Weekly Real Estate News
Freddie Mac earned $3.235 billion in the third quarter, a 17% increase from a year earlier, even as the mortgage finance company set aside substantially more money for potential credit losses. The results, released Thursday, October 29, offer another indication of how higher borrowing costs are affecting borrowers without yet overwhelming the profitability of the government-sponsored mortgage market.
The company reported $6.810 billion in net revenues, up 19% from $5.739 billion in the comparable 2025 quarter. Its provision for credit losses reached $800 million, compared with $175 million a year earlier. Freddie Mac attributed the reserve build principally to its single-family business, citing higher projected mortgage interest rates and new loan acquisitions.
The figures appear in Freddie Mac’s October 29 Form 8-K and accompanying financial results. The reporting period ended September 30; October 29 is the date of the public earnings disclosure, not the date on which the loans were originated or the quarter ended.
Profit improved from last year, but declined from June
Freddie Mac’s latest earnings are stronger than the $2.773 billion it reported in the third quarter of 2025, but below the $3.838 billion recorded in the second quarter of 2026. That sequential comparison matters because the second quarter included an $880 million benefit for credit losses, whereas the latest quarter required an $800 million provision. The change between those two credit-loss lines amounted to $1.68 billion.
Net interest income was $5.877 billion, up 8% from a year earlier, while noninterest income increased to $933 million from $284 million. Freddie Mac attributed the latter improvement largely to investment gains replacing losses. Noninterest expenses declined 6% to $1.994 billion.
The single-family business generated $2.714 billion in net income and $5.831 billion in revenues. Multifamily produced $521 million in net income and $979 million in revenues. Those figures help explain why the overall earnings increase should not be read as evidence that all parts of the mortgage portfolio are improving equally.
Delinquencies move higher in both businesses
Freddie Mac reported a 0.61% single-family serious-delinquency rate at September 30, up from 0.57% a year earlier. Its multifamily delinquency rate reached 0.58%, compared with 0.51% a year earlier. The two measures use different definitions: the single-family figure generally covers loans at least 90 days delinquent or in foreclosure, while the multifamily figure is based on loans 60 days or more delinquent. They should not be treated as directly interchangeable.
Freddie Mac’s $800 million provision is an accounting estimate for expected credit losses, not a statement that $800 million in loans defaulted during the quarter. It nevertheless reflects a more cautious assessment of the mortgage book, especially with elevated interest rates affecting affordability and borrowers’ refinancing options.
The results follow Fannie Mae’s October 28 earnings report, which also described a substantial increase in its credit-loss provision. Taken together, the reports point to a market in which the two housing finance companies remain profitable while building reserves against a less forgiving credit environment.
More than 400,000 homes and rental units financed
Freddie Mac said it provided $114 billion in mortgage-market liquidity during the quarter, financing approximately 286,000 single-family mortgages and 134,000 rental units. First-time homebuyers accounted for 51% of new single-family purchase loans, and the company said 91% of eligible multifamily units financed were affordable to low- and moderate-income households.
Its total mortgage portfolio stood at approximately $3.7 trillion at September 30. Net worth increased to $80.975 billion from $77.769 billion at June 30. The company remains in federal conservatorship, and the growth in retained earnings does not by itself signal a change in that status.
Freddie Mac also noted that it began accepting loans scored with VantageScore during the quarter, following federal policy changes earlier in 2026. The credit-score shift may matter for lender operations and borrower access, but Thursday’s financial release does not establish that it has already changed mortgage approval rates or pricing across the market.
What lenders should watch
The most important question for mortgage lenders and investors is whether the reserve build proves temporary or continues as borrowers confront elevated rates. Freddie Mac’s higher earnings show that its guarantee and investment businesses can absorb current pressures, but the rising delinquency measures and higher provision argue against declaring credit conditions stable.
Freddie Mac’s investor earnings materials and monthly portfolio reports provide the next points of comparison. Its October 29 disclosure is a fresh quarterly development, separate from WRE News’ earlier coverage of its September mortgage portfolio.
