FEDERAL HOME LOAN MORTGAGE CORP (FMCC): Results of Operations and Financial Condition
FEDERAL HOME LOAN MORTGAGE CORP (FMCC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Freddie Mac Reports Net Income of $3.8 Billion for Second Quarter 2026 Making Home Possible for 439,000 Households in Second Quarter 2026 • Financed 306,000 mortgages, with 54% of eligible loans affordable to low- to moderate-income families. • First-time homebuyers
How this was made
The 30-second read
Why it matters
Traders can update expectations for credit-loss provisioning, net interest income trajectory, and housing credit quality using the disclosed reserve release, credit-loss benefit, and delinquency rates.
Market read
Fresh quarterly financials with explicit drivers (credit reserve release, net interest income growth) and credit quality (delinquency) provide actionable inputs for mortgage-credit and rate-sensitive positioning.
What to watch
Non-interest income swung to a small loss due to net investment losses and lower guarantee income, which could matter if rates move against the hedging profile.
Freddie Mac Reports Net Income of $3.8 Billion for Second Quarter 2026
Net income increased 61% year-over-year to $3.8 billion, supported by a $0.9 billion benefit for credit losses, while net revenues increased 1% and non-interest expense declined 3%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated net interest incomeother | $6,010 million | $391 million | $711 million |
| Consolidated non-interest income (loss)other | (19) million | (533) million | (636) million |
| Consolidated net revenuesother | $5,991 million | (142) million | $75 million |
| Consolidated (provision) benefit for credit lossesother | $880 million | $560 million | $1,663 million |
| Consolidated non-interest expenseother | $(2,097) million | $(75) million | $61 million |
| Consolidated income before income tax expenseother | $4,774 million | $343 million | $1,799 million |
| Consolidated income tax expenseother | $(936) million | $(63) million | $(348) million |
| Consolidated net incomeother | $3,838 million | $280 million | $1,451 million |
| Consolidated other comprehensive income (loss), net of taxes and reclassification adjustmentsother | $9 million | $29 million | $(12) million |
| Consolidated comprehensive incomeother | $3,847 million | $309 million | $1,439 million |
| Net worthother | $77,769 million | $3,847 million | $12,958 million |
| Senior preferred stock liquidation preferenceother | $146,570 million | $3,538 million | $11,519 million |
| Remaining Treasury funding commitmentother | $140,162 million | — | — |
| Cumulative dividend payments to Treasuryother | $119,680 million | — | — |
| Cumulative draws from Treasuryother | $71,648 million | — | — |
| Single-Family net interest incomeother | $5,449 million | $329 million | $551 million |
| Single-Family non-interest income (loss)other | $(349) million | $(404) million | $(586) million |
| Single-Family (provision) benefit for credit lossesother | $846 million | $535 million | $1,468 million |
| Single-Family non-interest expenseother | $(1,870) million | $(90) million | $35 million |
| Single-Family net incomeother | $3,277 million | $301 million | $1,185 million |
| Multifamily net interest incomeother | $561 million | $62 million | $160 million |
| Multifamily non-interest income (loss)other | $330 million | $(129) million | $(50) million |
| Multifamily (provision) benefit for credit lossesother | $34 million | $25 million | $195 million |
| Multifamily non-interest expenseother | $(227) million | $15 million | $26 million |
| Multifamily net incomeother | $561 million | $(21) million | $266 million |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Single-FamilyNet interest income increased primarily due to continued mortgage portfolio growth and lower expense related to debt in hedge accounting relationships; non-interest loss reflected impacts from interest-rate risk management activities. | $5,100 million | $(75) million | $(35) million |
| MultifamilyNet interest income increased primarily due to an increase in the balance of fully guaranteed securitizations in the Multifamily mortgage portfolio due to the change in Multifamily business strategy; non-interest income declined due to lower guarantee income and a lower volume of loan sale activities. | $891 million | $(67) million | $110 million |
Capital returns
- Cumulative dividend payments to Treasury were $119,680 million as of June 30, 2026.
- Senior preferred stock liquidation preference was $146,570 million as of June 30, 2026.
What drove it
- Market liquidity provided was $128 Billion and homes and rental units financed were 439,000 during the second quarter of 2026.
- Consolidated net interest income increased 13% year-over-year, driven by growth in fully guaranteed Multifamily securitizations and continued Single-Family mortgage portfolio growth.
- The $0.9 billion consolidated benefit for credit losses was primarily driven by a Single-Family credit reserve release following updates to the process for generating future house price scenarios.
- Single-Family new business activity was $110 billion, compared with $94 billion in the second quarter of 2025, primarily driven by increased refinance activity.
- Single-Family financed 306,000 mortgages, including 97,000 first-time homebuyers. First-time homebuyers represented 52% of new single-family home purchase loans.
- 54% of eligible Single-Family loans were affordable to low- to moderate-income families.
- Multifamily new business activity was $18 billion, compared with $12 billion in the second quarter of 2025.
- Freddie Mac financed 133,000 rental units, with 91% of eligible units affordable to low- to moderate-income families.
- Single-Family average estimated guarantee fee rate was 54 bps for new business and 50 bps for the portfolio.
Concerns
- Consolidated net revenues declined $142 million sequentially because non-interest income (loss) moved to a $(19) million loss from $514 million of income in the first quarter of 2026.
- Consolidated non-interest income (loss) declined year-over-year due to net investment losses in the second quarter of 2026 versus net investment gains in the second quarter of 2025, as well as lower guarantee income.
- Single-Family net revenues declined 1% year-over-year and non-interest income (loss) was $(349) million, compared with $237 million of income in the second quarter of 2025.
- Single-Family serious delinquency rate was 0.60%, compared with 0.59% at December 31, 2025 and 0.55% at June 30, 2025.
- Multifamily delinquency rate was 0.51%, compared with 0.44% at December 31, 2025 and 0.47% at June 30, 2025.
- The earnings increase was primarily driven by a credit reserve release in the current period compared with a credit reserve build in the second quarter of 2025.
What to watch
- The sustainability of the $880 million consolidated benefit for credit losses and the impact of the updated future house price scenario process.
- The effect of interest-rate risk management activities and investment gains or losses on non-interest income.
- Single-Family serious delinquency performance and Multifamily delinquency performance.
- Multifamily execution of the shift to primarily issue fully guaranteed securitizations, including the effect on guarantee income and loan sale activity.
- Mortgage portfolio growth, refinance activity, and the volume of fully guaranteed Multifamily securitizations.
Balance sheet and cash flow
- Net worth was $77,769 million as of June 30, 2026.
- Remaining Treasury funding commitment was $140,162 million as of June 30, 2026.
- Cumulative draws from Treasury were $71,648 million as of June 30, 2026.
- Total Mortgage Portfolio was $3.7 Trillion as of June 30, 2026.
- Single-Family mortgage portfolio was $3.2 trillion, up 1% year-over-year.
- Multifamily mortgage portfolio was $505 billion, up 8% year-over-year.
Analysis
Freddie Mac reported a strong second quarter of 2026, with net income of $3,838 million, up $1,451 million from the second quarter of 2025 and up $280 million from the first quarter of 2026. Net revenues of $5,991 million increased $75 million year-over-year, although they declined $142 million sequentially. The year-over-year earnings improvement was principally driven by the $880 million benefit for credit losses, compared with a $(783) million provision in the prior-year quarter.
Core interest income was the principal revenue support. Consolidated net interest income rose $711 million year-over-year to $6,010 million, driven by continued Single-Family mortgage portfolio growth and a higher balance of fully guaranteed securitizations in Multifamily. That growth was partly offset by a sharp deterioration in non-interest income (loss), which was $(19) million versus $617 million in the second quarter of 2025. The filing attributes this swing to net investment losses versus prior-year net investment gains, lower guarantee income, and, within Single-Family, interest-rate risk management activities.
Single-Family generated $3,277 million of net income, up $1,185 million year-over-year, despite net revenues declining to $5,100 million. Its credit result shifted to an $846 million benefit from a $(622) million provision, while non-interest expense fell to $(1,870) million. New business activity increased to $110 billion from $94 billion, led by refinance activity. Multifamily net income rose to $561 million from $295 million as net revenues increased to $891 million, benefiting from growth in fully guaranteed securitizations and a $34 million credit benefit.
Credit and delinquency performance warrant attention. The Single-Family serious delinquency rate increased to 0.60% from 0.59% at December 31, 2025 and 0.55% at June 30, 2025. The Multifamily delinquency rate increased to 0.51% from 0.44% and 0.47%, respectively. The filing also identifies the updated process for future house price scenarios as the driver of the Single-Family reserve release, making the credit benefit a central contributor to the quarter's earnings growth.
Capital and conservatorship metrics improved with comprehensive income. Net worth increased to $77,769 million from $73,922 million in the first quarter of 2026, while the senior preferred stock liquidation preference rose to $146,570 million. Freddie Mac provided $128 Billion of market liquidity, financed 439,000 homes and rental units, and reported a $3.7 Trillion total mortgage portfolio. The release did not provide forward financial guidance.
Management, verbatim
Freddie Mac delivered strong second quarter financial results, reflecting the strength of the business, and disciplined execution against our priorities. Net income was $3.8 billion, driven by strong revenues, a credit benefit, and continued cost discipline. Freddie Mac’s net worth increased to $78 billion at quarter-end. As we advance our mission to make home possible, Freddie Mac remains focused on prudently managing risk, supporting the housing market, and serving families through all parts of the economic cycle.
William J. Pulte, Director, U.S. Federal Housing and Chair of the Board of Directors, Freddie Mac
Freddie Mac is working to increase access to housing and help more families achieve the dream of homeownership. In the second quarter, together with lenders of all sizes, we helped nearly 439,000 households buy, refinance or rent a home, including 97,000 first-time homebuyers. Nearly 91% of the rental units and 54% of the single-family homes we supported were affordable to families earning 120% or less of area median income.
Kenny Smith, CEO of Freddie Mac
Not in the filing
stated, not guessed- Forward guidance and outlook were not provided.
- Previous-release outlook was not provided.
- Gross margin was not reported.
- Operating income was not reported.
- Earnings per share, including GAAP and non-GAAP EPS, was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Cash and debt balances were not reported.
- Share repurchases and common-stock dividends were not reported.
- GAAP or non-GAAP basis labels were not provided in the supplied filing text.
- The Multifamily Segment Business Results table was truncated in the supplied filing text; its individual business-statistic rows were not available.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with Freddie Mac’s Q2 2026 results and conservatorship metrics.
Ticker impact
Freddie Mac reported Q2 2026 net income of $3.8B, up 61% YoY, driven by a credit reserve release and higher net interest income.
Near-term bias upward if traders view the credit reserve release as supportive and delinquency as contained; otherwise, expect skepticism if the benefit is seen as non-recurring.
The 8-K discloses specific quarterly results, including a $0.9B credit benefit and delinquency rising to 0.60% from 0.55% a year earlier, giving traders both upside (earnings) and caution (credit trend).
Market effects
Adds incremental read-through on agency mortgage credit performance and reserve dynamics, relevant to mortgage REITs and agency MBS sentiment.
US housing finance sentiment may improve modestly given the scale of funded mortgages and affordability mix.
Limited direct global impact, but can influence broader rate and credit risk appetite for mortgage-linked exposures.
Counterpoint
The earnings beat is primarily attributed to a credit reserve release, which may not be repeatable, while delinquency continues to drift higher.
Key entities
- issuerFederal Home Loan Mortgage Corp (Freddie Mac)
OTCQB-listed entity reporting Q2 2026 net income, net revenues, credit-loss benefit, and delinquency metrics.
- executiveWilliam J. Pulte
Director and Chair of the Board, quoted on results and risk management focus.
- executiveKenny Smith
CEO, quoted on housing access and affordability outcomes.
