The Federal Home Loan Mortgage Corp., or Freddie Mac, had a pretty good year overall in 2021, finishing with total equity of $28 billion — 71% greater than its net worth at year end 2020.
That’s just one key takeaway from its fourth-quarter and year-end earnings report, released Thursday. Some other highlights:
- It enabled 1.4 million families, including over 553,000 first-time homebuyers, to purchase a home last year, and nearly 2.9 million homeowners to refinance into more favorable terms, and
- Financed 655,000 rental units, with 94% of eligible units being affordable to low- to moderate-income families.
For the fourth quarter of 2021, Freddie Mac reported net income of $2.7 billion, a year-over-year decrease of 6%, as higher net revenues were offset by an increase in credit-related expenses, officials said. The government-sponsored enterprise (GSE) reported comprehensive income of $2.7 billion for the fourth quarter, an increase of 8% year-over-year.
Net revenues for the quarter increased 11% year-over-year to $5.6 billion, primarily driven by higher net-interest income, which increased 30% year-over-year to $4.8 billion. The increase in net-interest income was driven by continued mortgage portfolio growth and higher average portfolio guarantee fee rates in its single-family portfolio.
For all of 2021, Freddie Mac reported net income of $12.1 billion, a 65% year-over-year increase, primarily driven by higher net revenues and a credit reserve release in single-family. It reported comprehensive income of $11.6 billion for the year, up 54% year over year.
Net revenues for 2021 increased 32% year-over-year to $22 billion, primarily driven by higher net-interest income and higher net-investment gains.
Freddie Mac CEO Michael DeVito said during a webcast about the earnings report that the enterprise succeeded last year in its mission to make housing more accessible and affordable for homebuyers and renters in communities nationwide.
“We helped nearly 5 million families buy, refinance, or rent a home last year,” DeVito said. “We financed nearly 1.4 million purchases, including 554,000 for first-time home buyers. We enabled 2.9 million households to lower their monthly mortgage payments or to receive more favorable terms through refinancing.
“And of the 665,000 rental units we financed last year, 94% were affordable to renters earning 120% or less of area median income,” he said.
DeVito also touted Freddie Mac’s efforts to help families stay in their homes during the pandemic. “Last year, 317,000 single family borrowers received a (loan) forbearance, deferral or other relief from a Freddie Mac servicer,” he said. ”Since the earliest days of the pandemic in 2020, approximately 858,000 homeowners have entered into a forbearance agreement with our servicers, and we have helped more than 700,000 get back on their feet through the relief I mentioned earlier.”
He added that approximately 0.42% of loans in Freddie Mac’s multifamily portfolio remained in the COVID-19-related forbearance as of Dec. 31, “a marked decrease from 2.01% at the end of 2020.”
DeVito summed up the year by saying Freddie Mac "continued to build financial strength by adding nearly $12 billion to retained earnings, improving our safety and soundness, and moving us closer to our capital target. We accomplished this while effectively managing our risks, which allows us to support our mission through the economic cycle and particularly in times of crisis. We begin 2022 with much to be proud of — and even more to accomplish in the year ahead.”
