[Appendix]
[Estimates for Government-Sponsored Enterprises]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 1129]]


 
                    GOVERNMENT-SPONSORED ENTERPRISES

    This chapter contains descriptions of and data on the Government-
sponsored enterprises listed below. These enterprises were established 
and chartered by the Federal Government. They are not included in the 
Federal budget because they are classified as being private. However, 
because of their relationship to the Government, detailed statements of 
financial operations and condition are presented, to the extent such 
information is available, on a basis that is as consistent as 
practicable with the basis for the budget data of Government agencies. 
These statements are not reviewed by the President; they are presented 
as submitted by the enterprises.

    --The Student Loan Marketing Association is a for-profit financial 
        corporation chartered by Congress in 1972 under the Higher 
        Education Act (HEA) to help increase the availability of student 
        loans. Sallie Mae carries out secondary market and other 
        functions.

    --The College Construction Loan Insurance Association is organized 
        as a private, for-profit insurance corporation to guarantee and 
        insure bonds and loans made for construction and renovation of 
        college and university facilities. The Corporation was 
        established by, but was not chartered by, the Federal 
        Government.

    --The Federal National Mortgage Association provides supplementary 
        assistance to the secondary market for home mortgages. The 
        Federal Home Loan Mortgage Corporation provides a secondary 
        market for mortgage lenders. Both are supervised by the 
        Department of Housing and Urban Development for their roles in 
        helping to finance low- and moderate-income housing; both are 
        regulated for financial safety and soundness by the newly 
        established Office of Federal Housing Enterprise Oversight.

    --The Banks for Cooperatives, Agricultural Credit Bank, and Farm 
        Credit Banks provide financial assistance to agriculture. They 
        are supervised by the Farm Credit Administration.

    --The Federal Agricultural Mortgage Corporation, under the 
        supervision of the Farm Credit Administration, provides a 
        secondary mortgage market for agricultural real estate and 
        certain rural housing loans as well as for farm and business 
        loans guaranteed by the U.S. Department of Agriculture.

    --The Federal Home Loan Banks assist thrift institutions, banks, and 
        credit unions and are supervised by the Federal Housing Finance 
        Board.

    --The Financing Corporation functions as a financing vehicle for the 
        FSLIC Resolution Fund. It operates under the supervision and 
        control of the Federal Housing Finance Board.

    --The Resolution Funding Corporation provides financing for the 
        Resolution Trust Corporation (RTC) and is subject to the general 
        oversight and direction of the Thrift Depositor Protection 
        Oversight Board.

    The Board of Governors of the Federal Reserve System is not a 
Government-sponsored enterprise, but its transactions also are not 
included in the budget because of its unique status in the conduct of 
monetary policy. The Board provides data on its administrative budget on 
a calendar year basis, which is included here for information. Its 
budget schedules and statements are not subject to review by the 
President.
  


 
                         DEPARTMENT OF EDUCATION

                   Student Loan Marketing Association

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-1500-0-3-502      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Interest expense................       2,973       2,825       2,966
00.02   Administrative expenses and 
          taxes.........................         507         496         536
                                           ---------   ---------  ----------

00.91     Total operating expenses......       3,480       3,321       3,502
      Capital investment:

01.01   Loans, etc......................      11,021      10,553      10,441
01.02   Investments, dividends, and 
          other assets..................         888         700         750
                                           ---------   ---------  ----------

01.91     Total capital investment......      11,909      11,253      11,191
                                           ---------   ---------  ----------

10.00   Total obligations...............      15,389      14,574      14,693
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
22.00 New budget authority (gross)......      15,389      14,573      14,693
23.95 New obligations...................     -15,389     -14,574     -14,693
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Authority to borrow (indefinite)..        -466      -6,982      -2,492
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      15,855      21,555      17,185
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................      15,389      14,573      14,693
----------------------------------------------------------------------------

    Change in unpaid obligations:
      Unpaid obligations, start of year:

72.91   Obligated balance: U.S. 
          Securities: Par value.........       1,240       1,201       1,167
                                           ---------   ---------  ----------

72.99     Total unpaid obligations, 
            start of year...............       1,240       1,201       1,167
73.10 New obligations...................      15,389      14,574      14,693
73.20 Total outlays (gross).............     -15,428     -14,608     -14,636
      Unpaid obligations, end of year:

74.91   Obligated balance: Fund balance: 
          U.S. Securities: Par value....       1,201       1,167       1,224
                                           ---------   ---------  ----------

74.99     Total unpaid obligations, end 
            of year.....................       1,201       1,167       1,224
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      15,419      14,608      14,636
86.98 Outlays from permanent balances...           9
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      15,428      14,608      14,636
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....     -15,855     -21,555     -17,185
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................        -466      -6,982      -2,492
90.00 Outlays...........................        -427      -6,947      -2,549
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-1500-0-3-502      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................      11,021      10,553      10,441
                                           ---------   ---------  ----------

1150    Total direct loan obligations...      11,021      10,553      10,441
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      38,071      41,636      38,202
                                                                 
[[Page 1130]]

1231  Disbursements: Direct loan 
        disbursements...................      11,021      10,553      10,441
      Repayments:

1251    Repayments and prepayments......      -7,723      -9,034      -6,359
1252    Proceeds from loan asset sales 
          to the public or discounted...                  -5,000      -6,000
1264  Write-offs for default: Other 
        adjustments, net................         267          47          52
                                           ---------   ---------  ----------

1290    Outstanding, end of year........      41,636      38,202      36,336
---------------------------------------------------------------------------

    The Student Loan Marketing Association (Sallie Mae), a shareholder-
owned corporation, was created by the Education Amendments of 1972 to 
expand funds available for student loans by providing liquidity to 
lenders engaged in the Federal Family Education Loan Program (FFELP), 
formerly the guaranteed student loan program (GSLP).
    Sallie Mae provides liquidity through direct purchase of insured 
student loans from eligible lenders and through warehousing advances, 
which are loans to lenders secured by insured student loans, Government 
or agency securities, or other acceptable collateral. In capital 
shortage areas, Sallie Mae is authorized, at the request of Federal 
officials, to make insured loans directly to students. Sallie Mae is 
authorized to advance funds to State agencies that will provide loans to 
students. Sallie Mae is also authorized to provide a secondary market 
for noninsured loans; to serve as a guarantee agency in support of loan 
availability at the request of the Secretary of Education; to purchase 
and underwrite student loan revenue bonds; to provide certain additional 
services as determined by its board of directors to be supportive of the 
credit needs of students generally; and to provide financing for 
academic facilities and equipment.
    Sallie Mae is authorized by the Health Professions Educational 
Assistance Act of 1976 to provide a secondary market for federally 
insured loans to graduate health professions students.
    Operations.--The forecast data with respect to operations are based 
on certain general economic and specific FFELP loan volume assumptions 
and should not be relied upon as an official forecast of the 
corporation's future business.

                         ANNUAL LOAN ACTIVITY

                                                    [In millions of 
                                                        dollars]
Guaranteed student loans:            1995 actual  1996 est.   1997 est.
  Stafford (formerly ``regular''):
    Purchased.......................       6,441       6,700       6,750
    Warehoused......................       2,358       1,500       1,285
  PLUS/SLS: Purchased...............         998         830         865
                                    ------------------------------------
      Subtotal, Guaranteed student 
        loans.......................       9,797       9,030       8,900
Health professions loans: Purchased.         291         303         305
Other...............................         933       1,220       1,236
                                    ------------------------------------
      Total.........................      11,021      10,553      10,441
                                    ====================================

    Financing.--Between 1974 and early 1982, Sallie Mae borrowed through 
the Federal Financing Bank. The Secretary of Education was authorized by 
the Education Amendments of 1980 to guarantee principal and interest on 
such obligations issued prior to October 1, 1985. Under an agreement 
with the Department of the Treasury reached in early 1981, Sallie Mae 
began borrowing directly in the private capital markets. Its last 
borrowing through the FFB and its last issuance of federally guaranteed 
obligations occurred in January 1982. During the first quarter of 1994, 
Sallie Mae prepaid all of the outstanding FFB debt. Its obligations 
today have certain characteristics, provided by charter, which give them 
``agency'' status, but they are not federally insured or guaranteed.
    Management.--At its annual meeting in May 1995, the shareholders of 
Sallie Mae elected 14 members to its board of directors to serve until 
May 1996. The shareholders of Sallie Mae are entitled to elect 14 
members to the board. Pursuant to the Education Amendments of 1972, 
seven public directors are appointed by the President, who also names 
the chairman from among the 21 members.
    Restructuring.--Because of the transition from the guaranteed 
student loan program to the program of Federal Direct Student Loans and 
other reasons, the Administration has proposed legislation to 
restructure Sallie Mae into a fully private company. In any such 
restructuring, currently outstanding Sallie Mae debt would retain the 
characteristics of government sponsored enterprise debt, and customers 
having agreements with the GSE would be fully protected. Any new debt 
issued by a private company successor to Sallie Mae would not possess 
the characteristics of government sponsored enterprise debt.

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-1500-0-3-502    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................       2,827          3,959
0102  Expense...........................      -2,399         -3,481
                                        ------------ --------------  ------------  -------------
0109  Net income........................         428            478
-----------------------------------------------------------------------------------------------
    Note.--The Sallie Mae Board of Directors does not consider it 
appropriate to forecast corporate revenue in a public document since 
such forecasts could be used for speculative purposes.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-1500-0-3-502    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

        Investments in US securities:
1102      Treasury securities, par......       1,192          1,173         1,138          1,195
1104      Agency securities, par........          48             29            29             29
1106      Receivables, net..............         592            855           897            942
      Non-Federal assets:

1201    Investments in non-Federal 
          securities, net...............      11,720          9,907         7,517          7,824
1206    Receivables, net................         240            326           342            359
1207    Advances and prepayments........          22             13            13             14
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601    Direct loans, gross.............      38,172         41,739        38,297         36,426
1603    Allowance for estimated 
          uncollectible loans and 
          interest (-)..................        -100           -103           -95            -90
                                        ------------ --------------  ------------  -------------
1699      Value of assets related to 
            direct loans................      38,072         41,636        38,202         36,336
      Other Federal assets:

1801    Cash and other monetary assets..         101             37            39             41
1803    Property, plant and equipment, 
          net...........................         149            179           188            197
1901    Other assets....................          38            144           151            159
                                        ------------ --------------  ------------  -------------
1999    Total assets....................      52,174         54,299        48,516         47,096
    LIABILITIES:
      Non-Federal liabilities:

2202    Interest payable................         401            582           611            642
2203    Debt............................      49,692         51,672        45,757         44,199
2206    Pension and other actuarial 
          liabilities...................           9             14            15             16
2207    Other...........................         560            746           784            823
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............      50,662         53,014        47,167         45,680
    NET POSITION:
3200  Invested capital..................       1,511          1,284         1,349          1,416
                                        ------------ --------------  ------------  -------------
3999    Total net position..............       1,511          1,284         1,349          1,416
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position      52,173         54,298        48,516         47,096
-----------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-1500-0-3-502      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................          60          53          56
12.1  Civilian personnel benefits.......          16          17          18
21.0  Travel and transportation of 
        persons.........................           6           6           6
                                                                 
[[Page 1131]]

23.3  Communications, utilities, and 
        miscellaneous charges...........           6           6           6
25.1  Advisory and assistance services..          33          15          16
25.2  Other services....................         260         268         281
31.0  Equipment.........................           2           2           2
33.0  Loans.............................      11,022      10,553      10,441
43.0  Interest, dividends, and taxes....       3,984       3,654       3,867
                                           ---------   ---------  ----------

99.9    Total obligations...............      15,389      14,574      14,693
---------------------------------------------------------------------------

                                

             College Construction Loan Insurance Association

    The College Construction Loan Insurance Association (Connie Lee) was 
authorized by Public Law 99-498 on October 17, 1986. The Corporation was 
created to insure and reinsure bonds and loans of educational 
institutions which borrow funds to finance the acquisition, 
construction, or renovation of their facilities. The Association was 
incorporated in February 1987, under the District of Columbia Business 
Corporation Act.
    Connie Lee's authorizing statute states that ``no obligation which 
is insured, guaranteed, or otherwise backed by the corporation, shall be 
deemed to be an obligation which is guaranteed by the full faith and 
credit of the United States.''
    Operations.--Connie Lee is structured to operate as a private 
corporation, subject to the same state laws and regulations as any other 
insurance company. Accordingly, Connie Lee secures insurance licenses in 
each of the various states in which it expects to conduct its insurance 
activities.
    The Board of Directors authorized management to begin activities as 
a reinsuror of educational facilities bonds in 1988. Connie Lee 
reinsured its first bonds in December 1988. In fiscal year 1995, Connie 
Lee insured $913 million of debt service on bonds benefitting colleges, 
universities and teaching hospitals.
    Connie Lee also provided reinsurance on bonds representing $43 
million of debt service.
    The forecast data contained in this material are based on certain 
general economic assumptions and should not be construed as an official 
forecast of the Corporation's position.

                  INSURANCE AND REINSURANCE ACTIVITY

                                                    [In thousands of 
                                                        dollars]
                                                      1995 actual
Debt service insured:
 Direct insurance.................................             912,662
 Reinsurance......................................              43,479
                                                  --------------------

   Total..........................................             956,141

    Financing.--In order to provide capitalization, the Secretary of 
Education, the Student Loan Marketing Association (Sallie Mae), and 
other investors are authorized to purchase stock in the corporation. 
Sallie Mae made an initial investment of $2 million in Connie Lee stock 
in fiscal year 1987. The Secretary of Education purchased $19.1 million 
in Connie Lee stock with funds appropriated for this purpose in fiscal 
year 1988. Subsequently, the corporation sold an additional $50.9 
million of equity securities to Sallie Mae, increasing total capital of 
the corporation to $72.0 million. At the end of 1991, Connie Lee placed 
equity securities with private investors, providing sufficient 
incremental capital to obtain a triple-A credit rating necessary to 
engage in the financial guaranty business as a direct writer of 
insurance.

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-9931-0-3-502    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................          19             19            22             25
0102  Expense...........................         -11            -11           -11            -12
                                        ------------ --------------  ------------  -------------
0109  Net income........................           8              8            11             13
-----------------------------------------------------------------------------------------------

    Management.--Connie Lee is governed by an eleven-member board of 
directors comprised of two directors appointed by the Secretary of the 
Treasury; two directors appointed by the Secretary of Education; three 
directors appointed by the Student Loan Marketing Association; and four 
directors elected by the corporation's shareholders, one of whom must be 
an administrator of a college or university.
    The Administration has submitted legislation to the Congress which 
would fully privatize Connie Lee by divesting the Secretary of 
Education's stock ownership in the Corporation and repealing the 
Corporation's enabling legislation. Similar legislation has passed both 
the House and Senate and a compromise version is expected to be enacted 
this year.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-9931-0-3-502    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

        Investments in US securities:
1102      Treasury securities, par......          21             21            25             25
1104      Agency securities, par........          25             22            22             22
      Non-Federal assets:

1201    Investments in non-Federal 
          securities, net...............         134            154           171            189
1206    Receivables, net................           9              8             8              9
1207    Advances and prepayments........          25             34            37             42
      Other Federal assets:

1801    Cash and other monetary assets..           3              5             5              6
1803    Property, plant and equipment, 
          net...........................           1              1             1              1
                                        ------------ --------------  ------------  -------------
1999    Total assets....................         218            245           269            293
    LIABILITIES:
2104  Federal liabilities: Resources 
        payable to Treasury.............           4              8            11             13
2201  Non-Federal liabilities: Accounts 
        payable.........................          70             80            87             96
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............          74             88            98            109
    NET POSITION:
3200  Invested capital..................         144            157           171            184
                                        ------------ --------------  ------------  -------------
3999    Total net position..............         144            157           171            184
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position         218            245           269            293
-----------------------------------------------------------------------------------------------

                                


 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                  Federal National Mortgage Association

                             portfolio programs

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2500-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Interest on borrowings from the 
          public........................      17,309      19,274      21,336
00.02   Other costs.....................       2,528       2,650       2,966
                                           ---------   ---------  ----------

00.91     Total operating expenses......      19,837      21,924      24,302
      Capital investment:

01.01   Mortgage purchases and loans....      48,715      64,644      68,737
01.02   Lease-Purchase Discounts........        -386
                                           ---------   ---------  ----------

01.91     Total capital investment......      48,329      64,644      68,737
                                           ---------   ---------  ----------

10.00   Total obligations...............      68,166      86,568      93,039
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.47 Unobligated balance available, 
        start of year: Authority to 
        borrow..........................     339,930     406,170     484,780
22.00 New budget authority (gross)......     134,406     165,178     177,664
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......     474,336     571,348     662,444
23.95 New obligations...................     -68,166     -86,568     -93,039
24.47 Unobligated balance available, end 
        of year: Authority to borrow....     406,170     484,780     569,405
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.10 Authority to borrow...............      96,335     144,115     153,791
67.15 Net increase or decrease in 
        unlimited borrowing authorities.      -2,950      -3,000      -3,000
                                           ---------   ---------  ----------
                                                                  
[[Page 1132]]

67.90   Authority to borrow (total).....      93,385     141,115     150,791
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      41,021      24,063      26,873
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................     134,406     165,178     177,664
----------------------------------------------------------------------------

    Change in unpaid obligations:
      Unpaid obligations, start of year:

        Obligated balance:
72.47     Corporate borrowing authority.      28,031      39,959      46,572
72.90     Fund balance..................      35,687      24,215      13,431
                                           ---------   ---------  ----------

72.99     Total unpaid obligations, 
            start of year...............      63,718      64,174      60,003
73.10 New obligations...................      68,166      86,568      93,039
73.20 Total outlays (gross).............     -67,710     -90,739     -91,470
      Unpaid obligations, end of year:

        Obligated balance:
74.47     Corporate borrowing authority.      39,959      46,572      49,527
74.90     Fund balance: Uninvested 
            balance.....................      24,215      13,431      12,045
                                           ---------   ---------  ----------

74.99     Total unpaid obligations, end 
            of year.....................      64,174      60,003      61,572
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      41,021      24,063      26,813
86.98 Outlays from permanent balances...      26,689      66,676      64,657
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      67,710      90,739      91,470
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
88.00     Federal sources...............        -130        -130        -130
88.40     Non-Federal sources...........     -40,897     -23,806     -26,616
                                           ---------   ---------  ----------

88.90       Total, offsetting 
              collections (cash)........     -41,027     -23,936     -26,746
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................      93,379     141,242     150,918
90.00 Outlays...........................      26,683      66,803      64,724
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2500-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................      44,501      64,526      69,773
                                           ---------   ---------  ----------

1150    Total direct loan obligations...      44,501      64,526      69,773
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........     221,766     250,374     282,065
      Disbursements:

1231    Direct loan disbursements.......      44,574      63,686      67,815
1232    Purchase of loans assets from 
          the public....................       4,141         957         923
1251  Repayments: Repayments and 
        prepayments.....................     -18,418     -32,952     -35,536
1264  Write-offs for default: Other 
        adjustments, net................      -1,689
                                           ---------   ---------  ----------

1290    Outstanding, end of year........     250,374     282,065     315,267
---------------------------------------------------------------------------

    The Federal National Mortgage Association, (Fannie Mae) is a 
federally-chartered, privately-owned company with a public mission to 
play a leadership role in mortgage finance, to improve the liquidity of 
the residential mortgage market and increase the availability of 
mortgage credit to low-and moderate income families and areas 
underserved by private lending institutions. In carrying out its 
mission, Fannie Mae engages primarily in two forms of business: 
investing in portfolios of residential mortgages and guaranteeing 
residential mortgage securities. At the end of 1995, Fannie Mae held a 
net mortgage portfolio totaling over $250 billion and had outstanding 
guaranteed mortgage-backed securities of over $580 billion. Fannie Mae's 
portfolio purchases and MBS finance about one of every five mortgages in 
the country.
    Through a federal charter, Congress has equipped Fannie Mae with 
certain attributes to help it carry out its public mission and help 
lower the cost of homeownership for low- and moderate-income homebuyers. 
These include an exemption from state and local taxes (except real 
property taxes), an exemption of its debt and mortgage securities from 
Securities and Exchange Commission registration requirements, and 
potential access to U.S. Treasury funds. Fannie Mae's charter also 
prohibits the imposition of user fees. Fannie Mae pays federal income 
tax, however, over $1 billion in 1994. Securities guaranteed by Fannie 
Mae and debt issued by the company are solely the corporation's 
obligations and are not backed by the full faith and credit of the U.S. 
Government. The common stock of the corporation is owned by the public, 
if fully transferable, and trades on the New York, Midwest, and Pacific 
stock exchanges.
    Fannie Mae was established in 1938 to assist private markets in 
providing a steady supply of funds for housing. Fannie Mae was 
originally a subsidiary of the Reconstruction Finance Corporation and 
was permitted to purchase only loans insured by the Federal Housing 
Administration (FHA). In 1954, Fannie Mae was restructured as a mixed 
ownership (part government, part private) corporation. Congress sold the 
government's remaining interest in Fannie Mae in 1968 and completed the 
transformation to private shareholder ownership in 1970. Using the 
proceeds from the sale of subordinated debentures, Fannie Mae paid the 
Treasury $216 million for the government's preferred stock, which was 
retired, and for the Treasury's interest in the corporation's earned 
surplus. As a result, the corporation was taken off the federal budget.
    In 1992, Congress reaffirmed and clarified Fannie Mae's role in the 
housing finance system through charter act amendments included in the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
(``The Act''). Fannie Mae's charter purposes, as amended by the Act, 
are: ``to provide stability in the secondary market for residential 
mortgages; respond appropriately to the private capital market; provide 
ongoing assistance to the secondary market for residential mortgages 
(including activities relating to mortgages on housing for low- and 
moderate-income families involving a reasonable economic return that may 
be less than the return earned on other activities); and promote access 
to mortgage credit throughout the Nation (including central cities, 
rural areas, and underserved areas) by increasing the liquidity of 
mortgage investments and improving the distribution of investment 
capital for residential mortgage financing.''
    Overall, Fannie Mae's primary customers are low-, moderate-, or 
middle-income families. In 1995, over 26 percent of the one- to four-
unit mortgages purchased had balances of $60,000 or less and the average 
mortgage purchased was about $95,000. Also, about 40 percent of the 
single-family mortgages and close to 97 percent of the multifamily 
mortgages purchased by Fannie Mae served families with incomes below the 
area median income. Over the last five years, Fannie Mae has directed 
almost $23 billion to local housing markets for financing multi-family 
housing.
    Nevertheless, the Act subjected Fannie Mae to specific affordable 
housing goals designed to improve the flow of mortgage funds to low- and 
moderate-income families in central cities, rural areas, and other 
underserved areas. On December 1, 1995, the U.S. Department of Housing 
and Urban Development (HUD) issued a final rule that sets the levels of 
the goals for 1996-2000 and establishes the requirements for counting 
mortgage purchases for meeting these goals. During the transition period 
prior to the issuance of the final regulation, Fannie Mae was subject to 
interim affordable housing goals. These interim goals required Fannie 
Mae to have 30 percent of the units it finances serve low-and moderate-
income families and 30 percent of the units it finances in central 
cities. In 1995, Fannie Mae exceeded these goals with

[[Page 1133]]
about 45 percent of its financings made to low-and moderate-income 
families and 30.5 percent of its business located in central cities. 
Under the interim goals, Fannie Mae also was required to dedicate $4.6 
billion in financings for households with very low incomes or with low 
incomes living in low-income areas. Fannie Mae surpassed this goal with 
$8.2 billion of such loans in 1995.
    To help achieve these affordable housing goals, in 1994 Fannie Mae 
established its ``Showing America A New Way Home'' initiative designed 
to provide $1 trillion through the end of the decade to support 
affordable housing for families and communities most in need. In 
addition, the company selected 21 of the planned 25 Fannie Mae 
partnership offices around the country, which are working with lenders, 
local governments, nonprofit organizations, and neighborhood leaders to 
tailor affordable housing programs to each community's needs.
    The Act also established the Office of Federal Housing Enterprise 
Oversight (OFHEO), an independent office within HUD, headed by a 
Director who reports directly to the Congress. OFHEO is responsible for 
ensuring that Fannie Mae is adequately capitalized and operating in a 
safe and sound manner. Included among the express statutory authorities 
of the Director is the authority to conduct examinations of the 
financial health of the company and to issue minimum and risk-based 
capital standards. The minimum capital requirements are computed from 
statutorily established ratios that are applied to the assets and off-
balance sheet risks of Fannie Mae. The risk-based capital standard 
determines the amount of capital that Fannie Mae must hold to withstand 
the impact of simultaneous adverse credit and interest rate stresses 
over a 10-year period, plus an additional amount to cover management and 
operations risk. Total capital (shareholder's equity plus allowance for 
loan losses) at the end of December 1995 was $11.8 billion. The company 
has continued to remain in compliance with applicable capital standards 
and has been deemed adequately capitalized by OFHEO since its first 
classification in June 1993.
    Fannie Mae has pursued its housing mission vigorously and 
productively while continuing to maintain its financial strength. It 
provides liquidity and stability to the mortgage market. It also passes 
on reduced mortgage interest rates to homebuyers--according to some 
studies between 25 and 50 basis points. Meanwhile, Fannie Mae has 
remained profitable. It earned net income of $2.14 billion in 1995, up 
slightly from the $2.13 billion earned a year earlier. Also, Fannie 
Mae's earnings included a special one-time charge for a financial 
restructuring plan that included stock repurchase plans totaling $1 
billion and a $350 million contribution to the Fannie Mae foundation for 
expanding homeownership. Absent this restructuring package, Fannie Mae's 
1995 earnings would have been just under $2.4 billion, with most of the 
increase coming from a $224 million increase net interest income on the 
Enterprise's retained portfolio.
    The forecast data contained in this material has been developed 
based on certain general economic assumptions prevalent in the fourth 
quarter of 1995 and should not be construed as an official forecast for 
Fannie Mae.
    Income and retained earnings for the years ended September 30, 1994 
and 1995 follow (in thousands of dollars):

                                          1994 actual     1995 actual
Gross revenue...........................    17,756,900      21,408,700
Gross expenses..........................    14,660,800      18,190,200
                                         -------------  --------------

  Income before Federal income tax......     3,096,100       3,218,500
Federal income tax......................     1,023,400         930,100
                                         -------------  --------------

  Net income............................     2,072,700       2,288,400
Retained earnings, beginning of year....     6,117,800       7,545,000
Dividends on common stock...............     (645,500)       (710,400)
                                         -------------  --------------

  Retained earnings, end of year........     7,545,000       9,123,000
                                         -------------  --------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-2500-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Federal assets:

1101    Fund balances with Treasury.....         620            221
        Investments in US securities:
1102      Treasury securities, par......          25             22
1104      Other.........................      35,043         47,828        50,469         54,990
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601    Public: direct loans (net of 
          discount).....................     206,555        231,960       265,119        298,730
1602    Federal Agencies................       7,728          8,545         7,404          7,052
1603    Allowance for estimated 
          uncollectible loans and 
          interest (-)..................        -280           -287          -274           -277
                                        ------------ --------------  ------------  -------------
1699      Value of assets related to 
            direct loans................     214,003        240,218       272,249        305,505
      Other Federal assets:

1801    Cash and other monetary assets..       4,943          5,763         7,124          7,821
1803    Property, plant and equipment, 
          net...........................         172            177
                                        ------------ --------------  ------------  -------------
1999    Total assets....................     254,806        294,229       329,842        368,316
    LIABILITIES:
      Federal liabilities:

2101    Accounts payable................         602            349
2102    Accrued interest payable........       3,214          3,712         3,833          4,221
2105    Other...........................           5              5
      Non-Federal liabilities:

2203    Debt............................     239,320        277,192       309,896        345,761
2204    Estimated Federal liability for 
          loan guarantees, credit reform       2,304          2,028         3,342          3,607
2206    Pension and other actuarial 
          liabilities...................         199            157
2207    Subtotal, Federal taxes payable.         -24             65
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............     245,620        283,508       317,071        353,589
    NET POSITION:
3300  Cumulative results of operations..       9,186         10,721        12,771         14,727
                                        ------------ --------------  ------------  -------------
3999    Total net position..............       9,186         10,721        12,771         14,727
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position     254,806        294,229       329,842        368,316
-----------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2500-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................         198         335         354
12.1  Civilian personnel benefits.......          92
21.0  Travel and transportation of 
        persons.........................          12          10          11
23.3  Communications, utilities, and 
        miscellaneous charges...........          11          12          12
24.0  Printing and reproduction.........           6
25.1  Advisory and assistance services..          99         104         110
25.2  Other services....................       1,320       1,295       1,472
26.0  Supplies and materials............           3
31.0  Equipment.........................          67          70          74
33.0  Investments and loans.............      48,329      64,644      68,737
43.0  Interest and dividends............      18,029      20,098      22,269
                                           ---------   ---------  ----------

99.9    Total obligations...............      68,166      86,568      93,039
---------------------------------------------------------------------------

                                

                         mortgage-backed securities

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2501-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Capital investment: Commitments to 
        issue MBS.......................     -51,497     129,045     129,247
                                           ---------   ---------  ----------

10.00   Total obligations...............     -51,497     129,045     129,247
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
22.00 New budget authority (gross)......     -51,497     129,045     129,247
23.95 New obligations...................      51,497    -129,045    -129,247
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Corporate borrowing authority.....    -104,554      58,802      54,203
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      53,057      70,243      75,043
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................     -51,497     129,045     129,247
----------------------------------------------------------------------------

[[Page 1134]]


    Change in unpaid obligations:
72.47 Unpaid obligations, start of year: 
        Obligated balance: Corporate 
        borrowing authority.............     255,245     114,618     114,618
73.10 New obligations...................     -51,497     129,045     129,247
73.20 Total outlays (gross).............     -89,130    -129,045    -129,247
74.47 Unpaid obligations, end of year: 
        Obligated balance: Corporate 
        borrowing authority.............     114,618     114,618     114,618
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      53,057      70,243      75,043
86.98 Outlays from permanent balances...      36,073      58,802      54,203
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      89,130     129,045     129,247
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....     -53,057     -70,243     -75,043
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................    -104,554      58,802      54,204
90.00 Outlays...........................      36,073      58,802      54,204
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2501-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................     -51,497     129,045     129,247
                                           ---------   ---------  ----------

1150    Total direct loan obligations...     -51,497     129,045     129,247
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........     523,512     559,585     618,387
1231  Disbursements: Direct loan 
        disbursements...................      89,130     129,045     129,247
1251  Repayments: Repayments and 
        prepayments.....................     -53,057     -70,243     -75,043
                                           ---------   ---------  ----------

1290    Outstanding, end of year........     559,585     618,387     672,591
---------------------------------------------------------------------------

    According to accounting practices for private corporations, the 
mortgages in the pools of loans supporting the mortgage-backed 
securities are considered to be owned by the holders of these 
securities. Consequently, on the books of the Federal National Mortgage 
Association (Fannie Mae), these mortgages are not considered assets and 
the securities outstanding are not considered liabilities. However, the 
concepts of the budget of the U.S. Government consider these mortgages 
and mortgage-backed securities to be assets and liabilities, 
respectively, of Fannie Mae. For the purposes of this document, 
therefore, they are presented as assets and liabilities in the 
accompanying schedules. On the schedule of Status of direct loans for 
mortgage-backed securities, the items labeled ``New loans'' and 
``Recoveries: Repayments and prepayments'' are budgetary terms. However, 
from the Corporation's perspective, these items are ``Amounts issued'' 
and ``Amounts passed through to the holders of securities'', 
respectively.
    The forecast data contained in this material has been developed 
based on certain general economic assumptions prevalent in November 1993 
and should not be construed as an official forecast of the Corporation's 
position.

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-2501-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601    Direct loans, gross.............     524,052        560,107       618,887        673,092
1603    Allowance for estimated 
          uncollectible loans and 
          interest (-)..................        -540           -522          -500           -502
                                        ------------ --------------  ------------  -------------
1699      Value of assets related to 
            direct loans................     523,512        559,585       618,387        672,590
                                        ------------ --------------  ------------  -------------
1999    Total assets....................     523,512        559,585       618,387        672,590
    LIABILITIES:
2104  Federal liabilities: Resources 
        payable to Treasury.............     523,512        559,585       618,387        672,590
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............     523,512        559,585       618,387        672,590
-----------------------------------------------------------------------------------------------

                                

                 Federal Home Loan Mortgage Corporation

                             portfolio programs

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4420-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Interest expense and provision 
          for loan loss.................       6,702       7,698       9,755
00.02   Administration..................         390         424         461
                                           ---------   ---------  ----------

00.91     Total operating expenses......       7,092       8,122      10,216
01.01 Capital investment: Mortgage 
        purchases for portfolio.........      37,389      48,876      41,615
                                           ---------   ---------  ----------

10.00   Total obligations...............      44,481      56,998      51,831
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.47 Unobligated balance available, 
        start of year: Authority to 
        borrow..........................      21,957      21,989      18,642
22.00 New budget authority (gross)......      48,607      65,547      72,335
22.60 Redemption of debt................      -4,094     -11,896     -12,162
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......      66,470      75,640      78,815
23.95 New obligations...................     -44,481     -56,998     -51,831
24.47 Unobligated balance available, end 
        of year: Authority to borrow....      21,989      18,642      26,984
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Net change in borrowing 
        authorities.....................      30,740      33,143      41,254
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      17,867      32,404      31,081
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................      48,607      65,547      72,335
----------------------------------------------------------------------------

    Change in unpaid obligations:
72.47 Unpaid obligations, start of year: 
        Obligated balance: Authority to 
        borrow..........................       5,281       6,897       2,605
73.10 New obligations...................      44,481      56,998      51,831
73.20 Total outlays (gross).............     -42,865     -61,290     -52,327
74.47 Unpaid obligations, end of year: 
        Obligated balance: Authority to 
        borrow..........................       6,897       2,605       2,109
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      17,867      32,404      31,081
86.98 Outlays from permanent balances...      24,998      28,886      21,247
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      42,865      61,290      52,327
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....     -17,867     -26,421     -29,007
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................      30,740      39,126      43,328
90.00 Outlays...........................      24,998      34,869      23,320
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4420-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................      37,389      48,876      41,615
                                           ---------   ---------  ----------

1150    Total direct loan obligations...      37,389      48,876      41,615
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      66,679      95,052     127,554
                                                                 
[[Page 1135]]

1231  Disbursements: Direct loan 
        disbursements...................      37,389      48,876      41,615
1251  Repayments: Repayments and 
        prepayments.....................      -9,016     -16,374     -16,761
                                           ---------   ---------  ----------

1290    Outstanding, end of year........      95,052     127,554     152,408
---------------------------------------------------------------------------

    Federal Home Loan Mortgage Corporation, (Freddie Mac) is a 
federally-charted, private shareholder-owned company with a public 
mission to improve the liquidity of the residential mortgage market and 
increase the availability of mortgage credit to low- and moderate-income 
families and areas underserved by private lending institutions. In 
carrying out its mission, Freddie Mac engages primarily in two forms of 
business: investing in portfolios of residential mortgages and 
guaranteeing residential mortgage securities. At the end of 1995, 
Freddie Mac held a net mortgage portfolio totaling over $107 billion and 
had outstanding guaranteed mortgage-backed securities of just under $460 
billion.
    Through a federal charter, Congress has equipped Freddie Mac with 
certain advantages over wholly private firms in carrying out these 
activities. These advantages include an exemption from state and local 
taxes (except real property taxes), an exemption for their debt and 
mortgage securities from SEC filing registration requirements, and a 
potential access to U.S. Treasury funds. Freddie Mac does pay federal 
income tax, however, and securities guaranteed by Freddie Mac and debt 
issued by the company are not backed by the full faith and credit of the 
U.S. Government. The common stock of the corporation is owned by the 
public, is fully transferable, and trades on the New York and Pacific 
stock exchanges.
    Freddie Mac was established in 1970 under the Emergency Home Finance 
Act. Congress chartered Freddie Mac to provide mortgage lenders with an 
organized national secondary market enabling them to manage their 
conventional mortgage portfolio more effectively and gain indirect 
access to a ready source of additional funds to meet new demands for 
mortgages. Freddie Mac served as a conduit facilitating the flow of 
investment dollars from the capital markets to mortgage lenders, and 
ultimately, to homebuyers increasing the amount of mortgage credit 
available and making it more affordable.
    The Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (FIRREA) significantly changed the corporate governance of Freddie 
Mac. The company's three member Board of Directors, which had 
corresponded with the Federal Home Loan Bank Board, was replaced with an 
eighteen member Board of Directors. Thirteen board members are elected 
annually by shareholders and five are annually appointed by the 
President of the United States. In addition, FIRREA converted Freddie 
Mac's 60 million shares of non-voting, senior participating preferred 
stock into voting common stock. As a result, the corporation was taken 
off the federal budget.
    FIRREA also clarified Freddie Mac's role in the housing finance 
delivery system through amendments to its charter act. Specifically, 
FIRREA established Freddie Mac's public mission: ``to provide stability 
in the secondary market for residential mortgages; respond appropriately 
to the private capital market; provide ongoing assistance to the 
secondary market for residential mortgages (including activities 
relating to mortgages on housing for low- and moderate-income families 
involving a reasonable economic return that may be less than the return 
earned on other activities); and promote access to mortgage credit 
throughout the Nation (including central cities, rural areas, and 
underserved areas) by increasing the liquidity of mortgage investments 
and improving the distribution of investment capital for residential 
mortgage financing.''
    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (``The Act'') added to Freddie Mac's public mission by 
introducing new affordable housing goals that are designed to improve 
the flow of mortgage funds to low- and moderate-income families in 
central cities, rural areas, and other underserved areas. On December 1, 
1995, the U.S. Department of Housing and Urban Development (HUD) issued 
a final rule that sets the levels of the goals for 1996-1999 and 
establishes the requirements for counting mortgage purchases for meeting 
these goals. During the transition period prior to the issuance of the 
final regulation, Freddie Mac was subject to interim affordable housing 
goals. These interim goals required Freddie Mac to have 30 percent of 
the units it finances serve low- and moderate-income families and 30 
percent of the units it finances in central cities. In 1995, Freddie Mac 
purchased about 39 percent of its financings from low- and moderate-
income families and 23 percent of its business was located in central 
cities. Under the interim goals, Freddie Mae also was required to 
dedicate $3.357 billion in financings for households with very low 
incomes or with low incomes living in low-income areas. Freddie Mac 
achieved this goal with $5.426 billion of such loans in 1995.
    The Act also enhanced the regulatory oversight of Freddie Mac by 
establishing the Office of Federal Housing Enterprise Oversight (OFHEO), 
an independent office within HUD, headed by a Director who reports 
directly to the Congress. OFHEO is responsible for ensuring that Freddie 
Mac is adequately capitalized and operating in a safe and sound manner. 
Included among the express statutory authorities of the Director is the 
authority to conduct examinations of the financial health of the company 
and to issue minimum and risk-based capital standards. The minimum 
capital requirements are computed from statutorily established ratios 
that are applied to the assets and off-balance sheet risks of Freddie 
Mac. The risk-based capital standard determines the amount of capital 
that Freddie Mac must hold to withstand the impact of simultaneous 
adverse credit and interest rate stresses over a 10-year period, plus an 
additional amount to cover management and operations risk.
    Meanwhile, Freddie Mac has remained profitable. Freddie Mac recorded 
net income of $1.09 billion in 1995, an 11 percent increase over 1994 
earnings of $983 million. Most of Freddie's increased earnings in 1995 
came from a $284 million increase in net interest income as Freddie's 
retained portfolio surged by almost 50 percent during the year to pass 
the $100 billion mark in the fourth quarter. While accepting and 
managing higher interest rate risk, Freddie Mac has expanded its 
investments in retained mortgages from only $34 billion in 1992 to $107 
billion at the end of 1995 in an effort to generate higher overall 
returns.
    The forecast data contained in this material represent estimates and 
should not be construed as an official forecast of the corporation's 
future position. The data have been developed on the basis of certain 
economic assumptions that are reviewed and revised periodically. 
Consequently, the estimates are subject to forecast error and will 
normally differ from actual data when these become available.
    According to generally accepted accounting principles utilized by 
private corporations, the mortgages in the pools of loans supporting PCs 
are considered to be owned by the holder of these securities. Therefore, 
Freddie Mac does not show these mortgages as assets. However, the budget 
philosophy of the United States Government includes these mortgages and 
mortgages pass-through securities as assets and liabilities, 
respectively, of Freddie Mac. For the purpose of this document, 
therefore, they are presented as assets and liabilities in the 
accompanying schedules. On the Status of Direct Loans schedule for 
mortgage pass-through securities, the items labeled ``Disbursements'' 
and ``Repayments'' are budgetary terms. However, from Freddie Mac's 
perspective, these amounts represent ``Sales of PCs'' and ``Amounts 
passed through to PC holders,'' respectively.

[[Page 1136]]


                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4420-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................       6,439          8,623
0102  Expense...........................      -5,504         -7,571
                                        ------------ --------------  ------------  -------------
0109  Net income........................         935          1,052
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4420-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
1101  Federal assets: Fund balances with 
        Treasury........................      11,688          2,820         4,001          2,983
      Non-Federal assets:

1201    Investments in non-Federal 
          securities, net...............       2,443          2,150         2,630          2,700
1206    Receivables, net................       2,720          3,680         6,986          7,420
      Other Federal assets:

1801    Cash and other monetary assets..      13,095         23,916        14,616         23,409
1802    Inventories and related 
          properties....................      66,393         94,875       126,718        151,297
1803    Property, plant and equipment, 
          net...........................       1,368          1,212         1,174          1,181
                                        ------------ --------------  ------------  -------------
1999    Total assets....................      97,707        128,653       156,125        188,990
    LIABILITIES:
2101  Federal liabilities: Accounts 
        payable.........................          95             73
      Non-Federal liabilities:

2201    Accounts payable................         437            452
2202    Interest payable................         734          1,090
2203    Debt............................      83,946        111,610       141,129        173,085
2207    Other...........................       7,516          9,725         8,547          8,484
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............      92,728        122,950       149,676        181,569
    NET POSITION:
3200  Invested capital..................       4,979          5,703         6,448          7,420
                                        ------------ --------------  ------------  -------------
3999    Total net position..............       4,979          5,703         6,448          7,420
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position      97,707        128,653       156,124        188,989
-----------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4420-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................         184         200         219
12.1  Civilian personnel benefits.......          59          64          70
21.0  Travel and transportation of 
        persons.........................           9          10          11
23.3  Communications, utilities, and 
        other rent......................          32          35          38
24.0  Printing and reproduction.........           3           3           4
25.2  Other services....................          91          99         105
26.0  Supplies and materials............          12          13          14
33.0  Mortgage purchases for portfolio..      37,389      48,876      41,615
43.0  Interest and provision for loan 
        losses..........................       6,702       7,698       9,755
                                           ---------   ---------  ----------

99.9    Total obligations...............      44,481      56,998      51,831
---------------------------------------------------------------------------

                                

                         mortgage-backed securities

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4440-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Capital investment: Issue (sales) 
        of participation certification..      70,071     110,877     108,540
                                           ---------   ---------  ----------

10.00   Total obligations...............      70,071     110,877     108,540
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
22.00 New budget authority (gross)......      70,071     110,877     108,540
23.95 New obligations...................     -70,071    -110,877    -108,540
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Corporate borrowing authority (net 
        PC pool change).................      -6,626      21,017      30,493
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      76,697      89,860      78,047
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................      70,071     110,877     108,540
----------------------------------------------------------------------------

    Change in unpaid obligations:
73.10 New obligations...................      70,071     110,877     108,540
73.20 Total outlays (gross).............     -70,071    -110,877    -108,540
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      70,071     110,877     108,540
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      70,071     110,877     108,540
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....     -76,697     -89,860     -78,047
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................      -6,626      21,017      30,493
90.00 Outlays...........................      -6,626      21,017      30,493
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4440-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................      70,071     110,877     108,540
                                           ---------   ---------  ----------

1150    Total direct loan obligations...      70,071     110,877     108,540
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........     463,672     457,046     478,063
1231  Disbursements: Direct loan 
        disbursements...................      70,071     110,877     108,540
1251  Repayments: Repayments and 
        prepayments.....................     -76,697     -89,860     -78,047
                                           ---------   ---------  ----------

1290    Outstanding, end of year........     457,046     478,063     508,556
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4440-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
1901  Other Federal assets: Other assets     463,672        457,046       478,063        508,556
                                        ------------ --------------  ------------  -------------
1999    Total assets....................     463,672        457,046       478,063        508,556
    LIABILITIES:
2104  Federal liabilities: Resources 
        payable to Treasury.............     463,672        457,046       478,063        508,556
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............     463,672        457,046       478,063        508,556
-----------------------------------------------------------------------------------------------

                                


 
                           FARM CREDIT SYSTEM

    The Farm Credit System is a government sponsored enterprise that 
provides privately financed credit to agricultural and rural 
communities. The major functional entities of the system are: (1) Banks 
for Cooperatives (BC), (2) Agricultural Credit Bank (ACB), (3) Farm 
Credit Banks (FCB), and (4) direct lender associations. The history and 
specific functions of the bank entities are discussed after the 
presentation of financial schedules for each bank entity. As part of the 
Farm Credit System (FCS), these entities are regulated and examined by 
the Farm Credit Administration (FCA), an independent Federal agency. The 
administrative costs of FCA are currently financed by assessments of 
system institutions. System banks finance loans primarily from sales of 
bonds to the public and their own capital funds. The system bonds issued 
by the banks are not guaranteed by the U.S. Government either as to 
principal or interest. The bonds are backed by an insurance fund, 
administered by the Farm Credit System Insurance Corporation (FCSIC), an 
independent Federal agency that collects insurance premiums from member 
banks to pay its administrative expenses and fund insurance reserves. 
All of the banks' current operating expenses are paid from their own 
income and do not require budgetary resources from the Federal 
Government. Limited Federal assistance is provided to support interest 
payments on special FCS Finan

[[Page 1137]]
cial Assistance Corporation (FAC) debt obligations (see discussion of 
FAC elsewhere in this document).

                         Banks for Cooperatives

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4120-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Administrative expenses.........           5           6           7
00.02   Interest on borrowings..........         126         148         141
00.03   Insurance premiums..............           3           3           3
00.04   Provision for loan losses.......           3           3           3
00.06   Income tax expense..............           4           4           5
00.07   Other expenses..................           7           8           9
                                           ---------   ---------  ----------

00.91     Total operating expenses......         148         172         168
01.01 Capital investment: Direct loans..       8,690       9,976      10,076
                                           ---------   ---------  ----------

10.00   Total obligations...............       8,838      10,148      10,244
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.47 Unobligated balance available, 
        start of year: Authority to 
        borrow..........................       2,130       2,309       2,100
22.00 New budget authority (gross)......       9,017       9,983      10,082
22.60 Redemption of debt................                     -44         -32
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......      11,147      12,248      12,150
23.95 New obligations...................      -8,838     -10,148     -10,244
24.47 Unobligated balance available, end 
        of year: Authority to borrow....       2,309       2,100       1,906
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Net borrowing.....................         759
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............       8,258       9,983      10,082
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................       9,017       9,983      10,082
----------------------------------------------------------------------------

    Change in unpaid obligations:
73.10 New obligations...................       8,838      10,148      10,244
73.20 Total outlays (gross).............      -8,838     -10,148     -10,244
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................       8,838       9,983      10,082
86.98 Outlays from permanent balances...                     165         162
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........       8,838      10,148      10,244
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....      -8,258      -9,983     -10,082
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................         759
90.00 Outlays...........................         580         165         162
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4120-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................       8,690       9,976      10,076
                                           ---------   ---------  ----------

1150    Total direct loan obligations...       8,690       9,976      10,076
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........       1,654       2,273       2,478
1231  Disbursements: Direct loan 
        disbursements...................       8,690       9,976      10,076
1251  Repayments: Repayments and 
        prepayments.....................      -8,071      -9,771      -9,868
                                           ---------   ---------  ----------

1290    Outstanding, end of year........       2,273       2,478       2,686
---------------------------------------------------------------------------
    Note.--Direct loan balances exclude nonaccrual loans and sales 
contracts.

    Pursuant to the Agricultural Credit Act of 1987, stockholders in 11 
of 13 Banks for Cooperatives voted in 1988 to merge into a single 
National Bank for Cooperatives. On January 1, 1995, the Springfield Bank 
for Cooperatives also merged with other entities, as discussed below, to 
form the first Agricultural Credit Bank. The remaining Cooperative 
entity, the St. Paul Bank for Cooperatives, is independently chartered 
to provide credit and related services, nationwide, to eligible 
cooperatives primarily engaged in farm supply, grain, marketing and 
processing (including sugar and dairy.) Loans are also made to rural 
utilities, including telecommunications companies. The financial 
schedules below reflect the operations of the St. Paul Bank for 
Cooperatives. Loans are made for both seasonal and long-term needs.

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4120-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Total interest income.............         120            177           205            201
0102  Total interest expense............         -80           -127          -148           -141
                                        ------------ --------------  ------------  -------------
0109  Net interest income...............          40             50            57             60
0111  Other income......................           8             10             8             13
0112  Other expenses....................         -19            -21           -24            -27
                                        ------------ --------------  ------------  -------------
0119  Net income........................         -11            -11           -16            -14
                                        ------------ --------------  ------------  -------------
0191  Total revenues....................         128            187           213            214
                                        ------------ --------------  ------------  -------------
0192  Total expenses....................         -99           -148          -172           -168
                                        ------------ --------------  ------------  -------------
0199  Net income or loss................          29             39            41             46
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4120-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Non-Federal assets:

1201    Cash and investment securities..         236            394           397            428
1206    Accrued interest receivable on 
          loans.........................          27             40            44             49
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601    Direct loans, gross.............       1,687          2,305         2,320          2,271
1603    Allowance for estimated 
          uncollectible loans and 
          interest (-)..................         -21            -24           -25            -29
                                        ------------ --------------  ------------  -------------
1699      Value of assets related to 
            direct loans................       1,666          2,281         2,295          2,242
1803  Other Federal assets: Property, 
        plant and equipment, net........          68             71            70             79
                                        ------------ --------------  ------------  -------------
1999    Total assets....................       1,997          2,786         2,806          2,798
    LIABILITIES:
2104  Federal liabilities: Resources 
        payable to Treasury.............          26             28            49             36
      Non-Federal liabilities:

        Accounts payable:
2201      Consolidated systemwide and 
            other bank bonds............       1,093          1,329         1,194          1,175
2201      Consolidated systemwide notes.         643          1,166         1,257          1,244
2201      Notes payable and other 
            interest-bearing liabilities
2202    Accrued interest payable........          12             17            31             31
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............       1,774          2,540         2,531          2,486
    NET POSITION:
3300  Cumulative results of operations..         223            246           275            312
                                        ------------ --------------  ------------  -------------
3999    Total net position..............         223            246           275            312
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position       1,997          2,786         2,806          2,798
-----------------------------------------------------------------------------------------------
    Note.--Loans to cooperatives include nonaccrual loans and sales 
contracts.

                   Statement of Changes in Net Worth (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code    99-4120-0-3-351   1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........         208            224           246            275
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................           8              4             9             10
  Capital stock and participations 
    retired.............................         -14            -11           -11             -8
  Surplus retired.......................
  Net income............................          30             39            40             46
  Cash/Dividends/Patronage Distributions          -7            -10            -9            -10
  Other, net............................          -1
                                        ------------ --------------  ------------  -------------
Ending balance of net worth.............         224            246           275            313
-----------------------------------------------------------------------------------------------

[[Page 1138]]


              Financing Activities (in millions of dollars)

    --------------------------------------------------------------------
Identification code 99-4120-0-3-351         1994 actual     1995 actual      1996 est.      1997 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligation............................            1,573 1,699                    2,458           2,451
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................            1,186           1,524          2,213           2,206
  Consolidated systemwide and other bank 
    bonds retired.......................           -1,141          -1,287         -2,312          -2,226
  Consolidated systemwide notes, net....               81             523             92             -14
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................            1,699 2,458                    2,451           2,419
-------------------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4120-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

      Personnel compensation:

11.1    Personnel compensation and 
          benefits......................           4           5           6
                                           ---------   ---------  ----------

11.9      Total personnel compensation..           4           5           6
23.2  Cost of space occupied and 
        equipment.......................           1           1           1
25.2  Other services....................           3           3           3
33.0  Investments and loans.............       8,690       9,976      10,075
43.0  Interest and dividends............         127         148         142
92.0  Undistributed expenses............          13          15          17
                                           ---------   ---------  ----------

99.9    Total obligations...............       8,838      10,148      10,244
---------------------------------------------------------------------------

                                

                        Agricultural Credit Banks

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4130-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Administrative expenses.........          49          37          39
00.02   Interest on borrowings..........         902       1,097       1,148
00.03   Insurance premiums..............          14          14          15
00.04   Provision for loan losses.......          14          11          10
00.06   Income tax expense..............           9          24          25
00.07   Other expenses..................          89          63          66
                                           ---------   ---------  ----------

00.91     Total operating expenses......       1,077       1,246       1,303
01.01 Capital investment: direct loans..      42,644      44,000      45,000
                                           ---------   ---------  ----------

10.00   Total obligations...............      43,721      45,246      46,303
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.47 Unobligated balance available, 
        start of year: Authority to 
        borrow..........................       2,211       2,548       2,571
22.00 New budget authority (gross)......      44,058      45,269      46,531
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......      46,269      47,817      49,102
23.95 New obligations...................     -43,721     -45,246     -46,303
24.47 Unobligated balance available, end 
        of year: Authority to borrow....       2,548       2,571       2,799
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Net borrowing.....................       1,584         464         884
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      42,474      44,805      45,647
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................      44,058      45,269      46,531
----------------------------------------------------------------------------

    Change in unpaid obligations:
72.90 Unpaid obligations, start of year: 
        Obligated balance: Fund balance.         326         332         332
73.10 New obligations...................      43,721      45,246      46,303
73.20 Total outlays (gross).............     -43,715     -45,246     -46,303
74.90 Unpaid obligations, end of year: 
        Obligated balance: Fund balance: 
        Uninvested balance..............         332         332         332
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      43,715      45,245      46,303
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      43,715      45,246      46,303
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....     -42,474     -44,805     -45,647
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................       1,584         464         884
90.00 Outlays...........................       1,241         441         656
---------------------------------------------------------------------------
    On January 1, 1995, the National Bank for Cooperatives, the 
Springfield Bank for Cooperatives, and the Farm Credit Bank of 
Springfield consolidated to form on Agricultural Credit Bank (ACB), 
known as CoBank ACB. This bank is headquartered in Denver, Colorado and 
serves eligible cooperatives nationwide, and provides funding to 
Agricultural Credit Associations (ACAs) in one of its regions. An ACB 
operates under statutory authority that combines the authorities of a 
FCB and a BC. In exercising its FCB authority, CoBank ACB's charter 
limits its lending to ACAs located in the region previously served by 
the Farm Credit Bank of Springfield. As an entity lending to 
Cooperatives, CoBank engages in the same business activities as the St. 
Paul Bank and it provides international loans for the financing of 
agricultural exports.

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4130-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................      42,644      44,000      45,000
                                           ---------   ---------  ----------

1150    Total direct loan obligations...      42,644      44,000      45,000
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      12,874      14,231      14,800
1231  Disbursements: Direct loan 
        disbursements...................      42,638      44,000      45,000
1251  Repayments: Repayments and 
        prepayments.....................     -41,281     -43,427     -44,196
1263  Write-offs for default: Direct 
        loans...........................                      -4          -4
                                           ---------   ---------  ----------

1290    Outstanding, end of year........      14,231      14,800      15,600
---------------------------------------------------------------------------

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4130-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Total interest income.............                      1,171         1,368          1,441
0102  Total interest expense............                       -902        -1,097         -1,148
                                        ------------ --------------  ------------  -------------
0109  Net interest income...............                        269           271            293
0111  Other income......................                         23            10              9
0112  Other expense.....................                       -175          -148           -155
                                        ------------ --------------  ------------  -------------
0119  Net income........................                       -152          -138           -146
                                        ------------ --------------  ------------  -------------
0191  Total revenues....................                      1,194         1,378          1,450
                                        ------------ --------------  ------------  -------------
0192  Total expenses....................                     -1,077        -1,245         -1,303
                                        ------------ --------------  ------------  -------------
0199  Net income or loss................                        117           133            147
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4130-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Non-Federal assets:

1201    Cash and investment securities..       2,301          2,652         2,600          2,750
1206    Accrued interest receivable on 
          loans.........................         139            165           172            181
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601    Direct loans, gross.............      12,878         14,237        14,800         15,600
1603    Allowance for estimated 
          uncollectible loans and 
          interest (-)..................        -154           -170          -175           -181
                                        ------------ --------------  ------------  -------------
1699      Value of assets related to 
            direct loans................      12,724         14,067        14,625         15,419
1803  Other Federal assets: Property, 
        plant and equipment, net........         244            131           159            159
                                        ------------ --------------  ------------  -------------
1999    Total assets....................      15,408         17,015        17,556         18,509
                                                                                   
[[Page 1139]]

    LIABILITIES:
2104  Federal liabilities: Resources 
        payable to Treasury.............         128            142           145            145
      Non-Federal liabilities:

        Accounts payable:
2201      Consolidated systemwide and 
            other bank bonds............       8,567         10,805        10,882         11,045
2201      Consolidated systemwide notes.       5,401          4,717         5,110          5,837
2201      Notes payable and other 
            interest-bearing liabilities          24             12            20             20
2202    Accrued interest payable........          77            126           126            127
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............      14,197         15,802        16,283         17,174
    NET POSITION:
3200  Invested capital..................       1,211          1,213         1,273          1,335
                                        ------------ --------------  ------------  -------------
3999    Total net position..............       1,211          1,213         1,273          1,335
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position      15,408         17,015        17,556         18,509
-----------------------------------------------------------------------------------------------

                   Statement of Changes in Net Worth (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4130-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........       1,174          1,210         1,213          1,273
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................          28              7            25             25
  Capital stock and participations 
    retired.............................         -62            -52           -65            -75
  Surplus retired.......................
  Net income............................         119            117           132            148
  Cash/Dividends/Patronage Distributions         -25            -32           -33            -35
  Other, net............................         -23            -36
                                        ------------ --------------  ------------  -------------
Ending balance of net worth.............       1,210          1,213         1,273          1,336
-----------------------------------------------------------------------------------------------

              Financing Activities (in millions of dollars)

    --------------------------------------------------------------------
Identification code 99-4130-0-3-351         1994 actual     1995 actual      1996 est.      1997 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligations...........................           13,567 13,736
                                                                                  15,319          15,784
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................            6,945           7,768          7,700           7,900
  Consolidated systemwide and other bank 
    bonds retired.......................           -6,562          -5,505         -7,626          -7,741
  Consolidated systemwide notes, net....             -214            -679            390             725
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................           13,736 15,319
                                                                                  15,784          16,668
-------------------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4130-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
12.1  Personnel compensation and 
        benefits........................          42          31          33
23.2  Cost of space occupied and 
        equipment.......................           7           6           6
25.2  Other services....................          14          14          15
33.0  Investments and loans.............      42,644      44,000      45,000
43.0  Interest and dividends............         902       1,098       1,148
92.0  Undistributed expenses............         112          97         101
                                           ---------   ---------  ----------

99.9    Total obligations...............      43,721      45,246      46,303
---------------------------------------------------------------------------

                                

                            Farm Credit Banks

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4160-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Administrative expenses.........         107         105         105
00.02   Interest on borrowings..........       2,302       2,387       2,490
00.03   Insurance premiums..............          13          12          11
00.04   Provision for loan losses.......         -25           4           4
00.05   Losses/gains on property........          -7          -2
00.06   Other expenses..................         273         195         169
                                           ---------   ---------  ----------

00.91     Total operating expenses......       2,663       2,701       2,779
01.01 Capital investment: Direct loans..      22,036      22,103      22,437
                                           ---------   ---------  ----------

10.00   Total obligations...............      24,699      24,804      25,216
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.47 Unobligated balance available, 
        start of year: Authority to 
        borrow..........................       6,660       6,161       6,083
22.00 New budget authority (gross)......      24,744      24,986      25,482
22.60 Redemption of debt................        -544        -260        -562
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......      30,860      30,887      31,003
23.95 New obligations...................     -24,699     -24,804     -25,216
24.47 Unobligated balance available, end 
        of year: Authority to borrow....       6,161       6,083       5,787
----------------------------------------------------------------------------

    New budget authority (gross), detail:
68.00 Spending authority from offsetting 
        collections (gross): Offsetting 
        collections (cash)..............      24,744      24,986      25,482
----------------------------------------------------------------------------

    Change in unpaid obligations:
72.90 Unpaid obligations, start of year: 
        Obligated balance: Fund balance.         382         771         825
73.10 New obligations...................      24,699      24,804      25,216
73.20 Total outlays (gross).............     -24,310     -24,750     -25,091
74.90 Unpaid obligations, end of year: 
        Obligated balance: Fund balance: 
        Uninvested balance..............         771         825         950
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      24,310      24,750      25,091
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      24,310      24,750      25,091
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....     -24,744     -24,986     -25,482
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................        -434        -236        -391
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4160-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................      22,036      22,103      22,436
                                           ---------   ---------  ----------

1150    Total direct loan obligations...      22,036      22,103      22,436
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      36,190      36,535      37,103
1231  Disbursements: Direct loan 
        disbursements...................      22,036      22,492      22,880
1251  Repayments: Repayments and 
        prepayments.....................     -21,689     -21,930     -22,340
1263  Write-offs for default: Direct 
        loans...........................          -2           6           2
                                           ---------   ---------  ----------

1290    Outstanding, end of year........      36,535      37,103      37,645
---------------------------------------------------------------------------
    Note.--Loans outstanding at end of year do not include nonaccrual 
loans and sales contracts.

    The Agricultural Credit Act of 1987 (1987 Act) required the Federal 
Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge 
into a Farm Credit Bank (FCB) in each of the 12 Farm Credit districts. 
The FCBs operate under statutory authority that combines the prior 
authorities of the FLB and the FICB. No merger occurred in the Jackson 
district in 1988 because the FLB was in receivership. Pursuant to 
section 410(e) of the 1987 Act, as amended by the Farm Credit Banks 
Safety and Soundness Act of 1992, the FICB of Jackson merged with the 
FCB of Columbia on October 1, 1993. Mergers and consolidations of FCBs 
across district lines, that began in 1992 continued through mid-1995. As 
a result of this restructuring activity, 6 FCBs headquartered in the 
following cities, remain: AgFirst FCB, Columbia, South Carolina; 
AgAmerica FCB, Spokane, Washington; AgriBank FCB, St. Paul, Minnesota; 
FCB of Wichita, Wichita, Kansas; FCB of Texas, Austin, Texas; and 
Western FCB, Sacramento, California.
    The FCBs serve as discount banks and as of January 1, 1996 provided 
funds to 32 Federal Land Credit Associations (FLCA), 66 Production 
Credit Associations (PCAs), and 60 Agricultural Credit Associations 
(ACAs). These direct lender associations, in turn, make short-term 
production loans (PCAs

[[Page 1140]]
and ACAs) and long-term real estate loans (FLCAs and ACAs) to eligible 
farmers and ranchers. Also, as of January 1, 1996, 70 Federal Land Bank 
Associations originated and serviced long-term real estate loans for 2 
of the 6 FCBs that have no affiliated FLCAs. FCBs can also lend to local 
financing institutions, including commercial banks, as authorized by the 
Farm Credit Act of 1971, as amended.
    All the capital stock of the FICB's, from organization in 1923 to 
December 31, 1956, was held by the U.S. Government. The 1956 Act 
provided a long-range plan for the eventual ownership of the credit 
banks by the production credit associations and the gradual retirement 
of the Government's investment in the banks. This retirement was 
accomplished in full on December 31, 1968. The last of the Government 
capital that had been invested in the FLB's was repaid in 1947. 

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4160-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Total interest income.............       2,547          3,011         3,041          3,126
0102  Total interest expense............      -1,731         -2,302        -2,387         -2,490
                                        ------------ --------------  ------------  -------------
0109  Net interest income...............         816            709           654            636
0111  Other income......................          50             44            15             16
0112  Other expenses....................        -531           -361          -313           -289
                                        ------------ --------------  ------------  -------------
0119  Net income........................        -481           -317          -298           -273
                                        ------------ --------------  ------------  -------------
0191  Total revenues....................       2,597          3,055         3,056          3,142
                                        ------------ --------------  ------------  -------------
0192  Total expenses....................      -2,262         -2,663        -2,700         -2,779
                                        ------------ --------------  ------------  -------------
0199  Net income or loss................         335            392           356            363
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4160-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Non-Federal assets:

1201    Cash and investment securities..       6,300          6,708         6,804          7,080
1206    Accrued Interest Receivable.....         731            810           685            707
      Net value of assets related to 
          direct loans receivable and 
          acquired defaulted guaranteed 
          loans receivable:

1601    Direct loans, gross.............      36,366         36,659        37,080         37,602
1603    Allowance for estimated 
          uncollectible loans and 
          interest (-)..................        -627           -548          -477           -477
                                        ------------ --------------  ------------  -------------
1699      Value of assets related to 
            direct loans................      35,739         36,111        36,603         37,125
1803  Other Federal assets: Property, 
        plant and equipment, net........         464            402           384            406
                                        ------------ --------------  ------------  -------------
1999    Total assets....................      43,234         44,031        44,476         45,318
    LIABILITIES:
2104  Federal liabilities: Resources 
        payable to Treasury.............         273            276           243            258
      Non-Federal liabilities:

        Accounts payable:
2201      Consolidated systemwide and 
            other bank bonds............      27,706         28,532        28,702         29,851
2201      Consolidated systemwide notes.      10,342         10,060        10,150          9,563
2201      Notes payable and other 
            interest-bearing liabilities         567            597           704            811
2202    Accrued interest payable........         382            437           465            479
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............      39,270         39,902        40,264         40,962
    NET POSITION:
3200  Invested capital..................       3,964          4,129         4,212          4,356
                                        ------------ --------------  ------------  -------------
3999    Total net position..............       3,964          4,129         4,212          4,356
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position      43,234         44,031        44,476         45,318
-----------------------------------------------------------------------------------------------

                   Statement of Changes in Net Worth (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4160-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........       4,007          3,964         4,129          4,212
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................         128             37           295             64
  Capital stock and participations 
    retired.............................         409            121           104             48
  Surplus retired.......................
  Net income............................         336            392           356            362
  Cash/Dividends/Patronage Distributions         -65           -146          -463           -235
  Other, net............................         -33              3
                                        ------------ --------------  ------------  -------------
Ending balance of net worth.............       3,964          4,129         4,212          4,356
-----------------------------------------------------------------------------------------------

              Financing Activities (in millions of dollars)

    --------------------------------------------------------------------
Identification code 99-4160-0-3-371         1994 actual     1995 actual      1996 est.      1997 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligations...........................           37,377 38,119
                                                                                  39,041          39,775
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................           29,655          53,468         36,089          36,435
  Consolidated systemwide and other bank 
    bonds retired.......................          -28,861         -52,831        -33,634         -34,696
  Consolidated systemwide notes, net....              -93             143         -1,721            -655
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................           38,119 39,041
                                                                                  39,775          40,858
-------------------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4160-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................          85          83          84
23.2  Cost of space occupied and 
        equipment.......................          22          22          21
25.2  Other services....................          13          12          11
33.0  Investments and loans.............      22,036      22,103      22,437
43.0  Interest and dividends............       2,302       2,387       2,490
92.0  Undistributed expenses............         241         196         172
99.5  Below reporting threshold.........                       1           1
                                           ---------   ---------  ----------

99.9    Total obligations...............      24,699      24,804      25,216
---------------------------------------------------------------------------

                                

                Federal Agricultural Mortgage Corporation

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4180-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Administrative expenses and taxes.           3           5           6
                                           ---------   ---------  ----------

10.00   Total obligations...............           3           5           6
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.47 Unobligated balance available, 
        start of year: Authority to 
        borrow..........................          12          11          10
22.00 New budget authority (gross)......           3           4           7
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......          15          15          17
23.95 New obligations...................          -3          -5          -6
24.47 Unobligated balance available, end 
        of year: Authority to borrow....          11          10          11
----------------------------------------------------------------------------

    New budget authority (gross), detail:
68.00 Spending authority from offsetting 
        collections (gross): Offsetting 
        collections (cash)..............           3           4           7
----------------------------------------------------------------------------

    Change in unpaid obligations:
73.10 New obligations...................           3           5           6
73.20 Total outlays (gross).............          -3          -5          -6
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................           3           4           6
86.98 Outlays from permanent balances...                       1
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........           3           5           6
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....          -3          -4          -7
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................                       1          -1
---------------------------------------------------------------------------

[[Page 1141]]

    Farmer Mac was established by the Agricultural Credit Act of 1987 
(the Act) to facilitate creation of a secondary market for farm and 
rural housing mortgage loans that meet minimum credit standards. As 
authorized by the Act, Farmer Mac guarantees securities formed by 
certified loan pooling institutions. In addition, the Farmer Mac title 
of the Act was amended by the 1990 farm bill to authorize Farmer Mac to 
purchase, pool, and securitize the guaranteed portions of Farmers Home 
Administration (FmHA) guaranteed farmer program loans. These two areas 
of secondary market authority have been organized by Farmer Mac into two 
distinct programs designated as ``Farmer Mac I'' and ``Farmer Mac II,'' 
respectively. The Farmer Mac title was further amended in 1991 to 
clarify Farmer Mac's authority to issue debt obligations, to provide for 
the establishment of minimum capital standards for Farmer Mac, and to 
expand rulemaking authority for the Farm Credit Administration. The Farm 
Credit System Reform Act of 1996 significantly expanded the activities 
of Farmer Mac by allowing it to directly purchase mortgages and to form 
loan pools.
    In general, the agricultural secondary market is intended to attract 
new capital for financing agricultural real estate, including rural 
housing, foster increased long-term fixed-rate lending, and provide 
greater liquidity to agricultural lenders. Increased competition among 
agricultural lenders, stimulated by access to the secondary market, 
should result in more favorable rates and terms for agricultural 
borrowers.
    Farmer Mac is governed by a 15 member Board of Directors. Ten Board 
members are elected by stockholders, including five by the Farm Credit 
System, and five are appointed by the President subject to Senate 
confirmation.

                                Financing

    Funding for Farmer Mac comes from four sources: common and preferred 
stock; debt obligations; guarantee fees and a $1.5 billion line of 
credit with the U.S. Treasury.
    The actuarial soundness of the guarantee fee is reviewed annually by 
the Comptroller General in a report to Congress. The soundness of Farmer 
Mac I pools will be determined through a multi-stage process. First, 
loans must comply with the credit underwriting and appraisal standards. 
Second, pools of eligible loans must meet Farmer Mac's standards for 
geographic and commodity diversification and be subjected to economic 
stress analysis to determine pool performance characteristics. In the 
case of Farmer Mac II, only the FmHA guaranteed portions of the loans 
will be pooled by Farmer Mac.
    Available funds of Farmer Mac are invested in U.S. agency securities 
or other high-grade commercial paper. No stock dividends are allowed 
under the Act until the Board determines that an adequate loss reserve 
has been funded to back Farmer Mac guarantees.

                               Guarantees

    Farmer Mac provides a guarantee of timely payment of principal and 
interest on securities backed by pools of eligible loans. These 
securities are not guaranteed by the United States, and are not 
``government securities''. In 1996 Congress removed requirements that 
loan originators or poolers maintain cash reserves or subordinated 
securities.
    Farmer Mac guaranteed mortgage-backed securities are subject to 
registration requirements established by the Securities and Exchange 
Commission under the 1933 and 1934 Securities Acts.

                               Regulation

    Farmer Mac is federally regulated by the Farm Credit Administration 
(FCA). Under 1991 amendments to the Act, regulation is performed by the 
FCA's Office of Secondary Market Oversight. The Office is responsible 
for examination of and rulemaking for Farmer Mac (after a transition 
period), including the determination of the stress test for Farmer Mac's 
risk-based capital. The 1991 amendments also clarified FCA's regulatory 
authority, including enforcement of Farmer Mac's regulatory capital 
standards.

             Status of Guaranteed Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4180-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on commitments:
2131  Guaranteed loan commitments exempt 
        from limitation.................         155         392         715
                                           ---------   ---------  ----------

2150    Total guaranteed loan 
          commitments...................         155         392         715
----------------------------------------------------------------------------

    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........         463         506         795
2231  Disbursements of new guaranteed 
        loans...........................         155         392         715
2251  Repayments and prepayments........        -112        -103        -167
                                           ---------   ---------  ----------

2290    Outstanding, end of year........         506         795       1,343
----------------------------------------------------------------------------

    Memorandum:
2299  Guaranteed amount of guaranteed 
        loans outstanding, end of year..         506         795       1,343
---------------------------------------------------------------------------

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4180-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................           3              3             4              7
0102  Expense...........................          -4             -3            -5             -6
                                        ------------ --------------  ------------  -------------
0109  Net loss..........................          -1                           -1              1
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4180-0-3-351    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
1201  Non-Federal assets: Investment in 
        securities......................         474            619           592            915
                                        ------------ --------------  ------------  -------------
1999    Total assets....................         474            619           592            915
    LIABILITIES:
2203  Non-Federal liabilities: Debt.....         461            607           581            898
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............         461            607           581            898
    NET POSITION:
3200  Invested capital..................          12             12            11             17
                                        ------------ --------------  ------------  -------------
3999    Total net position..............          12             12            11             17
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position         473            619           592            915
-----------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4180-0-3-351      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Personnel 
        compensation and benefits.......           2           2           3
25.2  Other services....................           1           3           3
                                           ---------   ---------  ----------

99.9    Total obligations...............           3           5           6
---------------------------------------------------------------------------

                                


 
                      FEDERAL HOME LOAN BANK SYSTEM

                         Federal Home Loan Banks

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4200-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Operating expenses:

00.01   Administrative expenses 
          including FHFB assessments....         234         243         243
00.02   Affordable Housing program......         102         100         100
00.03   Interest on consolidated 
          obligations and loss on debt 
          retirement....................      11,941      10,000      10,000
00.04   Interest on members' deposits 
          and other borrowings..........       1,093       1,000       1,000
00.05   Payment to REFCORP..............         300         300         300
00.06   Cash dividends on capital stock.         547         500         500
                                           ---------   ---------  ----------
                                                                  
[[Page 1142]]

00.91     Total operating expenses......      14,217      12,143      12,143
      Capital investment:

01.01   Investment in bank premises.....          11          12           9
01.04   Net increase in advances and 
          non-Treasury securities.......      55,757
01.05   Repurchase of capital stock.....       4,005       5,074       5,400
                                           ---------   ---------  ----------

01.91     Total capital investment......      59,773       5,086       5,409
                                           ---------   ---------  ----------

10.00   Total obligations...............      73,990      17,229      17,552
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
      Unobligated balance available, start of year:

21.41   U.S. Securities: Par value......         910         148       1,248
21.90   Fund balance....................         448
                                           ---------   ---------  ----------

21.99     Total unobligated balance, 
            start of year...............       1,358         148       1,248
22.00 New budget authority (gross)......      72,780      31,173      17,552
22.60 Redemption of debt................                 -12,843
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......      74,138      18,478      18,800
23.95 New obligations...................     -73,990     -17,229     -17,552
24.41 Unobligated balance available, end 
        of year: U.S. Securities: Par 
        value...........................         148       1,248       1,248
----------------------------------------------------------------------------

    New budget authority (gross), detail:
67.15 Authority to borrow (indefinite)..      52,798
68.00 Spending authority from offsetting 
        collections: Offsetting 
        collections (cash)..............      19,982      31,173      17,552
                                           ---------   ---------  ----------

70.00   Total new budget authority 
          (gross).......................      72,780      31,173      17,552
----------------------------------------------------------------------------

    Change in unpaid obligations:
      Unpaid obligations, start of year:

        Obligated balance:
72.41     U.S. Securities: Par value....       3,329       2,482       2,752
72.47     Authority to borrow (obligated 
            balance net of U.S. Treasury 
            and agency securities held).                   2,379       1,048
72.90     Fund balance..................                     449         400
                                           ---------   ---------  ----------

72.99     Total unpaid obligations, 
            start of year...............       3,329       5,310       4,200
73.10 New obligations...................      73,990      17,229      17,552
73.20 Total outlays (gross).............     -72,009     -18,340     -17,552
      Unpaid obligations, end of year:

        Obligated balance:
74.41     U.S. Securities: Par value....       2,482       2,752       2,752
74.47     Authority to borrow...........       2,379       1,048       1,048
74.90     Fund balance: Uninvested 
            balance.....................         449         400         400
                                           ---------   ---------  ----------

74.99     Total unpaid obligations, end 
            of year.....................       5,310       4,200       4,200
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      72,009      18,340      17,552
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........      72,009      18,340      17,552
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

        Offsetting collections (cash) 
            from:
          Non-Federal sources:
88.40       Net decrease in advances and 
              non-Treasury investments..                 -13,618
88.40       Other collections from non-
              Federal sources...........     -19,982     -17,555     -17,552
                                           ---------   ---------  ----------

88.90       Total, offsetting 
              collections (cash)........     -19,982     -31,173     -17,552
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................      52,798
90.00 Outlays...........................      52,027     -12,833
---------------------------------------------------------------------------

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4200-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
    Position with respect to appropriations act 
                limitation on obligations:
1111  Limitation on direct loans........
1131  Direct loan obligations exempt 
        from limitation.................     724,349     725,000     725,000
                                           ---------   ---------  ----------

1150    Total direct loan obligations...     724,349     725,000     725,000
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........     116,567     122,128     120,500
1231  Disbursements: Direct loan 
        disbursements...................     724,349     725,000     725,000
1251  Repayments: Repayments and 
        prepayments.....................    -718,788    -726,628    -725,000
                                           ---------   ---------  ----------

1290    Outstanding, end of year........     122,128     120,500     120,500
---------------------------------------------------------------------------

    The 12 Federal Home Loan Banks were chartered by the Federal Home 
Loan Bank Board under the authority of the Federal Home Loan Bank Act of 
1932. Subsequent to the passage of the Financial Institutions Reform, 
Recovery, and Enforcement Act (FIRREA) of 1989, the FHLBanks are under 
the supervision of the Federal Housing Finance Board. The common mission 
of the FHLBanks is to facilitate the extension of credit through their 
members in order to provide access to housing for all Americans and to 
improve the quality of their communities. To accomplish this mission, 
the FHLBanks make loans, called advances, and provide other credit 
products such as letters of credit to member institutions. Advances and 
letters of credit must be fully secured by eligible collateral and long-
term advances may be made only for the purpose of providing funds for 
residential housing finance. Additionally, specialized community-related 
advance programs provide funds for community reinvestment and affordable 
housing programs. All regulated financial depositories and insurance 
companies engaged in residential housing finance are eligible for 
membership. Each FHLBank operates in a geographic district designated by 
the Board and together the FHLBanks cover all of the United States as 
well as Puerto Rico, the Virgin Islands, and Guam.
    Advances outstanding on September 30, 1995 totaled approximately 
$122.1 billion, a net increase of approximately $5.9 billion from the 
September 30, 1994 level of $116.2 billion.
    The principal source of funds for the lending operation is the sale 
of consolidated obligations to the public. On September 30, 1995, $226.4 
billion of these obligations were outstanding. The consolidated 
obligations are not guaranteed by the U.S. Government as to principal or 
interest. Other sources of lendable funds include a portion of members' 
deposits as determined by Board policy. Deposits totaled $16.9 billion 
and total capital amounted to $14.7 billion as of September 30, 1995. 
Funds not immediately used for advances to members are invested until 
such times as needed.
    The capital stock of the Federal Home Loan Banks is owned entirely 
by the members. Initially the U.S. Government purchased stock of the 
banks in the amount of $125 million. The banks had repurchased the 
Government's investment in full by mid-1951.
    The entire operating expenses of the FHLBanks are paid from their 
own income and are not included in the budget of the United States. 
Included in these expenses is the assessment by the Federal Housing 
Finance Board to cover the Board's administrative and other costs.
    FIRREA contains provisions for the establishment of an Affordable 
Housing Program (AHP) by each FHLBank. Each FHLBank has developed its 
AHP to enhance the availability of housing for very low-, low- and 
moderate-income families by providing direct subsidies or subsidized 
advances for members who use the funds for qualifying housing projects. 
The FHLBank system sets aside for its AHPs a total of $100 million 
annually.
    The forecast data for 1996 and 1997 contained in this material 
represents estimates and should not be construed as an official forecast 
of the FHLBanks System's future position.

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4200-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................       8,985         14,568        12,543         12,543
0102  Expense (excludes payments to 
        REFCORP)........................      -8,051        -13,370       -11,343        -11,343
                                        ------------ --------------  ------------  -------------
                                                                                   
[[Page 1143]]

0109  Net income........................         934          1,198         1,200          1,200
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4200-0-3-371    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Investments in US securities:

1102    Federal assets: Treasury 
          securities, net...............       4,239          2,630         4,000          4,000
      Non-Federal assets:

1201    Investments in non-Federal 
          securities, net...............      84,794        134,990       123,000        123,000
1206    Accounts receivable.............       2,053          3,532         3,000          3,000
1401  Net value of assets related to 
        direct loans receivable: Direct 
        loans receivable, gross.........     116,567        122,128       120,500        120,500
      Other Federal assets:

1801    Cash and other monetary assets..         448            449           400            400
1803    Property, plant and equipment, 
          net...........................         156            157           140            140
1901    Other assets....................          43            941           100            100
                                        ------------ --------------  ------------  -------------
1999    Total assets....................     208,300        264,828       251,140        251,140
    LIABILITIES:
2101  Federal liabilities: REFCORP and 
        AHP.............................         308            347           380            380
      Non-Federal liabilities:

2201    Accounts payable................         196            185           100            100
2202    Interest payable................       2,522          3,946         3,000          3,000
2203    Debt............................     168,379        226,406       217,000        217,000
        Other:
2207      Deposit funds and other 
            borrowings..................      23,666         18,437        15,000         15,000
2207      Other.........................         302            832           720            720
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............     195,374        250,154       236,200        236,200
    NET POSITION:
3200  Invested capital..................      12,926         14,674        14,940         14,940
                                        ------------ --------------  ------------  -------------
3999    Total net position..............      12,926         14,674        14,940         14,940
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position     208,300        264,828       251,140        251,140
-----------------------------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4200-0-3-371      1995 actual   1996 est.   1997 est.
----------------------------------------------------------------------------
11.1  Personnel compensation: Full-time 
        permanent.......................          92          95          95
12.1  Civilian personnel benefits.......          26          26          26
21.0  Travel and transportation of 
        persons.........................           6           8           8
23.3  Communications, utilities, and 
        other rent......................          22          22          22
24.0  Printing and reproduction.........           7           9           9
25.2  Other services....................          73          75          75
31.0  Equipment.........................           7           8           8
32.0  Land and structures...............          11          12           9
33.0  Net increase in advances and 
        securities......................      55,757
41.0  Subsidies (Affordable Housing 
        Program)........................         102         100         100
      Interest and dividends:

43.0    Interest and changes in other 
          assets........................      13,581      11,500      11,500
43.0    REFCORP interest................         300         300         300
92.0  Repurchase of capital stock 
        (gross).........................       4,005       5,074       5,400
                                           ---------   ---------  ----------

99.9    Total obligations...............      73,990      17,229      17,552
---------------------------------------------------------------------------

                                

                          Financing Corporation

    The Financing Corporation (FICO) is a mixed-ownership government 
corporation, chartered by the Federal Home Loan Bank Board pursuant to 
the Federal Savings and Loan Insurance Corporation Recapitalization Act 
of 1987, as amended (the ``Act''). FICO's sole purpose was to function 
as a financing vehicle for the FSLIC Resolution Fund, formerly the 
Federal Savings and Loan Insurance Corporation (FSLIC). FICO operates 
under the supervision and control of the Federal Housing Finance Board 
(the ``Finance Board''). Pursuant to the Act, FICO was authorized to 
issue debentures, bonds and other obligations subject to limitations 
contained in the Act, the net proceeds of which were to be used solely 
to purchase capital certificates issued by the FSLIC Resolution Fund, or 
to refund any previously issued obligations. The Resolution Trust 
Corporation Refinancing, Restructuring, and Improvement Act of 1991 
terminated the FICO's borrowing authority.
    The Act provided formulas pursuant to which the Federal Home Loan 
Banks made capital contributions to FICO at the direction of the Finance 
Board for the purchase of FICO capital stock. FICO used the proceeds 
received from the sales of such capital stock to purchase non-interest 
bearing securities for deposit in a segregated account as required by 
the Act. The non-interest bearing securities held in the segregated 
account will be the primary source of repayment of the principal of the 
FICO obligations. Securities in the segregated account are kept separate 
from other FICO accounts and funds but are not specifically pledged as 
collateral for the payment of obligations. The primary source of payment 
of interest on the obligations will be the receipt of assessments 
imposed on and collected from institutions' accounts which are insured 
by the Savings Association Insurance Fund (the ``SAIF''). 

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4033-0-3-373    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................         888            897           906            916
0102  Expense...........................        -795           -795          -795           -795
                                        ------------ --------------  ------------  -------------
0109  Net income........................          93            102           111            121
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4033-0-3-373    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Investments in US securities:

1102    Federal assets: Segregated 
          accounts investment, net......       1,143          1,244         1,354          1,475
      Other Federal assets:

1801    Cash, cash equivalents, and 
          interest receivable...........         344            279           279            279
1901    Other assets....................          13             13            12             12
                                        ------------ --------------  ------------  -------------
1999    Total assets....................       1,500          1,536         1,645          1,766
    LIABILITIES:
      Non-Federal liabilities:

2202    Interest payable................         236            236           236            236
2203    Debt............................       8,140          8,141         8,142          8,144
2207    Other...........................         152             85            83             81
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............       8,528          8,462         8,461          8,461
    NET POSITION:
3100  FICO capital stock purchased by 
        FHLBanks........................         680            680           680            680
3300  Cumulative results of operations..         463            565           675            796
      Other:

3600    Other...........................      -7,568         -7,568        -7,568         -7,568
3600    Other...........................        -603           -603          -603           -603
                                        ------------ --------------  ------------  -------------
3999    Total net position..............      -7,028         -6,926        -6,816         -6,695
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position       1,500          1,536         1,645          1,766
-----------------------------------------------------------------------------------------------

                                

                     Resolution Funding Corporation

    The Resolution Funding Corporation (the ``REFCORP'') is a mixed-
ownership government corporation established by Title V of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The 
sole purpose of REFCORP was to provide financing for the Resolution 
Trust Corporation (the ``RTC''). Pursuant to FIRREA, REFCORP was 
authorized to issue debentures, bonds, and other obligations, subject to 
limitations contained in the Act and regulations established by the 
Thrift Depositor Protection Oversight Board. The proceeds of the debt 
(less any discount, plus any premium, net of issuance cost) were used 
solely to purchase nonredeemable capital certificates of the RTC or to 
refund any previously issued obligations.
    REFCORP is subject to the general oversight and direction of the 
Thrift Depositor Protection Oversight Board. The day-to-day operations 
of REFCORP are under the management of a three-member Directorate 
comprised of the Director of

[[Page 1144]]
the Office of Finance of the Federal Home Loan Banks and two members 
selected by the Oversight Board from among the presidents of the twelve 
Federal Home Loan Banks (``the FHLBanks''). Members of the Directorate 
serve without compensation, and REFCORP is not permitted to have any 
paid employees. REFCORP and its Directorate are subject to regulations, 
orders and directions of the Thrift Depositor Protection Oversight 
Board.
    FIRREA and the regulations adopted by the Thrift Depositor 
Protection Oversight Board provide formulas pursuant to which the 
Federal Home Loan Banks made capital contributions to REFCORP's 
Principal Fund and continue to make interest payments on outstanding 
REFCORP obligations. FIRREA also provides that the U.S. Treasury cover 
any interest shortfall. Funds designated for the Principal Funds were 
used to purchase zero-coupon bonds. The zero-coupon bonds will be held 
in the Principal Fund and are the primary source of repayment of the 
principal of the obligations at maturity. 

                        Statement of Operations (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4029-0-3-373    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
0101  Revenue...........................       2,875          2,895         2,920          2,942
0102  Expense...........................      -2,626         -2,626        -2,626         -2,626
                                        ------------ --------------  ------------  -------------
0109  Net income........................         249            269           294            316
-----------------------------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   99-4029-0-3-373    1994 actual    1995 actual     1996 est.      1997 est.
-----------------------------------------------------------------------------------------------
    ASSETS:
      Investments in US securities:

1102    Federal assets: Principal fund 
          account investment, net.......       3,301          3,567         3,856          4,169
1206  Non-Federal assets: Assessments 
        receivable for interest expense.         881            881           881            881
1901  Other Federal assets: Other assets           1              1             1
                                        ------------ --------------  ------------  -------------
1999    Total assets....................       4,183          4,449         4,738          5,050
    LIABILITIES:
      Non-Federal liabilities:

2202    Accrued interest payable on 
          long-term obligations.........         881            881           881            881
2203    Debt............................      30,079         30,076        30,074         30,072
                                        ------------ --------------  ------------  -------------
2999    Total liabilities...............      30,960         30,957        30,955         30,953
    NET POSITION:
3100  Nonvoting capital stock issued to 
        FHLBanks........................       2,513          2,513         2,513          2,513
3200  RTC nonredeemable capital 
        certificates....................     -31,286        -31,286       -31,286        -31,286
3300  Cumulative results of operations..         939          1,208         1,499          1,813
3600  Other.............................       1,057          1,057         1,057          1,057
                                        ------------ --------------  ------------  -------------
3999    Total net position..............     -26,777        -26,508       -26,217        -25,903
                                        ------------ --------------  ------------  -------------
4999  Total liabilities and net position       4,183          4,449         4,738          5,050
-----------------------------------------------------------------------------------------------

                                


 
            BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

               Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4450-0-3-803      1994 actual   1995 est.   1996 est.
----------------------------------------------------------------------------

    Obligations by program activity:
      Board operating expenses:

00.01   Monetary and economic policy....          65          73          74
00.02   Services to financial 
          institutions and the public...           3           3           3
00.03   Supervision and regulation of 
          financial institutions........          57          64          65
00.04   System policy direction and 
          oversight.....................          28          31          32
                                           ---------   ---------  ----------

00.91     Subtotal: Board operating 
            expenses....................         153         171         174
01.01 Office of Inspector General 
        operating expenses..............           3           3           3
                                           ---------   ---------  ----------

10.00   Total obligations...............         156         174         177
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
21.40 Unobligated balance available, 
        start of year: Uninvested 
        balance.........................          -1          -3          -6
22.00 New budget authority (gross)......         154         171         177
                                           ---------   ---------  ----------

23.90   Total budgetary resources 
          available for obligation......         153         168         171
23.95 New obligations...................        -156        -174        -177
24.40 Unobligated balance available, end 
        of year: Uninvested balance.....          -3          -6          -7
----------------------------------------------------------------------------

    New budget authority (gross), detail:
68.00 Spending authority from offsetting 
        collections (gross): Offsetting 
        collections (cash)..............         154         171         177
----------------------------------------------------------------------------

    Change in unpaid obligations:
72.40 Unpaid obligations, start of year: 
        Obligated balance: Appropriation          13          18          21
73.10 New obligations...................         156         174         177
73.20 Total outlays (gross).............        -152        -171        -175
74.40 Unpaid obligations, end of year: 
        Obligated balance: Appropriation          18          21          23
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................         140         157         161
86.98 Outlays from permanent balances...          12          14          14
                                           ---------   ---------  ----------

87.00   Total outlays (gross)...........         152         171         175
----------------------------------------------------------------------------

    Offsets:
      Against gross budget authority and outlays:

88.40   Offsetting collections (cash) 
          from: Non-Federal sources.....        -154        -171        -177
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays...........................          -3                      -2
---------------------------------------------------------------------------
    The figures presented may differ from other Board financial material 
because they are prepared in accordance with OMB guidelines which vary 
from the Board's budget and accounting procedures.

    The Federal Reserve System operates under the provisions of the 
Federal Reserve Act of 1913, as amended, and other acts of Congress.
    Program.--To carry out its responsibilities under the Act, the Board 
determines general monetary, credit, and operating policies for the 
System as a whole and formulates the rules and regulations necessary to 
carry out the purposes of the Federal Reserve Act. The Board's principal 
duties consist of exerting an influence over credit conditions and 
supervising the Federal Reserve banks and member banks.
    Financing.--Under the provisions of section 10 of the Federal 
Reserve Act, the Board of Governors levies upon the Federal Reserve 
banks, in proportion to their capital and surplus, an assessment 
sufficient to pay its estimated expenses. The Board, under the Act, 
determines and prescribes the manner in which its obligations are 
incurred and its expenses paid. Funds derived from assessments are 
deposited in the Federal Reserve Bank of Richmond, and the Act provides 
that such funds ``shall not be construed to be Government funds or 
appropriated moneys.'' No Government appropriation is required to 
support operations of the Board.
    The information presented pertains to Board operations only. 
Expenditures made on behalf of the Federal Reserve banks for production, 
issuance, retirement, and shipment of Federal Reserve notes are not 
included, since they are reimbursed in full by the Federal Reserve 
banks.

              Statement of Operations (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4450-0-3-803      1994 actual   1995 est.   1996 est.
----------------------------------------------------------------------------
0101  Revenue...........................         154         171         177
0102  Expense...........................        -156        -174        -177
                                           ---------   ---------  ----------

0109  Net income or loss (-)............          -2          -3
---------------------------------------------------------------------------



[[Page 1145]]


                   Balance Sheet (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4450-0-3-803      1994 actual   1995 est.   1996 est.
----------------------------------------------------------------------------
    ASSETS:
1206  Non-Federal assets: Receivables, 
        net.............................           4           3           2
      Other Federal assets:

1801    Cash in bank....................          15          15          17
1803    Property, plant and equipment, 
          net...........................         112         125         135
                                           ---------   ---------  ----------

1999    Total assets....................         131         143         154
    LIABILITIES:
2201  Non-Federal liabilities: Accounts 
        payable and accrued liabilities.          22          24          25
                                           ---------   ---------  ----------

2999    Total liabilities...............          22          24          25
    NET POSITION:
3100  Appropriated capital..............          -3          -6          -7
3200  Invested capital..................         112         125         136
                                           ---------   ---------  ----------

3999    Total net position..............         109         119         129
                                           ---------   ---------  ----------

4999  Total liabilities and net position         131         143         154
---------------------------------------------------------------------------

               Object Classification (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4450-0-3-803      1994 actual   1995 est.   1996 est.
----------------------------------------------------------------------------

      Direct obligations:

        Personnel compensation:
11.1      Full-time permanent...........          89          95         100
11.3      Other than full-time permanent           1           1           1
11.5      Other personnel compensation..           2           2           2
                                           ---------   ---------  ----------

11.9        Total personnel compensation          92          98         103
12.1    Civilian personnel benefits.....          16          16          16
13.0    Benefits for former personnel...           1
21.0    Travel and transportation of 
          persons.......................           4           5           5
23.3    Communications, utilities, and 
          other rent....................           9           9          10
24.0    Printing and reproduction.......           3           3           3
25.1    Advisory and assistance services           1           2           3
25.2    Other services..................          13          18          16
26.0    Supplies and materials..........           5           6           7
31.0    Equipment.......................          10          14          11
                                           ---------   ---------  ----------

99.0      Subtotal, direct obligations..         154         171         174
25.2  Allocation Account--Direct 
        Obligations: Other services.....           3           3           3
99.5  Below reporting threshold.........          -1
                                           ---------   ---------  ----------

99.9    Total obligations...............         156         174         177
---------------------------------------------------------------------------

                              Personnel Summary

----------------------------------------------------------------------------
Identification code 99-4450-0-3-803      1994 actual   1995 est.   1996 est.
----------------------------------------------------------------------------
    Total compensable workyears:
1005  Full-time equivalent of overtime 
        and holiday hours...............          38          38          38
1011  Exempt Full-time equivalent 
        employment......................       1,650       1,659       1,665
---------------------------------------------------------------------------
    \1\ Includes 32, 32, and 31 positions respectively for the Office of 
Inspector General.