Mortgage finance company Freddie Mac’s first quarter loss widened to $151 million as the U.S. housing market worsened, though the results were not as poor as expected.

McLean-Va.-based Freddie Mac also said Wednesday it plans to raise $5.5 billion in new capital. Shares of Freddie Mac, the second-largest buyer and backer of home loans, rose more than 5 percent in premarket trading.

As a result of the planned stock sale, Freddie Mac’s federal regulator, the Office of Federal Housing Enterprise Oversight said it would reduce the capital cushion the company has to maintain.

Freddie will be required to keep 15 percent more capital than required by law, down from the current 20 percent mandate. Another five-point cut is expected to come in September, as long as the company stays in good standing with the regulator.

The quarterly loss at Freddie Mac was larger than a loss of $133 million in the January-March period last year. The results were equivalent to a loss of 66 cents a share, compared with 35 cents a share a year earlier.

Freddie Mac said it set aside $1.2 billion for losses as a result of rising mortgage delinquency rates, falling home prices and sales. Revenue in the period, however, rose to $1.53 billion from $694 million a year earlier.

Analysts surveyed by Thomson Financial had expected the government-sponsored company to lose 92 cents a share on average in the latest period.

Freddie Mac’s larger government-sponsored sibling, Fannie Mae, is raising $6.5 billion through stock sales to fortify its balance sheet after posting a $2.2 billion first quarter loss last week.

Freddie Mac’s shares rose $1.34, or 5.4 percent, to $26.30 in premarket trading.