Freddie Mac Earns $3.8B as Treasury’s Claim Hits $146.6B

Why It Matters

The profit is real and the mechanism behind it is not the business. Net income rose 61% because a $783 million credit provision a year ago became an $880 million benefit. The filing attributes that swing to updates in the company’s process for generating future house price scenarios. Strip the line out and what remains is net revenue up 1%, the operating pace of a company guaranteeing $3.2 trillion of single-family mortgages in a flat quarter.

The capital story runs the other way from the earnings story. Freddie retained all $3.8 billion, lifting net worth to $77.8 billion. The Treasury claim standing ahead of common shareholders reached $146.6 billion, and the same document schedules it to $150.4 billion on September 30. The quarter widened the gap between what the company has built and what sits in front of it. The per-share line records the result exactly: minus $9 million attributable to common, or $0.00 a share.

Underneath, two credit lines moved apart. The allowance fell to 0.19% of single-family loans while serious delinquencies rose to 0.60%, so the company is holding proportionally less against a book going marginally later. The filing gives the reason for the first move and not for the second, which is why the 10-Q, not this release, is the document that settles it.

A $1.7 billion swing in one line made the quarter

Credit losses at Freddie Mac (OTCQB: FMCC) swung from a $783 million provision a year ago to an $880 million benefit, a $1.7 billion reversal that supplied most of the profit growth. A change in Freddie’s own modeling carried the quarter. The filing ties the swing to a reserve release in Single-Family, “driven by updates to the company’s process for generating future house price scenarios.”

The rest of the ledger moved less. Net interest income rose 13% to $6.0 billion on mortgage portfolio growth and a larger balance of fully guaranteed multifamily securitizations. Non-interest results swung to a $19 million loss from $617 million of income, driven by net investment losses. Net revenues, the two combined, grew 1% to $6.0 billion. Expenses fell 3% to $2.1 billion on lower salaries and benefits.

Two growth rates describe the same quarter, and both are right: 61% measures against last year’s second quarter, 8% against this year’s first. The report landed a day after Fannie Mae reported $4 billion for the same three months. Freddie’s operational pace held underneath the accounting: 306,000 mortgages funded, with refinance borrowers nearly doubling from a year earlier to 106,000, driving $110 billion of new single-family business.

“Net income was $3.8 billion, driven by strong revenues, a credit benefit, and continued cost discipline,” said William J. Pulte in the release. Pulte is Director, U.S. Federal Housing, and chair of Freddie Mac’s board of directors. Chief Executive Officer Kenny Smith counted 97,000 first-time homebuyers among the nearly 439,000 households the company helped in the quarter.

Reserves fell to 0.19% while late payments rose

The allowance for credit losses ended the quarter at 0.19% of single-family loans, down from 0.23% a year ago. Over the same year, the serious delinquency rate rose to 0.60% from 0.55%, and the multifamily delinquency rate rose to 0.51% from 0.47%. Both moves are measured in hundredths of a point. The loans behind them remain conservative on paper: a 761 weighted average credit score on new loans, and a 53% current loan-to-value across the 13.9 million loans on the books. The two lines still point in opposite directions, and the release points readers to the Form 10-Q for the detail behind the new house-price scenario process.

The table that names its own next number: $150.4 billion

Net worth ended June at $77.8 billion, and Freddie was not required to pay a dividend to Treasury in June. Under its Purchase Agreement with Treasury, while the company rebuilds capital, each quarter’s increase in net worth is added to the liquidation preference of Treasury’s senior preferred stock a quarter later. That preference is the amount Treasury would collect ahead of every other shareholder, not a bill due now. The filing states it reached $146.6 billion on June 30 based on the first quarter’s build, and will reach $150.4 billion on September 30 based on this one. The claim now stands at nearly twice the company’s $77.8 billion net worth, and the same table records it stepping up each quarter on a one-quarter delay.

The rest of the conservatorship math: $119.7 billion of cumulative dividends paid to Treasury against $71.6 billion of cumulative draws. A $140.2 billion Treasury funding commitment still stands behind the company, which has operated with FHFA as its conservator. For common holders, the quarter was thinner than the headline. Against $3,838 million of net income, $3,847 million was attributed to the senior preferred stock. Net income attributable to common stockholders came to minus $9 million, or $0.00 per share.

Freddie’s report was the second big financial filing of Thursday morning, after ICE’s agreement to buy MarketAxess before the open.

What to watch

1. Freddie Mac’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, which the release points readers to for more information. The disclosure behind the updated house-price scenario process belongs there.

2. September 30, 2026 is a date the filing attaches a number to: the senior preferred liquidation preference is set to increase to $150.4 billion that day. The third-quarter report that follows should print the step.

3. The replay of Thursday’s 9 a.m. earnings call, available on FreddieMac.com for about 30 days per the release, along with the Second Quarter 2026 Financial Supplement furnished with the same Form 8-K.