Freddie Mac Q2 Earnings Call Highlights

Freddie Mac OTCMKTS: FMCC reported second-quarter net income of $3.8 billion, up 61% from a year earlier, as higher net interest income, lower expenses and a credit reserve release lifted results.

The government-sponsored enterprise ended the quarter with net worth of nearly $78 billion and a total mortgage portfolio of $3.7 trillion.

Chief Financial Officer Jim Whitlinger said the company provided about $128 billion of liquidity to the U.S. housing market during the quarter and helped nearly 439,000 families buy, refinance or rent homes. He said 91% of eligible rental units financed and 54% of single-family homes financed were affordable to households earning 120% or less of area median income. Among homebuyers purchasing a primary residence, 52% were first-time buyers.

Net revenues rose 1% year over year to $6 billion. Net interest income increased $711 million, or 13%, to reflect continued mortgage portfolio growth and an increase in fully guaranteed multifamily securitizations following a change in business strategy. Freddie Mac’s net interest yield rose seven basis points from the prior-year period to 69 basis points.

Non-interest income moved to a loss of $19 million from income of $617 million in the second quarter of 2025. Whitlinger attributed the change primarily to net investment losses in the current quarter versus investment gains a year earlier, as well as lower guarantee income.

The company recorded an $880 million benefit for credit losses, compared with a $783 million provision in the prior-year quarter. The benefit was primarily driven by a release of single-family reserves following updates to Freddie Mac’s process for generating future house-price scenarios.

Non-interest expense declined 3% year over year to $2.1 billion, which Whitlinger said reflected the company’s continued operational-efficiency efforts.

Freddie Mac’s single-family segment generated net income of $3.3 billion, a 57% increase from a year earlier. The increase primarily reflected the current-quarter credit loss benefit compared with a provision in the prior-year period. Single-family net interest income rose 11%, or $551 million, to $5.4 billion. The increase reflected 1% growth in the single-family mortgage portfolio and lower expenses associated with debt and hedge accounting relationships. Investment losses tied primarily to interest-rate management activities partly offset the gain.

The segment recorded an $846 million credit-loss benefit, compared with a $622 million provision in the second quarter of 2025. House prices increased 0.7% in the second quarter, compared with a 0.2% decline in the year-earlier quarter. Freddie Mac’s forecast assumes house prices will rise 1.7% over the next 12 months and 2.1% over the following 12 months, above its December 2025 forecast of 0.5% and 1.4%, respectively.

Single-family new business totaled $110 billion, with refinancings representing 33% of volume. The single-family serious delinquency rate was 60 basis points at June 30, up five basis points year over year and unchanged from the first quarter. Net charge-offs totaled $116 million, compared with $73 million in the prior-year quarter. The portfolio’s weighted-average current loan-to-value ratio was 53%, while its weighted-average credit score was 755.

Freddie Mac helped approximately 22,000 families remain in their homes through loan workouts during the quarter. Mortgage rates ended the quarter at 6.49%, after reaching 6.53% during the period, according to Whitlinger. He said elevated rates continued to affect market activity, though the company remain...