Freddie Mac 2015 Annual Report Download - page 400

Glossary
Freddie Mac 2015 Form 10-K 398
Mortgage-related investments portfolio - Our investment portfolio, which consists of mortgage-related
securities and unsecuritized single-family and multifamily loans. The size of our mortgage-related
investments portfolio under the Purchase Agreement is determined without giving effect to the January 1,
2010 change in accounting guidance related to transfers of financial assets and consolidation of VIEs.
Mortgage-to-debt OAS - The net OAS between the mortgage asset and agency debt sectors. This is an
important factor in determining the expected level of net interest yield on a new mortgage asset. Higher
mortgage-to-debt OAS means that a newly purchased mortgage asset is expected to provide a greater
return relative to the cost of the debt issued to fund the purchase of the asset and, therefore, a higher net
interest yield. Mortgage-to-debt OAS tends to be higher when there is weak demand for mortgage assets
and lower when there is strong demand for mortgage assets.
Multifamily loan - A loan secured by a property with five or more residential rental units or by a
manufactured housing community.
Multifamily mortgage portfolio - Consists of multifamily mortgage loans held by us on our consolidated
balance sheets as well as our guarantee of K Certificates, other securitization products, and other
mortgage-related guarantees, but excluding those underlying our guarantees of HFA bonds.
Multifamily new business activity - Represents loan purchases and issuances of other mortgage-
related guarantees.
Net worth (deficit) - The amount by which our total assets exceed (or are less than) our total liabilities as
reflected on our consolidated balance sheets prepared in conformity with GAAP.
Net worth sweep dividend, Net Worth Amount, and Capital Reserve Amount - For each quarter from
January 1, 2013 through and including December 31, 2017, the dividend payment on the senior preferred
stock will be the amount, if any, by which our Net Worth Amount at the end of the immediately preceding
fiscal quarter, less the applicable Capital Reserve Amount, exceeds zero. The term Net Worth Amount is
defined as the total assets of Freddie Mac (excluding Treasury’s commitment and any unfunded amounts
thereof), less our total liabilities (excluding any obligation in respect of capital stock), in each case as
reflected on our consolidated balance sheets prepared in conformity with GAAP. If the calculation of the
dividend payment for a quarter does not exceed zero, then no dividend shall accrue or be payable for that
quarter. The applicable Capital Reserve Amount was $1.8 billion for 2015, is $1.2 billion for 2016, and will
be reduced by $600 million each year thereafter until it reaches zero on January 1, 2018. For each
quarter beginning January 1, 2018, the dividend payment will be the amount, if any, by which our Net
Worth Amount at the end of the immediately preceding fiscal quarter exceeds zero.
NIBP - New Issue Bond Program - A component of the HFA initiative in which we and Fannie Mae issued
partially-guaranteed pass-through securities to Treasury that are backed by bonds issued by various state
and local HFAs. The program provided financing for HFAs to issue new housing bonds. Treasury is
obligated to absorb losses under the program up to a certain level before we are exposed to any losses.
Non-accrual loan - A loan for which we are not accruing interest income. We place loans on non-accrual
status when we believe collectability of principal and interest in full is not reasonably assured, which
generally occurs when a loan is three monthly payments past due, unless the loan is well secured and in
the process of collection based upon an individual loan assessment.
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