r transactions. Competition The company’s principal competitors in this segment include Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (with Federal Housing Administration (FHA)/ U.S. Department of Veterans Affairs (VA)), and other financial institutions. Multifamily segment This segment provides liquidity to the multifamily market and supports a consistent supply of workforce housing by purchasing and securitizing loans secured by properties with five or more units. The Multifamily segment reflects results from the company’s investment, securitization, and guarantee activities in multifamily loans and securities and the management of multifamily mortgage credit risk. In this segment, the company primarily issues the types of securitization and guarantee products which make up its guarantee portfolio, including K Certificates, other securitization products, and other mortgage-related guarantees. K Certificates: The company’s primary business model is to purchase multifamily loans for aggregation and securitization through the issuance of multifamily K Certificates, which allows it to transfer the majority of the expected credit losses of the loans to third-party investors. The company sells multifamily loans to a non-Freddie Mac securitization trust that issues senior and subordinated securities, and simultaneously purchases and places the senior securities into a Freddie Mac securitization trust that issues guaranteed K Certificates. In all of these transactions, it guarantees only the senior securities issued by the Freddie Mac securitization trust and do not issue or guarantee the subordinated securities issued by the non-Freddie Mac securitization trust. Other securitization products: The company purchases small balance multifamily loans and sells them to a third-party securitization trust in transactions that are similar to its K Certificate transactions and that transfer a portion of the credit risk of the loans to third-party investors. The company also issues other types of securitization products, including PCs backed by multifamily loans and pass through certificates backed by multifamily housing revenue bonds. Other mortgage-related guarantees: The company guarantees mortgage-related assets held by third parties in exchange for management and guarantee fee income without securitizing those assets. The company provides guarantees on certain tax-exempt multifamily housing revenue bonds secured by low- and moderate-income multifamily loans. Customers The company’s multifamily loan volume is sourced through its approved lenders. The company provides post-construction financing to apartment project operators with established performance records. Competition The company’s principal competitors in this segment include Fannie Mae and FHA. Investments segment This segment reflects results from three primary activities, such as managing the company’s mortgage-related investments portfolio, excluding Multifamily segment investments and single-family seriously delinquent loans; managing the treasury function for the entire company, including funding and liquidity; and managing interest-rate risk for the entire company. This segment is focused on: In this segment, the company manages products, including agency mortgage-related securities, non-agency mortgage-related securities, single-family unsecuritized loans, and non-mortgage-related assets. Customers The company’s unsecured debt securities and structured mortgage-related securities are initially purchased by dealers and redistributed to their customers. The customers for these securities include state and local governments, insurance companies, money managers, central banks, depository institutions, and pension funds. Competition The company’s principal competitor is Fannie Mae. Regulation and Supervision The company is subject to regulation and oversight by the Federal Housing Finance Agency under its charter and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Reform Act. The company is subject to the reporting requi
freddie mac (FMCC:OTC US)
8200 Jones Branch Drive
McLean, VA 22102
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