Freddie Mac’s Profit Falls 10% In 2025 As Credit Losses Rise

Freddie Mac on Thursday reported full-year 2025 net income of $10.7 billion, down 10% from 2024, on revenues of $23.3 billion, a 3% year-over-year decrease. The company’s provision for credit losses rose to $1.3 billion for the year, compared with $476 million in 2024.

Net interest income for full-year 2025 rose 8% from a year earlier to $21.4 billion, driven by mortgage portfolio growth and lower funding costs and partially offset by lower yields on short-term investments. Noninterest income fell 55% to $1.9 billion, reflecting a shift to net investment losses in 2025 from net investment gains in 2024.

The government-sponsored enterprise (GSE) also reported a profit of $2.8 billion for the fourth quarter of 2025, down 14% from the same period a year earlier, as lower non-interest income offset growth in net interest income.

Freddie Mac’s net worth increased to $70.4 billion as of Dec. 31, 2025, up from $59.6 billion a year earlier.

“Freddie Mac strengthened its financial position in 2025, earning net income of $10.7 billion on revenue of $23.3 billion and increasing its net worth to $70.4 billion,” CEO Kenny Smith said in a statement. “We helped more than 1.7 million families buy, refinance, or rent a home with the majority — 53% of single-family dwellings and 93% of rental units — affordable to low- and moderate-income households.”

During the GSE’s earnings call on Thursday morning, executive vice president and chief financial officer Jim Whitlinger said that 2025 marked the third consecutive year in which first-time homebuyers accounted for more than half (51%) of all Freddie Mac loan purchases. First-time buyers were 50% of purchase loan business in the fourth quarter.

Whitlinger also said 2025 was the third straight year of net income and comprehensive income above $10 billion — and revenue above $21 billion — for the GSE.

“Approximately 53% of all single-family homes and 93% of multifamily units we helped finance in 2025 were affordable to low and moderate-income families,” Whitlinger said during the call.

He added that the company improved its automated underwriting tool with new products and features that have allowed Freddie to qualify more than 250,000 additional borrowers and originate loans that are $1,700 less costly on average.

“Freddie Mac’s 2025 results reflect our relentless focus on driving efficiencies to lower the cost of housing and restore the American Dream for families nationwide,” Bill Pulte, director of the Federal Housing Finance Agency (FHFA), said in a statement.

“We delivered solid earnings, managed risk effectively, and identified new ways to increase supply and support affordability. Our investments in technology have streamlined the origination process, reduced unnecessary friction, and enabled our lenders to do business with us more cost-effectively.”

Non-interest income for Q4 2025 fell to $217 million, down from $1.3 billion a year earlier, primarily due to a shift from net investment gains in the prior-year period to net investment losses in the latest quarter.

“The net investment losses in the quarter were primarily driven by interest rate and spread changes in our single-family business and lower revenue from held-for-sale loan purchases, coupled with interest rate risk management activities in our multifamily business,” Whitlinger explained.

Freddie Mac recorded a $52 million provision for credit losses in the fourth quarter, reflecting a credit reserve build in multifamily. That was partially offset by a reserve release in single-family business attributable to new acquisitions, Whitlinger said.

Single-family and multifamily stats

In the fourth quarter, Freddie Mac provided $147 billion in liquidity, financing about 565,000 owner-occupied homes and rental units. For the year, it financed 1.1 million single-family mortgages and 617,000 rental units.

Single-family new business activity rose to $118 billion in the fourth quarter, up from $100 billion a year earlier, driven by higher refinance activity. The company financed 331,000 mortgages in Q4, including 117,000 refinances.

Freddie’s serious delinquency rate was 0.59% at year’s end, unchanged from the end of 2024.

Its single-family mortgage portfolio grew 2% year over year to $3.2 trillion, while the multifamily portfolio increased 6% to $496 billion.

Freddie Mac reported fourth-quarter net income of $2.5 billion, down 2% from a year earlier, as net revenues fell 6% to $4.9 billion. The company recorded a noninterest loss of $200 million, compared with non-interest income of $500 million a year earlier, primarily due to interest rate and spread changes.

It also reported a $200 million benefit for credit losses, reflecting a reserve release tied to changes in estimated single-family property values and home-price forecasts, partially offset by portfolio growth.

For full-year 2025, single-family business net income totaled $9.2 billion, down 2% from the prior year, while net revenues were flat at $19.9 billion. Net interest income increased 7% to $19.8 billion.

The multifamily segment reported Q4 2025 net income of $279 million, down 58% from a year earlier, as net revenues declined 24% to $862 million. The results reflected lower noninterest income, along with a $262 million provision for credit losses tied to new loan purchase commitments and deterioration in certain delinquent loans.

Multifamily new business activity totaled $29 billion in Q4 2025, compared with $30 billion a year earlier. The delinquency rate was 0.44% as of Dec. 31, up from 0.4% a year earlier but down from 0.51% at the end of the third quarter.

In 2025, Whitlinger said Freddie Mac shifted its multifamily strategy to focus primarily on issuing fully guaranteed securitizations. It designated a larger share of new loan purchases to hold for investment while reducing loan sale activity.

Freddie Mac has operated under federal conservatorship since 2008. As of Dec. 31, it had $140.2 billion in remaining funding commitment under its agreement with the U.S. Department of the Treasury.