Fourth-Quarter and Full-Year 2010 Results 1 

 Resource Center: 1-800-732-6643 

Contacts: Janis Smith 

 202-752-2078

Number: 5310a 

Date: February 24, 2011 

Fannie Mae Reports Fourth-Quarter and Full-Year 2010 Results 

Losses Decline and the Company Strengthens its Book of Business with New Acquisitions 

WASHINGTON DC – Fannie Mae (FNMA/OTC) today reported net income of $73 million in the fourth quarter of 2010, 

compared to a net loss of $1.3 billion in the third quarter of the year. The change resulted from a decline in the company’s 

credit-related expenses and the successful resolution of outstanding repurchase claims. Fannie Mae is building a strong new 

book of business and expects that new loans acquired since January 2009 will be profitable over their life cycle. The 

company is working to mitigate losses on its legacy book of business by focusing on reducing defaults, pursuing home 

retention solutions and foreclosure alternatives to help struggling homeowners, and pursuing contractual remedies from 

lenders and providers of credit enhancement. 

 

The company’s net loss attributable to common stockholders in the fourth quarter of 2010 was $2.1 billion, which included 

$2.2 billion in dividend payments to the U.S. Treasury. To eliminate the company’s net worth deficit of $2.5 billion as of 

December 31, 2010 the Federal Housing Finance Agency (FHFA) has requested $2.6 billion on the company’s behalf from 

Treasury, more than 80 percent of which is the dividend payment to Treasury. Upon receiving those funds, the company’s 

total obligation to Treasury for its senior preferred stock will be $91.2 billion. Overall, the company has paid a total of 

$10.2 billion in dividends to Treasury since its senior preferred stock was issued, including $7.7 billion paid in 2010. 

For the full year of 2010, Fannie Mae reported a net loss of $14.0 billion, compared with a loss of $72.0 billion for 2009. 

The net loss attributable to common stockholders, which includes the $7.7 billion in dividends paid to Treasury on the 

company’s senior preferred stock, was $21.7 billion, or $(3.81) per diluted share for 2010, compared with $74.4 billion, or 

$(13.11) per diluted share, for 2009. 

“Fannie Mae continues to make important strides as we build a strong new book of business, set new standards for credit 

quality in the mortgage industry, and maintain our focus on finding solutions for distressed borrowers and neighborhoods.” 

said Michael J. Williams, president and chief executive officer. “As a result, Fannie Mae is a leading provider of capital 

and liquidity for single-family mortgages and affordable multifamily rental housing during this critical period in the 

housing recovery.” 
Fourth-Quarter and Full-Year 2010 Results 2 

PROVIDING LIQUIDITY TO THE MARKET

During 2010, Fannie Mae guaranteed or purchased an estimated $856 billion in loans, which includes approximately $217 

billion in delinquent loans purchased from its single-family mortgage-backed securities trusts. The company purchases 

loans out of MBS trusts and takes them on its balance sheet to improve its funding costs and to allow the company to 

pursue loss mitigation solutions like modifications to minimize potential losses on these loans. As a result of these 

purchases, Fannie Mae reduced the level of loans in MBS trusts that were delinquent as to four or more consecutive 

monthly payments from $127 billion to $8 billion as of year-end. 

Fannie Mae continued to be the largest single issuer of mortgage-related securities in the secondary market in 2010, with an 

estimated market share of new single-family mortgage-related securities of 44.0 percent. In the multifamily market, Fannie 

Mae guaranteed an estimated 20.1 percent of multifamily mortgage debt outstanding as of September 30, 2010, the latest 

date for which the Federal Reserve has estimated mortgage debt outstanding for multifamily residences. The company 

financed approximately 2,712,000 single-family conventional loans, excluding delinquent loans purchased from its MBS 

trusts, and approximately 306,000 units in multifamily properties in 2010. 

CREDIT QUALITY

2009 – 2010 Single-Family Book of Business: The unpaid principal balance of single-family conventional loans Fannie 

Mae guaranteed or purchased since the beginning of 2009 total $1.28 trillion, more than 40 percent of its single-family 

guaranty book of business as of December 31, 2010. The company continues to expect that these loans will be profitable 

over their lifecycle, given their strong credit risk profile and performance to date. Conventional single-family loans added 

to Fannie Mae’s book of business in 2009 and 2010 had a weighted average loan-to-value ratio at origination of 68 percent, 

and a weighted average credit score at origination of 762. 

These loans have a stronger profile partly because the company changed its underwriting guidelines to more accurately 

reflect risk in the housing market and to significantly reduce acquisitions of higher-risk loans. The changes include a higher

minimum FICO credit score and reduced maximum debt-to-income ratio for most loans, a national minimum down 

payment policy, increases in the company’s guaranty fee pricing structure to better align risk and pricing, and updated 

appraisal policies. 

2005 – 2008 Single-Family Book of Business: Fannie Mae reserved for or realized approximately $110 billion of losses on 

its single-family loans over the past two years. Most of these losses are attributable to loans purchased or guaranteed from 

2005 through 2008. Fannie Mae estimates that it has reserved for the substantial majority of the remaining losses on these 

loans and that the company’s results of operations have already reflected a substantial majority of the credit losses it has yet 

to realize on these loans, and expects that defaults on these loans and the resulting charge-offs will occur over a period of 

years. Given the large current and anticipated supply of single-family homes in the market, it will take years before Fannie 

Mae’s inventory of real estate owned (REO) properties approaches pre-2008 levels. 
Fourth-Quarter and Full-Year 2010 Results 3 

Fannie Mae’s single-family serious delinquency rate decreased to 4.48 percent as of December 31, 2010, from 4.56 percent 

as of September 30, 2010, and from 5.38 percent as of December 31, 2009. This decrease is primarily the result of loan 

workouts completed and foreclosed property acquisitions during the quarter and year, reflecting the company’s emphasis on 

reducing delays in determining and executing the appropriate approach for a given loan. The 2005 to 2008 acquisitions are 

becoming a smaller percentage of the company’s guaranty book of business, decreasing from 50 percent of its guaranty 

book of business as of December 31, 2009 to 39 percent as of December 31, 2010. 

The ultimate performance of loans the company has acquired since the beginning of 2009 will be affected by 

macroeconomic trends, including unemployment, the economy, and home prices. For further discussion of the company’s 

credit performance, see the Executive Summary of its annual report on Form 10-K for the year ended December 31, 2010, 

which was filed today with the Securities and Exchange Commission. 

FORECLOSURE PREVENTION

During 2010, Fannie Mae completed more than 515,000 single-family loan workouts, including over 440,000 homeretention solutions (including modifications, repayment plans, and forbearances). In the fourth quarter of 2010, the 

company completed home-retention solutions for approximately 90,000 loans with an aggregate unpaid principal balance of 

$18 billion. Details of the company’s home-retention solutions, foreclosure alternatives, and refinances during 2010 

include: 

 Loan modifications, including permanent modifications under the Treasury Department's Home Affordable 

Modification Program (HAMP), of 403,506 for 2010, compared with 98,575 in 2009. These figures do not include 

modifications in trial periods. Loan modification volume was over four times higher in 2010 than in 2009, as the 

number of borrowers who were experiencing financial difficulty increased and a significant number of HAMP trial 

modifications were completed and became permanent HAMP modifications. Completed modifications decreased 

in the fourth quarter of 2010 to 81,692 from 106,365 in the third quarter of 2010. 

 Repayment plans/forbearances completed of 31,579, compared with 22,948 in 2009. The company completed 

7,973 repayment plans and forbearances in the fourth quarter of 2010, compared with 6,208 in the third quarter of 

2010. 

 Preforeclosure sales and deeds-in-lieu of foreclosure of 75,391, compared with 39,617 in 2009. Fannie Mae 

agreed to an increasing number of preforeclosure sales and accepted a higher number of deeds-in-lieu of 

foreclosure during 2010 as these are favorable solutions in the case of a growing number of homeowners. The 

company completed 15,632 preforeclosure sales and deeds-in-lieu of foreclosure in the fourth quarter of 2010, 

compared with 20,918 in the third quarter of 2010. The decrease was due primarily to weak market conditions 

affecting pre-foreclosure sales during the quarter. 

 Refinanced loans purchased or guaranteed by Fannie Mae totaled approximately 2,113,000 in 2010 (including 

659,000 loans through the company's Refi PlusTM initiative), compared with 2,484,000 refinances (including 
Fourth-Quarter and Full-Year 2010 Results 4 

329,000 through Refi Plus), in 2009. On average, homeowners who refinanced during 2010 through Refi Plus 

reduced their mortgage payments by $149 a month, or $1,788 annually. 

Homeowner Initiatives: In the fourth quarter of 2010 and into 2011, Fannie Mae continued to develop programs and 

invest in initiatives that are designed to help keep people in homes, assist prospective homeowners, and support the 

mortgage and housing markets overall. During the fourth quarter and into the beginning of 2011: 

 Fannie Mae began offering modifications under its Second Lien Modification Program, which is designed to work 

in tandem with HAMP by lowering payments on second lien mortgage loans for homeowners whose second lien 

mortgage loan is owned by Fannie Mae and whose first lien mortgage loan has been modified under HAMP, even 

where the company does not own the first lien mortgage loan. 

 In 2010, Fannie Mae launched KnowYourOptions.comTM, a bilingual consumer education website that outlines the 

choices available to homeowners who are struggling with their mortgage payments, and provides guidance on how 

they can contact and work with their mortgage company to find solutions. In January 2011, Fannie Mae launched 

WaysHomeTM, an interactive multi-media tool designed to educate homeowners about their options to avoid 

foreclosure, empower them to make informed decisions and motivate them to take action and seek help. 

WaysHome is a new feature available on KnowYourOptions.com. Through video reenactment, WaysHome allows 

homeowners to experience scenarios that address a range of options for avoiding foreclosure that include 

repayment plans, forbearances, modifications, deeds-in-lieu, and short sales. 

 Fannie Mae continues to conduct homeowner outreach across the country and in 2010, opened Mortgage Help 

Centers in Miami, Chicago, Atlanta, Los Angeles, Phoenix and Dallas/Fort Worth with other locations to be 

announced in 2011. The company also uses direct mail and phone calls to encourage homeowners to pursue 

foreclosure alternatives, and has also established partnerships with counseling agencies in other communities to 

provide similar services. 

FORECLOSURES AND REO 

Fannie Mae acquired 45,962 single-family REO properties through foreclosure in the fourth quarter of 2010, compared with 

85,349 in the third quarter of 2010. The reduction was due, in part, to a pause in foreclosures triggered by the discovery of 

deficiencies in servicers’ foreclosure processes. The company acquired 262,078 single-family REO properties through 

foreclosure in all of 2010, compared with 145,617 in 2009. As of December 31, 2010, the company’s inventory of singlefamily REO properties was 162,489, compared with 166,787 as of September 30, 2010, and 86,155 as of December 31, 

2009. The carrying value of the company’s single-family REO was $15.0 billion, compared with $16.4 billion as of 

September 30, 2010, and $8.5 billion as of December 31, 2009. 

As of December 31, 2010, approximately 27 percent of Fannie Mae’s REO properties were within state or locally mandated 

redemption periods (during which time the foreclosed-upon borrower can regain title to his or her property by paying off 

the full amount due on the loan), which lengthens the time a property is in REO inventory by an average of two to six 

months because these properties can’t be marketed until after the redemption period expires. 
Fourth-Quarter and Full-Year 2010 Results 5 

Additionally, as of December 31, 2010, approximately 40 percent of the company’s properties that it is unable to market for 

sale were occupied, in some instances due to Fannie Mae’s “Tenant-in-Place” or “Deed-for-Lease” programs. Properties 

that are occupied also remain in REO inventory for longer periods of time. 

The company’s single-family foreclosure rate, which reflects the annualized number of single-family properties acquired 

through foreclosure as a percentage of the total number of loans in its conventional single-family guaranty book of 

business, was 1.03 percent on an annualized basis in the fourth quarter of 2010, compared with 1.91 percent in the third 

quarter of 2010. The company’s single-family foreclosure rate was 1.46 percent for 2010, compared with 0.80 percent for 

2009. 

SUMMARY OF FOURTH-QUARTER AND FULL-YEAR 2010 RESULTS

Fannie Mae reported a net loss of $14.0 billion for 2010, compared with a loss of $72.0 billion for 2009. The company’s net 

loss attributable to common stockholders was $21.7 billion, or $(3.81) per diluted share in 2010, compared with a loss of 

$74.4 billion, or $(13.11) per diluted share in 2009. The net worth deficit of $2.5 billion as of December 31, 2010 takes into 

account dividends paid on senior preferred stock held by Treasury. 

(dollars in millions, except per share amounts) (1) 4Q10 3Q10 Variance 2010 2009 (5) Variance

Net interest income 4,637 $ 4,776 $ (139) $ 16,409 $ 14,510 $ 1,899 $ 

Guaranty fee income 45 51 (6) 202 7,211 (7,009) 

Fee and other income (1) 253 208 (45) 882 773 109 

Net revenues 4,890 5,080 (190) 17,493 22,494 (5,001) 

Investment gains, net 82 75 (7) 346 1,458 (1,112) 

Net other-than-temporary impairments (2) (326) (23) 303 (722) (9,861) 9,139 

Fair value gains (losses), net 366 525 (159) (511) (2,811) 2,300 

Income (losses) from partnership investments (37) 47 (84) (74) (6,735) 6,661 

Administrative expenses (592) (730) 138 (2,597) (2,207) (390) 

Credit-related expenses (3) (5,561) (4,318) 1,243 (26,614) (73,536) 46,922 

Other non-interest expenses (4) (457) (311) 146 (1,421) (1,809) 388 

Net losses and expenses (4,840) (6,420) 1,580 (31,593) (95,501) 63,908 

Income (loss) before federal income taxes and 

 extraordinary losses (1,340) 50 1,390 (14,100) (73,007) 58,907 

Benefit for federal income taxes 15 9 6 82 985 (903) 

Net income (loss) 65 (1,331) 1,396 (14,018) (72,022) 58,004 

Less: Net (income) loss attributable to the noncontrolling interest (8) 8 16 4 53 (49) 

Net income (loss) attributable to Fannie Mae 73 $ (1,339) $ 1,412 $ (14,014) $ (71,969) $ 57,955 $ 

Preferred stock dividends (2,154) (2,116) (38) (7,704) (2,474) (5,230) 

Net loss attributable to common stockholders (2,081) $ (3,455) $ 1,374 $ (21,718) $ (74,443) $ 52,725 $ 

Diluted loss per common share (0.37) $ (0.61) $ 0.24 $ (3.81) $ (13.11) $ 9.30 $ 

(1) Certain prior period amounts have been reclassified to conform to the current period presentation. Trust management income is included in fee and other income.

(3) Consists of provision for loan losses, provision for guaranty losses and foreclosed property expense.

(5) 2009 results do not reflect accounting standards for consolidation that the company adopted prospectively on January 1, 2010.

(2) Prior to an April 2009 change in account for impairments, net other-than temporary impairments also included the non-credit portion, which in subsequent periods is 

recorded in other comprehensive income. 

(4) Consists of debt extinguishment losses, net and other expenses.

On January 1, 2010, Fannie Mae prospectively adopted new accounting standards, which had a significant impact on the presentation and comparability of its 

consolidated financial statements. The new standards resulted in the consolidation of the substantial majority of Fannie Mae’s single-class securitization trusts 

and the elimination of previously recorded deferred revenue from our guaranty arrangements. While some line items in the company’s consolidated statements of 

operations were not impacted, others were impacted significantly, which reduces the comparability of the company’s results for 2010 with the results in prior 

years. For further discussion of the impact of the new accounting standards on the company’s consolidated results of operations, see Management’s Discussion 

and Analysis of Financial Condition and Results of Operations — Consolidated Results of Operations in its 2010 annual report on Form 10-K 
Fourth-Quarter and Full-Year 2010 Results 6 

Net revenues were $4.9 billion in the fourth quarter of 2010, down four percent from $5.1 billion in the third quarter of 

2010, due primarily to a decrease in net interest income. For the year, net revenue was $17.5 billion, down 22 percent from 

$22.5 billion in 2009. 

Credit-related expenses, which are the total provision for credit losses plus foreclosed property expense, were $4.3 billion 

in the fourth quarter, down from $5.6 billion in the third quarter of 2010. For the year, credit-related expenses were $26.6 

billion, compared with $73.5 billion in 2009. Fannie Mae’s provision for credit losses was substantially lower in 2010, as 

there was neither a significant increase in the number of seriously delinquent loans, nor a sharp decline in home prices. 

Therefore, the company did not need to substantially increase its total loss reserves in 2010. 

Additionally, Fannie Mae’s provision attributable to fair value losses on credit-impaired loans was $180 million in 2010 

compared with $20.3 billion in 2009. On December 31, 2010, the company entered into an agreement with Bank of 

America, N.A., and its affiliates, to address outstanding repurchase requests for residential mortgage loans. Bank of 

America agreed, among other things, to a cash payment of $1.3 billion, $930 million of which was recognized as a recovery 

of charge-offs resulting in a reduction to the company’s provision for guaranty losses and allowance for loan losses. 

Fannie Mae expects that its credit-related expenses will remain high in 2011, and that its credit losses will be higher in 2011

than in 2010. 

Credit losses, which the company defines generally as net charge-offs plus foreclosed property expense, excluding the 

effect of certain fair-value losses, were $3.2 billion in the fourth quarter of 2010, compared with $8.2 billion in the third 

quarter of 2010. For the year, credit losses were $23.6 billion, compared with $13.6 billion in 2009. The increase in 2010 

reflects the increase in the number of defaults, particularly due to loans acquired by Fannie Mae from 2005 through 2008 

with higher-risk attributes compared with current underwriting standards, the prolonged period of high unemployment and 

the decline in home prices. In addition, defaults in 2009 were lower than they could have been due to the foreclosure 

moratoria during the end of 2008 and first quarter of 2009. The increase in defaults during 2010 was partially offset by a 

slight reduction in average loss severity as home prices improved in some geographic regions. 

Single-family credit losses realized in 2009 and 2010, combined with the amounts reserved for single-family credit losses 

as of December 31, 2010, total approximately $110 billion. The vast majority of these losses are attributable to singlefamily loans Fannie Mae purchased or guaranteed from 2005 through 2008. To reduce the credit losses the company 

ultimately incurs on its legacy book of business in the future, Fannie Mae is focusing on reducing defaults to avoid losses 

that otherwise would occur; efficiently managing timelines for home retention solutions, foreclosure alternatives, and 

foreclosures; pursuing foreclosure alternatives to reduce the severity of the losses incurred; managing its REO inventory to 

reduce costs and maximize sales proceeds; and pursuing contractual remedies from lenders and providers of credit 

enhancement, including mortgage insurers. 
Fourth-Quarter and Full-Year 2010 Results 7 

Total loss reserves and fair value losses previously recognized on acquired credit-impaired loans were $85.4 billion as of 

December 31, 2010, compared with $84.6 billion as of September 30, 2010. The company considers a portion of total fair 

value losses previously recognized on loans purchased out of MBS trusts as an “effective reserve,” apart from our total loss 

reserves, to the extent that we expect to realize them as credit losses in the future. Total nonperforming loans in the 

company’s guaranty book of business were $214.8 billion as of December 31, 2010, compared with $213.3 billion as of 

September 30, 2010. 

Net fair value gains were $366 million in the fourth quarter of 2010, compared with gains of $525 million in the third 

quarter of 2010. For the year, net fair value losses were $511 million, compared with $2.8 billion of net fair value losses in

2009. In 2010, the company recognized trading gains of approximately $2.7 billion, which were more than offset by fair 

value losses on its derivatives of $3.0 billion. 

Net other-than-temporary impairment charges recorded in 2010 were primarily driven by a net decline in forecasted 

home prices for certain geographic regions, which resulted in a decrease in the present value of Fannie Mae’s cash flow 

projections on Alt-A and subprime securities. Net other-than-temporary impairment decreased in 2010 compared with 2009 

due to slower deterioration of the estimated credit component of the fair value losses of these securities. In addition, netother-than temporary impairment decreased in 2010 compared with 2009 because, effective beginning in the second quarter 

of 2009, the company recognizes only the credit portion of other-than-temporary impairment in its consolidated statements 

of operations due to the adoption of a new other-than-temporary accounting standard. The net other-than-temporary 

impairment charge recorded prior to April 1, 2009 included both the credit and non-credit components of the loss in fair 

value. Approximately 57% of the impairment recorded in 2009 was recorded in the first quarter of 2009 prior to the change 

in accounting standards. 

See “Note 6, Investments in Securities” in Fannie Mae’s 2010 Form 10-K for the year ended December 31, 2010 for 

additional information regarding the net other-than-temporary impairment recognized in 2010. The company provides 

further discussion of its financial results and condition, credit performance, fair value balance sheets, and other matters in 

its annual report on Form 10-K. Further information about the company’s credit performance, the characteristics of its 

guaranty book of business, the drivers of its credit losses, its foreclosure-prevention efforts, and other measures is contained 

in the “2010 Credit Supplement” on Fannie Mae’s website, www.fanniemae.com. 

NET WORTH AND U.S. TREASURY FUNDING

The Acting Director of FHFA has requested $2.6 billion of funds from Treasury on the company’s behalf under the terms 

of the senior preferred stock purchase agreement between Fannie Mae and Treasury to eliminate the company’s net worth 

deficit as of December 31, 2010. Fannie Mae’s fourth quarter dividend of $2.2 billion on its senior preferred stock held by 

Treasury was declared by FHFA and paid by the company on December 31, 2010. Fannie Mae paid a total of $7.7 billion 

in dividends on the senior preferred stock to Treasury in 2010. In December 2010, Treasury provided to the company $2.5 

billion to cure its net worth deficit as of September 30, 2010. As a result of this draw, the aggregate liquidation preference 

of the senior preferred stock increased from $86.1 billion to $88.6 billion as of December 31, 2010. It will increase to 

$91.2 billion upon the receipt of funds from Treasury to eliminate the company’s fourth-quarter 2010 net worth deficit. 
Fourth-Quarter and Full-Year 2010 Results 8 

Through December 31, 2010, the company has paid in aggregate $10.2 billion to Treasury in dividends on the senior 

preferred stock. Fannie Mae does not expect to earn profits in excess of its annual dividend obligation to Treasury for the 

indefinite future. As draws for credit losses abate, the company expects its draws to be driven increasingly by dividend 

payments to Treasury. 

FAIR VALUE UPDATE

The fair value of Fannie Mae’s net assets increased by $10.6 billion from September 30, 2010, resulting in a fair value net 

deficit of $120.3 billion as of December 31, 2010, compared to a fair value net deficit of $98.8 billion as of December 31, 

2009. As part of Fannie Mae’s disclosure requirements with FHFA, the company discloses on a quarterly basis 

supplemental non-GAAP consolidated fair value balance sheets, reflecting the company’s assets and liabilities at estimated 

fair value. The fair value of the company’s net assets is not a measure defined within generally accepted accounting 

principles and may not be comparable to similarly titled measures reported by other companies. The estimated fair value of 

the company’s net assets is calculated as of a particular point in time based on its existing assets and liabilities, and does not 

incorporate other factors that may have a significant impact on its long-term fair value. 

As a result, the estimated fair value of the company’s net assets presented in its non-GAAP consolidated fair value balance 

sheets does not represent an estimate of its net realizable value, liquidation value, or its market value as a whole. In 

addition, the fair value of the company’s net assets attributable to common stockholders presented in its fair value balance 

sheet does not represent an estimate of the value it expects to realize from operating the company, nor what it expects to 

draw from Treasury under the terms of the senior preferred stock purchase agreement. 

For more information on the change in the company’s fair value net deficit, please refer to “Supplemental Non-GAAP 

Information — Fair Value Balance Sheets” in the company’s annual report on Form 10-K for the year ended December 31, 

2010. See also “Supplemental Non-GAAP Consolidated Fair Value Balance Sheets” and “Explanation and Reconciliation 

of Non-GAAP Measures to GAAP Measures” later in this release for a reconciliation of the company’s fair value balance 

sheets to its GAAP consolidated balance sheets. 

BUSINESS SEGMENT RESULTS

Fannie Mae conducts its activities through three complementary businesses: our Single-Family business, our Multifamily 

business, and our Capital Markets group. As a result of the adoption of new accounting standards and changes to Fannie 

Mae’s segment presentation in 2010, segment results reported for the current periods are not comparable with prior years’ 

segment results. The company’s Single-Family and Multifamily businesses work with Fannie Mae’s lender customers to 

purchase and securitize mortgage loans customers deliver into Fannie Mae MBS. The Capital Markets group manages the 

company’s investment activity in mortgage-related assets, funding investments primarily with proceeds received from the 

issuance of Fannie Mae debt securities in the domestic and international capital markets. The Capital Markets group also 

provides liquidity to the mortgage market through short-term financing and other activities. 
Fourth-Quarter and Full-Year 2010 Results 9 

Single-Family guaranty book of business was $2.87 trillion as of December 31, 2010, compared with $2.85 trillion as of 

September 30, 2010, and $2.91 trillion as of December 31, 2009. Single-family guaranty fee income for the fourth quarter 

of 2010 was $1.8 billion, the same as the third quarter of 2010. The Single-Family business lost $3.6 billion in the fourth 

quarter of 2010, compared with a loss of $5.5 billion in the third quarter of 2010, due primarily to credit-related expenses of

$4.1 billion, almost all of which were attributable to loans purchased or guaranteed from 2005 through 2008. For the year, 

the Single-Family business lost $26.7 billion, compared with a loss of $63.8 billion in 2009, due primarily to a decrease in 

credit-related expenses. 

Multifamily guaranty book of business as of December 31, 2010 was $189.4 billion, compared with $187.4 billion as of 

September 30, 2010, and $185.3 billion as of December 31, 2009. Multifamily recorded credit-related expenses of $254 

million in the fourth quarter of 2010, compared with $2 million in the third quarter of 2010. Multifamily lost $183 million 

in the fourth quarter of 2010, compared with $181 million earned in the third quarter of 2010. For the year, Multifamily 

earned $216 million, compared with a loss of $9.0 billion in 2009 that was largely driven by losses on the company’s low 

income housing tax credit partnership investments and an increase in the provision for credit losses to build our multifamily 

loss reserves. 

Capital Markets’ net interest income was $3.7 billion in the fourth quarter of 2010, compared with $4.1 billion in the third 

quarter of 2010. For the year, net interest income was $14.3 billion, the same as in 2009. Fair value gains were $358 

million, compared with $436 million in the third quarter of 2010. Net other-than-temporary impairment was $24 million, 

compared with $323 million in the third quarter of 2010. The net mortgage investment portfolio balance decreased to 

$788.8 billion as of December 31, 2010, compared with $802.9 billion on September 30, 2010, from purchases of $65.3 

billion, liquidations of $40.8 billion, and sales of $38.6 billion during the quarter. Capital Markets earned $4.7 billion in the 

fourth quarter of 2010, compared with $4.8 billion in the third quarter of 2010. For the year, Capital Markets earned $16.1 

billion, compared with $857 million in 2009. 

# # # 

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

financial results; the profitability of its loans; future, credit losses, credit-related expenses, defaults, charge-offs and REO inventory; its draws from and dividends 

to be paid to Treasury; the performance and caliber of loans it has acquired and will acquire; its credit loss reduction efforts; its planned homeowner initiatives. 

These estimates, forecasts, expectations, and statements are forward-looking statements and are based on the company’s current assumptions regarding 

numerous factors, including assumptions about future home prices and the future performance of its loans. The company’s future estimates of these amounts, as 

well as the actual amounts, may differ materially from its current estimates as a result of home price changes, interest rate changes, unemployment, other 

macroeconomic variables, government policy matters, changes in generally accepted accounting principles, credit availability, social behaviors, the volume of 

loans it modifies, the effectiveness of its loss mitigation strategies, management of its real estate owned inventory and pursuit of contractual remedies, changes in 

the fair value of its assets and liabilities, impairments of its assets, the adequacy of its loss reserves, its ability to maintain a positive net worth, effects from 

activities the company takes to support the mortgage market and help homeowners, the conservatorship and its effect on the company’s business, the investment 

by Treasury and its effect on the company’s business, 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 extent of the servicer foreclosure process 

deficiencies and the duration of the related foreclosure pause, and many other factors. Changes in the company’s underlying assumptions and actual outcomes, 

which could be affected by the economic environment, government policy, and many other factors, including those discussed in the “Risk Factors” section of the 

company’s annual report on Form 10-K for the period ended December 31, 2010, and elsewhere in this release, could result in actual results being materially 

different from what is set forth in the forward-looking statements.

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 exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a 

federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers 

and other lenders so that they may lend to home buyers. Our job is to help those who house America. 
ANNEX I 

FANNIE MAE

 (In conservatorship)

Consolidated Balance Sheets

(Dollars in millions, except share amounts) 

Fourth-Quarter and Full-Year 2010 Results 10 

 As of December 31,

 2010 2009 

ASSETS 

Cash and cash equivalents (includes cash of consolidated trusts of $348 and $2,092, respectively) $ 17,297 $ 6,812 

Restricted cash (includes restricted cash of consolidated trusts of $59,619 and $-, respectively) 63,678 3,070 

Federal funds sold and securities purchased under agreements to resell or similar arrangements 11,751 53,684 

Investments in securities: 

 Trading, at fair value (includes securities of consolidated trusts of $21 and $5,599, respectively) 56,856 111,939 

 Available-for-sale, at fair value (includes securities of consolidated trusts of $1,055 and $10,513, respectively, 

 and securities pledged as collateral that may be sold or repledged of $- and $1,148, respectively) 94,392 237,728 

 Total investments in securities 151,248 349,667 

Mortgage loans: 

 Loans held for sale, at lower of cost or fair value 915 18,462 

 Loans held for investment, at amortized cost: 

 Of Fannie Mae 407,228 256,434 

 Of consolidated trusts (includes loans at fair value of $2,962 and $-, respectively, and loans pledged as collateral that 

 may be sold or repledged of $2,522 and $1,947, respectively) 2,577,133 129,590 

 Total loans held for investment 2,984,361 386,024 

 Allowance for loan losses (61,556) (9,925)

 Total loans held for investment, net of allowance 2,922,805 376,099 

 Total mortgage loans 2,923,720 394,561 

Accrued interest receivable: 

 Of Fannie Mae 5,344 3,774 

 Of consolidated trusts 9,349 519 

 Allowance for accrued interest receivable (3,414) (536)

 Total accrued interest receivable, net of allowance 11,279 3,757 

Acquired property, net 16,173 9,142 

Servicer and MBS trust receivable 951 18,329 

Other assets 25,875 30,119 

 Total assets $ 3,221,972 $ 869,141 

LIABILITIES AND EQUITY (DEFICIT)

Liabilities: 

Accrued interest payable: 

 Of Fannie Mae $ 4,052 $ 4,951 

 Of consolidated trusts 9,712 29 

 Federal funds purchased and securities sold under agreements to repurchase 52 - 

 Short-term debt: 

 Of Fannie Mae 151,884 200,437 

 Of consolidated trusts 5,359 - 

 Long-term debt: 

 Of Fannie Mae (includes debt at fair value of $893 and $3,274, respectively) 628,160 567,950 

 Of consolidated trusts (includes debt at fair value of $2,271 and $-, respectively) 2,411,597 6,167 

 Reserve for guaranty losses (includes $54 and $4,772, respectively, related to Fannie Mae MBS included in Investments 

 in securities) 323 54,430 

 Servicer and MBS trust payable 2,950 25,872 

 Other liabilities 10,400 24,586 

 Total liabilities 3,224,489 884,422 

Commitments and contingencies (Note 20) - - 

Fannie Mae stockholders' equity (deficit): 

 Senior preferred stock, 1,000,000 shares issued and outstanding 88,600 60,900 

 Preferred stock, 700,000,000 shares are authorized—576,868,139 and 579,735,457 shares issued 

 and outstanding, respectively 20,204 20,348 

 Common stock, no par value, no maximum authorization—1,270,092,708 and 1,265,674,761 shares 

 issued, respectively; 1,118,504,194 and 1,113,358,051 shares outstanding, respectively 667 664 

 Additional paid-in capital - 2,083 

 Accumulated deficit (102,986) (90,237)

 Accumulated other comprehensive loss (1,682) (1,732)

 Treasury stock, at cost, 151,588,514 and 152,316,710 shares, respectively (7,402) (7,398)

 Total Fannie Mae stockholders’ deficit (2,599) (15,372)

Noncontrolling interest 82 91 

 Total deficit (2,517) (15,281)

Total liabilities and equity (deficit) $ 3,221,972 $ 869,141 

See Notes to Consolidated Financial Statements
FANNIE MAE

(In conservatorship)

Consolidated Statements of Operations

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

Fourth-Quarter and Full-Year 2010 Results 11 

 For the Year Ended December 31,

 2010 2009 2008 

Interest income: 

 Trading securities $ 1,251 $ 3,859 $ 5,878 

 Available-for-sale securities 5,290 13,618 13,214 

 Mortgage loans: 

 Of Fannie Mae 14,992 15,378 18,547 

 Of consolidated trusts 132,591 6,143 4,145 

 Other 146 357 1,339 

 Total interest income 154,270 39,355 43,123 

Interest expense: 

 Short-term debt: 

 Of Fannie Mae 619 2,306 7,815 

 Of consolidated trusts 12 - - 

 Long-term debt: 

 Of Fannie Mae 18,857 22,195 26,145 

 Of consolidated trusts 118,373 344 381 

 Total interest expense 137,861 24,845 34,341 

Net interest income 16,409 14,510 8,782 

Provision for loan losses (24,702) (9,569) (4,022)

Net interest income (loss) after provision for loan losses (8,293) 4,941 4,760 

Guaranty fee income (includes imputed interest of $111, $1,333 and $1,423, respectively) 202 7,211 7,621 

Investment gains (losses), net 346 1,458 (246)

Other-than-temporary impairments (694) (9,057) (6,974)

Noncredit portion of other-than-temporary impairments recognized in other comprehensive loss (28) (804) - 

Net other-than-temporary impairments (722) (9,861) (6,974)

Fair value losses, net (511) (2,811) (20,129)

Debt extinguishment losses, net (includes debt extinguishment losses related to consolidated trusts 

 of $109, $- and $-, respectively) (568) (325) (222)

Losses from partnership investments (74) (6,735) (1,554)

Fee and other income 882 773 1,033 

 Non-interest loss (445) (10,290) (20,471)

Administrative expenses: 

 Salaries and employee benefits 1,277 1,133 1,032 

 Professional services 942 684 529 

 Occupancy expenses 170 205 227 

 Other administrative expenses 208 185 191 

 Total administrative expenses 2,597 2,207 1,979 

Provision for guaranty losses 194 63,057 23,929 

Foreclosed property expense 1,718 910 1,858 

Other expenses 853 1,484 1,093 

 Total expenses 5,362 67,658 28,859 

Loss before federal income taxes and extraordinary losses (14,100) (73,007) (44,570)

Provision (benefit) for federal income taxes (82) (985) 13,749 

Loss before extraordinary losses (14,018) (72,022) (58,319)

Extraordinary losses, net of tax effect - - (409)

Net loss (14,018) (72,022) (58,728)

 Less: Net loss attributable to the noncontrolling interest 4 53 21 

Net loss attributable to Fannie Mae (14,014) (71,969) (58,707)

Preferred stock dividends (7,704) (2,474) (1,069)

Net loss attributable to common stockholders $ (21,718) $ (74,443) $ (59,776)

 

Loss per share - Basic and Diluted $ (3.81) $ (13.11) $ (24.04)

Cash dividends per common share $ - $ - $ 0.75 

Weighted-average common shares outstanding - Basic and Diluted 5,694 5,680 2,487 

 

 

See Notes to Consolidated Financial Statements
FANNIE MAE

(In conservatorship)

Consolidated Statements of Cash Flows

(Dollars in millions) 

Fourth-Quarter and Full-Year 2010 Results 12 

 For the Year Ended December 31, 

 2010 2009 2008 

Cash flows (used in) provided by operating activities: 

Net loss $ (14,018) $ (72,022) $ (58,728) 

Reconciliation of net loss to net cash (used in) provided by operating activities: 

 Amortization of cost basis adjustments 126 2,568 8,189 

 Provisions for loan and guaranty losses 24,896 72,626 27,951 

 Valuation (gains) losses (1,289) 3,425 12,725 

 Losses from partnership investments 74 6,735 1,554 

 Current and deferred federal income taxes 258 (1,919) 12,904 

 Extraordinary losses, net of tax effect - - 409 

 Purchases of loans held for sale (81) (109,684) (56,768) 

 Proceeds from repayments of loans held for sale 88 2,413 617 

 Net change in trading securities, excluding non-cash transfers (23,612) 11,976 72,689 

 Other, net (13,837) (2,027) (5,689) 

Net cash (used in) provided by operating activities (27,395) (85,909) 15,853 

Cash flows provided by (used in) investing activities: 

 Purchases of trading securities held for investment (8,547) (48,659) (7,635) 

 Proceeds from maturities of trading securities held for investment 2,638 12,918 9,530 

 Proceeds from sales of trading securities held for investment 21,556 39,261 2,823 

 Purchases of available-for-sale securities (413) (165,103) (147,337) 

 Proceeds from maturities of available-for-sale securities 17,102 48,096 33,369 

 Proceeds from sales of available-for-sale securities 7,867 306,598 146,630 

 Purchases of loans held for investment (86,724) (52,148) (63,097) 

 Proceeds from repayments of loans held for investment of Fannie Mae 20,715 30,958 39,098 

 Proceeds from repayments of loans held for investment of consolidated trusts 574,740 26,184 10,230 

 Net change in restricted cash (15,025) - - 

 Advances to lenders (74,130) (79,163) (81,483) 

 Proceeds from disposition of acquired property and preforeclosure sales 39,682 22,667 10,905 

 Contributions to partnership investments (351) (688) (1,507) 

 Proceeds from partnership investments 129 87 1,042 

 Net change in federal funds sold and securities purchased under agreements to resell 

 or similar agreements 41,471 4,230 (9,793) 

 Other, net (531) (27,503) (15,282) 

Net cash provided by (used in) investing activities 540,179 117,735 (72,507) 

Cash flows (used in) provided by financing activities: 

 Proceeds from issuance of short-term debt of Fannie Mae 699,346 1,641,119 1,913,685 

 Payments to redeem short-term debt of Fannie Mae (748,550) (1,773,977) (1,824,511) 

 Proceeds from issuance of long-term debt of Fannie Mae 456,602 289,806 243,180 

 Payments to redeem long-term debt of Fannie Mae (397,813) (256,728) (266,758) 

 Proceeds from issuance of short-term debt of consolidated trusts 12,613 - - 

 Payments to redeem short-term debt of consolidated trusts (37,210) - - 

 Proceeds from issuance of long-term debt of consolidated trusts 263,962 58 377 

 Payments to redeem long-term debt of consolidated trusts (771,292) (601) (467) 

Payments of cash dividends on senior preferred stock to Treasury (7,706) (2,470) (31) 

Payments of cash dividends on common and preferred stock - - (1,774) 

Proceeds from issuance of common and preferred stock - - 7,211 

 Proceeds from senior preferred stock purchase agreement with Treasury 27,700 59,900 - 

 Net change in federal funds purchased and securities sold under agreements to repurchase 49 (54) (266) 

Net cash (used in) provided by financing activities (502,299) (42,947) 70,646 

Net increase (decrease) in cash and cash equivalents 10,485 (11,121) 13,992 

Cash and cash equivalents at beginning of period 6,812 17,933 3,941 

Cash and cash equivalents at end of period $ 17,297 $ 6,812 $ 17,933 

Cash paid during the period for: 

Interest $ 140,651 $ 26,344 $ 35,959 

Income taxes - 876 845 

Non-cash activities (excluding transition-related impacts - see Note 2): 

Mortgage loans acquired by assuming debt $ 484,699 $ - $ 167 

Net transfers from mortgage loans held for investment of consolidated trusts to mortgage loans 

 held for investment of Fannie Mae 121,852 - - 

Transfers from advances to lenders to investments in securities - 77,191 83,534 

Transfers from advances to lenders to loans held for investment of consolidated trusts 68,385 - - 

Net transfers from mortgage loans to acquired property 66,081 5,707 4,272 

 

 

 

See Notes to Consolidated Financial Statements
FANNIE MAE

 (In conservatorship)

Consolidated Statements of Changes in Equity

(Dollars in millions, except share amounts) 

Fourth-Quarter and Full-Year 2010 Results 13 

 Fannie Mae Stockholders’ Equity (Deficit)

 Retained Accumulated

 Shares Outstanding Additional Earnings Other Non Total 

 Senior Senior Preferred Common Paid-In (Accumulated Comprehensive Treasury Controlling Equity 

 Preferred Preferred Common Preferred Stock Stock Capital Deficit) Loss Stock Interest (Deficit) 

Balance as of December 31, 2007 - 466 974 $ - $ 16,913 $ 593 $ 1,831 $ 33,548 $ (1,362) $ (7,512) $ 107 $ 44,118 

Cumulative effect from the adoption of the 

 accounting standards on the fair value 

 option for financial instruments and 

 fair value measurement, net

 of tax - - - - - - - 148 (93) - - 55 

Balances of January 1, 2008 adjusted - 466 974 - 16,913 593 1,831 33,696 (1,455) (7,512) 107 44,173 

Change in investment in noncontrolling 

 interest - - - - - - - - - - 71 71 

Comprehensive loss:

Net loss - - - - - - - (58,707) - - (21) (58,728)

Other comprehensive loss, net of tax effect:

Changes in net unrealized losses on 

 available-for-sale securities

 (net of tax of $5,395) - - - - - - - - (10,020) - - (10,020)

 Reclassification adjustment for other-than-

 temporary impairments recognized 

 in net loss (net of tax of $2,441) - - - - - - - - 4,533 - - 4,533 

 Reclassification adjustment for gains 

 included in net loss (net of tax of $36) - - - - - - - - (67) - - (67)

 Unrealized losses on guaranty assets and 

 guaranty fee buy-ups - - - - - - - - (342) - - (342)

 Amortization of net cash flow hedging

 gains - - - - - - - - 1 - - 1 

 Prior service cost and actuarial gains, 

 net of amortization for defined 

 benefit plans - - - - - - - - (323) - - (323)

Total comprehensive loss (64,946)

Common stock dividends ($0.75 per share) - - - - - - - (741) - - - (741)

Senior preferred stock dividends - - - - - - (31) - - - - (31)

 Common stock issued - - 94 - - 49 2,477 - - - - 2,526 

 Common stock warrant issued - - - - - - 3,518 - - - - 3,518 

 Preferred stock dividends declared - - - - - - - (1,038) - - - (1,038)

 Senior preferred stock issued 1 - - 1,000 - - - - - - - 1,000 

 Preferred stock issued - 141 - - 4,812 - (127) - - - - 4,685 

 Conversion of convertible preferred stock 

 into common stock - (10) 16 - (503) 8 495 - - - - - 

 Treasury commitment - - - - - - (4,518) - - - - (4,518)

 Other - - 1 - - - (24) - - 168 - 144 

Balance as of December 31, 2008 1 597 1,085 1,000 21,222 650 3,621 (26,790) (7,673) (7,344) 157 (15,157)

Cumulative effect from the adoption of a

new accounting standard on other-than-

 temporary impairments, net of tax - - - - - - - 8,520 (5,556) - - 2,964 

Change in investment in noncontrolling

 interest - - - - - - - - - - (13) (13)

 Comprehensive loss: 

 Net loss - - - - - - - (71,969) - - (53) (72,022)

 Other comprehensive loss, net of tax effect: 

 Changes in net unrealized losses on 

 available-for-sale securities 

 (net of tax of $2,658) - - - - - - - - 4,936 - - 4,936 

 Reclassification adjustment for other-than- 

 temporary impairments recognized 

 in net loss (net of tax of $3,441) - - - - - - - - 6,420 - - 6,420 

 Reclassification adjustment for gains 

 

included in net loss (net of tax of 

$119) - - - - - - - - (220) - - (220)

 Unrealized gains on guaranty assets and 

 guaranty fee buy-ups - - - - - - - - 245 - - 245 

 Amortization of net cash flow hedging 

 gains - - - - - - - - 9 - - 9 

 Prior service cost and actuarial gains, 

 net of amortization for defined 

 benefit plans - - - - - - - - 107 - - 107 

 Total comprehensive loss (60,525)

 Senior preferred stock dividends - - - - - - (2,470) - - - - (2,470)

 Increase to senior preferred liquidation 

 preference - - - 59,900 - - - - - - - 59,900 

 Conversion of convertible preferred stock 

 into common stock - (17) 27 - (874) 14 860 - - - - - 

 Other - - 1 - - - 72 2 - (54) - 20 

See Notes to Consolidated Financial Statements
FANNIE MAE

(In conservatorship)

Consolidated Statements of Changes in Equity (Deficit)

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

Fourth-Quarter and Full-Year 2010 Results 14 

 Fannie Mae Stockholders’ Equity (Deficit)

 Retained Accumulated

 Shares Outstanding Additional Earnings Other Non Total 

 Senior Senior Preferred Common Paid-In (Accumulated Comprehensive Treasury Controlling Equity 

 Preferred Preferred Common Preferred Stock Stock Capital Deficit) Loss Stock Interest (Deficit) 

Balance as of December 31, 2009 1 580 1,113 $ 60,900 $ 20,348 $ 664 $ 2,083 $ (90,237) $ (1,732) $ (7,398) $ 91 $ (15,281)

Cumulative effect from the adoption of 

 the accounting standards on transfers of 

 financial assets and consolidation - - - - - - - 6,706 (3,394) - (14) 3,298 

Balance as of January 1, 2010, adjusted 1 580 1,113 60,900 20,348 664 2,083 (83,531) (5,126) (7,398) 77 (11,983)

 Change in investment in noncontrolling 

 interest - - - - - - - - - - 9 9 

 Comprehensive loss: 

 Net loss - - - - - - - (14,014) - - (4) (14,018)

 Other comprehensive loss, net of tax effect: 

 Changes in net unrealized losses on 

 available-for-sale securities, (net of tax 

 of $1,644) - - - - - - - - 3,054 - - 3,054 

 Reclassification adjustment for other-than- 

 temporary impairments recognized 

 in net loss (net of tax of $253) - - - - - - - - 469 - - 469 

 Reclassification adjustment for gains 

 included in net loss (net of tax of $10) - - - - - - - - (19) - - (19)

 Unrealized gains on guaranty assets and 

 guaranty fee buy-ups - - - - - - - - 1 - - 1 

 Prior service cost and actuarial gains, 

 

net of amortization for defined benefit 

plans - - - - - - - - (61) - - (61)

 Total comprehensive loss (10,574)

 Senior preferred stock dividends - - - - - - (2,265) (5,441) - - - (7,706)

 Increase to senior preferred liquidation 

 preference - - - 27,700 - - - - - - - 27,700 

 Conversion of convertible preferred stock 

 into common stock - (3) 5 - (144) 3 141 - - - - - 

 Other - - 1 - - - 41 - - (4) - 37 

Balance as of December 31, 2010 1 577 1,119 $ 88,600 $ 20,204 $ 667 $ - $ (102,986) $ (1,682) $ (7,402) $ 82 $ (2,517)

See Notes to Consolidated Financial Statements
Fourth-Quarter and Full-Year 2010 Results 15 

Supplemental Non-GAAP Consolidated Fair Value Balance Sheets 

 As of December 31, 2010 As of December 31, 2009(1) 

 GAAP GAAP 

 Carrying Fair Value Estimated Carrying Fair Value Estimated 

 Value Adjustment(2) Fair Value Value Adjustment(2) Fair Value 

 (Dollars in millions) 

Assets: 

Cash and cash equivalents $ 80,975 $ - $ 80,975 $ 9,882 $ - $ 9,882 

Federal funds sold and securities purchased 

under agreements to resell or similar 

arrangements 11,751 - 11,751 53,684 (28) 53,656 

Trading securities 56,856 - 56,856 111,939 - 111,939 

Available-for-sale securities 94,392 - 94,392 237,728 - 237,728 

Mortgage loans: 

Mortgage loans held for sale 915 - 915 18,462 153 18,615 

Mortgage loans held for investment, net of 

 allowance for loan losses: 

 Of Fannie Mae 358,698 (39,331) 319,367 246,509 (5,209) 241,300 

 Of consolidated trusts 2,564,107 46,038 (3) 2,610,145 (4) 129,590 (45) 129,545 (4) 

Total mortgage loans 2,923,720 6,707 2,930,427 (5) 394,561 (5,101) 389,460 (5) 

Advances to lenders 7,215 (225) 6,990 (6) (7) 5,449 (305) 5,144 (6) (7) 

Derivative assets at fair value 1,137 - 1,137 (6) (7) 1,474 - 1,474 (6) (7) 

Guaranty assets and buy-ups, net 458 356 814 (6) (7) 9,520 5,104 14,624 (6) (7) 

Total financial assets 3,176,504 6,838 3,183,342 (8) 824,237 (330) 823,907 (8) 

Master servicing assets and credit enhancements 479 3,286 3,765 (6) (7) 651 5,917 6,568 (6) (7) 

Other assets 44,989 (261) 44,728 (6) (7) 44,253 373 44,626 (6) (7) 

Total assets $ 3,221,972 $ 9,863 $ 3,231,835 $ 869,141 $ 5,960 $ 875,101 

Liabilities: 

Federal funds purchased and securities sold 

under agreements to repurchase $ 52 $ (1) $ 51 $ - $ - $ - 

Short-term debt: 

 Of Fannie Mae 151,884 90 151,974 200,437 56 200,493 

 Of consolidated trusts 5,359 - 5,359 - - - 

Long-term debt: 

 Of Fannie Mae 628,160 (9) 21,524 649,684 567,950 (9) 19,473 587,423 

 Of consolidated trusts 2,411,597 (9) 103,332 (3) 2,514,929 6,167 (9) 143 6,310 

Derivative liabilities at fair value 1,715 - 1,715 (10) (11) 1,029 - 1,029 (10) (11) 

Guaranty obligations 769 3,085 3,854 (10) (11) 13,996 124,586 138,582 (10) (11) 

Total financial liabilities 3,199,536 128,030 3,327,566 (8) 789,579 144,258 933,837 (8) 

Other liabilities 24,953 (472) 24,481 (10) (11) 94,843 (54,878) 39,965 (10) (11) 

Total liabilities 3,224,489 127,558 3,352,047 884,422 89,380 973,802 

Equity (deficit): 

Fannie Mae stockholders' equity (deficit): 

Senior preferred(12) 88,600 - 88,600 60,900 - 60,900 

Preferred 20,204 (19,829) 375 20,348 (19,629) 719 

Common (111,403) (97,866) (209,269) (96,620) (63,791) (160,411) 

Total Fannie Mae stockholders' 

 

deficit/non-GAAP fair value of net 

assets $ (2,599) $ (117,695) $ (120,294) $ (15,372) $ (83,420) $ (98,792) 

Noncontrolling interests 82 - 82 91 - 91 

Total deficit (2,517) (117,695) (120,212) (15,281) (83,420) (98,701) 

Total liabilities and equity (deficit) $ 3,221,972 $ 9,863 $ 3,231,835 $ 869,141 $ 5,960 $ 875,101 

See Explanation and Reconciliation of Non-GAAP Measures to GAAP Measures 
Fourth-Quarter and Full-Year 2010 Results 16 

Explanation and Reconciliation of Non-GAAP Measures to GAAP Measures 

(1) Certain prior period amounts have been reclassified to conform to the current period presentation. 

(2) Each of the amounts listed as a “fair value adjustment” represents the difference between the carrying value included in our 

GAAP consolidated balance sheets and our best judgment of the estimated fair value of the listed item. 

(3) Fair value exceeds the carrying value of consolidated loans and debt of consolidated trusts due to the fact that the loans and 

debt were consolidated in our GAAP consolidated balance sheet at unpaid principal balance at transition. Also impacting the 

difference between fair value and carrying value of the consolidated loans is the credit component of the loan. This credit 

component is reflected in the net guaranty obligation, which is included in the consolidated loan fair value, but was presented

as a separate line item in our fair value balance sheet in prior periods. 

(4) Includes certain mortgage loans that we elected to report at fair value in our GAAP consolidated balance sheet of $3.0 billion 

as of December 31, 2010. We did not elect to report any mortgage loans at fair value in our consolidated balance sheet as of 

December 31, 2009. 

(5) Performing loans had a fair value of $2.8 trillion and an unpaid principal balance of $2.7 trillion as of December 31, 2010 

compared to a fair value of $345.5 billion and an unpaid principal balance of $348.2 billion as of December 31, 

2009. Nonperforming loans, which include loans that are delinquent by one or more payments, had a fair value of $168.5 

billion and an unpaid principal balance of $287.4 billion as of December 31, 2010 compared to a fair value of $43.9 billion 

and an unpaid principal balance of $79.8 billion as of December 31, 2009. See "Note 19, Fair Value" for additional 

information on valuation techniques for performing and non performing loans. 

(6) The following line items: (a) Advances to lenders; (b) Derivative assets at fair value; (c) Guaranty assets and buy-ups, net; 

(d) Master servicing assets and credit enhancements and (e) Other assets, together consist of the following assets presented in

our GAAP consolidated balance sheets: (a) Total accrued interest receivable, net of allowance; (b) Acquired property, net; 

(c) Servicer and MBS trust receivable; and (d) Other assets. 

(7) “Other assets” include the following GAAP consolidated balance sheets line items: (a) Total accrued interest receivable, net 

of allowance; (b) Acquired property, net; and (c) Servicer and MBS trust receivable. The carrying value of these items in our 

GAAP consolidated balance sheets totaled $28.4 billion and $31.2 billion as of December 31, 2010 and 2009, respectively. 

“Other assets” in our GAAP consolidated balance sheets includes the following: (a) Advances to Lenders; (b) Derivative 

assets at fair value; (c) Guaranty assets and buy-ups, net; and (d) Master servicing assets and credit enhancements. The 

carrying value of these items totaled $9.3 billion and $17.1 billion as of December 31, 2010 and 2009, respectively. 

(8) We determined the estimated fair value of these financial instruments in accordance with the fair value accounting standard 

as described in “Note 19, Fair Value.” 

(9) Includes certain long-term debt instruments that we elected to report at fair value in our GAAP consolidated balance sheets 

of $3.2 billion and $3.3 billion as of December 31, 2010 and 2009, respectively. 

(10) The following line items: (a) Derivative liabilities at fair value; (b) Guaranty obligations; and (c) Other liabilities, consist of 

the following liabilities presented in our GAAP consolidated balance sheets: (a) Accrued interest payable of Fannie Mae; (b) 

Accrued interest payable of consolidated trusts; (c) Reserve for guaranty losses; (d) Servicer and MBS trust payable; and 

(e) Other liabilities. 

(11) “Other liabilities” include the following GAAP consolidated balance sheets line items: (a) Accrued interest payable of 

Fannie Mae; (b) Accrued interest payable of consolidated trusts; (c) Reserve for guaranty losses; and (d) Servicer and MBS 

trust payable. The carrying value of these items in our GAAP consolidated balance sheets totaled $17.0 billion and $85.3 

billion as of December 31, 2010 and 2009, respectively. We assume that certain other liabilities, such as deferred revenues, 

have no fair value. Although we report the “Reserve for guaranty losses” as a separate line item in our consolidated balance 

sheets, it is incorporated into and reported as part of the fair value of our guaranty obligations in our non-GAAP 

supplemental consolidated fair value balance sheets. “Other liabilities” in our GAAP consolidated balance sheets include the 

following: (a) Derivative liabilities at fair value and (b) Guaranty obligations. The carrying value of these items totaled $2.5 

billion and $15.0 billion as of December 31, 2010 and 2009, respectively. 

(12) The amount included in “estimated fair value” of the senior preferred stock is the liquidation preference, which is the same 

as the GAAP carrying value, and does not reflect fair value.