Executive Summary

Q2 2025 net income was $2.39B, down 14% year-over-year on a higher $0.78B provision for credit losses; net revenues were $5.92B, down 1% YoY as lower non‑interest income offset higher net interest income .
Street context: S&P Global consensus Revenue estimate was $5.20B vs actual $5.13B*, a modest miss; Primary EPS consensus was $0.00 vs reported -$0.01*, reflecting common EPS impacted by senior preferred allocations (no meaningful EPS consensus coverage) [Q2 2025]*.
Single‑Family segment net income fell to $2.09B (-8% YoY) on reserve build tied to lower internal house price index valuations and growth forecasts; Multifamily net income fell to $0.30B (-39% YoY) amid lower non‑interest income and higher provisions .
Mortgage portfolio ended at $3.6T (+2% YoY), net worth reached $64.8B; credit performance mixed: Single‑Family serious delinquency 0.55% (from 0.59% in 1Q25), while Multifamily delinquency rose to 0.47% (vs 0.40% in 4Q24) .
Stock reaction: investors focused on the step‑up in credit loss provisions and weaker non‑interest income; shares fell ~3.85% on the day to $6.76, with headlines calling the quarter “mixed” .

What Went Well and What Went Wrong

What Went Well

Net interest income rose to $5.30B (+8% YoY) on continued mortgage portfolio growth and lower funding costs, partially offset by lower yields on short‑term investments .
New Single‑Family business activity increased to $94B (vs $85B in Q2 2024), with 206K purchase borrowers and 58K refinance borrowers; 53% of eligible single‑family loans and 95% of eligible multifamily units were affordable to low‑/moderate‑income families .
Management emphasized capital build and safety: “The quarter’s $2.4 billion of earnings further enhanced our safety, taking Freddie Mac’s net worth to nearly $65 billion” — William J. Pulte (Chair) .

What Went Wrong

Provision for credit losses increased to $0.78B (vs $0.39B in Q2 2024), driven by reserve build in Single‑Family tied to lower internal house price index valuations and lower forecasted house price growth rates .
Non‑interest income fell to $0.62B (-42% YoY), pressured notably in Multifamily by lower held‑for‑sale purchase/securitization revenues and interest‑rate risk management impacts .
Multifamily delinquency increased to 0.47% (vs 0.38% in Q2 2024) on rising delinquent floating‑rate and small balance loans; segment net income declined to $0.30B (-39% YoY) .

Financial Results

Consolidated (USD billions unless noted)

Metric	Q4 2024	Q1 2025	Q2 2025
Net interest income	$5.051	$5.102	$5.299
Non-interest income	$1.278	$0.750	$0.617
Net revenues	$6.329	$5.852	$5.916
Provision for credit losses	$(0.092)	$(0.280)	$(0.783)
Non-interest expense	$(2.219)	$(2.088)	$(2.158)
Net income	$3.222	$2.794	$2.387
Net income (loss) per common share	$0.01	$(0.01)	$(0.01)
Net worth (conservatorship metric, $B)	$59.575	$62.403	$64.811

Segment: Single‑Family (USD billions unless noted)

Metric	Q4 2024	Q1 2025	Q2 2025
Net interest income	$4.698	$4.753	$4.898
Non-interest income	$0.497	$0.165	$0.237
Net revenues	$5.195	$4.918	$5.135
Provision for credit losses	$(0.038)	$(0.228)	$(0.622)
Non-interest expense	$(1.971)	$(1.871)	$(1.905)
Net income	$2.555	$2.261	$2.092

Segment: Multifamily (USD billions unless noted)

Metric	Q4 2024	Q1 2025	Q2 2025
Net interest income	$0.353	$0.349	$0.401
Non-interest income	$0.781	$0.585	$0.380
Net revenues	$1.134	$0.934	$0.781
Provision for credit losses	$(0.054)	$(0.052)	$(0.161)
Non-interest expense	$(0.248)	$(0.217)	$(0.253)
Net income	$0.667	$0.533	$0.295

KPIs and Portfolio

KPI	Q4 2024	Q1 2025	Q2 2025
Total mortgage portfolio (UPB, $T)	$3.571	$3.582	$3.593
Single‑Family mortgage portfolio (UPB, $B)	$3,104	$3,115	$3,127
Multifamily mortgage portfolio (UPB, $B)	$467	$467	$466
Single‑Family serious delinquency rate	0.59%	0.59%	0.55%
Multifamily delinquency rate	0.40%	0.46%	0.47%
Single‑Family new business activity (UPB, $B)	$100	$78	$94
Multifamily new business activity (UPB, $B)	$30	$10	$12
Single‑Family credit enhancement coverage	62%	62%	62%
Multifamily credit enhancement coverage	91%	93%	92%

Estimates vs Actuals (S&P Global)

Metric	Q2 2025 Consensus	Q2 2025 Actual
Revenue (USD)	$5,199M*	$5,133M*
Primary EPS (USD)	$0.00*	-$0.01*
Net Income Normalized (USD)	N/A*	$2,387M*

Values retrieved from S&P Global. Cells marked with * reflect SPGI data for “Revenue” and earnings measures, which may differ from company “Net revenues” presentation [Q2 2025]*.

Guidance Changes

Freddie Mac does not provide formal quantitative revenue/EPS/margin guidance.

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance	FY/Quarter	N/A	N/A	No formal guidance provided

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Credit loss provisioning	Q4: Small provision; FY build largely in Single‑Family due to new acquisitions . Q1: Provision rose to $0.28B, Single‑Family reserve build tied to new acquisitions .	Provision stepped up to $0.78B; reserve build driven by lower internal HPI valuations and lower house price growth forecasts .	More conservative housing assumptions → higher reserves.
Net interest income	Q4: $5.05B (+6% YoY) on portfolio growth and lower funding costs . Q1: $5.10B (+7% YoY) .	$5.30B (+8% YoY), continued portfolio growth and lower funding costs .	Strong and improving YoY; tailwind to core earnings.
Non‑interest income	Q4: Stronger from investment gains and hedging . Q1: Down YoY, especially in Multifamily .	Down 42% YoY; pressure in Multifamily from HFS securitization and rate‑risk management .	Continued headwind.
Multifamily credit	Q4: Delinquency 0.40% with higher floating‑rate delinquency . Q1: Delinquency 0.46% with floating‑rate/small balance pressure .	Delinquency 0.47%; continued deterioration in specific cohorts .	Gradual worsening in delinquency.
Capital/net worth & conservatorship	Net worth rose to $59.6B; senior preferred liquidation preference increased (no dividends due to ERCF) . Q1: Net worth $62.4B; liquidation preference increased to $135.1B at 6/30 .	Net worth $64.8B; liquidation preference $135.1B at 6/30, moving to $137.5B at 9/30 .	Steady capital build within conservatorship framework.

Management Commentary

“We grew the business in the second quarter… Earnings for the quarter reflected that growth, as well as the reserve we added to manage our portfolio safely and soundly… net worth to nearly $65 billion. Overall, the company served more than 360,000 homebuyers and renters… 53% of the homes and 95% of rental units affordable…” — William J. Pulte, Director, U.S. Federal Housing and Chair .
CFO prepared remarks highlighted a $2.4B net income print, $3.6T portfolio, >$100B liquidity provided, and affordability achievements; discussed higher provisions across segments driven by housing assumptions .

Q&A Highlights

Management addressed drivers of the provision increase, noting lower internal house price index valuations and reduced house price growth forecasts as key inputs impacting Single‑Family reserves .
Multifamily discussion focused on delinquency dynamics in floating‑rate and small balance loans and the corresponding reserve build .
Clarifications emphasized strong net interest income trends from portfolio growth and lower funding costs, balanced against non‑interest income volatility and macro rate effects .
Tone: Constructive on core earnings power and mission delivery; cautious on credit outlook given house price trajectories and multifamily cohorts .

Estimates Context

Revenue: SPGI consensus $5.20B vs actual $5.13B*, a slight miss; note SPGI “Revenue” taxonomy may differ from company “Net revenues” ($5.92B) [Q2 2025]* .
EPS: Primary EPS consensus $0.00 vs actual -$0.01*, reflecting common EPS impacted by senior preferred stock allocations; consensus coverage limited for EPS [Q2 2025]* .
Normalized net income: No meaningful consensus; company reported $2.39B [Q2 2025]* .
Implication: Expect estimate adjustments to incorporate higher credit loss provisions and lower non‑interest income run‑rate, partially offset by resilient net interest income tailwinds.

Values retrieved from S&P Global. Cells marked with * reflect SPGI data.

Key Takeaways for Investors

Core earnings engine remains solid: net interest income growth (+8% YoY) underscores durable spread income from a $3.6T portfolio and lower funding costs .
Credit turns more conservative: elevated $0.78B provision tied to internal HPI and forecast changes will suppress near‑term earnings; monitor house price prints and Single‑Family reserve methodologies .
Multifamily risk pockets: rising delinquency (0.47%) in floating‑rate/small balance loans warrant close attention; reserve build and credit enhancement coverage (92%) provide buffer .
Non‑interest income volatility is the swing factor: weaker Multifamily HFS/securitization and rate‑risk management outcomes can drive quarter‑to‑quarter variability .
Capital build continues within conservatorship: net worth reached $64.8B; senior preferred liquidation preference increases alongside earnings; dividend to Treasury remains deferred pending ERCF capital sufficiency .
Affordability/mission delivery remains strong and politically relevant (53% of eligible single‑family loans and 95% of eligible multifamily units affordable), supporting public policy goodwill .
Trading lens: near‑term sentiment hinges on provision trajectory and stabilization of non‑interest income; strength in net interest income provides downside support, but “mixed” quarter dynamics (and headline delinquency metrics) can cap upside until credit trends improve .

FEDERAL HOME LOAN MORTGAGE CORP (FMCC)·Q2 2025 Earnings Summary