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



[[Page 1229]]


 
                    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 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.

                                


 
                  FEDERAL NATIONAL MORTGAGE ASSOCIATION

                           Portfolio Programs

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-2500-0-3-371      2005 actual   2006 est.   2007 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 
2006 and 2007 was not required to be collected.

    The Federal National Mortgage Association (Fannie Mae) is a 
Government-sponsored enterprise (GSE) in the housing finance market. In 
fall 2003, and again on April 7 and 13, 2005, 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. 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 Federal Government has equipped 
Fannie Mae with certain advantages over wholly private firms in carrying 
out these activities. 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. Legislation 
directed the sale of 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.'' For additional discussion 
and analyses of Fannie Mae, please see the Analytical Perspectives 
volume of the Budget documents.

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 actual

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

Fund balances





      Investments in US securities:

1102

Treasury securities, par





1104

Other





[[Page 1230]]

      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      2005 actual   2006 est.   2007 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 
2006 and 2007 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. The restatement is not likely to be completed 
prior to the second half of calendar year 2006.

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 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      2005 actual   2006 est.   2007 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 
2006 and 2007 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. In 
fall 2003, and again on April 7 and 13, 2005, 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. 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 Federal Government 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

[[Page 1231]]

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 2004 is presented here, Freddie Mac 
announced on November 8, 2005 that it would reduce net income for the 
first half of calendar year 2005 and expects to release full-year 2005 
results by March 2006. For additional discussion and analyses of Freddie 
Mac, please see the Analytical Perspectives volume of the Budget 
documents.

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 actual

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

Investments in other securities, net

91,196



1206

Receivables, net

10,479



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

1601

Direct loans, gross

672,762



1603

Allowance for estimated uncollectible loans and interest (-)

-113







1699

Value of assets related to direct loans

672,649



1801

Cash and other monetary assets

11,570



1803

Property, plant and equipment, net

687



1901

Other assets

21,175







1999

Total assets

807,756



    LIABILITIES:
2101

Accounts payable

4



2202

Interest payable

5,517



2203

Debt

747,171



2207

Other

23,392







2999

Total liabilities

776,084



    NET POSITION:
3100

Invested capital

31,672







3999

Total net position

31,672







4999

Total liabilities and net position

807,756



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

                                

                       Mortgage-Backed Securities

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4440-0-3-371      2005 actual   2006 est.   2007 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 
2006 and 2007 was not required to be collected.

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 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      2005 actual   2006 est.   2007 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.....................
1264  Write-offs for default: Other 
        adjustments, net................
                                           ---------   ---------  ----------
1290    Outstanding, end of year........
---------------------------------------------------------------------------

    The Federal Home Loan Bank System is a Government-sponsored 
enterprise (GSE) in the housing finance market. In fall 2003, and again 
on April 7 and 13, 2005, 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 8,149 
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.

[[Page 1232]]

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. FHFB adopted a rule on June 23, 2004 
that requires each FHLBank to register a class of its stock. Only five 
of the twelve FHLBanks compiled by 2005. (Freddie Mac 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, but 
suspended filing financial statements with the SEC on November 15, 
2004.)

    Financial data for the FHLBanks are not presented here because 
following discussions with the SEC, six of the twelve FHLBanks have 
announced their intent to restate their 2001-2004 financial statements.

    For additional discussion and analyses of the FHLBanks, please see 
the Analytical Perspectives volume of the Budget.

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 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





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





-----------------------------------------------------------------------------------------------
    Note: Consistent with Government-wide practice for GSEs, information for 
2006 and 2007 was not required to be collected.

                                


 
                           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      2005 actual   2006 est.   2007 est.
----------------------------------------------------------------------------
1111  Limitation on direct loans........
1131  Direct loan obligations...........      88,938      89,000      91,000
                                           ---------   ---------  ----------
1150  Total direct loan obligations.....      88,938      89,000      91,000
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      23,270      25,122      25,373
1231  Disbursements: Direct loan 
        disbursements...................      88,932      89,000      91,000
1251  Repayments: Repayments and 
        prepayments.....................     -87,049     -88,719     -90,719
1263  Write-offs for default: Direct 
        loans...........................         -31         -30         -30
                                           ---------   ---------  ----------
1290    Outstanding, end of year........      25,122      25,373      25,624
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 actual

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

Cash and investment securities

6,877

7,184

1206

Accrued interest receivable on loans

117

169

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

1601

Direct loans, gross

23,269

25,122

1603

Allowance for estimated uncollectible loans and interest (-)

-431

-435





1699

Value of assets related to direct loans

22,838

24,687

1803

Property, plant and equipment, net

196

261





1999

Total assets

30,028

32,301

    LIABILITIES:
2104

Resources payable

388

675

2201

Consolidated systemwide and other bank bonds

26,040

28,342

2201

Notes payable and other interest-bearing liabilities

586

124

2202

Accrued interest payable

144

253





2999

Total liabilities

27,158

29,394

[[Page 1233]]

    NET POSITION:
3300

Cumulative results of operations

2,870

2,907





3999

Total net position

2,870

2,907





4999

Total liabilities and net position

30,028

32,301

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

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

-----------------------------------------------------------------------------------------------
                      99-4130            2004 actual    2005 actual     2006 est.      2007 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........   2,591,868      2,869,656     2,907,259      2,978,607
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................     200,063          6,269         1,098          1,103
  Capital stock and participations 
    retired.............................      76,829         67,534        51,000         56,000
  Net income............................     277,865        281,828       280,250        286,235
  Cash/Dividends/Patronage Distributions   (105,608)      (152,720)     (159,000)      (164,000)
  Other, net............................    (17,703)       (30,240)             0              0
                                        ------------ --------------  ------------  -------------
Ending balance of net worth.............   2,869,656      2,907,259     2,978,607      3,045,945
-----------------------------------------------------------------------------------------------

             Financing Activities (in thousands of dollars)

    --------------------------------------------------------------------
                    99-4130                 2004 actual     2005 actual      2006 est.      2007 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligations...........................       25,448,279      26,040,308     28,341,749      28,625,167
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................        8,010,499      11,221,891     11,500,000      12,000,000
  Consolidated systemwide and other bank 
    bonds retired.......................        6,707,741       9,378,220     11,316,582      11,816,583
  Consolidated systemwide notes, net....        (597,642)         311,845        100,000         100,000
  Other (Net)...........................        (113,092)         145,930              0               0
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................       26,040,303      28,341,749     28,625,167      28,908,584
-------------------------------------------------------------------------------------------------------

                                

                            Farm Credit Banks

               Status of Direct Loans (in millions of dollars)

----------------------------------------------------------------------------
Identification code 99-4160-0-3-371      2005 actual   2006 est.   2007 est.
----------------------------------------------------------------------------
1111  Limitation on direct loans........
1131  Direct loan obligations...........     103,814     107,629     113,088
                                           ---------   ---------  ----------
1150  Total direct loan obligations.....     103,814     107,629     113,088
----------------------------------------------------------------------------

    Cumulative balance of direct loans 
                outstanding:
1210  Outstanding, start of year........      60,762      66,801      70,099
1231  Disbursements: Direct loan 
        disbursements...................     103,812     107,734     113,198
1251  Repayments: Repayments and 
        prepayments.....................     -97,775    -104,436    -109,343
1264  Write-offs for default: Other 
        adjustments, net................           2
                                           ---------   ---------  ----------
1290    Outstanding, end of year........      66,801      70,099      73,954
---------------------------------------------------------------------------
    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 a FLB and of a FICB. No merger occurred in the Jackson 
district in 1988 because the FLB of Jackson 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. AgBank, FCB, Wichita, Kansas; 
and FCB of Texas, Austin, Texas.
    FCBs serve as discount banks and as of October 1, 2005 provided 
funds to 11 Federal Land Credit Associations (FLCA) and 85 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, and their cooperatives; farm-related 
business; and rural homeowners. 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

2004 actual

2005 actual

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

Cash and investment securities

15,576

19,513

1206

Accrued Interest Receivable

418

581

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

1601

Direct loans, gross

60,762

66,801

1603

Allowance for estimated uncollectible loans and interest (-)

-130

-19





1699

Value of assets related to direct loans

60,632

66,782

1803

Property, plant and equipment, net

329

321





1999

Total assets

76,955

87,197

    LIABILITIES:
2104

Resources payable

235

397

2201

Consolidated systemwide and other bank bonds

71,078

80,993

2201

Notes payable and other interest-bearing liabilities

734

368

2202

Accrued interest payable

388

592





2999

Total liabilities

72,435

82,350

    NET POSITION:
3300

Cumulative results of operations

4,520

4,847





3999

Total net position

4,520

4,847





4999

Total liabilities and net position

76,955

87,197

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

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

-----------------------------------------------------------------------------------------------
                      99-4160            2004 actual    2005 actual     2006 est.      2007 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth..........   4,188,851      4,520,633     4,846,675      5,078,212
                                        ============ ==============  ============  =============

  Capital stock and participations 
    issued..............................     431,832        237,099        39,318         16,815
  Capital stock and participations 
    retired.............................     169,946        118,560           207              0
  Surplus Retired.......................       (276)          4,257             0              0
  Net income............................     389,137        521,660       441,717        488,292
  Cash/Dividends/Patronage Distributions   (313,854)      (286,298)     (264,199)      (274,363)
  Other, net............................       (663)       (23,602)        14,908        (8,516)
                                        ------------ --------------  ------------  -------------
Ending balance of net worth.............   4,520,633      4,846,675     5,078,212      5,300,440
-----------------------------------------------------------------------------------------------

             Financing Activities (in thousands of dollars)

    --------------------------------------------------------------------
                    99-4160                 2004 actual     2005 actual      2006 est.      2007 est.
    --------------------------------------------------------------------
Beginning balance of outstanding system 
  obligations...........................       67,415,911      71,077,982     80,993,251      84,991,701
                                           ==============  ==============  =============  ==============

  Consolidated systemwide and other bank 
    bonds issued........................       32,598,885      37,670,028     29,197,506      34,139,338
  Consolidated systemwide and other bank 
    bonds retired.......................       29,918,762      28,143,701     25,773,029      30,214,242
  Consolidated systemwide notes, net....              985         383,675        573,973         812,590
  Other, net............................          (3,212)           5,267              0               0
                                           --------------  --------------  -------------  --------------

Ending balance of outstanding system 
  obligations...........................       71,077,982      80,993,251     84,991,701      89,729,387
-------------------------------------------------------------------------------------------------------

[[Page 1234]]



                                

                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, 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, 2005, 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, acting through its Office 
of Secondary Market Oversight (OSMO). FCA 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      2005 actual   2006 est.   2007 est.
----------------------------------------------------------------------------
2111  Limitation on guaranteed loans....
2131  Guaranteed loan commitments.......         559
                                           ---------   ---------  ----------
2150  Total guaranteed loan commitments.         559
----------------------------------------------------------------------------

    Cumulative balance of guaranteed loans 
                outstanding:
2210  Outstanding, start of year........       5,549       5,126       5,126
2231  Disbursements of new guaranteed 
        loans...........................         559
2251  Repayments and prepayments........        -982
                                           ---------   ---------  ----------
2290    Outstanding, end of year........       5,126       5,126       5,126
----------------------------------------------------------------------------

    Memorandum:
2299  Guaranteed amount of guaranteed 
        loans outstanding, end of year..         811
---------------------------------------------------------------------------

                             Balance Sheet (in millions of dollars)

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

2004 actual

2005 actual

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

Investment in securities

949

1,594

1206

Receivables, net

54

40

      Net value of assets related to 
          direct loans receivable:

1401

Direct loans receivable, gross

2,244

2,140

1402

Interest receivable

38

45





1499

Net present value of assets related to direct loans

2,282

2,185

1801

Cash and other monetary assets

500

438





1999

Total assets

3,785

4,257

    LIABILITIES:
2201

Accounts payable

75

48

2202

Interest payable

26

25

2203

Debt

3,424

3,928

2204

Liabilities for loan guarantees

32

19





2999

Total liabilities

3,557

4,020

    NET POSITION:
3300

Invested capital

228

237





3999

Total net position

228

237





4999

Total liabilities and net position

3,785

4,257

-----------------------------------------------------------------------------------------------
