The number of past due home loans guaranteed by Freddie Mac has fallen below the 4 percent threshold. The milestone is a sign that the performance of theGSEs’ loan portfolio is improving and loss mitigation efforts to turn defaults around are having an impact, considering Freddie endured a long three-year stretch of delinquency increases up until March of this year.

According to Freddie Mac’s monthly summary report released Friday, the number of single-family mortgages at least three months past due or in foreclosure as of the end of June stood at 3.96 percent. That’s down from 4.06 percent the month before and a high of 4.20 percent as recently as February.

Freddie noted in its explanation of the numbers that because the company includes loans in the trial period of the Home Affordable Modification Program (HAMP) as delinquent in its statistical reporting, this treatment results in a temporary rise in the delinquency rate until the modifications become effective and are removed from delinquent status.

The GSEs’ data show that 21,367 official loan modifications were completed on Freddie-owned mortgages in June. During the first six months of the year, servicers have permanently modified 93,568 distressed loans for the mortgage giant.

The volume of effective modifications impacts the GSE’s reported delinquency rate, which is an indication that past due numbers will continue to improve as more borrowers complete their HAMP trials and either move into permanent mods or pursue other foreclosure alternatives.

Freddie’s multifamily delinquency rate also dropped in June, sliding from 0.32 percent in May to 0.28 percent last month.

The company’s total mortgage portfolio shrank at an annualized rate of 0.9 percent in June, ending the month with a balance of $2.22 trillion. Mortgage-related investments declined by an annual rate of 13.8 percent, or $8.6 billion, in June to $739.5 billion.

Freddie Mac spokesman Michael Cosgrove explained to Reuters, “We have been in a low-growth mode in our retained portfolio for much of this year, with most of the growth in portfolio related to purchase of seriously delinquent loans from pools backing our PC securities.”

Both GSEs announced in February that they would buy back all home loans from investors that were at least 120-days past due in order to reduce capital expenditures. Freddie Mac has repurchased approximately $73 billion in seriously past due mortgages from securities pools.