Freddie Mac

help keep distressed owners in their homes. All that said, we know there is much more work to be done to bring greater access to affordable and sustainable housing. And those opportunities exist, even in this uncertain economic environment. For example, there are still opportunities for home ownership. Even with now higher rates, there are millions of mortgage-ready potential homebuyers who could afford a loan near the median home price. There are still reasons to refinance. There are still homeowners with higher interest rates who could benefit from refinancing. And there is still much work to do to create a more equitable housing market. Let me highlight three initiatives. First, we're currently buying loans from lenders with their own special purpose credit programs. Special purpose credit programs enable lenders to offer special credit terms, such as down payment assistance, underwriting, or pricing for traditionally underserved borrowers. and can be an important tool to help close the homeownership gap. Second, we rolled out Freddie Mac's special purpose credit program, Borrow Smart Access, across 10 cities with nearly a dozen participating lenders. More broadly, for those seeking down payment assistance anywhere in the country, our online down payment resource, Freddie Mac DPA1, now contains information on more than 225 lenders and nearly 400 existing down payment assistance programs. For those of you interested in these and many other things we're doing to support sustainable homeownership and affordable rental opportunities, you can find all of our updated information on FreddieMac.com. With that, I'll turn to our CFO, Chris Lowne, to review our financial results.

Thank you, Michael, and good morning. We earned net income of $2 billion this quarter, a decline of $1.8 billion, or 47% year-over-year. This decline was primarily driven by lower fair value gains and a credit reserve bill this quarter versus a credit reserve release in the prior year quarter. First quarter net interest income was $4.5 billion, a 10% year-over-year increase, a result of 4% growth in the single family mortgage portfolio, and a one basis point increase in the average single family guarantee fee rate. Higher investment income benefiting from higher interest rates also contributed to the increase in net interest income. These positive drivers were partially offset by lower deferred fee income recognition, resulting from slower prepayments due to higher mortgage rates. Non-interest income for the first quarter was $326 million, down $1.4 billion from the prior year quarter, primarily due to a decline in net investment gains in single family. In the first quarter of last year, we recorded large gains from forward sales of guaranteed mortgage-related securities. Our provision for credit losses was $395 million for this quarter, driven by modest credit reserve builds in both business segments, compared to a benefit of $837 million for the prior year quarter, which was primarily the result of a credit reserve release due to higher estimated house prices and an improvement in forecast economic conditions. Our total mortgage portfolio at the end of this quarter was $3.4 trillion, a 4% increase year over year. Turning to our individual business segments, the single-family segment reported net income of $1.7 billion for the quarter, down 51% year-over-year. Net interest income of $4.3 billion was up 13% year-over-year, as the single-family mortgage portfolio grew 4% from the prior year, and the average guarantee fee rate increased from 47 to 48 basis points. Investment net interest income also increased due to higher interest rates. These increases were partially offset by lower deferred fee income due to slower prepayments as a result of higher mortgage rates. Non-interest income for single-family was a loss of $93 million this quarter compared to income of $1.4 billion in the prior year quarter. In 1Q 2022, single-family non-interest income was primarily driven by gains on commitments to hedge the securitization pipeline due to spread widening on agency mortgage-related securities. Our provision for single-family credit losses was $318 million this quarter, primarily due to a credit reserve bill for new acquisitions. The $831 million benefit for credit losses in the prior year quarter was driven by a credit reserve release due to higher estimated house prices and improved forecasted economic conditions. The single-family allowance for credit losses coverage ratio at the end of this quarter was 26 basis points, up from 15 basis points a year earlier. The single-family serious delinquency rate continues to decline to 62 basis points at the end of the first quarter, down 30 basis points from the first quarter of 2022, and four basis points from 4Q 2022. In the first quarter, we helped approximately 24,000 families remain in their homes through loan workouts. Our single-family portfolio credit characteristics remain strong, with the weighted average current loan-to-value ratio at 55%, and the weighted average current credit score at 755. At the end of the quarter, 62% of our single-family portfolio had some form of credit enhancement. New business activity totaled $59 billion this quarter, a decline of $148 billion, or 71% year-over-year, as refinance activity declined significantly due to increases in mortgage interest rates. Home purchase volume made up 86% of our total new business activity this quarter versus 45% in 1Q 2022. The average guarantee fee rate charged on new business increased by six basis points from 49 basis points a year ago to 55 basis points this quarter. Moving on to multifamily, the segment reported net income of $318 million, down $69 million, or 18% from the prior year quarter. The decline was primarily driven by lower net interest income, offset in part by higher non-interest income, and by a provision for credit losses this period versus a benefit for credit losses in the prior year period. Net interest income of $205 million was down 31% year-over-year as the high interest rate environment led to lower security prepayment income compared to last year. Non-interest income of $419 million was up 25% year-over-year on a positive fair value impact to our guarantee asset as long-term interest rates declined during the first quarter. The multifamily provision for credit losses was $77 million this quarter versus a small benefit in the first quarter of 2022, primarily due to increased uncertainty in forecasted economic conditions. Our multifamily new business activity was $6 billion for the first quarter, down 60% from a year ago, as higher interest rates have reduced demand for multifamily mortgage financing. The multifamily mortgage portfolio increased 3% year-over-year to $426 billion this The multifamily delinquency rate was 13 basis points at the end of the quarter, up slightly from 12 basis points last quarter, and up from 8 basis points at the end of March 2022. This increase was primarily driven by an increase in delinquent loans in our senior housing and small balance loan portfolios. Approximately 93% of the multifamily mortgage portfolio was covered by credit enhancement at the end of the first quarter. On the capital front, Our net worth increased to $39.1 billion at the end of the quarter, representing a 23% increase year over year. With that, I'll turn it back to Michael.

Thank you, Chris. ReadyMax's solid performance in the first quarter helped promote sustainable homeownership and rental opportunities across the nation. But there's a lot more work to be done. In an uncertain economic environment, we remain focused on our mission and will continue to serve as a stabilizing force for the housing finance system. Thank you.