Federal Home Loan Mortgage Corp (FMCC) Q3 2025 Earnings Call Highlights: Strong Portfolio …

This article first appeared on GuruFocus.

Release Date: October 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Federal Home Loan Mortgage Corp (FMCC) reported a net income of $2.8 billion for the third quarter, increasing the company’s net worth to nearly $68 billion.
The total mortgage portfolio increased to $3.62 trillion, facilitating over $124 billion in liquidity to the U.S. housing market, up from $106 billion in the previous quarter.
The company helped 483,000 American families buy, refinance, or rent a home in the third quarter, a 33% increase from the previous quarter.
92% of eligible rental units and 54% of single-family homes financed were affordable to middle-class families, with 50% of homebuyers being first-time buyers.
The multifamily segment reported a 7% increase in net revenues year-over-year, driven by higher net interest income and a change in business strategy leading to increased securitizations.

Net income decreased by $332 million or 11% year-over-year, primarily due to a $175 million provision for credit losses.
Non-interest income declined by $555 million or 66% year-over-year, primarily due to single-family investment losses driven by interest rate and spread changes.
The single-family business segment reported a 9% decrease in net income year-over-year, with segment net revenues decreasing by 3%.
Serious delinquencies in the single-family mortgage portfolio increased slightly to 57 basis points, up from 55 basis points in the previous quarter.
The multifamily segment saw a 20% decrease in net income year-over-year, with a provision for credit losses of $57 million compared to a $92 million benefit in the prior year quarter.

Q: Can you elaborate on the factors contributing to the decrease in net income this quarter? A: James Whitlinger, Executive Vice President and Chief Financial Officer, explained that the net income of $2.8 billion for the third quarter represented an 11% year-over-year decrease. This was primarily due to a $175 million provision for credit losses, mainly from new single-family acquisitions, compared to a credit loss benefit in the prior year driven by lower mortgage interest rates and enhancements in credit estimation processes.

Q: What were the main drivers behind the increase in net interest income? A: Whitlinger noted that net interest income rose by 9% year-over-year to $5.5 billion, driven by higher guaranteed net interest income from the growth in the single-family mortgage portfolio and a strategic shift in the multifamily business towards fully guaranteed securitizations. Additionally, lower funding costs contributed to this increase, although it was partially offset by lower yields on short-term investments.