FEDERAL AGENCIES

Below are descriptions of the most commonly traded Federal Agencies and government-sponsored enterprises, along with the tax status of their securities.

1. Federal Farm Credit Banks (FFCB's)—Provide short and intermediate credit to the agriculture industry. Securities issued by the Federal Farm Credit Banks are secured by acceptable collateral with value equal to the bonds outstanding. The bonds are secured joint and several obligations of the Federal Farm Credit Banks operating under federal charter with governmental supervision. Income from FFCB Securities is subject to federal income tax but may be exempt from state income tax.
2. Federal Home Loan Banks (FHLB's)—Provide credit to member institutions of the Federal Home Loan System. Federal Home Loan Bank securities are joint and several obligations of the twelve Federal Home Loan Banks. Income from FHLB Securities is subject to federal income taxes but may be exempt from state taxes.
3. Federal National Mortgage Association (FNMA)—“Fannie Mae” was created by an Act of Congress but is now a publicly owned corporation that provides liquidity for the nation's secondary mortgage market. Income from FNMA Securities is subject to federal and state income taxes.
4. Federal Home Loan Mortgage Corporation (FHLMC)—Another publicly owned corporation that provides liquidity to the nation's mortgage market. Income from FHLMC Securities is subject to federal and state income taxes.
5. Student Loan Marketing Association (SLMA)—A publicly owned corporation that provides funds for the Guaranteed Student Loan Program. Income from SLMA Securities is subject to federal income taxes but may be exempt from state tax.
6. Tennessee Valley Authority (TVA)—Created by an Act of Congress to develop resources in that region, strengthen the economy, and provide for the national defense. Income from securities issued by TVA are subject to federal income tax, but may be exempt from certain state income taxes.


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