An “unmodified opinion” (often called a “clean” opinion) means the independent auditor concluded the entity’s financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework — i.e., there are no material misstatements that would require changing or qualifying the opinion. It is significant because it gives users confidence the statements are reliable and that there are no audit-identified problems large enough to affect decisions by stakeholders.
The U.S. Government Accountability Office (GAO) is Congress’s auditing and investigative arm. Under the Housing and Economic Recovery Act of 2008 GAO audits FHFA’s financial statements and issues an independent opinion on whether those statements are fairly presented and whether there are material weaknesses or unacceptable risks.
The Housing and Economic Recovery Act of 2008 (HERA) created or strengthened federal oversight of housing finance and specifically requires GAO to audit the Federal Housing Finance Agency’s financial statements. That statutory audit requirement gives GAO the authority and mandate to perform annual independent financial audits of FHFA.
A “material weakness” is a deficiency (or combination of deficiencies) in internal control over financial reporting such that there is a reasonable possibility a material misstatement will not be prevented or detected and corrected timely. “Unacceptable risks” is GAO/audit language for control problems or exposures that could materially harm the integrity of financial reporting or operations; together these findings would require a modified audit opinion if present.
“Safety and soundness” for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks means these institutions operate in a financially stable way (adequate capital and liquidity, sound risk management, compliance with rules) so they can continue to provide mortgage funding without posing systemic risk to the housing finance system.
FHFA’s clean GAO audit and accountability report increase public and market confidence that FHFA’s oversight, controls and reporting are reliable. For homeowners/renters it supports stability in the mortgage market (continuing flow of funding and risk management by Fannie/Freddie/FHLBanks); it can also influence policy, regulator credibility, and investor appetite for agency-backed mortgage securities.
The FY2025 Performance and Accountability Report includes FHFA’s audited financial statements, GAO’s unmodified audit opinion, descriptions of FHFA oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, performance results, and narrative on agency achievements and accountability. The public can access it on FHFAgov under “Performance and Accountability Report” or the FHFA news release linked on the homepage.