GOVERNMENT-SPONSORED ENTERPRISES Government-Sponsored Enterprises Government Sponsored Enterprises This chapter contains descriptions of the data on the Government-sponsored enterprises listed below. These enterprises were established and chartered by the Federal Government for public policy purposes. They are not included in the Federal Budget because they are private companies, and their securities are not backed by the full faith and credit of the Federal Government. However, because of their public purpose, detailed statements of financial condition are presented, to the extent such information is available, on a basis that is as consistent as practicable with the basis for the budget data of Government agencies. —The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation provide assistance to the secondary market for residential mortgages.—The Federal Home Loan Banks assist thrift institutions, banks, insurance companies, and credit unions in providing financing for housing and community development.—Institutions of the Farm Credit System, which include the Agricultural Credit Bank and Farm Credit Banks, provide financial assistance to agriculture. They are regulated by the Farm Credit Administration.—The Federal Agricultural Mortgage Corporation, also a Farm Credit System institution under the regulation of the Farm Credit Administration, provides a secondary market for agricultural real estate, rural housing loans, and certain rural utility loans, as well as for farm and business loans guaranteed by the U.S. Department of Agriculture. Federal National Mortgage Association Federal National Mortgage Association The Federal National Mortgage Association (Fannie Mae) is a Government-sponsored enterprise (GSE) in the housing finance market. As a housing GSE, Fannie Mae is a federally chartered, privately owned company with a public mission to provide stability in and to increase the liquidity of the residential mortgage market and to help increase the availability of mortgage credit to low- and moderate-income families and in underserved areas. Fannie Mae engages primarily in two forms of business: guaranteeing residential mortgage securities and investing in portfolios of residential mortgages. Fannie Mae was established in 1938 to assist private markets in providing a steady supply of funds for housing. Fannie Mae was originally a subsidiary of the Reconstruction Finance Corporation and was permitted to purchase only loans insured by the Federal Housing Administration (FHA). In 1954, Fannie Mae was restructured as a mixed ownership (part government, part private) corporation. Legislation directed the sale of the Government's remaining interest in Fannie Mae in 1968 and completed the transformation to private shareholder ownership in 1970. Stress in the mortgage markets has eliminated Fannie Mae's stockholder equity, and required ongoing assistance from Treasury under authority provided by the Congress in the Housing and Economic Recovery Act (HERA) of 2008. HERA strengthened housing GSE regulation by creating the Federal Housing Finance Agency (FHFA), a new independent regulator, and provided temporary authority for the U.S. Department of the Treasury to purchase obligations of the housing GSEs. In September 2008, FHFA put Fannie Mae under Federal conservatorship and the U.S. Department of the Treasury entered into a Senior Preferred Stock Purchase Agreement (PSPA) with Fannie Mae to make investments of up to $100 billion in senior preferred stock as required to maintain positive equity. In May 2009, Treasury increased the funding commitments for the PSPA to $200 billion and in December 2009, Treasury modified the funding commitments in the PSPA to the greater of $200 billion or $200 billion plus cumulative net worth deficits experienced during 2010–2012, less any surplus remaining as of December 31, 2012. As of December 31, 2011, Fannie Mae had received $111.6 billion under the PSPA and made $19.8 billion in dividend payments to Treasury. The Budget continues to reflect the GSEs as non-budgetary entities, though their status will continue to be reviewed. All of the current federal assistance being provided to Fannie Mae, including the PSPA, is shown on-budget. For additional discussion and analyses of Fannie Mae, please see the Analytical Perspectives volume of the Budget documents.Status of Direct Loans(in millions of dollars)Identification code 99–2500–0–3–3712011 actual2012 est.2013 est.
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year802,851722,158656,100
1251Repayments: Repayments and prepayments–80,693–66,058–65,610
1290Outstanding, end of year722,158656,100590,490
Balance Sheet(in millions of dollars)Identification code 99–2500–0–3–3712010 actual2011 actual
ASSETS:
Federal assets: Investments in US securities:
1102Treasury securities, par38,77540,755
1201Non-Federal assets: Investments in other securities, net26,64438,415
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601Mortgage Loans and Mortgage Related Securities477,433421,760
1601Mortgage Loans and Mortgage Related Securities - Consolidated Trusts2,559,6292,583,699
1604Direct loans and interest receivable, net3,037,0623,005,459
1606Acquired Property, net17,59012,195
1699Value of assets related to direct loans3,054,6523,017,654
Other Federal assets:
1801Cash and other monetary assets106,781117,053
1901Other assets2,770
1999Total assets3,229,6223,213,877
LIABILITIES:
Non-Federal liabilities:
2202Interest payable14,21212,928
2203Debt812,047744,803
2203Debt - Consolidated Trusts2,391,4152,446,973
2204Estimated liability for loan guarantees1,023
2207Other13,37216,964
2999Total liabilities3,232,0693,221,668
NET POSITION:
3300Senior Preferred Stock86,100104,787
3300Private Equity–88,627–112,640
3300Noncontrolling Interest8062
3999Total net position–2,447–7,791
4999Total liabilities and net position3,229,6223,213,877
Mortgage-backed Securities Prior to January 1, 2010 the mortgages in the pools of loans supporting the mortgage-backed securities guaranteed by Fannie Mae were considered to be owned by the holders of these securities according to the accounting standards for private corporations. Consequently, on the books of Fannie Mae, these mortgages were not considered assets and the securities outstanding were not considered liabilities. New accounting standards implemented on January 1, 2010 require consolidation of many, but not all, of these securities in Fannie Mae's financial statements. For the purposes of this document they are presented as direct loans for mortgage-backed securities. "Disbursements" and "Repayments" are budgetary terms. These items are reported by Fannie Mae as "Issuances" and "Liquidations" respectively. Status of Direct Loans(in millions of dollars)Identification code 99–2501–0–3–3712011 actual2012 est.2013 est.
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year2,642,8202,650,6332,650,633
1231Disbursements: Direct loan disbursements632,356
1251Repayments: Repayments and prepayments–624,543
1290Outstanding, end of year2,650,6332,650,6332,650,633
Federal Home Loan Mortgage Corporation Federal Home Loan Mortgage Corporation The Federal Home Loan Mortgage Corporation (Freddie Mac) is a Government-sponsored enterprise (GSE) in the housing finance market. As a housing GSE, Freddie Mac is a federally chartered, shareholder-owned, private company with a public mission to provide stability in and increase the liquidity of the residential mortgage market, and to help increase the availability of mortgage credit to low- and moderate-income families and in underserved areas. Freddie Mac engages primarily in two forms of business: guaranteeing residential mortgage securities and investing in portfolios of residential mortgages.Freddie Mac was established in 1970 under the Emergency Home Finance Act. The Congress chartered Freddie Mac to provide mortgage lenders with an organized national secondary market enabling them to manage their conventional mortgage portfolio more effectively and gain indirect access to a ready source of additional funds to meet new demands for mortgages. Freddie Mac serves as a conduit facilitating the flow of investment dollars from the capital markets to mortgage lenders, and ultimately, to homebuyers. Stress in the mortgage markets has eliminated Freddie Mac's stockholder equity, and required ongoing assistance from Treasury under authority provided by Congress in the Housing and Economic Recovery Act (HERA) of 2008. HERA strengthened housing GSE regulation by creating the Federal Housing Finance Agency (FHFA), a new independent regulator, and provided temporary authority for the U.S. Department of the Treasury to purchase obligations of the housing GSEs. In September 2008, FHFA put Freddie Mac under Federal conservatorship and the U.S. Department of the Treasury entered into a Senior Preferred Stock Purchase Agreement (PSPA) with Freddie Mac to make investments of up to $100 billion in senior preferred stock as required to maintain positive equity. In May 2009, Treasury increased the funding commitments for the PSPA to $200 billion and in December 2009, Treasury modified the funding commitments in the PSPA to the greater of $200 billion or $200 billion plus cumulative net worth deficits experienced during 2010–2012, less any surplus remaining as of December 31, 2012. As of December 31, 2011, Freddie Mac had received $71.2 billion under the PSPA and made $16.5 billion in dividend payments to Treasury. The Budget continues to reflect the GSEs as non-budgetary entities, though their status will continue to be reviewed. All of the current federal assistance being provided to Freddie Mac, including the PSPA, is shown on-budget. For additional discussion and analyses of Freddie Mac, please see the Analytical Perspectives volume of the Budget documents.Status of Direct Loans(in millions of dollars)Identification code 99–4420–0–3–3712011 actual2012 est.2013 est.
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year710,248679,133656,100
1251Repayments: Repayments and prepayments–31,115–23,033–65,610
1290Outstanding, end of year679,133656,100590,490
Balance Sheet(in millions of dollars)Identification code 99–4420–0–3–3712010 actual2011 actual
ASSETS:
Federal assets: Investments in US securities:
1102Treasury securities, par29,54818,159
1201Non-Federal assets: Investments in other securities, net46,39113,305
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601Mortgage Loans and Mortgage Related Securities461,637456,671
1601Mortgage Loans and Mortgage Related Securities - Consolidated Trusts1,681,7361,611,580
1604Direct loans and interest receivable, net2,143,3732,068,251
1606Acquired property, net7,5115,630
1699Value of assets related to direct loans2,150,8842,073,881
Other Federal assets:
1801Cash and other monetary assets55,77363,082
1901Other assets6,1343,909
1999Total assets2,288,7302,172,336
LIABILITIES:
Non-Federal liabilities:
2202Interest payable10,0978,603
2203Debt727,391674,421
2203Debt - Consolidated Trusts1,542,5031,488,036
2204Liabilities for loan guarantees791
2207Other8,0067,267
2999Total liabilities2,288,7882,178,327
NET POSITION:
3300Senior Preferred Stock64,10066,179
3300Private Equity–64,158–72,170
3999Total net position–58–5,991
4999Total liabilities and net position2,288,7302,172,336
Mortgage-backed Securities Prior to January 1, 2010 the mortgages in the pools of loans supporting the mortgage-backed securities guaranteed by Freddie Mac were considered to be owned by the holders of these securities according to the accounting standards for private corporations. Consequently, on the books of Freddie Mac, these mortgages were not considered assets and the securities outstanding were not considered liabilities. New accounting standards implemented on January 1, 2010 require consolidation of many, but not all, of these securities in Freddie Mac's financial statements. For the purposes of this document, they are presented as direct loans for mortgage-backed securities. "Disbursements'' and "Repayments'' are budgetary terms. These items are reported by Freddie Mac as "Issuances" and "Liquidations" respectively. Status of Direct Loans(in millions of dollars)Identification code 99–4440–0–3–3712011 actual2012 est.2013 est.
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year1,763,6961,689,0911,689,091
1231Disbursements: Direct loan disbursements360,213
1251Repayments: Repayments and prepayments–434,818
1290Outstanding, end of year1,689,0911,689,0911,689,091
Federal Home Loan Bank System Federal Home Loan Bank System The Federal Home Loan Bank System is a Government-sponsored enterprise (GSE) in the housing finance market. The Federal Home Loan Banks were chartered by the Federal Home Loan Bank Board under the authority of the Federal Home Loan Bank Act of 1932 (Act). The 12 Federal Home Loan Banks (FHLBanks) are under the supervision of the Federal Housing Finance Agency (FHFA), established by the Congress in 2008. The common mission of FHLBanks is to facilitate the extension of credit through their members. To accomplish this mission, FHLBanks make loans, called "advances", and provide other credit products and services to their over 7,700 member commercial banks, savings associations, insurance companies, and credit unions. Advances and letters of credit must be fully secured by eligible collateral, and long-term advances may be made only for the purpose of providing funds for residential housing finance. However, "community financial institutions'' may also use long-term advances to finance small businesses, small farms, and small agribusinesses. Additionally, specialized advance programs provide funds for community reinvestment and affordable housing programs. All regulated financial depositories, certified community development financial institutions, and insurance companies engaged in residential housing finance are eligible for membership. Each FHLBank operates in a geographic district and together FHLBanks cover all of the United States, as well as the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. The principal source of funds for the lending operation is the sale of consolidated obligations to the public. The consolidated obligations are not guaranteed by the U.S. Government as to principal or interest. Other sources of lendable funds include members' deposits and capital. Funds not immediately needed for advances to members are invested. The capital stock of the Federal Home Loan Banks is owned entirely by the members. Initially the U.S. Government purchased stock of the banks in the amount of $125 million. The banks had repurchased the Government's investment in full by mid-1951. The Act, as amended in 1989, requires each FHLBank to operate an Affordable Housing Program (AHP). Each FHLBank provides subsidies in the form of direct grants or below-market rate advances for members that use the funds for qualifying affordable housing projects. Each of the FHLBanks must set aside annually 10 percent of its previous year's net earnings, subject to an aggregate minimum of $100 million, for the AHP. The Act, as amended in 1999, also required that FHLBanks contribute 20 percent of net earnings annually to assist in the payment of interest on bonds issued by the Resolution Funding Corporation until such time as the total payments are equivalent to a $300 million annual annuity with a final maturity date of April 15, 2030. The FHBLs fulfilled this obligation on August 5, 2011. A rule issued on June 23, 2004 required each FHLBank to register a class of its stock with the Securities and Exchange Commission. All of the Federal Home Loan Banks complied by 2006. For additional discussion and analyses of the FHLBanks, please see the Analytical Perspectives volume of the Budget. Status of Direct Loans(in millions of dollars)Identification code 99–4200–0–3–3712011 actual2012 est.2013 est.
Position with respect to appropriations act limitation on obligations:
1131Direct loan obligations1,451,4721,451,4721,451,472
1150Total direct loan obligations1,451,4721,451,4721,451,472
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year563,982470,665470,665
1231Disbursements: Direct loan disbursements1,451,4721,451,4721,451,472
1251Repayments: Repayments and prepayments–1,541,457–1,451,472–1,451,472
1264Write-offs for default: Other adjustments, net (+ or -)–3,332
1290Outstanding, end of year470,665470,665470,665
Balance Sheet(in millions of dollars)Identification code 99–4200–0–3–3712010 actual2011 actual
ASSETS:
Federal assets: Investments in US securities:
1102Treasury securities, par6,6141,452
Non-Federal assets:
1201Investments in other securities, net324,489289,022
1206Accounts receivable2,0031,614
1401Net value of assets related to direct loans receivable: Direct loans receivable, gross563,920470,548
Other Federal assets:
1801Cash and other monetary assets5,00214,251
1803Property, plant and equipment, net225220
1901Other assets1,6641,372
1999Total assets903,917778,479
LIABILITIES:
2101Federal liabilities: REFCORP and Affordable Housing Program904724
Non-Federal liabilities:
2202Interest payable3,1612,418
2203Debt814,180702,798
2207Deposit funds and other borrowing21,02217,481
2207Other20,33614,815
2999Total liabilities859,603738,236
NET POSITION:
3100Invested capital44,31440,243
4999Total liabilities and net position903,917778,479
The Farm Credit System (System) is a Government-sponsored enterprise that provides privately financed credit to agricultural and rural communities. The major functional entities of the System are 1) the Agricultural Credit Bank (ACB); 2) the Farm Credit Banks (FCBs); and 3) the direct-lender associations. Farmer Mac, which is also an institution of the System, is discussed separately below. The history and specific functions of the bank entities are discussed after the presentation of financial schedules for each bank entity. As part of the System, these entities are regulated and examined by the Farm Credit Administration (FCA), an independent Federal agency. The administrative costs of FCA are financed by assessments of System institutions and Farmer Mac. System banks finance loans primarily from sales of bonds to the public and their own capital funds. The System bonds issued by the banks are not guaranteed by the U.S. Government either as to principal or interest. The bonds are backed by an insurance fund, administered by the Farm Credit System Insurance Corporation (FCSIC), an independent Federal agency that collects insurance premiums from member banks to pay its administrative expenses and fund insurance reserves. All of the banks' current operating expenses are paid from their own income and do not require budgetary resources from the Federal Government. CoBank, ACB, which is headquartered in Denver, Colorado, serves eligible cooperatives nationwide and provides funding to Agricultural Credit Associations (ACAs) in its chartered district. CoBank, ACB is the only Agricultural Credit Bank (ACB) in the Farm Credit System. The ACB operates under statutory authority that combines the authorities of a Farm Credit Bank (FCB) and a Bank for Cooperatives (BC). In exercising its FCB authority, CoBank's charter limits its lending to ACAs located in the northeast and western regions of the country. As an entity lending to cooperatives, CoBank is chartered to provide credit and related services nationwide to eligible cooperatives primarily engaged in farm supply, grain, marketing, and processing (including sugar, dairy, and ethanol). CoBank also makes loans to rural utilities, including telecommunications companies, and it provides international loans for the financing of agricultural exports.Statement of Changes in Net Worth (in thousands of dollars) |
2010 act.2011 act.2012 est.2013 est.
|
Beginning balance of net worth3,933,2684,371,3764,855,2556,587,126
Capital stock and participations issued41,3152,4221,583,411118,513
Capital stock and participations retired43,98029,90032,000195,250
Net income583,638725,484652,267648,071
Cash/Dividends/Patronage Distributions–249,771–293,420–471,792–501,016
Other, net106,90679,273–150
Ending balance of net worth4,371,3764,855,2556,587,1266,657,444
|
Financing Activities (in thousands of dollars) |
2010 act.2011 act.2012 est.2013 est.
|
Beginning balance of outstanding system obligations50,652,15950,414,05952,767,03575,081,986
|
Consolidated systemwide and other bank bonds issued13,275,84218,731,23241,391,38818,907,306
Consolidated systemwide and other bank bonds retired16,255,96817,118,75819,576,43715,841,754
Consolidated systemwide notes, net2,742,026740,502500,000500,000
Other (Net)0000
Ending balance of outstanding system obligations50,414,05952,767,03575,081,98678,647,538
|
Status of Direct Loans(in millions of dollars)Identification code 99–4130–0–3–3512011 actual2012 est.2013 est.
Position with respect to appropriations act limitation on obligations:
1131Direct loan obligations270,938265,441273,404
1150Total direct loan obligations270,938265,441273,404
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year46,46745,02864,891
1231Disbursements: Direct loan disbursements270,859265,441273,405
1251Repayments: Repayments and prepayments–272,262–245,532–270,927
1263Write-offs for default: Direct loans–36–46–50
1290Outstanding, end of year45,02864,89167,319
Balance Sheet(in millions of dollars)Identification code 99–4130–0–3–3512010 actual2011 actual
ASSETS:
Non-Federal assets:
1201Cash and investment securities12,13916,015
1206Accrued interest receivable on loans392332
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601Direct loans, gross46,46745,028
1603Allowance for estimated uncollectible loans and interest (-)–366–391
1699Value of assets related to direct loans46,10144,637
1803Other Federal assets: Property, plant and equipment, net1,6621,351
1999Total assets60,29462,335
LIABILITIES:
2104Federal liabilities: Resources payable1,237872
Non-Federal liabilities:
2201Consolidated systemwide and other bank bonds50,41452,767
2201Notes payable and other interest-bearing liabilities3,9013,528
2202Accrued interest payable371313
2999Total liabilities55,92357,480
NET POSITION:
3300Cumulative results of operations4,3714,855
4999Total liabilities and net position60,29462,335
The Agricultural Credit Act of 1987 (1987 Act) required the Federal Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge into a Farm Credit Bank (FCB) in each of the 12 Farm Credit districts. FCBs operate under statutory authority that combines the prior authorities of an FLB and of an FICB. No merger occurred in the Jackson district in 1988 because the FLB of Jackson was in receivership. Pursuant to section 410(e) of the 1987 Act, as amended by the Farm Credit Banks Safety and Soundness Act of 1992, FICB of Jackson merged with FCB of Columbia on October 1, 1993. Mergers and consolidations of FCBs across district lines that began in 1992 have continued to date. As a result of this restructuring activity, four FCBs, headquartered in the following cities, remain as of October 1, 2011: AgFirst Farm Credit Bank, Columbia, South Carolina; AgriBank, FCB, St. Paul, Minnesota; U.S. AgBank, FCB, Wichita, Kansas; and FCB of Texas, Austin, Texas. However, as of January 1, 2012, U.S. AgBank, FCB merged into CoBank, ACB, thereby reducing the number of FCBs to three.FCBs serve as discount banks and as of October 1, 2011 provided funds to three Federal Land Credit Associations (FLCAs) and 81 Agricultural Credit Associations (ACAs). These direct-lender associations, in turn, primarily make short- and intermediate-term production loans and long-term real estate loans to eligible farmers and ranchers, farm-related businesses, and rural homeowners. FCBs can also lend to other financing institutions, including commercial banks, as authorized by the Farm Credit Act of 1971, as amended.All the capital stock of FICBs, from their organization in 1923 to December 31, 1956, was held by the U.S. Government. The Farm Credit Act of 1956 provided a long-range plan for the eventual ownership of the FICBs by the production credit associations and the gradual retirement of the Government's investment in the banks. This retirement was accomplished in full on December 31, 1968. The last of the Government capital that had been invested in FLBs was repaid in 1947.All the capital stock of FICBs, from their organization in 1923 to December 31, 1956, was held by the U.S. Government. The Farm Credit Act of 1956 provided a long-range plan for the eventual ownership of the FICBs by the production credit associations and the gradual retirement of the Government's investment in the banks. This retirement was accomplished in full on December 31, 1968. The last of the Government capital that had been invested in FLBs was repaid in 1947.Statement of Changes in Net Worth(in thousands of dollars)|
2010 act.2011 act.2012 est.2013 est.
|
Beginning balance of net worth6,758,1678,129,4688,594,7837,465,023
Capital stock and participations issued397,149154,288293,22690,675
Capital stock and participations retired88,525180,52938,77334,263
Surplus Retired–1,868–60000
Net income1,237,0871,201,132878,471758,457
Cash/Dividends/Patronage Distributions–625,272–710,466–575,860–470,012
Other, net448,994290–1,686,82438,753
Ending balance of net worth8,129,4688,594,7837,465,0237,848,633
|
Financing Activities(in thousands of dollars)|
2010 act.2011 act.2012 est.2013 est.
|
Beginning balance of outstanding system obligations124,988,111126,924,149129,243,811111,439,527
|
Consolidated systemwide and other bank bonds issued106,492,468330,460,324230,409,572232,022,935
|
Consolidated systemwide and other bank bonds retired104,322,977328,912,956247,771,380226,651,495
Consolidated systemwide notes, net–233,453772,294–442,4760
Other (Net)0000
Ending balance of outstanding system obligations126,924,149129,243,811111,439,527116,810,967
|
Status of Direct Loans(in millions of dollars)Identification code 99–4160–0–3–3712011 actual2012 est.2013 est.
Position with respect to appropriations act limitation on obligations:
1131Direct loan obligations223,808184,182194,052
1150Total direct loan obligations223,808184,182194,052
Cumulative balance of direct loans outstanding:
1210Outstanding, start of year108,320109,77795,120
1231Disbursements: Direct loan disbursements223,715184,774195,032
1251Repayments: Repayments and prepayments–222,129–199,375–189,935
1263Write-offs for default: Direct loans–129–56–40
1290Outstanding, end of year109,77795,120100,177
Balance Sheet(in millions of dollars)Identification code 99–4160–0–3–3712010 actual2011 actual
ASSETS:
Non-Federal assets:
1201Cash and investment securities27,84329,355
1206Accrued Interest Receivable763698
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601Direct loans, gross108,321109,778
1603Allowance for estimated uncollectible loans and interest (-)–83–74
1699Value of assets related to direct loans108,238109,704
1803Other Federal assets: Property, plant and equipment, net915779
1999Total assets137,759140,536
LIABILITIES:
2104Federal liabilities: Resources payable545506
Non-Federal liabilities:
2201Consolidated systemwide and other bank bonds126,924129,244
2201Notes payable and other interest-bearing liabilities1,6511,735
2202Accrued interest payable510456
2999Total liabilities129,630131,941
NET POSITION:
3300Cumulative results of operations8,1298,595
4999Total liabilities and net position137,759140,536
Federal Agricultural Mortgage Corporation Farmer Mac is authorized under the Farm Credit Act of 1971, as amended by the Agricultural Credit Act of 1987 (Act), to create a secondary market for agricultural real estate and rural home mortgages. The Farmer Mac title of the Act was amended by the 1990 farm bill to authorize Farmer Mac to purchase, pool, and securitize the guaranteed portions of farmer program, rural business, and community development loans guaranteed by the U. S. Department of Agriculture (USDA). The Farmer Mac title was amended in 1991 to clarify Farmer Mac's authority to issue debt obligations, provide for the establishment of minimum capital standards, establish the Office of Secondary Market Oversight at the Farm Credit Administration (FCA), and expand the Agency's rulemaking authority. The Farm Credit System Reform Act of 1996 (1996 Act) amended the Farmer Mac title to allow Farmer Mac to purchase loans directly from lenders and to issue and guarantee mortgage-backed securities without requiring that a minimum cash reserve or subordinated (first loss) interest be maintained by poolers as had been required under its original authority. The 1996 Act expanded FCA's regulatory authority to include provisions for establishing a conservatorship or receivership, if necessary, and provided for increased core capital requirements at Farmer Mac phased in over three years. Most recently, the 2008 Farm Bill, the Food, Conservation and Energy Act of 2008, amended the Farmer Mac title to authorize the financing of rural electric and telephone cooperatives.Farmer Mac operates through several programs: "Farmer Mac I," which involves mortgage loans secured by first liens on agricultural real estate, rural utility cooperative real estate, or rural housing (qualified loans), and "Farmer Mac II," which involves the guaranteed portions of USDA-guaranteed loans. Farmer Mac operates by 1) purchasing, or committing to purchase, newly originated or existing qualified loans or guaranteed portions from lenders; 2) purchasing or guaranteeing "AgVantage'' bonds backed by qualified loans or guaranteed portions from lenders; and 3) exchanging qualified loans or guaranteed portions for guaranteed securities. Loans purchased by Farmer Mac may be aggregated into pools that back Farmer Mac guaranteed securities, which are held by Farmer Mac or sold into the capital markets. Farmer Mac is intended to attract new capital for financing qualified loans and guaranteed portions of loans; foster increased long-term, fixed-rate lending; and provide greater liquidity to agricultural and rural lenders. Farmer Mac is governed by a 15-member Board of Directors. Ten board members are elected by stockholders, including five by the Farm Credit System and five by commercial lenders. Five are appointed by the President, subject to Senate confirmation.Financial support and funding for Farmer Mac's operations come from several sources: sale of common and preferred stock, issuance of debt obligations, and net income. Under procedures specified in the Act, Farmer Mac may issue obligations to the U.S. Treasury in a cumulative amount not to exceed $1.5 billion to fulfill its guarantee obligations.As of September 30, 2011, Farmer Mac's core capital exceeded statutory requirements. Additionally, Farmer Mac's regulatory capital (core capital plus the allowance for loan losses) exceeded the amount of required regulatory capital as determined by the risk-based capital rule.Farmer Mac provides a guarantee of timely payment of principal and interest on securities backed by qualified loans or pools of qualified loans. These securities are not guaranteed by the United States and are not "Government securities." Farmer Mac is subject to reporting requirements under securities laws, and its guaranteed mortgage-backed securities are subject to registration with the Securities and Exchange Commission under the 1933 and 1934 Securities Acts.Farmer Mac is federally regulated by FCA, acting through its Office of Secondary Market Oversight (OSMO). FCA is responsible for the supervision of, examination of, and rulemaking for Farmer Mac.Status of Guaranteed Loans(in millions of dollars)Identification code 99–4180–0–3–3512011 actual2012 est.2013 est.
Position with respect to appropriations act limitation on commitments:
2131Guaranteed loan commitments4,278
2150Total guaranteed loan commitments4,278
Cumulative balance of guaranteed loans outstanding:
2210Outstanding, start of year11,47611,84111,841
2231Disbursements of new guaranteed loans4,278
2251Repayments and prepayments–3,913
2290Outstanding, end of year11,84111,84111,841
Memorandum:
2299Guaranteed amount of guaranteed loans outstanding, end of year1,463
Balance Sheet(in millions of dollars)Identification code 99–4180–0–3–3512010 actual2011 actual
ASSETS:
Non-Federal assets:
1201Investment in securities1,4571,913
1206Receivables, net12379
Net value of assets related to direct loans receivable:
1401Direct loans receivable, gross6,1238,534
1402Interest receivable6780
1499Net present value of assets related to direct loans6,1908,614
1801Other Federal assets: Cash and other monetary assets453825
1999Total assets8,22311,431
LIABILITIES:
Non-Federal liabilities:
2201Accounts payable167195
2202Interest payable4549
2203Debt7,47510,606
2204Liabilities for loan guarantees4034
2999Total liabilities7,72710,884
NET POSITION:
3300Invested capital496547
4999Total liabilities and net position8,22311,431