Total Revenue (USD, millions)

Cost of Goods Sold (COGS) (USD, millions)

Selling, General, and Administrative Expenses (SG&A) (USD, millions)

Research and Development (R&D) (USD, millions)

Depreciation and Amortization (D&A) (USD, millions)

Interest Expense (USD, millions)

Operating Income (EBIT) (USD, millions)

Net Income (USD, millions)

Earnings Per Share (EPS) - Basic (USD)

Earnings Per Share (EPS) - Diluted (USD)

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Proceeds from / Repayments of Debt (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Share Repurchases (USD, millions)

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Serious Delinquency Rate (Single-Family) (%)

Multifamily Serious Delinquency Rate (%)

Estimated Mark-to-Market LTV Ratio (%)

Weighted-Average DSCR

Current DSCR Below 1.0 (%)

Full Interest-Only (%)

Partial Interest-Only (%)

Percentage of Multifamily Guaranty Book with DSCR < 1.0 (%)

Unpaid Principal Balance of Freddie Mac-issued UMBS ($ billion)

Unpaid Principal Balance of Freddie Mac Securities ($ billion)

Forecasted Home Price Growth (%)

Forecasted 30-Year Mortgage Interest Rate (%)

Percentage of SDQ Loans Delinquent > 180 Days (%)

Percentage of SDQ Loans Delinquent > Two Years (%)

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Single-Family

- Net Interest Income

- Fee and Other Income

- Net Revenues

Multifamily

Capital Markets

Reconciling Items

Total Revenue

ddcd6e4aff2a53d8ae5adab3b3bb1ddcf29bae5b491f591f5f24be55f5fe9bec

1. The provision for credit losses in the multifamily segment increased due to ARM loans that were written down and an investigation into lending transactions with suspected fraud. Can you provide more details on these ARM loans and the nature of the suspected fraud impacting the portfolio?
2. With expectations of slower economic growth and the anticipated increase in the single-family serious delinquency rate due to Hurricanes Helene and Milton, how is Fannie Mae adjusting its risk management strategies to mitigate potential credit losses in the near term?
3. Given that housing affordability remains a significant challenge, with only 19% of surveyed individuals believing it's a good time to buy a home, what specific initiatives is Fannie Mae implementing to address affordability issues and stimulate existing home sales?
4. In light of the projected decline in multifamily market origination volumes and the expectation of rent growth remaining below historical averages, how does Fannie Mae plan to manage its multifamily portfolio to maintain profitability and support affordable housing?
5. The net income decreased to $4 billion this quarter from $4.5 billion in the previous quarter, partially due to smaller fair value gains. Can you elaborate on the factors that led to the decline in fair value gains and what measures are being taken to address this in future quarters?

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- **Increase in Multifamily Credit Losses and Serious Delinquencies**:
- **Declining Multifamily Property Values and Potential Fraud Investigation**:
- **Expected Increase in Single-Family Delinquencies Due to Economic Factors**:

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Fannie Mae (Federal National Mortgage Association, FNMA) is a government-sponsored, stockholder-owned corporation that operates in the U.S. housing finance system. The company provides liquidity, stability, and access to mortgage credit by working in the secondary mortgage market. Fannie Mae acquires residential mortgage loans from lenders, packages them into mortgage-backed securities (MBS), and guarantees payments to investors, earning revenue primarily through guaranty fees and net interest income.  **[0000310522-23-000184_fnm-20221231.htm:349]** **[0000310522-24-000184_fnm-20231231.htm:7]** **[0000310522-24-000184_fnm-20231231.htm:295]** 

1. **Single-Family** - Operates in the secondary mortgage market for loans secured by properties with four or fewer residential units. Generates revenue through guaranty fees for assuming credit risk and net interest income from its retained mortgage portfolio and corporate liquidity portfolio.  **[0000310522-24-000184_fnm-20231231.htm:10]** **[0000310522-23-000589_fnm-20230930.htm:24]** 

2. **Multifamily** - Operates in the secondary mortgage market for loans secured by properties with five or more residential units. Earns revenue from guaranty fees for assuming credit risk and net interest income from its retained mortgage portfolio and corporate liquidity portfolio.  **[0000310522-24-000184_fnm-20231231.htm:10]** **[0000310522-23-000589_fnm-20230930.htm:24]**

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### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024 and FY 2025
- **Guidance**:
  1. **Home Sales**: Expected to be **4.8 million units in 2024**, increasing to **5.2 million units in 2025**.  **[FNMA_3405069_4]** 
  2. **Home Price Growth**: Projected at **5.8% for 2024**, slowing to **3.6% in 2025**.  **[FNMA_3405069_4]** 
  3. **Single-Family Mortgage Originations**: Expected to grow from **$1.5 trillion in 2023** to approximately **$1.7 trillion in 2024**, with purchases making up **78%** of originations.  **[FNMA_3405069_4]** 
  4. **Multifamily Market Origination Volumes**: Expected to be roughly **$275 billion in 2024**, with a range between **$245 billion and $315 billion**.  **[FNMA_3405069_4]** 
  5. **Rent Growth**: Expected to remain below historical averages, in the range of **1% to 1.5% in 2024**.  **[FNMA_3405069_4]** 

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Multifamily Serious Delinquency Rate**: Expected increase due to a portfolio of approximately **$600 million of adjustable-rate conventional loans**.  **[FNMA_3395002_3]** 
  2. **Federal Reserve Rate Cuts**: Economists expect **two rate cuts** later in 2024.  **[FNMA_3395002_3]** 
  3. **Home Price Growth**: Projected to rise **6.1% in 2024**.  **[FNMA_3395002_3]** 
  4. **Single-Family Mortgage Originations**: Expected to grow to approximately **$1.7 trillion in 2024**, with purchases making up **80%**.  **[FNMA_3395002_3]** 
  5. **Multifamily Market Origination Volumes**: Estimated between **$245 billion and $315 billion** in 2024.  **[FNMA_3395002_3]** 
  6. **Multifamily Sales Activity and Property Values**: Expected to remain subdued in the near term.  **[FNMA_3395002_3]** 
  7. **Rent Growth**: Expected to remain below historical averages, in the range of **1% to 1.5% in 2024**.  **[FNMA_3395002_3]** 

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Interest Rates**: Expectation of **two rate cuts** from the Fed later in 2024.  **[FNMA_3381524_4]** 
  2. **Home Prices**: Expected to rise **4.8% in 2024**.  **[FNMA_3381524_4]** 
  3. **Single-Family Mortgage Originations**: Expected to grow to approximately **$1.8 trillion in 2024**.  **[FNMA_3381524_4]** 
  4. **Multifamily Market Origination Volumes**: Estimated between **$300 billion to $340 billion in 2024**.  **[FNMA_3381524_4]** 
  5. **Rent Growth**: Expected to remain below historical averages, in the **1% to 1.5% range in 2024**.  **[FNMA_3381524_4]** 
  6. **Multifamily Property Values**: Expectation of additional declines in the short term.  **[FNMA_3381524_4]** 

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **30-Year Fixed Mortgage Rate**: Expected to average **6.1% in 2024**.  **[FNMA_3373527_5]** 
  2. **Single-Family Mortgage Originations**: Expected to grow to nearly **$2 trillion in 2024**.  **[FNMA_3373527_5]** 
  3. **Multifamily Origination Volumes**: Estimated between **$295 billion and $325 billion**.  **[FNMA_3373527_6]** 
  4. **Rent Growth**: Expected to remain below historical averages, in the range of **1% to 1.5% in 2024**.  **[FNMA_3373527_6]** 
  5. **Multifamily Housing Starts**: Expected to decline in 2024.  **[FNMA_3373527_6]** 

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- **Strong Financial Performance**: Fannie Mae reported **$4.5 billion in net income in the second quarter of 2024**, an increase from $4.3 billion in the first quarter. The company's net worth reached **$86.5 billion**, further strengthening its financial stability.  **[FNMA_3395002_1]** **[FNMA_3395002_2]** **[FNMA_3395002_3]**
- **Healthy Credit Profile and Stable Book of Business**: The single-family guaranty book of business remains strong, with a **weighted average mark-to-market loan-to-value ratio of 50%** and a **weighted average credit score at origination of 753**. The single-family serious delinquency rate remained near historically low levels at **48 basis points**.  **[FNMA_3395002_2]** **[FNMA_3395002_3]**
- **Positive Outlook and Market Position**: Fannie Mae continues to provide significant liquidity to the housing market, helping **330,000 households buy, refinance, or rent a home** in the second quarter. The company is also innovating to reduce obstacles for consumers, such as limited credit history and high upfront costs, and is advancing ways to connect global capital to U.S. housing through the issuance of social bonds.  **[FNMA_3395002_1]** **[FNMA_3395002_2]**

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- **Multifamily property values declined 19%** from the peak in July 2022 to March 2024, returning to 2021 levels.  **[FNMA_3381524_3]**
- Elevated **interest rates may reduce the ability of multifamily borrowers to refinance**, potentially leading to increased defaults on balloon payments at maturity.  **[FNMA_3381524_3]**
- A **slowing economy may impact the credit performance of single-family loans**, possibly leading to an increase in serious delinquency rates.  **[FNMA_3381524_3]**

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- **Decline in multifamily property values and expected increase in serious delinquencies**: Multifamily property values have declined nearly **20% from the peak in July 2022 to June 2024**, and a portfolio of approximately **$600 million** in adjustable rate conventional loans is anticipated to become seriously delinquent.  **[FNMA_3395002_2]** **[FNMA_3395002_3]**
- **Anticipated pressure on the multifamily market due to elevated maturities and refinancing challenges**: Higher interest rates may reduce the ability of multifamily borrowers to refinance their loans prior to maturity, potentially leading to increased delinquencies and property value declines. Near-term maturities are expected to be elevated, which could put additional pressure on the multifamily market.  **[FNMA_3395002_2]** **[FNMA_3395002_3]**
- **Affordability concerns and low consumer sentiment affecting single-family housing**: Affordability challenges, together with low inventory and high mortgage rates averaging **7%**, are limiting the number of buyers, with only **19%** of consumers stating that it's a good time to buy a home. This may negatively impact Fannie Mae's single-family business.  **[FNMA_3395002_1]**

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- **Strong Financial Performance**: Fannie Mae reported **$4.3 billion in net income** for Q1 2024, an increase from **$3.9 billion** in Q4 2023, demonstrating robust profitability and financial stability.  **[FNMA_3381524_1]** **[FNMA_3381524_3]** **[FNMA_3381524_4]**
- **Increased Net Worth Enhancing Financial Resilience**: The company's net worth increased to **$82 billion** as of the end of March 2024 through retained earnings, bolstering its financial resilience.  **[FNMA_3381524_1]**
- **Significant Support to Housing Market and Mission Commitment**: In Q1 2024, Fannie Mae provided **$72 billion of liquidity** to the single-family and multifamily markets, assisting **280,000 households** in buying, refinancing, or renting homes.  **[FNMA_3381524_1]**  This includes helping **76,000 first-time homebuyers** and supporting **89,000 units** of multifamily rental housing, a significant majority of which were affordable to households earning at or below 120% of area median income.  **[FNMA_3381524_1]**

88c736f47b3d78dd29252319d07f4d3351b643204d076a2029f454b9790fc602

- Fannie Mae's net income increased significantly to **$17.4 billion** in 2023 from **$12.9 billion** in 2022, demonstrating strong financial performance.  **[FNMA_3373527_2]** **[FNMA_3373527_4]**
- The company's net worth grew to nearly **$78 billion** at the end of the year, bolstering its financial stability and enabling it to provide reliable mortgage credit.  **[FNMA_3373527_2]**
- The single-family serious delinquency rate remained near historically low levels at **55 basis points**, reflecting strong credit quality in the loan portfolio.  **[FNMA_3373527_4]**

2b7579c110bea940a2e21c9fd1a7322d135a4e5cfdecbde8bfdd0ec2fd188fb4

- **$4 billion in net income** in Q3 2024 increased Fannie Mae's net worth to **$90.5 billion**, strengthening financial stability.  **[FNMA_3405069_1]**
- Provided **$106 billion of liquidity** to the single-family and multifamily markets, helping **383,000 households** buy, refinance, or rent a home, including **117,000 first-time homebuyers**.  **[FNMA_3405069_1]**
- Maintained strong credit quality with a weighted average loan-to-value ratio of **77%** and a weighted average credit score of **759** on single-family acquisitions, while single-family serious delinquency rates remained near historically low levels at **52 basis points**.  **[FNMA_3405069_3]**

ea5ebfdaa345c88599d79484f9ff31b24725f4e5fecc0341b7620c264ecc8d9c

- **Decline in Multifamily Loan Acquisitions**: Fannie Mae's multifamily loan acquisitions decreased by **24% in 2023**, totaling **$53 billion**, due to market uncertainty and high interest rates.  **[FNMA_3373527_4]**
- **Increase in Multifamily Serious Delinquency Rate**: The multifamily serious delinquency rate increased to **46 basis points** as of December 31, 2023, up from **24 basis points** the previous year, driven by stress in seniors housing loans.  **[FNMA_3373527_4]**
- **Expected Decline in Multifamily Housing Starts and Rent Growth**: Fannie Mae expects multifamily housing starts to decline in 2024 and projects rent growth to remain below recent averages at **1% to 1.5%**, due to elevated interest rates, abundant supply in some markets, and anticipated slowing job growth.  **[FNMA_3373527_6]**

12c6c0fd48fe66ed03f72307b10806e9e0b2f6c3c0c8cd0ea99c3b0be378389e

Federal National Mortgage Association (FNMA)

Financials