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

    [[Page 1245]]

                        GOVERNMENT-SPONSORED ENTERPRISES

        This chapter contains descriptions of the 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, and their securities are not backed by the full faith and
    credit of the Federal Government. However, because of their public
    purpose, detailed statements of financial 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 (Sallie Mae) is a for-
            profit financial corporation chartered by the 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.

        --The Federal Home Loan Banks assist thrift institutions, banks,
            insurance companies, and credit unions in providing financing
            for housing and community development.

        --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 rural
            housing loans as well as for farm and business loans guaranteed
            by the U.S. Department of Agriculture.

                       STUDENT LOAN MARKETING ASSOCIATION

                       Student Loan Marketing Association

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-1500-0-3-502      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1111  Limitation on direct loans........
    1131  Direct loan obligations...........      10,219
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....      10,219
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      27,923
    1231  Disbursements: Direct loan
            disbursements...................      10,219
          Repayments:

    1251    Repayments and prepayments......      -3,173
    1252    Proceeds from loan asset sales
              or discounted.................     -34,833
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         136
    ---------------------------------------------------------------------------
        Note: Consistent with Government-wide practice for GSEs, information for
    2005 and 2006 was not required to be collected.

        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.
    Sallie Mae was reorganized in 1997 pursuant to the authority granted by
    the Student Loan Marketing Association Reorganization Act of 1996. Under
    the Reorganization Act, the GSE became a wholly owned subsidiary of SLM
    Corporation and was required to be wound down and liquidated by January
    30, 2008. On June 30, 2004, SLM Corporation first purchased FFELP
    student loans through non-GSE affiliates and, as a result, the GSE was
    required by statute to terminate purchases of FFELP student loans.
    Accordingly, the GSE is no longer a source of liquidity for SLM
    Corporation for the purchase of student loans and the GSE-related
    financing activities have primarily consisted of refinancing the
    remainder of its assets through non-GSE sources. As of September 2004,
    SLM Corporation had substantially completed the wind down of the GSE
    and, on November 1, 2004, it sent notices to the Secretary of Education
    and the Secretary of the Treasury that it intended to wind down and
    dissolve the GSE on December 31, 2004, three years in advance of the
    statutory deadline. The dissolution was completed on December 29, 2004.
    All GSE debt that remains outstanding upon completion of these wind down
    activities will be defeased through the creation of a fully
    collateralized trust, consisting of cash and financial instruments
    backed by the full faith and credit of the U.S. Government with cash
    flows that provide for the interest and principal obligations of the
    defeased debt.
        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]
                                                          2004 actual
    Guaranteed student loans:
     Stafford:

      Purchased.......................................               7,152
      Warehoused......................................                  65
     PLUS/SLS: Purchased..............................               1,238
                                                      --------------------

       Subtotal, Guaranteed student loans.............               8,455
    Health processing loans: Purchased................                   0
    Other.............................................               1,764
                                                      --------------------

       Total..........................................              10,219
                                                      ====================

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-1500-0-3-502

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102

    Treasury securities, par

    1,731

    534

    1106

    Receivables, net

    429

    13

    1201

    Investments in other securities, net

    1,408

    4,001

    1206

    Receivables, net

    29

    6

    1207

    Advances and prepayments

    9

          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601

    Direct loans, gross

    27,971

    136

    1603

    Allowance for estimated uncollectible loans and interest (-)

    -48

    1699

    Value of assets related to direct loans

    27,923

    136

    1801

    Cash and other monetary assets

    12

    3

    1901

    Other assets

    224

    2

    1999

    Total assets

    31,765

    4,695

        LIABILITIES:
    2202

    Interest payable

    265

    54

    [[Page 1246]]

    2203

    Debt

    26,821

    2,058

    2207

    Other

    2,331

    834

    2999

    Total liabilities

    29,417

    2,946

        NET POSITION:
    3300

    Invested Capital

    2,348

    1,749

    3999

    Total net position

    2,348

    1,749

    4999

    Total liabilities and net position

    31,765

    4,695

    -----------------------------------------------------------------------------------------------

                      FEDERAL NATIONAL MORTGAGE ASSOCIATION

                               Portfolio Programs

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2500-0-3-371      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........
          Disbursements:

    1231    Direct loan disbursements.......
    1232    Purchase of loans assets........
    1251  Repayments: Repayments and
            prepayments.....................
    1264  Write-offs for default: Other
            adjustments, net................
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........
    ---------------------------------------------------------------------------
        Note: Consistent with Government-wide practice for GSEs, information for
    2005 and 2006 was not required to be collected.

        The Federal National Mortgage Association (Fannie Mae) is a
    Government-sponsored enterprise (GSE) in the housing finance market. On
    September 10, 2003 and October 16, 2003, the Secretaries of the
    Departments of Housing and Urban Development and the Treasury announced
    a proposal to strengthen regulation of all the housing GSEs, including
    Fannie Mae.
        As a housing GSE, 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.
        Through a Federal charter, the 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), and an exemption of its debt and mortgage securities from
    Securities and Exchange Commission registration requirements. An
    additional advantage is that the Secretary of the Treasury may purchase
    and hold up to $2.25 billion of securities issued by Fannie Mae under
    terms and conditions and at prices determined by the Secretary to be
    appropriate. Securities guaranteed and debt issued by Fannie Mae 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. The 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, the 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 (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.''

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-2500-0-3-371

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101

    Fund balances

          Investments in US securities:

    1102

    Treasury securities, par

    1104

    Other

          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601

    Direct loans (net of discount)

    1602

    Federal Agencies

    1603

    Allowance for estimated uncollectible loans and interest (-)

    1699

    Value of assets related to direct loans

    1801

    Cash and other monetary assets

    1803

    Property, plant and equipment, net

    1999

    Total assets

        LIABILITIES:
    2101

    Accounts payable

    2102

    Accrued interest payable

    2105

    Other

    2203

    Debt

    2204

    Estimated liability for loan guarantees

    2206

    Pension and other actuarial liabilities

    2207

    Subtotal, Federal taxes payable

    2999

    Total liabilities

        NET POSITION:
    3300

    Cumulative results of operations

    3300

    Change in Stockholder Equity

    3999

    Total net position

    4999

    Total liabilities and net position

    -----------------------------------------------------------------------------------------------

                             mortgage-backed securities

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2501-0-3-371      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........

    [[Page 1247]]

    1231  Disbursements: Direct loan
            disbursements...................
    1251  Repayments: Repayments and
            prepayments.....................
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........
    ---------------------------------------------------------------------------
        Note: Consistent with Government-wide practice for GSEs, information for
    2005 and 2006 was not required to be collected.

        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 Fannie Mae's perspective, these items are ``Amounts issued'' and
    ``Amounts passed through to the holders of securities'', respectively.
    Financial data for Fannie Mae is not presented here because Fannie Mae
    announced in December 2004 that it would have to restate financial
    results for 2001-2004.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-2501-0-3-371

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601

    Direct loans, gross

    1603

    Allowance for estimated uncollectible loans and interest (-)

    1699

    Value of assets related to direct loans

    1999

    Total assets

        LIABILITIES:
    2104

    Resources payable

    2999

    Total liabilities

    4999

    Total liabilities and net position

    -----------------------------------------------------------------------------------------------

                     FEDERAL HOME LOAN MORTGAGE CORPORATION

                               Portfolio Programs

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4420-0-3-371      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1131  Direct loan obligations...........
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........
    1231  Disbursements: Direct loan
            disbursements...................
    1251  Repayments: Repayments and
            prepayments.....................
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........
    ---------------------------------------------------------------------------
        Note: Consistent with Government-wide practice for GSEs, information for
    2005 and 2006 was not required to be collected.

        The Federal Home Loan Mortgage Corporation (Freddie Mac) is a
    Government-sponsored enterprise (GSE) in the housing finance market. On
    September 10, 2003 and October 16, 2003, the Secretaries of the
    Departments of Housing and Urban Development and the Treasury announced
    a proposal to strengthen regulation of all the housing GSEs, including
    Freddie Mac.
        As a housing GSE, Freddie Mac is a Federally-charted, shareholder-
    owned, private 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.
        Through a Federal charter, the 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), and an exemption for its debt and
    mortgage securities from Securities and Exchange Commission registration
    requirements. An additional advantage is that the Secretary of the
    Treasury may purchase and hold up to $2.25 billion of securities issued
    by Freddie Mac under terms and conditions and at prices determined by
    the Secretary to be appropriate. Securities guaranteed and debt issued
    by Freddie Mac are explicitly not backed by the full faith and credit of
    the U.S. Government. The common stock of the corporation is owned by
    private shareholders 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. The 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 serves as a conduit facilitating the flow of
    investment dollars from the capital markets to mortgage lenders, and
    ultimately, to homebuyers.
        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. In addition, FIRREA converted
    Freddie Mac's 60 million shares of non-voting, senior participating
    preferred stock into voting common stock.
        While financial data for 2003 is presented here, Freddie Mac
    announced on November 1, 2004 that it would not report full-year audited
    2004 results until March 31, 2005.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4420-0-3-371

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102

    Treasury securities, par

    1201

    Investments in other securities, net

    116,837

    1206

    Receivables, net

    9,987

          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601

    Direct loans, gross

    661,157

    1603

    Allowance for estimated uncollectible loans and interest (-)

    -183

    1699

    Value of assets related to direct loans

    660,974

    1801

    Cash and other monetary assets

    27,740

    1803

    Property, plant and equipment, net

    569

    1901

    Other assets

    20,606

    1999

    Total assets

    836,713

        LIABILITIES:
    2101

    Accounts payable

    6

    2202

    Interest payable

    5,352

    2203

    Debt

    757,004

    2207

    Other

    42,207

    2999

    Total liabilities

    804,569

    [[Page 1248]]

        NET POSITION:
    3100

    Appropriated capital

    32,144

    3999

    Total net position

    32,144

    4999

    Total liabilities and net position

    836,713

    -----------------------------------------------------------------------------------------------

                           Mortgage-Backed Securities

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4440-0-3-371      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1111  Limitation on direct loans........
    1131  Direct loan obligations...........
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........
    1231  Disbursements: Direct loan
            disbursements...................
    1251  Repayments: Repayments and
            prepayments.....................
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........
    ---------------------------------------------------------------------------
        Note: Consistent with Government-wide practice for GSEs, information for
    2005 and 2006 was not required to be collected.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4440-0-3-371

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
    1901

    Underlying Mortgages

    1999

    Total assets

        LIABILITIES:
    2104

    Resources payable

    2999

    Total liabilities

    -----------------------------------------------------------------------------------------------

                          FEDERAL HOME LOAN BANK SYSTEM

                             Federal Home Loan Banks

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code  99-4200-0-3-371    2004 actual    2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1111  Limitation on direct loans........
    1131  Direct loan obligations...........
                                            -----------  -----------  ----------
    1150  Total direct loan obligations.....
      -------------------------------------------------------------------------
        Cumulative balance of direct loans outstanding:
    1210  Outstanding, start of year........
    1231  Disbursements: Direct loan
            disbursements...................
    1251  Repayments: Repayments and
            prepayments.....................
    1264  Write-offs for default: Other
            adjustments, net................
                                            -----------  -----------  ----------
    1290    Outstanding, end of year........
    ----------------------------------------------------------------------------
        Note: Consistent with Government-wide practice for GSEs, information for
    2005 and 2006 was not required to be collected.

        The Federal Home Loan Bank System is a Government-sponsored
    enterprise (GSE) in the housing finance market. On September 10, 2003
    and October 16, 2003, the Secretaries of the Departments of Housing and
    Urban Development and the Treasury announced a proposal to strengthen
    regulation of all the housing GSEs, including the Federal Home Loan Bank
    System.

        The 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
    (Act). The 12 Federal Home Loan Banks (FHLBanks) are under the
    supervision of the Federal Housing Finance Board (FHFB). The common
    mission of FHLBanks is to facilitate the extension of credit through
    their members. To accomplish this mission, FHLBanks make loans, called
    advances, and provide other credit products and services to their 8,122
    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 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 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.

        The principal source of funds for the lending operation is the sale
    of consolidated obligations to the public. 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.
    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 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. FHLBank System
    sets aside for its AHPs the greater of $100 million annually or 10
    percent of net income. The Act, as amended in 1999, also requires that
    FHLBanks contribute 20 percent of net earnings annually to assist in the
    payment of interest on bonds issued by the Resolution Funding
    Corporation.

        In 2002, the Administration requested all GSEs, including FHLBanks,
    to voluntarily register their equity securities with the Securities and
    Exchange Commission (SEC). This voluntary registration is part of the
    Administration's efforts to have GSEs undergo the same scrutiny process
    as other corporate enterprises. While FHLBanks have still not registered
    with SEC, FHFB adopted a rule on June 23, 2004 that will require each
    FHLBank to register a class of its stock by June 30, 2005. (Freddie Mac
    similarly has failed to commence registration with SEC, in spite of its
    prior commitment to do so. Fannie Mae registered with the SEC effective
    March 31, 2003.)

        Financial data for the Federal Home Loan Banks (FHLBs) is not
    presented here because the FHLBs announced through their Office of
    Finance in December 2004 that the consolidated financial statements for
    the FHLBs for 2002 and 2003, and the first two quarters of 2004 will
    need to be restated.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4200-0-3-371

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102

    Treasury securities, net

    1201

    Investments in other securities, net

    1206

    Accounts receivable

    1401

    Net value of assets related to direct loans receivable: Direct loans
    receivable, gross

    1801

    Cash and other monetary assets

    [[Page 1249]]

    1803

    Property, plant and equipment, net

    1901

    Other assets

    1999

    Total assets

        LIABILITIES:
    2101

    REFCORP and Affordable Housing Program

    2202

    Interest payable

    2203

    Debt

    2207

    Deposit funds and other borrowings

    2207

    Other

    2999

    Total liabilities

        NET POSITION:
    3100

    Invested capital

    3999

    Total net position

    4999

    Total liabilities and net position

    -----------------------------------------------------------------------------------------------

                               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 financed by assessments of system institutions and the
    Federal Agricultural Mortgage Corporation. System banks finance loans
    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.

                            Agricultural Credit Bank

        CoBank, ACB is headquartered in Denver, Colorado and serves eligible
    cooperatives nationwide, and provides funding to Agricultural Credit
    Associations (ACAs) in two of its regions. CoBank, ACB is the only
    Agricultural Credit Bank (ACB) in the Farm Credit System. An ACB
    operates under statutory authority that combines the authorities of a
    Farm Credit Bank (FCB) and a Bank for Cooperatives (BC). In exercising
    its FCB authority, CoBank, ACB's charter limits its lending to ACAs
    located in the northeast and northwest regions of the country. 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)

    ----------------------------------------------------------------------------
    Identification code 99-4130-0-3-351      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1111  Limitation on direct loans........
    1131  Direct loan obligations...........      70,969      71,000      72,000
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....      70,969      71,000      72,000
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      23,463      23,270      24,433
    1231  Disbursements: Direct loan
            disbursements...................      70,928      71,000      72,000
    1251  Repayments: Repayments and
            prepayments.....................     -71,071     -69,794     -69,638
    1263  Write-offs for default: Direct
            loans...........................         -50         -43         -35
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      23,270      24,433      26,760
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4130-0-3-351

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201

    Cash and investment securities

    5,916

    6,877

    1206

    Accrued interest receivable on loans

    112

    117

          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601

    Direct loans, gross

    23,463

    23,269

    1603

    Allowance for estimated uncollectible loans and interest (-)

    -435

    -431

    1699

    Value of assets related to direct loans

    23,028

    22,838

    1803

    Property, plant and equipment, net

    428

    196

    1999

    Total assets

    29,484

    30,028

        LIABILITIES:
    2104

    Resources payable

    309

    388

    2201

    Consolidated systemwide and other bank bonds

    25,448

    26,040

    2201

    Notes payable and other interest-bearing liabilities

    1,003

    586

    2202

    Accrued interest payable

    132

    144

    2999

    Total liabilities

    26,892

    27,158

        NET POSITION:
    3300

    Cumulative results of operations

    2,592

    2,870

    3999

    Total net position

    2,592

    2,870

    4999

    Total liabilities and net position

    29,484

    30,028

    -----------------------------------------------------------------------------------------------

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

    -----------------------------------------------------------------------------------------------
                          99-4130            2003 actual    2004 actual     2005 est.      2006 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........   2,286,988      2,591,868     2,869,656      2,927,970
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................     229,149        200,063            98            149
      Capital stock and participations
        retired.............................     102,255         76,829       101,182        106,400
      Net income............................     256,453        277,865       282,197        287,881
      Cash/Dividends/Patronage Distributions     -92,275       -105,608      -122,799       -125,000
      Other, net............................      13,808        -17,703
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............   2,591,868      2,869,656     2,927,970      2,984,600
    -----------------------------------------------------------------------------------------------

                 Financing Activities (in thousands of dollars)

        --------------------------------------------------------------------
                        99-4130                 2003 actual     2004 actual      2005 est.      2006 est.
        --------------------------------------------------------------------
    Beginning balance of outstanding system
      obligations...........................       22,512,882      25,448,279     26,040,303      27,342,318
                                               ==============  ==============  =============  ==============

      Consolidated systemwide and other bank
        bonds issued........................       13,957,965       8,010,499      8,500,000      10,000,000
      Consolidated systemwide and other bank
        bonds retired.......................        8,973,747       6,707,741      7,297,985       7,495,970
      Consolidated systemwide notes, net....       -1,756,495        -597,642        100,000         100,000
      Other (Net)...........................         -292,326        -113,092
                                               --------------  --------------  -------------  --------------

    Ending balance of outstanding system
      obligations...........................       25,448,279      26,040,303     27,342,318      29,946,348
    -------------------------------------------------------------------------------------------------------

                                Farm Credit Banks

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4160-0-3-371      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    1111  Limitation on direct loans........
    1131  Direct loan obligations...........      79,858      75,715      78,775
                                               ---------   ---------  ----------
    1150  Total direct loan obligations.....      79,858      75,715      78,775
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      58,353      60,762      63,747
    1231  Disbursements: Direct loan
            disbursements...................      79,846      79,433      82,700
    1251  Repayments: Repayments and
            prepayments.....................     -77,431     -76,448     -79,651

    [[Page 1250]]

    1264  Write-offs for default: Other
            adjustments, net................          -6
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      60,762      63,747      66,796
    ---------------------------------------------------------------------------
        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.
    FCBs operate under statutory authority that combines the prior
    authorities of FLB and FICB. No merger occurred in the Jackson district
    in 1988 because 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, FICB of Jackson merged with FCB of Columbia on October 1,
    1993. Mergers and consolidations of FCBs across district lines that
    began in 1992 have continued to date. As a result of this restructuring
    activity, 4 FCBs, headquartered in the following cities, remain: AgFirst
    FCB, Columbia, South Carolina; AgriBank FCB, St. Paul, Minnesota; U.S.
    Ag Bank, FCB, Wichita, Kansas; and FCB of Texas, Austin, Texas.
        FCBs serve as discount banks and as of October 1, 2004 provided
    funds to 11 Federal Land Credit Associations (FLCA) and 81 Agricultural
    Credit Associations (ACAs). These direct lender associations, in turn,
    make short-term production loans and long-term real estate loans to
    eligible farmers and ranchers. 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 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 FLB's was repaid in 1947.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4160-0-3-371

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201

    Cash and investment securities

    13,931

    15,576

    1206

    Accrued Interest Receivable

    382

    418

          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601

    Direct loans, gross

    58,353

    60,762

    1603

    Allowance for estimated uncollectible loans and interest (-)

    -151

    -130

    1699

    Value of assets related to direct loans

    58,202

    60,632

    1803

    Property, plant and equipment, net

    408

    329

    1999

    Total assets

    72,923

    76,955

        LIABILITIES:
    2104

    Resources payable

    335

    235

    2201

    Consolidated systemwide and other bank bonds

    67,640

    71,078

    2201

    Notes payable and other interest-bearing liabilities

    409

    734

    2202

    Accrued interest payable

    355

    388

    2999

    Total liabilities

    68,739

    72,435

        NET POSITION:
    3300

    Cumulative results of operations

    4,184

    4,520

    3999

    Total net position

    4,184

    4,520

    4999

    Total liabilities and net position

    72,923

    76,955

    -----------------------------------------------------------------------------------------------

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

    -----------------------------------------------------------------------------------------------
                          99-4160            2003 actual    2004 actual     2005 est.      2006 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........   3,750,211      4,183,851     4,520,633      4,776,205
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................     517,671        431,832        30,193         31,313
      Capital stock and participations
        retired.............................     186,310        169,946           123
      Surplus Retired.......................         963           -276
      Net income............................     351,895        389,137       416,099        441,115
      Cash/Dividends/Patronage Distributions    -353,902       -313,854      -230,290       -250,512
      Other, net............................     105,249           -663        39,693          5,735
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............   4,183,851      4,520,633     4,776,205      5,003,856
    -----------------------------------------------------------------------------------------------

                 Financing Activities (in thousands of dollars)

        --------------------------------------------------------------------
                        99-4160                 2003 actual     2004 actual      2005 est.      2006 est.
        --------------------------------------------------------------------
    Beginning balance of outstanding system
      obligations...........................       53,785,021      67,415,911     71,047,982      75,137,321
                                               ==============  ==============  =============  ==============

      Consolidated systemwide and other bank
        bonds issued........................       55,508,867      32,343,885     42,086,804      46,658,492
      Consolidated systemwide and other bank
        bonds retired.......................       37,369,535      29,918,782     38,422,430      44,159,009
      Consolidated systemwide notes, net....       -4,283,442         985,180        424,965         324,000
                                               --------------  --------------  -------------  --------------

    Ending balance of outstanding system
      obligations...........................       67,415,911      71,077,982     75,137,321      77,960,804
    -------------------------------------------------------------------------------------------------------

                    Federal Agricultural Mortgage Corporation

                                  (Farmer Mac)

        Farmer Mac is authorized under the Farm Credit Act of 1971 (Act), as
    amended by the Agricultural Credit Act of 1987, to create a secondary
    market for agricultural real estate and rural home mortgages. 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 United States Department of Agriculture (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, 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 (1996 Act) 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
    poolers as had been required under its original authority. The 1996 Act
    expanded FCA's regulatory authority to include provisions for
    establishing a conservatorship or receivership, if necessary, and
    provided for increased core capital requirements at Farmer Mac phased in
    over three years.
        Farmer Mac operates through two core 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 the 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,

    [[Page 1251]]

    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; and net income from operations. 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.
        As of September 30, 2004, Farmer Mac's core capital exceeded
    statutory requirements. Additionally, Farmer Mac's regulatory capital
    (core capital plus the allowance for loan loses) exceeded the amount of
    required regulatory capital as determined by the risk-based capital
    rule, with which Farmer Mac was required to be in compliance on May 23,
    2002.

                                   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''.
        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 FCA's Office of Secondary
    Market Oversight (OSMO). OSMO is responsible for the supervision,
    examination of, and rulemaking for Farmer Mac.

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4180-0-3-351      2004 actual   2005 est.   2006 est.
    ----------------------------------------------------------------------------
    2111  Limitation on guaranteed loans....
    2131  Guaranteed loan commitments.......         830
                                               ---------   ---------  ----------
    2150  Total guaranteed loan commitments.         830
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       5,642       5,549       5,549
    2231  Disbursements of new guaranteed
            loans...........................         830
    2251  Repayments and prepayments........        -923
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       5,549       5,549       5,549
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..         830
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4180-0-3-351

    2003 actual

    2004 actual

    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201

    Investment in securities

    1,083

    949

    1206

    Receivables, net

    39

    54

    1207

    Advances and prepayments

    18

          Net value of assets related to
              direct loans receivable:

    1401

    Direct loans receivable, gross

    2,501

    2,244

    1402

    Interest receivable

    42

    38

    1499

    Net present value of assets related to direct loans

    2,543

    2,282

    1801

    Cash and other monetary assets

    513

    500

    1999

    Total assets

    4,196

    3,785

        LIABILITIES:
    2201

    Accounts payable

    98

    75

    2202

    Interest payable

    30

    26

    2203

    Debt

    3,838

    3,424

    2204

    Liabilities for loan guarantees

    26

    32

    2999

    Total liabilities

    3,992

    3,557

        NET POSITION:
    3300

    Invested capital

    204

    228

    3999

    Total net position

    204

    228

    4999

    Total liabilities and net position

    4,196

    3,785

    -----------------------------------------------------------------------------------------------