Fannie Mae and Freddie Mac Adequately Capitalized

The Office of Federal Housing Enterprise Oversight (OFHEO) announced on March 31 that as of December 31, 2005 Fannie Mae and Freddie Mac were officially classified "adequately capitalized" and continued to exceed their 30 percent capital surcharge. By law, OFHEO is required to review the capital levels and classification of the two housing GSEs and report the results to Congress on at least a quarterly basis.

Fannie Mae's total 2005 year-end capital was $39.2 billion, exceeding its risk-based capital level of $12.6 billion by $26.6 billion. Freddie Mac reported total capital of $36.8 billion exceeding its $24.5 billion minimum capital requirement by $11.3 billion. These are estimates of the GSEs' financial condition and are only as reliable as their financial statements. Both companies have a 30 percent capital surcharge which is unlikely to be lifted until GAAP-compliant financial statements are filed.

CONTACTS: Jeff Lischer 202-383-1117

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