The Office of Federal Housing Enterprise Oversight said today that both Fannie Mae and Freddie Mac were “adequately capitalized” in the third quarter.
Fannie Mae had a 5.9 percent surplus above its directed capital requirement, while Freddie Mac surplus was 1.7 percent above its necessary requirements.
Fannie had core capital of $41.7 billion as of September 30, exceeding its capital requirement by $2.3 billion, while Freddie’s $34.6 billion exceeded its requirement by $600 million.
Despite meeting requirements, both saw the percentage of their surplus drop in the third quarter from the second quarter “primarily due to the credit and market related stresses on income,” the OFHEO said in a statement.
Both government-sponsored entities recently sold preferred stock and slashed their dividends in a bid to raise capital as increased loan losses led to record losses.
The two companies are classified by the OFHEO as adequately capitalized, undercapitalized, significantly undercapitalized or critically undercapitalized.
Fannie and Freddie own or guarantee roughly 40% of the $10.9 trillion U.S. residential mortgage market, and have recently pushed to capture more market share over the past several months.
Shares of Fannie Mae were up 83 cents, or 2.14%, to $39.63, while Freddie Mac climbed $1.44, or 4.45%, to $33.86 in afternoon trading on Wall Street.