I saw this question posed to him (Buffett) a couple of weeks ago on CNBC. If I remeber correctly, it was 2001 when Freddie was divested from Berkshire's holdings.

He didn't really give any specific reasons, but pointed out that Freddie's managemetn kept telling investors that they were going to grow at 15% a year, when it was apparent to Buffett that this was not possible. He alluded to massaging quarterly earnings, which can be done successfully in the short run, but not for the long run.

Duane

Duanej is right, it was around 2001. WB did say his reasons and they were related to derivative transactions. He mentioned no longer being able to understand the risks, who owned those risks, etc. Based on recent conversations I don't think he understood the full magnitude, but he knew enough to know that it was no longer a safe place for his/our capital.

BGF

Berkshire Hathaway letter to shareholders for the year 2000.

 " In 2000, we sold nearly all of our Freddie Mac and Fannie Mae shares,"