Second Quarter 2015 Results 1

Resource Center: 1-800-732-6643 

Contact: Pete Bakel

202-752-2034

Date: August 6, 2015

Fannie Mae Reports Net Income of $4.6 Billion and 

Comprehensive Income of $4.4 Billion for Second Quarter 2015

• Fannie Mae reported net income of $4.6 billion and comprehensive income of $4.4 billion for the second 

quarter of 2015. 

• Fannie Mae expects to pay $4.4 billion in dividends to Treasury in September 2015. With the expected 

September dividend payment, the company will have paid a total of $142.5 billion in dividends to Treasury. 

Dividend payments do not reduce prior Treasury draws, which total $116.1 billion since 2008.

• Fannie Mae provided approximately $144 billion in liquidity to the mortgage market in the second quarter 

of 2015, enabling families to buy, refinance, or rent homes.

• Fannie Mae helped distressed families retain their homes or avoid foreclosure through approximately 

34,000 workout solutions in the second quarter of 2015 using a combination of Fannie Mae’s proprietary 

programs as well as government sponsored programs.

WASHINGTON, DC — Fannie Mae (FNMA/OTC) reported net income of $4.6 billion for the second 

quarter of 2015 and comprehensive income of $4.4 billion. The company reported a positive net worth of 

$6.2 billion as of June 30, 2015 resulting in a dividend obligation to Treasury of $4.4 billion, which the 

company expects to pay in September 2015.

Fannie Mae’s net income of $4.6 billion and comprehensive income of $4.4 billion for the second quarter 

of 2015 compares to net income of $1.9 billion and comprehensive income of $1.8 billion for the first 

quarter of 2015. Net income increased due primarily to fair value gains, partially offset by credit-related 

expense, in the second quarter of 2015.

The company’s financial results for the second quarter of 2015 were affected by an increase in interest 

rates. Although the increase in interest rates had a positive impact on the fair value of the company’s 

financial instruments, the increase in interest rates had a negative impact on its credit-related expense. The 

negative impact on credit-related expense was partially offset by an increase in home prices during the 

second quarter of 2015. Also contributing to credit-related expense was the redesignation of certain 

nonperforming single-family loans from “held for investment” to “held for sale” in the second quarter of 

2015. 

Fannie Mae recognized a provision for federal income taxes of $2.2 billion for the second quarter of 2015, 

reflecting an effective tax rate of 32 percent.

“We reported another strong quarter of financial performance with solid revenues and an impressive book 

of business that only continues to improve. We have reduced the risk of our business and have made great 

strides in transferring credit risk to private capital to better protect taxpayers,” said Timothy J. 

Mayopoulos, president and chief executive officer. “We are committed to serving our customers and the 

market with solutions that promote simplicity and certainty. We are creating revolutionary new tools, 

products, and solutions – and enhancing our existing foundational resources – to support our lenders. We 

continue to make changes throughout our company that improve the way we work and increase the value 

we provide to the housing finance system.” 
Second Quarter 2015 Results 2

SUMMARY OF SECOND QUARTER 2015 RESULTS

(Dollars in millions) 2Q15 1Q15 Variance 2Q15 2Q14 Variance

Net interest income $ 5,677 $ 5,067 $ 610 $ 5,677 $ 4,904 $ 773

Fee and other income 556 308 248 556 383 173

Net revenues 6,233 5,375 858 6,233 5,287 946

Investment gains, net 514 342 172 514 483 31

Fair value gains (losses), net 2,606 (1,919) 4,525 2,606 (934) 3,540

Administrative expenses (689) (723) 34 (689) (697) 8

Credit-related income

(Provision) benefit for credit losses (1,033) 533 (1,566) (1,033) 1,639 (2,672)

Foreclosed property (expense) income (182) (473) 291 (182) 214 (396)

Total credit-related (expense) income (1,215) 60 (1,275) (1,215) 1,853 (3,068)

Temporary Payroll Tax Cut Continuation Act of 2011

(“TCCA”) fees (397) (382) (15) (397) (335) (62)

Other non-interest expenses(1) (202) 5 (207) (202) (238) 36

Net gains (losses) and income (expenses) 617 (2,617) 3,234 617 132 485

Income before federal income taxes 6,850 2,758 4,092 6,850 5,419 1,431

Provision for federal income taxes (2,210) (870) (1,340) (2,210) (1,752) (458)

Net income 4,640 1,888 2,752 4,640 3,667 973

Less: Net income attributable to noncontrolling interest — — — — (1) 1

Net income attributable to Fannie Mae $ 4,640 $ 1,888 $ 2,752 $ 4,640 $ 3,666 $ 974

Total comprehensive income attributable to Fannie Mae $ 4,359 $ 1,796 $ 2,563 $ 4,359 $ 3,711 $ 648

Dividends distributed or available for distribution to

senior preferred stockholder $ (4,359) $ (1,796) $ (2,563) $ (4,359) $ (3,712) $ (647)

(1) Consists debt extinguishment gains, net and other expenses.

Net revenues, which consist of net interest income and fee and other income, were $6.2 billion for the 

second quarter of 2015, compared with $5.4 billion for the first quarter of 2015. 

Net interest income, which includes guaranty fee revenue, was $5.7 billion for the second quarter of 2015

compared with $5.1 billion for the first quarter of 2015. Net interest income for the second quarter was 

driven by guaranty fee revenue, including amortization income from prepayments, and interest income 

earned on mortgage assets in the company’s retained mortgage portfolio. 

An increasing portion of Fannie Mae’s net interest income in recent years has been derived from guaranty 

fees rather than from interest income earned on the company’s retained mortgage portfolio assets. This is a 

result of both the impact of guaranty fee increases implemented in 2012 and the shrinking of the retained 

mortgage portfolio. The company estimates that a majority of its net interest income for the second quarter 

of 2015 was derived from guaranty fees on loans underlying its Fannie Mae MBS. The company expects 

that guaranty fees will continue to account for an increasing portion of its net interest income.
Second Quarter 2015 Results 3

Net fair value gains were $2.6 billion in the second quarter of 2015, compared with losses of $1.9 billion

in the first quarter of 2015. Fair value gains for the second quarter of 2015 were due primarily to increases 

in longer-term interest rates positively impacting the value of the company’s risk management derivatives. 

The estimated fair value of the company’s financial instruments may fluctuate substantially from period to 

period because of changes in interest rates, the yield curve, mortgage spreads, implied volatility, and 

activity related to these financial instruments. 

Credit-related expense, which consists of a provision for credit losses and foreclosed property expense, 

was $1.2 billion in the second quarter of 2015, compared with credit-related income of $60 million in the 

first quarter of 2015. The shift to credit-related expense in the second quarter of 2015 from credit-related 

income in the first quarter of 2015 was due primarily to an increase in the company’s provision for credit 

losses due to increased mortgage interest rates during the second quarter of 2015. Due to the rise in 

mortgage interest rates, the company expects a decline in future prepayments on individually impaired 

loans, including modified loans. Lower expected prepayments lengthen the expected lives of modified 

loans, which increases the impairment related to concessions provided on these loans and results in an 

increase in the provision for credit losses. The negative impact from the increase in interest rates was 

partially offset by a positive impact from an increase in home prices during the second quarter of 2015. 

Also contributing to credit-related expense was the redesignation of certain nonperforming single-family 

loans from “held for investment” to “held for sale” in the second quarter of 2015. These loans were 

adjusted to the lower of cost or fair value, which negatively impacted the company’s provision for credit 

losses by approximately $500 million. The change in intent is aligned with the company’s plan to 

complete additional sales of nonperforming loans by building these sales into a programmatic offering. 
Second Quarter 2015 Results 4

VARIABILITY OF FINANCIAL RESULTS 

Fannie Mae expects to remain profitable on an annual basis for the foreseeable future; however, the 

company expects its earnings in 2015 and future years will be substantially lower than its earnings for 

2014, due primarily to the company’s expectation of substantially lower income from resolution 

agreements, continued declines in net interest income from its retained mortgage portfolio assets, and 

lower credit-related income or a shift to credit-related expense. In addition, certain factors, such as 

changes in interest rates or home prices, could result in significant volatility in the company’s financial 

results from quarter to quarter or year to year. Fannie Mae’s future financial results also will be affected by 

a number of other factors, including: the company’s guaranty fee rates; the volume of single-family 

mortgage originations in the future; the size, composition, and quality of its retained mortgage portfolio 

and guaranty book of business; and economic and housing market conditions. The company’s expectations 

for its future financial results do not take into account the impact on its business of potential future 

legislative or regulatory changes, which could have a material impact on the company’s financial results, 

particularly the enactment of housing finance reform legislation. For additional information on factors that 

affect the company’s financial results, please refer to “Executive Summary” in the company’s quarterly 

report on Form 10-Q for the quarter ended June 30, 2015 (the “Second Quarter 2015 Form 10-Q”).
Second Quarter 2015 Results 5

SUMMARY OF SECOND QUARTER 2015 BUSINESS SEGMENT RESULTS

The business groups running Fannie Mae’s three reporting segments – its Single-Family business, its 

Multifamily business, and its Capital Markets group – engage in complementary business activities in 

pursuing the company’s goals of providing liquidity to the market, expanding access to credit, and helping 

the U.S. housing market recover.

(Dollars in millions) 2Q15 1Q15 Variance 2Q15 2Q14 Variance

Single-Family Segment:

Guaranty fee income(1) $ 3,092 $ 3,040 $ 52 $ 3,092 $ 2,893 $ 199

Credit-related (expense) income (1,238) (7) (1,231) (1,238) 1,781 (3,019)

TCCA fees(1) (397) (382) (15) (397) (335) (62)

Other expense, net(2) (412) (539) 127 (412) (512) 100

Income before federal income taxes 1,045 2,112 (1,067) 1,045 3,827 (2,782)

Provision for federal income taxes (419) (581) 162 (419) (1,133) 714

Net income $ 626 $ 1,531 $ (905) $ 626 $ 2,694 $ (2,068)

Multifamily Segment:

Guaranty fee income $ 357 $ 340 $ 17 $ 357 $ 317 $ 40

Credit-related income 23 67 (44) 23 72 (49)

Other(3) 27 146 (119) 27 (4) 31

Income before federal income taxes 407 553 (146) 407 385 22

Provision for federal income taxes (41) (70) 29 (41) (9) (32)

Net income $ 366 $ 483 $ (117) $ 366 $ 376 $ (10)

Capital Markets Segment:

Net interest income $ 1,513 $ 1,602 $ (89) $ 1,513 $ 1,917 $ (404)

Investment gains, net 1,562 1,509 53 1,562 1,648 (86)

Fair value gains (losses), net 2,555 (1,970) 4,525 2,555 (1,098) 3,653

Other(4) (230) (323) 93 (230) (308) 78

Income before federal income taxes 5,400 818 4,582 5,400 2,159 3,241

Provision for federal income taxes (1,750) (219) (1,531) (1,750) (610) (1,140)

Net income $ 3,650 $ 599 $ 3,051 $ 3,650 $ 1,549 $ 2,101

(1) Consists of the impact of a 10 basis point guaranty fee increase implemented pursuant to the Temporary Payroll Tax Cut Continuation 

Act of 2011 (the “TCCA”), the incremental revenue from which must be remitted to Treasury. The resulting revenue is included in 

guaranty fee income and the expense is recognized in “TCCA fees.”

(2) Consists primarily of administrative expenses and fee and other income.

(3) Consists primarily of gains from partnership investments, administrative expenses, and fee and other income.

(4) Consists primarily of guaranty fee expense, administrative expenses, and fee and other income.

Single-Family Business

• Single-Family net income was $626 million in the second quarter of 2015, compared with $1.5 billion

in the first quarter of 2015. Net income in the second quarter of 2015 was driven primarily by guaranty 

fee income, offset by credit-related expense.

• Single-Family guaranty fee income was $3.1 billion in the second quarter of 2015, compared with $3.0 

billion in the first quarter of 2015. Single-Family guaranty fee income increased in the second quarter 

of 2015 compared with the first quarter of 2015 as loans with higher guaranty fees have become a 
Second Quarter 2015 Results 6

larger part of the company’s Single-Family guaranty book of business due to the cumulative impact of 

guaranty fee price increases implemented in 2012. The Single-Family guaranty book of business was 

$2.83 trillion as of June 30, 2015, compared with $2.84 trillion as of March 31, 2015. 

• Single-Family credit-related expense was $1.2 billion in the second quarter of 2015, compared with $7 

million in the first quarter of 2015. The increase in credit-related expense in the second quarter of 2015

from the first quarter of 2015 was due primarily to an increase in the company’s provision for credit 

losses due to increased mortgage interest rates during the second quarter of 2015. This was partially 

offset by a benefit for credit losses due to an increase in home prices during the second quarter of 

2015. Also contributing to credit-related expense was the redesignation of certain nonperforming 

single-family loans from “held for investment” to “held for sale” in the second quarter of 2015. These 

loans were adjusted to the lower of cost or fair value, which negatively impacted the company’s 

provision for credit losses. 

Multifamily Business

• Multifamily net income was $366 million in the second quarter of 2015, compared with $483 million

in the first quarter of 2015. Multifamily net income in the second quarter of 2015 was driven primarily 

by guaranty fee income. The decrease in Multifamily net income in the second quarter of 2015

compared with the first quarter of 2015 was due to lower gains on sales of partnership investments.

• Multifamily guaranty fee income was $357 million for the second quarter of 2015, compared with 

$340 million for the first quarter of 2015. Multifamily guaranty fee income increased in the second 

quarter of 2015 compared with the first quarter of 2015 as loans with higher guaranty fees have 

become a larger part of the company’s Multifamily guaranty book of business, while loans with lower 

guaranty fees continue to liquidate. 

• The Multifamily guaranty book of business was $213.2 billion as of June 30, 2015, compared with 

$206.7 billion as of March 31, 2015.

Capital Markets

• Capital Markets net income was $3.7 billion in the second quarter of 2015, compared with $599 

million in the first quarter of 2015. Net income in the second quarter of 2015 was driven primarily by 

fair value gains, investment gains, and net interest income.

• Capital Markets net fair value gains were $2.6 billion in the second quarter of 2015, compared with net 

fair value losses of $2.0 billion in the first quarter of 2015. Net fair value gains for the second quarter 

of 2015 were due primarily to fair value gains on risk management derivatives driven by increases in 

longer-term interest rates during the quarter.

• Capital Markets net investment gains were $1.6 billion in the second quarter of 2015, compared with 

$1.5 billion in the first quarter of 2015. Net investment gains for the second quarter of 2015 were due 

primarily to the sale of mortgage-related securities during the quarter.

• Capital Markets net interest income was $1.5 billion for the second quarter of 2015, compared with 

$1.6 billion for the first quarter of 2015. Net interest income was driven primarily by interest earned 

on the retained mortgage portfolio.

• Capital Markets retained mortgage portfolio balance decreased to $390.3 billion as of June 30, 2015, 

compared with $411.7 billion as of March 31, 2015, resulting from purchases of $69.7 billion and 

sales and liquidations of $91.1 billion during the second quarter of 2015. 
Second Quarter 2015 Results 7

BUILDING A SUSTAINABLE HOUSING FINANCE SYSTEM

In addition to continuing to provide liquidity and support to the mortgage market, Fannie Mae continues to 

invest significant resources toward helping to maintain a safer and sustainable housing finance system for 

today and build a safer and sustainable housing finance system for the future. The company is pursuing the 

strategic goals identified by its conservator, the Federal Housing Finance Agency (“FHFA”). These 

strategic goals are: maintain, in a safe and sound manner, credit availability and foreclosure prevention 

activities for new and refinanced mortgages to foster liquid, efficient, competitive, and resilient national 

housing finance markets; reduce taxpayer risk through increasing the role of private capital in the 

mortgage market; and build a new single-family securitization infrastructure for use by Fannie Mae and 

Freddie Mac and adaptable for use by other participants in the secondary market in the future. 

ABOUT FANNIE MAE’S CONSERVATORSHIP

Fannie Mae has operated under the conservatorship of FHFA since September 6, 2008. Fannie Mae has 

not received funds from Treasury since the first quarter of 2012. The funding the company has received 

under its senior preferred stock purchase agreement with Treasury has provided the company with the 

capital and liquidity needed to fulfill its mission of providing liquidity and support to the nation’s housing 

finance markets and to avoid a trigger of mandatory receivership under the Federal Housing Finance 

Regulatory Reform Act of 2008. For periods through June 30, 2015, Fannie Mae has requested cumulative 

draws totaling $116.1 billion and paid $138.2 billion in dividends to Treasury. Under the senior preferred 

stock purchase agreement, the payment of dividends does not offset prior draws. As a result, Treasury 

maintains a liquidation preference of $117.1 billion on the company’s senior preferred stock. 

Treasury Draws and Dividend Payments

(1) Treasury draw requests are shown in the period for which requested and do not include the initial $1.0 billion liquidation preference 

of Fannie Mae’s senior preferred stock, for which Fannie Mae did not receive any cash proceeds. The payment of dividends does 

not offset prior Treasury draws.

(2) Fannie Mae expects to pay a dividend for the third quarter of 2015 calculated based on the company’s net worth of $6.2 billion as of 

June 30, 2015 less a capital reserve amount of $1.8 billion.

(3) Amounts may not sum due to rounding.

In August 2012, the terms governing the company’s dividend obligations on the senior preferred stock 

were amended. The amended senior preferred stock purchase agreement does not allow the company to 

build a capital reserve. Beginning in 2013, the required senior preferred stock dividends each quarter equal 

the amount, if any, by which the company’s net worth as of the end of the immediately preceding fiscal 
Second Quarter 2015 Results 8

quarter exceeds an applicable capital reserve amount. The capital reserve amount is $1.8 billion for each 

quarter of 2015 and will be reduced by $600 million each year until it reaches zero in 2018. 

The amount of remaining funding available to Fannie Mae under the senior preferred stock purchase 

agreement with Treasury is currently $117.6 billion. If the company were to draw additional funds from 

Treasury under the agreement in a future period, the amount of remaining funding under the agreement 

would be reduced by the amount of the company’s draw. Dividend payments Fannie Mae makes to 

Treasury do not restore or increase the amount of funding available to the company under the agreement.

Fannie Mae is not permitted to redeem the senior preferred stock prior to the termination of Treasury’s 

funding commitment under the senior preferred stock purchase agreement. The limited circumstances 

under which Treasury’s funding commitment will terminate are described in “Business—Conservatorship 

and Treasury Agreements” in the company’s annual report on Form 10-K for the year ended December 31, 

2014.

CREDIT QUALITY

While continuing to make it possible for families to buy, refinance, or rent homes, Fannie Mae has 

maintained responsible credit standards. Since 2009, Fannie Mae has seen the effect of the actions it took, 

beginning in 2008, to significantly strengthen its underwriting and eligibility standards and change its 

pricing to promote sustainable homeownership and stability in the housing market. Fannie Mae actively 

monitors on an ongoing basis the credit risk profile and credit performance of the company’s single-family 

loan acquisitions, in conjunction with housing market and economic conditions, to determine if its pricing, 

eligibility, and underwriting criteria accurately reflects the risk associated with loans the company 

acquires or guarantees. Single-family conventional loans acquired by Fannie Mae in the first six months of 

2015 had a weighted average borrower FICO credit score at origination of 749 and a weighted average 

original loan-to-value ratio of 74 percent.

Fannie Mae’s single-family conventional guaranty book of business as of June 30, 2015 consisted of 

single-family loans acquired prior to 2009; non-Refi PlusTM loans acquired beginning in 2009; loans 

acquired through the Administration’s Home Affordable Refinance Program® (“HARP®”); and other loans 

acquired pursuant to the company’s Refi Plusinitiative, excluding HARP loans. The company’s Refi Plus 

initiative, which started in April 2009 and includes HARP, provides expanded refinance opportunities for 

eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high 

loan-to-value ratios, including loans with loan-to-value ratios in excess of 100 percent.
Second Quarter 2015 Results 9

The single-family serious delinquency rate for Fannie Mae’s book of business has decreased for 21 

consecutive quarters since the first quarter of 2010, and was 1.66 percent as of June 30, 2015, compared 

with 5.47 percent as of March 31, 2010. This decrease is primarily the result of home retention solutions, 

foreclosure alternatives and completed foreclosures, improved loan payment performance, as well as the 

company’s acquisition of loans with stronger credit profiles since the beginning of 2009. Although Fannie 

Mae’s single-family serious delinquency rate has decreased, and is expected to continue to decrease, the 

company expects the number of single-family loans in its book of business that are seriously delinquent to 

remain above pre-2008 levels for years. The company’s single-family serious delinquency rate and the 

period of time that loans remain seriously delinquent continue to be negatively impacted by the length of 

time required to complete a foreclosure in some states. High levels of foreclosures, changes in state 

foreclosure laws, new federal and state servicing requirements imposed by regulatory actions and legal 

settlements, and the need for servicers to adapt to these changes have lengthened the time it takes to 

foreclose on a mortgage loan in a number of states, particularly in New York, Florida, and New Jersey. 

Other factors such as the pace of loan modifications, the timing and volume of future sales the company 

makes of non-performing loans, changes in home prices, unemployment levels, and other macroeconomic 

conditions also influence serious delinquency rates. 

Total loss reserves, which reflect the company’s estimate of the probable losses the company has incurred 

in its guaranty book of business, including concessions it granted borrowers upon modification of their 

loans, decreased to $32.1 billion as of June 30, 2015 from $32.9 billion as of March 31, 2015. Although 

the company’s loss reserves have declined substantially from their peak and are expected to decline 

further, the company expects its loss reserves will remain elevated relative to the levels experienced prior 

to the 2008 housing crisis for an extended period because (1) the company expects future defaults on loans 

that it acquired prior to 2009 and the resulting charge-offs will occur over a period of years and (2) a 

significant portion of the company’s reserves represents concessions granted to borrowers upon 

modification of their loans and its reserves will continue to reflect these concessions until the loans are 

fully repaid or default. 
Second Quarter 2015 Results 10

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Liquidity

Fannie Mae provided approximately $144 billion in liquidity to the mortgage market in the second quarter 

of 2015, through its purchases of loans and guarantees of loans and securities, which resulted in 

approximately: 

• 229,000 home purchases 

• 344,000 mortgage refinancings 

• 181,000 units of multifamily housing 

The company remained the largest single issuer of single-family mortgage-related securities in the 

secondary market in the second quarter of 2015, with an estimated market share of new single-family 

mortgage-related securities issuances of 37 percent, compared with 40 percent in the first quarter of 2015

and 39 percent in the second quarter of 2014.
Second Quarter 2015 Results 11

Fannie Mae also remained a continuous source of liquidity in the multifamily market. As of March 31, 

2015 (the latest date for which information is available), the company owned or guaranteed approximately 

19 percent of the outstanding debt on multifamily properties.

Refinancing Initiatives

Through the company’s Refi Plus initiative, which offers refinancing flexibility to eligible Fannie Mae 

borrowers and includes HARP, the company acquired approximately 59,000 loans in the second quarter of 

2015. Refinancings delivered to Fannie Mae through Refi Plus in the second quarter of 2015 reduced 

borrowers’ monthly mortgage payments by an average of $183. The company expects the volume of 

refinancings under HARP to continue to decline, due to a decrease in the population of borrowers with 

loans that have high LTV ratios who are willing to refinance and would benefit from refinancing.

Home Retention Solutions and Foreclosure Alternatives

To reduce the credit losses Fannie Mae ultimately incurs on its book of business, the company has been 

focusing its efforts on several strategies, including reducing defaults by offering home retention solutions, 

such as loan modifications. 

For the Six Months Ended June 30,

2015 2014

Unpaid

Principal

Balance

Number of

Loans

Unpaid

Principal

Balance

Number of

Loans

(Dollars in millions)

Home retention strategies:

Modifications $ 8,800 52,914 $ 11,584 68,054

Repayment plans and forbearances completed 476 3,423 511 3,884

Total home retention strategies 9,276 56,337 12,095 71,938

Foreclosure alternatives:

Short sales 1,610 7,781 2,760 13,347

Deeds-in-lieu of foreclosure 629 4,004 996 6,296

Total foreclosure alternatives 2,239 11,785 3,756 19,643

Total loan workouts $11,515 68,122 $ 15,851 91,581

Loan workouts as a percentage of single-family guaranty book of business 0.81% 0.79% 1.11% 1.05%
Second Quarter 2015 Results 12

Fannie Mae views foreclosure as a last resort. For homeowners and communities in need, the company 

offers alternatives to foreclosure. In dealing with homeowners in distress, the company first seeks home 

retention solutions, which enable borrowers to stay in their homes, before turning to foreclosure 

alternatives.

• Fannie Mae provided approximately 34,000 loan workouts during the second quarter of 2015

enabling borrowers to avoid foreclosure.

• Fannie Mae completed approximately 26,000 loan modifications during the second quarter of 

2015.

FORECLOSURES AND REO

When there is no viable home retention solution or foreclosure alternative that can be applied, the 

company seeks to move to foreclosure expeditiously in an effort to minimize prolonged delinquencies that 

can hurt local home values and destabilize communities.

For the Six Months Ended June 30,

2015 2014

Single-family foreclosed properties (number of properties):

Beginning of period inventory of single-family foreclosed properties (REO) 87,063 103,229

Total properties acquired through foreclosure 44,161 63,574

Dispositions of REO (62,507) (70,007)

End of period inventory of single-family foreclosed properties (REO) 68,717 96,796

Carrying value of single-family foreclosed properties (dollars in millions) $ 7,997 $ 10,347

Single-family foreclosure rate 0.51% 0.73%

• Fannie Mae acquired 19,845 single-family REO properties, primarily through foreclosure, in the 

second quarter of 2015, compared with 24,316 in the first quarter of 2015. 

• As of June 30, 2015, the company’s inventory of single-family REO properties was 68,717, 

compared with 79,319 as of March 31, 2015. The carrying value of the company’s single-family 

REO was $8.0 billion as of June 30, 2015.

• The company’s single-family foreclosure rate was 0.51 percent for the six months ended June 30, 

2015. This reflects the annualized total number of single-family properties acquired through 

foreclosure or deeds-in-lieu of foreclosure as a percentage of the total number of loans in Fannie 

Mae’s single-family guaranty book of business.

Fannie Mae’s financial statements for the second quarter of 2015 are available in the accompanying 

Annex; however, investors and interested parties should read the company’s Second Quarter 2015 Form 

10-Q, which was filed today with the Securities and Exchange Commission and is available on Fannie 

Mae’s Web site, www.fanniemae.com. The company provides further discussion of its financial results and 

condition, credit performance, and other matters in its Second Quarter 2015 Form 10-Q. Additional 

information about the company’s credit performance, the characteristics of its guaranty book of business, 

its foreclosure-prevention efforts, and other measures is contained in the “2015 Second Quarter Credit 

Supplement” at www.fanniemae.com.

# # #
Second Quarter 2015 Results 13

In this release, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements, including 

statements regarding: its future dividend payments to Treasury; the level and sources of its future revenues; the company’s plans for future 

sales of nonperforming loans; the company’s future profitability; the level of the company’s earnings in 2015 and future years as compared 

with 2014; the drivers of the expected decline in the company’s earnings in 2015 and future years; the factors that will affect the company’s 

future financial results; the company’s future single-family serious delinquency rates; the future volume of its HARP refinancings; the future 

fair value of the company’s securities and derivatives; the company’s future loss reserves; and the impact of the company’s actions to reduce 

credit losses. These estimates, forecasts, expectations, and statements are forward-looking statements based on the company’s current 

assumptions regarding numerous factors, including future interest rates and home prices, the future performance of its loans and the future 

guaranty fee rates applicable to the loans the company acquires. Actual results, and future projections, could be materially different from 

what is set forth in the forward-looking statements as a result of: home price changes; interest rate changes; unemployment rates; other 

macroeconomic and housing market variables; the company’s future serious delinquency rates; the company’s future guaranty fee pricing, 

and the impact of that pricing on the company’s guaranty fee revenues and competitive environment; government policy; credit availability, 

borrower behavior, including increases in the number of underwater borrowers who strategically default on their mortgage loan; the volume 

of loans it modifies; the effectiveness of its loss mitigation strategies and activities; significant changes in modification and foreclosure 

activity; the volume and pace of future nonperforming loan sales and their impact on the company’s results and serious delinquency rates; 

management of its real estate owned inventory and pursuit of contractual remedies; changes in the fair value of its assets and liabilities; 

future legislative or regulatory requirements or changes that have a significant impact on the company’s business, such as a requirement that 

the company implement a principal forgiveness program or the enactment of housing finance reform legislation; the company’s reliance on 

and future updates to the company’s models relating to loss reserves, including the assumptions used by these models; changes in generally 

accepted accounting principles; changes to the company’s accounting policies; whether the company’s counterparties meet their obligations 

in full; effects from activities the company takes to support the mortgage market and help borrowers; the company’s future objectives and 

activities in support of those objectives, including actions the company may take to reach additional underserved creditworthy borrowers; 

actions the company may be required to take by FHFA, as its conservator or as its regulator, such as changes in the type of business the 

company does or the implementation of a single GSE security; the conservatorship and its effect on the company’s business; the investment by 

Treasury and its effect on the company’s business; the uncertainty of the company’s future; challenges the company faces in retaining and 

hiring qualified employees; the deteriorated credit performance of many loans in the company’s guaranty book of business; a decrease in the 

company’s credit ratings; defaults by one or more institutional counterparties; resolution or settlement agreements the company may enter 

into with its counterparties; operational control weaknesses; changes in the fiscal and monetary policies of the Federal Reserve, including 

any change in the Federal Reserve’s policy toward the reinvestment of principal payments of mortgage-backed securities or any future sales 

of such securities; changes in the structure and regulation of the financial services industry; the company’s ability to access the debt markets; 

disruptions in the housing, credit, and stock markets; government investigations and litigation; the company’s reliance on and the 

performance of the company’s servicers; conditions in the foreclosure environment; global political risk; natural disasters, terrorist attacks, 

pandemics, or other major disruptive events; information security breaches; and many other factors, including those discussed in the “Risk 

Factors” section of and elsewhere in the company’s annual report on Form 10-K for the year ended December 31, 2014 and the company’s 

quarterly report on Form 10-Q for the quarter ended June 30, 2015, and elsewhere in this release.

Fannie Mae provides Web site addresses in its news releases solely for readers’ information. Other content or information appearing on these 

Web sites is not part of this release. 

Fannie Mae enables people to buy, refinance, or rent homes.

Visit us at www.fanniemae.com/progress

Follow us on Twitter: http://twitter.com/FannieMae
Second Quarter 2015 Results 14

ANNEX

FANNIE MAE

(In conservatorship)

Condensed Consolidated Balance Sheets — (Unaudited)

(Dollars in millions, except share amounts)

As of

June 30, December 31,

2015 2014

ASSETS

Cash and cash equivalents $ 19,313 $ 22,023

Restricted cash (includes $33,047 and $27,515, respectively, related to consolidated trusts) 37,388 32,542

Federal funds sold and securities purchased under agreements to resell or similar arrangements 22,010 30,950

Investments in securities:

Trading, at fair value 34,864 31,504

Available-for-sale, at fair value (includes $419 and $596, respectively, related to consolidated trusts) 24,161 30,654

Total investments in securities 59,025 62,158

Mortgage loans:

Loans held for sale, at lower of cost or fair value 4,563 331

Loans held for investment, at amortized cost:

Of Fannie Mae 250,872 272,360

Of consolidated trusts (includes $14,981 and $15,629, respectively, at fair value) 2,787,893 2,782,344

Total loans held for investment 3,038,765 3,054,704

Allowance for loan losses (31,150) (35,541)

Total loans held for investment, net of allowance 3,007,615 3,019,163

Total mortgage loans 3,012,178 3,019,494

Accrued interest receivable, net (includes $7,306 and $7,169, respectively, related to consolidated trusts) 8,039 8,193

Acquired property, net 8,506 10,618

Deferred tax assets, net 39,803 42,206

Other assets 19,138 19,992

Total assets $ 3,225,400 $ 3,248,176

LIABILITIES AND EQUITY

Liabilities:

Accrued interest payable (includes $8,160 and $8,282, respectively, related to consolidated trusts) $ 10,011 $ 10,232

Federal funds purchased and securities sold under agreements to repurchase — 50

Debt:

Of Fannie Mae (includes $8,861 and $6,403, respectively, at fair value) 425,085 460,443

Of consolidated trusts (includes $22,885 and $19,483, respectively, at fair value) 2,773,484 2,761,712

Other liabilities (includes $445 and $503, respectively, related to consolidated trusts) 10,661 12,019

Total liabilities 3,219,241 3,244,456

Commitments and contingencies — —

Fannie Mae stockholders’ equity:

Senior preferred stock, 1,000,000 shares issued and outstanding 117,149 117,149

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 1,158,082,750 shares

outstanding 687 687

Accumulated deficit (124,807) (127,618)

Accumulated other comprehensive income 1,360 1,733

Treasury stock, at cost, 150,679,953 shares (7,401) (7,401)

Total Fannie Mae stockholders’ equity 6,118 3,680

Noncontrolling interest 41 40

Total equity 6,159 3,720

Total liabilities and equity $ 3,225,400 $ 3,248,176

See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2015 Form 10-Q
Second Quarter 2015 Results 15

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Operations and Comprehensive Income — (Unaudited)

(Dollars and shares in millions, except per share amounts)

For the Three Months For the Six Months

Ended June 30, Ended June 30,

2015 2014 2015 2014

Interest income:

Trading securities $ 116 $ 143 $ 231 $ 270

Available-for-sale securities 294 414 670 854

Mortgage loans (includes $24,267 and $25,533, respectively, for the three months ended and

$48,889 and $51,487, respectively, for the six months ended related to consolidated trusts) 26,682 28,165 53,726 56,753

Other 34 24 67 48

Total interest income 27,126 28,746 54,694 57,925

Interest expense:

Short-term debt 33 21 62 41

Long-term debt (includes $19,528 and $21,692, respectively, for the three months ended and

$40,043 and $43,768, respectively, for the six months ended related to consolidated trusts) 21,416 23,821 43,888 48,242

Total interest expense 21,449 23,842 43,950 48,283

Net interest income 5,677 4,904 10,744 9,642

(Provision) benefit for credit losses (1,033) 1,639 (500) 2,413

Net interest income after (provision) benefit for credit losses 4,644 6,543 10,244 12,055

Investment gains, net 514 483 856 578

Fair value gains (losses), net 2,606 (934) 687 (2,124)

Debt extinguishment gains, net 3 38 11 38

Fee and other income 556 383 864 4,738

Non-interest income (loss) 3,679 (30) 2,418 3,230

Administrative expenses:

Salaries and employee benefits 331 319 682 644

Professional services 251 275 522 517

Occupancy expenses 43 47 86 97

Other administrative expenses 64 56 122 111

Total administrative expenses 689 697 1,412 1,369

Foreclosed property expense (income) 182 (214) 655 (476)

Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees 397 335 779 657

Other expenses, net 205 276 208 407

Total expenses 1,473 1,094 3,054 1,957

Income before federal income taxes 6,850 5,419 9,608 13,328

Provision for federal income taxes (2,210) (1,752) (3,080) (4,336)

Net income 4,640 3,667 6,528 8,992

Other comprehensive (loss) income:

Changes in unrealized gains on available-for-sale securities, net of reclassification

adjustments and taxes (280) 45 (371) 417

Other (1) — (2) —

Total other comprehensive (loss) income (281) 45 (373) 417

Total comprehensive income 4,359 3,712 6,155 9,409

Less: Comprehensive income attributable to noncontrolling interest — (1) — (1)

Total comprehensive income attributable to Fannie Mae $ 4,359 $ 3,711 $ 6,155 $ 9,408

Net income $ 4,640 $ 3,667 $ 6,528 $ 8,992

Less: Net income attributable to noncontrolling interest — (1) — (1)

Net income attributable to Fannie Mae 4,640 3,666 6,528 8,991

Dividends available for distribution to senior preferred stockholder (4,359) (3,712) (6,155) (9,404)

Net income (loss) attributable to common stockholders $ 281 $ (46) $ 373 $ (413)

Earnings (loss) per share:

Basic 0.05 (0.01) 0.06 (0.07)

Diluted 0.05 (0.01) 0.06 (0.07)

Weighted-average common shares outstanding:

Basic 5,762 5,762 5,762 5,762

Diluted 5,893 5,762 5,893 5,762

See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2015 Form 10-Q
Second Quarter 2015 Results 16

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Cash Flows— (Unaudited)

(Dollars in millions)

For the Six Months

Ended June 30,

2015 2014

Net cash (used in) provided by operating activities $ (1,506) $ 3,420

Cash flows provided by investing activities:

Proceeds from maturities and paydowns of trading securities held for investment 484 681

Proceeds from sales of trading securities held for investment 992 1,188

Proceeds from maturities and paydowns of available-for-sale securities 2,279 3,022

Proceeds from sales of available-for-sale securities 5,311 1,740

Purchases of loans held for investment (98,042) (55,843)

Proceeds from repayments and sales of loans acquired as held for investment of Fannie Mae 12,853 12,840

Proceeds from repayments and sales of loans acquired as held for investment of consolidated trusts 259,429 177,527

Net change in restricted cash (4,846) (592)

Advances to lenders (62,110) (42,545)

Proceeds from disposition of acquired property and preforeclosure sales 11,384 13,471

Net change in federal funds sold and securities purchased under agreements to resell or similar arrangements 8,940 22,275

Other, net (65) (349)

Net cash provided by investing activities 136,609 133,415

Cash flows used in financing activities:

Proceeds from issuance of debt of Fannie Mae 213,648 165,337

Payments to redeem debt of Fannie Mae (249,610) (217,988)

Proceeds from issuance of debt of consolidated trusts 167,880 113,448

Payments to redeem debt of consolidated trusts (265,969) (183,124)

Payments of cash dividends on senior preferred stock to Treasury (3,716) (12,882)

Other, net (46) (7)

Net cash used in financing activities (137,813) (135,216)

Net (decrease) increase in cash and cash equivalents (2,710) 1,619

Cash and cash equivalents at beginning of period 22,023 19,228

Cash and cash equivalents at end of period $ 19,313 $ 20,847

Cash paid during the period for:

Interest $ 52,679 $ 53,594

Income taxes 370 2,475

See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2015 Form 10-Q