Both of the government sponsored enterprises (GSEs) posted strong earnings in the third quarter of the year.  Freddie Mac announced comprehensive income of $1.8 billion while Fannie Mae's was $4.0 billion.

Freddie Mac said its income was essentially unchanged from Q2 but lower than the $2.56 billion reported in the third quarter of 2018.  The company had $2.79 billion in net revenue, $2.41 of which was interest income. This was down from $2.93 billion and $3.36 billion in the previous quarter and 3.55 billion and $3.26 billion a year earlier.

Market-related losses were $0.3 billion, driven by a $0.4 billion loss from net interest rate impacts resulting from declining long-term interest rates. These losses were partially offset by a $0.1 billion gain from market spread impacts. Gains from sales of single-family reperforming loans were $0.4 billion, substantially unchanged from the prior quarter.

The company's guarantee book grew 2 percent from the previous quarter and 6 percent year over year. The annual growth was composed of a 5 percent increase in the Single-Family Book and 15 percent growth in the Multifamily Book.

Adjusted guarantee fee income increased from  2.1 billion in the second quarter and $1.9 billion in the third quarter of last year to $2.3 billion. The company said this was primarily driven by higher amortization of single-family upfront fees resulting from an increase in loan prepayments.

The single-family serious delinquency rate declined to 0.61%, while the multifamily rate continued near zero at 0.04%.

Freddy Mac said it helped nearly 810,000 families to own or rent a home in the third quarter of 2019 and provided $173 billion in liquidity to the mortgage market.  It addition it served 865 regional and community-oriented lenders, representing more than 90 percent of all single-family lenders.  First-time homebuyers represented 45 percent of new single-family purchase loans acquired in the third quarter of 2019, and 95 percent of the eligible multifamily rental units financed were affordable to families earning at or below 120 percent of area median incomes.

The recent revision to the company's preferred stock agreement with the U.S Treasury now allows Freddie Mac to build its net worth as a buffer against potential losses.  Consequently, total equity increased to $6.7 billion at the end of the third quarter, up from $4.8 billion at the end of June.

Fannie Mae's comprehensive income increased from $3.4 billion in the previous quarter and was virtually identical to what it reported a year earlier.  Net revenue was $5.6 billion compared to $5.4 billion in the second quarter and unchanged from the third quarter of 2018.  Fee and other income made up $400 million of the 3rd quarter revenue, more than $100 million more than in either of the two earlier quarters. The increase was attributed primarily to higher prepayments on multifamily loans.

The single-family delinquency rate was 0.68 percent at the end of the reporting period, down 0.02 percent from the prior quarter. A year earlier the rate was 0.82 percent.

The company said it provided $460 billion in liquidity to the mortgage market in the first nine months of the year and acquired approximately 1.6 million single family loans, 950,000 of which were purchase mortgages.  The multifamily share of that liquidity was $52.1 billion which financed approximately 548,000 units of multifamily housing. Ninty-percent of those units met affordable housing guidelines. It was also responsible for 39 percent of new single-family mortgage related securities issued during the third quarter.

Under the new agreement with Treasury, Fannie Mae is allowed to retain $25 billion in capital rather than the previous $3 billion.  As a result, Fannie Mae's net worth increased to $10.3 billion as of September 30, 2019.