Appendix - Estimates for Government-Sponsored Enterprises

[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

1201

Investments in other securities, net

1,408

4,001

1206

Receivables, net

1207

Advances and prepayments

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

1901

Other assets

224

1999

Total assets

31,765

4,695

LIABILITIES:
2202

Interest payable

265

[[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

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.....
----------------------------------------------------------------------------

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.
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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
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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
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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)

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Identification code 99-4160-0-3-371

2003 actual

2004 actual

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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

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

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99-4160 2003 actual 2004 actual 2005 est. 2006 est.
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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
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Financing Activities (in thousands of dollars)

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99-4160 2003 actual 2004 actual 2005 est. 2006 est.
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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
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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)

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Identification code 99-4180-0-3-351 2004 actual 2005 est. 2006 est.
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2111 Limitation on guaranteed loans....
2131 Guaranteed loan commitments....... 830
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2150 Total guaranteed loan commitments. 830
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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
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Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 830
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Balance Sheet (in millions of dollars)

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Identification code 99-4180-0-3-351

2003 actual

2004 actual

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ASSETS:
1201

Investment in securities

1,083

949

1206

Receivables, net

1207

Advances and prepayments

Net value of assets related to
direct loans receivable:

1401

Direct loans receivable, gross

2,501

2,244

1402

Interest receivable

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

2202

Interest payable

2203

Debt

3,838

3,424

2204

Liabilities for loan guarantees

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

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