Freddie Mac 2012 Annual Report Download - page 241

We held more than 6,000 and 7,000 unsecuritized multifamily loans at December 31, 2012 and 2011, respectively. The
UPB of our investments in these loans was $76.6 billion and $82.3 billion as of December 31, 2012 and 2011, respectively,
and was included in unsecuritized held-for-investment mortgage loans, at amortized cost, and held-for-sale mortgage loans at
fair value on our consolidated balance sheets. We are not generally the primary beneficiary of the multifamily real estate
borrowing entities because the loans we acquire are passive in nature and do not provide us with the power to direct the
activities of these entities that most significantly impact their economic performance. However, when a multifamily loan
becomes delinquent, we may become the primary beneficiary of the borrowing entity depending upon the structure of this
entity and the rights granted to us under the governing legal documents. At both December 31, 2012 and 2011, the amount of
unsecuritized multifamily loans for which we could be considered the primary beneficiary of the underlying borrowing entity
was not material. See “NOTE 4: MORTGAGE LOANS AND LOAN LOSS RESERVES” for more information.
Other
Our involvement with other VIEs primarily includes certain of our other mortgage-related guarantees, investments in
LIHTC partnerships, and other guarantee commitments that we account for as derivatives.
We hold equity investments in various LIHTC partnerships that invest in lower-tier or project partnerships that are
single asset entities. In early 2010, the Acting Director of FHFA informed us that we may not sell or transfer our investments
in LIHTC assets and that he sees no other disposition options. As a result, we wrote down the carrying value of our LIHTC
investments to zero as we determined we could not realize any value from these investments.
At December 31, 2012 and 2011, we were the primary beneficiary of two and one, respectively, real estate entities that
invest in multifamily property, related to credit-enhanced multifamily housing revenue bonds that were not deemed to be
material. We were not the primary beneficiary of the remainder of other VIEs because our involvement in these VIEs is
passive in nature and does not provide us with the power to direct the activities of the VIEs that most significantly impact
their economic performance. See “Table 3.2 — Variable Interests in VIEs for which We are not the Primary Beneficiary” for
the carrying amounts and classification of the assets and liabilities recorded on our consolidated balance sheets related to our
other variable interests in non-consolidated VIEs, as well as our maximum exposure to loss as a result of our involvement
with these VIEs.
NOTE 4: MORTGAGE LOANS AND LOAN LOSS RESERVES
We own both single-family mortgage loans, which are secured by one to four unit residential properties, and
multifamily mortgage loans, which are secured by properties with five or more residential rental units. Our single-family
loans are predominately first lien, fixed-rate mortgages secured by the borrower’s primary residence. For a discussion of our
significant accounting policies regarding our mortgage loans and loan loss reserves, see “NOTE 1: SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES.”
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