Freddie Mac to Offer $6 Billion of Preferred Stock

For Immediate Release

November 27, 2007
Contact: corprel@freddiemac.com
or (703) 903-3933

McLean, VA – Freddie Mac (NYSE: FRE) today announced that it will issue $6 billion of non-cumulative perpetual preferred stock. The issuance will involve a larger offering of non-convertible non-cumulative perpetual preferred stock, and a substantially smaller offering of convertible non-cumulative perpetual preferred stock. Both offerings are expected to price in the near term.

Last week, Freddie Mac announced that, in order to meet the 30 percent mandatory target capital surplus directed by the company's safety and soundness regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), as well as to have the flexibility to further its franchise value, it planned to take near-term capital raising actions. As also announced today, the company has decided to reduce its fourth quarter common stock dividend to $0.25 per share.

Freddie Mac's estimated regulatory core capital was approximately $34.6 billion at September 30, 2007. Freddie Mac's minimum capital requirement at that date was $26.2 billion and the 30% mandatory target capital surplus was an additional $7.9 billion. Accordingly Freddie Mac's estimated regulatory core capital at September 30, 2007 represented an estimated cushion of $8.5 billion in excess of the company's regulatory minimum capital requirement and an estimated surplus of $0.6 billion in excess of the 30 percent mandatory target capital surplus imposed on the company by OFHEO. The capital raised through this offering will be used to bolster the company's capital base in light of actual and anticipated losses necessitated by GAAP accounting requirements and help Freddie Mac meet the 30 percent surplus going forward.

"Freddie Mac is announcing today a proactive capital management plan that will help us meet the 30 percent surplus and address regulatory concerns and GAAP accounting requirements, provide sufficient capital to continue fulfilling our important housing mission through the current market environment, and better position us to effectively manage the company going forward," said Freddie Mac Chairman and Chief Executive Officer Richard F. Syron.

The preferred stock is being offered via a syndicate of dealers headed by Lehman Brothers Inc. and Goldman, Sachs & Co. An application has been made to list the preferred stock on the New York Stock Exchange.

Information about these transactions is available in the preliminary Offering Circulars on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors/preferred_stock.html. Copies of the preliminary Offering Circulars can also be obtained from the underwriters at the following addresses:

Lehman Brothers Inc.
c/o Broadridge
Integrated Distribution Services
1155 Long Island Avenue
Edgewood, New York 11717
(888) 603-5847

Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Prospectus Department
(212) 902-1171

This announcement is neither an offer to sell nor a solicitation of offers to buy any of these securities. Any such offering will be made only by an offering circular.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible more than 50 million times, ensuring financing for one in six homebuyers and more than four million renters.

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