FMCC 10-K & 10-Q changes, risk factors and insider trading

Net interest income primarily consists of guarantee net interest income in Single-Family.income. We consolidate most of our Single-Family securitization trusts and, therefore, we recognize the loans held by the trust and the debt securities issued by the trust on our consolidated balance sheets. The difference between the interest income on these loans and the interest expense on the related debt securities primarily represents the guarantee fees we receive as compensation for our guarantee of the principal and interest payments of the issued debt securities. Guarantee net interest income includes two components:

n Contractual net interest income, which represents the ongoing monthly guarantee fee we receive for managing the credit risk associated with mortgage loans held by consolidated trusts, including the legislated guarantee fees that we are required to remit to Treasury and n Deferred fee income, which primarily consists of recognition of premiums and discounts on mortgage loans and debt ofissued by consolidated trusts and the fees that we receive or pay when we acquire single-family loans. These amounts are recognized in net interest income based on the effective yield over the contractual life of the associated financial instrument and may vary significantly from period to period, primarily based on changes in actual prepayments on the underlying loans.

n Guarantee net interest income l 20242025 vs. 20232024 - Increased primarily due to continued mortgage portfolio growth.growth in Single-Family and an increase in the volume of fully guaranteed securitizations in Multifamily.

l 2024 vs. 2023 vs. 2022 - DecreasedIncreased primarily due to a decline in deferred fee income due to slower prepayments as a result of higher mortgage interest rates, partially offset by continued mortgage portfolio growth.

n Investments net interest income l 20232025 vs. 20222024 - IncreasedDecreased primarily due to higherlower returnsincome onfrom securities purchased under agreements to resell asdriven by a resultdecrease of higherin short-term interest rates.

l 2024 vs. 2023 vs. 2022 - Expense increasedDecreased primarily due to higher interestdebt expense onfrom derivatives in hedge relationships as a resultissuance of higher interestyielding rates,debt, partially offset by athe favorableimpact changeof the increase in thenon-interest earningsbearing mismatch on qualifying fair value hedge relationships.funding.

(1) Loan fees included in interest income were $1.1$1.2 billion, $1.1 billion, and $1.5$1.0 billion for mortgage loans held by consolidated trusts and $0.1 billion, $0.0 billion, and $0.1 billion for mortgage loans held by Freddie Mac during 2025, 2024, and 2023, and 2022, respectively.

Guarantee income relates primarily to our Multifamily senior subordinate securitizations. We generally do not consolidate the trusts used in these transactions and therefore do not recognize the loans held by the trust or the debt securities issued by the trust on our consolidated balance sheets. Rather, we separately account for our guarantee to the trust and recognize the revenue from our guarantee as guarantee income. Guarantee income includes the amortization of our guarantee obligation as we are released from risk under our guarantee and changes in fair value of our guarantee assets, net of contractual guarantee fees received. Due to the change in our Multifamily business strategy, we expect guarantee income to decline in future periods as we focus primarily on issuing fully guaranteed securities.

Net investment gains primarily consist of the gains on sale of mortgage loans from our multifamily loan purchase and securitization activities. Because we do not consolidate our Multifamily senior subordinate securitization trusts, we account for these transactions as sales of the underlying loans. Net investment gains also include revenues from sales of multifamily loans and single-family delinquent and reperforming loans, gains and losses on investment securities, gains and losses from debt extinguishments and debt recorded at fair value, and gains and losses from interest-rate risk management activities. Net investment gains can vary significantly from period-to-period based on the pricing of our new multifamily loan purchases, the volume and nature of our investment, funding, and hedging activities,activities and changes in market conditions, such as interest rates and market spreads. Due to the change in our Multifamily business strategy, we expect net investment gains related to sales of multifamily loans to be lower in future periods as we focus primarily on issuing fully guaranteed securitizations.

Derivative instruments are a key component of our interest-rate risk management strategy. We use derivatives to economically hedge the interest-rate risk of our financial assets and liabilities and manage our exposure to interest-rate risk on an economic basis to a low level as measured by our models. We align our derivativederivatives portfolio to economically hedge the changing duration of our assets and liabilities and apply fair value hedge accounting to certain single-family mortgage loans and debt to reduce our GAAP earnings variability. As a result, interest-rate-related fair value gains and losses that we recognize on financial instruments that we measure at fair value generally have offsetting impacts from the derivative instruments that we use to economically hedge interest-rate risk. For additional information about our interest-rate risk management activities and the sensitivity of reported GAAP earnings to those activities, see MD&A - Risk Management - Market Risk. For additional information on derivative instruments, see Note 9.

n Investment gains,gains (losses), net l 20242025 vs. 20232024 - IncreasedDecreased primarily due to higherinterest rate and spread changes in Single-Family, as well as lower revenues from held-for-sale loan purchase and securitization activities, lower realized losses on sales of available-for-sale securities,activities and net impacts from indexinterest-rate lockrisk activities.management activities in Multifamily.

Our provision for credit losses relates primarily to single-family loans held-for-investment and can vary substantially from period to period based on a number of factors, such as changes in houseestimated pricesmarket andvalues of single-family properties based on our internal house price forecasts,index, changes in forecasted house price growth rates, changes in interest rates, borrower prepayments and delinquency rates, changes in the nature and volume of our CRT activities, events such as natural disasters and pandemics, the type and volume of our loss mitigation and foreclosure activity, and government assistance provided to borrowers. See MD&A - Critical Accounting Estimates for additional information.

n 2024 vs. 2023 - The provision for credit losses for 2024 was primarily driven by a credit reserve build in Single-Family attributable to new acquisitions. The benefit for credit losses for 2023 was primarily driven by a credit reserve release in Single-Family due to improvements in house prices.

Non-interest expense consists of salaries and employee benefits, professional services, technology, and occupancy, credit enhancement expense and benefit for credit enhancement recoveries,expense, legislative and regulatory assessments, and other expenses we incur to run our business.

Credit enhancement expense includes the premiums and other costs related to certain CRT transactions that are accounted for as freestanding contracts, primarily STACR and ACIS transactions in Single-Family. Benefit for credit enhancement recoveries primarily represents changes in expected recoveries from those transactions. We recognize expected recoveries from freestanding credit enhancements at the same time that we recognize an allowance for credit losses on the covered loans, measured on the same basis as the allowance for credit losses on the covered loans.

Legislative and regulatory assessments relate to three fees: (1) the legislated guarantee fees on single-family loans that we are required to remit to Treasury, (2) the fee imposed on Freddie Mac's total new business purchases that is allocated to certain affordable housing funds and remitted to Treasury and HUD, and (3) the FHFA regulatory assessment. The legislated guarantee fees relate to the 10 bps increase in guarantee fees implemented at the direction of FHFA pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011 as extended by the Infrastructure Investment and Jobs Act of 2021. The affordable housing funds allocation relates to the GSE Act requirement to set aside in each fiscal year an amount equal to 4.2 bps of each dollar of total new business purchases, and pay such amount to certain housing funds. We are prohibited from passing through the costs of the affordable housing funds allocation to the originators of the loans that we purchase. The regulatory assessment relates to FHFA's annual assessment on regulated entities, including Freddie Mac. The assessment, which is required under the GSE Act, is for FHFA's costs and expenses, as well as to maintain FHFA's working capital.

n Credit enhancement expense l 20232025 vs. 20222024 - IncreasedDecreased primarily due to a higherlower volume of outstanding cumulative CRT transactions in Single-Family and higherlower losses on STACR Trust note repurchases.

n InvestmentSecurities purchased under agreements to resell decreased and investment securities increased primarily due to ana change in strategy to increase investments in purchases of U.S. Treasury securities.

n Mortgage loans held-for-investment and debt issued by consolidated trusts increased primarily due to growth in our Single-Family mortgage portfolio.

Our Single-Family segment provides liquidity and support to the single-family mortgage market through a variety of activities that include the purchase, securitization, and guarantee of single-family loans originated by lenders. Central toThrough our missionbusiness isactivities ourwe commitment to helpinghelp families attain affordable and sustainable housing and to increasing equitableincrease access to housing finance.

Our primary business model is to acquire loans thatfrom lenders originateshortly after origination and then pool those loans into guaranteed mortgage-related securities that transfer interest-rate, prepayment, and liquidity risk to investors and can be sold in the capital markets. We consolidate most of our Single-Family securitization trusts and, therefore, we recognize the loans held by such trusts and the debt securities issued by such trusts on our balance sheet and recognize the guarantee fees we receive as net interest income. To reduce our exposure under our guarantees, we transfer credit risk on a portion of our Single-Family mortgage portfolio to the private market in certain instances. Most of our loans with LTV ratios above 80% at the time of purchase are also credit enhanced by primary mortgage insurance. The returns we generate from our business activities are primarily derived from the guarantee fees we receive in exchange for providing our guarantee of the principal and interest payments of the issued mortgage-related securities.

Our Single-Family business primarily consists of activities related to providing market liquidity by purchasing and securitizing mortgage loans and issuing guaranteed mortgage-related securities,securities. transferringAdditionally, creditwe risk, performing loss mitigation activities, and investinginvest in mortgage-related and other investments. Certain of our loan products and programs have been designed to address affordability challenges, particularly in underserved markets, while others aim to support housing supply and sustainability efforts.

n UMBS - Single-class pass-through securities issued through the CSPmortgage securitization platform with a 55-day payment delay for TBA-eligible fixed-rate mortgage loans. The UMBS is a single (common) security that is issued by either Fannie Mae or us. The UMBS market is designed to enhance the overall liquidity of TBA-eligible Freddie Mac and Fannie Mae securities by supporting their fungibility without regard to which company is the issuer. SIFMA permits UMBS TBA contracts to be settled by delivery of UMBS issued by either Freddie Mac or Fannie Mae under its good-delivery guidelines.

You should read the following MD&A in conjunction with our 2025 Annual Report and our condensed consolidated financial statements and accompanying notes for the three and six months ended MarchJune 31,30, 2026 included in Financial Statements.

Net Worth n Net income was $3.6$3.8 billion, up 27%61% from 1Q2Q 2025, primarily driven by higher net revenues and a credit reserve release in 1Q2Q 2026 compared to a credit reserve build in 1Q2Q 2025.

n Net revenues were $6.1$6.0 billion, an increase of 5%1% year-over-year, primarily driven by higher net interest income, partially offset by lower non-interest income.income (loss).

n Net worth was $73.9$77.8 billion as of MarchJune 31,30, 2026, up from $62.4$64.8 billion as of MarchJune 31,30, 2025. The quarterly increases in net worth have been, or will be, added to the aggregate liquidation preference of the senior preferred stock. The liquidation preference of the senior preferred stock was $143.0$146.6 billion on MarchJune 31,30, 2026, and will increase to $146.6$150.4 billion on JuneSeptember 30, 2026 based on the increase in net worth in 1Q2Q 2026.

Mortgage Portfolio (UPB in billions) n Our mortgage portfolio increased 2% year-over-year to $3.7 trillion at MarchJune 31,30, 2026, continuing to grow at a moderate pace.

l Our Single-Family mortgage portfolio was $3.2 trillion at MarchJune 31,30, 2026, up 1% year-over-year.

l Our Multifamily mortgage portfolio was $498$505 billion at MarchJune 31,30, 2026, up 7%8% year-over-year.

TheThis discussion of our consolidated results of operations should be read in conjunction with our condensed consolidated financial statements and accompanying notes.

n Guarantee net interest income l 1Q2Q 2026 vs. 1Q2Q 2025 and YTD 2026 vs. YTD 2025 - Increased primarily due to an increase in the balance of fully guaranteed securitizations in the Multifamily mortgage portfolio due to the change in our Multifamily business strategy and continued mortgage portfolio growth in Single-Family.

n Investments net interest income l 1Q2Q 2026 vs. 1Q2Q 2025 and YTD 2026 vs. YTD 2025 - Increased primarily due to growth in the mortgage-related investments portfolio.

n Impact on net interest income from hedge accounting l 1Q2Q 2026 vs. 1Q2Q 2025 and YTD 2026 vs. YTD 2025 - Decreased due to lower expense related to debt in hedge accounting relationships.

(1)Loan fees included in interest income were $0.4 billion and $0.3 billion for mortgage loans held by consolidated trusts in 1Qboth 2Q 2026 and 1Q2Q 2025, respectively.2025. Loan fees for mortgage loans held by Freddie Mac were not material in 1Q2Q 2026 or 1Q2Q 2025 .2025.

Non-Interest Income (Loss)

Table 4 - Components of Non-Interest Income (Loss)

n Guarantee income l 1Q2Q 2026 vs. 1Q2Q 2025-2025 and YTD 2026 vs. YTD 2025 - Decreased primarily due to fair value losses as a result of increases in medium-term interest rates during 1Qthe 2026,2026 periods, coupled with lower revenues from a declining off-balance sheet financial guarantee portfolio.

n Investment gains (losses), net l 1Q2Q 2026 vs. 1Q2Q 2025-2025 and YTD 2026 vs. YTD 2025 - Decreased primarily due to aimpacts lowerfrom volumeinterest-rate ofrisk loan salemanagement activities as we shifted the Multifamily business model to primarily issue fully guaranteed securities, as well as losses from debt extinguishments in 1Q 2026.Single-Family.

n 1Q2Q 2026 vs. 1Q2Q 2025 and YTD 2026 vs. YTD 2025 - The benefit for credit losses for 1Qthe 2026 periods was drivenprimarily bydue to a credit reserve release in Single-Family primarilydriven attributableby updates to changes in our viewsprocess offor forecastedgenerating future house price growth rates.scenarios. The provision for credit losses for 1Qthe 2025 periods was primarily driven by a credit reserve build in Single-Family attributable to newlower acquisitions.estimated market values of single-family properties based on our internal house price index and lower forecasted house price growth rates.

n Salaries and employee benefits l 1Q2Q 2026 vs. 1Q2Q 2025 and YTD 2026 vs. YTD 2025 - Decreased primarily due to lower employee headcount.

n Credit enhancement expense l 1QYTD 2026 vs. 1QYTD 2025 - Decreased primarily due to a lower UPB of Single-Family CRT transactions outstanding,outstanding and retention of higher levels of initial losses on recent CRT transactions, and lower losses on STACR Trust note repurchases.transactions.

As of MarchJune 31,30, 2026 compared to December 31, 2025:

n InvestmentSecurities securitiespurchased under agreements to resell decreased primarily due to netlower salesshort-term ofliquidity U.S.needs Treasuryand an increase in mortgage-related securities.

(1)Includes $37.9$39.9 billion and $35.9 billion of single-family loans that we have purchased from securitization trusts as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

(2) Estimated guarantee fee rate calculations for the Single-Family mortgage portfolio exclude certain loans, the majority of which are held by VIEs that we do not consolidate. The UPB of these excluded loans was $38$37 billion and $40$39 billion as of MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.

n Our loan purchase and guarantee activity increased induring 1Qthe 2026 periods compared to 1Qthe 2025 periods primarily driven by an increase in refinance activity due to lower mortgage interest rates.

n Our Single-Family mortgage portfolio was $3.2 trillion at MarchJune 31,30, 2026, up 1% year-over-year. The mortgage portfolio continued to grow at a moderate pace.

–Net revenues were $5.2$5.1 billion, updown 5%1% year-over-year.

◦Net interest income was $5.1$5.4 billion, up 8%11% year-over-year, primarily driven by continued mortgage portfolio growth and growthlower expense related to debt in thehedge mortgage-relatedaccounting investments portfolio.relationships.

–The benefit for credit losses was $0.3$0.8 billion for 1Q2Q 2026, drivenprimarily bydue to a credit reserve release primarilydriven attributableby updates to changes in our viewsprocess offor forecastedgenerating future house price growth rates.scenarios. The provision for credit losses ofwas $0.2$0.6 billion for 1Q2Q 2025 was2025, primarily driven by a credit reserve build attributable to newlower acquisitions.estimated market values of single-family properties based on our internal house price index and lower forecasted house price growth rates.

–Non-interest expense was $1.8$1.9 billion for 1Q2Q 2026, down 5%2% year-over-year, primarily driven by a decrease in salaries and employee benefits and lower credit enhancement expense.benefits.

(1) Excludes new LIHTC investments of $0.2$0.4 billion and $0.3 billion for 1Q2Q 2026.2026 Newand LIHTC2Q investments2025, inrespectively, 1Qand 2025$0.6 werebillion notand material.$0.3 billion for YTD 2026 and YTD 2025, respectively.

(5) Based on guarantee exposure of $440$452 billion and $407$409 billion foras 1Qof June 30, 2026 and 1QJune 30, 2025, respectively, which includes guaranteed mortgage related securities that are consolidated on our condensed consolidated balance sheet where income from guarantees is recognized in net interest income.

n Our newNew business activity wasincreased $12.8during billionthe in2026 1Q 2026, up 25% year-over-year,periods, primarily driven by a larger new business activity pipeline entering 1Q2026, 2026coupled duewith tothe aexecution largerof multifamilyour mortgagecompetitive originations market.strategies. Approximately 66% of our 1QYTD 2026 new business activity, based on UPB, was mission-driven, affordable housing, exceeding FHFA's annual minimum requirement of 50%.

n Total securitization issuance UPB wasincreased $23.4during billionthe in2026 1Q 2026, up 45% year-over-year,periods, driven by a larger average securitization pipeline. The larger percentage of fully guaranteed securitizations was due to the Multifamily business strategy change.

n Our Multifamily mortgage portfolio was $498$505 billion as of MarchJune 31,30, 2026, up 7%8% year-over-year, primarily driven by our new business activity.

n The average guarantee fee rate on our guarantee exposuresexposure increased year-over-year, primarily due to continued growth of fully guaranteed securitization issuances for which we charge higher guarantee fee rates.

◦Non-interest income was $0.5$0.3 billion, down 22%13% year-over-year, primarily driven by lower guarantee income and a lower volume of loan sale activities, as we shifted the Multifamily business model to primarily issue fully guaranteed securitizations.

We monitor and evaluate market conditions that we reasonably foresee could affect the credit quality of our single-family loan purchases. See MD&A - Our Business Segments - Single-Family - Housing and Mortgage Market Metrics for additional information on market conditions. Additionally, when managing our new acquisitions, we consider our risk limits and guidance from FHFA and capital requirements under the ERCF. This may affect the volume and characteristics of our loan acquisitions. See MD&A - Regulation and Supervision - Federal Housing Finance Agency in our 2025 Annual Report for additional information on guidance from FHFA.

The table below provides the UPB of the mortgage loans acquired during the periods presented that were covered by primary mortgage insurance, the UPB of the mortgage loans covered by CRT transactions we entered into during the periods presented, and maximum coverage related to these newly acquired credit enhancements. InThe recentcredit periods,risk wepositions haveto changedwhich ourthe businessmaximum strategycoverage andapplies revisedmay ourvary CRTon transactionsa bytransaction-by-transaction retaining higher levels of initial losses.basis. As a result, the benefitsUPB providedand bymaximum thesecoverage revisedpresented CRT transactionsbelow may not be lowerfully thanindicative those provided byof the earlieramount CRTof transactionscredit evenrisk iftransferred theand data across different periods may not be directly comparable. For example, a higher maximum coverage provided by the more recenta CRT transactionstransaction iswith similara tohigher thatattachment point may transfer less credit risk than a lower maximum coverage provided by the earliera CRT transactions.transaction with a lower attachment point.

Our expected recovery receivable from freestanding credit enhancements was $0.1$42 billionmillion and $71 million as of bothJune March 31,30, 2026 and December 31, 2025.2025, respectively.