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Authority of the Board and New Board Committees

Board Committees

The Board has four standing committees: Audit; Business and Risk; Compensation; and Nominating and Governance. Information concerning the authority of the Board Committees is available on our Board Committees web page.

Authority of Board

The directors serve on behalf of, and exercise authority as directed by, the Conservator. The Conservator has instructed the Board that it should consult with and obtain the approval of the Conservator before taking action in the following areas:

• Actions involving capital stock, dividends, the Senior Preferred Stock Purchase Agreement between the company and the U.S. Department of the Treasury, increases in risk limits, material changes in accounting policy, and reasonably foreseeable material increases in operational risk;

• Creation of any subsidiary or affiliate or any substantial transaction between Freddie Mac and any of its subsidiaries or affiliates, except for transactions undertaken in the ordinary course (e.g., the creation of a trust, real estate mortgage investment conduit (REMIC), real estate investment trust (REIT) or similar vehicle);

• Matters that relate to conservatorship, such as, but not limited to, the initiation and material actions in connection with significant litigation addressing the actions or authority of the Conservator, repudiation of contracts, qualified financial contracts in dispute due to conservatorship status, and counterparties attempting to nullify or amend contracts due to conservatorship status;

• Actions involving hiring, compensation and termination benefits of directors and officers at the executive vice president level and above. Regardless of title, this includes executive positions with the functions of Chief Operating Officer, Chief Financial Officer, General Counsel, Chief Business Officer, Chief Investment Officer, Treasurer, Chief Compliance Officer, Chief Risk Officer and Chief/General/Internal Auditor;

• Actions involving the retention and termination of external auditors, and law firms serving as consultants to the Board;

• Settlements in excess of $50 million of litigation, claims, regulatory proceedings or tax-related matters;

• Any merger with or purchase or acquisition of a business involving consideration in excess of $50 million; and

• Actions that in the reasonable business judgment of the Board at the time that the action is taken is likely to cause significant reputation risk.