### Question
How is the term applicable preferred stock defined?


### Answer
The term **applicable preferred stock** is defined in *12 U.S.C. § 5261* as the following:

> any stock—


(1) which is preferred stock in—


(A) the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.), or


(B) the Federal Home Loan Mortgage Corporation, established pursuant to the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.), and


  

(2) which—


(A) was held by the applicable financial institution on September 6, 2008, or


(B) was sold or exchanged by the applicable financial institution on or after January 1, 2008, and before September 7, 2008

#### Citation:
  - *12 U.S.C. § 5261*
  - Heading: **CHAPTER 52-EMERGENCY ECONOMIC STABILIZATION > SUBCHAPTER III-TAX PROVISIONS**

