Standard & Poor's cut Freddie Mac (FMCC.OB: Quote, Profile, Research, Stock Buzz) and Fannie Mae's (FNMA.OB: Quote, Profile, Research, Stock Buzz) long-term ratings one notch on Monday.

S&P said the downgrades from the top-notch Triple-A were due to its lowering of the U.S. sovereign credit rating late on Friday.

"The downgrades of Fannie Mae and Freddie Mac reflect their direct reliance on the U.S. government," the rating agency said.