8-K: Freddie Mac Reports Q4, Full-Year 2025 Results

Freddie Mac reports a decrease in net income for Q4 and full-year 2025, despite increased new business activity and continued support for affordable housing.

Summary

• Freddie Mac reported net income of $2.8 billion for the fourth quarter of 2025, a 14% decrease year-over-year, primarily due to lower net revenues.
• Full-year 2025 net income was $10.7 billion, down 10% from the previous year, driven by lower net revenues and an increased provision for credit losses.
• Net revenues for Q4 2025 were $5.8 billion (down 9% YoY) and for full-year 2025 were $23.3 billion (down 3% YoY), primarily impacted by lower non-interest income.
• The total mortgage portfolio grew by 2% year-over-year to $3.7 trillion as of December 31, 2025.
• New business activity in the Single-Family segment increased to $118 billion in Q4 2025 (up from $100 billion in Q4 2024) and $389 billion for full-year 2025 (up 12% YoY).
• The Multifamily segment's new business activity for full-year 2025 was $76 billion, a 17% increase year-over-year, despite a slight decrease in Q4 2025 to $29 billion.
• Freddie Mac financed 1.1 million mortgages in 2025, with 53% of eligible loans affordable to lowto moderate-income families, and 51% of new single-family home purchase loans going to first-time homebuyers.
• The company financed 617,000 rental units in 2025, with 93% of eligible units affordable to lowto moderate-income families.
• The serious delinquency rate for Single-Family loans was 0.59% at December 31, 2025, unchanged from December 31, 2024, but up from 0.57% at September 30, 2025.
• The Multifamily delinquency rate was 0.44% at December 31, 2025, down from 0.51% at September 30, 2025, but up from 0.40% at December 31, 2024.
• Freddie Mac's net worth increased to $70.4 billion as of December 31, 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative report due to significant year-over-year declines in net income and revenues, primarily driven by a shift to investment losses and increased credit loss provisions, despite positive trends in new business activity and portfolio growth.

Positives

• Total mortgage portfolio increased 2% year-over-year to $3.7 trillion, indicating continued market presence and growth.
• Single-Family new business activity for Q4 2025 was $118 billion, up from $100 billion in Q4 2024, driven by increased refinance activity.
• Full-year 2025 Single-Family new business activity increased 12% year-over-year to $389 billion.
• Full-year 2025 Multifamily new business activity increased 17% year-over-year to $76 billion.
• Net interest income increased by 10% year-over-year in Q4 2025 to $5.5 billion and by 8% for full-year 2025 to $21.4 billion, driven by mortgage portfolio growth and lower funding costs.
• Freddie Mac helped 1.7 million households in 2025, with 53% of eligible single-family loans and 93% of eligible rental units affordable to lowto moderate-income families.
• First-time homebuyers represented 51% of new single-family home purchase loans in 2025, demonstrating support for new homeowners.
• Net worth increased to $70.4 billion as of December 31, 2025, strengthening the company's financial position.
• The company was not required to pay a dividend to Treasury in December 2025, as it continues to build capital.

Negatives

• Net income decreased by 14% year-over-year in Q4 2025 to $2.8 billion and by 10% for full-year 2025 to $10.7 billion.
• Net revenues decreased by 9% year-over-year in Q4 2025 to $5.8 billion and by 3% for full-year 2025 to $23.3 billion.
• Non-interest income significantly declined, shifting from net investment gains in 2024 to net investment losses in 2025, contributing to lower overall revenues.
• Provision for credit losses increased to $1.3 billion for full-year 2025, up from $0.5 billion in 2024, primarily due to credit reserve builds in both Single-Family and Multifamily segments.
• Multifamily net income decreased substantially by 58% year-over-year in Q4 2025 to $0.3 billion and by 39% for full-year 2025 to $1.5 billion.
• The Single-Family serious delinquency rate increased slightly to 0.59% at December 31, 2025, from 0.57% at September 30, 2025.
• The Multifamily delinquency rate increased to 0.44% at December 31, 2025, from 0.40% at December 31, 2024.
• Net income (loss) attributable to common stockholders was negative $7 million for Q4 2025 and negative $78 million for full-year 2025.

Risks

• The company's continued operation under conservatorship with the FHFA.
• Changes in economic and market conditions and trends, including fluctuations in house prices and house price forecasts.
• Challenges related to liquidity and capital management.
• Potential impacts from actions by the U.S. government (FHFA, Treasury, executive branch, Congress) and state and local governments.
• Changes in the fiscal and monetary policies of the Federal Reserve.
• The impact of any downgrade in Freddie Mac's credit ratings or those of the U.S. government.
• The effects of legislative and regulatory developments and new accounting guidance.
• Risks associated with the credit quality of loans the company owns or guarantees.
• The costs and benefits of the company's Credit Risk Transfer (CRT) transactions.
• The potential impact of banking crises or failures on the company's operations.
• The effects of natural disasters or catastrophic events on its business, results of operations, and financial condition.

Future Outlook

Freddie Mac's future outlook emphasizes its continued mission to make home possible for families, promote liquidity, stability, affordability, and equity in the housing market. The company expects to continue building capital to meet regulatory requirements, with the senior preferred stock liquidation preference projected to increase to $143.0 billion by March 31, 2026. Management anticipates ongoing efforts to drive efficiencies, manage risk, and leverage technology to streamline operations and support affordability.

Management Comments

• William J. Pulte, Director, U.S. Federal Housing and Chair of the Board of Directors, Freddie Mac: "Our 2025 results reflect our relentless focus on driving efficiencies to lower the cost of housing and restore the American Dream for families nationwide. 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."
• Kenny Smith, CEO of Freddie Mac: "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. 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 lowand moderate-income households. This included about 400,000 homebuyers achieving homeownership for the first time. These achievements reflect the dedication of Freddie Mac’s outstanding staff, our lender partners, and the support of U.S. Federal Housing. I thank everyone who helped make these results possible."

Industry Context

StockSavvy.ai notes that Freddie Mac's results reflect a mixed housing market environment in 2025. While overall mortgage portfolio growth and increased refinance activity suggest resilience, the decline in net income and revenues, particularly from non-interest sources, indicates challenges in a potentially higher interest rate or volatile investment landscape. The continued focus on affordability and first-time homebuyers aligns with broader governmental and societal goals to address housing supply and access, distinguishing Freddie Mac's mission-driven approach from purely profit-driven private sector mortgage lenders. The increase in credit loss provisions across both Single-Family and Multifamily segments could signal a cautious outlook on credit quality, potentially influenced by economic uncertainties or specific market segments, a trend that bears watching across the broader mortgage industry.

Comparison to Industry Standards

• The filing does not provide specific comparisons to other comparable companies, projects, or global benchmarks within the housing finance industry. Freddie Mac operates under a unique conservatorship structure, making direct comparisons to private sector entities challenging.

Stakeholder Impact

• Shareholders (common stockholders) experienced a net loss per common share of $0.00 for Q4 2025 and ($0.02) for full-year 2025, indicating no direct financial benefit from the company's earnings due to the conservatorship structure.
• Employees are impacted by non-interest expenses, including salaries and employee benefits, which were $1,711 million for full-year 2025.
• Customers (homebuyers and renters) benefited from Freddie Mac's financing of 1.7 million households in 2025, with a significant focus on affordability for lowto moderate-income families.
• Lender partners benefit from streamlined origination processes and cost-effective business practices due to Freddie Mac's technology investments.
• The U.S. Treasury, as the primary stakeholder under conservatorship, continues to provide funding commitment, with the senior preferred stock liquidation preference increasing based on Freddie Mac's net worth.

Next Steps

• Management will host a conference call on February 12, 2026, at 9 a.m. Eastern Time to discuss the results with the media.
• The company will continue to build sufficient capital to meet the Enterprise Regulatory Capital Framework (ERCF) requirements and buffers.
• The senior preferred stock liquidation preference is expected to increase to $143.0 billion on March 31, 2026.

Key Dates

Keywords

Freddie Mac, Mortgage, Housing Finance, SEC Filing, Financial Results, Net Income, Mortgage Portfolio, Affordable Housing, Conservatorship, Single-Family, Multifamily, Credit Losses, Delinquency Rate, First-Time Homebuyers, Refinance Activity