Freddie Mac earned $3.2 billion in the third quarter, up 17% from a year earlier. But it set aside $800 million for credit losses, up from $175 million a year earlier, mostly because, the company said, it now projects higher mortgage rates ahead. The same company’s weekly rate survey, published at noon the same day, showed borrowers getting a small reprieve: the 30-year fixed rate fell for a second straight week.
Freddie Mac reported net income of $3.235 billion for the quarter ended Sept. 30, compared with $2.773 billion a year earlier, according to its third-quarter earnings release filed with the SEC on Oct. 29, 2026. Profit was down from $3.838 billion in the second quarter. That earlier quarter included an $880 million credit-loss benefit, which turned into an $800 million provision this time.
Rates fall to 7.24%
The 30-year fixed-rate mortgage averaged 7.24% in the week ending Oct. 29, down from 7.32% a week earlier, according to Freddie Mac’s Primary Mortgage Market Survey. Freddie Mac called it the lowest level this month. A year ago the average was 6.17%. The 15-year fixed rate fell to 6.60% from 6.68%, compared with 5.41% a year ago.
The survey averages rates on applications submitted from the prior Thursday through Wednesday. This week’s window ran through Oct. 28, the day the Federal Reserve held its target range at 3.75% to 4%. Two officials, Lisa D. Cook and Beth M. Hammack, voted against the decision because they preferred a quarter-point hike. RealtyWire’s earlier coverage tracked rates’ climb to their 2026 high. In early September the 30-year average was 6.71%, which at the time was a 13-month high, as we reported. The latest reading is still more than half a point above that.
Why the provision jumped
Higher rates also run through Freddie Mac’s own books. The company said the single-family provision of $685 million was “primarily due to a credit reserve build driven by an increase in projected future mortgage interest rates, as well as new acquisitions.” The allowance for credit losses on single-family loans rose to 0.22% of loans outstanding from 0.19% in the second quarter.
Revenue more than covered the provision. Net revenues rose 19% from a year earlier to $6.8 billion. Net interest income rose 8% to $5.9 billion. Non-interest income was $933 million, compared with $284 million a year earlier, which the company attributed to net investment gains. Non-interest expense fell 6% to $2.0 billion, which the company said reflected lower credit enhancement costs and lower salaries and benefits.
“Through the first three quarters of 2026, net income has increased 34 percent compared with the same period a year ago,” Chief Executive Officer Kenny Smith said in the release.
Delinquencies tick up
Credit is softening at the edges, though from low levels. The single-family serious delinquency rate was 0.61% at Sept. 30, up from 0.59% at the end of 2025 and 0.57% a year earlier. In multifamily, the delinquency rate rose to 0.58% from 0.44% at Dec. 31, 2025, and 0.51% a year earlier. Freddie Mac attributed its $115 million multifamily provision to “overall credit performance deterioration in the mortgage portfolio,” partly offset by changes to how it estimates losses.
Multifamily lending slowed sharply. New multifamily business fell to $16 billion from $25 billion a year earlier, which the company said was “primarily driven by the higher mortgage interest rate environment.” It financed 134,000 rental units, down from 195,000. Even so, multifamily net income rose 22% to $521 million, helped by a 43% jump in net interest income from fully guaranteed securitizations.
Refinancing dries up; VantageScore shows up
On the single-family side, Freddie Mac funded 286,000 home loans, down from 306,000 in the second quarter. The drop came from refinancing: refinance borrowers fell to 64,000 from 106,000, while purchase borrowers rose to 222,000 from 200,000. First-time buyers made up 51% of purchase loans on primary residences, or 106,000 households. The average original credit score on new loans was 759.
The quarter was also the first in which VantageScore appeared in Freddie Mac’s pricing figures. VantageScore 4.0 was the model used for pricing on 6% of new single-family acquisitions, with Classic FICO at 94%. In the second quarter, FICO’s share was 100%. “With direction from U.S. Federal Housing in the third quarter, the company began accepting the use of VantageScore’s credit scoring model by all lenders,” William J. Pulte, director of U.S. Federal Housing and chair of Freddie Mac’s board, said in the release. That followed the decision to open VantageScore 4.0 to all Fannie and Freddie lenders.
Freddie Mac’s net worth rose to $81.0 billion from $67.6 billion a year earlier. Freddie Mac has been in conservatorship since September 2008 and is retaining earnings to build capital. As a result, the liquidation preference of Treasury’s senior preferred stock rose to $150.4 billion and will rise to $153.6 billion on Dec. 31. More mortgage coverage is on RealtyWire’s mortgage page.
