Freddie Mac (FMCC) Delivers Robust Q1 2026 Results: Net Income Jumps 27%, Affordable Housing Efforts Accelerate

Key Financial Highlights

• Net Income: \$3.6 billion for Q1 2026, up 27% year-over-year.
• Net Revenues: \$6.1 billion, a 5% increase from Q1 2025, driven mainly by higher net interest income.
• Net Worth: \$74 billion as of March 31, 2026.
• Total Mortgage Portfolio: \$3.7 trillion.
• Credit Losses: Benefit for credit losses of \$0.3 billion, primarily due to a credit reserve release in Single-Family, reversing reserve builds from the prior year.
• Non-Interest Income: \$0.5 billion, down 31% year-over-year, mainly due to lower guarantee income and net investment gains.
• Non-Interest Expense: \$2.0 billion, down 3% year-over-year, mainly due to reduced salary, benefit, and credit enhancement expenses.

Business Segment Performance

Single-Family Segment

• Net Income: \$3.0 billion, up 32% year-over-year.
• Net Revenues: \$5.2 billion, up 5% year-over-year, with net interest income rising 8% to \$5.1 billion.
• Benefit for Credit Losses: \$0.3 billion, driven by favorable changes in house price growth forecasts.
• New Business Activity: \$103 billion, up substantially from \$78 billion in Q1 2025, reflecting strong refinancing activity.
• Mortgages Financed: 281,000, with 52% of eligible loans classified as affordable to low- to moderate-income families.
• First-Time Homebuyers: Represented 52% of new single-family home purchase loans, totaling 79,000 first-time buyers in the quarter.
• Serious Delinquency Rate: 0.60%, up slightly from 0.59% at year-end and Q1 2025.
• Credit Enhancement Coverage: 62%.

Multifamily Segment

• Net Income: \$0.6 billion, up 9% year-over-year.
• Net Revenues: \$1.0 billion, up 3% year-over-year, with net interest income increasing 43% to \$0.5 billion.
• New Business Activity: \$13 billion, up from \$10 billion in Q1 2025.
• Rental Units Financed: 99,000, with 93% of eligible units affordable to low- to moderate-income families and 72% to low-income families.
• Delinquency Rate: 0.43%, down from 0.44% at year-end and 0.46% a year ago.
• Securitization Issuance: \$24 billion (UPB), with a larger share of fully guaranteed securitizations due to a strategic shift in the business model.
• Credit Enhancement Coverage: 91%.

Liquidity and Capital Position

• Market Liquidity Provided: \$116 billion in Q1 2026.
• Senior Preferred Stock Liquidation Preference: \$143.0 billion as of March 31, 2026, increasing to \$146.6 billion by June 30, 2026.
• Treasury Support: \$140.2 billion of funding commitment remains available under the Purchase Agreement with the U.S. Treasury.
• No Dividend to Treasury Required: Freddie Mac did not pay a dividend to the Treasury in March 2026, as it is building capital to meet the Enterprise Regulatory Capital Framework requirements.

Strategic and Regulatory Developments

• Freddie Mac continues to operate under FHFA conservatorship since 2008, with capital retention focused on meeting regulatory buffers before resuming dividends to Treasury.
• Strategic business model changes in the Multifamily segment to focus on fully guaranteed securitizations, impacting both revenue mix and risk profile.
• Continued emphasis on affordable housing—52% of single-family and 93% of multifamily financings designated as affordable.
• Ongoing reduction in regulatory barriers to foster innovation and competition in the housing market.

Management Commentary

“Freddie Mac’s strong first quarter performance reflects progress under the guidance of U.S. Federal Housing to build a company that can help more Americans achieve the dream of homeownership or find the right rental home for their family. That means supporting first-time homebuyers and working families, expanding the supply of affordable rental housing, and strengthening risk management. It also means reducing regulations so market participants can innovate and compete to deliver better outcomes for families across the housing cycle.”
— William J. Pulte, Director, U.S. Federal Housing and Chair of the Board of Directors, Freddie Mac

“We delivered strong first quarter results, with net income of \$3.6 billion and net revenues of \$6.1 billion. During the quarter, we provided \$116 billion of liquidity to the housing market and our net worth continues to grow, ending at \$74 billion. These results reflect the Freddie Mac team working in close partnership with our lenders, servicers, and housing finance stakeholders, with a focus on execution and risk management.”
— Kenny Smith, CEO of Freddie Mac

Potential Price Sensitive and Investor-Relevant Issues

• Significant Year-Over-Year Earnings Growth: The 27% surge in net income and 32% increase in Single-Family net income signal robust profitability and operational leverage.
• Credit Reserve Release: Reversal from credit reserve builds to releases could indicate improved credit outlook and lower-than-expected losses, a positive for risk profile.
• Strategic Shift in Multifamily: The move towards fully guaranteed securitizations may alter risk-return dynamics, reduce unpredictability from loan sales, and boost investor confidence in revenue stability.
• Capital Retention and Dividend Policy: Freddie Mac is not yet paying dividends to the Treasury, as it must meet regulatory capital requirements first. The steadily rising liquidation preference of the senior preferred stock affects the timing and likelihood of future common shareholder dividends.
• Affordable Housing Focus: Sustained high percentages of affordable loans and units financed emphasize Freddie Mac’s public mission—potentially influencing policy and regulatory support.
• Market Risks and Forward-Looking Statements: Management highlights a range of macro and regulatory risks, including economic conditions, interest rates, housing prices, and government actions, which could materially affect future performance and share value.

Comprehensive Financial Position (as of March 31, 2026)

• Total Assets: \$3.51 trillion
• Total Liabilities: \$3.43 trillion
• Equity: \$73.9 billion
• Allowance for Credit Losses: 0.22% of Single-Family loans, 0.42% of Multifamily loans
• Weighted Average LTV (Single-Family): 75% original, 53% current
• Weighted Average Credit Score (Single-Family): 758 original, 753 current
• Average Guarantee Fee Rate (Single-Family): 54 bps for new business, 50 bps for portfolio
• Average Guarantee Fee Rate (Multifamily): 58 bps

Upcoming Investor Events

Management will host a conference call at 9 a.m. ET on April 30, 2026, to discuss the results and outlook. The webcast and replay will be available on the Investor Relations page of Freddie Mac’s website.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Forward-looking statements in the company’s report are subject to risks and uncertainties, including but not limited to economic conditions, regulatory changes, and strategic execution. Investors should review Freddie Mac’s filings with the SEC and other public disclosures before making investment decisions. The author is not responsible for investment outcomes based on this summary.

View FEDERAL HOME LOAN MORTGAGE CORP Historical chart here