Freddie Mac (FMCC) Q4 & Full-Year 2025 Financial Report: Key Investment Factors

Based on my comprehensive analysis of Freddie Mac (FMCC) and the current U.S. housing market environment, I will outline the key factors investors should focus on in the upcoming Q4 and full-year 2025 financial report.

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Freddie Mac is scheduled to release its Fourth Quarter and Full-Year 2025 financial results before market open on

[1]. This analysis provides a systematic framework for evaluating the company’s stability and growth potential.

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Freddie Mac has experienced remarkable stock price appreciation over the past three years (+1,404%), though the stock has corrected significantly in 2026, down 28.8% year-to-date [0]. The company operates as a Government-Sponsored Enterprise (GSE) with a unique structure that significantly impacts its valuation dynamics. The Q4 2025 earnings will be closely watched for indicators of:

• Continued profitability trends following the strong Q3 FY2025 performance
• Management’s outlook for mortgage originations in 2026
• Developments regarding potential exit from conservatorship
• Credit quality trends amid a normalizing housing market

Sell (56% of analysts rate as Sell)
$0.44 per share
$5.49 billion [0]

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Freddie Mac’s net interest income has demonstrated consistent growth, reaching $5.46 billion in Q3 FY2025, up from $4.999 billion in Q3 FY2024—a 9.1% year-over-year increase [2]. The spread between interest income ($32.98 billion) and interest expense ($27.52 billion) remains healthy at approximately $5.46 billion quarterly.

• Did net interest margin expand or contract in Q4?
• How did the declining mortgage rate environment (30-year fixed averaging 6.11% as of February 2026) [3] impact net interest income?
• What is the trajectory of interest-earning assets growth?

The Single-Family Guarantee Segment represents

of Freddie Mac’s revenue [0]. Guarantee income was $377 million in Q3 FY2025, down from $487 million in Q3 FY2024—a 22.6% decline [2].

• Monitor credit guarantee fee (g-fee) trends
• Assess the impact of competitive pressures on pricing
• Evaluate multifamily segment performance (13.2% of revenue)

Q3 FY2025 saw a

, compared to a benefit of $191 million in Q3 FY2024 [2]. This represents a significant deterioration that warrants close attention.

• Non-performing loan ratios
• Loss given default (LGD) assumptions
• Home price appreciation (HPA) impacts on loan-to-value (LTV) ratios
• Delinquency rates by vintage year

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Freddie Mac’s ROE stands at

, which is notably strong for a financial institution [0]. However, this metric must be contextualized against the company’s unique capital structure and conservatorship obligations.

• The Treasury’s senior preferred stock carries a liquidation preference of $137.459 billion [2]
• Retained earnings remain significantly negative at $(15.316) billion [2]
• Common stockholders have historically received minimal value due to preferred stock claims

Non-interest expense totaled $2.116 billion in Q3 FY2025, relatively stable compared to $2.183 billion in Q3 FY2024 [2]. Key expense categories include:

• Salaries and benefits: $423 million
• Legislative and regulatory assessments: $839 million
• Credit enhancement expense: $489 million

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As of September 30, 2025 [2]:

• Total Assets:
  $3.468 trillion
• Total Liabilities:
  $3.401 trillion
• Total Equity:
  $67.6 billion
• Current Ratio:
  1.55x [0]

Metric	Value	Assessment
P/E Ratio	2.13x	Extremely low - potential undervaluation
P/B Ratio	0.35x	Trading below book value significantly
Quick Ratio	1.55x	Strong liquidity position
Debt/Equity	50:1	Appropriate for GSE operations

Freddie Mac’s conservative capital approach following the 2008 crisis has resulted in a

[0]. The company maintains significant reserves against credit losses.

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1. Declining Mortgage Rates:
   The 30-year fixed-rate mortgage averaged 6.11% as of early February 2026, down from approximately 6.85% at the beginning of 2025 [3]. This creates favorable conditions for:
   • Refinance activity (forecast to rise 31.7% to $827 billion in 2026) [4]
   • Improved purchase affordability
   • Reduced prepayment speeds (benefiting MSR valuations)

2. Housing Market Recovery:
   Zillow forecasts 1.9% home value appreciation in 2026, with gradual improvement in existing home sales [5].

3. Policy Support:
   The current administration has directed Fannie Mae and Freddie Mac to initiate a $200 billion purchase program of mortgage-backed securities, providing direct liquidity to the housing market [6].

1. Prepayment Risk:
   As mortgage rates decline, refinancing activity increases, potentially accelerating prepayments and reducing the value of existing mortgage servicing rights (MSR).

2. Affordability Challenges:
   Despite improving rates, home prices remain elevated, limiting purchase volume recovery.

3. Multifamily Sector Stress:
   With elevated vacancies and ongoing completions in the multifamily sector, this 13.2% of revenue segment faces headwinds.

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Freddie Mac has been in FHFA conservatorship since September 2008. Any developments regarding exit from conservatorship represent a

for valuation.

• FHFA Director commentary on reform timeline
• Treasury Department statements on preferred stock treatment
• Capital recapitalization plans
• Regulatory framework updates

The company’s capital structure is heavily influenced by Treasury preferred stock with a $137.459 billion liquidation preference [2]. The treatment of this preferred stock in any reform scenario will significantly impact common stock valuation.

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Freddie Mac’s stock has demonstrated extreme volatility:

• 52-Week Range:
  $1.07 - $14.99 [0]
• Beta:
  1.81 (highly sensitive to market movements) [0]
• 30-Day Volatility:
  4.75% [calculated]

Indicator	Value	Signal
Current Price	$7.37	Below 20-day ($7.69) and 50-day ($9.26) MAs
RSI (14)	Normal Range	No overbought/oversold signal
MACD	No Cross	Slightly bullish bias
KDJ	K:22.2, D:23.2	Bearish momentum
Trend	Sideways	Trading range: $7.09-$7.69

Rating	Count	Target Price
Buy	3 (33.3%)	$13.35 - $20.00
Hold	1 (11.1%)	-
Sell	5 (55.6%)	-
Consensus Target	-	$16.68 (+126.3%) [0]

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Investors should seek answers to the following questions during the earnings call:

1. Net Interest Income Outlook:
   How is the declining rate environment affecting net interest margin?
2. Credit Quality Trends:
   Are delinquency rates increasing? What is the provision outlook?
3. Capital Return Plans:
   What is the dividend outlook given the capital position?

4. Conservatorship Exit Timeline:
   What is the expected framework and timeline?
5. Multifamily Strategy:
   How is the company addressing multifamily sector challenges?
6. MSR Valuation:
   How are prepayments impacting the MSR portfolio?

7. 2026 Origination Forecast:
   What are management’s expectations for purchase and refinance volumes?
8. Competitive Positioning:
   How is Freddie Mac responding to competitive pressures?

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• Conservative exit from conservatorship with favorable preferred stock treatment
• Sustained low mortgage rate environment boosting origination volumes
• Continued home price appreciation reducing credit losses
• Policy support for housing affordability

• Deteriorating credit quality in the portfolio
• Accelerating prepayments reducing MSR values
• Regulatory changes unfavorable to GSE structure
• Economic slowdown impacting housing demand
• Extreme stock volatility (beta of 1.81) [0]

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Freddie Mac’s Q4 and full-year 2025 financial report will provide critical insights into the company’s positioning for 2026. Key takeaways for investors:

1. Valuation Opportunity:
   The P/E ratio of 2.13x and P/B ratio of 0.35x suggest potential undervaluation, though this must be weighed against corporate structure uncertainties [0].

2. Operating Performance:
   Strong ROE of 17.57% demonstrates efficient capital deployment, but profitability is heavily influenced by interest rate movements [0].

3. Housing Market Tailwinds:
   Declining mortgage rates and policy support create favorable conditions for 2026 [3][4].

4. Catalyst Watch:
   Any updates on conservatorship exit timeline could significantly impact valuation.

5. Risk Management:
   Credit quality trends and prepayment speeds will be key indicators of portfolio health.

based on current ratings, though the consensus price target of $16.68 suggests significant upside potential if reform expectations are met [0].

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[1] Business Insider - Freddie Mac Announces Release Date (https://markets.businessinsider.com/news/stocks/freddie-mac-announces-release-date-for-fourth-quarter-and-full-year-2025-financial-results-1035809861)

[2] SEC Filing - Freddie Mac Form 10-Q (https://www.sec.gov/Archives/edgar/data/1026214/000102621425000116/fmcc-20250930.htm)

[3] Freddie Mac PMMS - Mortgage Rates (https://www.freddiemac.com/pmms)

[4] LinkedIn - Mortgage & Housing Market Forecast (https://www.linkedin.com/pulse/mortgage-housing-market-forecast-new-american-funding-go6ec)

[5] Zillow Research - Home Value and Sales Forecast (https://www.zillow.com/research/home-value-sales-forecast-33822/)

[6] Chronicle Journal - $200 Billion Intervention (http://markets.chroniclejournal.com/chroniclejournal/article/marketminute-2026-1-19-the-200-billion-intervention-how-the-administration-is-using-fannie-mae-and-freddie-mac-to-reshape-the-mortgage-market)

[0] Ginlix API Data (Market data, financial analysis, technical indicators)