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.
Q: How did the single-family segment perform this quarter? A: The single-family segment reported a net income of $2.3 billion, a 9% decrease year-over-year. Segment net revenues were $4.9 billion, down 3% from the prior year, as higher net interest income was offset by lower non-interest income. The segment’s mortgage portfolio grew by 2% year-over-year to $3.1 trillion, with a credit reserve build of $148 million due to new acquisitions.
Q: What changes were observed in the multifamily segment? A: The multifamily segment’s net income decreased by 20% to $426 million. However, net revenues increased by 7% to $835 million, driven by higher net interest income due to a strategic shift towards fully guaranteed securitizations. The multifamily mortgage portfolio grew by 6% year-over-year to $480 billion, with 90% of the portfolio covered by credit enhancements.
Q: Can you discuss the company’s efforts in expanding affordable housing? A: Whitlinger highlighted Freddie Mac’s initiatives to support affordable housing, including the doubling of the multifamily Low-Income Housing Tax Credit equity cap to $2 billion and investments in modern single-section factory-built homes. These efforts aim to address the nationwide shortage of affordable homes and improve the housing market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
link