Last month our conservator, the Federal Housing Finance Agency (FHFA), and the U.S. Department of the Treasury announced changes to our Preferred Stock Purchase Agreement (PSPA) which will allow Freddie Mac to retain earnings until we meet the FHFA capital rule requirements.

The amended PSPA also included notable requirements that may impact how you do business with us. You’ll find the details on these new provisions in sections 5.12 and 5.14 of the amended PSPA.

  • A consecutive rolling 4-quarter cap of $1.5 billion in UPB for each Seller for cash transactions
  • Volume limits for loans with certain higher risk characteristics

Our teams have started their analysis to fully understand the impact of these provisions to all our clients. We will be working closely with FHFA for guidance and consulting with many of you as we build our roadmap to move forward. These ongoing discussions will shape how to best assist our clients to continue doing business with us, while making sure we comply with the PSPA provisions. 

We will also work with the various secondary market advisors and vendors (your critical technology platforms) so they can be ready to support your needs and operational adjustments you will pursue when selling loans to us as a result of the impacts of the amended PSPA.

As we undertake this foundational work, you can be assured we will be guided by our mandate to provide stability, liquidity and affordability in the mortgage market to benefit lenders of all sizes. 

We will communicate with you about the progress of our work so you can make the necessary and timely operational and business decisions that best suit your business model.

In the meantime, here are a few resources you may want to review regarding our Guarantor execution options if you are new to this execution or need a refresher. The requirements for these options are outlined in Topic 6200 of our Single-Family Seller/Servicer Guide however, we require our Sellers to have a specific contract in place to sell loans through the Guarantor path.

If you have questions or concerns to share with us about the PSPA amendments, please reach out to your Freddie Mac representative. We are compiling all client and vendor feedback so we can refer to these as we work on our solutions.