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FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE (FNMA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered $3.32B net income on $7.24B net revenues; efficiency ratio improved to 31.5% from 36.1% in Q1 as administrative expenses fell 15% sequentially .
  • Revenue vs S&P Global consensus: company “net revenues” came in below S&P’s “Revenue Consensus Mean” for Q2 2025; we note taxonomy differences (S&P’s “Revenue” differs from Fannie’s “net revenues”). Nevertheless, Q2 2025 was a miss vs consensus, while Q4 2024 and Q2 2024 were beats and Q1 2025 was a miss (see Estimates Context) [GetEstimates]*.
  • Credit provisioning rose to $946M driven by lower actual and projected single-family home price growth and declines in near‑term multifamily property values; SDQ rates improved modestly QoQ in both businesses .
  • Strategic catalyst: launch of AI-powered mortgage fraud “Crime Detection Unit” with Palantir to strengthen safety and soundness—management framed this as an efficiency and loss prevention driver .
  • Net worth crossed $100B for the first time ($101.64B) and regulatory capital deficit narrowed; illustrative return on required CET1 was 9.5% in Q2, supporting the capital build narrative .

What Went Well and What Went Wrong

What Went Well

  • Expense discipline: non‑interest expense fell $256M QoQ; efficiency ratio improved to 31.5% vs 36.1% in Q1 and 31.3% a year ago .
  • Durable fee income: guaranty fee‑driven revenues remained steady, with average charged single‑family fee at 48.3 bps and multifamily at 73.3 bps; NIM remained relatively stable .
  • Strategic initiative and tone: “Fannie Mae gets stronger by the day… we will continue operating the company as a for‑profit enterprise so that we can drive down housing costs and deliver maximum value for the American people,” said Chair William J. Pulte; CEO emphasized “another solid quarter… building regulatory capital and achieving attractive returns” .

What Went Wrong

  • Provisioning headwind: credit loss provision surged to $946M (vs $24M in Q1), primarily from lower single‑family HPA and multifamily property value declines, compressing net income QoQ and YoY .
  • Single‑family pretax income decreased 6% QoQ on higher provision; DTI>43% and FICO<680 acquisition mix ticked up, requiring monitoring amid macro affordability pressures .
  • Multifamily pretax income fell 22% QoQ with higher foreclosed property expenses and smaller change in credit enhancement recoveries vs prior year, and a 0.61% SDQ rate that remains elevated vs pre‑2024 levels .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Net Revenues ($USD Billions)$7.34 $7.30 $7.09 $7.24
Net Income ($USD Billions)$4.48 $4.13 $3.66 $3.32
Efficiency Ratio (%)31.3% 32.3% 36.1% 31.5%
Return on Assets (%)0.41% 0.38% 0.34% 0.31%
Provision for Credit Losses ($USD Billions)$(0.30) benefit $(0.32) benefit $(0.02) $0.95

Segment Performance

SegmentMetricQ2 2024Q1 2025Q2 2025
Single‑FamilyNet Revenues ($B)$6.15 $5.93 $6.06
Provision ($B)$(0.55) benefit $(0.02) $0.74
Non‑interest Expense ($B)$2.24 $2.31 $2.07
Net Income ($B)$3.86 $2.92 $2.74
MultifamilyNet Revenues ($B)$1.19 $1.15 $1.18
Provision ($B)$(0.25) benefit $0.00 $0.21
Non‑interest Expense ($B)$0.18 $0.29 $0.28
Net Income ($B)$0.63 $0.74 $0.58

KPIs

KPIQ2 2024Q1 2025Q2 2025
Total Assets ($USD Trillions)$4.324 $4.354 $4.338
Net Worth ($USD Billions)$86.48 $98.31 $101.64
Total Mortgage Loans ($USD Trillions)$4.129 $4.127 $4.120
Avg Charged Guaranty Fee – SF (bps)47.6 48.1 48.3
Avg Charged Guaranty Fee – MF (bps)75.5 74.1 73.3
SF Serious Delinquency Rate (%)0.53% 0.56% 0.53%
MF Serious Delinquency Rate (%)0.56% 0.63% 0.61%
Net Interest Margin (%)——0.66%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/Net RevenuesFY/Q2 2025Not providedNot providedMaintained (no quantitative guidance)
Non‑Interest ExpenseFY/Q2 2025Not providedNot provided; management emphasized continued efficiency focusMaintained qualitative focus
Credit Provision/LossesFY/Q2 2025Not providedNot provided; drivers cited (HPA, multifamily values)Maintained qualitative commentary
DividendsFY/Q2 2025Senior preferred dividends equal to net incomeContinued as per statements of operationsMaintained

Note: The company did not issue quantitative ranges for revenue, margins, OpEx, tax rate or segment guidance in the press release or webcast.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Expense efficiencyQ1: Efficiency ratio 36.1%; focus on trimming costs Ratio improved to 31.5%; admin expenses down 15% QoQ Improving cost discipline
AI/technology initiativesQ2 pre‑quarter: Palantir AI Crime Detection Unit announced Reinforced fraud prevention priority and partnership impact Building tech-enabled risk tools
Macro: Mortgage rates & HPAQ1: HPA +1.4% YoY; mortgage rate 6.65% HPA +2% QoQ; lower projected HPA drove higher provision Mixed; lower forward HPA
Credit quality (SDQ, NCO)Q1: SF SDQ 0.56%, MF SDQ 0.63%; low NCO SF SDQ 0.53%, MF SDQ 0.61%; NCO muted overall Slight improvement QoQ
Regulatory capitalQ1: Net worth $98.3B; capital deficit narrowing Net worth $101.6B; illustrative RO req. CET1 9.5%; deficit reduced Continued build
Product performance (SF/MF)Q1: SF acquisitions $64.3B; MF volume $11.8B SF acquisitions $84.1B; MF volume $17.4B on seasonal trends Activity uptick

Management Commentary

  • Chair William J. Pulte: “Fannie Mae gets stronger by the day… we will continue operating the company as a for‑profit enterprise so that we can drive down housing costs and deliver maximum value for the American people” .
  • CEO Priscilla Almodovar: “Fannie Mae had another solid quarter, reporting $3.3 billion of net income… notable progress on expenses… we remain steadfast in our mission, and in safely and soundly making a positive impact on American housing” .
  • CFO Chryssa Halley: Provision increase “is the main factor driving net income lower… main driver was lower actual and forecasted home price growth (single‑family) and deterioration in actual and forecasted multifamily property values” .
  • Technology/fraud: Management highlighted prioritizing fraud prevention and partnership with Palantir to reduce losses and strengthen market integrity .

Q&A Highlights

  • The webcast consisted of prepared remarks; there was no live analyst Q&A session, and the call concluded after management’s comments .
  • Management clarified drivers of provision (HPA and multifamily valuations), cost actions, and capital build, while reiterating efficiency focus and fraud prevention priorities .

Estimates Context

  • S&P Global consensus “Revenue” vs reported results:
    • Q2 2025: Consensus $7.75B* vs S&P “actual revenue” $6.48B* → miss; Fannie Mae’s “net revenues” reported at $7.24B (company taxonomy differs) [GetEstimates]* .
    • Q1 2025: Consensus $7.64B* vs S&P “actual revenue” $7.18B* → miss [GetEstimates]*.
    • Q4 2024: Consensus $7.40B* vs S&P “actual revenue” $7.83B* → beat [GetEstimates]*.
    • Q2 2024: Consensus $7.44B* vs S&P “actual revenue” $8.02B* → beat [GetEstimates]*.
PeriodConsensus Revenue ($B)S&P Actual Revenue ($B)Outcome
Q2 20247.44*8.02*Beat*
Q4 20247.40*7.83*Beat*
Q1 20257.64*7.18*Miss*
Q2 20257.75*6.48*Miss*

Note: S&P’s “Revenue” definition for FNMA is not identical to the company’s “net revenues.” Company‑reported net revenues for the same periods are shown in Financial Results .

EPS context: Consensus EPS and actual EPS were $0.00 given capital structure and conservatorship treatment [GetEstimates]* .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Expense control was the quarter’s bright spot; improved efficiency ratio and lower admin expenses underpin near‑term margin resilience even as provisions normalize higher .
  • Provisioning will be the swing factor for earnings near‑term; monitor HPA trajectories and multifamily property values—management flagged regional softness and new delinquencies .
  • Fee income durability continues; rising average charged guaranty fees and stable NIM support revenue stability amid muted refi and steady purchase volumes .
  • Capital build narrative remains intact; net worth >$100B and shrinking regulatory capital deficit provide medium‑term de‑risking of the equity story (within conservatorship constraints) .
  • Fraud detection partnership (Palantir) is a potentially material operational and loss mitigation catalyst—watch for quantified impacts over coming quarters .
  • Trading implications: near‑term sensitivity to macro HPA prints and multifamily credit metrics; expense discipline and guaranty fee trends are supportive, but consensus misses on “Revenue” (S&P taxonomy) may keep expectations conservative [GetEstimates]* .
  • Medium‑term thesis: stable fee‑driven revenues, improving efficiency, and capital accumulation—balanced against provisioning cycles and policy/regulatory backdrop highlighted in filings .