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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesFederal Home Loan Mortgage Corporation, known as Freddie Mac, is a congressionally chartered company that supports the U.S. mortgage market by buying eligible loans from lenders, packaging loans into mortgage-backed securities, and guaranteeing payments to investors. Its income comes from guarantee and management fees, mortgage-related interest, and other business activity; issuing debt helps fund its operations but is not profit by itself. Freddie Mac does not make mortgage loans directly to homebuyers.
What is Freddie Mac?
Freddie Mac is the operating name of the Federal Home Loan Mortgage Corporation. Congress created the corporation on July 24, 1970, and its board authorized it to do business as Freddie Mac, according to the company’s investor FAQ. Its stated mission is to provide liquidity, stability, and affordability to the U.S. housing market.
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The key to understanding the company is its place in the secondary mortgage market. A borrower applies to a lender, and the lender makes the mortgage. Freddie Mac generally enters the process after that loan has been originated, buying qualifying loans from lenders. The purchase gives lenders money they can use to make additional mortgages, rather than leaving all their capital tied up in loans they have already made.
Freddie Mac’s single-family business buys conventional, conforming mortgages on one- to four-unit homes. Its multifamily business works through specialized lenders to finance rental properties. Those are different segments of its mortgage activity, but both connect mortgage lending to investors and funding markets.
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Does Freddie Mac give you a mortgage?
No. Freddie Mac says it does not make loans directly to homebuyers. A borrower applies to a lender, which evaluates and originates the mortgage. If the loan meets the relevant requirements, Freddie Mac may later buy it from that lender. That secondary-market purchase can affect how readily lenders can recycle funds into new loans, but Freddie Mac is not the borrower’s bank and does not directly approve a consumer’s application.
How does the Freddie Mac mortgage process work?
The process links the borrower’s loan to investors who buy mortgage-backed securities. The borrower still makes scheduled payments through a mortgage servicer; the lender-to-investor chain changes how the loan is financed and who ultimately bears different risks.
- A lender originates the loan. The lender makes a mortgage to a borrower. Freddie Mac’s single-family purchases cover qualifying conventional, conforming mortgages for one- to four-unit homes; its multifamily business uses specialized lenders for rental-property finance.
- Freddie Mac purchases an eligible mortgage. The lender receives cash or, in some transactions, mortgage-backed securities. Proceeds can free up the lender’s capacity to make more loans.
- Loans are pooled and securitized. Freddie Mac assembles loans into pools and issues mortgage-backed securities tied to those pools. It guarantees principal and interest payments to the security holders.
- Investors buy the securities. Banks, insurers, pension funds, asset managers, and other investors can provide funding by buying mortgage-backed securities. Freddie Mac also issues corporate debt to fund its mortgage purchases, investments, and operations.
- Payments move through the servicing chain. The borrower sends payments to the servicer, which forwards them through the mortgage-finance system. Investors receive principal and interest under the security’s terms. If the underlying loans underperform, Freddie Mac remains responsible for the payments promised under its guarantee.
Securitization changes how a group of mortgages is funded and traded; it does not make the underlying loans risk-free. Freddie Mac manages credit, interest-rate, liquidity, and funding risks, and says it transfers some mortgage credit risk to third-party investors through credit-risk-transfer programs. The company’s guarantee remains an obligation to security holders even when some credit risk has been transferred.
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Guarantee fees
Freddie Mac charges guarantee fees for guaranteeing mortgage-backed securities and accepting mortgage credit risk. This is a core element of the business model: the fee compensates the company for taking on an obligation to security holders if borrowers’ payments fall short. The amount and mix of fee income vary by product, segment, and reporting period.
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In a discussion of fourth-quarter and full-year 2025 results, Freddie Mac CFO Jim Whitlinger said the average guarantee-fee rate on new total guarantee exposures reached 56 basis points in 2025, five basis points higher than in 2024. He attributed the increase primarily to growth in fully guaranteed securitizations, which carry higher guarantee-fee rates. A basis point is one hundredth of a percentage point, so 56 basis points is 0.56 percentage points; the reported figure is a rate on new total guarantee exposures, not a statement of the company’s total revenue or profit.
Management fees and mortgage-related income
Freddie Mac identifies management fees for accepting and managing risks associated with mortgages it buys. Its reported segment results also include net interest income and noninterest income. These categories can move differently as product activity and risk-management decisions change, so a single fee rate does not describe the full earnings picture.
For 2025, Freddie Mac said Multifamily net interest income rose 33 percent, reflecting higher guarantee-fee income. The same segment’s noninterest income declined by $1.1 billion. The company attributed that decrease primarily to lower held-for-sale loan purchase and securitization activity after a strategy shift, along with interest-rate risk-management effects. Those explanations show why income can change even when the business continues to support mortgage finance: the volume and form of transactions, as well as risk management, matter.
Debt provides funding, not earnings by itself
Freddie Mac issues corporate debt securities and bonds to finance purchases and investments. Selling debt raises funds, but it is not the same as earning revenue: the company must account for the cost of that funding, including interest expense. A useful way to read a description of its business is to distinguish cash raised to finance assets from fees and income earned by operating the mortgage business.
Credit provisions and other costs reduce earnings
Guarantee and management income do not equal profit. Credit-loss provisions, operating expenses, interest expense, and regulatory assessments also affect net income. For the Multifamily segment, Freddie Mac reported a provision for credit losses of $532 million in 2025, compared with $102 million in 2024. The CFO said the 2025 provision reflected reserve building tied to new purchase commitments and acquisitions following a strategy change, as well as deterioration in some delinquent loans.
A provision for credit losses is an expense in the period reported, not a fee collected from borrowers or investors. Its size can reflect the company’s view of expected losses and the loans or commitments in its portfolio. The rise in the 2025 Multifamily provision illustrates why a fee-based business still has exposure to borrower and portfolio performance.
What do Freddie Mac’s recent earnings figures show?
Freddie Mac’s reported numbers should be read with their period and scope attached. The 2025 Multifamily figures below are segment results; the second-quarter 2026 figures are company-level results for one quarter. They should not be treated as directly comparable measures.
| Measure | Reported figure | Scope and period |
|---|---|---|
| Multifamily net revenues | $3.4 billion | Freddie Mac Multifamily segment, full year 2025 |
| Multifamily net income | $1.5 billion | Freddie Mac Multifamily segment, full year 2025 |
| Multifamily net interest income | Up 33 percent | Freddie Mac Multifamily segment, 2025 compared with 2024 |
| Multifamily provision for credit losses | $532 million, compared with $102 million in 2024 | Freddie Mac Multifamily segment, full year 2025 |
| Average guarantee-fee rate on new total guarantee exposures | 56 basis points, up 5 basis points from 2024 | Freddie Mac, 2025 |
| Net revenues | $6.0 billion | Freddie Mac, second quarter 2026 |
| Net income | $3.8 billion | Freddie Mac, second quarter 2026 |
| Net worth | $78 billion | Freddie Mac, as of June 30, 2026 |
| Total portfolio | $3.7 trillion | Freddie Mac, as of June 30, 2026 |
The 2026 earnings page reports a quarterly revenue and income flow alongside net worth and portfolio size at a specific date. Net worth and portfolio are balance-sheet or portfolio measures, not earnings for the quarter. For the same reason, the 2025 Multifamily segment results cannot be substituted for Freddie Mac’s consolidated results.
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Is Freddie Mac a government agency?
No. Freddie Mac’s investor FAQ describes it as a federally chartered private company serving a public purpose, not a government agency. The company’s relationship with the federal government nevertheless matters: the Federal Housing Finance Agency (FHFA) appointed itself conservator on September 6, 2008, and Freddie Mac’s current company materials continue to identify FHFA as both its regulator and conservator.
The conservatorship is associated with a Treasury agreement involving senior preferred stock and a warrant, as described in the investor FAQ. That arrangement does not make Freddie Mac’s securities direct obligations of the U.S. Treasury. In particular, a mortgage-backed security supported by Freddie Mac’s guarantee should not be described as equivalent to a Treasury bond.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How is Freddie Mac different from Fannie Mae and Ginnie Mae?
Freddie Mac and Fannie Mae are separate corporations with substantially similar congressional mandates and charters, according to Freddie Mac’s investor FAQ. Both operate in the secondary mortgage market. Ginnie Mae has a different legal status and role: it is a government-owned corporation within the Department of Housing and Urban Development (HUD) and guarantees securities backed by federally insured or guaranteed loans. Freddie Mac says Ginnie Mae does not purchase mortgages from lenders or buy, sell, or issue securities in the same way.
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| Institution | Legal status described by Freddie Mac | Role in the mortgage market |
|---|---|---|
| Freddie Mac | Federally chartered private company; under FHFA conservatorship | Purchases qualifying mortgages, securitizes loans, and guarantees payments to security holders |
| Fannie Mae | Separate corporation with a substantially similar charter and congressional mandate to Freddie Mac | Part of the secondary mortgage market |
| Ginnie Mae | Government-owned corporation within HUD | Guarantees securities backed by federally insured or guaranteed loans |
The practical distinction is not simply that all three are “government mortgage agencies.” Freddie Mac and Fannie Mae’s mortgage-purchase and securitization model differs from Ginnie Mae’s guarantee role. Their legal status and what they do with loans are important to keep separate.
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What Freddie Mac’s guarantee does—and does not—mean
For investors, the guarantee is a central part of the mortgage-backed security. Freddie Mac promises principal and interest payments under the security’s terms, while the borrower’s payment is collected and transmitted by the servicer. The guarantee helps support the security’s payment structure; it does not erase the financial consequences of credit deterioration for Freddie Mac, as the company’s credit-loss provisions demonstrate.
The company also describes transferring some credit risk to outside investors. In the CFO’s account of Multifamily’s shift toward predominantly fully guaranteed securitizations, Whitlinger said: “Under this approach, Multifamily initially retains the credit risk on the underlying loans and subsequently transfers that risk through Multifamily Credit Insurance Pool and Multifamily Structured Credit Risk Note transactions.” The sequence matters: the segment initially holds risk and then uses specified transactions to transfer some of it. That is not the same as saying all risk disappears or that every mortgage-backed security has the same risk allocation.
How to interpret Freddie Mac’s business in one sentence
Freddie Mac connects mortgage lenders with capital-market investors: it buys eligible loans, finances and securitizes mortgage activity, charges for guarantees and management, and bears costs and risks that shape its earnings. The distinction between its operating income, financing, credit obligations, and government-related conservatorship is essential to understanding what the company is—and what it is not.
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