2006 Annual Report

The complete report has been divided into four segments for easier online viewing and printing.

To our Stockholders:

2006 was a challenging year in the U.S. housing and mortgage markets, and Freddie Mac shared in those challenges. But even though housing weakened last year, Freddie Mac gained some strength.

Housing starts tumbled by 13 percent in 2006. Home purchases fell 10 percent. Mortgage originations dropped and home prices began to decline in a number of local markets. And the possibility of further weakness in the sector remains a leading concern for economic growth in 2007 — particularly if accompanied by widespread loan defaults or a severe tightening of credit standards.

At this writing, defaults and late payments have remained relatively low on prime mortgages, which are made to lower-risk borrowers and account for the lion’s share of home loans. But late payments have risen swiftly over the past year on subprime mortgages, those made to borrowers having spottier credit histories and posing higher risks. Read more from Richard Syron [PDF 256K].

Segment 1 of the Report [PDF 146K] contains the following information:

Table of Contents

BUSINESS
REGULATION AND SUPERVISION
RISK FACTORS
MARKET FOR THE COMPANY'S COMMON EQUITY,
  RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
  OF EQUITY SECURITIES
FORWARD-LOOKING STATEMENTS
SELECTED FINANCIAL DATA 

Segment 2 of the Report [PDF 181K] contains the following information:

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
    EXECUTIVE SUMMARY
    CONSOLIDATED RESULTS OF OPERATIONS
    CONSOLIDATED BALANCE SHEETS ANALYSIS
    CONSOLIDATED FAIR VALUE BALANCE SHEETS ANALYSIS
    LIQUIDITY AND CAPITAL RESOURCES

Segment 3 of the Report [PDF 192K] contains the following information:

RISK MANAGEMENT
    Operational Risks
    Interest-Rate Risk and Other Market Risks
    Credit Risks
OFF-BALANCE SHEET ARRANGEMENTS
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
PORTFOLIO BALANCES AND ACTIVITIES
QUARTERLY SELECTED FINANCIAL DATA
RISK MANAGEMENT AND DISCLOSURE COMMITMENTS

Segment 4 of the Report [PDF 308K] contains the following information:

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PROPERTIES
LEGAL PROCEEDINGS
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
   ACCOUNTING AND FINANCIAL DISCLOSURES
CONTROLS AND PROCEDURES
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
   AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
PRINCIPAL ACCOUNTING FEES AND SERVICES
CERTIFICATIONS
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
  COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
ADDITIONAL FINANCIAL INFORMATION
INDEX OF ACRONYMS