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Contact: Pete Bakel 

 202-752-2034 

Date: April 2, 2013 

Fannie Mae Reports Largest Net Income in Company History; 

$17.2 Billion for 2012 and $7.6 Billion for Fourth Quarter 2012

Fannie Mae Paid Taxpayers $11.6 Billion in Dividends in 2012

 Significant improvement in credit results and growing revenue resulted in annual net income of $17.2 

billion and $7.6 billion for the fourth quarter, the largest annual and quarterly net income in the 

company’s history.

 Fannie Mae has paid taxpayers $35.6 billion in dividends since 2008; company expects to remain 

profitable for the foreseeable future.

 Fannie Mae has funded the mortgage market with approximately $3.3 trillion in liquidity since 2009, 

enabling families to buy, refinance, or rent a home.

WASHINGTON, DC - Fannie Mae (FNMA/OTC) today reported annual net income of $17.2 billion for 

2012 and quarterly net income of $7.6 billion for the fourth quarter of 2012, compared with a net loss of 

$16.9 billion for 2011. The improvement in the company’s full-year and quarterly net income was due 

primarily to improved credit results driven by a decline in serious delinquency rates, an increase in home 

prices, higher sales prices on Fannie Mae-owned properties, and the company’s resolution agreements 

with Bank of America. 

As a result of actions to strengthen its financial performance and continued improvement in the housing 

market, Fannie Mae’s financial results improved significantly in 2012 and the company expects to remain 

profitable for the foreseeable future. Based on analysis of all relevant factors, Fannie Mae determined that 

the valuation allowance on the company’s deferred tax assets was still appropriate as of December 31, 

2012. The valuation allowance as of December 31, 2012 was $58.9 billion. 

“Our financial results improved significantly in 2012 and we expect our earnings to remain strong over the 

next few years,” said Timothy J. Mayopoulos, president and chief executive officer. “We have taken a 

number of actions since 2009 to manage our legacy book of business, build a healthy new book of 

business with responsible underwriting standards, price appropriately for risk, and reduce uncertainty by 

resolving outstanding issues. These actions have helped to strengthen our financial performance and to 

support the housing recovery by enabling families to buy, refinance, or rent a home even during the 

housing crisis.” 

“Solid business fundamentals such as improving performance of our book of business and improvements 

in the housing market led us to report the largest annual and quarterly net income in the company’s 

history,” said Susan McFarland, executive vice president and chief financial officer. “We expect to remain 

profitable for the foreseeable future and return significant value to taxpayers.” 

Fourth Quarter and Full Year 2012 Results 1
Fannie Mae reported comprehensive income of $18.8 billion for the full year of 2012 and $7.8 billion for 

the fourth quarter of 2012. For the full year of 2012, Fannie Mae paid $11.6 billion in dividends to 

Treasury under the senior preferred stock purchase agreement between Fannie Mae and Treasury. As a 

result of the company’s positive net worth as of December 31, 2012, the company did not request a draw 

from Treasury for the fourth quarter of 2012. 

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 will 

equal the amount, if any, by which the company’s net worth as of the end of the preceding quarter exceeds 

an applicable capital reserve amount. The applicable capital reserve amount will be $3.0 billion for each 

quarter of 2013 and will be reduced by $600 million annually until it reaches zero in 2018. With Fannie 

Mae’s payment of a $4.2 billion dividend in the first quarter of 2013, the company has paid $35.6 billion 

in dividends to Treasury. 

(1) Treasury draws 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 liquidation preference on Fannie Mae’s senior preferred stock is not reduced by 

the payment of dividends to Treasury.

Fannie Mae has operated under the conservatorship of the Federal Housing Finance Agency (“FHFA”) 

since September 6, 2008. The funding the company has received under the senior preferred stock purchase 

agreement with the U.S. Treasury has provided the company with the capital and liquidity needed to 

maintain its ability 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. Through March 31, 2013, Fannie Mae has requested cumulative draws totaling 

$116.1 billion. Under the senior preferred stock purchase agreement, the payment of dividends cannot be 

used to offset prior Treasury draws. Accordingly, while Fannie Mae has paid $35.6 billion in dividends to 

Treasury, Treasury still maintains a liquidation preference of $117.1 billion on the company’s senior 

preferred stock. 

Beginning January 1, 2013, the amount of remaining funding available to Fannie Mae under the senior 

preferred stock purchase agreement with Treasury is $117.6 billion. This reflects the remaining funding 

available as of December 31, 2009 of $124.8 billion less the company’s net worth of $7.2 billion at 

December 31, 2012. 

Fourth Quarter and Full Year 2012 Results 2
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, 2012. 

DEFERRED TAX ASSET VALUATION ALLOWANCE

Each quarter, Fannie Mae evaluates the recoverability of its deferred tax assets, weighing a complex set of 

factors. The company is required to establish or maintain a valuation allowance for these assets if it 

determines that it is more likely than not that some or all of the deferred tax assets will not be realized. 

Fannie Mae established a valuation allowance against its deferred tax assets in 2008. 

In evaluating the recoverability of Fannie Mae’s deferred tax assets, as of December 31, 2012, the 

company again determined that the factors in favor of maintaining the allowance outweighed the factors in 

favor of releasing it. Therefore, Fannie Mae did not release any of its valuation allowance as of 

December 31, 2012. The valuation allowance as of December 31, 2012 was $58.9 billion. 

If and when Fannie Mae does release the valuation allowance on its deferred tax assets, it will be included 

as income in that period and will result in a corresponding increase in the company’s net worth as of the 

end of that period. Accordingly, Fannie Mae expects to pay Treasury a significant dividend in the quarter 

following a release of the valuation allowance on the company’s deferred tax assets. Although Fannie Mae 

has not completed its analysis, the company believes that, after considering all relevant factors, it may 

release the valuation allowance on its deferred tax assets as early as the first quarter of 2013. 

For information on the release of the deferred tax asset valuation allowance, please refer to the company’s 

annual report on Form 10-K for the year ended December 31, 2012. 

RESOLUTION AGREEMENTS WITH BANK OF AMERICA

Fannie Mae’s net income for 2012 was impacted by its resolution agreements with Bank of America 

related to repurchase requests and compensatory fees. These agreements led to the recognition of $1.3 

billion in pre-tax income for 2012. In addition, the company expects to recognize additional net income in 

the first quarter of 2013 and in future periods relating to the resolution agreements. 

Repurchase Request Resolution Agreement: On January 6, 2013, Fannie Mae entered into a resolution 

agreement with affiliates of Bank of America Corporation to resolve certain repurchase requests arising 

from breaches of selling representations and warranties. The resolution agreement resolved the company’s 

outstanding and expected future repurchase requests arising from breaches of selling representations and 

warranties on specified single-family loans delivered to Fannie Mae by Bank of America and 

Countrywide that were originated between January 1, 2000 and December 31, 2008. The resolution 

agreement included, among other things, the following components: 

 Bank of America made a cash payment to Fannie Mae of $3.6 billion in January 2013 related 

to repurchase requests; 

 Bank of America repurchased approximately 29,500 loans from Fannie Mae in January 2013 

for an aggregate repurchase price of $6.6 billion, subject to a reconciliation process; and

 Bank of America made an initial cash payment of $518 million in January 2013 related to 

mortgage insurance claims.

Fourth Quarter and Full Year 2012 Results 3
The resolution agreement addressed $11.3 billion of unpaid principal balance, or 97 percent, of Fannie 

Mae’s outstanding repurchase requests made to Bank of America as of December 31, 2012. Accordingly, 

the amount of Fannie Mae’s outstanding repurchase requests will decrease substantially in the three 

months ending March 31, 2013 as outstanding repurchase requests to Bank of America represented 73 

percent of Fannie Mae’s total repurchase requests outstanding as of December 31, 2012. 

Compensatory Fee Resolution Agreement: Also on January 6, 2013, Fannie Mae and Bank of America 

entered into a compensatory fee agreement to resolve outstanding and certain future compensatory fees 

owed by Bank of America due to servicing delays. Bank of America made an initial payment to Fannie 

Mae of $1.3 billion in January 2013. Subsequent to the initial payment, Fannie Mae and Bank of America 

will complete a loan review process in 2013 as specified in the compensatory fee agreement to mutually 

determine the final amount of compensatory fees owed. For the year ended December 31, 2012, Fannie 

Mae recognized income of $203 million in “Foreclosed property (income) expense” in its consolidated 

statement of operations and comprehensive income (loss) as a result of the compensatory fee agreement. 

Any remaining amount will be recognized in 2013 once Fannie Mae has completed a sufficient portion of 

the loan review process to determine the final amount of income that will be received under the terms of 

the agreement. 

For information on the resolution agreements with Bank of America, please refer to the company’s annual 

report on Form 10-K for the year ended December 31, 2012. 

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Fannie Mae provided approximately $3.3 trillion in liquidity to the mortgage market from January 1, 2009 

through December 31, 2012 through its purchases and guarantees of loans, which enabled borrowers to 

complete 9.7 million mortgage refinancings and 2.7 million home purchases, and provided financing for 

1.7 million units of multifamily housing. 

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

secondary market in the fourth quarter of 2012, with an estimated market share of new single-family 

mortgage-related securities issuances of 48 percent, compared with 54 percent in the fourth quarter of 

2011 and 49 percent for all of 2012. Fannie Mae also remained a constant source of liquidity in the 

multifamily market. As of December 31, 2012, the company owned or guaranteed approximately 22 

percent of the total outstanding debt on multifamily properties. 

Fourth Quarter and Full Year 2012 Results 4
HELPING TO BUILD A NEW HOUSING FINANCE SYSTEM

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

significant resources toward helping to build a new housing finance system for the future, primarily 

through pursuing the strategic goals identified by its conservator, FHFA. These strategic goals are: build a 

new infrastructure for the secondary mortgage market; gradually contract the company’s dominant 

presence in the marketplace while simplifying and shrinking its operations; and maintain foreclosure 

prevention activities and credit availability for new and refinanced mortgages. 

CREDIT QUALITY

New Single-Family Book of Business: Fannie Mae is setting responsible credit standards to protect 

homeowners and taxpayers, while making it possible for families to purchase, refinance, or rent a home. 

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. As of December 31, 2012, 66 percent of Fannie 

Mae’s single-family guaranty book of business consisted of loans it had purchased or guaranteed since the 

beginning of 2009. While Fannie Mae does not yet know how the single-family loans the company has 

acquired since January 1, 2009 will ultimately perform, given their strong credit risk profile and based on 

their performance so far, the company expects that these loans, in the aggregate, will be profitable over 

their lifetime, meaning the company’s fee income on these loans will exceed the company’s credit losses 

and administrative costs for them. 

Fourth Quarter and Full Year 2012 Results 5
Single-family conventional loans acquired by Fannie Mae for the full year of 2012 had a weighted average 

borrower FICO credit score at origination of 761 and an average original loan-to-value (“LTV”) ratio of 

75 percent. The average original LTV ratio for the company’s acquisitions increased for the full year of 

2012 because the company acquired more loans with higher LTV ratios in that period than in prior periods 

as changes to the Home Affordable Refinance Program (“HARP”) were implemented. 

Fannie Mae’s Expectations Regarding Future Loss Reserves: The company’s total loss reserves 

decreased to $62.6 billion as of December 31, 2012 from $76.9 billion as of December 31, 2011. The 

company expects the trends of improving home prices and declining single-family serious delinquency 

rates will continue. As a result, the company believes that its total loss reserves peaked as of December 31, 

2011. Accordingly, the company does not expect total loss reserves to increase above $76.9 billion in the 

foreseeable future. 

Fannie Mae’s single-family serious delinquency rate has declined each quarter since the first quarter of 

2010, and was 3.29 percent as of December 31, 2012, 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, as well as the company’s acquisition of loans with stronger credit profiles since the 

beginning of 2009. 

Fourth Quarter and Full Year 2012 Results 6
HOME RETENTION SOLUTIONS AND FORECLOSURE ALTERNATIVES

To reduce the credit losses Fannie Mae ultimately incurs on its legacy 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. Fannie Mae completed nearly 40,000 loan modifications during the 

fourth quarter of 2012 and approximately 163,000 for the full year of 2012, bringing the total number of 

loan modifications the company has completed since January 1, 2009 to nearly 879,000. 

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

offers alternatives to foreclosure. These solutions have enabled 1.2 million homeowners to avoid 

foreclosure since 2009. 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. 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 Year Ended December 31, 

2012 2011 2010 2009 

 

Unpaid 

Principal 

Balance 

Number of 

Loans 

Unpaid 

Principal 

Balance 

Number of 

Loans 

Unpaid Principal 

Balance 

Number of 

Loans 

Unpaid Principal 

Balance 

Number of 

Loans 

(Dollars in millions) 

Home retention solutions: 

Modifications ............................. $ 30,640 163,412 $ 42,793 213,340 $ 82,826 403,506 $ 18,702 98,575

Repayment plans and forbearances 

completed.................................. 3,298 23,329 5,042 35,318 4,385 31,579 2,930 22,948

HomeSaver Advance first-lien loans. — — — — 688 5,191 6,057 39,199

 33,938 186,741 47,835 248,658 87,899 440,276 27,689 160,722

Foreclosure alternatives: 

Short sales ................................. 15,916 73,528 15,412 70,275 15,899 69,634 8,457 36,968

Deeds-in-lieu of foreclosure ........... 2,590 15,204 1,679 9,558 1,053 5,757 491 2,649

 18,506 88,732 17,091 79,833 16,952 75,391 8,948 39,617

Total loan workouts ........................... $ 52,444 275,473 $ 64,926 328,491 $ 104,851 515,667 $ 36,637 200,339

Loan workouts as a percentage of singlefamily guaranty book of business........... 1.85 % 1.57 % 2.29 % 1.85 % 3.66 % 2.87 % 1.26 % 1.10 %

Fourth Quarter and Full Year 2012 Results 7
Fourth Quarter and Full Year 2012 Results 8

REFINANCING INITIATIVES

Through the company’s Refi PlusTMinitiative, which provides expa

eligible Fannie Mae b r and HA co cq xi 1 i

the fourth quarter of 2012 and approxim tely 1,117,000 for the full year of 2012. Som

ayments increased as they took advantage of the ability to refinance th ugh Refi lus to reduc 

 f m b mo o ix t o 

 mortgage to a fully amortizing m rtgage. Even taking these into account, 

d to F ae u h Ref us in the fourth quarter of 2012 reduced borrowers’ 

men by a aver $23

nded refinance opportunities for 

o rowers includes

a

RP, the mpany a uired appro mately 3

e borrowe

9,000 loans

rs’ 

n 

monthly p ro P e

the term of their loan, to switch ro an adjusta le-rate rtgage t a f ed-ra e mortgage, or t switch

from an interest-only

refinancings delivere

o

annie M thro g i Pl

monthly mortgage pay ts n age of 7. 

S AND REO

Fannie Mae acquired 41,112 single-family REO properties, primarily through foreclosure, in the fourth 

quarter of 2012, compared with 41,884 in the third quarter of 2012. As of December 31, 2012, the 

company’s inventory of single-family REO properties was 105,666, compared with 107,225 as of 

September 30, 2012. The carrying value of the company’s single-family REO was $9.5 billion as of 

December 31, 2012. 

The company’s single-family foreclosure rate was 0.99 percent for the full year of 2012. This reflects the 

annualized 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. 

FORECLOSURE
For the Year Ended December 31, 

2012 2011 2010 

Single-family foreclosed properties (number of properties): 

Beginning of period inve

Fourth Quarter and Full Year 2012 Results 9

ntory of single-family foreclosed properties (REO). 118,528 162,489 86,155 

Total properties acquired through foreclosure.................................................. 174,479 199,696 262,078 

Dispositions of REO......................................................................................... (187,341 ) (243,657 ) (185,744 )

End of period inventory of single-family foreclosed properties (REO) ........... 105,666 118,528 162,489 

Carrying value of single-family foreclosed properties (dollars in millions)..... $ 9,505 $ 9,692 $ 14,955 

Single-family foreclosure rate.......................................................................... 0.99 % 1.13 % 1.46 %

The company provides further discussion of its financial results and con , fair 

value balance sheets, and other matters in its annual report on Form 10-K for he y nde Dec r 3 , 

 Exchange C mmission. Further inform

bo s es rs o t 

losses, its foreclosure-prevention effo ent” 

dition, credit performance

t ear e d embe 1

2012, which was filed today with the Securities and o ation about the 

company’s credit performance, the characteristics of its guaranty ok of bu in s, the drive f its credi

rts, and other measures is contai

on Fannie Mae’s Web site, www.fanniemae.com

ned in the “2012 Credit Supplem

. 

# # # 

orec ectati , a a lo

y; the ti nd possibility of a release of the company's 

e compa tur s reser tability a

 future dividend payments to Treasury; its future outstanding repurchase requests and expected actions in connection with its agreements with Bank of 

merica; the trends of improving home prices and declining serious delinquency rates; the impact of the company's actions to reduce credit losses; and the 

s 

enerally accepted accounting principles, changes to the company's accounting 

ns to it, its ability to maintain a positive net worth, effects from activities 

e company takes to support the mortgage market and help homeowners, the conservatorship and its effect on the company's business, the investment by 

 changes in the structure and regulation of the financial services industry, the company's ability to access the 

ot 

In this release and the accompanying Appendix, the company has presented a number of estimates, f asts, exp ons nd other forw rd- oking 

statements regarding the company's future earnings and financial results, including its profitabilit

aluation allowance on its deferred tax assets; the value the company can deliver to taxpayers; th

ming a

v ny's fu

its

e los ves; the profi of its lo ns; 

A

future fair value of the company's trading securities and derivatives. These estimates, forecasts, expectations, and statements are forward looking statement

based on the company's current assumptions regarding numerous factors, including future home prices and the future performance of its loans. 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 variables, government policy, credit availability, social behaviors, including increases in the number of 

underwater borrowers who strategically default on their mortgage loan, the volume of loans it modifies, the nature, volume and effectiveness of its loss 

mitigation strategies and activities, 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, future legislative or regulatory requirements that have a significant impact on the 

company's business such as a requirement that the company implement a principal forgiveness program, future updates to the company's models relating to 

loss reserves, including the assumptions used by these models; changes in g

policies, failures by its mortgage seller-servicers to fulfill their repurchase obligatio

th

Treasury and its effect on the company's business,

debt markets, disruptions in the housing, credit, and stock markets, government investigations and litigation, the performance of the company's servicers,

conditions in the foreclosure environment, natural or other disasters, 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, 2012, 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 n

part of this release. 

Fannie Mae enables people to buy, refinance, or rent a home.
Fourth Quarter and Full Year 2012 Results 10

APPENDIX

SUMMARY OF FOURTH QUARTER AND FULL YEAR 2012 RESULTS

annie Mae reported net income of $7.6 billion for the fourth quarter of 2012, compared with net income 

of $1.8 billion for the third quarter of 2012 and a net loss of $2.4 billion for the fourth quarter of 2011. 

The company reported net income of $17.2 billion for 2012, compared with a net loss of $16.9 billion for 

2011. As a result of the company’s positive net worth as of December 31, 2012, which takes into account 

dividends paid on senior preferred stock held by Treasury, the company will not request a draw for the 

quarter from Treasury under the senior preferred stock purchase agreement. 

F

(Dollars in millions) 4Q12 3Q12 Variance FY 2012 FY 2011 Variance 

Net interest income $ 5,559 $ 5,317 $ 242 $ 21,501 $ 19,281 $ 2,220

Fee and other income 339 378 (39 ) 1,487 1,163 324

Net revenues 5,898 5,695 203 $ 22,988 20,444 2,544

Investment gains, net 106 134 (28 ) 487 506 (19 )

Net other-than-temporary impairments (12 ) (38 ) 26 (713 ) (308 ) (405 )

Fair value gains (losses), net 209 (1,020 ) 1,229 (2,977 ) (6,621 ) 3,644

Administrative expenses (648 ) (588 ) (60 ) (2,367 ) (2,370 ) 3

Credit-related income (expenses) 

Benefit (provision) for credit losses 1,890 (2,079 ) 3,969 852 (26,718 ) 27,570

Foreclosed property income (expense) 475 48 427 254 (780 ) 1,034

Total credit-related income (expenses) 2,365 (2,031 ) 4,396 1,106 (27,498 ) 28,604

Other non-interest expenses(1) (348 ) (339 ) (9 ) (1,304 ) (1,098 ) (206 )

Net gains (losses) and income (expenses) 1,672 (3,882 ) 5,554 (5,768 ) (37,389 ) 31,621

Income (loss) before federal income taxes 7,570 1,813 5,757 17,220 (16,945 ) 34,165

Benefit for federal income taxes — — — — 90 (90 )

Net income (loss) 7,570 1,813 5,757 17,220 (16,855 ) 34,075

Less: Net loss attributable to the noncontrolling 

interest — 8 (8 ) 4 — 4

Net income (loss) attributable to Fannie Mae $ 7,570 $ 1,821 $ 5,749 $ 17,224 $ (16,855 ) $ 34,079

Total comprehensive income (loss) attributable to 

Fannie Mae $ 7,753 $ 2,567 $ 5,186 $ 18,843 $ (16,408 ) $ 35,251

Preferred stock dividends $ (2,928 ) $ (2,929 ) $ 1 $ (11,603 ) $ (9,614 ) $ (1,989)

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

Net revenues were $5.9 billion for the fourth quarter of 2012, compared with $5.7 billion for the third 

quarter of 2012. Net interest income was $5.6 billion, compared with $5.3 billion for the third quarter of 

2012. The increase in net interest income compared with the third quarter of 2012 was driven by an 

increase in income from guaranty fees and accelerated amortization income driven by the high volume of 

prepayments. The increase was partially offset by lower net interest income from portfolio assets due to a 

decline in the company’s retained portfolio. For the year, net revenues were $23.0 billion, up 12.4 percent 

from $20.4 billion in 2011. 
Fourth Quarter and Full Year 2012 Results 11

Credit-related income, which consists of recognition of a benefit or provision for credit losses and 

erty income, was $2.4 billion in the fou arte , co it illio

expense the third quarter 2 or e , cr it- ted 1 ion

credit-related expense of $27.5 billion in 2011. The co ny re

 the fourth quarter and full ye r of due la to an in as in ice

foreclosed prop rth qu r of 2012 mpared w h $2.0 b n in 

credit-related of 012. F th year ed rela income was $ .1 bill , 

compared with mpa corded credit-related 

income in a 2012 rgely cre e home pr s. 

Credit losses, which the company defines as net charge-offs plus fo sed p xp clud

-value losses, w re $2. illion in the fourth quarter of 2012, compared with $3.5 

 third quarter of 2012. For the year, credit losses were $14.6 billion com red 8.7 

wn in the fourth quarter of 2012 compared with the third quarter of 

2012 due primarily to improved sales p ices on annie Mae-owned properties, a decrease in volume of 

, and r tio ag ent with Bank t u

er o vio ly rge o ns. r n e

provements in hom ri h p ic on nn e an

reclo roperty e ense, ex ing 

the effect of certain fair e 2 b

billion in the pa with $1

billion in 2011. Credit losses were do

r F

foreclosure and short sale activity the esolu n reem of America, which con rib ted 

to an increase in the amount of recov ies n pre us cha d- ff loa C edit losses were dow y ar 

over year due to im

fewer defaults during the year. 

e p ces, hig er sales r es Fa ie Mae-owned properti s, d 
Fourth Quarter and Full Year 2012 Results 12

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, were $62.6 billion as of December 31, 2012, compared with $66.9 billion as of September 30, 

2012 and $76.9 billion as of December 31, 2011. The total loss reserve coverage to total nonperforming 

loans was 25 percent as of December 31, 2012, compared with 26 percent as of September 30, 2012 and 

31 percent as of December 31, 2011. 

Net fair value gains were $209 million in the fourth quarter of 2012, compared with net fair value losses 

of $1.0 billion in the third quarter of 2012. For the year, net fair value losses were $3.0 billion, compared 

with $6.6 billion in 2011. The company recorded fair value gains in the fourth quarter of 2012 due to 

lower derivative losses because interest rates increased in the fourth quarter of 2012. The decrease in fair 

value losses for the full year was driven primarily by lower losses on Fannie Mae’s risk management 

derivatives as interest rates declined significantly in 2011 compared with a more modest decline in 2012. 

The estimated fair value of the company’s trading securities and derivatives may fluctuate substantially 

from period to period because of changes in interest rates, credit spreads, and interest rate volatility, as 

well as activity related to these financial instruments. 
Fourth Quarter and Full Year 2012 Results 13

pany purchases and securitizes into Fannie Mae MBS. 

The Capital Markets group manages the company’s investment activity in mortgage-related assets and 

other interest-earning non-mortgage investments, funding investments in mortgage-related assets 

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. 

Single-Family business had net income of $4.0 billion in the fourth quarter of 2012, compared with a net 

loss of $822 million in the third quarter of 2012. For the year, the Single-Family business had net income 

of $6.3 billion, compared with a net loss of $23.9 billion in 2011. The shift to net income in the fourth 

quarter from a net loss in the third quarter and to net income in 2012 compared with net loss in 2011 was 

due primarily to continuing improvement in the company’s credit results. The Single-Family guaranty 

book of business was $2.83 trillion as of December 31, 2012, compared with $2.85 trillion as of 

eptember 30, 2012 and $2.84 trillion as of December 31, 2011. Single-Family guaranty fee income was 

3 

r of 2012. Multifamily recorded credit-related 

income of $187 million in 2012, compared with credit-related expense of $280 million in 2011. 

Multifamily guaranty fee income was $280 million for the fourth quarter of 2012 and $265 million for the 

third quarter of 2012. Multifamily guaranty fee income was $1.0 billion for 2012 and $884 million for 

2011. 

Capital Markets group had net income of $4.3 billion in the fourth quarter of 2012, compared with $4.1 

billion in the third quarter of 2012. The group had net income of $14.2 billion for the year, compared with 

$9.0 billion for 2011. Capital Markets’ net interest income for the fourth quarter of 2012 was $3.0 billion, 

compared with $3.2 billion for the third quarter of 2012. The group had net interest income of $13.2 

billion for the year, compared with $13.9 billion for 2011. Fair value gains for the fourth quarter of 2012 

were $211 million, compared with fair value losses of $1.0 billion in the third quarter of 2012. Fair value 

losses for the year were $3.0 billion compared with fair value losses of $6.6 billion for 2011. The Capital 

Markets mortgage investment portfolio balance decreased to $633.1 billion as of December 31, 2012, 

compared with $708.4 billion as of December 31, 2011, resulting from purchases of $288.3 billion, 

liquidations of $139.5 billion, and sales of $224.2 billion during the year. 

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 mission of providing liquidity, stability, and affordability to the U.S. housing 

market. The company’s Single-Family and Multifamily businesses work with Fannie Mae’s lender 

customers, who deliver mortgage loans that the com

S

$2.3 billion in the fourth quarter of 2012 and $2.0 billion in the third quarter of 2012. For the year, SingleFamily guaranty fee income was $8.2 billion, compared with $7.5 billion in 2011. 

Multifamily had net income of $447 million in the fourth quarter of 2012, compared with $427 million in

the third quarter of 2012. For the year, Multifamily had net income of $1.5 billion, compared with $58

million in 2011. The Multifamily guaranty book of business was $206.2 billion as of December 31, 2012, 

compared with $202.2 billion as of September 30, 2012 and $195.2 billion as of December 31, 2011. 

Multifamily recorded credit-related expense of $54 million in the fourth quarter of 2012, compared with

credit-related income of $99 million in the third quarte
Fourth Quarter and Full Year 2012 Results 14

 

($ ariance

Si

 in millions) 4Q12 3Q12 Variance 2012 2011 V

ngle-Family Segment: 

Guaranty fee income $ 2,256 $ 2,014 $ 242 $ 8,151 $ 7,507 $ 644 

Credit-related income (expenses) 2,419 (2,130 ) 4,549 919 (27,218 ) 28,137

Other (649 ) (706 ) 57 (2,780 ) (4,230 ) 1,450

Net income (loss) $ 4,026 $ (822 ) $ 4,848 $ 6,290 $ (23,941 ) $ 30,231 

Multifamily Segment: 

Guaranty fee income $ 280 $ 265 $ 15 $ 1,040 $ 884 $ 156 

Credit-related (expenses) income (54 ) 99 (153 ) 187 (280 ) 467

Other 221 63 158 284 (21 ) 305

Net income $ 447 $ 427 $ 20 $ 1,511 $ 583 $ 928 

Capital Markets Segment: 

Net interest income $ 3,010 $ 3,247 $ (237 ) $ 13,241 $ 13,920 $ (679)

Investment gains, net 1,551 2,201 (650 ) 6,217 3,711 2,506

Fair value gains (losses), net 211 (961 ) 1,172 (3,041 ) (6,596 ) 3,555

Other (470 ) (365 ) (105 ) (2,216 ) (2,036 ) (180 )

Net income $ 4,302 $ 4,122 $ 180 $ 14,201 $ 8,999 $ 5,202 
Fourth Quarter and Full Year 2012 Results 15
Fourth Quarter and Full Year 2012 Results 16
Fourth Quarter and Full Year 2012 Results 17
Fourth Quarter and Full Year 2012 Results 18