FREDDIE MAC TO FUND $1 BILLION IN GULF MORTGAGE BONDS, SUPPLYING LOW COST LOANS TO AS MANY AS 10,000 STORM VICTIMS

Baton Rouge, LA – Freddie Mac (NYSE:FRE), one of the nation’s largest mortgage investors, today announced it will buy up to $1 billion in tax-exempt mortgage revenue bonds (MRBs) so state and local housing finance agencies in the Gulf Coast can provide below-market rate mortgages and home repair loans to as many as 10,000 families displaced by Hurricanes Katrina and Rita. Initially, Freddie Mac will be purchasing MRBs issued by the Louisiana Housing Finance Agency and the Mississippi Home Corporation.

Freddie Mac decided to make the commitment immediately after Congress passed, and President Bush signed on September 23, the Katrina Emergency Tax Relief Act of 2005. That law waives the first-time homebuyer requirement on MRB loans and raises the cap on home repair loans from $15,000 to $150,000 for Katrina victims.

“We committed to buy these MRBs at below-market interest rates so as many as 10,000 low-income families affected by these disasters can rebuild their homes at the lowest interest rates available,” said Richard F. Syron, Chairman and CEO of Freddie Mac. “Today’s announcement further demonstrates what Congress created Freddie Mac to do: to provide stability, liquidity, and affordability for housing markets – both in good times and in crises like this one.”

Freddie Mac’s commitment was praised by Baton Rouge Congressman and Louisiana Congressional delegation dean Rep. Richard Baker (R-6^th). “As we turn our focus from the temporary to the long-term housing needs of storm victims, providing affordable homeownership opportunities will be vital to the hopeful future of displaced families, and Freddie Mac's announcement will certainly help,” said Baker, who also chairs the House subcommittee that has oversight responsibilities over Freddie Mac and other government-sponsored enterprises.

Qualified borrowers must use the loans to buy or repair homes in the federally designated Katrina disaster areas. Borrowers can also use loans to buy a house in a different part of the same state provided they had a mortgage on a principal residence in a storm disaster area as of August 28, 2005. These special requirements apply only to loans closed before January 1, 2008.

Congressional Leaders Praise Freddie Mac Response

“The commitment from Freddie Mac today will help bring people back to Louisiana by boosting capital investment in new housing,” said Senator Mary L. Landrieu (D-La). “Nearly half a million homes have been destroyed or damaged beyond repair along the Gulf Coast. It is going to take a lot of work to rebuild, but investments like this will help restore our neighborhoods, rebuild our communities and revitalize our economy.”

U.S. Sen. David Vitter also said “I’m pleased that Freddie Mac is committed to helping victims of Hurricanes Katrina and Rita by offering low-interest loans to as many as 10,000 families in the disaster areas. These low-interest loans will greatly help families finance home repairs or rebuild their homes right here in Louisiana.”

Rep. Baker said he also “applauds this initiative because it represents the kind of productive, public-private model that I have advanced both in my proposal to establish a Louisiana Recovery Corporation and in the affordable housing fund for disaster victims created by my housing finance reform bill, in which federal and private sector resources are put in the service of state, city, and community leaders who will be the primary shapers of Louisiana's recovery and rebuilding.”

“I commend Freddie Mac's effort to restore decent, safe, affordable homes to the hurricane disaster areas,” added Rep. William F. Jefferson (D-2^nd). “Today's announcement shows how government at all levels can successfully work together with the private sector and begin to reverse the trauma Hurricane Katrina inflicted on 10,000 of our neighbors. It is my hope that Freddie Mac's actions will inspire other investors to step forward, work with our state and local agencies, and provide more for our displaced homeowners.”

“Today’s announcement will mean up to $1 billion in new affordable housing loans for thousands of Louisiana families that were devastated by Hurricanes Katrina and Rita,” said Louisiana Governor Kathleen Babineaux Blanco. “I commend Freddie Mac and the Louisiana Housing Finance Agency for moving so quickly to turn the Katrina Emergency Tax Relief Act into real opportunities and financial relief for our citizens in need. By working together we will continue healing our communities, supporting our families and rebuilding Louisiana.”

“It is through alliances between organizations such as Freddie Mac and the Louisiana Housing Finance Agency that our families will recover from the devastation caused by Hurricanes Katrina and Rita,” said Helena Cunningham, President of the Louisiana Housing Finance Agency. “I commend Freddie Mac using its financial resources to amplify our efforts to kindle not just a recovery, but also the beginnings of a post-hurricane housing renaissance. This is a jubilant effort.”

Freddie Mac said it is buying all of the mortgage revenue bonds for its retained portfolio, which will enable the state and local finance agencies to begin issuing the bonds as quickly as possible. The bond proceeds will then be made available to qualified borrowers as below-market loans through participating lenders in each state.

Today’s announcement builds on Freddie Mac’s other efforts to assist Gulf Coast families and communities. Since Hurricane Katrina struck, Freddie Mac has adopted emergency policies that effectively suspend mortgage collections from many single and multifamily borrowers affected by the storm until at least December 1, assure forbearance for National Guard members involved in recovery operations, finance as much as $300 million in pre-storm loans closed on homes in federally-designated disaster areas, and joined with the Freddie Mac Foundation to donate $10 million to hurricane relief organizations.

For more information on the loans that will be financed through today’s $1 billion Freddie Mac commitment, contact the Louisiana Housing Finance Agency at (225) 763-8700 or (888) 454-2001 or the Mississippi Home Corporation at (601) 718-4636.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and nearly four million renters in America.

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