currency 

are referred collectively. 

Specified Principal Currency: The Specified Currency provided for the payment of principal on Debt Securities. 

Spread: A constant or variable percentage or number to be added to or subtracted from the relevant Index for a 

Variable Rate Debt Security. 

Step Debt Securities: Debt Securities that bear interest at different fixed rates during different specified periods. 

Sterling: British pounds sterling.

Supplemental Agreement: An agreement which, as to the related issuance of Debt Securities, supplements the 

other provisions of this Agreement and identifies and establishes the particular offering of Debt Securities issued in respect 

 

7
thereof. A Supplemental Agreement may be documented by a supplement to this Agreement, a Pricing Supplement, a 

confirmation or a terms sheet. A Supplemental Agreement may, as to any particular issuance of Debt Securities, modify, 

amend or supplement the provisions of this Agreement in any respect whatsoever. A Supplemental Agreement shall be 

effective and binding as of its publication, whether or not executed by Freddie Mac. 

TARGET2: The Trans-European Automated Real-Time Gross Settlement Express Transfer payment system 

which utilizes a single shared platform and which was launched on November 19, 2007. 

Treasury Auction: The most recent auction of Treasury Bills prior to a given Reset Date. 

Treasury Bills: Direct obligations of the United States. 

Treasury Department: United States Department of the Treasury. 

Treasury Rate: The rate determined by the Calculation Agent in accordance with Section 2.07(i)(L). 

Treasury Rate Determination Date: The day of the week in which the Reset Date falls on which Treasury Bills 

would normally be auctioned or, if no auction is held for a particular week, the first Business Day of that week. Treasury 

Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is 

normally held on the following Tuesday, except that the auction may be held on the preceding Friday; provided, however, 

that if an auction is held on the Friday of the week preceding the Reset Date, the Treasury Rate Determination Date will be 

that preceding Friday; and provided, further, that if the Treasury Rate Determination Date would otherwise fall on the 

Reset Date, that Reset Date will be postponed to the next succeeding Business Day. 

U.S. Government Securities Business Day: Any day except for (i) a Saturday, (ii) a Sunday, (iii) a day on which the 

Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be 

closed for the entire day for purposes of trading in United States government securities, or (iv) a day on which the FRBNY 

is closed for business.

Variable Principal Repayment Amount: The principal amount determined by reference to one or more Indices or 

otherwise, payable on the applicable Maturity Date or date of redemption or repayment of a Debt Security, as specified in 

the applicable Supplemental Agreement. 

Variable Rate Debt Securities: Debt Securities that bear interest at a variable rate, and reset periodically, 

determined by reference to one or more Indices or otherwise. The formula for a variable rate may include a Spread. 

Yen: Japanese yen. 

Zero Coupon Debt Securities: Debt Securities that do not bear interest and may be issued at a discount to their 

principal amount. 

 

8
ARTICLE II 

Authorization; Certain Terms 

Section 2.01. Authorization. 

Debt Securities shall be issued by Freddie Mac in accordance with the authority vested in Freddie Mac by Section 

306(a) of the Freddie Mac Act. The indebtedness represented by the Debt Securities shall be unsecured general obligations 

of Freddie Mac, or, if so provided in the applicable Supplemental Agreement, secured obligations of Freddie Mac. Debt 

Securities shall be offered from time to time by Freddie Mac in an unlimited amount and shall be known by the designation 

given them, and have the Maturity Dates stated, in the applicable Supplemental Agreement. Freddie Mac, in its discretion 

and at any time, may offer Additional Debt Securities having the same terms and conditions as Debt Securities previously 

offered. The Debt Securities may be issued as Reference Securities, which includes Reference Notes and Reference Bonds, 

or may be issued as any other Debt Securities denominated in U.S. dollars or other currencies, with maturities of one day or 

longer and may be in the form of Notes or Bonds or otherwise. Issuances may consist of new issues of Debt Securities or 

reopenings of an existing issue of Debt Securities. 

Section 2.02. Other Debt Securities Issued Hereunder. 

Freddie Mac may from time to time create and issue Debt Securities including Convertible Debt Securities 

hereunder which contain terms and conditions not specified in this Agreement. Such Debt Securities shall be governed by 

the applicable Supplemental Agreement and, to the extent that the terms of this Agreement are not inconsistent with 

Freddie Mac’s intent in creating and issuing such Debt Securities, by the terms of this Agreement. Such Debt Securities 

shall be secured or unsecured obligations of Freddie Mac. If the Debt Securities are secured obligations of Freddie Mac, the 

provisions of Article V hereof shall apply to such Debt Securities. 

Section 2.03. Specified Currencies and Specified Payment Currencies. 

(a) Each Debt Security shall be denominated and payable in such Specified Currency as determined by Freddie 

Mac. Fed Book-Entry Debt Securities will be denominated and payable in U.S. dollars only. 

(b) Except under the circumstances provided in Article VI hereof, Freddie Mac shall make payments of any interest 

on Debt Securities in the Specified Interest Currency and shall make payments of the principal of Debt Securities in the 

Specified Principal Currency. The Specified Currency for the payment of interest and principal with respect to any Debt 

Security shall be set forth in the applicable Supplemental Agreement. 

Section 2.04. Minimum Denominations. 

The Debt Securities shall be issued and maintained in the minimum denominations of U.S. $1,000 and additional 

increments of U.S. $1,000 for U.S. dollar denominated Debt Securities, unless otherwise provided in the applicable 

Supplemental Agreement and as may be allowed or required from time to time by the relevant regulatory authority or any 

laws or regulations applicable to the relevant Specified Currency. In the case of Zero Coupon Debt Securities, 

denominations will be expressed in terms of the principal amount payable on the Maturity Date. 

 

9
Section 2.05. Maturity. 

(a) Each Debt Security shall mature on its Maturity Date, as provided in the applicable Supplemental Agreement, 

unless redeemed at the option of Freddie Mac or repaid at the option of the Holder prior thereto in accordance with the 

provisions described under Section 2.06. Debt Securities may be issued with minimum or maximum maturities allowed or 

required from time to time by the relevant regulatory or stock exchange authority or clearing systems or any laws or 

regulations applicable to the Specified Currency. 

(b) If so provided in the applicable Supplemental Agreement, certain Debt Securities may have provision 

permitting their Beneficial Owner to elect to extend the initial Maturity Date specified in such Supplemental Agreement, or 

any later date to which the maturity of such Debt Securities has been extended, on specified dates. However, the maturity 

of such Debt Securities may not be extended beyond the final Maturity Date specified in the Supplemental Agreement. 

(c) The principal amount payable on the Maturity Date of a Debt Security shall be a Fixed Principal Repayment 

Amount or a Variable Principal Repayment Amount, in each case as provided in the applicable Supplemental Agreement. 

Section 2.06. Optional Redemption and Optional Repayment. 

(a) The Supplemental Agreement for any particular issue of Debt Securities shall provide whether such Debt 

Securities may be redeemed at Freddie Mac’s option or repayable at the Holder’s option, in whole or in part, prior to their 

Maturity Date. If so provided in the applicable Supplemental Agreement, an issue of Debt Securities shall be subject to 

redemption at the option of Freddie Mac, or repayable at the option of the Holders, in whole or in part, on one or more 

specified dates, at any time on or after a specified date, or during one or more specified periods of time. The redemption or 

repayment price for such Debt Securities (or such part of such Debt Securities as is redeemed or repaid) shall be an amount 

provided in, or determined in a manner provided in, the applicable Supplemental Agreement, together with accrued and 

unpaid interest to the date fixed for redemption or repayment. 

(b) Unless otherwise provided in the applicable Supplemental Agreement, notice of optional redemption shall be 

given to Holders of the related Debt Securities not less than 5 Business Days prior to the date of redemption in the manner 

provided in Section 8.07. The date that we provide such notice constitutes the first Business Day for purposes of this 

minimum notice period. Freddie Mac also announces its intent to redeem certain Debt Securities on the Freddie Mac 

website at http://www.freddiemac.com/debt/html/redemption_release.html. 

(c) In the case of a partial redemption of an issue of Fed Book-Entry Debt Securities by Freddie Mac, such Fed 

Book-Entry Debt Securities shall be redeemed pro rata. In the case of a partial redemption of an issue of Registered Debt 

Securities by Freddie Mac, one or more of such Registered Debt Securities shall be reduced by the Global Agent in the 

amount of such redemption, subject to the principal amount of such Registered Debt Securities after redemption remaining 

in an authorized denomination. The effect of any partial redemption of an issue of Registered Debt Securities on the 

Beneficial Owners of such Registered Debt Securities will depend on the procedures of the applicable clearing system and, 

if such Beneficial Owner is not a participant therein, on the procedures of the participant through which such Beneficial 

Owner owns its interest.

 

10
(d) If so provided in the applicable Supplemental Agreement, certain Debt Securities shall be repayable, in whole 

or in part, by Freddie Mac at the option of the relevant Holders thereof or otherwise, on one or more specified dates, at any 

time on or after a specified date, or during one or more specified periods of time, upon terms and procedures provided in 

the applicable Supplemental Agreement. Unless otherwise provided in the applicable Supplemental Agreement, in the case 

of a Registered Debt Security, to exercise such option, the Holder shall deposit with the Global Agent (i) such Registered 

Debt Security; and (ii) a duly completed notice of optional repayment in the form obtainable from the Global Agent, in 

each case not more than the number of days nor less than the number of days specified in the applicable Supplemental 

Agreement prior to the date fixed for repayment. Unless otherwise specified in the applicable Supplemental Agreement, no 

such Registered Debt Security (or notice of repayment) so deposited may be withdrawn without the prior consent of 

Freddie Mac or the Global Agent. Unless otherwise provided in the applicable Supplemental Agreement, in the case of a 

Fed Book-Entry Debt Security, if the Beneficial Owner wishes to exercise such option, then the Beneficial Owner shall 

give notice thereof to Freddie Mac through the relevant Holding Institution as provided in the applicable Supplemental 

Agreement. 

(e) The principal amount payable upon redemption or repayment of a Debt Security shall be a Fixed Principal 

Repayment Amount or a Variable Principal Repayment Amount, in each case as provided in the applicable Supplemental 

Agreement. 

Section 2.07. Payment Terms of the Debt Securities. 

(a) Debt Securities shall bear interest at one or more fixed rates or variable rates or may not bear interest. If so 

provided in the applicable Supplemental Agreement, Debt Securities may be separated by a Holder into one or more 

Interest Components and Principal Components. The Offering Circular or the applicable Supplemental Agreement for such 

Debt Securities shall specify the procedure for stripping such Debt Securities into such Interest and Principal Components. 

(b) The applicable Supplemental Agreement shall specify the frequency with which interest, if any, is payable on 

the related Debt Securities. Interest on Debt Securities shall be payable in arrears on the Interest Payment Dates specified in 

the applicable Supplemental Agreement and on each Principal Payment Date. 

(c) Each issue of interest-bearing Debt Securities shall bear interest during each Interest Payment Period. No 

interest on the principal of any Debt Security will accrue on or after the Principal Payment Date on which such principal is 

repaid. 

(d) The determination by the Calculation Agent of the interest rate on, or any Index in relation to, a Variable Rate 

Debt Security and the determination of any payment on any Debt Security (or any interim calculation in the determination 

of any such interest rate, index or payment) shall, absent manifest error, be final and binding on all parties. If a principal or 

interest payment error occurs, Freddie Mac may correct it by adjusting payments to be made on later Interest Payment 

Dates or Principal Payment Dates (as appropriate) or in any other manner Freddie Mac considers appropriate. If the source 

of an Index changes in format, but the Calculation Agent determines that the Index source continues to disclose the 

information necessary to determine the related interest rate substantially as required, the Calculation Agent will amend the 

procedure for obtaining information from that source to reflect the changed format. All Index values used to determine 

principal or interest payments are subject to correction within 30 days from the applicable payment. The source of a

 

11
corrected value must be the same source from which the original value was obtained. A correction might result in an 

adjustment on a later date to the amount paid to the Holder. 

(e) Payments on Debt Securities shall be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a 

Specified Payment Currency other than U.S. dollars, to the nearest smallest transferable unit (with one-half cent or unit 

being rounded upwards). 

(f) In the event that any jurisdiction imposes any withholding or other tax on any payment made by Freddie Mac 

(or our agent or any other person potentially required to withhold) with respect to a Debt Security, Freddie Mac (or our 

agent or such other person) will deduct the amount required to be withheld from such payment, and Freddie Mac (or our 

agent or such other person) will not be required to pay additional interest or other amounts, or redeem or repay the Debt 

Securities prior to the applicable Maturity Date, as a result. 

(g) Fixed Rate Debt Securities 

Fixed Rate Debt Securities shall bear interest at a single fixed interest rate. The applicable Supplemental Agreement 

shall specify the fixed interest rate per annum on a Fixed Rate Debt Security. Unless otherwise specified in the applicable 

Supplemental Agreement, interest on a Fixed Rate Debt Security shall be computed on the basis of a 360-day year 

consisting of twelve 30-day months.

(h) Step Debt Securities 

Step Debt Securities shall bear interest from their Issue Date to a specified date at their initial fixed interest rate and 

from that date to their Maturity Date at one or more different fixed interest rates that shall be prescribed as of the Issue 

Date. A Step Debt Security will have one or more step periods. The applicable Supplemental Agreement shall specify the 

fixed interest rate per annum payable on Step Debt Securities for each related period from issuance to maturity. Unless 

otherwise specified in the applicable Supplemental Agreement, interest on a Step Debt Security shall be computed on the 

basis of a 360-day year consisting of twelve 30-day months. 

(i) Variable Rate Debt Securities 

(A) Variable Rate Debt Securities shall bear interest at a variable rate determined on the basis of a direct or an 

inverse relationship to one or more specified Indices or otherwise, (x) plus or minus a Spread, if any, or (y) 

multiplied by one or more Leverage or Deleverage Factors, if any, as specified in the applicable Supplemental 

Agreement. Variable Rate Debt Securities also may bear interest in any other manner described in the applicable 

Supplemental Agreement. 

(B) Variable Rate Debt Securities may have a Cap and/or a Floor. 

(C) The applicable Supplemental Agreement shall specify the accrual method (i.e., the day count convention) for 

calculating interest or any relevant accrual factor on the related Variable Rate Debt Securities. The accrual method 

may incorporate one or more of the following defined terms: 

“Actual/360” shall mean that interest or any other relevant accrual factor shall be calculated on the basis of 

the actual number of days elapsed in a year of 360 days. 

“Actual/365 (fixed)” shall mean that interest or any other relevant accrual factor shall be calculated on the 

basis of the actual number of days elapsed in a year of 365 days, regardless of whether accrual or payment occurs 

during a calendar leap year.

“Actual/Actual” shall mean, unless otherwise indicated in the applicable Supplemental Agreement, that 

interest or any other relevant accrual factor shall be calculated on the basis of (x) the actual number of days elapsed 

 

12
in the Interest Payment Period divided by 365, or (y) if any portion of the Interest Payment Period falls in a calendar 

leap year, (A) the actual number of days in that portion divided by 366 plus (B) the actual number of days in the 

remaining portion divided by 365. If so indicated in the applicable Supplemental Agreement, “Actual/Actual” shall 

mean interest or any other relevant accrual factor shall be calculated in accordance with the definition of “Actual/

Actual” adopted by the International Securities Market Association (“Actual/Actual (ISMA)”), which means a 

calculation on the basis of the following: 

(1) where the number of days in the relevant Interest Payment Period is equal to or shorter than the 

Determination Period during which such Interest Payment Period ends, the number of days in such Interest 

Payment Period divided by the product of (A) the number of days in such Determination Period and (B) the 

number of Interest Payment Dates that would occur in one calendar year; or 

(2) where the Interest Payment Period is longer than the Determination Period during which the Interest 

Payment Period ends, the sum of (A) the number of days in such Interest Payment Period falling in the 

Determination Period in which the Interest Payment Period begins divided by the product of (X) the number 

of days in such Determination Period and (Y) the number of Interest Payment Dates that would occur in one 

calendar year; and (B) the number of days in such Interest Payment Period falling in the next Determination 

Period divided by the product of (X) the number of days in such Determination Period and (Y) the number of 

Interest Payment Dates that would occur in one calendar year. 

(D) The applicable Supplemental Agreement shall specify the frequency with which the rate of interest on the 

related Variable Rate Debt Securities shall reset. The applicable Supplemental Agreement also shall specify the 

Reset Date. If the interest rate will reset within an Interest Payment Period, then the interest rate in effect on the sixth 

Business Day preceding an Interest Payment Date will be the interest rate for the remainder of that Interest Payment 

Period and the first day of each Interest Payment Period also will be a Reset Date. Variable Rate Debt Securities 

may bear interest prior to the initial Reset Date at an initial interest rate, if any, specified in the applicable 

Supplemental Agreement. If so, then the first day of the first Interest Payment Period will not be a Reset Date. The 

rate of interest applicable to each Interest Reset Period shall be determined as provided below or in the applicable 

Supplemental Agreement. 

Except for a Variable Rate Debt Security as to which the rate of interest thereon is determined by reference to 

SOFR, Prime Rate, Treasury Rate, CMT Rate, or Federal Funds Rate (Daily) or as otherwise set forth in the 

applicable Supplemental Agreement, the Determination Date for a Variable Rate Debt Security means the second 

Business Day preceding the Reset Date applicable to an Interest Reset Period. 

(E) If the rate of interest on a Variable Rate Debt Security is subject to adjustment within an Interest Payment 

Period, accrued interest shall be calculated by multiplying the principal amount of such Variable Rate Debt Security 

by an accrued interest factor. Unless otherwise specified in the applicable Supplemental Agreement, this accrued 

interest factor shall be computed by adding the interest factor calculated for each Interest Reset Period in such 

Interest Payment Period and rounding the sum to nine decimal places. The interest factor for each such Interest 

Reset Period shall be computed by (1) multiplying the number of days in the Interest Reset Period by the interest 

rate (expressed as a decimal) applicable to such Interest Reset Period; and (2) dividing the product by the number of

 

13
days in the year referred to in the accrual method specified in the applicable Supplemental Agreement. 

(F) For each issue of Variable Rate Debt Securities, the Calculation Agent shall also cause the interest rate for the 

applicable Interest Reset Period and the amount of interest accrued on the minimum denomination specified for such 

issue to be made available to Holders as soon as practicable after its determination but in no event later than two 

Business Days thereafter. Such interest amounts so made available may subsequently be amended (or appropriate 

alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of 

the Interest Reset Period. 

(G) If the applicable Supplemental Agreement specifies SOFR as the applicable Index for determining the rate of 

interest for the related Variable Rate Debt Security, the following provisions shall apply (unless otherwise specified 

in the applicable Supplemental Agreement): 

“SOFR” means the Secured Overnight Financing Rate published by the FRBNY on the FRBNY’s Website. 

With respect to any U.S. Government Securities Business Day: 

(1) the Secured Overnight Financing Rate published for such U.S. Government Securities Business Day as 

such rate appears on the FRBNY’s Website at 3:00 p.m. (New York time) on the immediately following U.S. 

Government Securities Business Day (the “SOFR Determination Time”); 

(2) if the rate specified in (1) above does not so appear, the Secured Overnight Financing Rate as published in 

respect of the first preceding U.S. Government Securities Business Day for which the Secured Overnight 

Financing Rate was published on the FRBNY’s Website; 

“Compounded SOFR” means the rate of return of a daily compound interest investment computed in 

accordance with the following formula (and the resulting percentage will be rounded, if necessary, to the nearest one 

hundred-thousandth of a percentage point, with 0.000005 being rounded upwards to 0.00001): 

where, for purposes of applying the above formula: 

“d0,” for any Observation Period, is the number of U.S. Government Securities Business Days in the relevant 

Observation Period; 

“i” is a series of whole numbers from one to d0, each representing the relevant U.S. Government Securities 

Business Day in chronological order from, and including, the first U.S. Government Securities Business Day in the 

relevant Observation Period; 

“SOFRi,” for any U.S. Government Securities Business Day “i” in the relevant Observation Period, is equal 

to SOFR in respect of that day “i”;

 

14
“ni

,” for any U.S. Government Securities Business Day “i” in the relevant Observation Period, is the number 

of calendar days from, and including, such U.S. Government Securities Business Day “i” to, but excluding, the 

following U.S. Government Securities Business Day (“i+1”); and 

“d” is the number of calendar days in the relevant Observation Period. 

The following definitions solely apply to the preceding description of SOFR and Compounded SOFR: 

“FRBNY’s Website” means the website of the FRBNY, currently at http://www.newyorkfed.org, or any 

successor source. 

“Observation Period” means, in respect of each Interest Period, the period from, and including, the date two 

U.S. Government Securities Business Days preceding the first date in such Interest Period to, but excluding, the date 

two U.S. Government Securities Business Days preceding the Interest Payment Date for such Interest Period. 

“U.S. Government Securities Business Day” means any day except for a Saturday, a Sunday or a day on 

which the Securities Industry and Financial Markets Association recommends that the fixed income departments of 

its members be closed for the entire day for purposes of trading in U.S. government securities. 

Effect of Benchmark Transition Event — SOFR 

Benchmark Replacement. Notwithstanding the foregoing, if Freddie Mac determines on or prior to the 

relevant Reference Time that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred 

with respect to the then-current Benchmark, the Benchmark Replacement will replace the then-current Benchmark for all 

purposes relating to the notes in respect of all determinations on such date and for all determinations on all subsequent 

dates. 

Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark 

Replacement, Freddie Mac will have the right to make Benchmark Replacement Conforming Changes from time to time. 

Decisions and Determinations. Any determination, decision or election that may be made by Freddie Mac 

pursuant to this Section titled “Effect of Benchmark Transition Event — SOFR,” including any determination with respect 

to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to 

take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error, may be made 

in Freddie Mac’s sole discretion, and, notwithstanding anything to the contrary in the documentation relating to the Debt 

Securities, shall become effective without consent from any other party. 

Certain Defined Terms. As used in this Section titled “Effect of Benchmark Transition Event — SOFR,” and 

solely for purposes of this section: 

“Benchmark” means, initially, SOFR, as such term is defined in Section titled “SOFR”; provided that if 

Freddie Mac determines on or prior to the Reference Time that a Benchmark Transition Event and its related Benchmark 

Replacement Date have occurred with respect to SOFR or the then-current Benchmark, then “Benchmark” means the 

applicable Benchmark Replacement.

 

15
“Benchmark Replacement” means the first alternative set forth in the order below that can be determined by 

Freddie Mac as of the Benchmark Replacement Date. 

(1) the sum of: (a) the alternate rate of interest that has been selected or recommended by the Relevant 

Governmental Body as the replacement for the then-current Benchmark and (b) the Benchmark Replacement 

Adjustment; 

(2) the sum of: (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment; or 

(3) the sum of: (a) the alternate rate of interest that has been selected by Freddie Mac as the replacement for 

the then-current Benchmark giving due consideration to any industry-accepted rate of interest as a 

replacement for the then-current Benchmark for U.S. dollar-denominated floating rate notes at such time and 

(b) the Benchmark Replacement Adjustment. 

“Benchmark Replacement Adjustment” means the first alternative set forth in the order below that can be 

determined by Freddie Mac as of the Benchmark Replacement Date: 

(1) the spread adjustment (which may be a positive or negative value or zero), or method for calculating or 

determining such spread adjustment, that has been selected or recommended by the Relevant Governmental 

Body for the applicable Unadjusted Benchmark Replacement; 

(2) if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, the ISDA 

Fallback Adjustment; or 

(3) the spread adjustment (which may be a positive or negative value or zero) that has been selected by 

Freddie Mac giving due consideration to any industry-accepted spread adjustment, or method for calculating 

or determining such spread adjustment, for the replacement of the then-current Benchmark with the 

applicable Unadjusted Benchmark Replacement for U.S. dollar- denominated floating rate notes at such time. 

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, 

any technical, administrative or operational changes (including changes to the timing and frequency of determining rates 

and making payments of interest, rounding of amounts or tenors, and other administrative matters) that Freddie Mac 

decides may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent 

with market practice (or, if Freddie Mac decides that adoption of any portion of such market practice is not administratively 

feasible or if Freddie Mac determines that no market practice for use of the Benchmark Replacement exists, in such other 

manner as Freddie Mac determines is reasonably necessary). 

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the 

then-current Benchmark (including the daily published component used in the calculation thereof): 

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date 

of the public statement or publication of information referenced therein and (b) the date on which the 

administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark (or such 

component); or 

(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public 

statement or publication of information referenced therein.

 

16
For the avoidance of doubt, if the event that gives rise to the Benchmark Replacement Date occurs on the 

same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will 

be deemed to have occurred prior to the Reference Time for such determination. 

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect 

to the then-current Benchmark (including the daily published component used in the calculation thereof): 

(1) a public statement or publication of information by or on behalf of the administrator of the Benchmark (or 

such component) announcing that such administrator has ceased or will cease to provide the Benchmark (or 

such component), permanently or indefinitely, provided that, at the time of such statement or publication, 

there is no successor administrator that will continue to provide the Benchmark (or such component); or 

(2) a public statement or publication of information by the regulatory supervisor for the administrator of the 

Benchmark (or such component), the central bank for the currency of the Benchmark (or such component), an 

insolvency official with jurisdiction over the administrator for the Benchmark (or such component), a 

resolution authority with jurisdiction over the administrator for the Benchmark (or such component) or a court 

or an entity with similar insolvency or resolution authority over the administrator for the Benchmark, which 

states that the administrator of the Benchmark (or such component) has ceased or will cease to provide the 

Benchmark (or such component) permanently or indefinitely, provided that, at the time of such statement or 

publication, there is no successor administrator that will continue to provide the Benchmark (or such 

component); or 

(3) a public statement or publication of information by the regulatory supervisor for the administrator of the 

Benchmark announcing that the Benchmark is no longer representative. 

“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives 

Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional 

booklet for interest rate derivatives published from time to time.

“ISDA Fallback Adjustment” means the spread adjustment (which may be a positive or negative value or 

zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence 

of an index cessation event with respect to the Benchmark. 

“ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA 

Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable 

tenor excluding the applicable ISDA Fallback Adjustment. 

“Reference Time” with respect to any determination of the Benchmark means (1) if the Benchmark is 

Compounded SOFR, the SOFR Determination Time, and (2) if the Benchmark is not Compounded SOFR, the time 

determined by Freddie Mac after giving effect to the Benchmark Replacement Conforming Changes. 

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New 

York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of 

New York or any successor thereto.

 

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“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark 

Replacement Adjustment. 

(H) If the applicable Supplemental Agreement specifies the Prime Rate as the applicable Index for determining the rate of 

interest for the related Variable Rate Debt Securities, the following provisions shall apply: 

The “Prime Rate” means, with respect to any Reset Date (in the following order of priority): 

(1) the rate for the Prime Rate Determination Date, as published in H.15 or other recognized electronic 

source used for the purpose of displaying that rate opposite the caption “Bank prime loan”; 

(2) if the rate is not published in H.15 by 5:00 p.m., New York City time, on the Reset Date, then the Prime 

Rate will be the arithmetic mean, determined by the Calculation Agent, of the rates (after eliminating certain 

rates, as described below in this clause (2)) that appear, at 11:00 a.m., New York City time, on the Prime Rate 

Determination Date, on Reuters USPRIME1 Page as the U.S. dollar prime rate or base lending rate of each 

bank appearing on that page; provided, that at least three rates appear. In determining the arithmetic mean: 

(i) if 20 or more rates appear, the highest five rates (or in the event of equality, five of the highest) 

and the lowest five rates (or in the event of equality, five of the lowest) will be eliminated, 

(ii) if fewer than 20 but 10 or more rates appear, the highest two rates (or in the event of equality, two 

of the highest) and the lowest two rates (or in the event of equality, two of the lowest) will be 

eliminated, or 

(iii) if fewer than 10 but five or more rates appear, the highest rate (or in the event of equality, one of 

the highest) and the lowest rate (or in the event of equality, one of the lowest) will be eliminated; 

(3) if fewer than three rates so appear on Reuters USPRIME1 Page pursuant to clause (2) above, then the 

Calculation Agent will request five major banks in the City of New York selected by the Calculation Agent 

(after consultation with Freddie Mac, if Freddie Mac is not then acting as Calculation Agent) to provide a 

quotation of such banks’ U.S. dollar prime rates or base lending rates on the basis of the actual number of 

days in the year divided by 360 as of the close of business on the Prime Rate Determination Date. If at least 

three quotations are provided, then the Prime Rate will be the arithmetic mean determined by the Calculation 

Agent of the quotations obtained (and, if five quotations are provided, eliminating the highest quotation (or in 

the event of equality, one of the highest) and the lowest quotation (or in the event of equality, one of the 

lowest)); 

(4) if fewer than three quotations are so provided pursuant to clause (3) above, the Calculation Agent will 

request five banks or trust companies organized and doing business under the laws of the United States or any 

state, each having total equity capital of at least U.S. $500,000,000 and being subject to supervision or 

examination by federal or state authority, selected by the Calculation Agent (after consultation with Freddie 

Mac, if Freddie Mac is not then acting as Calculation Agent), to provide a quotation of such banks’ or trust 

companies’ U.S. dollar prime rates or base lending rates on the basis of the actual number of days in the year 

divided by 360 as of the close of business on the Prime Rate Determination Date. In making such selection of

 

18
five banks or trust companies, the Calculation Agent will include each bank, if any, that provided a quotation 

as requested in clause (3) above and exclude each bank that failed to provide a quotation as requested in 

clause (3). If at least three quotations are provided, then the Prime Rate will be the arithmetic mean 

determined by the Calculation Agent of the quotations obtained; and 

(5) if fewer than three quotations are so provided pursuant to clause (4) above, then the Prime Rate will be 

the Prime Rate determined for the immediately preceding Reset Date. If the applicable Reset Date is the first 

Reset Date, then the Prime Rate will be the rate calculated pursuant to clause (1) for the most recent New 

York Banking Day preceding the Reset Date for which such rate was published in H.15. 

(I) If the applicable Supplemental Agreement specifies the Treasury Rate as the applicable Index for determining the rate 

of interest for the related Variable Rate, the following provisions shall apply: 

The “Treasury Rate” means, with respect to any Reset Date (in the following order of priority): 

(1) the rate for the Treasury Rate Determination Date of Treasury Bills having the Index Maturity, as 

published in H.15, or other recognized electronic source used for the purpose of displaying that rate under the 

caption “U.S. government securities/Treasury bills (secondary market)”; 

(2) if the rate described in clause (1) above is not so published by 3.00 p.m., New York City time, on the 

Reset Date, then the rate from Treasury Auction of Treasury Bills having the Index Maturity, as that rate 

appears under the caption “INVEST RATE” on the display on Reuters USAUCTION10 Page or Reuters 

USAUCTION11 Page; 

(3) if the rate described in clause (2) above is not published by 5:00 p.m., New York City time, on the Reset 

Date, then the auction average rate for Treasury Bills having the Index Maturity obtained from the applicable 

Treasury Auction as announced by the Treasury Department in the form of a press release under the heading 

“Investment Rate” by 5:00 p.m. on such Reset Date; 

(4) if the rate described in clause (3) above is not so announced by the Treasury Department by 5:00 p.m., 

New York City time, on the Reset Date, then auction average rate obtained from the Treasury Auction of the 

applicable Treasury Bills, as otherwise announced by the Treasury Department by 5:00 p.m., New York City 

time, on the Reset Date as determined by the Calculation Agent; 

(5) if such rate described in clause (4) is not so announced by the Treasury Department by 5:00 p.m., New 

York City time, on the Reset Date, the Calculation Agent will request five leading primary United States 

government securities dealers in the City of New York selected by the Calculation Agent (after consultation 

with Freddie Mac, if Freddie Mac is not then acting as Calculation Agent) to provide a quotation of such 

dealers’ secondary market bid yields, as of 3:00 p.m. on the Reset Date, for Treasury Bills with a remaining 

maturity closest to the Index Maturity (or, in the event that the remaining maturities are equally close, the 

longer remaining maturity). If at least three quotations are provided, then the Treasury Rate will be the 

arithmetic mean determined by the Calculation Agent of the quotations obtained; and

 

19
(6) if fewer than three quotations are so provided pursuant to clause (5) above, then the Treasury Rate for the 

immediately preceding Reset Date. If the applicable Reset Date is the first Reset Date, then the Treasury Rate 

will be the auction average rate for Treasury Bills having the Index Maturity from the most recent auction of 

Treasury Bills prior to the Reset Date for which such rate was announced by the Treasury Department in the 

form of a press release under the heading “Investment Rate.” 

The rate (including the auction average rate) for Treasury Bills and the secondary market bid yield for Treasury 

Bills will be obtained and expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable (or, if not 

so expressed, will be converted by the Calculation Agent to such a bond equivalent yield). 

(J) If the applicable Supplemental Agreement specifies the CMT Rate as the applicable Index for determining the 

rate of interest for the related Variable Rate, the following provisions shall apply: 

The “CMT Rate” means, with respect to any Reset Date (in the following order of priority): 

(1) for any CMT Determination Date, the daily rate for the Index Maturity that appears on page “FRBCMT” 

on Reuters (or any other page that replaces the FRBCMT page on that service or any successor service) under 

the heading “...Treasury Constant Maturities. Federal Reserve Board Release H.15...Mondays Approximately 

3:45 p.m.”; 

(2) if the applicable rate described in clause (1) is not displayed on Reuters page FRBCMT at 3:45 p.m., New 

York City time, on the CMT Determination Date, then the CMT Rate will be the Treasury constant maturity 

rate for the Index Maturity applicable for the CMT Determination Date as published in H.15; 

(3) if the CMT Rate is not determined pursuant to clause (1) and the applicable rate described in clause (2) 

does not appear in H.15 at 3:45 p.m., New York City time, on the CMT Determination Date, then the CMT 

Rate will be the Treasury constant maturity rate, or other U.S. Treasury rate, applicable to an Index Maturity 

with reference to the CMT Determination Date, that: 

(i) is published by the Federal Reserve or the Treasury Department; and 

(ii) Freddie Mac has determined to be comparable to the applicable rate formerly displayed on the 

FRBCMT page on Reuters and published in H.15; 

(4) if the CMT Rate is not determined pursuant to clause (1) or (2) and the rate described in clause (3) above 

does not appear at 3:45 p.m., New York City time, on the CMT Determination Date, then the CMT Rate will 

be the yield to maturity of the arithmetic mean of the secondary market offered rates for U.S. Treasury 

securities with an original maturity of approximately the Index Maturity and a remaining term to maturity of 

no more than one year shorter than the Index Maturity, and in a Representative Amount, as of approximately 

3:45 p.m., New York City time, on the CMT Determination Date, as quoted by three primary U.S. 

government securities dealers in New York City that Freddie Mac selects. In selecting these offered rates, 

Freddie Mac will request quotations from five primary dealers and will disregard the highest quotation or, if 

there is equality, one of the highest and the lowest quotation or, if there is equality, one of the lowest. If two 

U.S. Treasury securities with an original maturity longer than the Index Maturity have remaining terms to 

maturity that are equally close to the Index Maturity, Freddie Mac will obtain quotations for the U.S. 

Treasury security with the shorter remaining term to maturity;

 

20
(5) if the CMT Rate is not determined pursuant to clause (1), (2) or (3) and fewer than five but more than two 

primary dealers are quoting offered rates as described in clause (4), then the CMT Rate for the CMT 

Determination Date will be based on the arithmetic mean of the offered rates so obtained, and neither the 

highest nor the lowest of those quotations will be disregarded; 

(6) if the CMT Rate is not determined pursuant to clause (1), (2), (3) or (4) and two or fewer primary dealers 

are quoting offered rates as described in clause (5), then the CMT Rate will be the yield to maturity of the 

arithmetic mean of the secondary market offered rates for U.S. Treasury securities having an original maturity 

longer than the Index Maturity and a remaining term to maturity closest to the Index Maturity, and in a 

Representative Amount, as of approximately 3:45 p.m., New York City time, on the CMT Determination 

Date, as quoted by three primary U.S. government securities dealers in New York City that Freddie Mac 

selects. In selecting these offered rates, Freddie Mac will request quotations from five primary dealers and 

will disregard the highest quotation, or, if there is equality, one of the highest and the lowest quotation or, if 

there is equality, one of the lowest; 

(7) if the CMT Rate is not determined pursuant to clauses (1) through (6) above and fewer than five but more 

than two primary dealers are quoting offered rates as described in clause (6), then the CMT Rate for the CMT 

Determination date will be based on the arithmetic mean of the offered rates so obtained, and neither the 

highest nor the lowest of those quotations will be disregarded; 

(8) if the Calculation Agent obtains fewer than three quotations of the kind described in clause (6), the CMT 

Rate in effect for the new Interest Reset Period will be the CMT Rate in effect for the prior Interest Reset 

Period, or if the applicable Reset Date is the first Reset Date, the rate of interest payable for the new Interest 

Reset Period will be the initial interest rate; and 

(9) if the CMT Rate in its present form ceases to exist and the provisions described in this Agreement for 

determining a fallback rate are found to be unreliable or result in a fallback rate that is not comparable to the 

CMT Rate, Freddie Mac, as the Calculation Agent, is authorized to designate an alternative determination 

method or index to the CMT Rate. If, prior to the time the CMT Rate may cease to exist, a new industry 

standard index is adopted, the Calculation Agent may elect, in its sole discretion, to use such standard index 

in lieu of the CMT Rate. If the Calculation Agent has designated an alternative determination method or 

index to the CMT Rate in accordance with the foregoing, the Calculation Agent in its sole discretion may 

determine the business day convention, the definition of business day and the interest determination date to be 

used and any other relevant methodology, including any adjustment factor needed to make such alternative 

determination method or index comparable to the CMT Rate base rate, in a manner that is consistent with 

industry-accepted practices. The Calculation Agent’s designation of an alternative determination method or 

index as described herein will be final and binding on all parties. 

(K) If the applicable Supplemental Agreement specifies the Federal Funds Rate (Daily) as the applicable Index for 

determining the rate of interest for the related Variable Rate, the following provisions shall apply:

 

21
The “Federal Funds Rate (Daily)” means, with respect to any Reset Date:

(1) the rate for the Business Day preceding the Federal Funds Rate (Daily) Determination Date for U.S. 

dollar federal funds, as published in the latest H.15 or other recognized electronic source used for the purpose 

of displaying that rate opposite the caption “Federal funds (effective)”; 

(2) if the rate specified in clause (1) is not published by 5:00 p.m., New York City time, on the Federal Funds 

Rate Determination Date, then the Calculation Agent will request five leading brokers (which may include the 

related Dealers or their affiliates) of federal funds transactions in the City of New York selected by the 

Calculation Agent (after consultation with Freddie Mac, if Freddie Mac is not then acting as Calculation 

Agent) each to provide a quotation of the broker’s effective rate for transactions in overnight federal funds 

arranged by the broker settling on the Business Day preceding the Federal Funds Rate (Daily) Determination 

Date. If at least two quotations are provided, then the Federal Funds Rate (Daily) will be the arithmetic mean 

determined by the Calculation Agent of the quotations obtained (and, if five quotations are provided, 

eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, 

in the event of equality, one of the lowest)); 

(3) if fewer than two quotations are so provided pursuant to clause (2) above, then the Calculation Agent will 

request five leading brokers (which may include the related Dealers or their affiliates) of federal funds 

transactions in the City of New York selected by the Calculation Agent (after consultation with Freddie Mac, 

if Freddie Mac is not then acting as Calculation Agent) each to provide a quotation of the broker’s rates for 

the last transaction in overnight federal funds arranged by the broker as of 11:00 a.m., New York City time, 

on the Business Day preceding the Federal Funds Rate (Daily) Determination Date. If at least two quotations 

are provided, then the Federal Funds Rate (Daily) will be the arithmetic mean determined by the Calculation 

Agent of the quotations obtained (and, if five quotations are provided, eliminating the highest quotation (or, in 

the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the 

lowest)); and 

(4) if fewer than two quotations are so provided pursuant to clause (3) above, then the Federal Funds Rate 

(Daily) as of such Federal Funds Rate (Daily) Determination Date will be the Federal Funds Rate (Daily) 

determined for the immediately preceding Reset Date. If the applicable Reset Date is the first Reset Date, then 

the rate of interest payable for the new Interest Rate Period will be the initial interest rate. 

(j) Fixed/Variable Rate Debt Securities 

Fixed/Variable Rate Debt Securities shall bear interest at a single fixed rate for one or more specified periods and at 

a rate determined by reference to one or more Indices, or otherwise, for one or more other specified periods. Fixed/Variable 

Rate Debt Securities also may bear interest at a rate that Freddie Mac may elect to convert from a fixed rate to a variable 

rate or from a variable rate to a fixed rate, if so provided in the applicable Supplemental Agreement. 

If Freddie Mac may convert the interest rate on a Fixed/Variable Rate Debt Security from a fixed rate to a variable 

rate, or from a variable rate to a fixed rate, accrued interest for each Interest Payment Period may be calculated using an 

accrued interest factor in the manner described in Section 2.07(i)(E).

 

22
(k) Zero Coupon Debt Securities 

Zero Coupon Debt Securities shall not bear interest. 

(l) Amortizing Debt Securities 

Amortizing Debt Securities are those on which Freddie Mac makes periodic payments of principal during the terms 

of such Debt Securities as described in the related Supplemental Agreement. Amortizing Debt Securities may bear interest 

at fixed or variable rates. 

(m) Debt Securities with Variable Principal Repayment Amounts 

Variable Principal Repayment Amount Debt Securities are those on which the amount of principal payable is 

determined with reference to an Index specified in the related Supplemental Agreement. 

(n) Mortgage Linked Amortizing Debt Securities 

Mortgage Linked Amortizing Debt Securities are Amortizing Debt Securities on which Freddie Mac makes 

periodic payments of principal based on the rate of payments on referenced mortgage or mortgage-related assets, as 

described in the related Supplemental Agreement. Mortgage Linked Amortizing Debt Securities may bear interest at fixed 

or variable rates. 

(o) Range Accrual Debt Securities 

Range Accrual Debt Securities are Variable Rate Debt Securities on which no interest may accrue during periods 

when the applicable Index is outside a specified range as described in the related Supplemental Agreement. 

(p) Extendible Variable Rate Debt Securities 

Extendible Variable Rate Debt Securities’ are Variable Rate Debt Securities, the maturity of which may be 

extended at a Beneficial Owner’s option effective as of specified dates, subject to a final maturity date, and that bear 

interest at variable rates subject to different Spreads for different specified periods, as described in the related Supplemental 

Agreement. 

Section 2.08. Business Day Convention. 

Unless otherwise specified in the applicable Supplemental Agreement, in any case in which an Interest Payment 

Date or Principal Payment Date is not a Business Day, payment of any interest on or the principal of the Debt Securities 

shall not be made on such date but shall be made on the next Business Day with the same force and effect as if made on 

such Interest Payment Date or Principal Payment Date, as the case may be. Unless otherwise provided in the applicable 

Supplemental Agreement, no interest on such payment shall accrue for the period from and after such Interest Payment 

Date or Principal Payment Date, as the case may be, to the actual date of such payment. 

Section 2.09. Reopened Issues and Repurchases. 

Freddie Mac reserves the right, in its discretion and at any time, to offer additional Debt Securities which have the 

same terms (other than Issue Date, interest commencement date and issue price) and conditions as Debt Securities for 

which settlement has previously occurred or been scheduled so as to form a single series of Debt Securities as specified in 

the applicable Supplemental Agreement. 

Freddie Mac reserves the right, in its discretion and at any time, to purchase Debt Securities or otherwise acquire 

(either for cash or in exchange for securities) some or all of an issue of Debt Securities at any price or prices in the open

 

23
market or otherwise. Such Debt Securities may be held, resold or canceled by Freddie Mac. 

ARTICLE III 

Form; Clearance and Settlement Procedures 

Section 3.01. Form of Fed Book-Entry Debt Securities. 

(a) General 

Fed Book-Entry Debt Securities shall be issued and maintained only on the Fed Book-Entry System. Fed BookEntry Debt Securities shall not be exchangeable for definitive Debt Securities. The Book-Entry Rules are applicable to Fed 

Book-Entry Debt Securities. 

(b) Title 

Fed Book-Entry Debt Securities shall be held of record only by Holding Institutions. Such entities whose names 

appear on the book-entry records of a Federal Reserve Bank as the entities to whose accounts Fed Book-Entry Debt 

Securities have been deposited shall be the Holders of such Fed Book-Entry Debt Securities. The rights of the Beneficial 

Owner of a Fed Book-Entry Debt Security with respect to Freddie Mac and the Federal Reserve Banks may be exercised 

only through the Holder of the Fed Book-Entry Debt Security. Freddie Mac and the Federal Reserve Banks shall have no 

direct obligation to a Beneficial Owner of a Fed Book-Entry Debt Security that is not also the Holder of the Fed BookEntry Debt Security. The Federal Reserve Banks shall act only upon the instructions of the Holder in recording transfers of 

a Debt Security maintained on the Fed Book-Entry System. Freddie Mac and the Federal Reserve Banks may treat the 

Holders as the absolute owners of Fed Book-Entry Debt Securities for the purpose of making payments in respect thereof 

and for all other purposes, whether or not such Fed Book-Entry Debt Securities shall be overdue and notwithstanding any 

notice to the contrary. 

The Holders and each other financial intermediary holding such Fed Book-Entry Debt Securities directly or 

indirectly on behalf of the Beneficial Owners shall have the responsibility of remitting payments for the accounts of their 

customers. All payments on Fed Book-Entry Debt Securities shall be subject to any applicable law or regulation. 

(c) Fiscal Agent 

The FRBNY shall be the Fiscal Agent for Fed Book-Entry Debt Securities. 

In acting under the Fiscal Agency Agreement, the FRBNY shall act solely as Fiscal Agent of Freddie Mac and does 

not assume any obligation or relationship of agency or trust for or with any Holder of a Fed Book-Entry Debt Security.

Section 3.02. Form of Registered Debt Securities. 

(a) General 

As specified in the applicable Supplemental Agreement, Registered Debt Securities shall be deposited with (i) a 

custodian for, and registered in the name of a nominee of, DTC, or (ii) a Common Depositary, and registered in the name 

of such Common Depositary or a nominee of such Common Depositary.

 

24
(b) Title 

The person in whose name a Registered Debt Security is registered in the Register shall be the Holder of such 

Registered Debt Security. Beneficial interests in a Registered Debt Security shall be represented, and transfers thereof shall 

be effected, only through book-entry accounts of financial institutions acting on behalf of the Beneficial Owners of such 

Registered Debt Security, as a direct or indirect participant in the applicable clearing system for such Registered Debt 

Security. 

Freddie Mac, the Global Agent and the Registrar may treat the Holders as the absolute owners of Registered Debt 

Securities for the purpose of making payments and for all other purposes, whether or not such Registered Debt Securities 

shall be overdue and notwithstanding any notice to the contrary. Owners of beneficial interests in a Registered Debt 

Security shall not be considered by Freddie Mac, the Global Agent or the Registrar as the owner or Holder of such 

Registered Debt Security and, except as provided in Section 4.02(a), shall not be entitled to have Debt Securities registered 

in their names and shall not receive or be entitled to receive definitive Debt Securities. Any Beneficial Owner shall rely on 

the procedures of the applicable clearing system and, if such Beneficial Owner is not a participant therein, on the 

procedures of the participant through which such Beneficial Owner holds its interest, to exercise any rights of a Holder of 

such Registered Debt Securities. 

Payments by DTC participants to Beneficial Owners of DTC Registered Debt Securities held through DTC 

participants shall be the responsibility of such participants. Payments with respect to Other Registered Debt Securities held 

through Euroclear, Clearstream, Luxembourg or any other applicable clearing system shall be credited to Euroclear 

participants, Clearstream, Luxembourg participants or participants of any other applicable clearing system in accordance 

with the relevant system’s rules and procedures. 

(c) Global Agent 

In acting under the Global Agency Agreement, the Global Agent acts solely as a fiscal agent of Freddie Mac and 

does not assume any obligation or relationship of agency or trust for or with any Holder of a Registered Debt Security, 

except that any moneys held by the Global Agent for payment on a Registered Debt Security shall be held in trust for the 

Holder as provided in the Global Agency Agreement. 

(d) Registrar 

In acting under the Global Agency Agreement, the Registrar does not assume any obligation or relationship of 

agency or trust for, or with, any Holder of a Registered Debt Security. 

Section 3.03. Clearance and Settlement Procedures. 

(a) General 

Unless otherwise provided in the applicable Supplemental Agreement: 

(i) Most Debt Securities denominated and payable in U.S. dollars and distributed within the United States shall 

clear and settle through the Fed Book-Entry System. 

(ii) Most Debt Securities denominated and payable in U.S. dollars and distributed simultaneously within and 

outside of the United States, including all Reference Securities, shall clear and settle, within the United States, 

through the Fed Book-Entry System and, outside of the United States, through the systems operated by Euroclear, 

Clearstream, Luxembourg and/or any other designated clearing system. 

 

25
(iii) Debt Securities denominated or payable in a Specified Currency other than U.S. dollars (and Debt Securities 

denominated and payable in U.S. dollars that are not cleared and settled in accordance with clause (i) and (ii) above 

and distributed solely within the United States will clear and settle through the system operated by DTC. 

(iv) Debt Securities denominated or payable in a Specified Currency other than U.S. dollars (and Debt Securities 

denominated and payable in U.S. dollars that are not cleared and settled in accordance with clauses (i) and (ii) 

above) and distributed simultaneously within and outside of the United States shall clear and settle through the 

systems operated by DTC, Euroclear, Clearstream, Luxembourg and/or any other designated clearing system. 

(v) Debt Securities, irrespective of the Specified Currency in which such Debt Securities are denominated or 

payable, distributed solely outside of the United States shall clear and settle through the systems operated by 

Euroclear, Clearstream, Luxembourg and/or any other designated clearing system or, in certain cases, DTC. 

(b) Primary Distribution 

(i) General. On initial issue, Debt Securities shall be credited through one or more of the systems specified 

below or any other system specified in the applicable Supplemental Agreement. 

(ii) Federal Reserve Banks. Fed Book-Entry Debt Securities shall be issued and settled through the Fed-BookEntry System in same-day funds and shall be held by designated Holding Institutions. After initial issue, all Fed 

Book-Entry Debt Securities shall continue to be held by such Holding Institutions in the Fed Book-Entry System 

unless arrangements are made for the transfer thereof to another Holding Institution. Fed Book-Entry Debt 

Securities shall not be exchangeable for definitive Debt Securities. 

(iii) DTC. DTC participants acting on behalf of investors holding DTC Registered Debt Securities through DTC 

shall follow the delivery practices applicable to securities eligible for DTC’s Same-Day Funds Settlement System. 

DTC Registered Debt Securities shall be credited to DTC participants’ securities accounts following confirmation 

of receipt of payment to Freddie Mac on the relevant Issue Date. 

(iv) Euroclear and Clearstream, Luxembourg. Investors holding Other Registered Debt Securities through 

Euroclear, Clearstream, Luxembourg or such other clearing system shall follow the settlement procedures 

applicable to conventional Eurobonds in registered form. Such Other Registered Debt Securities shall be credited to 

Euroclear, Clearstream, Luxembourg or such other clearing system participants’ securities accounts either on the 

relevant Issue Date or on the settlement day following the relevant Issue Date against payment in same-day funds 

(for value on the relevant Issue Date). 

(c) Secondary Market Transfers 

(i) Fed Book-Entry Debt Securities. Transfers of Fed Book-Entry Debt Securities shall take place only in bookentry form on the Fed Book-Entry System. Such transfers shall occur between Holding Institutions in accordance 

with the rules of the Fed Book-Entry System. 

(ii) Registered Debt Securities. Transfers of beneficial interests in Registered Debt Securities within the various 

systems that may be clearing and settling interests therein shall be made in accordance with the usual rules and 

operating procedures of the relevant system applicable to the Registered Debt Securities and the nature of the 

transfer.

 

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(iii) Freddie Mac shall not bear responsibility for the performance by any system or the performance of the 

system’s respective direct or indirect participants or accountholders of the respective obligations of such 

participants or account holders under the rules and procedures governing such system’s operations.

ARTICLE IV 

Payments, Exchange for Definitive Debt Securities 

Section 4.01. Payments. 

(a) Payments on Fed Book-Entry Debt Securities 

Payments of principal of and any interest on Fed Book-Entry Debt Securities shall be made in U.S. dollars (except 

as otherwise provided in the applicable Supplemental Agreement) on the applicable payment dates to Holders thereof as of 

the end of the Business Day preceding each such payment date. Payments on Fed Book-Entry Debt Securities shall be 

made by credit of the payment amount to the Holders’ accounts at the relevant Federal Reserve Bank. All payments to or 

upon the order of a Holder shall be valid and effective to discharge the liability of Freddie Mac and the Fiscal Agent in 

respect of the related Fed Book-Entry Debt Securities. 

(b) Payments on Registered Debt Securities 

(i) Payments in respect of Registered Debt Securities shall be made in immediately available funds to DTC, 

Euroclear, Clearstream, Luxembourg or any other applicable clearing system, or their respective nominees, as the 

case may be, as the Holders thereof. Except as provided in Article VII hereof, such payments shall be made in the 

Specified Payment Currency. All payments to or upon the order of the Holder of a Registered Debt Security shall 

be valid and effective to discharge the liability of Freddie Mac in respect of such Registered Debt Security. 

Ownership positions within each system shall be determined in accordance with the normal conventions observed 

by such system. Freddie Mac, the Global Agent and the Registrar shall not have any responsibility or liability for 

any aspect of the records relating to or payments made on account of beneficial ownership interests in a Registered 

Debt Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership 

interests. 

(ii) Interest on a Registered Debt Security shall be paid on the applicable Interest Payment Date. Such interest 

payment shall be made to the Holder of such Registered Debt Security as of the close of business on the related 

Record Date. The first payment of interest on any Registered Debt Security originally issued between a Record 

Date and the related Interest Payment Date shall be made on the Interest Payment Date following the next Record 

Date to the Holder on such next Record Date. The principal of each Registered Debt Security, together with 

accrued and unpaid interest thereon, shall be paid to the Holder thereof against presentation and surrender of such 

Registered Debt Security. 

(iii) All payments on Registered Debt Securities are subject to any applicable law or regulation. If a payment 

outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions, 

payments in respect of the related Registered Debt Securities shall be made at the office of any paying agent in the 

United States.

 

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Section 4.02. Exchange for Definitive Debt Securities. 

In the event that Freddie Mac issues definitive Debt Securities in exchange for Registered Debt Securities issued in 

global form, such definitive Debt Securities shall have terms identical to the Registered Debt Securities for which they 

were exchanged except as described below. 

(a) Issuance of Definitive Debt Securities 

Unless otherwise provided in the applicable Supplemental Agreement, beneficial interests in Registered Debt 

Securities issued in global form shall be subject to exchange for definitive Debt Securities only if such exchange is 

permitted by applicable law and (i) in the case of a DTC Registered Debt Security, DTC notifies Freddie Mac that it is no 

longer willing or able to discharge properly its responsibilities as depositary with respect to such DTC Registered Debt 

Security, or ceases to be a “clearing agency” registered under the Securities Exchange Act of 1934 (if so required), or is at 

any time no longer eligible to act as such, and in each case Freddie Mac is unable to locate a successor within 90 calendar 

days of receiving notice of such ineligibility on the part of DTC; (ii) in the case of any Other Registered Debt Security, if 

all of the systems through which it is cleared or settled are closed for business for a continuous period of 14 calendar days 

(other than by reason of holidays, statutory or otherwise) or are permanently closed for business or have announced an 

intention permanently to cease business and in any such situations Freddie Mac is unable to locate a single successor within 

90 calendar days of such closure; or (iii) an Event of Default has occurred and continues unremedied. In such 

circumstances, Freddie Mac shall cause sufficient definitive Debt Securities to be executed and delivered as soon as 

practicable (and in any event within 45 calendar days of Freddie Mac’s receiving notice of the occurrence of such 

circumstances) to the Global Agent or its agent for completion, authentication and delivery to the relevant registered 

holders of such definitive Debt Securities. A person having an interest in a DTC Registered Debt Security or Other 

Registered Debt Security issued in global form shall provide Freddie Mac or the Global Agent with a written order 

containing instructions and such other information as Freddie Mac or the Global Agent may require to complete, execute 

and deliver such definitive Debt Securities in authorized denominations. 

(b) Title 

The person in whose name a definitive Debt Security is registered in the Register shall be the “Holder” of such 

definitive Debt Security. Freddie Mac, the Global Agent and the Registrar may treat the Holders as the absolute owners of 

definitive Debt Securities for the purpose of making payments and for all other purposes, whether or not such definitive 

Debt Securities shall be overdue and notwithstanding any notice to the contrary. 

(c) Payments 

Interest on a definitive Debt Security shall be paid on the applicable Interest Payment Date. Such interest payments 

shall be made by check mailed to the Holder thereof at the close of business on the Record Date preceding such Interest 

Payment Date at such Holder’s address appearing in the Register. The principal of each definitive Debt Security, together 

with accrued and unpaid interest thereon, shall be due on the Principal Payment Date (subject to the right of the Holder 

thereof on the related Record Date to receive interest due on an Interest Payment Date that is on or prior to such Principal 

Payment Date) and shall be paid against presentation and surrender of such definitive Debt Security at the offices of the 

Global Agent or other paying agent. Payments on the Principal Payment Date shall be made by check provided at the 

appropriate office of the Global Agent or other paying agent or mailed by the Global Agent to the Holder of such definitive

 

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Debt Security. U.S. dollar checks shall be drawn on a bank in the United States. Checks in a Specified Payment Currency 

other than U.S. dollars shall be drawn on a bank office located outside the United States. 

Notwithstanding the provisions described in the preceding paragraph relating to payments by check, the Holder of 

an aggregate principal amount of at least $10,000,000 of an issue of Debt Securities of which definitive Debt Securities 

form a part (or, in the case of a definitive Debt Security denominated in a Specified Currency other than U.S. dollars, the 

Specified Currency equivalent of at least $10,000,000) may elect to receive payments thereon by wire transfer of 

immediately available funds in the Specified Payment Currency to an account in such Specified Payment Currency with a 

bank designated by such Holder that is acceptable to Freddie Mac; provided, that such bank has appropriate facilities 

therefor and accepts such transfer and such transfer is permitted by any applicable law or regulation and will not subject 

Freddie Mac to any liability, requirement or unacceptable charge. In order for such Holder to receive such payments, the 

relevant paying agent (including the Global Agent) must receive at its office from such Holder (i) in the case of payments 

on an Interest Payment Date, a written request therefor not later than the close of business (a) on the related Record Date in 

the case of a definitive Debt Security or (b) 15 days prior to such Interest Payment Date in the case of a Registered Debt 

Security issued in the global form; or (ii) in the case of payments on the Principal Payment Date, a written request therefor 

not later than the close of business on the date 15 days prior to such Principal Payment Date and the related definitive Debt 

Security not later than two Business Days prior to such Principal Payment Date. Such written request must be delivered to 

the relevant paying agent (including the Global Agent) by mail, by hand delivery or by tested or authenticated telex. Any 

such request shall remain in effect until the relevant paying agent receives written notice to the contrary. 

All payments on definitive Debt Securities shall be subject to any applicable law or regulation. If a payment outside 

the United States is illegal or effectively precluded by exchange controls or similar restrictions, payments in respect of the 

related definitive Debt Securities may be made at the office of any paying agent in the United States. 

(d) Partial Redemption 

Definitive Debt Securities subject to redemption in part by Freddie Mac shall be selected by the Global Agent by 

lot or in such other manner as the Global Agent deems fair and appropriate, subject to the requirement that the principal 

amount of each outstanding definitive Debt Security after such redemption is in an authorized denomination.

(e) Transfer and Exchange 

Definitive Debt Securities shall be presented for registration of transfer or exchange (with the form of transfer 

included thereon properly endorsed, or accompanied by a written instrument of transfer, with such evidence of due 

authorization and guaranty of signature as may be required by the Registrar, duly executed) at the office of the Registrar or 

any other transfer agent upon payment of any taxes and other governmental charges and other amounts, but without 

payment of any service charge to the Registrar or such transfer agent for such transfer or exchange. A transfer or exchange 

shall not be effective unless, and until, recorded in the Register. 

A transfer or exchange of a definitive Debt Security shall be effected upon satisfying the Registrar with regard to 

the documents and identity of the person making the request and subject to such reasonable regulations as Freddie Mac 

may from time to time agree with the Registrar. Such documents may include forms prescribed by U.S. tax authorities to

 

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establish the applicability of, or the exemption from, withholding or other taxes regarding the transferee Holder. Definitive 

Debt Securities may be transferred or exchanged in whole or in part only in the authorized denominations of the DTC 

Registered Debt Securities or Other Registered Debt Securities issued in global form for which they were exchanged. In the 

case of a transfer of a definitive Debt Security in part, a new definitive Debt Security in respect of the balance not 

transferred shall be issued to the transferor. In addition, replacement of mutilated, destroyed, stolen or lost definitive Debt 

Securities also is subject to the conditions discussed above with respect to transfers and exchanges generally. Each new 

definitive Debt Security to be issued upon transfer of such a definitive Debt Security, as well as the definitive Debt 

Security issued in respect of the balance not transferred, shall be mailed to such address as may be specified in the form or 

instrument of transfer at the risk of the Holder entitled thereto in accordance with the customary procedures of the 

Registrar. 

ARTICLE V 

Secured Debt Securities 

If so provided in the applicable Supplemental Agreement, the indebtedness represented by certain Debt Securities 

shall be secured obligations of Freddie Mac. In such event, the description of the security interest and the terms of the grant 

of the security interest shall be set forth in the applicable Supplemental Agreement. 

ARTICLE VI 

Currency Conversions 

Section 6.01. Currency Conversions for DTC Registered Debt Securities. 

(a) In the case of DTC Registered Debt Securities whose Specified Payment Currency is other than U.S. dollars, the 

Currency Exchange Bank specified in the applicable Supplemental Agreement, for Holders of such DTC Registered Debt 

Securities, shall convert any amounts paid by Freddie Mac in such Specified Payment Currency into U.S. dollars, unless 

such Holders elect to receive payments in such Specified Payment Currency as hereinafter described. Freddie Mac shall 

have no responsibility for the conversion of the Specified Payment Currency for such DTC Registered Debt Securities into 

U.S. dollars. 

(b) The U.S. dollar amount to be received by a Holder of a DTC Registered Debt Security in respect of which 

payments are to be converted from the Specified Payment Currency into U.S. dollars shall be determined by the Currency 

Exchange Bank in the morning of the day that would be considered the date for “spot” settlement of the Specified Payment 

Currency on the applicable payment date in accordance with market convention (generally two New York business days 

prior to such payment date) at the market rate determined by the Currency Exchange Bank to accomplish the conversion on 

such payment date of the aggregate amount of the Specified Payment Currency payable in respect of DTC Registered Debt 

Securities scheduled to receive payments converted into U.S. dollars. All currency exchange costs shall be borne by the 

Holders of such DTC Registered Debt Securities (and, accordingly, by the related Beneficial Owners) by deductions from 

such payments. In the event all or any portion of a Specified Payment Currency is not convertible into U.S. dollars, Holders 

of such DTC Registered Debt Securities shall receive payment in the Specified Payment Currency.

 

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(c) A Holder of a DTC Registered Debt Security to be paid in a Specified Payment Currency other than U.S. dollars 

shall have the option to receive payments of the principal of and any interest on such DTC Registered Debt Security in the 

Specified Payment Currency by notifying DTC no later than the date 12 days prior to such Principal Payment Date or 

Interest Payment date, as applicable. 

ARTICLE VII 

Events of Default and Remedies 

Section 7.01. Events of Default. 

(a) An “Event of Default” with respect to a specific issue of Debt Securities shall consist of (i) any failure by 

Freddie Mac to pay to Holders of such Debt Securities any required payment that continues unremedied for 30 days; (ii) 

any failure by Freddie Mac to perform in any material respect any other covenant or agreement in this Agreement, which 

failure continues unremedied for 60 days after the giving of notice of such failure to Freddie Mac by the Holders of not less 

than 25% of the outstanding principal amount (or notional principal amount) of such Debt Securities; (iii) a court having 

jurisdiction in the premises shall enter a decree or order for relief in respect of Freddie Mac in an involuntary case under 

any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoint a receiver, liquidator, 

assignee, custodian, or sequestrator (or other similar official) of Freddie Mac or for all or substantially all of its property, or 

order the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period 

of 60 consecutive days; or (iv) Freddie Mac shall commence a voluntary case under any applicable bankruptcy, insolvency 

or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case 

under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, 

custodian, or sequestrator (or other similar official) of Freddie Mac or any substantial part of its property, or shall make any 

general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due. 

The appointment of a conservator (or other similar official) by a regulator having jurisdiction over Freddie Mac, 

whether or not Freddie Mac consents to such appointment, will not constitute an Event of Default. 

Section 7.02. Rights Upon Event of Default. 

(a) As long as an Event of Default under this Agreement remains unremedied, Holders of not less than 50% of the 

outstanding principal amount (or notional principal amount) of an issue of Debt Securities to which such Event of Default 

relates may, by written notice to Freddie Mac, declare such Debt Securities due and payable and accelerate the maturity of 

such Debt Securities. Upon such acceleration, the principal amount of such Debt Securities and the interest accrued thereon 

shall be due and payable. 

(b) No Holder has any right under this Agreement to institute any action or proceeding at law or in equity or in 

bankruptcy or otherwise, or for the appointment of a receiver or trustee, or for any other remedy, unless (i) such Holder 

previously has given to Freddie Mac written notice of an Event of Default and of the continuance thereof; (ii) the Holders 

of not less than 50% of the outstanding principal amount (or notional principal amount) of an issue of Debt Securities to 

which such Event of Default relates have given written notice to Freddie Mac of such Event of Default; and (iii) such Event 

of Default continues uncured for a period of 60 days following such notice. No Holder of an issue of Debt Securities has

 

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any right in any manner whatsoever by virtue of or by availing itself of any provision of this Agreement to affect, disturb or 

prejudice the rights of any other such Holder, or to obtain or seek to obtain preference or priority over any other such 

Holder or to enforce any right under this Agreement, except in the manner provided in this Agreement and for the ratable 

and common benefit of all such Holders. 

(c) Prior to or after the institution of any action or proceeding relating to an issue of Debt Securities, the Holders of 

not less than 50% of the outstanding principal amount (or notional principal amount) of such Debt Securities may waive an 

Event of Default, whether or not it has resulted in a declaration of an acceleration of the maturity of such Debt Securities, 

and may rescind and annul any previously declared acceleration. 

(d) Whenever in this Agreement it is provided that the Holders of a specified percentage in outstanding principal 

amount (or notional principal amount) of an issue of Debt Securities may take any action (including the making of any 

demand or request, or the giving of any authorization, notice, consent or waiver), the fact that at the time of taking any such 

action the Holders of such specified percentage have joined therein may be evidenced by a writing, or any number of 

writings of similar tenor, executed by Holders in person, or by an agent or proxy appointed in writing.

ARTICLE VIII 

Miscellaneous Provisions 

Section 8.01. Limitations on Liability of Freddie Mac and Others. 

Neither Freddie Mac nor any of its directors, officers, employees or agents shall be under any liability to the 

Holders or Beneficial Owners for any action taken, or not taken, by them in good faith under this Agreement or for errors 

in judgment. This provision will not protect Freddie Mac or any other related person against any liability which would 

otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence or by reason of reckless disregard of 

obligations and duties under this Agreement. Freddie Mac and such related persons shall have no liability of whatever 

nature for special, indirect or consequential damages, lost profits or business, or any other liability or claim (other than for 

direct damages), even if reasonably foreseeable or Freddie Mac has been advised of the possibility of such loss, damage, 

liability or claim. 

In performing its responsibilities under this Agreement, Freddie Mac may employ agents or independent 

contractors. Except upon an Event of Default (as defined herein), Freddie Mac shall not be subject to the control of Holders 

in any manner in the discharge of its responsibilities pursuant to this Agreement. 

Freddie Mac shall not be under any obligation to appear in, prosecute or defend any legal action that is not 

incidental to its responsibilities under this Agreement and which in its opinion may involve it in any expense or liability. 

However, Freddie Mac may in its discretion undertake any such legal action which it may deem necessary or desirable in 

the interests of the Holders. In such event, the legal expenses and costs of such action shall be expenses and costs of 

Freddie Mac. 

Section 8.02. Binding Effect of this Agreement. 

(a) By receiving and accepting a Debt Security, each Holder, financial intermediary and Beneficial Owner of such 

Debt Security unconditionally agrees, without any signature or further manifestation of assent, to be bound by the terms

 

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and conditions of this Agreement, as supplemented, modified or amended pursuant to its terms. 

(b) This Agreement shall be binding upon and inure to the benefit of any successor to Freddie Mac. 

Section 8.03. Replacement. 

Any Registered Debt Security in definitive form that becomes mutilated, destroyed, stolen or lost shall be replaced 

by Freddie Mac at the expense of the Holder upon delivery to the Global Agent of evidence of the destruction, theft or loss 

thereof, and an indemnity satisfactory to Freddie Mac and the Global Agent. Upon the issuance of any substituted 

Registered Debt Security, Freddie Mac or the Global Agent may require the payment by the Holder of a sum sufficient to 

cover any taxes and expenses connected therewith. 

Section 8.04. Conditions to Payment, Transfer or Exchange. 

Freddie Mac, its agent or any other person potentially required to withhold with respect to payments on a Debt 

Security shall have the right to require a Holder of a Debt Security, as a condition to payment of principal of or interest on 

such Debt Security, or as a condition to transfer or exchange of such Debt Security, to present at such place as Freddie 

Mac, its agent or such other person shall designate a certificate in such form as Freddie Mac, its agent or such other person 

may from time to time prescribe, to enable Freddie Mac, its agent or such other person to determine its duties and liabilities 

with respect to (i) any taxes, assessments or governmental charges which Freddie Mac, any Federal Reserve Bank, the 

Global Agent or such other person, as the case may be, may be required to deduct or withhold from payments in respect of 

such Debt Security under any present or future law of the United States or jurisdiction therein or any regulation or 

interpretation of any taxing authority thereof; and (ii) any reporting or other requirements under such laws, regulations or 

interpretations. Freddie Mac, its agent or such other person shall be entitled to determine its duties and liabilities with 

respect to such deduction, withholding, reporting or other requirements on the basis of information contained in such 

certificate or, if no certificate shall be presented, on the basis of any presumption created by any such law, regulation or 

interpretation, and shall be entitled to act in accordance with such determination.

Section 8.05. Amendment. 

(a) Freddie Mac may modify, amend or supplement this Agreement and the terms of an issue of Debt Securities, 

without the consent of the Holders or Beneficial Owners, (i) to cure any ambiguity, or to correct or supplement any 

defective provision or to make any other provision with respect to matters or questions arising under this Agreement or the 

terms of any Debt Security that are not inconsistent with any other provision of this Agreement or the Debt Security; (ii) to 

add to the covenants of Freddie Mac for the benefit of the Holders or surrender any right or power conferred upon Freddie 

Mac; (iii) to evidence the succession of another entity to Freddie Mac and its assumption of the covenants of Freddie Mac; 

(iv) to conform the terms of an issue of Debt Securities or cure any ambiguity or discrepancy resulting from any changes in 

the Book-Entry Rules or any regulation or document that are applicable to book-entry securities of Freddie Mac; (v) to 

increase the amount of an issue of Debt Securities as contemplated under Section 2.09; or (vi) in any other manner that 

Freddie Mac may determine and that will not adversely affect in any material respect the interests of Holders or Beneficial 

Owners at the time of such modification, amendment or supplement. 

 

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(b) In addition, either (i) with the written consent of the Holders of at least 50% of the aggregate then outstanding 

principal amount or notional principal amount of an issue of Debt Securities affected thereby, excluding any such Debt 

Securities owned by Freddie Mac; or (ii) by the adoption of a resolution at a meeting of Holders at which a quorum is 

present, by the Holders of at least 50% of the aggregate then outstanding principal amount or notional principal amount of 

an issue of Debt Securities represented at such meeting, excluding any such Debt Securities owned by Freddie Mac, 

Freddie Mac may from time to time and at any time modify, amend or supplement the terms of an issue of Debt Securities 

for the purpose of adding any provisions to or changing in any manner or eliminating any provisions of such Debt 

Securities or modifying in any manner the rights of the Holders; provided, however, that no such modification, amendment 

or supplement may, without the written consent or affirmative vote of each Holder of a Debt Security; (A) change the 

Maturity Date or any Interest Payment Date of such Debt Security; (B) materially modify the redemption or repayment 

provisions, if any, relating to the redemption or repayment price of, or any redemption or repayment date or period for, 

such Debt Security; (C) reduce the principal amount of, delay the principal payment of, or materially modify the rate of 

interest or the calculation of the rate of interest on, such Debt Security; (D) in the case of Registered Debt Securities only, 

change the Specified Payment Currency of such Registered Debt Security; or (E) reduce the percentage of Holders whose 

consent or affirmative vote is necessary to modify, amend or supplement the terms of the relevant issue of Debt Securities. 

A quorum at any meeting of Holders called to adopt a resolution shall be Holders entitled to vote a majority of the then 

aggregate outstanding principal amount or notional principal amount of an issue of such Debt Securities called to such 

meeting and, at any reconvened meeting adjourned for lack of a quorum, 25% of the then aggregate outstanding principal 

amount or notional principal amount of such issue of Debt Securities, in both cases excluding any such Debt Securities 

owned by Freddie Mac. It shall not be necessary for the Holders to approve the particular form of any proposed 

amendment, but it shall be sufficient if such consent or resolution approves the substance of such change. If any 

modification, amendment or supplement of the terms of an issue of Debt Securities that have been separated into Interest 

and Principal Components requires the consent of Holders, only the Holders of the Principal Components will be entitled to 

give or withhold that consent. Holders of Interest Components will have no right to give or withhold such consent. 

(c) The “principal amount,” for purposes of the preceding paragraph, for a Debt Security that is a Zero Coupon 

Debt Security issued at a discount or for a Debt Security issued at an “issue price” of 80% or less of its principal amount 

will be equal to (i) the issue price of such Debt Security; plus (ii) the original issue discount that has accrued from the Issue 

Date of such Debt Security to the OID Determination Date; minus (iii) any amount considered as part of the “stated 

redemption price at maturity” of such Debt Security that has been paid from the Issue Date of such Debt Security to the 

OID Determination Date. 

The “principal amount,” for purposes of the second preceding paragraph, of a Debt Security whose Specified 

Principal Currency is other than U.S. dollars will be the U.S. dollar equivalent, determined on the Issue Date, of the 

principal amount (or, in the case of the Debt Securities referred to in the preceding paragraph, the amount determined in 

accordance with the provisions described in such preceding paragraph) of such Debt Security. The “principal amount” of a 

Debt Security with principal determined by reference to an Index will be described in the applicable Supplemental 

Agreement. The “principal amount” of a Debt Security with principal determined by reference to an Index will be 

described in the applicable Supplemental Agreement.

 

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(d) Freddie Mac may establish a record date for the determination of Holders entitled to vote at any meeting of 

Holders of Debt Securities, to grant any consent in respect of Debt Securities and to notice with respect to any such 

meeting or consent. 

(e) Any instrument given by or on behalf of any Holder of a Debt Security in connection with any consent to any 

such modification, amendment or supplement shall be irrevocable once given and shall be conclusive and binding on all 

subsequent Holders of such Debt Security or any Debt Security issued, directly or indirectly, in exchange or substitution 

therefor, irrespective of whether or not notation in regard thereto is made thereon. Any modification, amendment or 

supplement of this Agreement or of the terms of Debt Securities shall be conclusive and binding on all Holders of Debt 

Securities affected thereby, whether or not they have given such consent or were present at any meeting (unless by the 

terms of this Agreement a written consent or an affirmative vote of such Holders is required), and whether or not notation 

of such modification, amendment or supplement is made upon the Debt Securities. 

Section 8.06. Securities Acquired by Freddie Mac. 

Freddie Mac may, from time to time, repurchase or otherwise acquire (either for cash or in exchange for newlyissued Debt Securities) all or a portion of any issue of Debt Securities. Any Debt Securities owned by Freddie Mac shall 

have an equal and proportionate benefit under the provisions of this Agreement, without preference, priority or distinction 

as among such Debt Securities, except that in determining whether the Holders of the required percentage of the 

outstanding principal amount (or notional principal amount) of an issue of Debt Securities have given any required 

demand, authorization, notice, consent or waiver under this Agreement, any Debt Securities owned by Freddie Mac or any 

person directly or indirectly controlling or controlled by or under direct or indirect common control with Freddie Mac shall 

be disregarded and deemed not to be outstanding for the purpose of such determination. 

Section 8.07. Notice. 

(a) Any notice, demand or other communication which by any provision of this Agreement is required or permitted 

to be given to or served upon any Holder may be given or served in writing by deposit thereof, postage prepaid, in the mail, 

addressed to such Holder as such Holder’s name and address may appear in the records of Freddie Mac, a Federal Reserve 

Bank or the Registrar, as the case may be, or, in the case of a Holder of a Fed Book-Entry Debt Security by transmission to 

such Holder through the communication system linking the Federal Reserve Banks, or, in the case of a Holder of a Debt 

Security maintained on DTC, by transmission to such Holder through the DTC communication system. In the event that the 

Federal Reserve Banks’ communication system and/or the DTC communication system is unavailable, Freddie Mac may 

give notice to a Holder by making use of an alternate comparable communication system, platform or service. Such notice, 

demand or other communication to or upon any 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 by any provision of this Agreement is required or permitted 

to be given to or served upon Freddie Mac shall be given in writing addressed (until another address is published by 

Freddie Mac) as follows: Federal Home Loan Mortgage Corporation, 8200 Jones Branch Drive, McLean, Virginia 22102 

Attention: General Counsel and Secretary. Such notice, demand or other communication to or upon Freddie Mac shall be 

deemed to have been sufficiently given or made only upon actual receipt of the writing by Freddie Mac.

 

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Section 8.08. Governing Law. 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE HOLDERS AND FREDDIE MAC 

WITH RESPECT TO THE DEBT SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND 

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 THEREBY, THE 

LAWS OF THE STATE OF NEW YORK SHALL BE DEEMED REFLECTIVE OF THE LAWS OF THE UNITED 

STATES. 

Section 8.09. Headings. 

The Article, Section and Subsection headings are for convenience only and shall not affect the construction of this 

Agreement. 

FEDERAL HOME LOAN MORTGAGE CORPORATION

 

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Exhibit 10.1

AGREEMENT

This Agreement (“Agreement”) is entered into by and between the Federal Home Loan Mortgage Corporation 

(“Freddie Mac” or “Company”) and David M. Brickman (“you”), effective on the date you assign a personal signature 

at the conclusion of this Agreement. 

I. Participation in Business Transactions Involving Freddie Mac

To help protect Freddie Mac’s confidential and proprietary information (as required by the Freddie Mac Code of 

Conduct following a separation of employment), you agree not to participate directly (or indirectly, by explicitly 

directing others in their direct participation in transactional activities) in any Business Transaction involving Freddie 

Mac, on behalf of yourself or a third party, for a period of ninety (90) calendar days following your date of separation 

from employment. For purposes of this paragraph, “Business Transaction” shall mean business engagements between 

Freddie Mac and third parties involving the purchase or sale of securities, properties or mortgages. This agreement 

shall not be construed as restricting my ability to be employed by, advise, or interact in a manner consistent with 

normal business interactions with people or entities that do transact with Freddie Mac. Questions regarding the scope 

of this prohibition should be directed to the Freddie Mac Compliance Helpline. 

/s/ Michael T. Hutchins /s/ David M. Brickman

For Freddie Mac David M. Brickman

Date: 2/10/2021 Date: 2/9/2021
Exhibit 10.2

David M. Brickman February 9, 2021

*Address Redacted*

*Address Redacted*

Dear David:

I am writing to bring a matter to your attention regarding your 2020 compensation from Freddie Mac.

As you know, the Equity in Government Compensation Act of 2015 (“Act”) limits the amount of 

compensation to the CEO of no more than $600,000 annually. As part of our year end process in 

producing the Executive Compensation disclosure for the 2020 Annual Report, we identified the fact that 

you have received base salary during the 2020 calendar year in excess of $600,000.

The total amount in excess of $600,000 is $23,076.93. The excess is directly attributable to an extra pay 

period in 2020. There were 27 pay periods in 2020 as opposed to the normal 26 pay periods that 

typically occur in a calendar year. 

Due to this overpayment, Freddie Mac is hereby requesting that you repay the net (after federal and 

state tax withholding) amount of $15,216.90. 

If you would like to reduce this repayment amount further, you may sign the attached FICA form 

regarding your Medicare taxes, which would authorize Freddie Mac to seek a refund of these taxes and 

consequently reduce the repayment amount to $14,882.28. (Otherwise, if you wish, you can pay the 

slightly larger amount, and seek the Medicare tax refund yourself.) 

Please sign below to affirm your agreement to make this repayment, and return the signed copy back to 

me electronically at gregory_watchman@freddiemac.com at your earliest convenience. Then please 

send a check in the above amount made out to Freddie Mac to 131 S. Dearborn, 6th Floor, Chicago, 

Illinois 60603. Please add the following to the memo line on the check: *Account Number Redacted*.

Many thanks,

Greg

Greg Watchman

VP & Deputy General Counsel

Freddie Mac

_/s/ David M. Brickman____________________

David M. Brickman
Federal	Home	Loan	Mortgage	Corporation

CLAIM	FOR	FICA	TAX	REFUND

Federal	law	requires	that	we	obtain	your	signature	before	a	refund	of	prior	year	FICA	tax	can	be	processed.		Please	

complete	the	information	below	and	return	this	form	to:

Freddie	Mac

	 Attention	Payroll

	 8200	Jones	Branch	Drive

McLean,	VA	22102

The	form	may	be	faxed	to	703-918-8255	or	emailed	to	payroll@freddiemac.com

I	certify	I	have	not	claimed	and	will	not	claim,	from	the	Internal	Revenue	Service,	a	refund	in	the	amount	of	FICA	

taxes	withheld	from	my	wages	during	the	time	period	indicated	below.

I	request	the	FICA	taxes	withheld	be	refunded	to	me	by	Federal	Home	Loan	Mortgage	Corporation.	

NAME	(please	print)	__David	M.	Brickman_________________________

Employee	ID_*Employee	ID	Redacted*_

Address__*Address	Redacted*____________________________________________________________

________	*Address	Redacted*____________________________________________________________

_____________________________________________________________________________________

Period	of	Withholding	 	2020

Reason	for	Refund				 Repayment	of	wages	due	to	exceeding	the	statutory	limit	of	$600,000	in	calendar	year	

2020.

Signature__/s/	David	M.	Brickman_______________________________				Date__2/2/2021_______
Exhibit 31.1

CERTIFICATION

PURSUANT TO SECURITIES EXCHANGE ACT RULE 13a-14(a)

I, Mark B. Grier, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 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: April 29, 2021

/s/ Mark B. Grier

Mark B. Grier

Interim 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 March 31, 2021 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: April 29, 2021

/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 March 31, 2021 of the Federal Home Loan Mortgage Corporation (the 

"Company"), as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark B. Grier, Interim 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: April 29, 2021

/s/ Mark B. Grier

Mark B. Grier

Interim 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 March 31, 2021 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: April 29, 2021

/s/ Christian M. Lown

Christian M. Lown

Executive Vice President and Chief Financial Officer