EX-99.1 2 fnma2021q2pressrelease.htm EX-99.1 Document
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Contact:     Pete Bakel      Resource Center: 1-800-732-6643
    202-752-2034                                     Exhibit 99.1
Date:    August 3, 2021                                         

Fannie Mae Reports Net Income of $7.2 Billion for Second Quarter 2021
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$7.2 billion net income for the second quarter of 2021 compared with $5.0 billion for the first quarter of 2021
“Fannie Mae’s second quarter results demonstrate our ability to advance our mission, operate safely and soundly, and grow our capital. To meet our mission through business cycles, we must be safe and sound – and to be safe and sound, we need to have adequate capital. These priorities are the foundation for our work with our industry partners to address the nation’s long-term housing challenges, including housing affordability, supply, and equity.”

Hugh R. Frater, Chief Executive Officer
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Net worth increased to $37.3 billion as of June 30, 2021
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$384 billion in liquidity provided to the Single-Family and Multifamily mortgage markets in the second quarter of 2021
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$129.5 billion of Single-Family home purchase acquisitions, a record high, of which nearly 50% were for first-time homebuyers
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128,000 units of rental housing financed, more than 90% affordable to families earning at or below 120% of area median income
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Nearly 1.4 million single-family forbearance plans initiated to help borrowers since the onset of the COVID-19 pandemic; as of June 30, 2021, approximately 1.1 million of these loans have exited forbearance, including approximately 659,000 through reinstatement or payoff, and approximately 323,000 through the company’s payment deferral option
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Home price growth in the first half of 2021 was 10.5%, the highest six-month growth rate in the history of Fannie Mae’s home price index
Q2 2021 Key Results
$37.3 Billion Net Worth
$806 Billion Supporting Housing Activity
Increase of $7.1 billion in Q2 2021
SF Home PurchasesSF RefinancingsMF Rental Units
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$7.2 Billion Net Income
Single-Family SDQ Rate
Increase of $2.2 billion compared with first quarter 2021
SDQ RateSDQ Rate without Forbearances
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Second Quarter 2021 Results
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Summary of Financial Results
(Dollars in millions)
Q221Q121Variance% ChangeQ220Variance% Change
Net interest income
$8,286 $6,742 $1,544 23 %5,777 2,509 43 %
Fee and other income
103 87 16 18 %90 13 14 %
Net revenues
8,389 6,829 1,560 23 %5,867 2,522 43 %
Investment gains, net646 45 601 NM149 497 NM
Fair value gains (losses), net(446)784 (1,230)NM(1,018)572 56 %
Administrative expenses(746)(748)2 — %(754)8 1 %
Credit-related income (expenses)2,547 770 1,777 NM(22)2,569 NM
Temporary Payroll Tax Cut Continuation Act of 2011 (TCCA) fees(758)(731)(27)4 %(660)(98)15 %
Other expenses, net*(598)(634)36 (6)%(348)(250)72 %
Income before federal income taxes
9,034 6,315 2,719 43 %3,214 5,820 181 %
Provision for federal income taxes
(1,882)(1,322)(560)42 %(669)(1,213)181 %
Net income
$7,152 $4,993 $2,159 43 %$2,545 $4,607 181 %
Total comprehensive income
$7,120 $4,966 $2,154 43 %$2,532 $4,588 181 %
Net worth$37,345 $30,225 $7,120 24 %$16,477 $20,868 127 %
NM - Not meaningful
* Other expense, net also includes credit enhancement expense and change in expected credit enhancement recoveries
Financial Highlights
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Net income increased $2.2 billion in the second quarter of 2021 compared with the first quarter of 2021 driven primarily by an increase in credit-related income and higher net interest income, partially offset by a shift from fair value gains in the first quarter of 2021 to fair value losses in the second quarter of 2021.
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Credit-related income increased $1.8 billion in the second quarter of 2021 compared with the first quarter of 2021. Credit-related income in the second quarter of 2021 was driven by higher actual and forecasted home prices, as well as an increase in the volume of redesignations of reperforming single-family mortgage loans from held-for-investment to held-for sale.
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Net interest income increased $1.5 billion in the second quarter of 2021 compared with the first quarter of 2021, driven primarily by an increase in net amortization income, particularly in the beginning of the second quarter. Single-family mortgage loan prepayment activity slowed some throughout the second quarter of 2021 compared to the first quarter of 2021; however refinancing activity remained strong due to the continued low interest-rate environment.
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Fair value losses were $446 million in the second quarter of 2021, compared with fair value gains of $784 million in the first quarter of 2021. The $1.2 billion shift from gains to losses was driven by a decrease in Treasury yields, which drove losses on commitments to sell securities and fair value debt as prices rose.
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Investment gains increased $601 million in the second quarter of 2021, driven by gains from the sale of single-family reperforming loans in the second quarter of 2021, compared with no such sales in the first quarter of 2021.
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Second Quarter 2021 Results
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Single-Family Business Financial Results
(Dollars in millions)
Q221Q121Variance% ChangeQ220Variance% Change
Net interest income
$7,323 $5,894 $1,429 24 %$4,939 $2,384 48 %
Fee and other income
80 62 18 29 %71 9 13 %
Net revenues
7,403 5,956 1,447 24 %5,010 2,393 48 %
Investment gains, net658 64 594 NM96 562 NM
Fair value gains (losses), net(386)740 (1,126)NM(1,030)644 63 %
Administrative expenses(619)(623)4 (1)%(625)6 (1)%
Credit-related income2,525 679 1,846 NM216 2,309 NM
Temporary Payroll Tax Cut Continuation Act of 2011 (TCCA) fees(758)(731)(27)4 %(660)(98)(15)%
Other expenses, net*
(591)(529)(62)12 %(351)(240)(68)%
Income before federal income taxes
8,232 5,556 2,676 48 %2,656 5,576 NM
Provision for federal income taxes
(1,725)(1,162)(563)48 %(556)(1,169)NM
Net income
$6,507 $4,394 $2,113 48 %$2,100 $4,407 NM
Average charged guaranty fee on new conventional acquisitions, net of TCCA47.9 bps48.0 bps(0.1) bps— %46.7 bps1.2 bps3 %
Average charged guaranty fee on conventional guaranty book of business, net of TCCA45.2 bps44.9 bps0.3 bps1 %44.2 bps1.0 bps2 %
* Other expense, net also includes credit enhancement expense and change in expected credit enhancement recoveries
Key Business Highlights
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Single-family conventional acquisition volume was $373.3 billion in the second quarter of 2021. Purchase acquisitions reached a record high of $129.5 billion, of which nearly 50% were for first-time homebuyers. Refinance acquisitions were $243.8 billion in the second quarter of 2021, a decline compared with the first quarter of 2021, but remaining at a high level due to the continued low interest-rate environment.
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Average single-family conventional guaranty book of business during the second quarter of 2021 increased from the first quarter of 2021 by 2.7%. Credit characteristics of the single-family conventional guaranty book of business remained strong, with a weighted-average mark-to-market loan-to-value ratio of 55% and weighted-average FICO credit score of 752.
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Average charged guaranty fee, net of TCCA fees, on the single-family conventional guaranty book increased from 44.9 basis points for the three months ended March 31, 2021 to 45.2 basis points for the three months ended June 30, 2021. Average charged guaranty fee on newly acquired single-family conventional loans, net of TCCA fees, remained relatively flat at 47.9 basis points.
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As of June 30, 2021, 1.8% of the single-family guaranty book of business based on loan count, or 313,679 loans, was in forbearance, the vast majority of which was related to the COVID-19 pandemic, compared with 2.5% as of March 31, 2021. Since the start of the pandemic, 74% of loans that entered forbearance have successfully exited.
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Single-family serious delinquency rate decreased to 2.08% as of June 30, 2021, from 2.58% as of March 31, 2021, due to the on-going economic recovery and the decline in the number of the company’s single-family loans in a COVID-19 forbearance plan. Single-family serious delinquency rate excluding loans in forbearance decreased from 0.66% as of March 31, 2021 to 0.64% as of June 30, 2021. Single-family seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process.

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Second Quarter 2021 Results
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Multifamily Business Financial Results
(Dollars in millions)
Q221Q121Variance% ChangeQ220Variance% Change
Net interest income
$963 $848 $115 14 %$838 $125 15 %
Fee and other income
23 25 (2)(8)%19 4 21 %
Net revenues
986 873 113 13 %857 129 15 %
Fair value gains (losses), net(60)44 (104)NM12 (72)NM
Administrative expenses(127)(125)(2)2 %(129)2 (2)%
Credit-related income (expenses)22 91 (69)(76)%(238)260 NM
Credit enhancement expense(55)(58)3 (5)%(53)(2)4 %
Change in expected credit enhancement recoveries13 (15)28 NM65 (52)(80)%
Other income (expense), net23 (51)74 NM44 (21)(48)%
Income before federal income taxes
802 759 43 6 %558 244 44 %
Provision for federal income taxes
(157)(160)3 (2)%(113)(44)39 %
Net income
$645 $599 $46 8 %$445 $200 45 %
Average charged guaranty fee rate on multifamily guaranty book of business, at end of period76.8 bps75.9 bps0.9 bps1 %72.3 bps4.5 bps6 %
Key Business Highlights
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New multifamily business volume was $10.9 billion in the second quarter of 2021, resulting in $32.4 billion for the first half of 2021. The Federal Housing Finance Agency (FHFA) established a 2021 multifamily volume cap of $70 billion, of which 50% must be mission-driven, focused on certain affordable and underserved market segments, and 20% must be affordable to residents earning 60% or less of area median income.
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The multifamily guaranty book of business grew by $2.8 billion in the second quarter of 2021 to $401.9 billion. The average charged guaranty fee on the multifamily book increased from 75.9 basis points for the first quarter of 2021 to 76.8 basis points for the second quarter of 2021 as a result of higher pricing on acquisitions. This resulted in an increase in guaranty fee revenue, which drove the increase in net interest income for the quarter.
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As of June 30, 2021, based on unpaid principal balance, 1.2% of Fannie Mae’s multifamily guaranty book of business had received a forbearance plan (excluding loans that liquidated prior to period end), primarily as a result of the COVID-19 pandemic. More than 70% of those loans, measured by unpaid principal balance, were in a repayment plan or reinstated and only 0.2% of the book, or $1.0 billion in unpaid principal balance, was still in active forbearance as of June 30, 2021.
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The multifamily serious delinquency rate continued to decrease in the second quarter to 0.53% as of June 30, 2021 from 0.66% as of March 31, 2021, driven primarily by the on-going economic recovery resulting in loans that received forbearance finishing repayment plans or otherwise reinstating. The multifamily serious delinquency rate excluding loans that have received a forbearance remained at 0.03% as of June 30, 2021. Multifamily seriously delinquent loans are loans that are 60 days or more past due.
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Second Quarter 2021 Results
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Additional Matters
Fannie Mae’s condensed consolidated balance sheets and condensed statements of operations and income for the second quarter of 2021 are available in the accompanying Annex; however, investors and interested parties should read the company’s Second Quarter 2021 Form 10-Q, which was filed today with the Securities and Exchange Commission and is available on Fannie Mae’s website, www.fanniemae.com. The company provides further discussion of its financial results and condition, credit performance, and other matters in its Second Quarter 2021 Form 10-Q. Additional information about the company’s financial and credit performance is contained in Fannie Mae’s “Q2 2021 Financial Supplement” at www.fanniemae.com.

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Fannie Mae provides website addresses in its news releases solely for readers’ information. Other content or information appearing on these websites is not part of this release.
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.
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ANNEX
FANNIE MAE
Condensed Consolidated Balance Sheets - (Unaudited)
(Dollars in millions)
As of
June 30,
2021		December 31, 2020
ASSETS
Cash and cash equivalents$48,879 $38,337 
Restricted cash and cash equivalents (includes $68,777 and $68,308, respectively, related to consolidated trusts)
76,420 77,286 
Federal funds sold and securities purchased under agreements to resell or similar arrangements
(includes $17,775 and $0, respectively, related to consolidated trusts)
43,888 28,200 
Investments in securities:
Trading, at fair value (includes $6,186 and $6,544, respectively, pledged as collateral)
95,101 136,542 
Available-for-sale, at fair value (with an amortized cost of $932 and $1,606, net of allowance for credit losses of $3 as of June 30, 2021 and December 31, 2020)
955 1,697 
Total investments in securities96,056 138,239 
Mortgage loans:
Loans held for sale, at lower of cost or fair value
6,933 5,197 
Loans held for investment, at amortized cost:
Of Fannie Mae81,363 112,726 
Of consolidated trusts
3,770,125 3,546,521 
Total loans held for investment (includes $5,616 and 6,490, respectively, at fair value)
3,851,488 3,659,247 
Allowance for loan losses(7,114)(10,552)
Total loans held for investment, net of allowance3,844,374 3,648,695 
Total mortgage loans3,851,307 3,653,892 
Advances to lenders6,257 10,449 
Deferred tax assets, net12,575 12,947 
Accrued interest receivable, net (includes $9,821 and $9,635, respectively, related to consolidated trusts and net of an allowance of $168 and $216 as of June 30, 2021 and December 31, 2020, respectively)
10,169 9,937 
Acquired property, net1,138 1,261 
Other assets11,349 15,201 
Total assets$4,158,038 $3,985,749 
LIABILITIES AND EQUITY
Liabilities:
Accrued interest payable (includes $8,653 and $8,955, respectively, related to consolidated trusts)
$9,374 $9,719 
Debt:
Of Fannie Mae (includes $2,946 and $3,728, respectively, at fair value)
251,576 289,572 
Of consolidated trusts (includes $22,972 and $24,586, respectively, at fair value)
3,844,699 3,646,164 
Other liabilities (includes $1,325 and $1,523, respectively, related to consolidated trusts)
15,044 15,035 
Total liabilities4,120,693 3,960,490 
Commitments and contingencies (Note 13)— — 
Fannie Mae stockholders’ equity:
Senior preferred stock (liquidation preference of $151,724 and $142,192, respectively)
120,836 120,836 
Preferred stock, 700,000,000 shares are authorized—555,374,922 shares issued and outstanding
19,130 19,130 
Common stock, no par value, no maximum authorization—1,308,762,703 shares issued and
   1,158,087,567 shares outstanding
687 687 
Accumulated deficit(95,965)(108,110)
Accumulated other comprehensive income57 116 
Treasury stock, at cost, 150,675,136 shares
(7,400)(7,400)
Total stockholders’ equity (See Note 1: Senior Preferred Stock Purchase Agreement and Senior Preferred Stock for information on the related dividend obligation and liquidation preference)
37,345 25,259 
Total liabilities and equity$4,158,038 $3,985,749 





See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2021 Form 10-Q
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FANNIE MAE
(In conservatorship)
Condensed Consolidated Statements of Operations and Comprehensive Income - (Unaudited)
(Dollars in millions, except per share amounts)

For the Three Months
Ended June 30,		For the Six Months Ended June 30,
2021202020212020
Interest income:
Trading securities$122 $219 $262 $535 
Available-for-sale securities18 26 37 57 
Mortgage loans24,932 27,007 48,285 55,945 
Federal funds sold and securities purchased under agreements to resell or similar arrangements
4 14 12 121 
Other31 25 73 59 
Total interest income25,107 27,291 48,669 56,717 
Interest expense:
Short-term debt
(1)(54)(4)(156)
 Long-term debt(16,820)(21,460)(33,637)(45,437)
Total interest expense(16,821)(21,514)(33,641)(45,593)
Net interest income8,286 5,777 15,028 11,124 
Benefit (provision) for credit losses2,588 (12)3,353 (2,595)
Net interest income after benefit (provision) for credit losses10,874 5,765 18,381 8,529 
Investment gains (losses), net646 149 691 (9)
Fair value gains (losses), net(446)(1,018)338 (1,294)
Fee and other income103 90 190 210 
Non-interest loss303 (779)1,219 (1,093)
Administrative expenses:
Salaries and employee benefits(365)(382)(752)(775)
Professional services(184)(231)(398)(443)
Other administrative expenses(197)(141)(344)(285)
Total administrative expenses(746)(754)(1,494)(1,503)
Foreclosed property expense(41)(10)(36)(90)
Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees(758)(660)(1,489)(1,297)
Credit enhancement expense(274)(360)(558)(736)
Change in expected credit enhancement recoveries(44)273 (75)461 
Other expenses, net(280)(261)(599)(479)
Total expenses(2,143)(1,772)(4,251)(3,644)
Income before federal income taxes9,034 3,214 15,349 3,792 
Provision for federal income taxes(1,882)(669)(3,204)(786)
Net income7,152 2,545 12,145 3,006 
Other comprehensive income (loss):
Changes in unrealized gains (losses) on available-for-sale securities, net of reclassification adjustments and taxes
(31)(11)(54)7 
Other, net of taxes(1)(2)(5)(5)
Total other comprehensive income (loss)(32)(13)(59)2 
Total comprehensive income$7,120 $2,532 $12,086 $3,008 
Net income$7,152 $2,545 $12,145 $3,006 
Dividends distributed or amounts attributable to senior preferred stock
(7,120)(2,532)(12,086)(3,008)
Net income (loss) attributable to common stockholders$32 $13 $59 $(2)
Earnings per share:
Basic$0.01 $0.00 $0.01 $0.00 
Diluted0.01 0.00 0.01 0.00 
Weighted-average common shares outstanding:
Basic5,867 5,867 5,867 5,867 
Diluted5,893 5,893 5,893 5,867 

See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2021 Form 10-Q
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Second Quarter 2021 Results
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