Freddie Mac (FRE) saw a sharp rise in delinquency of single-family home loans as the mortgage finance company felt the dual impact of its foreclosure program being suspended and the broader economic slowdown.

In a monthly report released Wednesday, Freddie said it's delinquency rate rose to 1.98% in January from 1.72% in December.

Freddie noted that these numbers may be distorted due to the temporary moratorium on its foreclosure program, which means loans stay delinquent instead of moving on to foreclosure. The company didn't reveal the extent of the impact.

Even then, these rates continue to rise to record highs for the mortgage finance giant, and are an indication of the extent of decline among prime borrowers with conforming loans. The delinquency rate was at 0.65% at the end of 2007.

Freddie warned that "additional suspensions of foreclosures during 2009 may also adversely impact delinquency rates going forward."

Meanwhile, in January, Freddie's commitments to buy mortgage bonds dropped to $17.03 billion from $25.365 billion in December.

The mortgage giant's total investment portfolio balance also shrunk to $798.92 billion from $804.8 billion at the end of 2008, as it sold some of its holdings. This puts Freddie about $100 billion shy of the new $900 billion limit proposed by the Treasury.

Over the past couple of months, the role of Freddie and its sibling Fannie Mae (FNM) have diminished in the mortgage market as both the U.S. Treasury and the Federal Reserve have emerged as backstop buyers with deep pockets.

The U.S. Treasury, so far, has bought $97.5 billion of agency mortgage-backed securities, while the central bank bought $134.85 billion, and is on target to buy $500 billion, or more if necessary.

However, market participants still keep tabs on Fannie and Freddie's portfolios as an indication of their financial health, and their ability to continue to play a role as both guarantors and buyers of mortgage bonds.

Other details in the monthly report show that Freddie's issuance of guaranteed securities and pass-through certificates increased to $16.28 billion from $15.72 billion in December.

The mortgage giant's total mortgage portfolio shrunk 2.8% in January to $2.2 trillion.

The duration gap, a measure of the portfolio's sensitivity to interest rates, averaged zero month in January.

-By Prabha Natarajan, Dow Jones Newswires, 201-938-5071; prabha.natarajan@dowjones.com