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Non-Interest MF Income Drives Freddie 1Q24 Profits
dhollier at Inside Mortgage Finance
It’s not often that multifamily plays a key role in the profitability of the government-sponsored enterprises. However, in its first-quarter earnings call this morning, Freddie Mac reported a remarkable $1 billion in non-interest income from its multifamily business, a sequential gain of $653 million and up $593 million from a year ago.
Meanwhile, Freddie’s $2.8 billion in consolidated net income was up $771 million from a year ago, though still off $148 million from the fourth quarter.
Net revenues on the single-family side were up $271 million year over year, but down $303 million from the fourth quarter, mostly due to a $259 million decline in non-interest revenue. At the same time, the single-family business posted a $120 million provision for credit losses in the first quarter after a $548 million benefit in the fourth.
That $668 million flip-flop, combined with a $259 drop in single-family non-interest income in the first quarter, drove a 37% sequential decline in net income for the division. It’s worth noting, though, that Freddie’s $1.9 billion in single-family profits in the first quarter were up from about $1.7 billion in 1Q23.