Freddie Mac 2005 Annual Report Download - page 22

Risk Oversight; and Compensation and Human Resources Committees) are also available on our website. Printed copies of
these documents may be obtained upon request from our Investor Relations department.
REGULATION AND SUPERVISION
Department of Housing and Urban Development
The U.S. Department of Housing and Urban Development, or HUD, has general regulatory power over Freddie Mac,
including power over new programs, aÅordable housing goals and fair lending.
Housing Goals
We are subject to aÅordable housing goals set by HUD. The goals, which are set as a percentage of the total number of
dwelling units underlying our total mortgage purchases, have risen steadily since they became permanent in 1995. The goals
are intended to expand housing opportunities for low- and moderate-income families, low-income families living in low-
income areas and very low-income families, and families living in HUD-deÑned underserved areas. The goal relating to low-
income families living in low-income areas and very low-income families is referred to as the ""special aÅordable'' housing
goal. This special aÅordable housing goal also includes a multifamily subgoal that sets an annual minimum dollar volume
of qualifying multifamily mortgage purchases.
EÅective January 1, 2005, HUD:
‚ established new and increasing aÅordable housing goal levels for the years 2005 through 2008;
‚ established three new subgoals for mortgages that count towards the goals and that Ñnance purchases of single-family,
owner-occupied properties located in metropolitan areas;
‚ increased the multifamily special aÅordable volume target to $3.92 billion, based on HUD's established formula; and
‚ required the certiÑcation of information provided in Freddie Mac's Annual Mortgage Report and Annual Housing
Activities Report submitted to HUD.
In total, beginning in 2005 and continuing through 2008, we are required to achieve six diÅerent and increasing HUD goals
and subgoals and a higher multifamily special aÅordable volume target, as summarized in Table 2 below.
Table 2 Ì Housing Goals and Home Purchase Subgoals for 2005 through 2008(1)
Housing Goals
2008 2007 2006 2005
Low- and moderate-income goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 56% 55% 53% 52%
Underserved areas goalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39 38 38 37
Special aÅordable goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27 25 23 22
Multifamily special aÅordable volume target (dollars in billions)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3.92 $3.92 $3.92 $3.92
Home Purchase Subgoals(2)
2008 2007 2006 2005
Low- and moderate-income goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47% 47% 46% 45%
Underserved areas goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34 33 33 32
Special aÅordable goal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18 18 17 17
(1) An individual mortgage may qualify for more than one of the goals or subgoals. Each of the goal and subgoal percentages will be determined
independently and cannot be aggregated to determine a percentage of total purchases that qualiÑes for these goals or subgoals.
(2) These home purchase subgoals are expressed as percentages of the total number of mortgages we purchased that Ñnance the purchase of single-family,
owner-occupied properties located in metropolitan areas.
Meeting these goals and subgoals in future years will be challenging and there can be no assurance that we will do so.
See ""RISK FACTORS Ì Legal and Regulatory Risks.'' However, we view the purchase of mortgage loans beneÑting low-
and moderate-income families and neighborhoods as a principal part of our mission and business, and we are committed to
fulÑlling the needs of these borrowers and markets.
We have reported to HUD that we achieved each of the aÅordable housing goals and subgoals as applicable to 2005,
2004 and 2003. HUD has determined that we met the goals for 2004 and 2003, and is evaluating our performance with
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