Federal Home Loan Mortgage : Press Release, 11/8/22

Freddie Mac Reports Net Income of $1.3 Billion for Third Quarter 2022

Making Home Possible for 542,000 Households in Third Quarter 2022

• Financed 392,000 mortgages, with 56% of eligible loans being affordable to low- to moderate-income families, and enabled 130,000 first-time homebuyers to purchase a home
• Financed 150,000 rental units, with 96% of eligible units being affordable to low- to moderate-income families

Third Quarter 2022 Financial Results

Market Liquidity		Homes and Rental Units		Net Worth -		Total Mortgage
Provided -		Financed -			Portfolio -
$135 Billion		542,000		$35.2 Billion		$3.4 Trillion

Consolidated

Net Revenues

$5.2 Billion

Net Income $1.3 Billion

Comprehensive

Income

$1.1 Billion

Single-Family

Net Revenues

$4.4 Billion

Net Income $0.8 Billion

Comprehensive

Income

$0.8 Billion

Multifamily

Net Revenues

$0.8 Billion

Net Income $0.5 Billion

Comprehensive

Income

$0.3 Billion

• Net income of $1.3 billion, a decrease of 55% year-over-year, primarily driven by a credit reserve build in Single-Family
• Net revenues of $5.2 billion, a decrease of 1% year-over-year, as higher net interest income in Single-Family was offset by a decline in non-interest income in Multifamily
• Provision for credit losses of $1.8 billion, primarily driven by deterioration in housing market conditions, including lower observed and forecasted house price appreciation
• New business activity of $121 billion, down 60% year-over- year, as refinance activity slowed significantly due to rising mortgage interest rates
• Mortgage portfolio of $3.0 trillion, up 11% year-over-year, driven by an increase in average portfolio loan size and a higher share of single-family mortgage debt outstanding
• Serious delinquency rate of 0.67%, down from 1.46% at September 30, 2021, driven by the decline of loans in forbearance
• Completed approximately 28,000 loan workouts
• 61% of mortgage portfolio covered by credit enhancements
• New business activity of $14 billion, down 22% year-over-year, due to rising interest rates and increased competition
• Mortgage portfolio of $416 billion, up 3% year-over-year, as new business activities were partially offset by borrower prepayments
• Delinquency rate of 0.13%, up from 0.12% at September 30, 2021
• 95% of mortgage portfolio covered by credit enhancements

"In a dynamic economic environment, Freddie Mac continued to provide much-needed liquidity, stability, and affordability to the housing finance system. We earned quarterly net income of $1.3 billion and added to the capital that supports our mission. With our focus on risk management, we are actively managing the company to support homebuyers, renters, and the housing market throughout the economic cycle."

Michael J. DeVito Chief Executive Officer

Freddie Mac Third Quarter 2022 Financial Results

November 8, 2022

Page 2

McLean, VA - Freddie Mac (OTCQB: FMCC) today reported net income of $1.3 billion for the third quarter of 2022, a decrease of 55% year-over-year, primarily driven by a credit reserve build in Single-Family.

Net revenues were $5.2 billion, down 1% year-over-year, as higher net interest income in Single-Family was offset by a decline in non-interest income in Multifamily. Net interest income was $4.6 billion, up 3% year-over-year, as continued mortgage portfolio growth and higher average portfolio guarantee fee rates were partially offset by lower deferred fee income, which was driven by slower prepayments as a result of higher mortgage interest rates. Non- interest income decreased 24% year-over year to $0.6 billion, primarily driven by lower guarantee income and a decrease in net investment gains in Multifamily.

Provision for credit losses was $1.8 billion for the third quarter of 2022, primarily driven by deterioration in housing market conditions, including lower observed and forecasted house price appreciation. The benefit for credit losses of $0.2 billion in the third quarter of 2021 was primarily driven by observed house price appreciation and reduced expected credit losses related to COVID-19.

Non-interest expense was $1.8 billion, down 1% year-over-year, primarily driven by a benefit for credit enhancement recoveries due to the corresponding increase in the provision for credit losses. This decrease was partially offset by higher credit enhancement expense as a result of a higher volume of outstanding credit risk transfer transactions and higher spreads on recent transactions.

Summary of Consolidated Results of Operations

(Dollars in millions)		3Q 2022		2Q 2022		Change		3Q 2021		Change
Net interest income		$4,554		$4,759	($205)		$4,418	$136
Non-interest income		627		645	(18)		829	(202)
Net revenues		5,181		5,404	(223)		5,247	(66)
Benefit (provision) for credit losses		(1,796)		(307)	(1,489)		243	(2,039)
Non-interest expense		(1,825)		(2,020)	195		(1,844)	19
Income (loss) before income tax (expense)
benefit		1,560		3,077	(1,517)		3,646	(2,086)
Income tax (expense) benefit		(247)		(624)	377		(727)	480
Net income (loss)		1,313		2,453	(1,140)		2,919	(1,606)
Other comprehensive income (loss), net of taxes
and reclassification adjustments		(181)		(66)	(115)		(10)	(171)
Comprehensive income (loss)		$1,132		$2,387	($1,255)		$2,909	($1,777)
Conservatorship metrics (in millions)
Net worth			$1,132		$9,919
	$35,230		$34,098		$25,311
Senior preferred stock liquidation preference		106,746		104,359	2,387		95,050	11,696
Remaining Treasury funding commitment		140,162		140,162		-		140,162		-
Cumulative dividend payments to Treasury		119,680		119,680		-		119,680		-
Cumulative draws from Treasury		71,648		71,648		-		71,648		-

Freddie Mac Third Quarter 2022 Financial Results

November 8, 2022

Page 3

Single-Family Segment

Financial Results

Net Revenues	Net Income	Comprehensive Income
(In billions)	(In billions)	(In billions)

		$5.2	$4.9
	$4.7		$4.4
$3.9
3Q21	4Q21	1Q22	2Q22	3Q22

		$3.4
$2.0	$2.2		$2.2
				$0.8
3Q21	4Q21	1Q22	2Q22	3Q22

		$3.4
$2.0	$2.2	$2.2

$0.8

3Q21 4Q21 1Q22 2Q22 3Q22

(Dollars in millions)		3Q 2022		2Q 2022		Change		3Q 2021		Change
Net interest income		$4,363		$4,535	($172)		$4,080	$283
Non-interest income		58		336	(278)		(119)	177
Net revenues		4,421		4,871	(450)		3,961	460
Benefit (provision) for credit losses		(1,784)		(298)	(1,486)		244	(2,028)
Non-interest expense		(1,653)		(1,854)	201		(1,672)	19
Income (loss) before income tax (expense) benefit		984		2,719	(1,735)		2,533	(1,549)
Income tax (expense) benefit		(141)		(551)	410		(505)	364
Net income (loss)		843		2,168	(1,325)		2,028	(1,185)
Other comprehensive income (loss), net of taxes and
reclassification adjustments		(39)		5	(44)		18	(57)
Comprehensive income (loss)		$804		$2,173	($1,369)		$2,046	($1,242)

Key Drivers

Net income decreased year-over-year, mainly driven by:

• A provision for credit losses for the third quarter of 2022, primarily driven by deterioration in housing market conditions, including lower observed and forecasted house price appreciation. The benefit for credit losses in the third quarter of 2021 was primarily driven by observed house price appreciation and reduced expected credit losses related to COVID-19.
• Higher net interest income primarily due to continued mortgage portfolio growth and higher average portfolio guarantee fee rates. This increase was partially offset by lower deferred fee income, which was driven by slower prepayments as a result of higher mortgage interest rates.

Freddie Mac Third Quarter 2022 Financial Results

November 8, 2022

Page 4

Single-Family Segment

Business Results

			New Business Activity			Mortgage Portfolio		Serious Delinquency Rate
					(UPB in billions)								(UPB in billions)
$299																	$2,792	$2,884	$2,928	$2,971		1.46%
$271
					$207											$2,682								1.12%	0.92%
	$167																			0.76%	0.67%
		$160			$138		$121
				$114
	$132							$52			$23
$111
	$93		$86		$98
3Q21	4Q21	1Q22	2Q22	3Q22		3Q21	4Q21	1Q22	2Q22	3Q22		3Q21	4Q21	1Q22	2Q22	3Q22
				Home purchase		Refinance

New Business Statistics:

Single-Family homes funded (in thousands) Purchase borrowers (in thousands) Refinance borrowers (in thousands)

Affordable to low- to moderate-income families (%)(1) First-time homebuyers (%)(2)

Average guarantee fee rate charged (bps) Weighted average original loan-to-value (LTV) (%) Weighted average original credit score

UPB covered by new CRT issuance (in billions)

Portfolio Statistics:

Average guarantee fee rate charged (bps) Weighted average current LTV (%) Weighted average current credit score Loan count (in millions)

Credit-Related Statistics:

Loan workout activity (in thousands)

Credit enhancement coverage (%)

3Q 2022		2Q 2022		Change		3Q 2021		Change
392		468	(76)		1,027	(635)
297		263	34		415	(118)
95		205	(110)		612	(517)
56		61	(5)		52	4
49		49		-		46	3
54		52	2		48	6
78		75	3		72	6
747		744	3		750	(3)
$136		$151	($15)		$167	($31)
48		47	1		46	2
53		52	1		55	(2)
756		756		-		756		-
13.6		13.5	0.1		12.8	0.8
28		37	(9)		73	(45)
61		59	2		50	11

1. Eligible loans acquired affordable to families earning at or below 120% of area median income (AMI).
2. Calculated as a percentage of purchase borrowers with loans secured by primary residences.

Business Highlights

• The company provided funding for 392,000 single-family homes, 297,000 of which were purchase loans, as refinance activity slowed significantly due to higher mortgage interest rates. First-time homebuyers represented 49% of new single-family home purchase loans.
• Single-Familyloan workout activity decreased to 28,000 from 73,000 in the third quarter of 2021, as the overall forbearance population continued to decline.
• Credit enhancement coverage of the Single-Family mortgage portfolio increased to 61% from 50% in the third quarter of 2021, primarily due to the new business activity included in credit risk transfer (CRT) transactions.

Freddie Mac Third Quarter 2022 Financial Results

November 8, 2022

Page 5

Multifamily Segment

Financial Results

Net Revenues	Net Income	Comprehensive Income
(In billions)	(In billions)	(In billions)

$1.3
	$0.9			$0.8	$0.9					$0.9
		$0.6			$0.5
		$0.5					$0.5		$0.5
					$0.4	$0.3				$0.3
										$0.3
											$0.2
3Q21	4Q21	1Q22	2Q22	3Q22	3Q21	4Q21	1Q22	2Q22	3Q22	3Q21	4Q21	1Q22	2Q22	3Q22

(Dollars in millions)		3Q 2022		2Q 2022		Change		3Q 2021		Change
Net interest income		$191		$224	($33)		$338	($147)
Non-interest income		569		309	260		948	(379)
Net revenues		760		533	227		1,286	(526)
Benefit (provision) for credit losses		(12)		(9)	(3)		(1)	(11)
Non-interest expense		(172)		(166)	(6)		(172)		-
Income (loss) before income tax (expense) benefit		576		358	218		1,113	(537)
Income tax (expense) benefit		(106)		(73)	(33)		(222)	116
Net income (loss)		470		285	185		891	(421)
Other comprehensive income (loss), net of taxes and
reclassification adjustments		(142)		(71)	(71)		(28)	(114)
Comprehensive income (loss)		$328		$214	$114		$863	($535)

Key Drivers

Net income decreased year-over-year, mainly driven by lower non-interest income from:

• Lower guarantee income due to fair value losses on guarantee assets as a result of higher interest rates.
• Lower net investment gains due to spread widening and lower margins on new loan purchases and securitizations, partially offset by gains from interest-rate risk management activities.