The mortgage giant said it lost $4.7 billion, or $1.44 cents per share, in the April-June quarter. That takes into account $1.6 billion in dividends paid to the Treasury Department. It compares with a loss of $6 billion, or $1.85 per share, during the same quarter in 2010.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a government regulator has controlled their financial decisions.
Standard & Poor's cited the "direct reliance" on the U.S. government when it lowered Freddie and Fannie's credit ratings on Monday, from AAA to AA+. That reflected the same downgrade S&P made of long-term U.S. government debt on Friday.
Fannie and Freddie own or guarantee about half of all U.S. mortgages and nearly all new mortgage loans. The mortgage giants buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world.
Washington-based Fannie Mae said Friday that its second-quarter loss widened to nearly $5.2 billion. It continues to seek loan modifications to reduce defaults. That compares with a loss of $3.13 billion a year earlier.
Taxpayers have spent roughly $150 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates the final cost for rescuing the firms could go as high as $259 billion.
Pressure has been building for the government to do away with Fannie and Freddie and reduce taxpayers' exposure to risk. The Treasury Department rolled out a plan in February to slowly dissolve Fannie and Freddie, although that process could take years. Abolishing Fannie and Freddie would transform how homes are bought and redefine who can afford them.