Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities
U.S. Government Accountability Office
Freddie Mac: Purchase mortgage loans and issue mortgage-backed securities
| Administering Agency/Entity |
Freddie Mac |
| Short Description |
Freddie Mac serves two key housing missions: (1) provide stability in the secondary market for residential mortgages (also in periods of economic stress) and (2) serve the mortgage credit needs of targeted groups such as low-income borrowers. To accomplish these goals, Freddie Mac issues debt and stock and then purchases mortgages from lenders with the proceeds. Freddie Mac is required to meet numeric goals set by the Federal Housing Finance Agency (FHFA) for purchases of mortgages serving low- and moderate-income families. Freddie Mac either retains the mortgages in portfolio or pools them into mortgage-backed securities (MBS) to sell to investors in the secondary mortgage market. In exchange for a fee, Freddie Mac guarantees the timely payment of interest and principal on MBS that they issue. |
| Primary Purpose |
Increase availability of mortgage loans |
| Type of Housing Supported |
Both |
| Type of Assistance |
Other |
| Fiscal Year 2010 Obligations |
Freddie Mac is not included in the federal budget. However, stress in the mortgage markets has required ongoing assistance from the Department of the Treasury (Treasury) under authority provided by the Congress in the Housing and Economic Recovery Act (HERA) of 2008. HERA created the FHFA, a new independent regulator, and provided temporary authority for the Treasury to purchase obligations of Fannie Mae and Freddie Mac (GSEs or the enterprises). In September 2008, FHFA put the enterprises under federal conservatorship. Additionally, Treasury has implemented five programs with respect to the enterprises, as well as the Federal Home Loan Banks (FHL Banks). These programs include the Senior Preferred Stock Purchase Agreements, Mortgage-Backed Securities Purchase Program, GSE Credit Facility (not used), New Issue Bond Program, and the Temporary Credit and Liquidity Program. |
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