OFHEO News Release - 6-9-08

OFHEO ANNOUNCES FIRST QUARTER 2008

MINIMUM AND RISK-BASED CAPITAL CLASSIFICATION

FOR FANNIE MAE and FREDDIE MAC

WASHINGTON, DC - James B. Lockhart, Director of the Office of Federal Housing Enterprise Oversight (OFHEO), the safety and soundness regulator for Fannie Mae and Freddie Mac, classified Fannie Mae and Freddie Mac as adequately capitalized as of March 31, 2008. Both Fannie Mae and Freddie Mac have publicly released financial results for the first quarter 2008 and OFHEO's results are consistent with those publicly released data.

On March 19, 2008, OFHEO announced an agreement with the Enterprises to reduce the OFHEO-directed capital requirement from 30 percent to 20 percent in recognition of the significant remediation efforts and the commitments by the Enterprises to raise significant new capital and to retain substantial surpluses over the OFHEO-directed requirement.

On March 31, 2008 Fannie Mae's surplus over the OFHEO-directed requirement (20 percent over the statutory requirement as of quarter-end) and statutory capital requirement were 13.5 percent and 36.2 percent, respectively. This compares to 9.3 percent above the 30 percent OFHEO-directed requirement and 42.1 percent above the statutory capital requirement at year-end.

Freddie Mac's surplus above the new 20 percent OFHEO-directed requirement was 18.5 percent while its surplus over the statutory requirement was 42.3 percent for March 31, 2008. This compares to 10.0 percent above the 30 percent OFHEO-directed requirement and 43.0 percent above the statutory requirement at year­end 2007. Both Enterprises' percentages over the OFHEO-directed requirement reflect significant increases over the fourth quarter results, due primarily to the reduction in the OFHEO-directed requirement. Freddie Mac's surplus compared to the statutory requirement remained fairly steady during the quarter. Fannie Mae's surplus compared to the statutory requirement declined, primarily due to credit related losses.

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http://www.ofheo.gov/media/capclass/1Q2008CapClass.pdf