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

        This chapter contains descriptions of and data on the Government-
    sponsored enterprises listed below. These enterprises were established
    and chartered by the Federal Government for public policy purposes. They
    are not included in the Federal budget because they are private
    companies. However, because of their public purpose, 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 Federal National Mortgage Association and the Federal Home
            Loan Mortgage Corporation provide   assistance to the secondary
            market for residential mortgages. Both are supervised by the
            Department of Housing and Urban Development  for  their  roles
            in helping to finance low-, moderate-, and middle-income
            housing; both are regulated for financial safety and soundness
            by the Office of Federal Housing Enterprise Oversight.

        --Institutions of the Farm Credit System the 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,
            insurance companies, and credit unions in providing financing
            for housing and community development and are supervised by the
            Federal Housing Finance Board.

                       STUDENT LOAN MARKETING ASSOCIATION

                       Student Loan Marketing Association

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-1500              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........      14,023       5,989       9,146
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....      14,023       5,989       9,146
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      29,468      37,797      33,870
    1231  Disbursements: Direct loan
            disbursements...................      14,023       8,989       9,146
          Repayments:

    1251    Repayments and prepayments......      -3,986      -4,125      -3,364
    1252    Proceeds from loan asset sales
              or discounted.................      -1,971      -9,000     -12,000
    1264  Write-offs for default: Other
            adjustments, net................         263         209         188
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      37,797      33,870      27,840
    ---------------------------------------------------------------------------

        The Student Loan Marketing Association (Sallie Mae) was created as a
    shareholder-owned government sponsored enterprise (GSE) 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 was privatized in 1997 pursuant to the authority
    granted by the Student Loan Marketing Association Reorganization Act of
    1996. The GSE is a wholly owned subsidiary of SLM Holding Corporation
    and must wind down and be liquidated by September 30, 2008. Under
    legislation passed in 1998, if SLM Holding Corporation affiliates with a
    depository institution, the GSE must wind down within two years (unless
    such period is extended by the Department of the Treasury).
        The GSE 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, the GSE is authorized, at the request of Federal
    officials, to make insured loans directly to students. The GSE is
    authorized to advance funds to State agencies that will provide loans to
    students. The GSE 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.
        The GSE 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.
        Generally, under the privatization legislation, the GSE cannot
    engage in any new business activities or acquire any additional program
    assets other than purchasing student loans and serving, at the request
    of the Secretary of Education, as a lender-of-last-resort. The GSE can
    continue to make warehousing advances under contractual commitments
    existing on August 7, 1997.
        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. The 1999 loan volume amounts reflect the
    purchase of the Nellie Mae Corporation, including its $2.6 billion
    student loan portfolio.

                              ANNUAL LOAN ACTIVITY

                            [In millions of dollars]

                                         1999 actual  2000 est.   2001 est.
    Guaranteed student loans:
      Stafford:
        Purchased.......................      10,716       7,043       7,292
        Warehoused......................         713         300         150
      PLUS/SLS: Purchased...............       1,121         732         758
      Consolidations....................         909         594         614
      Health professions loans;
        Purchased.......................          69
                                        ------------------------------------
          Subtotal, Guaranteed student
            loans.......................      13,528       8,669       8,814
    Other...............................         495         320         332
                                        ------------------------------------
          Total.........................      14,023       8,989       9,146
                                        ====================================

        Financing.--The GSE is financed by borrowing in the private debt
    markets and securitizing its assets. The GSE must wind down and be
    liquidated by September 30, 2008. All obligations of the GSE remaining
    upon liquidation must be placed into a defeasance trust. The GSE's
    outstanding adjustable rate cumulative preferred stock is required to be
    redeemed prior to such date.
        The financial data contained in this material relating to future
    periods represents estimates that have been prepared specifically for
    inclusion in the President's Budget. These data should not be viewed as
    official forecasts of the corporation's future position, nor should they
    be used as a basis for making financial or investment decisions relating
    to the corporation. The data have been developed on the basis of certain
    economic assumptions that are subject to periodic review and revision.
    Consequently, the estimates are subject to forecast error and actual
    results from future business operations are likely to differ from these
    data.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-1500            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       3,116          2,854
    0102  Expense...........................      -2,595         -2,391
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............         521            463
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-1500            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Treasury securities, par........       1,404          1,401         1,429          1,458
    1104    Agency securities, par..........
    1106    Receivables, net................         669            942           848            678
    1201  Investments in other securities,
            net.............................       2,728          2,009         1,543            864
    1206  Receivables, net..................         706            684           616            431
    1207  Advances and prepayments..........          15             16            17             18
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............      29,586         37,947        34,005         27,951
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -118           -150          -135           -111
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................      29,468         37,797        33,870         27,840
    1801  Cash and other monetary assets....          50             38            40             42
    1803  Property, plant and equipment, net         182            172           180            189
    1901  Other assets......................         358            435           457            480
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      35,580         43,494        39,000         32,000
        LIABILITIES:
    2202  Interest payable..................         300            293           264            238
    2203  Debt..............................      33,517         41,591        37,125         30,215
    2207  Other.............................         883            677           711            747
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      34,700         42,561        38,100         31,200
        NET POSITION:
    3300  Invested Capital..................         880            933           900            800
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         880            933           900            800
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      35,580         43,494        39,000         32,000
    -----------------------------------------------------------------------------------------------

                      FEDERAL NATIONAL MORTGAGE ASSOCIATION

                               Portfolio Programs

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-2500              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........     201,660     133,917     152,021
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....     201,660     133,917     152,021
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     393,210     518,629     599,719
          Disbursements:

    1231    Direct loan disbursements.......     208,542     132,281     151,144
    1232    Purchase of loans assets........      19,258         335         362
    1251  Repayments: Repayments and
            prepayments.....................    -100,348     -51,525     -59,117
    1264  Write-offs for default: Other
            adjustments, net................      -2,033
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     518,629     599,719     692,108
    ---------------------------------------------------------------------------

        The Federal National Mortgage Association (Fannie Mae) is a
    federally-chartered, privately-owned company with a public mission to
    provide stability and to increase the liquidity of the residential
    mortgage market and to help increase the availability of mortgage credit
    to low- and moderate-income families and in underserved areas. 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. As of September 30, 1999,
    Fannie Mae held a net mortgage portfolio totaling $504 billion and had
    net outstanding guaranteed mortgage-backed securities of over $670
    billion.
        Through a federal charter, Congress has equipped Fannie Mae with
    certain attributes to help it carry out its public mission. 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 conditional
    access to a $2.25 billion line of credit from the U.S. Treasury.
    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, is 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.''
        In December 1995, the U.S. Department of Housing and Urban
    Development (HUD) set affordable housing goals for 1996-1999 and
    established the requirements for counting mortgage purchases to low- and
    moderate-income families and families living in underserved areas with
    specific census tract and minority concentration requirements. Under the
    regulations, the low- and moderate-income goal is 42 percent; the
    geographically targeted goal is 24 percent and the special affordable
    housing goal is 14 percent. Fannie Mae exceeded all of the housing goals
    in 1998 with low- and moderate-income purchases at 44.1 percent,
    geographically targeted purchases at 27 percent, and special affordable
    housing purchases at 14.3 percent.
        HUD is publishing a proposed rule for public comment that would set
    new affordable housing goals for the period covering 2000 to 2003. After
    a transition period, the goals would be 50 percent for the low- and
    moderate-income goal, 31 percent for the geographically targeted goal,
    and 20 percent for the special affordable housing goal.
        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 has statutory
    responsibility 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 September 1999 was $17.9
    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.
        Through the third quarter of 1999, Fannie Mae earned $2.87 billion.
        Income and retained earnings for the years ended September 30, 1998
    and 1999 follow (in thousands of dollars):

                                              1998 actual     1999 actual
    Gross revenue...........................    30,510,100      35,255,700
    Gross expenses..........................    25,885,200      30,289,400
                                             -------------  --------------

      Income before Federal income tax......     4,624,900       4,966,300
    Federal income tax......................     1,365,800       1,280,300
                                             -------------  --------------

      Net income............................     3,259,100       3,686,000
    Retained earnings, beginning of year....    12,766,100      15,064,600
    Dividends on common stock...............     (960,600)     (1,076,500)
                                             -------------  --------------

      Retained earnings, end of year........    15,064,600      17,674,100
                                             -------------  --------------

        The financial data contained in this material relating to future
    periods represent estimates that have been prepared specifically for
    inclusion in the President's Budget. These data should not be viewed as
    an official forecast of the corporation's future position, nor should
    they be used as a basis for making financial or investment decisions
    relating to the corporation. The data have been developed on the basis
    of certain economic assumptions that are subject to periodic review and
    revision. Consequently, the estimates are subject to forecast error and
    actual results from future business operations are likely to differ from
    these data.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-2500            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Fund balances.....................          19              4
          Investments in US securities:

    1102    Treasury securities, par........         123             34
    1104    Other...........................      68,714         36,498        44,772         48,800
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans (net of discount)..     362,478        477,130       580,250        670,984
    1602    Federal Agencies................      13,854         27,367         4,164          4,081
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -254           -194          -188           -190
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................     376,078        504,303       584,226        674,875
    1801  Cash and other monetary assets....       9,974         10,513        10,622         12,029
    1803  Property, plant and equipment, net         191            180
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     455,099        551,532       639,620        735,704
        LIABILITIES:
    2101  Accounts payable..................         400            254
    2102  Accrued interest payable..........       5,544          6,574         7,198          8,341
    2105  Other.............................           8             11
    2203  Debt..............................     430,582        524,879       609,566        702,060
    2204  Estimated liability for loan
            guarantees......................       3,135          2,311         3,035          2,863
    2206  Pension and other actuarial
            liabilities.....................         225            288
    2207  Subtotal, Federal taxes payable...         353            160
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     440,247        534,477       619,799        713,264
        NET POSITION:
          Cumulative results of operations:

    3300    Cumulative results of operations      15,065         17,674        20,730         24,170
    3300    Change in Stockholder Equity....        -213           -619          -909         -1,730
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      14,852         17,055        19,821         22,440
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position     455,099        551,532       639,620        735,704
    -----------------------------------------------------------------------------------------------

                             mortgage-backed securities

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-2501              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........     297,503     208,781     228,595
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....     297,503     208,781     228,595
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     798,460     938,484   1,033,975
    1231  Disbursements: Direct loan
            disbursements...................     348,792     208,781     228,595
    1251  Repayments: Repayments and
            prepayments.....................    -208,768    -113,290    -122,309
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     938,484   1,033,975   1,140,261
    ---------------------------------------------------------------------------

        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 financial data contained in this material relating to future
    periods represent estimates that have been prepared specifically for
    inclusion in the President's Budget. These data should not be viewed as
    an official forecast of the corporation's future position, nor should
    they be used as a basis for making financial or investment decisions
    relating to the corporation. The data have been developed on the basis
    of certain economic assumptions that are subject to periodic review and
    revision. Consequently, the estimates are subject to forecast error and
    actual results from future business operations are likely to differ from
    these data.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-2501            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............     799,006        939,092     1,034,576      1,140,862
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -546           -608          -601           -600
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................     798,460        938,484     1,033,975      1,140,261
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     798,460        938,484     1,033,975      1,140,261
        LIABILITIES:
    2104  Resources payable.................     798,460        938,484     1,033,975      1,140,261
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     798,460        938,484     1,033,975      1,140,261
    -----------------------------------------------------------------------------------------------

                     FEDERAL HOME LOAN MORTGAGE CORPORATION

                               Portfolio Programs

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-4420              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........     156,862      69,700      77,500
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....     156,862      69,700      77,500
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     216,522     315,968     355,811
    1231  Disbursements: Direct loan
            disbursements...................     156,862      69,700      77,500
    1251  Repayments: Repayments and
            prepayments.....................     -57,416     -29,857     -37,492
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     315,968     355,811     395,819
    ---------------------------------------------------------------------------

        The Federal Home Loan Mortgage Corporation (Freddie Mac), is a
    federally-charted, private shareholder-owned company with a public
    mission to provide stability and increase the liquidity of the
    residential mortgage market, and to help increase the availability of
    mortgage credit to low- and moderate-income families and in underserved
    areas. 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. As of September 30, 1999,
    Freddie Mac held a mortgage portfolio totaling $315 billion and had
    outstanding guaranteed mortgage-backed securities of $739 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
    conditional access to a $2.25 billion line of credit from the U.S.
    Treasury. Securities guaranteed by Freddie Mac and debt issued by the
    company are explicitly 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; and 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. The Federal Housing Enterprise Financial
    Safety and Soundness Act of 1992 (``The Act'') added to Freddie Mac's
    public mission the promotion of ``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 Act also established 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. In
    December 1995, the U.S. Department of Housing and Urban Development
    (HUD) affordable housing goals for 1996-1999 and established the
    requirements for counting mortgage purchases for meeting these goals.
    The goals provide that, of the total number of dwelling units financed
    by Freddie Mac's mortgage purchases, 42 percent meet the low- and
    moderate-income goal, 24 percent meet the geographically targeted goal,
    and 14 percent meet the special affordable goal.
        Freddie Mac exceeded all of the housing goals in 1998 with low- and
    moderate-income purchases of 42.9 percent, geographically targeted
    purchases of 26.1 percent, special affordable purchases of 15.9 percent,
    and the multifamily portion of the special affordable purchases of $2.7
    billion in qualifying multifamily mortgages.
        HUD is publishing a proposed rule for public comment that would set
    new affordable housing goals for the period covering 2000 to 2003. After
    a transition period, the goals would be 50 percent for the low- and
    moderate-income goal, 31 percent for the geographically targeted goal,
    and 20 percent for the special affordable housing goal.
        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 appointed by the
    President. 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.
        Through the third quarter of 1999, Freddie Mac recorded net income
    of $1.63 billion.
        The financial data contained in this material relating to future
    periods represent estimates that have been prepared specifically for
    inclusion in the President's budget. These data should not be viewed as
    an official forecast of the corporation's future position, nor should
    they be used as a basis for making financial or investment decisions
    relating to the corporation. The data have been developed on the basis
    of certain economic assumptions that are subject to periodic review and
    revision. Consequently, the estimates are subject to forecast error and
    actual results from future business operations are likely to differ from
    these data.
        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.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4420            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201  Investments in other securities,
            net.............................      30,825         26,515        48,265         49,965
    1206  Receivables, net..................      12,271         18,643        18,532         18,413
    1207  Advances and prepayments..........         255            487           507            507
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Retained mortgage inventory.....     216,522        315,968       355,811        395,819
    1603    Allowances (-)..................        -294           -467          -742         -1,179
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................     216,228        315,501       355,069        394,640
    1801  Cash and other monetary assets....       1,286          1,992         2,000          2,000
    1803  Property, plant and equipment, net       1,153          1,251         1,384          1,571
    1901  Other assets......................       1,238            496         1,351          1,856
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     263,256        364,885       427,108        468,952
        LIABILITIES:
    2101  Accounts payable..................           1            115
    2201  Accounts payable..................         804          2,146         3,002          2,951
    2202  Interest payable..................       1,543          2,311         3,373          4,366
    2203  Debt..............................     236,387        341,014       403,441        442,529
    2206  Pension and other actuarial
            liabilities.....................          13             19            28             41
          Other:

    2207    Accrued payroll and benefits....          62             82           108            142
    2207    Accrued annual leave (funded or
              unfunded).....................           1              2             4              8
    2207    Other Liabilities...............      15,157          8,056         4,117          4,266
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     253,968        353,745       414,073        454,303
        NET POSITION:
    3100  Invested capital..................       9,288         11,140        13,035         14,649
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       9,288         11,140        13,035         14,649
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position     263,256        364,885       427,108        468,952
    -----------------------------------------------------------------------------------------------

                           Mortgage-Backed Securities

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-4440              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........     270,798     162,000     188,900
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....     270,798     162,000     188,900
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     490,687     529,213     616,832
    1231  Disbursements: Direct loan
            disbursements...................     270,798     162,000     188,900
    1251  Repayments: Repayments and
            prepayments.....................    -232,272     -74,381     -87,360
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     529,213     616,832     718,372
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4440            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1901  Underlying Mortgages..............     490,687        529,231       616,832        718,372
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     490,687        529,231       616,832        718,372
        LIABILITIES:
    2104  Resources payable.................     490,687        529,213       616,832        718,372
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     490,687        529,213       616,832        718,372
    -----------------------------------------------------------------------------------------------

                               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)
    Agricultural Credit Bank (ACB), (2) Farm Credit Banks (FCB), and (3)
    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 Financial Assistance Corporation (FAC) debt
    obligations (see discussion of FAC elsewhere in this document).

                            Agricultural Credit Bank

        On July 1, 1999, the remaining cooperative entity, the St. Paul Bank
    for Cooperatives, merged into 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 Bank for Cooperatives (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 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). CoBank also makes loans to rural
    utilities, including telecommunications companies and it provides
    international loans for the financing of agricultural exports.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-4130              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........      49,522      50,000      50,000
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....      49,522      50,000      50,000
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      16,612      18,093      18,545
    1231  Disbursements: Direct loan
            disbursements...................      49,503      50,000      50,000
    1251  Repayments: Repayments and
            prepayments.....................     -47,884     -49,532     -48,808
    1263  Write-offs for default: Direct
            loans...........................        -138         -16         -16
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      18,093      18,545      19,721
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4130            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    0101  Total interest income.............       1,460          1,424         1,493          1,592
    0102  Total interest expense............      -1,103         -1,063        -1,116         -1,191
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............         357            361           377            401
    0111  Other income......................          35             46            49             52
    0112  Other expense.....................        -201           -323          -246           -249
                                            ------------ --------------  ------------  -------------
    0115  Net income or loss (-)............        -166           -277          -197           -197
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................       1,495          1,470         1,542          1,644
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................      -1,304         -1,386        -1,362         -1,440
                                            ------------ --------------  ------------  -------------
    0195  Total income or loss (-)..........         191             84           180            204
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........         191             84           180            204
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4130            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201  Cash and investment securities....       3,892          3,755         3,848          4,093
    1206  Accrued interest receivable on
            loans...........................         190            182           187            198
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............      16,612         18,093        18,545         19,721
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -294           -314          -322           -342
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................      16,318         17,779        18,223         19,379
    1803  Property, plant and equipment, net         204            159           178            178
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      20,604         21,875        22,436         23,848
        LIABILITIES:
    2104  Resources payable.................         206            167           174            178
          Accounts payable:

    2201    Consolidated systemwide and
              other bank bonds..............      18,079         19,468        19,954         21,220
    2201    Notes payable and other
              interest-bearing liabilities..         437            351           360            383
    2202  Accrued interest payable..........         186            228           234            248
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      18,908         20,214        20,722         22,029
        NET POSITION:
    3300  Cumulative results of operations..       1,697          1,660         1,714          1,818
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       1,697          1,660         1,714          1,818
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      20,605         21,874        22,436         23,847
    -----------------------------------------------------------------------------------------------

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

    -----------------------------------------------------------------------------------------------
                          99-4130            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........       1,582          1,697         1,660          1,714
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................           7              5             5              5
      Capital stock and participations
        retired.............................          40             80            90             65
      Net income............................         191             84           179            204
      Cash/Dividends/Patronage Distributions         -48            -27           -40            -40
      Other, net............................           5           (19)             0              0
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............       1,697          1,660         1,714          1,818
    -----------------------------------------------------------------------------------------------

                             Financing Activities (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4130            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of outstanding system
        obligations.........................      18,573         18,079        19,468         19,954
                                            ============ ==============  ============  =============

      Consolidated systemwide and other bank
        bonds issued........................       9,686         11,875        12,000         12,000
      Consolidated systemwide and other bank
        bonds retired.......................      11,073          9,657        11,913         11,235
      Consolidated systemwide notes, net....         893           -829           400            500
                                            ------------ --------------  ------------  -------------
    Ending balance of outstanding system
        obligations.........................      18,079         19,468        19,954         21,220
    -----------------------------------------------------------------------------------------------

                                Farm Credit Banks

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-4160              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........      38,051      40,530      39,957
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....      38,051      40,530      39,957
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      44,061      45,823      46,966
    1231  Disbursements: Direct loan
            disbursements...................      38,015      40,483      39,402
    1251  Repayments: Repayments and
            prepayments.....................     -36,182     -39,340     -37,429
    1264  Write-offs for default: Other
            adjustments, net................         -71
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      45,823      46,966      48,939
    ---------------------------------------------------------------------------
        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, Sacramento, California; 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 October 1, 1999 provided
    funds to 50 Federal Land Credit Associations (FLCA), 60 Production
    Credit Associations (PCAs), and 49 Agricultural Credit Associations
    (ACAs). These direct lender associations, in turn, make short-term
    production loans (PCAs and ACAs) and long-term real estate loans (FLCAs
    and ACAs) to eligible farmers and ranchers. Also, as of October 1, 1999,
    18 Federal Land Bank Associations originated and serviced long-term real
    estate loans for 2 of the 6 FCBs. 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)

    -----------------------------------------------------------------------------------------------
                          99-4160            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    0101  Total interest income.............       3,348          3,317         3,413          3,562
    0102  Total interest expense............      -2,652         -2,662        -2,885         -3,085
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............         696            655           528            477
    0111  Other income......................          55             59            41             43
    0112  Other expenses....................        -279           -325          -251           -244
                                            ------------ --------------  ------------  -------------
    0115  Net income or loss (-)............        -224           -266          -210           -201
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................       3,403          3,376         3,454          3,605
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................      -2,931         -2,987        -3,136         -3,329
                                            ------------ --------------  ------------  -------------
    0195  Total income or loss (-)..........         472            389           318            276
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........         472            389           318            276
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4160            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201  Cash and investment securities....       8,727          9,590         9,554          9,636
    1206  Accrued Interest Receivable.......         809            790           698            703
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............      44,061         45,823        46,967         48,984
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -446           -358          -254           -244
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................      43,615         45,465        46,713         48,740
    1803  Property, plant and equipment, net         629            336           332            334
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      53,780         56,181        57,297         59,413
        LIABILITIES:
    2104  Resources payable.................         196            222           248            249
          Accounts payable:

    2201    Consolidated systemwide and
              other bank bonds..............      47,714         50,087        51,905         54,074
    2201    Notes payable and other
              interest-bearing liabilities..         901            902           324            192
    2202  Accrued interest payable..........         502            547           534            548
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      49,313         51,758        53,011         55,063
        NET POSITION:
    3300  Cumulative results of operations..       4,467          4,423         4,285          4,350
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       4,467          4,423         4,285          4,350
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      53,780         56,181        57,296         59,413
    -----------------------------------------------------------------------------------------------

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

    -----------------------------------------------------------------------------------------------
                          99-4160            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........       4,404          4,467         4,423          4,285
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................          67             68            92             36
      Capital stock and participations
        retired.............................          87            124           184             18
      Surplus Retired.......................                                       85
      Net income............................         472            389           318            276
      Cash/Dividends/Patronage Distributions       (383)          (342)         (267)          (230)
      Other, net............................          -7            -35           -12
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............       4,467          4,423         4,285          4,350
    -----------------------------------------------------------------------------------------------

                  Financing Activities (in millions of dollars)

        --------------------------------------------------------------------
                        99-4160                 1998 actual     1999 actual      2000 est.      2001 est.
        --------------------------------------------------------------------
    Beginning balance of outstanding system
      obligations...........................           43,588          47,714         50,087          53,646
                                               ==============  ==============  =============  ==============

      Consolidated systemwide and other bank
        bonds issued........................           51,216          43,119         44,444          45,020
      Consolidated systemwide and other bank
        bonds retired.......................           48,689          39,878         38,882          41,175
      Consolidated systemwide notes, net....            1,599            -868         -2,003              34
                                               --------------  --------------  -------------  --------------

    Ending balance of outstanding system
      obligations...........................           47,714          50,087         53,646          57,524
    -------------------------------------------------------------------------------------------------------

                    Federal Agricultural Mortgage Corporation

        Farmer Mac is authorized under the Farm Credit Act of 1971 (the
    Act), as amended by the Agricultural Credit Act of 1987, to create a
    secondary market for agricultural real estate and rural home mortgages
    that meet minimum credit standards. 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 farmer program, rural business
    and community development loans guaranteed by the USDA. The Farmer Mac
    title was further amended in 1991 to clarify Farmer Mac's authority to
    issue debt obligations, provide for the establishment of minimum capital
    standards, and establish the Office of Secondary Market Oversight at the
    Farm Credit Administration (FCA) and expand the agency's rulemaking
    authority. Most recently, the Farm Credit System Reform Act of 1996
    amended the Farmer Mac title to allow Farmer Mac to purchase loans
    directly from lenders and to issue and guarantee mortgage-backed
    securities without requiring that a minimum cash reserve or subordinated
    (first loss) interest be maintained by the lenders, poolers or investors
    as had been required under its original authority. The 1996 Act also
    increased Farmer Mac's capital requirements over time and expanded the
    regulatory authorities of the FCA.
        Farmer Mac operates through two programs, ``Farmer Mac I,'' which
    involves mortgage loans secured by first liens on agricultural real
    estate or rural housing (qualified loans), and ``Farmer Mac II,'' which
    involves guaranteed portions of USDA guaranteed loans. Farmer Mac
    operates by: (i) purchasing, or committing to purchase, newly originated
    or existing qualified loans or guaranteed portions from lenders; (ii)
    purchasing ``AgVantage'' bonds backed by qualified loans or guaranteed
    portions from lenders; and (iii) exchanging qualified loans or
    guaranteed portions for guaranteed securities. Loans purchased by Farmer
    Mac are aggregated into pools that back Farmer Mac guaranteed securities
    which are held by Farmer Mac or sold into the capital markets. Farmer
    Mac is intended to attract new capital for financing qualified loans and
    guaranteed portions, foster increased long-term, fixed-rate lending, and
    provide greater liquidity to agricultural and rural lenders.
        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 by commercial lenders. Five are appointed by the
    President, subject to Senate confirmation.

                                    Financing

        Financial support and funding for Farmer Mac's operations come from
    several sources: sale of common and preferred stock; issuance of debt
    obligations; gain on sale of guaranteed loan-backed securities;
    guarantee fees; and income from investments. Under procedures specified
    in the Act, Farmer Mac may issue obligations to the U.S. Treasury in a
    cumulative amount not to exceed $1.5 billion to fulfill its guarantee
    obligations.
        Farmer Mac must maintain core and risk based capital as provided in
    the Act and FCA regulations.
        Available funds of Farmer Mac are invested in U.S. agency securities
    or other high-grade commercial investments. 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 qualified loans or pools of qualified
    loans. These securities are not guaranteed by the United States, and are
    not ``government securities''. The 1996 Act removed requirements that
    loan originators or other third parties maintain cash reserves or
    subordinated securities in connection with the issuance of Farmer Mac's
    guaranteed securities.
        Farmer Mac is subject to reporting requirements under securities
    laws and its guaranteed mortgage-backed securities are subject to
    registration with the Securities and Exchange Commission under the 1933
    and 1934 Securities Acts.

                                   Regulation

        Farmer Mac is federally regulated by the FCA's Office of Secondary
    Market Oversight (OSMO). OSMO is responsible for examination of and
    rulemaking for Farmer Mac, including the establishment of risk-based
    capital requirements by regulation. On November 12, 1999, FCA published
    a notice of proposed rulemaking, stress test, and a request for public
    comments. Following the comment period, a final risk-based capital rule
    and stress test will be developed by FCA and published in the Federal
    Register. The 1996 amendments to the Farmer Mac title expanded FCA's
    regulatory authority to include provisions for establishing a
    conservatorship or receivership, if necessary, and provided for
    increased levels of core capital phased in over three years. As of
    September 30, 1999, Farmer Mac's total capital exceeds regulatory and
    statutory requirements. Lastly, in connection with the enactment of the
    1996 Act, Congress requested, during Farmer Mac's transition to the
    expanded capital requirements thereunder, that FCA, in a cooperative
    effort with the U.S. Treasury, monitor Farmer Mac's financial condition
    and report to Congress semiannually.

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-4180              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    2111  Limitation on guaranteed loans....       1,662       2,077       2,597
    2131  Guaranteed loan commitments.......       1,662       2,077       2,597
                                               ---------   ---------  ----------
    2150  Total guaranteed loan commitments.       3,324       4,154       5,194
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       1,048       2,057       3,318
    2231  Disbursements of new guaranteed
            loans...........................       1,662       2,077       2,597
    2251  Repayments and prepayments........        -653        -816      -1,021
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       2,057       3,318       4,894
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       2,057       3,318       4,894
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4180            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        Revenue:
    0101  Net Interest Income...............           6             14            18             22
    0101  Guarantee Fee Income..............           2              6             8             10
    0101  Gain on Security Issuance.........           2
    0102  Expense...........................          -7            -14           -18            -23
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............           3              6             8              9
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........           3              7             9              9
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4180            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201  Investment in securities..........         622            853           853            853
    1206  Receivables, net..................           2              3             3              4
    1207  Advances and prepayments..........           5             12            15             18
          Net value of assets related to
              direct loans receivable:

    1401    Direct loans receivable, gross..         614          1,278         1,598          1,998
    1402    Interest receivable.............          17             30            37             46
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....         631          1,308         1,635          2,044
    1801  Cash and other monetary assets....         435            506           476             89
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,695          2,682         2,982          3,008
        LIABILITIES:
    2201  Accounts payable..................           8              4             4              6
    2202  Interest payable..................           7             12            15             18
    2203  Debt..............................       1,598          2,573         2,861          2,870
    2204  Liabilities for loan guarantees...           3              6             7              9
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       1,616          2,595         2,887          2,903
        NET POSITION:
    3300  Invested capital..................          79             87            95            105
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          79             87            95            105
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,695          2,682         2,982          3,008
    -----------------------------------------------------------------------------------------------

                          FEDERAL HOME LOAN BANK SYSTEM

                             Federal Home Loan Banks

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
                        99-4200              1999 actual   2000 est.   2001 est.
    ----------------------------------------------------------------------------
    1111  Limitation on direct loans........
    1131  Direct loan obligations...........   2,181,262   2,181,262   2,181,262
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....   2,181,262   2,181,262   2,181,262
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     245,647     366,842     368,885
    1231  Disbursements: Direct loan
            disbursements...................   2,181,262   2,181,262   2,181,262
    1251  Repayments: Repayments and
            prepayments.....................   2,060,067   2,179,219   2,179,219
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     366,842     368,885     370,928
    ---------------------------------------------------------------------------

        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 (the Act). 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. To accomplish
    this mission, the FHLBanks make loans, called advances, and provide
    other credit products and services to their 7,226 member commercial
    banks, savings associations, insurance companies, and credit unions.
    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. However, ``community
    financial institutions'' may also use long-term advances to finance
    small businesses, small farms, and small agribusinesses. Additionally,
    specialized advance programs provide funds for community reinvestment
    and affordable housing programs. All regulated financial depositories,
    ``community financial institutions,'' 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 the District of
    Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the
    Northern Mariana Islands.
        Advances outstanding on September 30, 1999 totaled approximately
    $367 billion, a net increase of approximately $120 billion from the
    September 30, 1998 level of $246 billion.
        The principal source of funds for the lending operation is the sale
    of consolidated obligations to the public. On September 30, 1999, $477
    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 members' deposits and
    capital. Deposits totaled $16 billion and total capital amounted to $27
    billion as of September 30, 1999. Funds not immediately needed for
    advances to members are invested.
        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 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 are the assessments by the Finance Board to cover its
    administrative and other costs. The Finance Board's budget and
    expenditures, however, are included in the budget of the United States.
         The Act, as amended in 1989, requires each FHLBank to operate an
    Affordable Housing Program (AHP). Each FHLBank provides subsidies in the
    form of direct grants or below-market rate advances for members that use
    the funds for qualifying affordable housing projects. The FHLBank System
    sets aside for its AHPs the greater of $100 million annually or 10
    percent of the preceding year's net income. The Act also requires that
    the FHLBanks contribute 20 percent of net earnings annually to assist in
    the payment of interest on bonds issued by the Resolution Funding
    Corporation.
        The forecast data for 2000 and 2001 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)

    -----------------------------------------------------------------------------------------------
                          99-4200            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................      20,408         24,596        24,596         24,596
    0102  Expense (excludes payments to
            REFCORP)........................     -18,810        -22,553       -22,553        -22,553
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............       1,598          2,043         2,043          2,043
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
                          99-4200            1998 actual    1999 actual     2000 est.      2001 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Treasury securities, net........         433            233           233            233
    1201  Investments in other securities,
            net.............................     135,167        155,471       155,471        155,471
    1206  Accounts receivable...............       5,944          8,057         8,057          8,057
    1401  Net value of assets related to
            direct loans receivable: Direct
            loans receivable, gross.........     246,107        366,842       368,885        370,928
    1801  Cash and other monetary assets....         422            399           399            399
    1803  Property, plant and equipment, net         146             88            88             88
    1901  Other assets......................         175            261           261            261
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     388,394        531,351       533,394        535,437
        LIABILITIES:
    2101  REFCORP and Affordable Housing
            Program.........................         510            580           580            580
    2201  Accounts payable..................         165             59            59             59
    2202  Interest payable..................       6,427          8,709         8,709          8,709
    2203  Debt..............................     336,262        477,472       477,472        477,472
          Other:

    2207    Deposit funds and other
              borrowings....................      23,550         16,147        16,147         16,147
    2207    Other...........................         354          1,452         1,452          1,452
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     367,268        504,419       504,419        504,419
        NET POSITION:
    3100  Invested capital..................      21,126         26,932        28,975         31,018
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      21,126         26,932        28,975         31,018
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position     388,394        531,351       533,394        535,437
    -----------------------------------------------------------------------------------------------