First Quarter 2017 Results 1

Resource Center: 1-800-232-6643 

Contact: Pete Bakel 

202-752-2034

Date: May 5, 2017

Fannie Mae Reports Net Income of $2.8 Billion and 

Comprehensive Income of $2.8 Billion for First Quarter 2017

• Fannie Mae expects to pay $2.8 billion in dividends to Treasury in June 2017. With the expected June 2017 

dividend payment, Fannie Mae will have paid a total of $162.7 billion in dividends to Treasury. 

• Fannie Mae was the largest provider of liquidity to the mortgage market in the first quarter of 2017, 

providing approximately $136 billion in mortgage financing that enabled families to buy, refinance, or rent 

homes.

• Fannie Mae is focused on providing value to the housing finance system by:

delivering increased speed, simplicity, and certainty to customers and serving their needs by building a 

company that is efficient, innovative, and continuously improving;

implementing innovations that deliver greater value and reduced risk to lenders, such as the company’s 

Day 1 CertaintyTM initiative with verification tools to expand representation and warranty relief; and 

helping make predictable long-term fixed-rate mortgages, including the 30-year fixed-rate mortgage, 

available to families across the country.

• Fannie Mae continues to increase the role of private capital in the mortgage market and reduce the risk to 

Fannie Mae’s business, taxpayers, and the housing finance system through its credit risk transfer 

transactions. As of March 31, 2017, approximately 26 percent of the loans in the company’s single-family 

conventional guaranty book of business, measured by unpaid principal balance, were covered by a credit 

risk transfer transaction.

WASHINGTON, DC — Fannie Mae (FNMA/OTC) reported net income of $2.8 billion and comprehensive income of 

$2.8 billion for the first quarter of 2017. The company reported a positive net worth of $3.4 billion as of March 31, 

2017. As a result, the company expects to pay Treasury a $2.8 billion dividend in June 2017.

“Across our business, we are creating new ways to help our customers make the mortgage process easier and 

safer, and provide options that are affordable to more borrowers,” said Timothy J. Mayopoulos, president and chief 

executive officer. “Both the market and our operations continued to strengthen, and our progress was reflected in 

another profitable quarter. We look forward to advancing our vision to create a digital mortgage process, and make 

new strides in our efforts to encourage the creation of affordable multifamily housing.”

First Quarter 2017 Results — Fannie Mae’s net income of $2.8 billion for the first quarter of 2017 compares to net 

income of $5.0 billion for the fourth quarter of 2016. The decrease in net income was due primarily to: 

• Significantly smaller increases in interest rates in the first quarter of 2017 as compared with the fourth quarter of 

2016. 

Large increases in longer-term interest rates in the fourth quarter of 2016 resulted in substantial fair value 

gains on the company’s risk management derivatives for the quarter as well as credit-related expenses that 

partially offset these gains. 

By contrast, interest rates increased only slightly in the first quarter of 2017, and therefore did not have a 

substantial impact on the fair value of the company’s risk management derivatives or its credit-related 

income for the quarter.
First Quarter 2017 Results 2

SUMMARY OF FIRST QUARTER 2017 RESULTS

(Dollars in millions) 1Q17 4Q16 Variance 1Q17 1Q16 Variance

Net interest income $ 5,346 $ 5,805 $ (459) $ 5,346 $ 4,769 $ 577

Fee and other income 249 414 (165) 249 203 46

Net revenues 5,595 6,219 (624) 5,595 4,972 623

Investment gains (losses), net (9) 322 (331) (9) 69 (78)

Fair value gains (losses), net (40) 3,890 (3,930) (40) (2,813) 2,773

Administrative expenses (684) (714) 30 (684) (688) 4

Credit-related income (expense)

Benefit (provision) for credit losses 396 (1,303) 1,699 396 1,184 (788)

Foreclosed property expense (217) (137) (80) (217) (334) 117

Total credit-related income (expense) 179 (1,440) 1,619 179 850 (671)

Temporary Payroll Tax Cut Continuation Act of 2011

(TCCA) fees (503) (487) (16) (503) (440) (63)

Other expenses, net (382) (210) (172) (382) (264) (118)

Income before federal income taxes 4,156 7,580 (3,424) 4,156 1,686 2,470

Provision for federal income taxes (1,383) (2,545) 1,162 (1,383) (550) (833)

Net income $ 2,773 $ 5,035 $ (2,262) $ 2,773 $ 1,136 $ 1,637

Total comprehensive income $ 2,779 $ 4,871 $ (2,092) $ 2,779 $ 936 $ 1,843

Dividends distributed or available for distribution to

senior preferred stockholder $ (2,779) $ (5,471) $ 2,692 $ (2,779) $ (919) $ (1,860)

Net revenues, which consist of net interest income and fee and other income, were $5.6 billion for the first quarter 

of 2017, compared with $6.2 billion for the fourth quarter of 2016. 

The company has two primary sources of net interest income: (1) the guaranty fees it receives for managing the 

credit risk on loans underlying Fannie Mae mortgage-backed securities held by third parties; and (2) the difference 

between interest income earned on the assets in its retained mortgage portfolio and the interest expense 

associated with the debt that funds those assets.

Net interest income was $5.3 billion for the first quarter of 2017, compared with $5.8 billion for the fourth quarter of 

2016. The decrease in net interest income for the first quarter of 2017 was due primarily to lower amortization 

income from mortgage prepayments due to lower refinance activity and lower interest income due to a decline in the 

average balance of the company’s retained mortgage portfolio as the company continued to reduce this portfolio. 

In recent periods, an increasing portion of Fannie Mae’s net interest income has been derived from guaranty fees 

rather than from the company’s retained mortgage portfolio assets. This shift has been driven by both the guaranty 

fee increases the company implemented in 2012 and the reduction of the company’s retained mortgage portfolio. 

More than 75 percent of the company’s net interest income in the first quarter of 2017 was derived from its guaranty 

business. The company expects that guaranty fees will continue to account for an increasing portion of its net 

interest income.
First Quarter 2017 Results 3

Net fair value losses were $40 million in the first quarter of 2017, compared with net fair value gains of $3.9 billion

in the fourth quarter of 2016. Net fair value losses for the first quarter of 2017 were due primarily to losses on 

Connecticut Avenue SecuritiesTM debt reported at fair value resulting from tightening spreads between Connecticut 

Avenue Securities yields and LIBOR during the quarter. Net fair value losses for the first quarter of 2017 were 

partially offset by gains on the company’s risk management derivatives due primarily to increases in longer-term 

swap rates during the first quarter of 2017. Net fair value gains in the fourth quarter of 2016 were due primarily to 

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

Net fair value gains in the fourth quarter of 2016 also were driven by gains on commitments to sell mortgage-related 

securities driven by a decrease in prices as interest rates increased during the commitment periods in the quarter. 

The estimated fair value of the company’s derivatives and securities may fluctuate substantially from period to 

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

activity related to these financial instruments. 

Credit-related income (expense) consists of a benefit or provision for credit losses and foreclosed property 

expense. Credit-related income was $179 million in the first quarter of 2017, compared with credit-related expense 

of $1.4 billion in the fourth quarter of 2016. Credit-related income in the first quarter of 2017 was driven primarily by 

an increase in actual and forecasted home prices.

Credit-related expense in the fourth quarter of 2016 was due primarily to a provision for credit losses driven 

primarily by an increase in actual and projected interest rates during the quarter. The increase in actual and 

projected interest rates in the fourth quarter of 2016 increased the impairment on the company’s individually 

impaired loans primarily related to concessions provided on its modified loans, which was the driver of the provision 

for credit losses for the quarter.
First Quarter 2017 Results 4

VARIABILITY OF FINANCIAL RESULTS 

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

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

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

of other factors, including: the company’s guaranty fee rates; the volume of single-family mortgage originations in 

the future; the size, composition, and quality of its retained mortgage portfolio and guaranty book of business; and 

economic and housing market conditions. Although Fannie Mae expects to remain profitable on an annual basis for 

the foreseeable future, due to the company’s limited and declining capital reserves (which decrease to zero in 2018) 

and the potential for significant volatility in its financial results, the company could experience a net worth deficit in a 

future quarter. If Fannie Mae experiences a net worth deficit in a future quarter, the company will be required to 

draw additional funds from Treasury under the senior preferred stock purchase agreement to avoid being placed 

into receivership. 

The company’s expectations for its future financial results do not take into account the impact on its business of 

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

results, particularly the enactment of housing finance reform legislation, corporate income tax reform legislation, and 

changes in accounting standards. For example, the current Administration proposes reducing the U.S. corporate 

income tax rate. Under applicable accounting standards, a significant reduction in the U.S. corporate income tax 

rate would require the company to record a substantial reduction in the value of its deferred tax assets in the quarter 

in which the legislation is enacted. Thus, if legislation significantly lowering the U.S. corporate income tax rate is 

enacted, the company expects to incur a significant net loss and net worth deficit for the quarter in which the 

legislation is enacted and could potentially incur a net loss for that year. If the company experiences a net worth 

deficit in a future quarter, it will be required to draw additional funds from Treasury under the senior preferred stock 

purchase agreement in order to avoid being placed into receivership. For additional information on factors that affect 

the company’s financial results, please refer to the company’s quarterly report on Form 10-Q for the quarter ended 

March 31, 2017 (the “First Quarter 2017 Form 10-Q”).

SUMMARY OF FIRST QUARTER 2017 BUSINESS SEGMENT RESULTS

Fannie Mae’s two reportable business segments—Single-Family and Multifamily—engage in complementary 

business activities in pursuing Fannie Mae’s vision to be America’s most valued housing partner and to provide 

liquidity, access to credit, and affordability in all U.S. housing markets at all times, while effectively managing and 

reducing risk to Fannie Mae’s business, taxpayers, and the housing finance system. In support of this vision, Fannie 

Mae is focused on: advancing a sustainable and reliable business model that reduces risk to the housing finance 

system and taxpayers; providing reliable, large-scale access to affordable mortgage credit for qualified borrowers 

and helping struggling homeowners; and serving customer needs by building a company that is efficient, innovative, 

and continuously improving.
First Quarter 2017 Results 5

(Dollars in millions) 1Q17 4Q16 Variance 1Q17 1Q16 Variance

Single-Family Segment:

Net interest income $ 4,756 $ 5,178 $ (422) $ 4,756 $ 4,245 $ 511

Fee and other income 76 299 (223) 76 67 9

Net revenues 4,832 5,477 (645) 4,832 4,312 520

Credit-related income (expense) 184 (1,456) 1,640 184 828 (644)

Investment gains (losses), net (50) 209 (259) (50) 56 (106)

Fair value gains (losses), net (12) 3,988 (4,000) (12) (2,850) 2,838

Administrative expenses (601) (630) 29 (601) (609) 8

TCCA fees (503) (487) (16) (503) (440) (63)

Other expenses (256) (239) (17) (256) (246) (10)

Income before federal income taxes 3,594 6,862 (3,268) 3,594 1,051 2,543

Provision for federal income taxes (1,252) (2,375) 1,123 (1,252) (389) (863)

Net income $ 2,342 $ 4,487 $ (2,145) $ 2,342 $ 662 $ 1,680

Multifamily Segment:

Net interest income $ 590 $ 627 $ (37) $ 590 $ 524 $ 66

Fee and other income 173 115 58 173 136 37

Net revenues 763 742 21 763 660 103

Credit-related income (expense) (5) 16 (21) (5) 22 (27)

Fair value gains (losses), net (28) (98) 70 (28) 37 (65)

Administrative expenses (83) (84) 1 (83) (79) (4)

Other income (expense) (85) 142 (227) (85) (5) (80)

Income before federal income taxes 562 718 (156) 562 635 (73)

Provision for federal income taxes (131) (170) 39 (131) (161) 30

Net income $ 431 $ 548 $ (117) $ 431 $ 474 $ (43)

Single-Family Business

• Single-Family net income was $2.3 billion in the first quarter of 2017, compared with $4.5 billion in the fourth 

quarter of 2016. Net income for the first quarter of 2017 was driven primarily by net interest income and creditrelated income.

• Single-Family net interest income was $4.8 billion in the first quarter of 2017, compared with $5.2 billion in the 

fourth quarter of 2016. The decrease in net interest income for the first quarter of 2017 was due primarily to 

lower amortization income from mortgage prepayments due to lower refinance activity and lower interest 

income due to a decline in the average balance of the company’s single-family retained mortgage portfolio as 

the company continued to reduce this portfolio.

• Single-Family credit-related income was $184 million in the first quarter of 2017, compared with credit-related 

expense of $1.5 billion in the fourth quarter of 2016. Credit-related income in the first quarter of 2017 was driven 

primarily by an increase actual and forecasted home prices.

• Single-Family net fair value losses were $12 million in the first quarter of 2017, compared with net fair value 

gains of $4.0 billion in the fourth quarter of 2016. Net fair value losses for the first quarter of 2017 were due 

primarily to losses on Connecticut Avenue Securities debt reported at fair value resulting from tightening 

spreads between Connecticut Avenue Securities yields and LIBOR during the quarter. These fair value losses 

were partially offset by gains on the company’s risk management derivatives due primarily to increases in 

longer-term swap rates during the first quarter of 2017. 
First Quarter 2017 Results 6

Multifamily Business

• Multifamily net income was $431 million in the first quarter of 2017, compared with $548 million in the fourth 

quarter of 2016. Net income in the first quarter of 2017 was driven primarily by net interest income. 

• Multifamily net interest income was $590 million in the first quarter of 2017, compared with $627 million in the 

fourth quarter of 2016. The decrease in net interest income was due primarily to a decline in the average 

balance of the multifamily retained mortgage portfolio, as well as lower amortization income due to lower 

prepayments in the first quarter of 2017. The decrease in net interest income was partially offset by higher 

guaranty fee income as the company’s multifamily guaranty book of business grew and loans with higher 

guaranty fees became a larger part of its book, while loans with lower guaranty fees continued to liquidate.

• Multifamily net fair value losses were $28 million in the first quarter of 2017, compared with $98 million in the 

fourth quarter of 2016. Net fair value losses in the first quarter of 2017 were driven primarily by losses on our 

multifamily commitments to sell mortgage-related securities as a result of increases in prices during the 

commitment periods. 

• Multifamily new business volume totaled $17.4 billion for the first quarter of 2017, of which approximately 62

percent counted toward FHFA’ s 2017 multifamily volume cap. 

BUILDING A SUSTAINABLE HOUSING FINANCE SYSTEM

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

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

a safer and sustainable housing finance system for the future. The company is pursuing the strategic goals 

identified by its conservator, the Federal Housing Finance Agency (FHFA). These strategic goals are: maintain, in a 

safe and sound manner, credit availability and foreclosure prevention activities for new and refinanced mortgages to 

foster liquid, efficient, competitive, and resilient national housing finance markets; reduce taxpayer risk through 

increasing the role of private capital in the mortgage market; and build a new single-family infrastructure for use by 

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

ABOUT FANNIE MAE’S CONSERVATORSHIP AND AGREEMENTS WITH TREASURY

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

commitment under a senior preferred stock purchase agreement to provide funding to Fannie Mae under certain 

circumstances if the company has a net worth deficit. Pursuant to this agreement and the senior preferred stock the 

company issued to Treasury in 2008, the Director of FHFA has directed Fannie Mae to pay dividends to Treasury on 

a quarterly basis since entering into conservatorship in 2008. 

The chart below shows the funds the company has drawn from Treasury pursuant to the senior preferred stock 

purchase agreement, as well as the dividend payments the company has made to Treasury on the senior preferred 

stock, since entering into conservatorship.
First Quarter 2017 Results 7

__________

(1) Under the terms of the senior preferred stock purchase agreement, dividend payments the company makes to Treasury do 

not offset the company’s prior draws of funds from Treasury, and the company is not permitted to pay down draws it has 

made under the agreement except in limited circumstances. Accordingly, the current aggregate liquidation preference of the 

senior preferred stock is $117.1 billion, due to the initial $1.0 billion liquidation preference of the senior preferred stock (for 

which the company did not receive cash proceeds) and the $116.1 billion the company has drawn from Treasury. Amounts 

may not sum due to rounding.

(2) Treasury draws are shown in the period for which requested, not when the funds were received by the company. Fannie 

Mae has not requested a draw for any period since 2012.

Fannie Mae expects to pay Treasury a dividend of $2.8 billion for the second quarter of 2017 by June 30, 2017, 

calculated based on the company’s net worth of $3.4 billion as of March 31, 2017, less the current capital reserve 

amount of $600 million.

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

amended. The amended senior preferred stock purchase agreement does not allow the company to build a capital 

reserve. Beginning in 2013, the required senior preferred stock dividends each quarter equal the amount, if any, by 

which the company’s net worth as of the end of the immediately preceding fiscal quarter exceeds an applicable 

capital reserve amount. The capital reserve amount is $600 million for each quarter of 2017 and will decrease to 

zero in 2018. 

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

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

agreement in a future period, the amount of remaining funding under the agreement would be reduced by the 

amount of the company’s draw. Dividend payments Fannie Mae makes to Treasury do not restore or increase the 

amount of funding available to the company under the agreement.

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

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

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

Agreements” in the company’s annual report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 

10-K”). 
First Quarter 2017 Results 8

CREDIT RISK TRANSFER TRANSACTIONS

In late 2013, Fannie Mae began entering into credit risk transfer transactions with the goal of transferring, to the 

extent economically sensible, a portion of the mortgage credit risk on some of the recently-acquired loans in its 

single-family book of business in order to reduce the economic risk to the company and taxpayers of future 

borrower defaults. Fannie Mae’s primary method of achieving this goal has been through the issuance of its 

Connecticut Avenue Securities (CAS) and its Credit Insurance Risk TransferTM (CIRTTM) transactions. In these 

transactions, the company transfers to investors a portion of the mortgage credit risk associated with losses on a 

reference pool of mortgage loans and in exchange pays investors a premium that effectively reduces the guaranty 

fee income the company retains on the loans.

As of March 31, 2017, $723 billion in outstanding unpaid principal balance of the company’s single-family loans, or 

approximately 26 percent of the loans in its single-family conventional guaranty book of business measured by 

unpaid principal balance, were included in a reference pool for a credit risk transfer transaction. During the first 

quarter of 2017, the company transferred a portion of the mortgage credit risk on single-family mortgages with 

unpaid principal balance of $108 billion at the time of the transactions.

These transactions increase the role of private capital in the mortgage market and reduce the risk to Fannie Mae’s 

business, taxpayers, and the housing finance system. Over time, the company expects that a larger portion of its 

single-family conventional guaranty book of business will be covered by credit risk transfer transactions.

The chart below shows as of the dates specified the total outstanding unpaid principal balance of Fannie Mae’s 

single-family loans, as well as the percentage of the company’s total single-family conventional guaranty book of 

business measured by unpaid principal balance, that were included in a reference pool for a credit risk transfer 

transaction.

CREDIT QUALITY

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

responsible credit standards. Since 2009, Fannie Mae has seen the effect of the actions it took, beginning in 2008, 

to significantly strengthen its underwriting and eligibility standards to promote sustainable homeownership and 

stability in the housing market. Fannie Mae actively monitors the credit risk profile and credit performance of the 

company’s single-family loan acquisitions, in conjunction with housing market and economic conditions, to 

determine if its pricing, eligibility, and underwriting criteria accurately reflect the risks associated with loans the 

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

2017 had a weighted average borrower FICO credit score at origination of 746 and a weighted average original 

loan-to-value ratio of 73 percent.

As of March 31, 2017, 88 percent of the company’s single-family conventional guaranty book of business consisted 

of loans acquired since 2009.
First Quarter 2017 Results 9

* Fannie Mae has acquired HARP loans and other Refi Plus loans under its Refi PlusTM initiative since 2009. Fannie Mae’s 

Refi Plus initiative offers refinancing flexibility to eligible borrowers who are current on their loans and whose loans are 

owned or guaranteed by the company and meet certain additional criteria. HARP loans, which have loan-to-value (“LTV”) 

ratios at origination greater than 80 percent, refers to loans the company has acquired pursuant to the Home Affordable 

Refinance Program® (“HARP®”). Other Refi Plus loans, which have LTV ratios at origination of 80 percent or less, refers to 

loans the company has acquired under its Refi Plus initiative other than HARP loans. Loans the company acquires under 

Refi Plus and HARP are refinancings of loans that were originated prior to June 2009.

The single-family serious delinquency rate for Fannie Mae’s book of business has decreased for 28 

consecutive quarters since the first quarter of 2010 and was 1.12 percent as of March 31, 2017, compared with 5.47 

percent as of March 31, 2010. 

Fannie Mae expects its single-family serious delinquency rate to continue to decline; however, as the single-family 

serious delinquency rate has already declined significantly over the past several years, the company expects more 

modest declines in this rate in the future. The company’s single-family serious delinquency rate and the period of 

time that loans remain seriously delinquent continue to be negatively affected by the length of time required to 

complete a foreclosure in some states. Other factors that affect the company’s single-family serious delinquency 

rate include the pace of loan modifications, the timing and volume of nonperforming loan sales we make, servicer 

performance, and changes in home prices, unemployment levels and other macroeconomic conditions.
First Quarter 2017 Results 10

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

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

decreased to $22.5 billion as of March 31, 2017 from $23.8 billion as of December 31, 2016. The decrease in the 

company’s combined loss reserves for the first quarter of 2017 was driven primarily by redesignations of loans from 

held for investment to held for sale and charge-offs, which relieved the allowance on these loans, as well as an 

increase in actual and forecasted home prices. The company’s loss reserves have declined in recent years and are 

expected to decline further in 2017; however, the company expects a smaller decline in its loss reserves in 2017 

than the decline in 2016. 

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Liquidity

Fannie Mae provided approximately $136 billion in liquidity to the mortgage market in the first quarter of 2017, 

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

• Approximately 233,000 home purchases 

• Approximately 303,000 mortgage refinancings 

• Approximately 202,000 units of multifamily housing financed
First Quarter 2017 Results 11

The company was the largest issuer of single-family mortgage-related securities in the secondary market in the first 

quarter of 2017, with an estimated market share of new single-family mortgage-related securities issuances of 39

percent, compared with 41 percent in the fourth quarter of 2016 and 37 percent in the first quarter of 2016. 

The chart below shows the company’s market share of single-family mortgage-related securities issuances in the 

first quarter of 2017 compared with that of its primary competitors.

Fannie Mae also remained a continuous source of liquidity in the multifamily market in the first quarter of 2017. As 

of December 31, 2016 (the latest date for which information is available), the company owned or guaranteed 

approximately 19 percent of the outstanding debt on multifamily properties.

Refinancing Initiatives

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

includes HARP, the company acquired approximately 33,000 loans in the first quarter of 2017. Refinancings 
First Quarter 2017 Results 12

delivered to Fannie Mae through Refi Plus in the first quarter of 2017 reduced borrowers’ monthly mortgage 

payments by an average of $213.

Home Retention Solutions and Foreclosure Alternatives

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

its efforts on several strategies, including reducing defaults by offering home retention solutions, such as loan 

modifications. 

For the Three Months Ended March 31,

2017 2016

Unpaid

Principal

Balance

Number of

Loans

Unpaid

Principal

Balance

Number of

Loans

(Dollars in millions)

Home retention solutions:

Modifications $ 3,343 19,928 $ 3,451 20,899

Repayment plans and forbearances completed 262 1,895 175 1,296

Total home retention solutions 3,605 21,823 3,626 22,195

Foreclosure alternatives:

Short sales 450 2,181 611 2,995

Deeds-in-lieu of foreclosure 178 1,153 265 1,745

Total foreclosure alternatives 628 3,334 876 4,740

Total loan workouts $ 4,233 25,157 $ 4,502 26,935

Loan workouts as a percentage of single-family guaranty book of

business 0.59% 0.58% 0.64% 0.62%

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

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

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

• Fannie Mae provided approximately 25,000 loan workouts during the first quarter of 2017 enabling 

borrowers to avoid foreclosure.

• Fannie Mae completed approximately 20,000 loan modifications during the first quarter of 2017.
First Quarter 2017 Results 13

FORECLOSURES AND REAL ESTATE OWNED (REO) PROPERTIES

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 Three Months Ended

March 31,

2017 2016

Single-family foreclosed properties (number of properties):

Beginning of period inventory of single-family foreclosed properties (REO) 38,093 57,253

Total properties acquired through foreclosure 11,186 16,367

Dispositions of REO (14,728) (21,331)

End of period inventory of single-family foreclosed properties (REO) 34,551 52,289

Carrying value of single-family foreclosed properties (dollars in millions) $ 3,951 $ 5,963

Single-family foreclosure rate 0.26% 0.38%

• Fannie Mae acquired 11,186 single-family REO properties, primarily through foreclosure, in the first quarter 

of 2017, compared with 10,736 in the fourth quarter of 2016. 

• As of March 31, 2017, the company’s inventory of single-family REO properties was 34,551, compared with 

38,093 as of December 31, 2016. The carrying value of the company’s single-family REO was $4.0 billion

as of March 31, 2017.

• The company’s single-family foreclosure rate was 0.26 percent for the three months ended March 31, 2017. 

This reflects the annualized total number of single-family properties acquired through foreclosure or deedsin-lieu of foreclosure as a percentage of the total number of loans in Fannie Mae’s single-family guaranty 

book of business.

Fannie Mae’s financial statements for the first quarter of 2017 are available in the accompanying Annex; however, 

investors and interested parties should read the company’s First Quarter 2017 Form 10-Q, which was filed today 

with the Securities and Exchange Commission and is available on Fannie Mae’s website, www.fanniemae.com. The 

company provides further discussion of its financial results and condition, credit performance, and other matters in 

its First Quarter 2017 Form 10-Q. Additional information about the company’s credit performance, the 

characteristics of its guaranty book of business, its foreclosure-prevention efforts, and other measures is contained 

in the “2017 First Quarter Credit Supplement” at www.fanniemae.com.

# # #

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

statements, including statements regarding: its future dividend payments to Treasury; the impact of and future plans with respect 

to the company’s credit risk transfer transactions; the sources of its future net interest income; the company’s future profitability; 

the factors that will affect the company’s future financial results; the company’s future serious delinquency rates and the factors 

that will affect the company’s future single-family serious delinquency rates; the future fair value of the company’s financial 

instruments; the company’s future loss reserves; and the impact of the company’s actions to reduce credit losses. These 

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

regarding numerous factors. Actual results, and future projections, could be materially different from what is set forth in the 

forward-looking statements as a result of: home price changes; interest rate changes; unemployment rates; other 

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

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

policy; credit availability; changes in borrower behavior; the volume of loans it modifies; the effectiveness of its loss mitigation 

strategies; significant changes in modification and foreclosure activity; the volume and pace of future nonperforming loan sales 

and their impact on the company’s results and serious delinquency rates; the effectiveness of its management of its real estate 

owned inventory and pursuit of contractual remedies; changes in the fair value of its assets and liabilities; future legislative or 

regulatory requirements or changes that have a significant impact on the company’s business, such as the enactment of housing 

finance reform legislation or corporate income tax reform legislation; actions by FHFA, Treasury, the Department of Housing and 
First Quarter 2017 Results 14

Urban Development or other regulators that affect the company’s business; the size, composition and quality of the company’s 

guaranty book of business and retained mortgage portfolio; the company’s market share; the life of the loans in the company’s 

guaranty book of business; future updates to the company’s models relating to loss reserves, including the assumptions used by 

these models; changes in generally accepted accounting principles; changes to the company’s accounting policies; whether the 

company’s counterparties meet their obligations in full; effects from activities the company takes to support the mortgage market 

and help borrowers; the company’s future objectives and activities in support of those objectives, including actions the company 

may take to reach additional underserved creditworthy borrowers; actions the company may be required to take by FHFA, in its 

role as the company’s conservator or as its regulator, such as changes in the type of business the company does or the 

implementation of the Single Security Initiative for Fannie Mae and Freddie Mac; limitations on the company’s business imposed 

by FHFA, in its role as the company’s conservator or as its regulator; the conservatorship and its effect on the company’s 

business; the investment by Treasury and its effect on the company’s business; the uncertainty of the company’s future; 

challenges the company faces in retaining and hiring qualified executives and other employees; the deteriorated credit 

performance of many loans in the company’s guaranty book of business; a decrease in the company’s credit ratings; defaults by 

one or more institutional counterparties; resolution or settlement agreements the company may enter into with its counterparties; 

operational control weaknesses; changes in the fiscal and monetary policies of the Federal Reserve, including any change in the 

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

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

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

reliance on and the performance of the company’s servicers; conditions in the foreclosure environment; global political risks; 

natural disasters, environmental disasters, terrorist attacks, pandemics, or other major disruptive events; information security 

breaches or threats; and many other factors, including those discussed in the “Risk Factors” and “Forward-Looking Statements” 

sections of and elsewhere in the company’s annual report on Form 10-K for the year ended December 31, 2016 and the 

company’s quarterly report on Form 10-Q for the quarter ended March 31, 2017, and elsewhere in this release.

Fannie Mae provides website addresses in its news releases solely for readers’ information. Other content or information 

appearing on these websites is not part of this release. 

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We 

partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing 

finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us 

on twitter.com/fanniemae.
First Quarter 2017 Results 15

ANNEX

FANNIE MAE

(In conservatorship)

Condensed Consolidated Balance Sheets — (Unaudited)

(Dollars in millions, except share amounts)

As of

March 31, December 31,

2017 2016

ASSETS

Cash and cash equivalents $ 24,988 $ 25,224

Restricted cash (includes $22,642 and $31,536, related to consolidated trusts) 27,321 36,953

Federal funds sold and securities purchased under agreements to resell or similar arrangements 35,260 30,415

Investments in securities:

Trading, at fair value (includes $1,066 and $1,277, respectively, pledged as collateral ) 37,684 40,562

Available-for-sale, at fair value (includes $113 and $107, respectively, related to consolidated trusts) 7,721 8,363

Total investments in securities 45,405 48,925

Mortgage loans:

Loans held for sale, at lower of cost or fair value 5,024 2,899

Loans held for investment, at amortized cost:

Of Fannie Mae 187,211 204,318

Of consolidated trusts 2,939,396 2,896,001

Total loans held for investment (includes $11,683 and $12,057, respectively, at fair value) 3,126,607 3,100,319

Allowance for loan losses (22,129) (23,465)

Total loans held for investment, net of allowance 3,104,478 3,076,854

Total mortgage loans 3,109,502 3,079,753

Deferred tax assets, net 32,647 33,530

Accrued interest receivable (includes $7,089 and $7,064, respectively, related to consolidated trusts) 7,704 7,737

Acquired property, net 4,103 4,489

Other assets 16,824 20,942

Total assets $ 3,303,754 $ 3,287,968

LIABILITIES AND EQUITY

Liabilities:

Accrued interest payable (includes $8,311 and $8,285, respectively, related to consolidated trusts) $ 9,588 $ 9,431

Debt:

Of Fannie Mae (includes $9,162 and $9,582, respectively, at fair value) 327,183 327,097

Of consolidated trusts (includes $36,372 and $36,524, respectively, at fair value) 2,954,471 2,935,219

Other liabilities (includes $336 and $390, respectively, related to consolidated trusts) 9,133 10,150

Total liabilities 3,300,375 3,281,897

Commitments and contingencies — —

Stockholders’ equity:

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

Preferred stock, 700,000,000 shares are authorized—555,374,922 shares issued and outstanding 19,130 19,130

Common stock, no par value, no maximum authorization—1,308,762,703 shares issued, 1,158,087,567 and

1,158,082,750 shares outstanding, respectively 687 687

Accumulated deficit (126,952) (124,253)

Accumulated other comprehensive income 765 759

Treasury stock, at cost, 150,675,136 and 150,679,953 shares, respectively (7,400) (7,401)

Total equity 3,379 6,071

Total liabilities and equity $ 3,303,754 $ 3,287,968

See Notes to Condensed Consolidated Financial Statements in the First Quarter 2017 Form 10-Q
First Quarter 2017 Results 16

FANNIE MAE

(In conservatorship)

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

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

For the Three Months

Ended March 31,

2017 2016

Interest income:

Trading securities $ 142 $ 120

Available-for-sale securities 101 203

Mortgage loans (includes $24,954 and $24,626, respectively, related to consolidated trusts) 27,047 26,961

Other 94 48

Total interest income 27,384 27,332

Interest expense:

Short-term debt 44 51

Long-term debt (includes $20,308 and $20,658, respectively, related to consolidated trusts) 21,994 22,512

Total interest expense 22,038 22,563

Net interest income 5,346 4,769

Benefit for credit losses 396 1,184

Net interest income after benefit for credit losses 5,742 5,953

Investment gains (losses), net (9) 69

Fair value losses, net (40) (2,813)

Fee and other income 249 203

Non-interest income (loss) 200 (2,541)

Administrative expenses:

Salaries and employee benefits 344 364

Professional services 229 215

Occupancy expenses 46 45

Other administrative expenses 65 64

Total administrative expenses 684 688

Foreclosed property expense 217 334

Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees 503 440

Other expenses, net 382 264

Total expenses 1,786 1,726

Income before federal income taxes 4,156 1,686

Provision for federal income taxes (1,383) (550)

Net income 2,773 1,136

Other comprehensive income (loss):

Changes in unrealized gains on available-for-sale securities, net of reclassification adjustments and taxes 8 (198)

Other (2) (2)

Total other comprehensive income (loss) 6 (200)

Total comprehensive income $ 2,779 $ 936

Net income $ 2,773 $ 1,136

Dividends distributed or available for distribution to senior preferred stockholder (2,779) (919)

Net income (loss) attributable to common stockholders $ (6) $ 217

Earnings (loss) per share:

Basic $ 0.00 $ 0.04

Diluted 0.00 0.04

Weighted-average common shares outstanding:

Basic 5,762 5,762

Diluted 5,762 5,893

See Notes to Condensed Consolidated Financial Statements in the First Quarter 2017 Form 10-Q
First Quarter 2017 Results 17

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Cash Flows— (Unaudited)

(Dollars in millions)

For the Three

Months Ended

March 31,

2017 2016

Net cash provided by (used in) operating activities $ 2,673 $ (3,111)

Cash flows provided by investing activities:

Proceeds from maturities and paydowns of trading securities held for investment 579 975

Proceeds from sales of trading securities held for investment 66 792

Proceeds from maturities and paydowns of available-for-sale securities 594 883

Proceeds from sales of available-for-sale securities 151 3,802

Purchases of loans held for investment (41,206) (39,935)

Proceeds from repayments of loans acquired as held for investment of Fannie Mae 6,718 5,026

Proceeds from sales of loans acquired as held for investment of Fannie Mae — 849

Proceeds from repayments and sales of loans acquired as held for investment of consolidated

trusts 97,415 104,669

Net change in restricted cash 9,632 (2,994)

Advances to lenders (28,703) (25,635)

Proceeds from disposition of acquired property and preforeclosure sales 3,454 4,129

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

arrangements (4,845) 9,800

Other, net (330) (545)

Net cash provided by investing activities 43,525 61,816

Cash flows used in financing activities:

Proceeds from issuance of debt of Fannie Mae 230,272 180,322

Payments to redeem debt of Fannie Mae (230,655) (196,016)

Proceeds from issuance of debt of consolidated trusts 78,443 71,723

Payments to redeem debt of consolidated trusts (119,208) (107,575)

Payments of cash dividends on senior preferred stock to Treasury (5,471) (2,859)

Other, net 185 (58)

Net cash used in financing activities (46,434) (54,463)

Net increase (decrease) in cash and cash equivalents (236) 4,242

Cash and cash equivalents at beginning of period 25,224 14,674

Cash and cash equivalents at end of period $ 24,988 $ 18,916

Cash paid during the period for:

Interest $ 25,954 $ 26,013

Income taxes — 360

See Notes to Condensed Consolidated Financial Statements in the First Quarter 2017 Form 10-Q