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, 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 financing 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 Funds

Portfolio Programs

Status of Direct Loans (in millions of dollars)


Identification code 915–4986–0–4–371 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 176,989 172,108 172,108
1251 Repayments: Net repayments and prepayments –4,881



1290 Outstanding, end of year 172,108 172,108 172,108

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, 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. 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.

The Housing and Economic Recovery Act of 2008 reformed housing GSE regulation by creating the Federal Housing Finance Agency (FHFA), a new independent regulator, and providing temporary authority for the U.S. Department of the Treasury to purchase obligations of the housing GSEs. On September 6, 2008, FHFA placed Fannie Mae under Federal conservatorship in response to the GSEs' declining capital adequacy and to support the safety and soundness of the GSEs. On the following day, 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. Based on the financial results reported by Fannie Mae as of December 31, 2012, and under the terms of the PSPA, the cumulative funding commitment cap for Fannie Mae was set at $233.7 billion. As of March 31, 2021, Fannie Mae had received $119.8 billion under the PSPA, and had made a total of $181.4 billion in dividend payments to Treasury on the senior preferred stock. 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 of Fannie Mae, please see the Analytical Perspectives volume of the Budget documents.

Balance Sheet (in millions of dollars)


Identification code 915–4986–0–4–371 2019 actual 2020 actual

ASSETS:
Federal assets:
Investments in U.S. securities:
1102 Treasury securities, par 36,016 135,972
1201 Non-Federal assets: Investments in non-Federal securities, net 23,260 12,774
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601 Mortgage Loans and Mortgage Related Securities 118,076 115,986
1601 Mortgage Loans and Mortgage Related Securities - Consolidated Trusts 3,206,856 3,439,678


1604 Direct loans and interest receivable, net 3,324,932 3,555,664
1606 Acquired Property, net 2,452 1,462


1699 Value of assets related to direct loans 3,327,384 3,557,126
Other Federal assets:
1801 Cash and other monetary assets 95,782 135,695
1901 Other assets 11,994 23,036


1999 Total assets 3,494,436 3,864,603
LIABILITIES:
Non-Federal liabilities:
2202 Interest payable 10,400 9,982
2203 Debt 213,522 289,423
2203 Debt - Consolidated Trusts 3,248,336 3,530,381
2207 Other 11,836 14,124


2999 Total liabilities 3,484,094 3,843,910
NET POSITION:
3300 Senior Preferred Stock 120,836 120,836
3300 Private Equity –110,494 –100,143
3300 Noncontrolling Interest


3999 Total net position 10,342 20,693


4999 Total liabilities and net position 3,494,436 3,864,603

Mortgage-backed Securities

Status of Direct Loans (in millions of dollars)


Identification code 915–4987–0–4–371 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 3,218,309 3,481,562 3,481,562
1231 Disbursements: Direct loan disbursements 1,173,366
1251 Repayments: Repayments and prepayments –910,113



1290 Outstanding, end of year 3,481,562 3,481,562 3,481,562

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 the Budget 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.

Federal Home Loan Mortgage Corporation

Federal Funds

Portfolio Programs

Status of Direct Loans (in millions of dollars)


Identification code 913–4988–0–4–371 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 221,601 198,176 198,176
1251 Repayments: Repayments and prepayments –23,425



1290 Outstanding, end of year 198,176 198,176 198,176

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.

The Housing and Economic Recovery Act of 2008 reformed 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. On September 6, 2008, FHFA placed Freddie Mac under Federal conservatorship in response to the GSEs' declining capital adequacy and to support the safety and soundness of the GSEs. On the following day, 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. Based on the financial results reported by Freddie Mac as of December 31, 2012, and under the terms of the PSPA, the cumulative funding commitment cap for Freddie Mac was set at $211.8 billion. As of March 31, 2021, Freddie Mac had received $71.6 billion under the PSPA, and had made a total of $119.7 billion in dividend payments to Treasury on the senior preferred stock. 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 of Freddie Mac, please see the Analytical Perspectives volume of the Budget documents.

Balance Sheet (in millions of dollars)


Identification code 913–4988–0–4–371 2019 actual 2020 actual

ASSETS:
Federal assets:
Investments in U.S. securities:
1102 Treasury securities, par 24,282 28,497
1201 Non-Federal assets: Investments in non-Federal securities, net 51,187 99,252
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601 Mortgage Loans and Mortgage Related Securities 140,557 147,937
1601 Mortgage Loans and Mortgage Related Securities - Consolidated Trusts 1,905,633 2,115,509


1604 Direct loans and interest receivable, net 2,046,190 2,263,446
1606 Acquired property, net


1699 Value of assets related to direct loans 2,046,190 2,263,446
Other Federal assets:
1801 Cash and other monetary assets 42,803 56,990
1901 Other assets 5,784 5,886


1999 Total assets 2,170,246 2,454,071
LIABILITIES:
Non-Federal liabilities:
2202 Interest payable 6,688 6,020
2203 Debt 279,951 284,896
2203 Debt - Consolidated Trusts 1,869,308 2,138,420
2207 Other 7,625 10,844


2999 Total liabilities 2,163,572 2,440,180
NET POSITION:
3300 Senior Preferred Stock 72,648 72,648
3300 Private Equity –65,974 –58,757


3999 Total net position 6,674 13,891


4999 Total liabilities and net position 2,170,246 2,454,071

Mortgage-backed Securities

Status of Direct Loans (in millions of dollars)


Identification code 914–4989–0–4–371 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 2,190,219 2,459,232 2,459,232
1231 Disbursements: Direct loan disbursements 897,670
1251 Repayments: Repayments and prepayments –628,657



1290 Outstanding, end of year 2,459,232 2,459,232 2,459,232

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 the Budget, 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.

Federal Home Loan Bank System

Federal Funds

Federal Home Loan Banks

Status of Direct Loans (in millions of dollars)


Identification code 913–4990–0–4–371 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 728,188 546,987 546,987
1231 Disbursements: Direct loan disbursements 5,466,399
1251 Repayments: Repayments and prepayments –5,651,985
1264 Other adjustments, net (+ or -) 4,385



1290 Outstanding, end of year 546,987 546,987 546,987

The Federal Home Loan Bank System is a Government-sponsored enterprise (GSE) in the housing finance market. The Federal Home Loan Banks (FHLBanks) were chartered by the Federal Home Loan Bank Board under the authority of the Federal Home Loan Bank Act of 1932 (Act). The 11 Federal Home Loan Banks 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 nearly 6,700 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. 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, and must meet other requirements in the Act to obtain membership. Each FHLBank operates in a geographic district and together FHLBanks cover all of the United States, including 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. For additional discussion of the FHLBanks, please see the Analytical Perspectives volume of the Budget.

Balance Sheet (in millions of dollars)


Identification code 913–4990–0–4–371 2019 actual 2020 actual

ASSETS:
Federal assets:
Investments in U.S. securities:
1102 Treasury securities, par 54,001 62,060
Non-Federal assets:
1201 Investments in non-Federal securities, net 297,831 270,730
1206 Accounts receivable 2,034 1,271
1401 Net value of assets related to direct loans receivable: Direct loans receivable, gross 728,261 547,070
Other Federal assets:
1801 Cash and other monetary assets 769 9,988
1803 Property, plant and equipment, net
1901 Other assets 3,111 3,345


1999 Total assets 1,086,007 894,464
LIABILITIES:
2101 Federal liabilities: REFCORP and Affordable Housing Program 1,080 1,064
Non-Federal liabilities:
2202 Interest payable 1,909 928
2203 Debt 1,010,890 821,933
2207 Deposit funds and other borrowing 10,787 14,952
2207 Other 5,712 4,116


2999 Total liabilities 1,030,378 842,993
NET POSITION:
3100 Invested capital 55,629 51,471


4999 Total liabilities and net position 1,086,007 894,464

Farm Credit System

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. The Federal Agricultural Mortgage corporation (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. System entities are regulated and examined by the Farm Credit Administration (FCA), an independent Federal agency. The administrative costs of FCA are financed by assessments on System institutions, including 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 as to either principal or interest. The bonds are backed by an insurance fund, administered by the Farm Credit System Insurance Corporation (FCSIC), an independent Federal Government-controlled corporation that collects insurance premiums from member banks to fund insurance reserves. All of the FCSIC's operating expenses are also paid from the insurance premiums it receives from the System banks; as a result, the FCSIC does not require budgetary resources from the Federal Government.

Federal Funds

Agricultural Credit Bank

Status of Direct Loans (in millions of dollars)


Identification code 912–4991–0–4–351 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 101,899 111,985 114,902
1231 Disbursements: Direct loan disbursements 453,272 470,535 488,455
1251 Repayments: Repayments and prepayments –443,143 –467,578 –484,029
1263 Write-offs for default: Direct loans –43 –40 –50



1290 Outstanding, end of year 111,985 114,902 119,278

CoBank, Agricultural Credit Bank (ACB), which is headquartered near Denver, Colorado, provides funding to eligible cooperatives nationwide and Agricultural Credit Associations (ACAs) in its chartered district. CoBank is the only Agricultural Credit Bank (ACB) in the System. An ACB operates under statutory authority that combines the authorities of an FCB and a bank for cooperatives (BC). CoBank is the only System bank with the authorities of a BC. In exercising its FCB authority, CoBank's charter limits its lending to 21 ACAs located in the northeast, central, and western regions of the country. And, in exercising its BC authority, 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)


2019 act. 2020 act. 2021 est. 2022 est.

Beginning balance of net worth 9,058,428 10,447,308 11,679,369 12,218,314




Capital stock and participations issued 78,467 121,516 193,897 107,795
Capital stock and participations retired 44,027 34,792 35,726 52,425
Net income 1,054,550 1,194,308 1,106,170 1,125,478
Cash/Dividends/Patronage Distributions –566,874 –607,179 –619,336 –647,602
Other, net 866,764 558,208 –106,060 –222,875




Ending balance of net worth 10,447,308 11,679,369 12,218,314 12,528,685

Financing Activities (in thousands of dollars)


2019 act. 2020 act. 2021 est. 2022 est.

Beginning balance of outstanding system obligations 115,909,963 122,493,375 132,426,345 134,310,007




Consolidated systemwide and other bank bonds issued 55,744,873 78,143,926 81,120,041 84,209,501
Consolidated systemwide and other bank bonds retired 48,978,751 67,723,738 79,228,169 78,263,814
Consolidated systemwide notes, net –167,077 –471,800 0 0
Other (Net) –15,633 –15,418 –8,210 –6,988




Ending balance of outstanding system obligations 122,493,375 132,426,345 134,310,007 140,248,706

Balance Sheet (in millions of dollars)


Identification code 912–4991–0–4–351 2019 actual 2020 actual

ASSETS:
Non-Federal assets:
1201 Cash and investment securities 33,318 34,486
1206 Accrued interest receivable on loans 452 412
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601 Direct loans, gross 101,898 111,984
1603 Allowance for estimated uncollectible loans and interest (-) –621 –631


1699 Value of assets related to direct loans 101,277 111,353
1803 Other Federal assets: Property, plant and equipment, net 1,323 2,100


1999 Total assets 136,370 148,351
LIABILITIES:
2104 Federal liabilities: Resources payable to Treasury 1,789 2,179
Non-Federal liabilities:
2201 Consolidated systemwide and other bank bonds 122,493 132,426
2201 Notes payable and other interest-bearing liabilities 1,194 1,716
2202 Accrued interest payable 447 351


2999 Total liabilities 125,923 136,672
NET POSITION:
3300 Cumulative results of operations 10,447 11,679


4999 Total liabilities and net position 136,370 148,351

Farm Credit Banks

Status of Direct Loans (in millions of dollars)


Identification code 912–4992–0–4–371 2020 actual 2021 est. 2022 est.

Cumulative balance of direct loans outstanding:
1210 Outstanding, start of year 139,911 153,942 162,320
1231 Disbursements: Direct loan disbursements 224,885 233,059 243,711
1251 Repayments: Repayments and prepayments –210,851 –224,656 –234,492
1263 Write-offs for default: Direct loans –3 –25 –35



1290 Outstanding, end of year 153,942 162,320 171,504

The Agricultural Credit Act of 1987 (1987 Act) required the Federal Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge into an 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. Mergers and consolidations of FCBs across district lines, which began in 1992, have continued to date. As a result of this restructuring activity, three FCBs, headquartered in the following cities, remain as of October 1, 2020: AgFirst Farm Credit Bank, Columbia, South Carolina; AgriBank, FCB, St. Paul, Minnesota; and FCB of Texas, Austin, Texas.

FCBs serve as discount banks and, as of October 1, 2020, provided funds to one Federal Land Credit Association and 46 Agricultural Credit Associations. 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 (1971 Act).

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)




2019 act. 2020 act. 2021 est. 2022 est.



Beginning balance of net worth 10,072,862 10,559,072 11,405,805 11,528,837




Capital stock and participations issued 257,973 947,216 233,558 228,611
Capital stock and participations retired 13,396 446,022 0 0
Surplus Retired 105 118 100 100
Net income 1,063,565 1,347,161 1,177,480 1,174,060
Cash/Dividends/Patronage Distributions –956,091 –1,138,345 –1,145,987 –1,149,031
Other, net 134,264 136,841 –141,919 10,148




Ending balance of net worth 10,559,072 11,405,805 11,528,837 11,792,525

Financing Activities (in thousands of dollars)




2019 act. 2020 act. 2021 est. 2022 est.



Beginning balance of outstanding system obligations 152,736,019 160,146,949 176,239,909 183,747,670




Consolidated systemwide and other bank bonds issued 251,290,862 293,432,765 247,774,037 236,034,133
Consolidated systemwide and other bank bonds retired 243,996,390 277,598,044 239,731,324 226,904,933
Consolidated systemwide notes, net 0 0 0 0
Other (Net) 116,458 258,239 –534,952 51,082




Ending balance of outstanding system obligations 160,146,949 176,239,909 183,747,670 192,927,952

Balance Sheet (in millions of dollars)


Identification code 912–4992–0–4–371 2019 actual 2020 actual

ASSETS:
Non-Federal assets:
1201 Cash and investment securities 31,658 34,631
1206 Accrued Interest Receivable 937 686
Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable:
1601 Direct loans, gross 139,910 153,941
1603 Allowance for estimated uncollectible loans and interest (-) –60 –69


1699 Value of assets related to direct loans 139,850 153,872
1803 Other Federal assets: Property, plant and equipment, net 758 1,080


1999 Total assets 173,203 190,269
LIABILITIES:
2104 Federal liabilities: Resources payable to Treasury 504 709
Non-Federal liabilities:
2201 Consolidated systemwide and other bank bonds 160,147 176,240
2201 Notes payable and other interest-bearing liabilities 1,370 1,545
2202 Accrued interest payable 623 369


2999 Total liabilities 162,644 178,863
NET POSITION:
3300 Cumulative results of operations 10,559 11,406


4999 Total liabilities and net position 173,203 190,269

Federal Agricultural Mortgage Corporation

Status of Guaranteed Loans (in millions of dollars)


Identification code 912–4993–0–4–351 2020 actual 2021 est. 2022 est.

Cumulative balance of guaranteed loans outstanding:
2210 Outstanding, start of year 20,933 21,989 21,989
2231 Disbursements of new guaranteed loans 5,665
2251 Repayments and prepayments –4,609



2290 Outstanding, end of year 21,989 21,989 21,989

Memorandum:
2299 Guaranteed amount of guaranteed loans outstanding, end of year 2,735

Farmer Mac

Farmer Mac is authorized under the Farm Credit Act of 1971 (as amended by the 1987 Act) to create a secondary market for agricultural real estate and rural home mortgages. The Farmer Mac title of the 1971 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. 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. Most recently, the 2018 Farm Bill, the Agricultural Improvement Act of 2018, increase the acreage exception provided in section 8.8(c)(2) of the Farm Credit Act of 1971 from 1,000 acres to 2,000 acres. The change became effective on June 18, 2020.

Farmer Mac operates through several programs: the "Farm & Ranch" program involves mortgage loans secured by first liens on agricultural real estate or rural housing (qualified loans); the "USDA guarantees" program involves the guaranteed portions of certain USDA-guaranteed loans; and the "Rural Utilities" program involves rural electric and telecommunications 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; and (3) exchanging qualified loans, or guaranteed portions of qualified loans, 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 governed by a 15-member Board of Directors. Ten board members are elected by stockholders, including five by stockholders that are Farm Credit System (FCS) institutions and five by stockholders that are non-FCS financial services firms. Five are appointed by the President, subject to Senate confirmation.

Financing

Financial support and funding for Farmer Mac's operations come from several sources: sale of common and preferred stock, issuance of debt obligations, and 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 Farmer Mac's guarantee obligations.

Guarantees

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.

Regulation

Farmer Mac is federally regulated by FCA, acting through its Office of Secondary Market Oversight. FCA is responsible for the supervision of, examination of, and rulemaking for Farmer Mac.

Balance Sheet (in millions of dollars)


Identification code 912–4993–0–4–351 2019 actual 2020 actual

ASSETS:
Non-Federal assets:
1201 Investment in securities 3,157 3,577
1206 Receivables, net 78 106
Net value of assets related to direct loans receivable:
1401 Direct loans receivable, gross 17,333 19,252
1402 Interest receivable 159 153


1499 Net present value of assets related to direct loans 17,492 19,405
1801 Other Federal assets: Cash and other monetary assets 588 911


1999 Total assets 21,315 23,999
LIABILITIES:
Non-Federal liabilities:
2201 Accounts payable 63 55
2202 Interest payable 104 93
2203 Debt 20,359 22,882
2204 Liabilities for loan guarantees 39 39


2999 Total liabilities 20,565 23,069
NET POSITION:
3300 Invested capital 750 930


4999 Total liabilities and net position 21,315 23,999