Freddie Mac 2015 Annual Report Download - page 224

Financial Statements Notes to the Consolidated Financial Statements | Note 2
Freddie Mac 2015 Form 10-K 222
GOVERNMENT SUPPORT FOR OUR BUSINESS
We receive substantial support from Treasury and are dependent upon its continued support in order to
continue operating our business. Our ability to access funds from Treasury under the Purchase
Agreement, is critical to:
• Keeping us solvent;
• Allowing us to focus on our primary business objectives under conservatorship; and
• Avoiding the appointment of a receiver by FHFA under statutory mandatory receivership provisions.
At September 30, 2015, our assets exceeded our liabilities under GAAP; therefore FHFA did not request
a draw on our behalf and, as a result, we did not receive any funding from Treasury under the Purchase
Agreement during the three months ended December 31, 2015. Since conservatorship began through
December 31, 2015, we have paid cash dividends of $96.5 billion to Treasury at the direction of the
Conservator.
Additionally, in recent years, the Federal Reserve purchased significant amounts of mortgage-related
securities issued by us, Fannie Mae, and Ginnie Mae.
See Note 7 and Note 10 for more information on the conservatorship and the Purchase Agreement.
HOUSING FINANCE AGENCY INITIATIVE
In 2009, we entered into a Memorandum of Understanding with Treasury, FHFA, and Fannie Mae, which
sets forth the terms under which Treasury and, as directed by FHFA, we and Fannie Mae, would provide
assistance to state and local HFAs so that the HFAs can continue to meet their mission of providing
affordable financing for both single-family and multifamily housing. FHFA directed us and Fannie Mae to
participate in the HFA initiative on a basis that is consistent with the goals of being commercially
reasonable and safe and sound. Treasury’s participation in these assistance initiatives does not affect the
amount of funding that Treasury can provide to Freddie Mac under the Purchase Agreement.
The primary initiatives are as follows:
• TCLFP - In December 2009, on a 50-50 pro rata basis, Freddie Mac and Fannie Mae agreed to
provide $8.2 billion of credit and liquidity support, including outstanding interest at the date of the
guarantee, for variable rate demand obligations, or VRDOs, previously issued by HFAs. This support
was provided through the issuance of guarantees, which provide credit enhancement to the holders
of such VRDOs and also create an obligation to provide funds to purchase any VRDOs that are put
by their holders and are not remarketed. Treasury provided a credit and liquidity backstop on the
TCLFP. These guarantees replaced existing liquidity facilities from other providers. The guarantees
were scheduled to expire on December 31, 2012. However, Treasury gave TCLFP participants the
option to extend their individual TCLFP facilities to December 31, 2015 and certain participants
elected to do so. No outstanding guarantees existed as of December 31, 2015.
• NIBP - In December 2009, on a 50-50 pro rata basis, Freddie Mac and Fannie Mae agreed to issue in
total $15.3 billion of partially guaranteed pass-through securities backed by new single-family and
certain new multifamily housing bonds issued by HFAs. Treasury purchased all of the pass-through
securities issued by Freddie Mac and Fannie Mae. This initiative provided financing for HFAs to issue
new housing bonds.