UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from to

Commission file number: 0-50231

Federal National Mortgage Association 

(Exact name of registrant as specified in its charter) 

Fannie Mae

Federally chartered corporation 52-0883107 1100 15th Street, NW 800 232-6643

Washington, DC 20005

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

(Address of principal executive 

offices, including zip code)

(Registrant’s telephone number, 

including area code)

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class Trading Symbol(s) Name of each exchange on which registered

None N/A N/A

Securities registered pursuant to Section 12(g) of the Act: 

Common Stock, without par value 

8.25% Non-Cumulative Preferred Stock, Series T, stated value $25 per share 

Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S, stated value $25 per share 

7.625% Non-Cumulative Preferred Stock, Series R, stated value $25 per share

6.75% Non-Cumulative Preferred Stock, Series Q, stated value $25 per share 

Variable Rate Non-Cumulative Preferred Stock, Series P, stated value $25 per share 

Variable Rate Non-Cumulative Preferred Stock, Series O, stated value $50 per share 

5.375% Non-Cumulative Convertible Series 2004-1 Preferred Stock, stated value $100,000 per share 

5.50% Non-Cumulative Preferred Stock, Series N, stated value $50 per share

4.75% Non-Cumulative Preferred Stock, Series M, stated value $50 per share 

5.125% Non-Cumulative Preferred Stock, Series L, stated value $50 per share 

5.375% Non-Cumulative Preferred Stock, Series I, stated value $50 per share 

5.81% Non-Cumulative Preferred Stock, Series H, stated value $50 per share 

Variable Rate Non-Cumulative Preferred Stock, Series G, stated value $50 per share 

Variable Rate Non-Cumulative Preferred Stock, Series F, stated value $50 per share 

5.10% Non-Cumulative Preferred Stock, Series E, stated value $50 per share

5.25% Non-Cumulative Preferred Stock, Series D, stated value $50 per share 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ̈ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  ̈ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the 

past 90 days. Yes þ No  ̈

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation 

S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No  ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging 

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of 

the Exchange Act. 

Large accelerated filer ☐ Accelerated filer ☑

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over 

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit 

report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect 

the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any 

of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the common stock held by non-affiliates computed by reference to the closing price of the common stock quoted on the OTCQB on 

June 30, 2022 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $498 million.

As of February 1, 2023, there were 1,158,087,567 shares of common stock of the registrant outstanding.
Table of Contents

Page

PART I

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Summary of Our Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Liquidity Provided in 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Our Mission, Strategy and Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Mortgage Securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Managing Mortgage Credit Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Conservatorship and Treasury Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Legislation and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Human Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Where You Can Find Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Risk Factors Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

GSE and Conservatorship Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Credit Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Operational Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Liquidity and Funding Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Market and Industry Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Legal and Regulatory Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

General Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Item 6. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . 61

Key Market Economic Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Consolidated Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Consolidated Balance Sheet Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Retained Mortgage Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Guaranty Book of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Business Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Single-Family Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Single-Family Mortgage Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Single-Family Mortgage-Related Securities Issuances Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Single-Family Business Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Single-Family Business Financial Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Single-Family Mortgage Credit Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Multifamily Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Fannie Mae 2022 Form 10-K i
Multifamily Mortgage Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Multifamily Market Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Multifamily Business Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Multifamily Business Financial Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Multifamily Mortgage Credit Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Consolidated Credit Ratios and Select Credit Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Liquidity and Capital Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Mortgage Credit Risk Management Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Climate and Natural Disaster Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Institutional Counterparty Credit Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Market Risk Management, including Interest-Rate Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Liquidity and Funding Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Operational Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Impact of Future Adoption of New Accounting Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Glossary of Terms Used in This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . 161

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

ESG Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Report of the Audit Committee of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

Compensation Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

Compensation Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199

Compensation Tables and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . . 210

Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . . 211

Policies and Procedures Relating to Transactions with Related Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211

Transactions with Related Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

PART IV

Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

Fannie Mae 2022 Form 10-K ii
PART I

We have been under conservatorship, with the Federal Housing Finance Agency (“FHFA”) acting as conservator, 

since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the 

company, and of any shareholder, officer or director of the company with respect to the company and its assets. 

The conservator has since provided for the exercise of certain functions and authorities by our Board of Directors. 

Our directors owe their fiduciary duties of care and loyalty solely to the conservator. Thus, while we are in 

conservatorship, the Board has no fiduciary duties to the company or its stockholders.

We do not know when or how the conservatorship will terminate, what further changes to our business will be made 

during or following conservatorship, what form we will have and what ownership interest, if any, our current common 

and preferred stockholders will hold in us after the conservatorship is terminated or whether we will continue to exist 

following conservatorship. 

We are not currently permitted to pay dividends or other distributions to stockholders. Our agreements with the U.S. 

Department of the Treasury (“Treasury”) include a commitment from Treasury to provide us with funds to maintain a 

positive net worth under specified conditions; however, the U.S. government does not guarantee our securities or 

other obligations. Our agreements with Treasury also include covenants that significantly restrict our business 

activities. For additional information on the conservatorship, the uncertainty of our future, and our agreements with 

Treasury, see “Business—Conservatorship and Treasury Agreements” and “Risk Factors—GSE and 

Conservatorship Risk.”

Forward-looking statements in this report are based on management’s current expectations and are subject to 

significant uncertainties and changes in circumstances, as we describe in “Business—Forward-Looking Statements.” 

Future events and our future results may differ materially from those reflected in our forward-looking statements due to 

a variety of factors, including those discussed in “Risk Factors” and elsewhere in this report. 

You can find a “Glossary of Terms Used in This Report” in “Management’s Discussion and Analysis of Financial 

Condition and Results of Operations (‘MD&A’).” 

Item 1. Business

Introduction

Fannie Mae is a leading source of financing for mortgages in the United States. Organized as a government-sponsored 

entity, Fannie Mae is a shareholder-owned corporation. We were chartered by Congress to provide liquidity and stability 

to the residential mortgage market and to promote access to mortgage credit. Our revenues are primarily driven by 

guaranty fees we receive for assuming the credit risk on loans underlying the mortgage-backed securities we issue. We 

do not originate loans or lend money directly to borrowers. Rather, we work primarily with lenders who originate loans to 

borrowers. We acquire and securitize those loans into mortgage-backed securities that we guarantee (which we refer to 

as Fannie Mae MBS or our MBS).

Business | Introduction

Fannie Mae 2022 Form 10-K 1
Executive Summary

Please read this summary together with our MD&A, our consolidated financial statements as of December 31, 2022 and 

the accompanying notes.

Summary of Our Financial Performance

Consolidated Results

(Dollars in billions)

$25.3

$29.9 $29.7

$11.8

$22.2

$12.9

$11.8

$22.1

$12.9

Net revenues Net income Comprehensive income 2020 2021 2022

2022 vs. 2021

• Net revenues remained relatively flat in 2022 compared with 2021, as lower amortization income was offset by 

higher income from portfolios and higher base guaranty fee income.

◦ Lower amortization income was driven by a higher interest rate environment in 2022, which slowed 

refinancing activity driving lower prepayment volumes compared with 2021. 

◦ Higher income from portfolios was primarily driven by higher yields on assets in our other investments 

portfolio as a result of increases in interest rates, as well as a decrease in interest expense on our 

long-term funding debt due to a decrease in the average outstanding balance; and

◦ Higher base guaranty fee income was due to an increase in the size of our guaranty book of business 

and higher average charged guaranty fees.

• Net income decreased $9.3 billion in 2022 compared with 2021, primarily driven by a $11.4 billion shift to 

provision for credit losses in 2022 from a benefit for credit losses in 2021. Also contributing to the decline in net 

income was a $1.6 billion shift to investment losses in 2022 from investment gains in 2021. These decreases 

were partially offset by higher fair value gains.

◦ Provision for credit losses in 2022 was due to:

• A single-family provision primarily driven by decreases in forecasted home prices, the overall 

credit risk profile of our newly acquired loans, and rising interest rates.

• A multifamily provision primarily driven by an increase in expected credit losses on our seniors 

housing portfolio, which has been disproportionately impacted by recent market conditions, as 

well as higher actual and projected interest rates. 

◦ Net investment losses in 2022 were primarily driven by a significant decrease in the market value of 

single-family loans, which resulted in valuation losses on loans held-for-sale as of December 31, 2022, 

as well as lower prices on loans sold during the year. Net investment gains in 2021 were driven by 

strong loan pricing coupled with a high volume of single-family loan sales during the year. 

Business | Executive Summary

Fannie Mae 2022 Form 10-K 2
◦ Fair value gains in 2022 were primarily driven by the impact of rising interest rates and widening of the 

secondary spread, which led to price declines. As a result of the price declines, we recognized gains 

on our commitments to sell mortgage-related securities and long-term debt of consolidated trusts held 

at fair value. These gains were partially offset by fair value losses on fixed-rate trading securities.

• Net worth increased by $12.9 billion in 2022 to $60.3 billion as of December 31, 2022. The increase is 

attributed to $12.9 billion of comprehensive income for the year ended December 31, 2022.

2021 vs. 2020

• Net revenues increased $4.6 billion in 2021 compared with 2020, driven by higher base guaranty fee income 

and higher amortization income partially offset by lower income from portfolios.

◦ Higher base guaranty fee income was driven by the growth of our guaranty book of business along 

with higher average guaranty fees related to the loans in our book of business in 2021. 

◦ Higher amortization income was due to high prepayment volumes from loan refinancings as a result of 

the continued low interest-rate environment. The loans and associated debt of consolidated trusts that 

liquidated in 2021 also had larger unamortized deferred fees than those that liquidated in 2020.

◦ Lower net interest income from our portfolios compared with 2020 was due to lower average balances 

and lower yields on our mortgage loans and securities partially offset by lower borrowing costs on our 

long-term funding debt.

• Net income increased $10.4 billion in 2021 compared with 2020, mainly due to higher net revenues as 

discussed above plus a shift from provision for credit losses in 2020 to a benefit for credit losses in 2021. 

Benefit for credit losses in 2021 was primarily driven by strong actual and forecasted home price growth, a 

benefit from the redesignation of certain nonperforming and reperforming loans and a reduction in our estimate 

of losses we expected to incur as a result of the COVID-19 pandemic, partially offset by a provision for higher 

actual and projected interest rates. 

• Net worth increased by $22.1 billion in 2021 to $47.4 billion as of December 31, 2021. The increase is 

attributed to $22.1 billion of comprehensive income for the year ended December 31, 2021.

Liquidity Provided in 2022

Through our single-family and multifamily business segments, we provided $684 billion in liquidity to the mortgage 

market in 2022, which enabled the financing of approximately 2.6 million home purchases, refinancings and rental units.

Fannie Mae Provided $684 billion in Liquidity in 2022

Unpaid Principal Balance Units

$378B 1,151K

Single-Family Home Purchases

$237B 886K

Single-Family Refinancings

$69B 598K

Multifamily Rental Units

We continued our commitment to green financing in 2022, issuing a total of $9.1 billion in multifamily green MBS, 

$1.4 billion in single-family green MBS, and $781 million in multifamily green resecuritizations. We also issued 

$11.8 billion in multifamily social MBS and $773 million in multifamily social resecuritizations in 2022. These green and 

social bonds were issued in alignment with our Sustainable Bond Framework, which guides our issuances of green and 

social bonds that support energy and water efficiency and housing affordability. A portion of these bonds meet both 

program criteria and are included in each respective category.

Business | Executive Summary

Fannie Mae 2022 Form 10-K 3
Our Mission, Strategy and Charter

Our Mission and Strategy

Our mission is to facilitate equitable and sustainable access to homeownership and quality affordable rental housing 

across America. 

We have developed a new strategic plan for 2023 to 2025 representing how we intend to achieve our mission and 

chartered purposes in a safe and sound manner. Our strategic plan includes the following foundational objectives and 

related priorities.

Objectives Related Priorities

Improve Access to Equitable and Sustainable 

Housing: Build on our mission-first culture to deliver 

positive community outcomes that serve renters and 

homeowners.

• Advance greater equity in the housing finance system 

by removing significant barriers to quality affordable 

housing, particularly for historically underserved 

consumers.

• Increase and preserve access to sustainable housing 

by maintaining inclusive credit standards, helping 

consumers navigate hardships, and supporting the 

housing ecosystem’s adaptation to climate change. 

• Increase efficiency, reduce frictions, and benefit 

borrowers and renters through lender, fintech, and 

other stakeholder engagements. 

Enhance our Financial and Risk Positions: Ensure that 

we are financially secure, can earn investable returns, and 

manage risk to the firm and the housing finance system.

• Improve our capabilities to price and manage our 

business to balance mission, housing goals, duties to 

serve, risk profile, returns, and securities performance. 

• Manage risk dynamically through changing market 

conditions, evolving risks, and the growing impacts of 

climate change. 

• Generate strong financial results and continue to build 

net worth.

This strategic plan remains subject to FHFA review and approval.

In addition, since 2012, FHFA has released annual corporate performance objectives for us, referred to as the 

conservatorship scorecard. For information on FHFA’s 2023 conservatorship scorecard objectives, see our Current 

Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on January 10, 2023. For information 

on FHFA’s 2022 conservatorship scorecard objectives and our performance against these objectives, see “Executive 

Compensation—Determination of 2022 Compensation—Assessment of Corporate Performance against 2022 

Scorecard.”

Our Charter

The Federal National Mortgage Association Charter Act (the “Charter Act”) establishes the parameters under which we 

operate and our purposes, which are to:

• provide stability in the secondary market for residential mortgages;

• respond appropriately to the private capital market;

• provide ongoing assistance to the secondary market for residential mortgages (including activities relating to 

mortgages on housing for low- and moderate-income families involving a reasonable economic return that may 

be less than the return earned on other activities) by increasing the liquidity of mortgage investments and 

improving the distribution of investment capital available for residential mortgage financing; and

• promote access to mortgage credit throughout the nation (including central cities, rural areas and underserved 

areas) by increasing the liquidity of mortgage investments and improving the distribution of investment capital 

available for residential mortgage financing.

The Charter Act specifies that our operations are to be financed by private capital to the maximum extent feasible. We 

are expected to earn reasonable economic returns on all our activities. However, we may accept lower returns on 

certain activities relating to mortgages on housing for low- and moderate-income families in order to support those 

segments of the market. 

Business | Our Mission, Strategy and Charter

Fannie Mae 2022 Form 10-K 4
Principal balance limitations. To meet our purposes, the Charter Act authorizes us to purchase and securitize mortgage 

loans secured by single-family and multifamily properties. Our acquisitions of single-family conventional mortgage loans 

are subject to maximum original principal balance limits, known as “conforming loan limits.” The conforming loan limits 

are adjusted each year based on FHFA’s housing price index. In most of the U.S., the conforming loan limit for 

mortgages secured by one-family residences was set at $647,200 for 2022, and will increase to $726,200 for 2023. 

Higher limits apply for mortgages secured by two- to four-family residences and in four statutorily-designated states and 

territories (Alaska, Hawaii, Guam and the U.S. Virgin Islands). In addition, higher loan limits of up to 150% of the 

otherwise applicable loan limit apply in certain high-cost areas. The Charter Act does not impose maximum original 

principal balance limits on loans we purchase or securitize that are insured by the Federal Housing Administration 

(“FHA”) or guaranteed by the Department of Veterans Affairs (“VA”).

The Charter Act also includes the following provisions:

• Credit enhancement requirements. The Charter Act generally requires credit enhancement on any single-family 

conventional mortgage loan that we purchase or securitize that has a loan-to-value (“LTV”) ratio over 80% at 

the time of purchase. The credit enhancement may take the form of one or more of the following: (1) insurance 

or a guaranty by a qualified insurer on the portion of the unpaid principal balance of a mortgage loan that 

exceeds 80% of the property value; (2) a seller’s agreement to repurchase or replace the loan in the event of 

default; or (3) retention by the seller of at least a 10% participation interest in the loan. Regardless of LTV ratio, 

the Charter Act does not require us to obtain credit enhancement to purchase or securitize loans insured by 

FHA or guaranteed by the VA. 

• Issuances of our securities. We are authorized, upon the approval of the Secretary of the Treasury, to issue 

debt obligations and mortgage-related securities. Neither the U.S. government nor any of its agencies 

guarantees, directly or indirectly, our debt or mortgage-related securities.

• Authority of Treasury to purchase our debt obligations. At the discretion of the Secretary of the Treasury, 

Treasury may purchase our debt obligations up to a maximum of $2.25 billion outstanding at any one time. 

• Exemption for our securities offerings. Our securities offerings are exempt from registration requirements under 

the federal securities laws. As a result, we do not file registration statements or prospectuses with the SEC with 

respect to our securities offerings. However, our equity securities are not treated as exempt securities for 

purposes of Sections 12, 13, 14 or 16 of the Securities Exchange Act of 1934 (the “Exchange Act”). 

Consequently, we are required to file periodic and current reports with the SEC, including annual reports on 

Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Our non-equity securities are 

exempt securities under the Exchange Act. 

• Exemption from specified taxes. Fannie Mae is exempt from taxation by states, territories, counties, 

municipalities and local taxing authorities, except for taxation by those authorities on our real property. We are 

not exempt from the payment of federal corporate income taxes.

• Limitations. We may not originate mortgage loans or advance funds to a mortgage seller on an interim basis, 

using mortgage loans as collateral, pending the sale of the mortgages in the secondary market. We may 

purchase or securitize mortgage loans only on properties located in the United States and its territories.

Mortgage Securitizations

We support market liquidity by issuing Fannie Mae MBS that are readily traded in the capital markets. We create Fannie 

Mae MBS by placing mortgage loans in a trust and issuing securities that are backed by those mortgage loans. Monthly 

payments received on the loans are the primary source of payments passed through to Fannie Mae MBS holders. We 

guarantee to the MBS trust that we will supplement amounts received by the MBS trust as required to permit timely 

payment of principal and interest on the trust certificates. In return for this guaranty, we receive guaranty fees.

Below we discuss the three broad categories of our securitization transactions and the uniform mortgage-backed 

securities we issue.

Securitization Transactions

We currently securitize a substantial majority of the single-family and multifamily mortgage loans we acquire. Our 

securitization transactions primarily fall within three broad categories: lender swap transactions, portfolio securitizations, 

and structured securitizations.

Business | Our Mission, Strategy and Charter

Fannie Mae 2022 Form 10-K 5
Lender Swap Transactions

In a single-family “lender swap transaction,” a mortgage lender that operates in the primary mortgage market generally 

delivers a pool of mortgage loans to us in exchange for Fannie Mae MBS backed by these mortgage loans. Lenders 

may hold the Fannie Mae MBS they receive from us or sell them to investors. A pool of mortgage loans is a group of 

mortgage loans with similar characteristics. After receiving the mortgage loans in a lender swap transaction, we place 

them in a trust for which we serve as trustee. This trust is established for the sole purpose of holding the mortgage 

loans separate and apart from our corporate assets. We guarantee to each MBS trust that we will supplement amounts 

received by the MBS trust as required to permit timely payment of principal and interest on the related Fannie Mae 

MBS. We are entitled to a portion of the interest payment as a fee for providing our guaranty. The mortgage servicer 

also retains a portion of the interest payment as a fee for servicing the loan. Then, on behalf of the trust, we make 

monthly distributions to the Fannie Mae MBS certificateholders from the principal and interest payments and other 

collections on the underlying mortgage loans.

Lender Swap Transaction

Our Multifamily business generally creates multifamily Fannie Mae MBS in lender swap transactions in a manner similar 

to our Single-Family business. Multifamily lenders typically deliver only one mortgage loan to back each multifamily 

Fannie Mae MBS. The characteristics of each mortgage loan are used to establish guaranty fees on a risk-adjusted 

basis. Securitizing a multifamily mortgage loan into a Fannie Mae MBS facilitates its sale into the secondary market.

Business | Mortgage Securitizations

Fannie Mae 2022 Form 10-K 6
Portfolio Securitization Transactions

We also purchase mortgage loans and mortgage-related securities for securitization and sale at a later date through our 

“portfolio securitization transactions.” Most of our portfolio securitization transactions are driven by our single-family 

whole loan conduit activities, pursuant to which we purchase single-family whole loans from a large group of typically 

small to mid-sized lenders principally for the purpose of securitizing the loans into Fannie Mae MBS, which may then be 

sold to dealers and investors. 

Portfolio Securitization Transaction

Structured Securitization Transactions

In a “structured securitization transaction,” we create structured Fannie Mae MBS, typically for lenders or securities 

dealers, in exchange for a transaction fee. In these transactions, the lender or dealer “swaps” a mortgage-related asset 

that it owns (typically a mortgage security) in exchange for a structured Fannie Mae MBS we issue. The process for 

issuing Fannie Mae MBS in a structured securitization is similar to the process involved in our lender swap 

securitizations described above.

We also issue structured transactions backed by multifamily Fannie Mae MBS through the Fannie Mae Guaranteed 

Multifamily Structures (“Fannie Mae GeMSTM”) program, which provides additional liquidity and stability to the 

multifamily market, while expanding the investor base for multifamily Fannie Mae MBS.

Uniform Mortgage-Backed Securities, or UMBS

Overview

Since 2019, we and Freddie Mac have each been issuing UMBS®, a uniform mortgage-backed security intended to 

maximize liquidity for both Fannie Mae and Freddie Mac mortgage-backed securities in the to-be-announced (“TBA”) 

market. 

UMBS and Structured Securities

Each of Fannie Mae and Freddie Mac (the “GSEs”) issues and guarantees UMBS and structured securities backed by 

UMBS and other securities, as described below.

• UMBS. Each of Fannie Mae and Freddie Mac issues and guarantees UMBS that are directly backed by the 

mortgage loans it has acquired, referred to as “first-level securities.” UMBS issued by Fannie Mae are backed 

only by mortgage loans that Fannie Mae has acquired, and similarly UMBS issued by Freddie Mac are backed 

only by mortgage loans that Freddie Mac has acquired. There is no commingling of Fannie Mae- and Freddie 

Mac-acquired loans within UMBS. 

Mortgage loans backing UMBS are limited to fixed-rate mortgage loans eligible for financing through the TBA 

market. We continue to issue some types of Fannie Mae MBS that are not TBA-eligible and therefore are not 

issued as UMBS, such as single-family Fannie Mae MBS backed by adjustable-rate mortgages and all 

multifamily Fannie Mae MBS.

Business | Mortgage Securitizations

Fannie Mae 2022 Form 10-K 7
• Structured Securities. Each of Fannie Mae and Freddie Mac also issues and guarantees structured 

mortgage-backed securities, referred to as “second-level securities,” that are resecuritizations of UMBS or 

previously-issued structured securities. In contrast to UMBS, second-level securities can be commingled—that 

is, they can include both Fannie Mae securities and Freddie Mac securities as the underlying collateral for the 

security. These structured securities include Supers®, which are single-class resecuritizations, and Real Estate 

Mortgage Investment Conduits (“REMICs”), which are multi-class resecuritizations. While Supers are backed 

only by TBA-eligible securities, REMICs can be backed by TBA-eligible or non-TBA-eligible securities. 

In July 2022, we implemented a new upfront fee to create structured securities that include Freddie Mac 

securities, calculated as 50 basis points on the portion of the securities made up of Freddie Mac-issued 

collateral. Previously, there had been no fee to create these commingled securities. We implemented the fee to 

partially address the cost of capital we are required to hold to guarantee Freddie Mac’s securities. Freddie Mac 

implemented a similar fee. 

On January 19, 2023, we, Freddie Mac and the Director of FHFA announced a reduction in this upfront fee for 

commingled securities to 9.375 basis points, effective April 1, 2023. In announcing the reduced fee, the Director 

of FHFA stated that FHFA is dedicated to preserving the strength and resilience of the UMBS market and 

committed to maintaining a durable framework that will enable commingling activity to resume in a way that 

addresses the concerns of all stakeholders to the greatest extent possible. She also stated that FHFA continues 

its review of the enterprise regulatory capital framework to ensure the framework appropriately reflects the risks 

of Fannie Mae’s and Freddie Mac’s business activities, including commingled securities.

The key features of UMBS are the same as those of legacy single-family Fannie Mae MBS. Accordingly, all single-family 

Fannie Mae MBS that are directly backed by fixed-rate loans and generally eligible for trading in the TBA market are 

considered UMBS, whether issued before or after the introduction of UMBS. In this report, we use the term “Fannie 

Mae-issued UMBS” to refer to single-family Fannie Mae MBS that are directly backed by fixed-rate mortgage loans and 

generally eligible for trading in the TBA market. We use the term “Fannie Mae MBS” or “our MBS” to refer to any type of 

mortgage-backed security that we issue, including UMBS, Supers, REMICs and other types of single-family or 

multifamily mortgage-backed securities. References to our single-family guaranty book of business in this report exclude 

Freddie Mac-acquired mortgage loans underlying Freddie Mac mortgage-related securities that we have resecuritized.

Common Securitization Platform

Certain aspects of the securitization process for our single-family Fannie Mae MBS issuances are performed by 

Common Securitization Solutions, LLC (“CSS”), which is a limited liability company we own jointly with Freddie Mac. 

CSS operates a common securitization platform, which was designed to allow for the potential integration of additional 

market participants in the future. In October 2021, FHFA announced its determination that CSS should focus on 

maintaining the resiliency of Fannie Mae’s and Freddie Mac’s mortgage-backed securities platform instead of expanding 

its role to serve a broader market.

We rely on the common securitization platform operated by CSS to securitize the single-family MBS we issue and for 

ongoing administrative functions for our single-family MBS. We do not use the common securitization platform for 

multifamily Fannie Mae MBS. See “Risk Factors—GSE and Conservatorship Risk” for a discussion of risks posed by 

our reliance on CSS. 

Managing Mortgage Credit Risk

Effectively pricing and managing mortgage credit risk is key to our business. Below we discuss key elements of how we 

are compensated for and manage the risk of credit losses through the life cycle of our loans.

Loan Acquisition Policies

Loans we acquire must be underwritten in accordance with our guidelines and standards. 

• In Single-Family, the substantial majority of loans we acquire are assessed by Desktop Underwriter® (DU®), our 

proprietary single-family automated underwriting system. DU performs a comprehensive evaluation of the 

primary risk factors of a mortgage. We regularly review DU’s underlying models to determine whether its risk 

analysis and eligibility assessment appropriately reflect current market conditions and loan performance data to 

ensure the loans we acquire are consistent with our risk appetite and FHFA guidance. 

Business | Mortgage Securitizations

Fannie Mae 2022 Form 10-K 8
• In Multifamily, we acquire the vast majority of our loans through our Delegated Underwriting and Servicing 

(DUS®) Program. DUS lenders, who must be pre-approved by us, are delegated the authority to underwrite and 

service loans for delivery to us in accordance with our standards and requirements. Based on a given loan’s 

unique characteristics and our established delegation criteria, lenders assess whether a loan must be reviewed 

by us. If review is required, our internal credit team will assess the loan’s risk profile to determine if it meets our 

risk tolerances. DUS lenders also share with us the risk of loss on our multifamily loans, thereby aligning our 

interests throughout the life of the loan. We closely monitor our multifamily loan acquisitions and market 

conditions and, as appropriate, make changes to our standards and requirements to ensure the amount and 

characteristics of the multifamily loans we acquire are consistent with our risk appetite and FHFA guidance, 

such as FHFA’s annual volume cap.

For more information about our mortgage acquisition policies and underwriting standards, see “MD&A—SingleFamily Business—Single-Family Mortgage Credit Risk Management” and “MD&A—Multifamily Business—

Multifamily Mortgage Credit Risk Management.”

In exchange for managing credit risk on the loans we acquire, we receive guaranty fees that take into account, among 

other factors, the credit risk characteristics of the loans we acquire. We provide information about our guaranty fees in 

“MD&A—Single-Family Business—Single-Family Business Metrics” and in “MD&A—Multifamily Business—Multifamily 

Business Metrics.”

Loan Performance Management

We closely monitor the performance of loans in our guaranty book of business and we work to reduce defaults and 

mitigate the severity of credit losses through our servicing policies and practices.

Single-Family Loans

• For single-family loans, the most important loan performance criteria we monitor are (1) serious delinquency 

rates, which are typically strong indicators of loans that are at a heightened risk of default, and (2) mark-tomarket LTV ratios, which affect both the likelihood of losses and the potential severity of any losses we may 

ultimately realize. While mark-to-market LTV ratios are significantly impacted by changes in home prices, which 

are outside our control, we have an array of loss mitigation tools to try to reduce defaults on delinquent loans 

and to minimize the severity of the losses we do incur. 

• We consider single-family loans to be seriously delinquent when they are 90 days or more past due or in the 

foreclosure process. Once a single-family loan becomes 36 days past due, the servicer is required to make 

weekly attempts, for the next six months, to contact the borrower to try to engage in steps to resolve the 

delinquency. Our loss mitigation tools include payment forbearance, repayment plans, payment deferrals and 

loan modifications. We describe these tools and discuss them further in “MD&A—Single-Family Business—

Single-Family Mortgage Credit Risk Management—Single-Family Problem Loan Management.” Successful 

loan reperformance is heavily influenced by the effective use of these tools and the amount of equity the 

borrower has in their home. 

• For delinquent loans that are unable to reperform, we use alternatives to foreclosure where possible, such as 

short sales, which generally reduce our credit losses while helping borrowers avoid foreclosure. We provide 

more information on short sales and our other foreclosure alternatives in “MD&A—Single-Family Business—

Single-Family Mortgage Credit Risk Management—Single-Family Problem Loan Management—Loan Workout 

Metrics—Foreclosure Alternatives.” When we acquire properties, including through foreclosure, our primary 

objectives are to facilitate equitable and sustainable access to homeownership, quality affordable rental 

housing, and housing for owner occupant and community-minded purchasers, while obtaining the highest price 

possible. The value of the underlying property relative to the loan’s unpaid principal balance has a significant 

impact on the severity of loss we incur as a result of loan default. We provide information on the mark-to-market 

LTV ratio of loans in our single-family conventional book of business in “MD&A—Single-Family Business—

Single-Family Mortgage Credit Risk Management—Single-Family Portfolio Diversification and Monitoring.”

• We present additional information on the credit characteristics and performance of our single-family loans in 

“MD&A—Single-Family Business—Single-Family Mortgage Credit Risk Management” and “Note 13, 

Concentrations of Credit Risk—Risk Characteristics of our Guaranty Book of Business.” 

Multifamily Loans

• For multifamily loans, key indicators of credit risk are debt service coverage ratios (“DSCRs”) and delinquency 

rates. Loans with lower DSCRs, particularly loans with an estimated current DSCR below 1.0, and seriously 

Business | Managing Mortgage Credit Risk

Fannie Mae 2022 Form 10-K 9
delinquent loans indicate a heightened risk of default. We consider a multifamily loan seriously delinquent when 

it is 60 days or more past due. 

• For loans with indicators of heightened default risk, our DUS lenders work with us to help maintain the credit 

quality of the multifamily guaranty book of business and prevent foreclosures through loss mitigation strategies 

such as payment forbearance or loan modification.

• For loans that ultimately default, we work to minimize the severity of loss in several ways, including pursuing 

contractual remedies through our DUS loss-sharing arrangements and with providers of additional credit 

enhancements where available.

• We may offer forbearance for borrowers experiencing temporary challenges, like natural disasters and financial 

hardship.

• We present information on the credit characteristics and performance of our multifamily loans in “MD&A—

Multifamily Business—Multifamily Mortgage Credit Risk Management” and “Note 13, Concentrations of Credit 

Risk—Risk Characteristics of our Guaranty Book of Business.” 

Sharing and Selling Credit Risk 

In addition to managing credit risk through our selling and servicing practices, we also share and transfer credit risk to 

third parties through a variety of credit enhancement products and programs.

• For single-family loans we acquire with an LTV ratio over 80% our charter generally requires credit 

enhancement, which we typically meet through third-party primary mortgage insurance. 

• Our Multifamily business uses a shared-risk business model that distributes credit risk to the private markets, 

primarily through our DUS program. Under DUS, our multifamily lenders typically share with us approximately 

one-third of the credit risk on these loans, aligning the interests of lenders and Fannie Mae. DUS lenders 

receive credit-risk-related compensation in exchange for sharing risk. The lender risk-sharing we obtain through 

our DUS program accompanies our multifamily loans at the time we acquire them.

• We use other types of credit enhancements, including pool mortgage insurance and credit risk transfer 

transactions. In our credit risk transfer transactions, we use risk-sharing capabilities we have developed to 

obtain credit enhancement by transferring portions of our single-family and multifamily mortgage credit risk on 

reference pools of mortgage loans to the private market. Our credit risk transfer transactions effectively reduce 

the guaranty fee income we retain on the loans covered by the transactions, as a portion of the guaranty fee on 

the loans is paid to investors as compensation for taking a share of the credit risk. Our credit risk transfer 

transactions are designed to transfer to the investors, in exchange for these payments, a portion of the losses 

we expect would be incurred in an economic downturn or a stressed credit environment. 

For more information about our loans with credit enhancement, see “MD&A—Single-Family Business—Single-Family 

Mortgage Credit Risk Management—Single-Family Credit Enhancement and Transfer of Mortgage Credit Risk” and 

“MD&A—Multifamily Business—Multifamily Mortgage Credit Risk Management.” See “Risk Factors—Credit Risk” for 

discussion of the mortgage credit risks we face.

Conservatorship and Treasury Agreements

Conservatorship

On September 6, 2008, the Director of FHFA appointed FHFA as our conservator, pursuant to authority provided by the 

Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended, including by the Housing and 

Economic Recovery Act of 2008 (together, the “GSE Act”). The conservatorship is a statutory process designed to 

preserve and conserve our assets and property and put the company in a sound and solvent condition.

The conservatorship has no specified termination date. For more information on the risks to our business relating to the 

conservatorship and uncertainties regarding the future of our company and business, as well as the adverse effects of 

the conservatorship on the rights of holders of our common and preferred stock, see “Risk Factors—GSE and 

Conservatorship Risk.”

Our conservatorship could terminate through a receivership. For information on the circumstances under which FHFA is 

required or permitted to place us into receivership and the potential consequences of receivership, see “Legislation and 

Regulation—GSE-Focused Matters—Receivership” and “Risk Factors—GSE and Conservatorship Risk.”

Business | Managing Mortgage Credit Risk

Fannie Mae 2022 Form 10-K 10
Management of the Company during Conservatorship

Upon its appointment, the conservator immediately succeeded to (1) all rights, titles, powers and privileges of Fannie 

Mae, and of any shareholder, officer or director of Fannie Mae with respect to Fannie Mae and its assets, and (2) title to 

the books, records and assets of any other legal custodian of Fannie Mae. The conservator subsequently issued an 

order that provided for our Board of Directors to exercise specified functions and authorities. The conservator also 

provided instructions regarding matters for which conservator decision or notification is required. The conservator 

retains the authority to amend or withdraw its order and instructions at any time. For more information on the functions 

and authorities of our Board of Directors during conservatorship, see “Directors, Executive Officers and Corporate 

Governance—Corporate Governance—Conservatorship and Board Authorities.”

Our directors serve on behalf of the conservator and exercise their authority as directed by and with the approval, where 

required, of the conservator. Our directors owe their fiduciary duties of care and loyalty solely to the conservator. Thus, 

while we are in conservatorship, the Board has no fiduciary duties to the company or its stockholders.

Because we are in conservatorship, our common stockholders currently do not have the ability to elect directors or to 

vote on other matters. The conservator eliminated common and preferred stock dividends (other than dividends on the 

senior preferred stock issued to Treasury) during the conservatorship.

Powers of the Conservator under the GSE Act

FHFA has broad powers when acting as our conservator. As conservator, FHFA can direct us to enter into contracts or 

enter into contracts on our behalf. Further, FHFA may transfer or sell any of our assets or liabilities (subject to limitations 

and post-transfer notice provisions for transfers of certain types of financial contracts), without any approval, assignment 

of rights or consent of any party. However, mortgage loans and mortgage-related assets that have been transferred to a 

Fannie Mae MBS trust must be held by the conservator for the beneficial owners of the Fannie Mae MBS and cannot be 

used to satisfy the general creditors of the company. Neither the conservatorship nor the terms of our agreements with 

Treasury change our obligation to make required payments on our debt securities or perform under our mortgage 

guaranty obligations.

A Supreme Court decision in June 2021, in Collins et al. v. Yellen, Secretary of the Treasury, et al., held that the 

President has the power to remove the Director of FHFA for any reason, not just for cause. The Supreme Court’s 

opinion in Collins v. Yellen also included an expansive interpretation of FHFA’s authority as conservator under the 

Housing and Economic Recovery Act of 2008, noting that “when the FHFA acts as a conservator, it may aim to 

rehabilitate the regulated entity in a way that, while not in the best interests of the regulated entity, is beneficial to the 

Agency and, by extension, the public it serves.” See “Risk Factors—GSE and Conservatorship Risk” for a discussion of 

the risks relating to conservatorship.

Treasury Agreements

On September 7, 2008, Fannie Mae, through FHFA in its capacity as conservator, entered into a senior preferred stock 

purchase agreement with Treasury, pursuant to which we issued to Treasury one million shares of Variable Liquidation 

Preference Senior Preferred Stock, Series 2008-2, which we refer to as the “senior preferred stock,” and a warrant to 

purchase shares of common stock equal to 79.9% of the total number of shares of our common stock outstanding on a 

fully diluted basis at the time the warrant is exercised for a nominal price. The senior preferred stock purchase 

agreement and the dividend and liquidation provisions of the senior preferred stock have been amended multiple times, 

most recently in January 2021, pursuant to a letter agreement between us, through FHFA in its capacity as conservator, 

and Treasury. Some provisions added to the agreement in January 2021 were subsequently temporarily suspended 

pursuant to a September 2021 letter agreement. Below we discuss the terms of the senior preferred stock purchase 

agreement and the senior preferred stock as they are currently in effect. See “Risk Factors—GSE and Conservatorship 

Risk” for a description of the risks to our business relating to the senior preferred stock purchase agreement, as well as 

the adverse effects of the senior preferred stock and the warrant on the rights of holders of our common stock and other 

series of preferred stock.

Senior Preferred Stock Purchase Agreement

Funds Available for Draw

The senior preferred stock purchase agreement provides that, on a quarterly basis, we may draw funds up to the 

amount, if any, by which our total liabilities exceed our total assets, as reflected in our consolidated balance sheet, 

prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), for the 

applicable fiscal quarter (referred to as the “deficiency amount”), up to the maximum amount of remaining funding under 

the agreement. As of the date of this filing, the maximum amount of remaining funding under the agreement is $113.9 

billion. If we were to draw additional funds from Treasury under the agreement with respect to a future period, the 

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 11
amount of remaining funding under the agreement would be reduced by the amount of our draw. The senior preferred 

stock purchase agreement provides that the deficiency amount will be calculated differently if we become subject to 

receivership or other liquidation process.

Commitment Fee and Capital Reserve End Date

The senior preferred stock purchase agreement provides for the payment of an unspecified quarterly commitment fee to 

Treasury to compensate Treasury for its ongoing support under the senior preferred stock purchase agreement. The 

amount of this fee, as well as a number of the agreement’s other terms and the terms of the senior preferred stock, 

depend on whether we have reached the “capital reserve end date,” which is defined as the last day of the second 

consecutive fiscal quarter during which we have had and maintained capital equal to, or in excess of, all of the capital 

requirements and buffers under the enterprise regulatory capital framework, which is discussed in “Legislation and 

Regulation—GSE-Focused Matters—Capital Requirements.” Under the agreement, (1) through and continuing until the 

capital reserve end date, the periodic commitment fee will not be set, accrue, or be payable, and (2) not later than the 

capital reserve end date, we and Treasury, in consultation with the Chair of the Federal Reserve, will agree to set the 

periodic commitment fee. Treasury’s funding commitment under the senior preferred stock purchase agreement has no 

expiration date. The agreement provides that Treasury’s funding commitment will terminate under any of the following 

circumstances: (1) the completion of our liquidation and fulfillment of Treasury’s obligations under its funding 

commitment at that time; (2) the payment in full of, or reasonable provision for, all of our liabilities (whether or not 

contingent, including mortgage guaranty obligations); or (3) the funding by Treasury of the maximum amount that may 

be funded under the agreement. In addition, Treasury may terminate its funding commitment and declare the agreement 

null and void if a court vacates, modifies, amends, conditions, enjoins, stays or otherwise affects the appointment of the 

conservator or otherwise curtails the conservator’s powers. 

Debt and MBS Holders

If we default on payments with respect to our debt securities or guaranteed Fannie Mae MBS and Treasury fails to 

perform its obligations under its funding commitment, and if we and/or the conservator are not diligently pursuing 

remedies in respect of that failure, the senior preferred stock purchase agreement provides that any holder of such 

defaulted debt securities or Fannie Mae MBS may file a claim in the United States Court of Federal Claims for relief 

requiring Treasury to fund us up to (1) the amount necessary to cure the payment defaults on our debt and Fannie Mae 

MBS, (2) the deficiency amount, or (3) the amount of remaining funding under the senior preferred stock purchase 

agreement, whichever is the least. Any payment that Treasury makes under those circumstances would be treated for 

all purposes as a draw under the senior preferred stock purchase agreement that would increase the liquidation 

preference of the senior preferred stock.

Most provisions of the senior preferred stock purchase agreement may be waived or amended by mutual agreement of 

the parties; however, no waiver or amendment of the agreement is permitted that would decrease Treasury’s aggregate 

funding commitment or add conditions to Treasury’s funding commitment if the waiver or amendment would adversely 

affect in any material respect the holders of our debt securities or guaranteed Fannie Mae MBS.

Senior Preferred Stock

Dividend Provisions

Treasury, as the holder of the senior preferred stock, is entitled to receive, when, as and if declared, out of legally 

available funds, cumulative quarterly cash dividends. The dividends we have paid to Treasury on the senior preferred 

stock during conservatorship have been declared by, and paid at the direction of, our conservator, acting as successor 

to the rights, titles, powers and privileges of the Board of Directors. Dividend payments we make to Treasury do not 

restore or increase the amount of funding available to us under the senior preferred stock purchase agreement. 

The dividend provisions of the senior preferred stock were amended pursuant to the January 2021 letter agreement to 

permit us to retain increases in our net worth until our net worth exceeds the amount of adjusted total capital necessary 

for us to meet the capital requirements and buffers under the enterprise regulatory capital framework. As described 

more fully below, after the capital reserve end date, the amount of quarterly dividends to Treasury will be equal to the 

lesser of any quarterly increase in our net worth and a 10% annual rate on the then-current liquidation preference of the 

senior preferred stock. As a result of these provisions, our ability to retain earnings in excess of the capital requirements 

and buffers set forth in the enterprise regulatory capital framework will be limited.

Dividend Amount Prior to Capital Reserve End Date

The terms of the senior preferred stock provide for dividends each quarter in the amount, if any, by which our net worth 

as of the end of the immediately preceding fiscal quarter exceeds an applicable capital reserve amount. The January 

2021 letter agreement increased the applicable capital reserve amount, starting with the quarterly dividend period 

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 12
ending on December 31, 2020, from $25 billion to the amount of adjusted total capital necessary for us to meet the 

capital requirements and buffers set forth in the enterprise regulatory capital framework. If our net worth does not 

exceed this amount as of the end of the immediately preceding fiscal quarter, then dividends will neither accumulate nor 

be payable for such period. Our net worth is defined as the amount, if any, by which our total assets (excluding 

Treasury’s funding commitment and any unfunded amounts related to the commitment) exceed our total liabilities 

(excluding any obligation with respect to capital stock), in each case as reflected on our balance sheet prepared in 

accordance with GAAP. 

Dividend Amount Following Capital Reserve End Date

Beginning on the first dividend period following the capital reserve end date, the applicable quarterly dividend amount 

on the senior preferred stock will be the lesser of: 

(1) a 10% annual rate on the then-current liquidation preference of the senior preferred stock; and 

(2) an amount equal to the incremental increase in our net worth during the immediately prior fiscal quarter. 

However, the applicable quarterly dividend amount will immediately increase to a 12% annual rate on the then-current 

liquidation preference of the senior preferred stock if we fail to timely pay dividends in cash to Treasury. This increased 

dividend amount will continue until the dividend period following the date we have paid, in cash, full cumulative 

dividends to Treasury (including any unpaid dividends), at which point the applicable quarterly dividend amount will 

revert to the prior calculation method.

Liquidation Preference

Shares of the senior preferred stock have no par value and have a stated value and initial liquidation preference equal 

to $1,000 per share, for an aggregate initial liquidation preference of $1 billion.

Under the terms that currently govern the senior preferred stock, the aggregate liquidation preference will be increased 

by the following: 

• any amounts Treasury pays to us pursuant to its funding commitment under the senior preferred stock 

purchase agreement (as of the date of this filing, the cumulative amount Treasury has paid to us under its 

funding commitment is $119.8 billion);

• any quarterly commitment fees that are payable but not paid in cash (no such fees have become payable, nor 

will such fees be set until the capital reserve end date); 

• any dividends that are payable but not paid in cash to Treasury, regardless of whether or not they are declared; 

and

• at the end of each fiscal quarter through and including the capital reserve end date, an amount equal to the 

increase in our net worth, if any, during the immediately prior fiscal quarter.

The aggregate liquidation preference of the senior preferred stock was $180.3 billion as of December 31, 2022. It will 

increase to $181.8 billion as of March 31, 2023 due to the $1.4 billion increase in our net worth during the fourth quarter

of 2022.

The senior preferred stock ranks ahead of our common stock and all other outstanding series of our preferred stock, as 

well as any capital stock we issue in the future, as to both dividends and rights upon liquidation. As a result, if we are 

liquidated, the holder of the senior preferred stock is entitled to its then current liquidation preference before any 

distribution is made to the holders of our common stock or other preferred stock. 

Limitations on Redemption and Paydown of Liquidation Preference; Requirement to Pay Net 

Proceeds of Capital Stock Issuances to Reduce Liquidation Preference

We are not permitted to redeem the senior preferred stock prior to the termination of Treasury’s funding commitment 

under the senior preferred stock purchase agreement. Moreover, we are not permitted to pay down the liquidation 

preference of the outstanding shares of senior preferred stock except to the extent of (1) accumulated and unpaid 

dividends previously added to the liquidation preference and not previously paid down; and (2) quarterly commitment 

fees previously added to the liquidation preference and not previously paid down. In addition to these exceptions, if we 

issue any shares of capital stock for cash while the senior preferred stock is outstanding, the net proceeds of the 

issuance, with the exception of up to $70 billion in aggregate gross cash proceeds from the issuance of common stock, 

must be used to pay down the liquidation preference of the senior preferred stock. As described below under 

“Covenants under Treasury Agreements,” we may issue common stock ranking pari passu or junior to the common 

stock issued to Treasury in connection with the exercise of its warrant provided that (i) Treasury has already exercised 

its warrant in full, and (ii) all currently pending significant litigation relating to the conservatorship and the August 2012 

amendment to the senior preferred stock purchase agreement has been resolved. The liquidation preference of each 

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 13
share of senior preferred stock may not be paid down below $1,000 per share prior to the termination of Treasury’s 

funding commitment. Following the termination of Treasury’s funding commitment, we may pay down the liquidation 

preference of all outstanding shares of senior preferred stock at any time, in whole or in part.

Additional Senior Preferred Stock Provisions

The senior preferred stock provides that we may not, at any time, declare or pay dividends on, make distributions with 

respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any common stock or other 

securities ranking junior to the senior preferred stock unless (1) full cumulative dividends on the outstanding senior 

preferred stock (including any unpaid dividends added to the liquidation preference) have been declared and paid in 

cash, and (2) all amounts required to be paid with the net proceeds of any issuance of capital stock for cash (as 

described in the preceding paragraph) have been paid in cash. Shares of the senior preferred stock are not convertible. 

Shares of the senior preferred stock have no general or special voting rights, other than those set forth in the certificate 

of designation for the senior preferred stock or otherwise required by law. The consent of holders of at least two-thirds of 

all outstanding shares of senior preferred stock is generally required to amend the terms of the senior preferred stock or 

to create any class or series of stock that ranks prior to or on parity with the senior preferred stock.

Common Stock Warrant

Pursuant to the senior preferred stock purchase agreement, on September 7, 2008, we, through FHFA in its capacity as 

conservator, issued to Treasury a warrant to purchase shares of our common stock equal to 79.9% of the total number 

of shares of our common stock outstanding on a fully diluted basis on the date the warrant is exercised, for an exercise 

price of $0.00001 per share. The warrant may be exercised in whole or in part at any time on or before September 7, 

2028.

Covenants under Treasury Agreements

The senior preferred stock purchase agreement contains covenants that prohibit us from taking a number of actions 

without the prior written consent of Treasury, including:

• paying dividends or other distributions on or repurchasing our equity securities (other than the senior preferred 

stock or warrant);

• issuing equity securities, except for stock issuances made (1) to Treasury, (2) pursuant to obligations that 

existed at the time we entered conservatorship, and (3) as amended by the January 2021 letter agreement, for 

common stock ranking pari passu or junior to the common stock issued to Treasury in connection with the 

exercise of its warrant, provided that (i) Treasury has already exercised its warrant in full, and (ii) all currently 

pending significant litigation relating to the conservatorship and the August 2012 amendment to the senior 

preferred stock purchase agreement has been resolved, which may require Treasury’s assent. Net proceeds of 

the issuance of any shares of capital stock for cash while the senior preferred stock is outstanding, except for 

up to $70 billion in aggregate gross cash proceeds from the issuance of common stock, must be used to pay 

down the liquidation preference of the senior preferred stock;

• terminating or seeking to terminate our conservatorship, other than through a receivership, except that, as 

revised by the January 2021 letter agreement, FHFA can terminate our conservatorship without the prior 

consent of Treasury if several conditions are met, including (1) all currently pending significant litigation relating 

to the conservatorship and the August 2012 amendment to the senior preferred stock purchase agreement has 

been resolved, and (2) for two or more consecutive quarters, our common equity tier 1 capital (as defined in the 

enterprise regulatory capital framework), together with any stockholder equity that would result from a firm 

commitment public underwritten offering of common stock which is fully consummated concurrent with the 

termination of conservatorship, equals or exceeds at least 3% of our adjusted total assets (as defined in the 

enterprise regulatory capital framework);

• selling, transferring, leasing or otherwise disposing of any assets, except for dispositions for fair market value in 

limited circumstances including if (a) the transaction is in the ordinary course of business and consistent with 

past practice or (b) the assets have a fair market value individually or in the aggregate of less than $250 million; 

and

• issuing subordinated debt.

Covenants in the senior preferred stock purchase agreement also subject us to limits on the amount of mortgage assets 

that we may own and the total amount of our indebtedness. 

• Mortgage Asset Limit. The senior preferred stock purchase agreement limits the amount of mortgage assets we 

are permitted to own to $225 billion. We are currently managing our business to a $202.5 billion mortgage 

asset cap pursuant to instructions from FHFA. Our mortgage assets as of December 31, 2022 were 

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 14
$79.5 billion, which includes 10% of the notional value of interest-only securities we hold. We disclose the 

amount of our mortgage assets each month in the “Endnotes” to our Monthly Summaries, which are available 

on our website and announced in a press release. 

• Debt Limit. Our debt limit under the senior preferred stock purchase agreement is set at 120% of the amount of 

mortgage assets we were allowed to own under the agreement on December 31 of the immediately preceding 

calendar year. This debt limit is currently $270 billion. As calculated for this purpose, our indebtedness as of 

December 31, 2022 was $139.3 billion. We disclose the amount of our indebtedness on a monthly basis under 

the caption “Total Debt Outstanding” in our Monthly Summaries. 

Compensation. Another covenant prohibits us from entering into any new compensation arrangements or increasing 

amounts or benefits payable under existing compensation arrangements with any of our executive officers (as defined 

by SEC rules) without the consent of the Director of FHFA, in consultation with the Secretary of the Treasury.

Annual Risk Management Plan Covenant. Each year we remain in conservatorship we are required to provide Treasury 

a risk management plan that sets out our strategy for reducing our risk profile, describes the actions we will take to 

reduce the financial and operational risk associated with each of our business segments, and includes an assessment 

of our performance against the planned actions described in the prior year’s plan. We submitted our most recent risk 

management plan to Treasury in December 2022.

Covenants Added in January 2021 and Currently in Effect

In addition to the changes described above to covenants already in the senior preferred stock purchase agreement, the 

January 2021 letter agreement added the following additional covenants that are currently in effect:

• Enterprise Regulatory Capital Framework. We are required to comply with the enterprise regulatory capital 

framework rule published by FHFA in the Federal Register on December 17, 2020, disregarding any 

subsequent amendments or modifications to the rule.

As described in “Legislation and Regulation—GSE-Focused Matters—Capital Requirements” below, FHFA 

published additional final rules amending the enterprise regulatory capital framework in 2022. FHFA has 

instructed us to report our capital requirements under the amended enterprise regulatory capital framework, not 

under the original requirements of the framework published in December 2020. Accordingly, we are not in 

compliance with this covenant. Although our compliance with the covenants in the senior preferred stock 

purchase agreement is not a condition of Treasury’s funding commitment under that agreement, FHFA, as our 

conservator and regulator, has the authority to direct compliance or impose consequences for any noncompliance with that agreement.

• New Business Restrictions. The following additional restrictive covenants that relate to our single-family 

business activities:

◦ Requirement to Provide Equitable Access for Single-Family Acquisitions. We:

▪ may not vary our pricing or acquisition terms for single-family loans based on the business 

characteristics of the seller, including the seller’s size, charter type, or volume of business with 

us; and 

▪ must offer to purchase at all times, for equivalent cash consideration and on substantially the 

same terms, any single-family mortgage loan that (1) is of a class of loans that we then offer to 

acquire for inclusion in our mortgage-backed securities or for other non-cash consideration, 

(2) is offered by a seller that has been approved to do business with us, and (3) has been 

originated and sold in compliance with our underwriting standards.

◦ Single-Family Loan Eligibility Requirements Program. We are required to maintain a program 

reasonably designed to ensure that the single-family loans we acquire are limited to: 

▪ qualified mortgages, except government-backed loans; 

▪ loans exempt from the Consumer Financial Protection Bureau’s (the “CFPB’s”) ability-to-repay 

and qualified mortgage rule, except timeshares and home equity lines of credit; 

▪ loans secured by an investment property; 

▪ refinancing loans with streamlined underwriting originated in accordance with our eligibility 

criteria for high loan-to-value refinancings;

▪ loans originated with temporary underwriting flexibilities during times of exigent 

circumstances, as determined in consultation with FHFA; 

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 15
▪ loans secured by manufactured housing; and

▪ such other loans that FHFA may designate that were eligible for purchase by us as of the date 

of the January 2021 letter agreement.

Covenants Added in January 2021 and Temporarily Suspended in September 2021

The business restrictions described below were added to the senior preferred stock purchase agreement as a result of 

the January 2021 letter agreement and subsequently temporarily suspended pursuant to a letter agreement dated 

September 14, 2021. Under the terms of the September 2021 letter agreement, the suspension of these provisions will 

terminate six months after Treasury so notifies us. As of the date of this filing, we have not received a notification from 

Treasury regarding the termination of these suspensions. Although the restrictions on these activities under the senior 

preferred stock purchase agreement are temporarily suspended, in the ordinary course of business these and other 

business activities are subject to constraints from a variety of sources, including board- and management-approved risk 

limits, capital considerations and FHFA instructions. These suspended restrictions are as follows:

• Single Counterparty Volume Cap on Single-Family Acquisitions for Cash. This suspended provision would 

require that we not acquire more than $1.5 billion in single-family loans for cash consideration from any single 

seller (including its affiliates) during any period comprising four calendar quarters. Loan acquisitions through 

lender swap securitization transactions would not be subject to this limitation.

• Limit on Multifamily Volume. This suspended provision would require that we not acquire more than $80 billion 

in multifamily mortgage assets in any 52-week period, with this multifamily volume cap to be adjusted up or 

down by FHFA at the end of each calendar year based on changes to the consumer price index. Additionally, at 

least 50% of our multifamily acquisitions in any calendar year must, at the time of acquisition, be classified as 

mission-driven, consistent with FHFA guidelines. Although this provision has been suspended, FHFA has 

established a cap on our new multifamily business volume and required that a minimum portion of our 

multifamily business volume be mission-driven, focused on certain affordable and underserved market 

segments. For more information on our multifamily volume cap, see “Legislation and Regulation—GSEFocused Matters—Multifamily Business Volume Cap” and “MD&A—Multifamily Business—Multifamily Business 

Metrics.” 

• Limit on Specified Higher-Risk Single-Family Acquisitions. This suspended provision would prohibit our 

acquisition of a single-family mortgage loan if, following the acquisition, more than 3% of our single-family loans 

that result from a refinancing or 6% of our single-family loans that do not result from a refinancing would have 

two or more of the higher-risk characteristics listed below at origination. The 3% and 6% measurements would 

each be based on loans we acquired during the preceding 52-week period. The higher-risk characteristics are:

• a combined loan-to-value ratio greater than 90%; 

• a debt-to-income ratio greater than 45%; and 

• a FICO credit score (or equivalent credit score) less than 680. 

• Limit on Acquisitions of Single-Family Mortgage Loans Backed by Second Homes and Investment Properties. 

This suspended provision would require that we limit our acquisitions of single-family mortgage loans secured 

by either second homes or investment properties to not more than 7% of the single-family mortgage loans we 

have acquired during the preceding 52-week period.

Equitable Housing Finance Plan

In September 2021, FHFA instructed Fannie Mae and Freddie Mac to submit Equitable Housing Finance Plans to FHFA 

by the end of 2021. We publicly released our first Equitable Housing Finance Plan in June 2022. Consistent with the 

GSE Act, the plan provides a three-year roadmap for our actions to advance equity in housing finance by working to 

remove barriers to affordable rental housing and homeownership experienced by members of underserved populations, 

particularly racial and ethnic groups with a significant homeownership rate disparity. Fannie Mae’s Equitable Housing 

Finance Plan focuses on empowering Black renters and homeowners in three key areas:

• Housing Preparation: Helping Black consumers prepare early for sustainable homeownership and access to 

quality rental housing through credit building and financial education.

• Buying or Renting: Removing unnecessary obstacles Black people face in shopping for, acquiring, renting, or 

mortgaging a home.

• Moving in and Maintaining: Enhancing sustainable homeownership so that renters and homeowners can 

withstand disruptions or temporary hardships and remain stably housed.

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 16
FHFA is also requiring Fannie Mae and Freddie Mac to submit annual progress reports on the actions undertaken 

during the prior year to implement their plans. 

We are focusing in this initial plan on the needs of Black homeowners and renters, a population for whom inequities 

caused by past discriminatory housing practices are particularly profound. Based on data from the Census Bureau’s 

2019 American Community Survey, the Black homeownership rate is estimated to be approximately 30 percentage 

points lower than the white homeownership rate. While our solutions seek to address key obstacles that Black 

homeowners and renters face as they secure housing, we expect they will benefit borrowers and renters in all 

populations. In the future, we expect to expand the focus of our equitable housing efforts to address challenges faced 

by other populations who have been historically underserved by the housing finance system, including Latino 

homeowners and renters.

In connection with our Equitable Housing Finance Plan and in support of other efforts we may undertake to support 

equitable housing, we anticipate establishing and supporting special purpose credit programs. We launched a special 

purpose credit program pilot with a number of lenders in 2022 and anticipate expanding this pilot with additional lenders 

in 2023. Under the Equal Credit Opportunity Act, creditors can create special purpose credit programs for groups that 

have been historically disadvantaged in obtaining credit. Special purpose credit programs benefit applicants who would 

otherwise be denied credit or receive it on less favorable terms.

Legislation and Regulation

As a federally chartered corporation and as a financial institution, we are subject to government regulation and 

oversight. FHFA, our primary regulator, regulates our safety and soundness and our mission, and also acts as our 

conservator. FHFA is an independent agency of the federal government with general supervisory and regulatory 

authority over Fannie Mae, Freddie Mac and the Federal Home Loan Banks (“FHLBs”). The U.S. Department of 

Housing and Urban Development (“HUD”) and FHFA regulate us with respect to fair lending matters. Our regulators also 

include the SEC and Treasury. In addition, even if we are not directly subject to an agency’s regulation or oversight, 

regulations by that agency that affect mortgage lenders and servicers, debt investors, or the markets for our MBS or 

debt securities could have a significant impact on us.

Housing Finance Reform

The Administration and Congress may consider housing finance reforms or legislation that could result in significant 

changes in our structure and role in the future, including proposals that would result in Fannie Mae’s liquidation or 

dissolution. There continues to be significant uncertainty regarding the timing, content and impact of future legislative 

and regulatory actions affecting us. See “Risk Factors—GSE and Conservatorship Risk” for a description of risks 

associated with our future and potential housing finance reform.

GSE-Focused Matters

We describe below matters applicable specifically to Fannie Mae. These matters relate to legislation, regulation or, in 

some cases, conservatorship. In the following section, we describe matters that are applicable more broadly or to other 

mortgage or capital market participants and that may directly or indirectly affect us.

Capital Requirements

In December 2020, FHFA published a final rule establishing a new enterprise regulatory capital framework for Fannie 

Mae and Freddie Mac. FHFA published three additional final rules amending the enterprise regulatory capital framework 

in March 2022 and June 2022. The March 2022 amendment refined the prescribed leverage buffer amount and the riskbased capital treatment of credit risk transfer transactions, as well as implemented technical corrections. The June 2022 

amendments introduced new public disclosure requirements and a requirement to submit annual capital plans to FHFA 

and provide prior notice to FHFA for certain capital actions. We refer to the rule’s requirements, as amended, as the 

“enterprise regulatory capital framework.”

The enterprise regulatory capital framework establishes leverage and risk-based capital requirements beyond what is 

expressly required by the GSE Act. The framework provides a granular assessment of credit risk specific to different 

mortgage loan categories, as well as components for market risk and operational risk. The enterprise regulatory capital 

framework includes the following requirements relating to the amount and form of capital we must hold:

• Supplemental leverage and risk-based capital requirements based largely on definitions of capital used in U.S. 

banking regulators’ regulatory capital framework. Under the leverage capital requirements, we must maintain a 

tier 1 capital ratio of 2.5% of adjusted total assets. Under the risk-based capital requirements, we must maintain 

Business | Conservatorship and Treasury Agreements

Fannie Mae 2022 Form 10-K 17
minimum common equity tier 1 capital, tier 1 capital, and adjusted total capital ratios of 4.5%, 6%, and 8%, 

respectively, of risk-weighted assets;

• A requirement that we hold prescribed capital buffers that can be drawn down in periods of financial stress and 

then rebuilt over time as economic conditions improve. If we fall below the prescribed buffer amounts, we must 

restrict capital distributions such as stock repurchases and dividends, as well as discretionary bonus payments 

to executives, until the buffer amounts are restored. The prescribed capital buffers represent the amount of 

capital we are required to hold above the minimum leverage and risk-based capital requirements.

◦ The prescribed leverage buffer amount, or PLBA, represents the amount of tier 1 capital we are 

required to hold above the minimum tier 1 leverage capital requirement; 

◦ The risk-based capital buffers consist of three separate components: a stability capital buffer, a stress 

capital buffer, and a countercyclical capital buffer. Taken together, these risk-based buffers comprise 

the prescribed capital conservation buffer amount, or PCCBA. The PCCBA must be comprised entirely 

of common equity tier 1 capital;

• Specific minimum percentages, or “floors,” on the risk-weights applicable to single-family and multifamily 

exposures, which has the effect of increasing the capital required to be held for loans otherwise subject to lower 

risk weights;

• Specific floors on the risk-weights applicable to retained portions of credit risk transfer transactions, which has 

the effect of decreasing the capital relief obtained from these transactions; and

• Additional elements based on U.S. banking regulators’ regulatory capital framework, including the planned 

eventual introduction of an advanced approach to complement the standardized approach for measuring riskweighted assets.

The dates by which we must comply with the requirements of the enterprise regulatory capital framework are staggered 

and largely dependent on whether we remain in conservatorship. Our compliance with the capital buffers will be 

required upon exit from conservatorship, and our compliance with the minimum regulatory capital requirements will be 

required by the later of our exit from conservatorship or such later date as may be ordered by FHFA. The compliance 

date for advanced approaches of the rule will be January 1, 2025, or such later date as may be specified by FHFA. 

The enterprise regulatory capital framework requires substantially higher levels of capital than the previously applicable 

statutory minimum capital requirement. To be fully capitalized under the enterprise regulatory capital framework, we 

must meet all applicable leverage capital requirements and risk-based capital requirements, including applicable 

buffers, under the standardized approach of the rule. As of December 31, 2022, our risk-based adjusted total capital 

requirement (including buffers) represented the amount of capital needed to be fully capitalized under the standardized 

approach to the rule, and we had a $258 billion shortfall of our available capital (deficit) to this requirement. See “MD&A

—Liquidity and Capital Management—Capital Management—Capital Requirements” and “Note 12, Regulatory Capital 

Requirements” for more information about our capital metrics under the enterprise regulatory capital framework as of 

December 31, 2022. 

The enterprise regulatory capital framework also contains a number of requirements relating to capital reporting and 

capital planning, which are either already effective or will become effective in 2023, including:

• A requirement to submit capital reports to FHFA each quarter;

• A requirement to disclose on a quarterly basis in an appropriate publicly available filing or other document our 

regulatory capital levels, buffers, adjusted total assets and total risk-weighted assets under the standardized 

approach of the enterprise regulatory capital framework;

• A requirement to provide specified additional public capital disclosures on a quarterly basis; and

• A requirement to submit annual capital plans to FHFA containing specified information and related requirements 

to obtain FHFA’s approval or provide notice to FHFA for certain capital actions.

Before the enterprise regulatory capital framework went into effect, we followed the requirements of FHFA’s 

conservatorship capital framework, which was a risk management framework for evaluating business decisions and 

performance during conservatorship. We have completed our transition from using the conservatorship capital 

framework to make business and risk decisions to using the enterprise regulatory capital framework and certain other 

risk measures to make these decisions. We currently operate at a significant shortfall to the enterprise regulatory capital 

framework’s requirements. Actions we may take to address this shortfall may have a significant impact on our business. 

Because the timing of when we will be required to hold capital in compliance with the enterprise regulatory capital 

framework is uncertain and depends on factors outside our control, the impact of these capital requirements on our 

business remains uncertain.

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 18
Stress Testing

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires certain financial 

companies to conduct annual stress tests to determine whether the companies have the capital necessary to absorb 

losses as a result of adverse economic conditions. Under FHFA regulations implementing this requirement, each year 

we are required to conduct a stress test using two different scenarios of financial conditions provided by FHFA—

baseline and severely adverse—and to publish a summary of our stress test results for the severely adverse scenario 

by August 15. We publish our stress test results on our website. We and FHFA published our most recent stress test 

results for the severely adverse scenario on August 11, 2022. 

Following our publication of our 2022 stress test results, we discovered errors in a model we use to prepare our annual 

stress test results that affected these results for 2022 and prior years. Once our evaluation of these errors is complete, 

we will post updated 2022 stress test results for the severely adverse scenario on our website.

Portfolio Standards

The GSE Act requires FHFA to establish standards governing our portfolio holdings, to ensure that they are backed by 

sufficient capital and consistent with our mission and safe and sound operations. FHFA is also required to monitor our 

portfolio and, in some circumstances, may require us to dispose of or acquire assets. In 2010, FHFA adopted, as the 

standard for our portfolio holdings, the portfolio limits specified in the senior preferred stock purchase agreement 

described under “Conservatorship and Treasury Agreements—Treasury Agreements—Covenants under Treasury 

Agreements,” as it may be amended from time to time. The rule is effective for as long as we remain subject to the 

terms and obligations of the senior preferred stock purchase agreement.

FHFA Proposed Liquidity Requirements

In June 2020, FHFA instructed us to meet prescriptive liquidity requirements. In December 2020, those requirements 

became effective and FHFA issued a proposed rule in line with the updated requirements. Liquidity requirements affect 

the amount of liquid assets we are required to hold, and to meet FHFA’s instructions and proposed rule, we hold more 

liquid assets than we were required to hold under our previous framework. For information about our liquidity 

requirements, see “MD&A—Liquidity and Capital Management—Liquidity Management—Liquidity and Funding Risk 

Management Practices and Contingency Planning.”

Receivership

Under the GSE Act, the Director of FHFA must place us into receivership if they make a written determination that our 

assets are less than our obligations (that is, we have a net worth deficit) or if we have not been paying our debts as they 

become due, in either case, for a period of 60 days. FHFA has notified us that the measurement period for any 

mandatory receivership determination with respect to our assets and liabilities would commence no earlier than the SEC 

public filing deadline for our quarterly or annual financial statements and would continue for 60 calendar days thereafter. 

FHFA has advised us that if, during that 60-day period, we receive funds from Treasury in an amount at least equal to 

the deficiency amount under the senior preferred stock purchase agreement, the Director of FHFA will not make a 

mandatory receivership determination.

In addition, we could be put into receivership at the discretion of the Director of FHFA at any time for other reasons set 

forth in the GSE Act. The statutory grounds for discretionary appointment of a receiver include: a substantial dissipation 

of assets or earnings due to unsafe or unsound practices; the existence of an unsafe or unsound condition to transact 

business; an inability to meet our obligations in the ordinary course of business; a weakening of our condition due to 

unsafe or unsound practices or conditions; critical undercapitalization; undercapitalization and no reasonable prospect 

of becoming adequately capitalized; the likelihood of losses that will deplete substantially all of our capital; or by 

consent.

The appointment of FHFA as receiver would immediately terminate the conservatorship. In the event of receivership, the 

GSE Act requires FHFA, as the receiver, to organize a limited-life regulated entity with respect to Fannie Mae. Among 

other requirements, the GSE Act provides that this limited-life regulated entity:

• would succeed to Fannie Mae’s charter and thereafter operate in accordance with and subject to such charter; 

• would assume, acquire or succeed to our assets and liabilities to the extent that such assets and liabilities are 

transferred by FHFA to the entity; and 

• would not be permitted to assume, acquire or succeed to any of our obligations to shareholders.

Placement into receivership would likely have a material adverse effect on holders of our common stock and preferred 

stock, and could have a material adverse effect on holders of our debt securities and Fannie Mae MBS. Should we be 

placed into receivership, different assumptions would be required to determine the carrying value of our assets, which 

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 19
would likely lead to substantially different financial results. For more information on the risks to our business relating to 

receivership and uncertainties regarding the future of our business, see “Risk Factors—GSE and Conservatorship 

Risk.”

Resolution Planning

In May 2021, FHFA issued a final rule requiring us to develop a plan for submission to FHFA that would assist FHFA in 

planning for the rapid and orderly resolution of the company if FHFA is appointed as our receiver. The stated goals in 

the rule for our resolution plan are to:

• minimize disruption in the national housing finance markets by providing for the continued operation of our core 

business lines in receivership by a newly constituted limited-life regulated entity;

• preserve the value of our franchise and assets;

• facilitate the division of assets and liabilities between the limited-life regulated entity and the receivership 

estate;

• ensure that investors in our guaranteed mortgage-backed securities and our unsecured debt bear losses in the 

order of their priority established under the GSE Act, while minimizing unnecessary losses and costs to these 

investors; and 

• foster market discipline by making clear that no extraordinary government support will be available to indemnify 

investors against losses or fund the resolution of the company.

The rule requires that we submit our initial resolution plan to FHFA by April 6, 2023, and subsequent resolution plans not 

later than every two years thereafter unless otherwise notified by FHFA. The rule provides that, in developing our 

resolution plan, we must assume that receivership may occur under severely adverse economic conditions, and we may 

not assume the provision or continuation of extraordinary support by the U.S. government (including support under our 

senior preferred stock purchase agreement with Treasury).

Affordable Housing Allocations

The GSE Act requires us to set aside in each fiscal year an amount equal to 4.2 basis points for each dollar of the 

unpaid principal balance of our new business purchases and to pay this amount to specified HUD and Treasury funds in 

support of affordable housing. New business purchases consist of single-family and multifamily whole mortgage loans 

purchased during the period and single-family and multifamily mortgage loans underlying Fannie Mae MBS issued 

during the period pursuant to lender swaps, which we describe in “Mortgage Securitizations.” We are prohibited from 

passing through the cost of these allocations to the originators of the mortgage loans that we purchase or securitize. For 

each year’s new business purchases since 2015, we have set aside amounts for these contributions and transferred the 

funds when directed by FHFA to do so. See “Certain Relationships and Related Transactions, and Director 

Independence—Transactions with Related Persons—Treasury Interest in Affordable Housing Allocations” for 

information on our contribution for 2022 new business purchases.

Fair Lending

The GSE Act requires the Secretary of HUD to assure that Fannie Mae and Freddie Mac meet their fair lending 

obligations. Among other things, HUD periodically reviews and comments on our underwriting and appraisal guidelines 

to ensure consistency with the Fair Housing Act. In July 2021, FHFA issued a Policy Statement on Fair Lending 

describing its statutory authority and policies for supervisory oversight and enforcement of fair lending matters with 

respect to Fannie Mae and Freddie Mac. In August 2021, FHFA and HUD entered into a memorandum of understanding 

regarding fair housing and fair lending coordination. Among other things, the memorandum of understanding allows 

HUD and FHFA to coordinate on investigations, compliance reviews, and ongoing monitoring of Fannie Mae and 

Freddie Mac to ensure compliance with the Fair Housing Act. In December 2021, FHFA released an advisory bulletin to 

provide FHFA's supervisory expectations and guidance to Fannie Mae and Freddie Mac on fair lending and fair housing 

compliance.

FHFA Rule on Credit Score Models

Fannie Mae uses credit scores to establish a minimum credit threshold for mortgage lending, provide a foundation for 

risk-based pricing, and support disclosures to investors. Under an FHFA rule that became effective in October 2019, we 

are required to validate and approve third-party credit score models and obtain FHFA’s approval of our determination. 

We must evaluate the models for factors such as accuracy, reliability and integrity, as well as impacts on fair lending and 

the mortgage industry. For a discussion of our current credit score model and FHFA’s announcement of its validation 

and approval of two new credit score models for use by Fannie Mae and Freddie Mac, see “MD&A—Single-Family 

Business—Single-Family Mortgage Credit Risk Management—Single-Family Acquisition and Servicing Policies and 

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 20
Underwriting and Servicing Standards—New Credit Score Models and Expected Change to Credit Report 

Requirement.” 

Interagency Action Plan to Advance Property Appraisal and Valuation Equity 

In March 2022, the Interagency Task Force on Property Appraisal and Valuation Equity (the “PAVE Task Force”) 

published an Action Plan to Advance Property Appraisal and Valuation Equity (the “PAVE Action Plan”). The PAVE Task 

Force is composed of thirteen federal agencies and offices, including HUD and FHFA. The PAVE Action Plan outlines 

the historical role of racism in the valuation of residential property, examines the various forms of bias that can appear in 

residential property valuation practices, describes affirmative steps that federal agencies will take to advance equity in 

the residential property valuation process, and outlines further recommendations that government and industry 

stakeholders can initiate. Some of the proposed actions contained in the PAVE Action Plan, including additional 

initiatives the PAVE Task Force is considering such as expanded use of alternatives to traditional appraisals, could have 

a significant impact on our current appraisal and valuation policies and procedures. We expect to work closely with 

FHFA on any potential future changes to these policies and procedures in support of the PAVE Action Plan and any 

further recommendations of the PAVE Task Force.

Housing Goals

In this and the following sections, we discuss our housing goals and our duty to serve obligations pursuant to the GSE 

Act, as well as FHFA’s requirement, as our conservator, that a portion of our new multifamily business be focused on 

affordable and underserved markets.

Our housing goals, which are established by FHFA in accordance with the GSE Act, require that a specified amount of 

mortgage loans we acquire meet specified standards relating to affordability or location. For single-family goals, our 

acquisitions are measured against the lower of benchmarks set by FHFA or the level of goal-eligible originations in the 

primary mortgage market. The single-family benchmarks are expressed as a percentage of the total number of goaleligible single-family mortgages acquired each year. Multifamily goals for 2022 and prior years were established as a 

fixed number of units to be financed; however, as described below, our new multifamily goals for 2023 and 2024 are 

expressed as a percentage of goal-eligible units in multifamily properties financed by mortgages acquired each year.

2021 Housing Goals

In October 2022, FHFA determined that we met all of our 2021 single-family and multifamily housing goals. The tables 

below display information about our 2021 housing goals and our performance against these goals. 

2021(1)

FHFA 

Benchmark

SingleFamily

Market 

Level Result

Low-income (≤80% of area median income) home purchase goal 24 % 26.7 % 28.7 %

Very low-income (≤50% of area median income) home purchase goal 6 6.8 7.4 

Low-income areas home purchase goal(2) 18 22.9 24.5 

Low-income areas home purchase subgoal(3) 14 19.1 20.3 

Low-income refinancing goal 21 26.1 26.2 

Single-Family Housing Goals

(1) The FHFA benchmarks and our results are expressed as a percentage of the total number of goal-eligible single-family mortgages 

acquired during the year. The single-family market level is the percentage of goal-eligible single-family mortgages originated in the primary 

mortgage market during the year.

(2) These mortgage loans must be secured by a property that is (a) in a low-income census tract, (b) in a high-minority census tract and 

affordable to moderate-income families (those with incomes less than or equal to 100% of area median income), or (c) in a designated 

disaster area and affordable to moderate-income families.

(3) These mortgage loans must be secured by a property that is (a) in a low-income census tract or (b) in a high-minority census tract and 

affordable to moderate-income families.

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 21
Multifamily Housing Goals

2021(1)

Goal Result

Low-income (≤80% of area median income) goal 315,000 384,488 

Very low-income (≤50% of area median income) subgoal 60,000 83,459 

Small multifamily low-income subgoal(2) 10,000 14,409 

(1) FHFA goals and our results are expressed as number of units financed during the year.

(2) Units in small multifamily properties (defined as properties with 5 to 50 units) affordable to low-income families.

2022 to 2024 Housing Goals

In December 2021, FHFA published a final rule establishing new benchmark levels for our single-family housing goals 

for 2022 through 2024 and new multifamily housing goals for 2022. In December 2022, FHFA published a final rule 

establishing new multifamily housing goals for 2023 and 2024.

2022 to 2024 Single-Family Housing Goals

FHFA will continue to evaluate our performance against the single-family housing goals using a two-part approach that 

compares the goal-qualifying share of our single-family mortgage acquisitions against both a benchmark level and a 

market level. To meet a single-family housing goal or subgoal, the percentage of our single-family mortgage acquisitions 

that meet each goal or subgoal must equal or exceed either the benchmark level set in advance by FHFA or the market 

level for that year. The market level is determined retrospectively each year based on actual goal-eligible originations in 

the primary mortgage market as measured by FHFA based on Home Mortgage Disclosure Act data for that year. 

The December 2021 final rule established two new single-family home purchase subgoals to replace the prior lowincome areas home purchase subgoal: a new minority census tracts subgoal and a new low-income census tracts 

subgoal, which are described in the table below. The December 2021 final rule also increased the benchmark levels for 

the remaining single-family housing goals.

FHFA Benchmark Level

Single-Family Goals 2022-2024

Low-income home purchase goal(1) 28%

Very low-income home purchase goal(2) 7%

Low-income areas home purchase goal(3) 20% (2022)

Minority census tracts subgoal (new)(4) 10%

Low-income census tracts subgoal (new)(5) 4%

Low-income refinancing goal(6) 26%

(1) Home purchase mortgages on single-family, owner-occupied properties to borrowers with incomes no greater than 80% of area median 

income.

(2) Home purchase mortgages on single-family, owner-occupied properties to borrowers with incomes no greater than 50% of area median 

income.

(3) Home purchase mortgages on single-family, owner-occupied properties with borrowers in census tracts with median income no greater 

than 80% of area median income; borrowers with incomes no greater than 100% of area median income in minority census tracts; and 

borrowers in designated disaster areas. Minority census tracts are those that have a minority population of at least 30% and a median 

income of less than 100% of area median income. For 2018 to 2021, FHFA set the low-income areas home purchase goal benchmark 

level on an annual basis by adding a disaster area increment to the low-income areas subgoal benchmark level. For 2022 to 2024, FHFA 

sets the low-income areas home purchase goal benchmark level on an annual basis by adding a disaster area increment to the sum of the 

benchmark levels for the minority census tracts subgoal and the low-income census tracts subgoal.

(4) Home purchase mortgages on single-family, owner-occupied properties to borrowers with incomes no greater than 100% of area median 

income in minority census tracts. 

(5) (i) Home purchase mortgages on single-family, owner-occupied properties to borrowers (regardless of income) in low-income census tracts 

that are not minority census tracts, and (ii) home purchase mortgages on single-family, owner-occupied properties to borrowers with 

incomes greater than 100% of area median income in low-income census tracts that are also minority census tracts. Low income census 

tracts are those where the median income is no greater than 80% of area median income.

(6) Refinancing mortgages on single-family, owner-occupied properties to borrowers with incomes no greater than 80% of area median 

income.

We believe we met all of our 2022 single-family housing goal benchmarks other than the low-income home purchase 

benchmark and the very low-income home purchase benchmark. As noted above, we are in compliance with the singleBusiness | Legislation and Regulation

Fannie Mae 2022 Form 10-K 22
family housing goals if we meet either the benchmarks or market share measures, so we may still meet our goals. FHFA 

will make a final determination regarding our 2022 single-family housing goals performance later in the year, after the 

release of data reported under the Home Mortgage Disclosure Act.

If we do not meet our housing goals, FHFA determines whether the goals were feasible. If FHFA finds that our goals 

were feasible, we may become subject to a housing plan that could require us to take additional steps that could have 

an adverse effect on our results of operations and financial condition. The housing plan must describe the actions we 

would take to meet the goal in the next calendar year and be approved by FHFA. The potential penalties for failure to 

comply with housing plan requirements include a cease-and-desist order and civil money penalties.

2022 Multifamily Housing Goals

In response to comments on its rule proposal, FHFA’s final rule published in December 2021 established multifamily 

housing goals for 2022 only, rather than for 2022 through 2024. The December 2021 final rule increased each of the 

multifamily housing goals. FHFA will evaluate our performance for 2022 against the following multifamily goals.

Goal

Multifamily Goals 2022

Low-income goal(1) 415,000

Very low-income subgoal(2) 88,000

Small multifamily low-income subgoal(3) 17,000

(1) Affordable to low-income families, defined as families with incomes no greater than 80% of area median income.

(2) Affordable to very low-income families, defined as families with incomes no greater than 50% of area median income.

(3) Units in small multifamily properties (defined as properties with 5 to 50 units) affordable to low-income families.

We believe we met all of our 2022 multifamily housing goals, and FHFA will make a final determination regarding this 

performance later in the year.

2023 and 2024 Multifamily Housing Goals

In December 2022, FHFA published a final rule on our multifamily housing goals for 2023 and 2024. Rather than 

measuring the multifamily housing goals based on a fixed number of units, our 2023 and 2024 multifamily housing goals 

are based on the percentage share of the goal-qualifying units in our annual multifamily loan acquisitions that are 

affordable to each income category. The rule did not change the underlying criteria that determine which multifamily 

units qualify for credit under the housing goals.

The table below sets forth our multifamily housing goals for 2023 and 2024.

Goal

Multifamily Goals 2023 and 2024

(Percentage share of goal-eligible units)

Low-income goal(1) 61 %

Very low-income subgoal2) 12 

Small multifamily low-income subgoal(3) 2.5 

(1) Affordable to low-income families, defined as families with incomes less than or equal to 80% of area median income.

(2) Affordable to very low-income families, defined as families with incomes less than or equal to 50% of area median income.

(3) Units in small multifamily properties (defined as properties with 5 to 50 units) affordable to low-income families.

The final rule noted that FHFA may adjust these 2023 and 2024 multifamily housing goals following publication in light of 

market conditions or for other reasons. 

As described in “Risk Factors—GSE and Conservatorship Risk,” actions we may take to meet our housing goals and 

duty to serve requirements described below may materially increase our provision for credit losses and our write-offs.

Multifamily Business Volume Cap

As our conservator, FHFA has established caps on our new multifamily business volume and requirements that a 

portion of our multifamily volume be focused on affordable and underserved markets. Our multifamily loan purchase cap 

for 2023 is $75 billion, a reduction from the $78 billion cap applicable for 2022. Consistent with the 2022 cap, a 

minimum of 50% of our 2023 multifamily loan purchases must be mission-driven, focused on specified affordable and 

underserved market segments; however, FHFA has revised the multifamily requirements for mission-driven, affordable 

housing for 2023, including by:

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 23
• Removing the requirement that 25% of multifamily loan purchases must be affordable to residents earning 60% 

or less of area median income to reduce inconsistencies with FHFA’s housing goals; and

• Within the mission-driven eligibility criteria, creating a new category focused on preserving affordability in 

workforce housing to encourage financing of loans on properties with rent or income restrictions affordable at 

levels that meet market needs.

See “MD&A—Multifamily Business—Multifamily Business Metrics” for more information about our multifamily business 

volume cap, which is a requirement under the scorecard FHFA issued establishing 2023 corporate performance 

objectives for us. More information on FHFA’s 2023 scorecard is provided in our current report on Form 8-K filed on 

January 10, 2023.

Duty to Serve Underserved Markets

The GSE Act requires that we serve very low-, low-, and moderate-income families in three specified underserved 

markets: manufactured housing, affordable housing preservation and rural housing. Under FHFA’s implementing “duty 

to serve” rule, we are required to adopt an underserved markets plan for each underserved market covering a threeyear period that sets forth the activities and objectives we will undertake to meet our duty to serve that market. 

The types of activities that are eligible for duty to serve credit in each underserved market are summarized below:

• Manufactured housing market. For the manufactured housing market, duty to serve credit is available for 

eligible activities relating to manufactured homes (whether titled as real property or personal property (known 

as chattel)) and loans for specified categories of manufactured housing communities. 

• Affordable housing preservation market. For the affordable housing preservation market, duty to serve credit is 

available for eligible activities relating to preserving the affordability of housing for renters and buyers under 

specified programs enumerated in the GSE Act and other comparable affordable housing programs 

administered by state and local governments, subject to FHFA approval. Duty to serve credit also is available 

for activities related to small multifamily rental properties, energy efficiency improvements on existing 

multifamily rental and single-family first lien properties, certain shared equity homeownership programs, the 

purchase or rehabilitation of certain distressed properties, and activities under HUD’s Choice Neighborhoods 

Initiative and Rental Assistance Demonstration programs. 

• Rural housing market. For the rural housing market, duty to serve credit is available for eligible activities related 

to housing in rural areas, including activities related to housing in high-needs rural regions and for high-needs 

rural populations. 

FHFA reviews our draft underserved markets plans. In response to comments we received from FHFA on our initially 

proposed plans for 2022 to 2024, we revised our draft plans for further FHFA consideration. FHFA issued a nonobjection to the revised draft plans in April 2022.

FHFA has also established an annual process for evaluating our achievements under the plans, with performance 

results to be reported to Congress annually. If FHFA determines that we failed to meet the requirements of an 

underserved markets plan, FHFA may require us to submit a housing plan for FHFA approval that could require us to 

take additional steps. In October 2022, FHFA reported its determination that we complied with our 2021 duty to serve 

requirements. We believe we also met our 2022 duty to serve obligations. FHFA will determine our performance with 

respect to our 2022 duty to serve obligations in 2023.

Guaranty Fees and Pricing

Our guaranty fees and pricing are subject to regulatory, legislative and conservatorship requirements, including FHFA 

guidance and instruction. These requirements include the following:

• Upfront Fees. We use loan-level price adjustments, including various upfront risk-based fees, to price for the 

credit risk we assume in providing our guaranty on the single-family loans we acquire. FHFA, as conservator, 

must approve changes to the national loan-level price adjustments (or upfront fees) that we charge for the risk 

we assume in providing our guaranty and can direct us to make other changes to our guaranty fee pricing for 

new single-family acquisitions. 

• Base Fees. We have the ability to change our base single-family contractual guaranty fee pricing, subject to 

minimum base guaranty fees set by FHFA in its regulatory capacity. These minimum base guaranty fees 

generally apply to our acquisitions of 30-year and 15-year single-family fixed-rate loans in lender swap 

transactions.

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 24
• Return Targets. For new single-family and multifamily acquisitions, FHFA has instructed us to meet a minimum 

return on equity target based on our capital requirements. FHFA also has instructed us to establish a long-term 

target for returns at the enterprise level, which may impact our guaranty fees.

• TCCA Fees. In December 2011, Congress enacted the Temporary Payroll Tax Cut Continuation Act of 2011 

(the “TCCA”) which, among other provisions, required that we increase our single-family guaranty fees by at 

least 10 basis points and remit this increase to Treasury. To meet our obligations under the TCCA and at the 

direction of FHFA, we increased the guaranty fee on all single-family residential mortgages delivered to us by 

10 basis points effective April 1, 2012. The resulting revenue is included in net interest income and the expense 

is recognized as “TCCA fees.” In November 2021, the Infrastructure Investment and Jobs Act was enacted, 

which extended to October 1, 2032 our obligation under the TCCA to collect 10 basis points in guaranty fees on 

single-family residential mortgages delivered to us and pay the associated revenue to Treasury. In January 

2022, FHFA advised us to continue to pay these TCCA fees to Treasury with respect to all single-family loans 

acquired by us before October 1, 2032, and to continue to remit these amounts to Treasury on and after 

October 1, 2032 with respect to loans we acquired before this date until those loans are paid off or otherwise 

liquidated. As noted in “Glossary of Terms Used in This Report,” in this report we use the term “TCCA fees” to 

refer to the expense recognized as a result of the 10 basis point increase in guaranty fees on all single-family 

residential mortgages delivered to us on or after April 1, 2012 pursuant to the Temporary Payroll Tax Cut 

Continuation Act of 2011 and as extended by the Infrastructure Investment and Jobs Act, which we remit to 

Treasury on a quarterly basis.

• UMBS. Our ability to change our single-family guaranty fee pricing is limited by the FHFA rule described in 

“FHFA Rule on Uniform Mortgage-Backed Securities” below, as our single-family guaranty fees is one of the 

covered items.

See “MD&A—Single-Family Business—Single-Family Business Metrics—Recent and Future Price Changes” for a 

discussion of changes to our single-family guaranty fee pricing announced in 2022 and 2023. Also see “MD&A—

Consolidated Results of Operations—TCCA Fees” and “Certain Relationships and Related Transactions, and Director 

Independence—Transactions with Related Persons—Transactions with Treasury—Obligation to Pay TCCA Fees to 

Treasury” for additional discussion of our TCCA fees.

New Products and Activities

The GSE Act requires us to provide advance notice to FHFA before undertaking a new activity and to obtain prior 

approval from FHFA before offering a new product to the market, subject to certain exclusions. In December 2022, 

FHFA adopted a final rule implementing these provisions. The final rule will be effective February 27, 2023, and will 

replace an interim final rule that has been in place since July 2009. 

The final rule establishes a process for the review of new activities and products by FHFA, including providing for a 30-

day public notice and comment period with respect to new products. The final rule also establishes criteria for 

determining what constitutes a new activity that requires advance notice to FHFA and what is excluded from being 

considered a new activity, such as enhancements or modifications to DU or to the mortgage terms and conditions or 

underwriting criteria relating to the mortgages we purchase or guarantee. The final rule describes a new product as any 

new activity that FHFA determines merits public notice and comment about whether it is in the public interest. FHFA may 

approve a new product proposed by us if FHFA determines that the new product is authorized under our charter, in the 

public interest and consistent with safety and soundness. The final rule provides that FHFA has the authority to place 

conditions or limitations on a new activity or a new product.

Executive Compensation

The amount and type of compensation we may pay our executives is subject to a number of legal and regulatory 

restrictions, particularly while we are in conservatorship. For a description of our executive compensation program and 

legal, regulatory and conservator requirements that affect our executive compensation, see “Executive Compensation.” 

FHFA Rule on Uniform Mortgage-Backed Securities

We and Freddie Mac are required to align our programs, policies and practices that affect the prepayment rates of TBAeligible MBS pursuant to an FHFA rule. The rule is intended to ensure that Fannie Mae and Freddie Mac programs, 

policies and practices that individually have a material effect on cash flows (including policies that affect prepayment 

speeds) are and will remain aligned regardless of whether we and Freddie Mac are in conservatorship. The rule 

provides a non-exhaustive list of covered programs, policies and practices, including management decisions or actions 

about: single-family guaranty fees; the spread between the note rate on the mortgage and the pass-through coupon on 

the MBS; eligibility standards for sellers, servicers, and private mortgage insurers; distressed loan servicing 

requirements; removal of mortgage loans from securities; servicer compensation; and proposals that could materially 

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 25
change the credit risk profile of the single-family mortgages securitized by a GSE. We believe that our policies and 

practices are generally aligned with the requirements specified by FHFA pursuant to the rule. However, FHFA may 

mandate additional alignment efforts in the future, and the impact of any such efforts on our business or our MBS is 

uncertain. See “Mortgage Securitizations—Uniform Mortgage-Backed Securities, or UMBS—UMBS and Structured 

Securities” for a discussion of a new upfront fee for commingled securities that we announced in January 2023 and a 

statement issued by the Director of FHFA relating to this fee and FHFA’s review of the enterprise regulatory capital 

framework.

Industry and General Matters

COVID-19 Response

In response to the COVID-19 pandemic, a number of legislative and executive actions were taken by the federal 

government and state and local governments to assist affected borrowers and renters and to slow the spread of the 

pandemic, including actions that applied to the loans we guarantee. While most of these actions are no longer in effect,

the COVID-19 national emergency remains in place. In January 2023, the Administration announced it intends to extend 

the COVID-19 national emergency to May 11, 2023, and end the emergency on that date. We continue to offer 

forbearance relief and other home retention solutions to borrowers affected by the COVID-19 pandemic, as described in 

“MD&A—Single-Family Business—Single-Family Problem Loan Management.”

Risk Retention

Under a rule implementing the Dodd-Frank Act’s credit risk retention requirement, sponsors of securitization 

transactions are generally required to retain a 5% economic interest in the credit risk of the securitized assets. The rule 

offers several compliance options, one of which is to have either Fannie Mae or Freddie Mac (so long as they remain in 

conservatorship or receivership with capital support from the United States) securitize and fully guarantee the assets, in 

which case no further retention of credit risk is required. A potential exit from conservatorship, or changes we make in 

our business upon any potential exit from conservatorship to comply with the rule, could reduce our market share or 

adversely impact our business. Securities backed solely by mortgage loans meeting the definition of a “qualified 

residential mortgage” are exempt from the risk retention requirements of the rule. The rule currently defines “qualified 

residential mortgage” to have the same meaning as the term “qualified mortgage” as defined by the CFPB in connection 

with its ability-to-repay rule discussed below. 

Ability-to-Repay Rule and the Qualified Mortgage Patch

The Dodd-Frank Act amended the Truth in Lending Act to require creditors to determine that borrowers have a 

“reasonable ability to repay” most mortgage loans prior to making such loans. In 2013, the CFPB issued a rule that, 

among other things, requires creditors to determine a borrower’s “ability to repay” a mortgage loan. If a creditor fails to 

comply, a borrower may be able to offset a portion of the amount owed in a foreclosure proceeding or recoup monetary 

damages. The rule offers several options for complying with the ability-to-repay requirement, including making loans that 

meet certain terms and characteristics (referred to as “qualified mortgages”), which may provide creditors and their 

assignees with special protection from liability. A loan will be a standard qualified mortgage under the rule if, among 

other things, (1) the points and fees paid in connection with the loan do not exceed 3% of the total loan amount, (2) the 

loan term does not exceed 30 years, (3) the loan is fully amortizing with no negative amortization, interest-only or 

balloon features and (4) the debt-to-income (“DTI”) ratio on the loan does not exceed 43% at origination and is 

underwritten according to Appendix Q in the rule. The CFPB also created the qualified mortgage “patch,” pursuant to 

which a special class of conventional mortgage loans are considered qualified mortgages if they (1) meet the points and 

fees, term and amortization requirements of qualified mortgages generally and (2) are eligible for sale to Fannie Mae or 

Freddie Mac. In 2013, FHFA directed Fannie Mae and Freddie Mac to limit our acquisition of single-family loans to those 

loans that meet the points and fees, term and amortization requirements for qualified mortgages, or to loans that are 

exempt from the ability-to-repay rule, such as loans made to investors.

In December 2020, the CFPB published a rule amendment that eliminated the qualified mortgage patch and replaced 

the 43% DTI ratio limit and certain other requirements for a standard qualified mortgage with a pricing and underwriting 

framework. The final qualified mortgage rule went into effect in March 2021, with lenders initially required to comply 

beginning in July 2021. In April 2021, the CFPB published a final rule extending the mandatory compliance date to 

October 2022 and thereby also extending the qualified mortgage patch. The qualified mortgage patch was allowed to 

expire on October 1, 2022. We do not expect the final qualified mortgage rule to impact our business significantly. See 

“Risk Factors—GSE and Conservatorship Risk” and “Risk Factors—Legal and Regulatory Risk” for more information on 

risks presented by regulatory changes in the financial services industry.

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 26
Single-Counterparty Credit Limit

The Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) has adopted rules to restrict the 

counterparty credit exposures of U.S.-based global systemically important banks (“U.S. G-SIBs”) and certain large bank 

holding companies, large savings and loan holding companies, and U.S. intermediate holding companies that are 

subsidiaries of foreign banking organizations. These rules generally limit the exposure of a covered organization to any 

counterparty and its affiliates to no more than 25% of the covered organization’s tier 1 capital. U.S. G-SIBs must adhere 

to a stricter limit of 15% of their tier 1 capital for exposures to any other U.S. G-SIB or non-bank entity supervised by the 

Federal Reserve. 

While Fannie Mae is in conservatorship, a covered organization’s exposures involving claims on or directly and fully 

guaranteed by Fannie Mae are exempt from these restrictions and Fannie Mae MBS and debt can be used as collateral 

to reduce a banking organization’s counterparty exposure. We do not know what impact, if any, these rules may have on 

our lenders’ or counterparties’ business practices, or whether and to what extent this rule may adversely affect demand 

for or the liquidity of securities we issue. The Federal Reserve Board has indicated that a change in the conservatorship 

status of the GSEs could affect aspects of the Federal Reserve Board’s regulatory framework, and that it “will continue 

to monitor and take into consideration any future changes to the conservatorship status of the GSEs, including the 

extent and type of support received by the GSEs.”

Transition from LIBOR and Alternative Reference Rates

In 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates the London Inter-bank Offered Rate 

(“LIBOR”), announced its intention to stop persuading or compelling the group of major banks that sustains LIBOR to 

submit rate quotations. ICE Benchmark Administration (“IBA”), the administrator of LIBOR, ceased publication of oneweek and two-month U.S. dollar LIBOR after December 2021. In November 2022, the FCA issued a consultation paper 

stating that overnight, one-month, three-month, six-month and twelve-month LIBOR will continue to be published in their 

representative, bank panel quotation-based form until June 30, 2023. In the same consultation paper, the FCA proposed 

to require publication of the one-month, three-month and six-month LIBOR on a non-representative, synthetic basis 

(that is, calculated based on the use of a term rate using the Secured Overnight Financing Rate) until the end of 

September 2024.

We are exposed to LIBOR-based financial instruments, primarily relating to our acquisitions of loans and securities, 

sales of securities, and derivative transactions, that have been entered into previously and mature after June 2023. 

However, we no longer acquire LIBOR loans or securities, issue LIBOR securities or enter into LIBOR derivatives 

transactions that increase our LIBOR risk exposure, so our exposure to LIBOR continues to diminish.

We have been actively seeking to facilitate an orderly transition from LIBOR to emerging alternative rates. We 

established an internal office focused on LIBOR transition issues that is overseen by our LIBOR Enterprise Steering 

Council, which includes members of senior management. We also coordinate with FHFA on our LIBOR transition efforts. 

In addition to the work we are doing on an enterprise level to facilitate an orderly transition from LIBOR, we also are a 

voting member of the Alternative Reference Rates Committee (the “ARRC”) and participate in its working groups. The 

ARRC is a group of private-market participants convened by the Federal Reserve Board and the Federal Reserve Bank 

of New York to identify a set of alternative U.S. dollar reference interest rates and an adoption plan for those alternative 

rates. Banking and financial regulators, including FHFA, also participate in the ARRC as ex-officio members. In 2017, 

the ARRC recommended an alternative reference rate, referred to as the Secured Overnight Financing Rate (“SOFR”). 

The Federal Reserve Bank of New York began publishing SOFR in 2018. 

In support of the ARRC’s efforts to develop SOFR as a key market index, we issued the market’s first SOFR securities 

in 2018. We also have taken numerous steps to transition our financial instruments away from LIBOR; including using 

SOFR-indexed adjustable-rate mortgage products for new originations for our single-family business and our multifamily 

business, ceasing our purchase of any LIBOR adjustable-rate mortgage loans, issuing SOFR-indexed REMIC 

securities, and ceasing the issuance of new LIBOR REMIC securities. We supported the initial development of SOFRindexed interest rate swaps and futures transactions and continue to execute these SOFR trades on a frequent basis. 

We have not issued LIBOR debt securities since 2017, and we no longer enter into new LIBOR derivatives trades that 

increase our LIBOR risk exposure. 

Our LIBOR-indexed derivative contracts historically represented the largest category (measured by notional amount) of 

our LIBOR exposure. During 2021, we terminated the vast majority of our LIBOR derivatives transactions (and, where 

appropriate, entered into new SOFR derivatives trades). While we have a small amount of remaining legacy LIBOR 

derivatives trades that will mature after June 2023, the related contracts provide that LIBOR will be replaced with SOFR 

once LIBOR ceases to be published. 

Given that our derivatives LIBOR exposure has been significantly decreased and the transition to SOFR has been 

addressed, our three principal sources of continued exposure to LIBOR arise from (1) single-family and multifamily 

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 27
LIBOR-based adjustable-rate mortgage loans that we have securitized or own; (2) LIBOR-indexed REMIC structured 

securities that we have issued; and (3) LIBOR-indexed credit risk transfer securities. Each of those products allow us to 

select a replacement index if LIBOR ceases to be published or, for products issued in 2020 or after, uses fallback 

language based predominantly on the recommendations of the ARRC. 

In December 2022, the Federal Reserve Board published Regulation ZZ, a final regulation that provides default rules for 

certain contracts that use LIBOR as the benchmark reference interest rate index. Regulation ZZ implements the 

“Adjustable Interest Rate (LIBOR) Act” (the “LIBOR Act”), which was enacted in March 2022 and establishes a clear and 

uniform process for replacing LIBOR as the benchmark reference interest rate index in existing contracts that do not 

contain a clearly defined or practicable replacement benchmark for when LIBOR is discontinued. Under Regulation ZZ, 

references to the most common tenors of LIBOR in these contracts will be replaced as a matter of law, without the need 

to be amended, to instead reference the benchmark interest rate indices identified by the Federal Reserve Board in the 

regulation. 

The replacement benchmark interest rate indices identified by the Federal Reserve Board in Regulation ZZ are based 

on SOFR and include appropriate “tenor spread adjustments” to reflect historical spreads between LIBOR and SOFR. In 

December 2022, FHFA, as our conservator, directed us to adopt the Federal Reserve-selected benchmark replacement 

indices, including applicable tenor spread adjustments, in the case of all legacy contracts and financial instruments in 

which we will exercise discretion in selecting a LIBOR replacement index. On December 22, 2022, we announced the 

following replacement indices for the legacy LIBOR loans and securities for which we are responsible for selecting the 

replacement index, which are the benchmark replacements provided in Regulation ZZ and are based on SOFR:

• Single-family adjustable-rate mortgages (“ARMs”) and related MBS: Relevant tenor of term SOFR published by 

CME Group Benchmark Administration, Ltd. plus the applicable tenor spread adjustment specified in 

Regulation ZZ; and

• Multifamily ARMs and related MBS, credit risk transfer securities, and collateralized mortgage obligations: 30-

day average SOFR plus the applicable tenor spread adjustment specified in Regulation ZZ.

Our transition to these replacement indices will occur the day after June 30, 2023, the last date on which all remaining 

tenors of USD LIBOR will be published. 

The LIBOR Act and Regulation ZZ establish a safe harbor for market participants that act in accordance with such 

legislation and regulation, shielding them from litigation for selecting and implementing the Federal Reserve-selected 

replacement indices and related conforming changes. As a result, the LIBOR Act and Regulation ZZ reduce the risks to 

us associated with the approaching cessation of LIBOR. See “Risk Factors—Market and Industry Risk” for a discussion 

of the risks to our results of operations, financial condition, liquidity and net worth posed by the discontinuance of

LIBOR.

SEC Proposed Rule Prohibiting Conflicts of Interest in Certain Securitizations

In January 2023, the SEC issued a proposed rule prohibiting conflicts of interest in certain securitization transactions. 

The proposed rule would restrict securitization participants from engaging in certain transactions with respect to an 

asset-backed security for a period ending one year after the initial sale of that security and also specifies certain 

prohibited transaction types. The proposed rule provides an exception for our asset-backed securities so long as those 

securities are fully guaranteed by us and we are operating under the conservatorship of FHFA with capital support from 

the United States. 

As a result, if adopted as proposed, the rule could affect or prohibit our ability to enter into credit risk transfer 

transactions following our exit from conservatorship. Further, while the SEC indicated in the proposing release its intent 

to exempt us from the rule while we are in conservatorship, questions remain regarding the proposed rule and we are 

still assessing the potential impact of the rule on our credit risk transfer transactions during conservatorship. In addition, 

there can be no assurance that the final rule will not reflect important modifications, including with respect to the 

exception for our asset-backed securities prior to our exit from conservatorship.

Human Capital

Overview

Our employees are key to ensuring our long-term success and meeting our strategic objectives. We had approximately 

8,000 employees as of December 31, 2022, our final pay-period end date in 2022. Because we design, build and 

maintain complex systems to support our specialized role in the secondary mortgage market, 41% of our employees 

work in technology-related jobs. A tight labor market and remote work opportunities increased the competition we faced 

from other companies in hiring new employees, as well as in retaining our employees. Competition was especially high 

Business | Legislation and Regulation

Fannie Mae 2022 Form 10-K 28
for employees with technology skills. While voluntary attrition steadily declined to a near pre-pandemic level throughout 

2022, we remain focused on attracting, engaging, retaining and developing a highly skilled workforce in this competitive 

market. During 2022, an average of 8% of total positions in the company and 10% of our technology-related positions 

were vacant. Our vacancy rate at any given point in time can be affected by factors such as hiring priorities, labor 

market conditions, and headcount growth rates. We discuss how restrictions on our compensation and uncertainty with 

respect to our future can affect our ability to retain and recruit employees in “Risk Factors—GSE and Conservatorship 

Risk.” Despite conservatorship, an uncertain future, and limitations on the compensation we are able to offer, we believe 

many employees and potential recruits are attracted by our mission and the compelling nature of our work. 

See “Directors, Executive Officers and Corporate Governance—Corporate Governance—Human Capital Management 

Oversight” for information on oversight of human capital management by our Board of Directors’ Compensation and 

Human Capital Committee.

Employee Engagement

We are committed to maintaining an engaged workforce as we believe engagement is critical to the ongoing 

achievement of the company’s and the conservator’s goals. We monitor employee engagement through regular 

surveys. In 2022, the vast majority of our employees agreed with statements such as that they would recommend 

Fannie Mae as a great place to work, which we consider to be strong indicators of their engagement. We believe our 

ability to recruit and retain employees and keep them engaged is influenced by the opportunity to do interesting work 

that supports our mission. We also offer employee benefits to encourage involvement in socially positive efforts, 

including those that echo our mission. Specifically, we offer employees up to $5,000 per year in matching charitable gifts 

(subject to overall available funding) and 10 hours of paid leave each month to engage in volunteer activities. We have 

also established a relief fund to which our employees can make charitable donations to assist employees who have 

suffered losses as a result of a natural disaster or other catastrophic event. In January 2023, we introduced new 

benefits to support our employees’ mental, physical and financial well-being, including expanded paid parental, 

caretaker and vacation leave and a new leave for employees experiencing a home catastrophe.

Employee Development

We invest in our employees’ development to support the success of the company as well as our employees. We seek to 

provide training and opportunities that enable employees to develop digital, leadership and other critical skills we need 

to achieve our strategic objectives and fulfill our mission. Through Fannie Mae University, our platform for employee 

development, our employees can build knowledge and skills with the help of online courses, videos and other 

resources. We have worked on instilling lean management techniques, practices and behaviors throughout our 

workforce and Agile development principles for employees engaged in product development. We also emphasize to our 

employees their responsibility for and role in managing risk through our risk-assessment and monitoring activities, 

training and corporate messaging. 

Safety and Resiliency

In 2022, we continued to prioritize the safety and resiliency of our workforce. Recognizing that our employees are 

balancing a number of competing obligations, we seek to provide an environment that supports our business needs 

while helping employees better meet their personal obligations. We embrace hybrid ways of working and operate in a 

hybrid work model, with office space where teams can come together and flexibility regarding when employees will be in 

the office. A significant majority of our employees are primarily working remotely and we currently expect they will 

continue to work primarily remotely for the foreseeable future. To date, our business resiliency plans and technology 

systems have effectively supported this remote work arrangement. To support our employees in their remote work 

environment, we have offered office supply stipends. We have also taken a number of steps to support employee 

resiliency, including extending our practice of half-day flexible Fridays through 2023. 

Diversity and Inclusion

We seek to foster an environment in which all employees are treated with dignity and respect, have the opportunity to 

contribute to meaningful work and grow their careers in an inclusive environment free from discrimination, harassment, 

and retaliation. We believe this commitment helps us attract and retain a skilled, diverse workforce at all levels of our 

organization. As of December 31, 2022, racial or ethnic minorities constituted 58% of our overall workforce and 28% of 

our officer-level employees, and women constituted 44% of our overall workforce and 39% of our officer-level 

employees.

In 2022, to ensure a strong leadership focus on diversity and inclusion, we appointed a Chief Diversity & Inclusion 

Officer to the management committee reporting to our President. The Chief Diversity & Inclusion Officer leads our Office 

of Minority and Women Inclusion, which is responsible for driving the development of our diversity and inclusion 

Business | Human Capital

Fannie Mae 2022 Form 10-K 29
strategic plan in partnership with leaders across the company, and reporting on our progress against the plan. We also 

sponsor programs and activities to cultivate a diverse and inclusive work environment by focusing on inclusive 

leadership principles, talent development, enterprise accessibility, team and group dynamics, and a consistent 

communications strategy that reinforces the practice of driving inclusion to achieve innovative solutions. We supported 

ten voluntary, grassroots employee resource groups in 2022 that are open to all employees, support diversity and 

inclusion, and provide a forum for members to come together for professional growth and development, cultural 

awareness, education, community service, and networking across the organization. Our officer-led Diversity Advisory 

Council supports the integration of our diversity and inclusion strategy throughout the company.

Our commitment to diversity extends to our Board of Directors. Over half of Fannie Mae’s Board members are women 

and/or racial or ethnic minorities. See “Directors, Executive Officers and Corporate Governance—Corporate 

Governance—Composition of Board of Directors” for additional information on the diversity of our Board of Directors. 

Where You Can Find Additional Information

We make available free of charge through our website our annual reports on Form 10-K, quarterly reports on 

Form 10-Q, current reports on Form 8-K and all other SEC reports and amendments to those reports as soon as

reasonably practicable after we electronically file the material with, or furnish it to, the SEC. Our website address is 

www.fanniemae.com. Materials that we file with the SEC are also available from the SEC’s website, www.sec.gov. You 

may also request copies of any filing from us, at no cost, by calling the Fannie Mae Investor Relations & Marketing 

Helpline at 1-800-2FANNIE (1-800-232-6643). 

References in this report to our website or to the SEC’s website do not incorporate information appearing on those 

websites unless we explicitly state that we are incorporating the information.

Forward-Looking Statements

This report includes statements that constitute forward-looking statements within the meaning of Section 21E of the 

Exchange Act. In addition, we and our senior management may from time to time make forward-looking statements in 

our other filings with the SEC, our other publicly available written statements and orally to analysts, investors, the news 

media and others. Forward-looking statements often include words such as “expect,” “anticipate,” “intend,” “plan,” 

“believe,” “seek,” “estimate,” “forecast,” “project,” “would,” “should,” “could,” “likely,” “may,” “will” or similar words. 

Examples of forward-looking statements in this report include, among others, statements relating to our expectations 

regarding the following matters: 

• our future financial performance and the factors that will affect such performance;

• our future aggregate liquidation preference and net worth;

• economic, mortgage market and housing market conditions (including expectations regarding economic 

recession, home price declines, unemployment rates, refinance volumes and interest rates), the factors that will 

affect those conditions, and the impact of those conditions on our business and financial results;

• our business plans and strategies, and their impact;

• climate change and its impact;

• the impact of changes in our guaranty fee pricing;

• the impact of future changes to our credit score model requirements and our credit report requirements;

• the effects of our credit risk transfer transactions, as well as the factors that will affect our engagement in future 

credit risk transfer transactions;

• volatility in our financial results and the impact of hedge accounting on such volatility; 

• the size and composition of our retained mortgage portfolio, and the factors that will affect them;

• the impact of the adoption of new accounting guidance;

• the impact of the transition from LIBOR to SOFR on our measurement of interest-rate risk and financial results;

• the impact of legislation and regulation on our business or financial results;

• our payments to HUD and Treasury funds under the GSE Act;

• the risks to our business;

Business | Human Capital

Fannie Mae 2022 Form 10-K 30
• the future credit performance of the loans in our guaranty book of business (including future loan delinquencies 

and foreclosures) and the factors that will affect such performance; 

• our expectations relating to cyber attacks and other information security threats;

• the factors that will affect the competition we face;

• how we intend to meet our debt obligations and the factors that will affect our access to debt funding; and 

• our expectations relating to legal and regulatory actions and proceedings.

Forward-looking statements reflect our management’s current expectations, forecasts or predictions of future conditions, 

events or results based on various assumptions and management’s estimates of trends and economic conditions in the 

markets in which we are active and that otherwise impact our business plans. Forward-looking statements are not 

guarantees of future performance. By their nature, forward-looking statements are subject to significant risks and 

uncertainties and changes in circumstances. Our actual results and financial condition may differ, possibly materially, 

from the anticipated results and financial condition indicated in these forward-looking statements. 

There are a number of factors that could cause actual conditions, events or results to differ materially from those 

described in our forward-looking statements, including, among others, the following: 

• uncertainty regarding our future, our exit from conservatorship and our ability to raise or earn the capital 

needed to meet our capital requirements; 

• significant challenges we face in retaining and hiring qualified executives and other employees; 

• the prevalence and severity of future COVID-19 outbreaks; the actions taken to contain the virus, or treat its 

impact, including government actions to mitigate the economic impact of the pandemic; borrower and renter 

behavior in response to the pandemic and its economic impact; the short-term and long-term impact of 

COVID-19 infections on the U.S. workforce; and future economic and operating conditions, including the 

economic impact of outbreaks or increases in the number or severity of COVID-19 cases;

• the impact of the senior preferred stock purchase agreement and the enterprise regulatory capital framework, 

as well as future legislative and regulatory requirements or changes, governmental initiatives, or executive 

orders affecting us, such as the enactment of housing finance reform legislation, including changes that limit 

our business activities or our footprint or impose new mandates on us; 

• actions by FHFA, Treasury, HUD, the CFPB, the SEC or other regulators, Congress, the Executive Branch, or 

state or local governments that affect our business;

• a default by the United States government on its obligations;

• changes in the structure and regulation of the financial services industry; 

• the potential impact of a change in the corporate income tax rate, which we expect would affect our net income 

in the quarter of enactment as a result of a change in our measurement of our deferred tax assets and our net 

income in subsequent quarters as a result of the change in our effective federal income tax rate;

• the timing and level of, as well as regional variation in, home price changes; 

• future interest rates and credit spreads; 

• developments that may be difficult to predict, including: market conditions that result in changes in our

amortization income from our guaranty book of business or changes in net interest income from our portfolios, 

fluctuations in the estimated fair value of our derivatives and other financial instruments that we mark to market 

through our earnings; and developments that affect our loss reserves, such as changes in interest rates, home 

prices or accounting standards, or events such as natural or other disasters, the emergence of widespread 

health emergencies or pandemics, or other disruptive or catastrophic events;

• uncertainties relating to the discontinuance of LIBOR, or other market changes that could impact the loans we 

own or guarantee or our MBS; 

• disruptions or instability in the housing and credit markets;

• the size and our share of the U.S. mortgage market and the factors that affect them, including population 

growth and household formation;

• growth, deterioration and the overall health and stability of the U.S. economy, including U.S. gross domestic 

product (“GDP”), unemployment rates, personal income, inflation and other indicators thereof;

• changes in fiscal or monetary policy of the U.S. or other countries, and the impact of such changes on domestic 

and international financial markets; 

Business | Forward-Looking Statements

Fannie Mae 2022 Form 10-K 31
• our and our competitors’ future guaranty fee pricing and the impact of that pricing on our competitive 

environment and guaranty fee revenues; 

• the volume of mortgage originations;

• the size, composition, quality and performance of our guaranty book of business and retained mortgage 

portfolio; 

• the competitive environment in which we operate, including the impact of legislative, regulatory or other 

developments on levels of competition in our industry and other factors affecting our market share; 

• how long loans in our guaranty book of business remain outstanding; 

• the effectiveness of our business resiliency plans and systems;

• changes in the demand for Fannie Mae MBS, in general or from one or more major groups of investors;

• our conservatorship, including any changes to or termination (by receivership or otherwise) of the 

conservatorship and its effect on our business; 

• the investment by Treasury, including the impact of past or potential future changes to the terms of the senior 

preferred stock purchase agreement, and their effect on our business, including restrictions imposed on us by 

the terms of the senior preferred stock purchase agreement, the senior preferred stock, and the warrant, as 

well as the extent that these or other restrictions on our business and activities are applied to us through other 

mechanisms even if we cease to be subject to these agreements and instruments; 

• adverse effects from activities we undertake to support the mortgage market and help borrowers, renters, 

lenders and servicers; 

• actions we may be required to take by FHFA, in its role as our conservator or as our regulator, such as changes 

in the type of business we do or actions relating to UMBS or our resecuritization of Freddie Mac-issued 

securities; 

• limitations on our business imposed by FHFA, in its role as our conservator or as our regulator; 

• our current and future objectives and activities in support of those objectives, including actions we may take to 

reach additional underserved borrowers or address barriers to sustainable housing opportunities and advance 

equity in housing finance; 

• the possibility that changes in leadership at FHFA or the Administration may result in changes that affect our 

company or our business;

• our reliance on CSS and the common securitization platform CSS operates for a majority of our single-family 

securitization activities; provisions in the CSS limited liability company agreement that permit FHFA to add 

members to the CSS Board of Managers, which may limit the ability of Fannie Mae and Freddie Mac to control 

decisions of the Board; and changes FHFA may require in our relationship with or in our support of CSS;

• a decrease in our credit ratings; 

• limitations on our ability to access the debt capital markets; 

• constraints on our entry into new credit risk transfer transactions;

• significant changes in forbearance, modification and foreclosure activity; 

• the volume and pace of any future nonperforming and reperforming loan sales and their impact on our results 

and serious delinquency rates; 

• changes in borrower behavior; 

• actions we may take to mitigate losses, and the effectiveness of our loss mitigation strategies, management of 

our real estate owned (“REO”) inventory and pursuit of contractual remedies; 

• defaults by one or more institutional counterparties; 

• resolution or settlement agreements we may enter into with our counterparties; 

• our need to rely on third parties to fully achieve some of our corporate objectives; 

• our reliance on mortgage servicers; 

• changes in GAAP, guidance by the Financial Accounting Standards Board (“FASB”) and changes to our 

accounting policies; 

• changes in the fair value of our assets and liabilities; 

Business | Forward-Looking Statements

Fannie Mae 2022 Form 10-K 32
• the stability and adequacy of the systems and infrastructure that impact our operations, including ours and 

those of CSS, our other counterparties and other third parties; 

• the impact of interdependence between the single-family mortgage securitization programs of Fannie Mae and 

Freddie Mac in connection with UMBS;

• operational control weaknesses; 

• our reliance on models and future updates we make to our models, including the data and assumptions used 

by these models; 

• the effectiveness of our risk management processes and related controls, including those relating to climate 

risk and model risk;

• domestic and global political risks and uncertainties, including the impact of the Russian war in Ukraine and 

escalating tensions between China and Taiwan; 

• natural disasters, environmental disasters, terrorist attacks, widespread health emergencies or pandemics, 

infrastructure failures, or other disruptive or catastrophic events; 

• severe weather events, fires, floods or other climate change events or impacts, including those for which we 

may be uninsured or under-insured or that may affect our counterparties, and other risks resulting from climate 

change and efforts to address climate change and related risks;

• cyber attacks or other information security breaches or threats; and 

• the other factors described in “Risk Factors.” 

Readers are cautioned not to unduly rely on the forward-looking statements we make and to place these forwardlooking statements into proper context by carefully considering the factors discussed in “Risk Factors” in this report. 

These forward-looking statements are representative only as of the date they are made, and we undertake no obligation 

to update any forward-looking statement as a result of new information, future events or otherwise, except as required 

under the federal securities laws. 

Item 1A. Risk Factors

Risk Factors Summary

The summary of risks below provides an overview of the principal risks we are exposed to in the normal course of our 

business activities. This summary does not contain all of the information that may be important to you, and you should 

read the more detailed discussion of risks that follows this summary.

GSE and Conservatorship Risk

• The future of our company is uncertain.

• FHFA, as our conservator, controls our business activities. We may be required to take actions that are difficult 

to implement, reduce our profitability or expose us to additional risk.

• Our business activities are significantly affected by the senior preferred stock purchase agreement.

• Our regulator is authorized or required to place us into receivership under specified conditions, which would 

result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding 

against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common 

shareholders.

• Our business and results of operations may be materially adversely affected if we are unable to retain and 

recruit well-qualified executives and other employees. The conservatorship, the uncertainty of our future, and 

limitations on our executive and employee compensation put us at a disadvantage compared to many other 

companies with which we compete for talent.

• Pursuing our housing goals, duty to serve obligations, and Equitable Housing Finance Plan may materially 

adversely affect our business, results of operations and financial condition.

• The conservatorship and agreements with Treasury adversely affect our common and preferred shareholders.

• The liquidity and market value of our MBS could be adversely affected by negative developments in the UMBS 

market or from the loss of support from certain regulatory bodies for UMBS.

• Our issuance of UMBS and structured securities backed by Freddie Mac-issued securities exposes us to 

significant operational and counterparty credit risk.

Business | Forward-Looking Statements

Fannie Mae 2022 Form 10-K 33
• Our reliance on CSS and the common securitization platform exposes us to significant third-party risk.

• We are limited in our ability to diversify our business and undertake activities that management believes would 

benefit our business.

• An active trading market in our equity securities may cease to exist, which would adversely affect the market 

price and liquidity of our common and preferred stock.

Credit Risk

• We may incur significant provisions for credit losses and write-offs on the loans in our book of business. 

• The credit enhancements we use provide only limited protection against potential future credit losses. These 

transactions also increase our expenses.

• One or more of our institutional counterparties may fail to fulfill their contractual obligations to us, resulting in 

financial losses, business disruption and decreased ability to manage risk. 

• Our financial condition or results of operations may be adversely affected if mortgage servicers fail to perform 

their obligations to us.

• We may incur losses as a result of claims under our mortgage insurance policies not being paid in full or at all. 

• Mortgage fraud could result in significant financial losses and harm to our reputation. 

• We may suffer losses if borrowers suffer property damage as a result of a hazard for which the borrower has no 

or insufficient insurance.

• The occurrence of major natural or other disasters in the United States or its territories and the impact of 

climate change could materially increase our provision for credit losses and our write-offs. 

Operational Risk

• A failure in our operational systems or infrastructure, or those of third parties, could materially adversely affect 

our business, impair our liquidity, cause financial losses and harm our reputation.

• A breach of the security of our systems or facilities, or those of third parties with which we do business, 

including as a result of cyber attacks, could damage or disrupt our business or result in the disclosure or 

misuse of confidential or other information (including personal information), which could damage our reputation, 

result in regulatory sanctions and/or increase our costs and cause losses that have a material adverse impact 

on our business, financial results and financial condition.

• Our concurrent implementation of multiple new initiatives may increase our operational risk and result in one or 

more material weaknesses in our internal control over financial reporting.

• Material weaknesses in our internal control over financial reporting could result in errors in our reported results 

or disclosures that are not complete or accurate.

• Failure of our models to produce reliable results may adversely affect our ability to manage risk and make 

effective business decisions, as well as create regulatory and reputational risk.

Liquidity and Funding Risk

• Limitations on our ability to access the debt capital markets could have a material adverse effect on our ability 

to fund our operations, and our liquidity contingency plans may be difficult or impossible to execute during a 

sustained liquidity crisis.

• A decrease in the credit ratings on our senior unsecured debt could have an adverse effect on our ability to 

issue debt on reasonable terms, particularly if such a decrease were not based on a similar action on the credit 

ratings of the U.S. government. A decrease in our credit ratings also could require that we post additional 

collateral for our derivatives contracts.

Market and Industry Risk

• Changes in interest rates or our loss of the ability to manage interest-rate risk successfully could adversely 

affect our financial results and condition, and increase our interest-rate risk.

• Changes in spreads could materially impact our results of operations, net worth and the fair value of our net 

assets.

Risk Factors | Risk Factors Summary

Fannie Mae 2022 Form 10-K 34
• Uncertainty relating to the discontinuance of LIBOR may adversely affect our results of operations, financial 

condition, liquidity and net worth.

• Our business and financial results are affected by general economic conditions, including home prices and 

employment trends, and changes in economic conditions or financial markets may materially adversely affect 

our business and financial condition.

• Actions by the Federal Reserve can materially affect our business and financial condition, including our 

business volumes and demand for our mortgage-backed securities. 

Legal and Regulatory Risk

• Regulatory changes in the financial services industry may negatively impact our business.

• Legislative, regulatory or judicial actions could negatively impact our business, results of operations, financial 

condition or net worth.

• Our business and financial results could be materially adversely affected by legal or regulatory proceedings.

General Risk

• The COVID-19 pandemic may continue to adversely affect our business and financial results.

• Changes in accounting standards and policies can be difficult to predict and can materially impact how we 

record and report our financial results.

• In many cases, our accounting policies and methods, which are fundamental to how we report our financial 

condition and results of operations, require management to make judgments and estimates about matters that 

are inherently uncertain. Management also relies on models in making these estimates.

Risk Factors

Refer to “MD&A—Key Market Economic Indicators,” “MD&A—Risk Management,” “MD&A—Single-Family Business” 

and “MD&A—Multifamily Business” for more detailed descriptions of the primary risks to our business and how we seek 

to manage those risks.

The risks we face could materially adversely affect our business, results of operations, financial condition, liquidity and 

net worth, and could cause our actual results to differ materially from our past results or the results contemplated by any 

forward-looking statements we make. We believe the risks described below and in the other sections of this report 

referenced above are the most significant we face; however, these are not the only risks we face. We face additional 

risks and uncertainties not currently known to us or that we currently believe are immaterial.

GSE and Conservatorship Risk

The future of our company is uncertain.

The company faces an uncertain future, including how long we will continue to exist in our current form, the extent of our 

role in the market, the level of government support of our business, how long we will be in conservatorship, what form 

we will have, what ownership interest, if any, our current common and preferred stockholders will hold in us after the 

conservatorship is terminated, and whether we will continue to exist following conservatorship. The conservatorship has 

been in place since 2008, is indefinite in duration, and the timing, conditions and likelihood of our emerging from 

conservatorship are uncertain. Our conservatorship could terminate through a receivership. Termination of the 

conservatorship, other than in connection with a receivership, requires Treasury’s consent under the senior preferred 

stock purchase agreement; unless (1) all currently pending significant litigation relating to the conservatorship and the 

August 2012 amendment to the senior preferred stock purchase agreement has been resolved, and (2) for two or more 

consecutive quarters, our common equity tier 1 capital, together with any other stockholder equity that we may issue in 

a public offering, equals or exceeds 3% of our adjusted total assets (as defined in the enterprise regulatory capital 

framework). See “Legal Proceedings” and “Note 16, Commitments and Contingencies” for a discussion of the pending 

significant litigation relating to the amendment of the senior preferred stock purchase agreement and/or 

conservatorship.

Our current capital levels are significantly below the levels required under the enterprise regulatory capital framework. 

Our efforts to build capital to meet our requirements can be significantly affected by the amount and type of our new 

loan acquisitions, which can drive increases in our required capital that offset or even outpace increases in our available 

capital. We believe that the returns on our current book of business are not sufficient to attract private investors in our 

equity securities, which we believe would limit our options for exiting conservatorship. Increasing our returns may 

require substantial increases in our pricing or changes in other aspects of our business that could significantly affect our 

competitive position, our loan acquisition volumes, or the type of business we do, including the level of support we 

Risk Factors | Risk Factors Summary

Fannie Mae 2022 Form 10-K 35
provide to low- and moderate-income borrowers and renters. We currently have higher capital requirements than our 

primary competitor, Freddie Mac, driven primarily by the larger size of our guaranty book of business. These higher 

capital requirements could negatively affect our ability to compete with Freddie Mac for the acquisition of mortgage 

loans, reduce our market share, change the mix of loans we acquire, and negatively affect the profitability of the loans 

we acquire. For more information on the enterprise regulatory capital framework, see “Business—Legislation and 

Regulation—GSE-Focused Matters—Capital Requirements.” In addition, we believe that Treasury’s potential additional 

substantial equity ownership in our company, along with restrictions imposed on our business and future dividends and 

fees we will be required to pay to Treasury under the current terms of the senior preferred stock purchase agreement 

will reduce our attractiveness to potential equity investors.

The Administration and Congress may consider housing finance reforms or legislation that could result in significant 

changes in our structure and role in the future, including proposals that would result in Fannie Mae’s liquidation or 

dissolution. Congress may consider legislation, or federal agencies such as FHFA may consider regulations or 

administrative actions, to increase the competition we face, reduce our market share, further expand our obligations to 

provide funds to Treasury, further constrain our business operations, or subject us to other obligations that may 

adversely affect our business. We cannot predict the timing or content of housing finance reform legislation or other 

legislation, regulations or administrative actions that will impact our activities, nor can we predict the extent of such 

impact. 

FHFA, as our conservator, controls our business activities. We may be required to take actions that are difficult 

to implement, reduce our profitability or expose us to additional risk.

In conservatorship, our business is not managed with a strategy to maximize shareholder returns. Our directors owe 

their fiduciary duties of care and loyalty solely to the conservator. Thus, while we are in conservatorship, the Board has 

no fiduciary duties to the company or its stockholders. The Supreme Court’s opinion in Collins v. Yellen in June 2021

included an expansive interpretation of FHFA’s authority as conservator under the Housing and Economic Recovery Act 

of 2008, noting that “when the FHFA acts as a conservator, it may aim to rehabilitate the regulated entity in a way that, 

while not in the best interests of the regulated entity, is beneficial to the Agency and, by extension, the public it serves.” 

As conservator, FHFA can direct us to enter into contracts or enter into contracts on our behalf, and generally has the 

power to transfer or sell any of our assets or liabilities. 

Our strategic direction is subject to FHFA review and approval. FHFA also requires us to meet specified annual 

corporate performance objectives referred to as the conservatorship scorecard. We face a variety of different, and 

sometimes competing, business objectives and FHFA-mandated activities, such as the initiatives we have been 

pursuing under the conservatorship scorecards. FHFA has and may require us to undertake activities that are costly or 

difficult to implement. FHFA also has required us to make changes to our business that have adversely affected our 

financial results and could require us to make additional changes at any time. For example, FHFA may require us to 

undertake some activities that: reduce our profitability; expose us to additional credit, market, funding, operational, and 

other risks; or provide additional support for the mortgage market that serves our mission, but adversely affects our 

financial results.

FHFA can prevent us from engaging in business activities or transactions that we believe would benefit our business 

and financial results, and from time to time has done so. For example, because FHFA can direct us to make changes to 

our guaranty fee pricing and can prevent us from making changes to our guaranty fee pricing, our ability to address 

changing market conditions, pursue certain strategic objectives, or manage the mix of loans we acquire is constrained.

With FHFA’s broad powers as conservator, changes in leadership at FHFA, including those resulting from a change in 

the Administration, could result in significant changes to the goals FHFA establishes for us and could have a material 

impact on our business and financial results. The President has the power to remove the Director of FHFA for any 

reason. 

Our business activities are significantly affected by the senior preferred stock purchase agreement.

Even if we are released from conservatorship, we remain subject to the terms of the senior preferred stock purchase 

agreement with Treasury, under which we issued the senior preferred stock and warrant. The senior preferred stock 

purchase agreement can only be canceled or modified with the consent of Treasury. The agreement includes a number 

of covenants that significantly restrict our business activities. These restrictions under the senior preferred stock 

purchase agreement could adversely affect our ability to attract capital from the private sector in the future. For more 

information about the covenants in the senior preferred stock purchase agreement and their potential impact on our 

business, see “Business—Conservatorship and Treasury Agreements—Treasury Agreements—Covenants under 

Treasury Agreements.”

Risk Factors | GSE and Conservatorship Risk

Fannie Mae 2022 Form 10-K 36
Our regulator is authorized or required to place us into receivership under specified conditions, which would 

result in our liquidation. Amounts recovered by our receiver may not be sufficient to pay claims outstanding 

against us, repay the liquidation preference of our preferred stock or to provide any proceeds to common 

shareholders.

The Director of FHFA is required to place us into receivership if they make a written determination that our assets are 

less than our obligations or if we have not been paying our debts as they become due, in either case, for a period of 

60 days after the SEC filing deadline for any of our Form 10-Ks or Form 10-Qs. Although Treasury committed to 

providing us funds in accordance with the terms of the senior preferred stock purchase agreement, if we need funding 

from Treasury to avoid triggering FHFA’s obligation to place us into receivership, Treasury may not be able to provide 

sufficient funds to us within the required 60 days if it has exhausted its borrowing authority, if there is a government 

shutdown, or if the funding we need exceeds the amount available to us under the agreement. In addition, we could be 

put into receivership at the discretion of the Director of FHFA at any time for the reasons set forth in the GSE Act, 

including if our Board or shareholders consent to the appointment of a receiver or, if under the definitions in the GSE 

Act, we are undercapitalized with no reasonable prospect of becoming adequately capitalized or we are critically 

undercapitalized. Under the GSE Act, FHFA succeeded to all of the rights, titles, powers and privileges of our board of 

directors and shareholders. 

A receivership would terminate our conservatorship. In addition to the powers FHFA has as our conservator, the 

appointment of FHFA as our receiver would terminate all rights and claims that our shareholders and creditors may have 

against our assets or under our charter arising from their status as shareholders or creditors, except for their right to 

payment, resolution or other satisfaction of their claims as permitted under the GSE Act. If we are placed into 

receivership and do not or cannot fulfill our MBS guaranty obligations, there may be significant delays of any payments 

to our MBS holders, and the MBS holders could become unsecured creditors of ours with respect to claims made under 

our guaranty to the extent the mortgage collateral underlying the Fannie Mae MBS is insufficient to satisfy the claims of 

the MBS holders.

In the event of a liquidation of our assets, only after payment of secured claims, administrative expenses of the receiver 

and the immediately preceding conservator, other obligations of the company (other than obligations to shareholders), 

and the liquidation preference of the senior preferred stock, would any liquidation proceeds be available to repay the 

liquidation preference on any other series of preferred stock. Finally, only after the liquidation preference on all series of 

preferred stock is repaid would any liquidation proceeds be available for distribution to the holders of our common stock. 

In the event of such a liquidation, we can make no assurances that there would be sufficient proceeds to make any 

distribution to holders of our preferred stock or common stock, other than to Treasury as the holder of our senior 

preferred stock. As described in “Business—Conservatorship and Treasury Agreements—Treasury Agreements—

Senior Preferred Stock—Liquidation Preference,” under the current terms of the senior preferred stock, until the capital 

reserve end date, the liquidation preference of the senior preferred stock increases each quarter by the amount of the 

increase in our net worth, if any, during the immediately prior fiscal quarter. The aggregate liquidation preference of the 

senior preferred stock was $180.3 billion as of December 31, 2022 and we expect it will continue to increase as we 

increase our net worth, leaving less available for holders of our preferred stock or common stock in the event of a 

liquidation of our assets.

Our business and results of operations may be materially adversely affected if we are unable to retain and 

recruit well-qualified executives and other employees. The conservatorship, the uncertainty of our future, and 

limitations on our executive and employee compensation put us at a disadvantage compared to many other 

companies with which we compete for talent.

Our business is highly dependent on the talents and efforts of our executives and other employees. The 

conservatorship, the uncertainty of our future, and limitations on executive and employee compensation have had, and 

are likely to continue to have, an adverse effect on our ability to retain and recruit talent. Several of our senior 

executives departed in the first half of 2022, including our Chief Executive Officer, our Chief Operating Officer, and our 

Chief Risk Officer. Future attrition in key management positions and challenges in finding replacements could harm our 

ability to manage our business effectively, to successfully implement strategic initiatives, and ultimately could adversely 

affect our financial performance. 

Actions taken by Congress, FHFA and Treasury to date, or that may be taken by them or other government agencies in 

the future, have had, and may continue to have, an adverse effect on our retention and recruitment of executives and 

other employees. We are subject to significant restrictions on the amount and type of compensation we may pay while 

under conservatorship. For example:

• The Equity in Government Compensation Act of 2015 limits the compensation and benefits for our Chief 

Executive Officer to the same level in effect as of January 1, 2015 while we are in conservatorship or 

Risk Factors | GSE and Conservatorship Risk

Fannie Mae 2022 Form 10-K 37
receivership. Accordingly, annual direct compensation for our Chief Executive Officer is limited to base salary at 

an annual rate of $600,000.

• The Stop Trading on Congressional Knowledge Act of 2012, known as the STOCK Act, and related FHFA 

regulations prohibit our senior executives from receiving bonuses during conservatorship. 

• As our conservator, FHFA has the authority to approve the terms and amounts of our executive compensation. 

FHFA also has the authority to require changes to our executive compensation program, which could affect our 

ability to retain and recruit executive officers.

• FHFA has advised us that, given our conservatorship status, our executive compensation program is designed 

generally to provide for lower pay levels relative to large financial services firms that are not in conservatorship. 

FHFA has directed that we may target between the 25th and 50th percentiles of appropriate market data for 

new executive hires and compensation increase requests for existing executives, which limits the level of 

market-competitive compensation we are able to offer our executives if FHFA does not grant an exception. See 

“Executive Compensation—Compensation Discussion and Analysis—2022 Executive Compensation Program; 

Chief Executive Officer Compensation” for a description of FHFA’s primary objectives for our executive 

compensation program, as well as directives and guidance FHFA has provided relating to our executive 

compensation during conservatorship. 

• The terms of our senior preferred stock purchase agreement with Treasury contain specified restrictions 

relating to compensation, including a prohibition on selling or issuing equity securities without Treasury’s prior 

written consent except under limited circumstances, which effectively eliminates our ability to offer equity-based 

compensation to our employees.

As a result of the restrictions on our compensation, we have not been able to incent and reward excellent performance 

with compensation structures that provide upside potential to our executives, which places us at a disadvantage 

compared to many other companies in attracting and retaining executives. In addition, the restrictions on our 

compensation and the uncertainty of potential action by Congress or the Administration with respect to our future— 

including whether we will exit conservatorship, how long it may take before we exit conservatorship, or whether housing 

finance reform will result in a significant restructuring of the company or the company no longer continuing to exist—also 

may adversely affect our ability to retain and recruit executives and other employees.

The cap on our Chief Executive Officer compensation continues to make retention and succession planning for this 

position difficult, and it may make it difficult to attract qualified candidates for this critical role in the future.

We face competition from the financial services and technology industries, and from businesses outside of these 

industries, for qualified executives and other employees. A tight labor market and remote work opportunities increased 

the competition we faced from other companies in 2022 in hiring new executives and other employees, as well as in 

retaining our executives and employees. If future competition for executive and employee talent is strong and if we are 

unable to retain, promote and attract executives and other employees with the necessary skills and talent, we would 

face increased risks for operational failures. In the future, if there are several high-level departures at approximately the 

same time, our ability to conduct our business could be materially adversely affected, which could have a material 

adverse effect on our results of operations and financial condition.

Pursuing our housing goals, duty to serve obligations, and Equitable Housing Finance Plan may materially 

adversely affect our business, results of operations and financial condition.

We are required by the GSE Act to support the housing market in ways that could materially adversely affect our 

financial results and condition. For example, we are subject to housing goals that require a portion of the mortgage 

loans we acquire to meet specified standards relating to affordability or location. We also have a duty to serve very low-, 

low- and moderate-income families in three specified underserved markets: manufactured housing, affordable housing 

preservation and rural housing. In September 2021, FHFA instructed us to prepare and implement a three-year 

Equitable Housing Finance Plan. This plan, which we published in June 2022, is intended to advance equity in housing 

finance by working to remove barriers to affordable rental housing and homeownership experienced by members of 

underserved populations, particularly racial and ethnic groups with a significant homeownership rate disparity. We are 

taking actions to support the housing market, including to meet our housing goals, duty to serve obligations and 

Equitable Housing Finance Plan, that could materially adversely affect our profitability. For example, we are acquiring 

loans that offer lower expected returns or could materially increase our provision for credit losses and our write-offs. 

Also see “MD&A—Single-Family Business—Single-Family Business Metrics—Recent and Future Price Changes” for a 

discussion of price changes we recently implemented for certain first-time homebuyers, low-income borrowers, and 

underserved communities that could negatively impact the credit risk profile of our new single-family acquisitions and 

investor interest in our future single-family credit risk transfer transactions.

If we do not meet our housing goals or duty to serve requirements, and FHFA finds that the goals or requirements were 

feasible, we may become subject to a housing plan with additional requirements that could have a material adverse 

Risk Factors | GSE and Conservatorship Risk

Fannie Mae 2022 Form 10-K 38
effect on our results of operations and financial condition. The potential penalties for failure to comply with housing plan 

requirements include a cease-and-desist order and civil money penalties. See “Business—Legislation and Regulation—

GSE-Focused Matters” for more information on our housing goals and duty to serve underserved markets and 

“Business—Conservatorship and Treasury Agreements—Equitable Housing Finance Plan” for more information on our 

Equitable Housing Finance Plan.

The conservatorship and agreements with Treasury adversely affect our common and preferred shareholders.

The material adverse effects of the conservatorship on our shareholders under our agreements with Treasury include 

the following: 

No voting rights during conservatorship. During conservatorship, our common shareholders do not have the ability to 

elect directors or to vote on other matters unless the conservator delegates this authority to them. 

No dividends to common or preferred shareholders, other than to Treasury. Our conservator announced in September 

2008 that we would not pay any dividends on the common stock or on any series of preferred stock, other than the 

senior preferred stock, while we are in conservatorship. In addition, under the terms of the senior preferred stock 

purchase agreement, dividends may not be paid to common or preferred shareholders (other than on the senior 

preferred stock) without the prior written consent of Treasury, regardless of whether we are in conservatorship. 

Our profits directly increase the liquidation preference of Treasury’s senior preferred stock and, after the capital reserve 

end date, we will be required to pay dividends on the senior preferred stock. The senior preferred stock ranks senior to 

our common stock and all other series of our preferred stock, as well as any capital stock we issue in the future, as to 

both dividends and distributions upon liquidation. Accordingly, if we are liquidated, the senior preferred stock is entitled 

to its then-current liquidation preference, before any distribution is made to the holders of our common stock or other 

preferred stock. Under the current terms of the senior preferred stock, until the capital reserve end date, the liquidation 

preference of the senior preferred stock increases each quarter by the amount of the increase in our net worth, if any, 

during the immediately prior fiscal quarter. We expect the aggregate liquidation preference of the senior preferred stock 

will continue to increase as we increase our net worth, leaving less available for holders of our preferred stock or 

common stock in the event of a liquidation of our assets. In addition, the current terms of the senior preferred stock 

provide that, following the capital reserve end date, we will be required to pay dividends on the senior preferred stock of 

the lesser of (1) a 10% annual rate on the then-current liquidation preference of the senior preferred stock and (2) an 

amount equal to the incremental increase in our net worth during the immediately prior fiscal quarter. See “Business—

Conservatorship and Treasury Agreements—Treasury Agreements—Senior Preferred Stock” for more information on 

the dividend provisions and aggregate liquidation preference of the senior preferred stock.

Exercise of the Treasury warrant would substantially dilute the investment of current shareholders. If Treasury exercises 

its warrant to purchase shares of our common stock equal to 79.9% of the total number of shares of our common stock 

outstanding on a fully diluted basis, the ownership interest in the company of our then-existing common shareholders 

will be substantially diluted. 

We are not managed for the benefit of shareholders. Because we are in conservatorship, we are not managed with a 

strategy to maximize shareholder returns. 

The senior preferred stock purchase agreement, senior preferred stock and warrant can only be canceled or modified 

with the consent of Treasury. For additional description of the conservatorship and our agreements with Treasury, see 

“Business—Conservatorship and Treasury Agreements.” 

The liquidity and market value of our MBS could be adversely affected by negative developments in the UMBS 

market or from the loss of support from certain regulatory bodies for UMBS.

The success of UMBS is largely predicated on the fungibility of UMBS issued by Fannie Mae and Freddie Mac. If 

investors stop viewing Fannie Mae-issued UMBS and Freddie Mac-issued UMBS as fungible, or if investors prefer 

Freddie Mac-issued UMBS over Fannie Mae-issued UMBS, it could adversely affect the liquidity and market value of 

Fannie Mae MBS, the volume of our UMBS issuances and our guaranty fee revenues. FHFA adopted a rule to align 

Fannie Mae and Freddie Mac programs, policies and practices that affect the prepayment rates of TBA-eligible 

mortgage-backed securities to support the fungibility of Fannie Mae-issued UMBS and Freddie Mac-issued UMBS. 

However, these alignment efforts may not be successful over the long term and the prepayment rates on Fannie Maeissued UMBS and Freddie Mac-issued UMBS could diverge in a manner that is disadvantageous for us. 

We may experience price differences with Freddie Mac on individual new production pools of TBA-eligible mortgages, 

particularly with respect to specified pools and our multi-lender securities. From time to time, we may need to adjust our 

pricing for a particular new production pool category or introduce new initiatives to maintain alignment and 

competitiveness with Freddie Mac with respect to the acquisition of such pools. Depending on the amount of pricing 

Risk Factors | GSE and Conservatorship Risk

Fannie Mae 2022 Form 10-K 39
adjustments in any period, it is possible that those adjustments could adversely affect our guaranty fee revenues for that 

period. 

The continued support of FHFA, Treasury, the Securities Industry and Financial Markets Association, and certain other 

regulatory bodies is critical to the success of UMBS. If any of these entities were to cease its support, the liquidity and 

market value of Fannie Mae-issued UMBS could be adversely affected. Furthermore, if either we or Freddie Mac exits 

conservatorship, it is unclear whether our and Freddie Mac’s programs, policies and practices in support of UMBS and 

resecuritizations of each other’s securities would be sustained.

Our issuance of UMBS and structured securities backed by Freddie Mac-issued securities exposes us to 

significant operational and counterparty credit risk.

When we resecuritize Freddie Mac-issued UMBS or other Freddie Mac securities, our guaranty of principal and interest 

extends to the underlying Freddie Mac security. Although we have an indemnification agreement with Freddie Mac, in 

the event Freddie Mac were to fail (for credit or operational reasons) to make a payment due on its securities underlying 

a Fannie Mae-issued structured security, we would be obligated under our guaranty to fund any shortfall and make the 

entire payment on the related Fannie Mae-issued structured security on that payment date. A failure by Freddie Mac to 

meet its obligations under the terms of its securities that back structured securities we issue could have a material 

adverse effect on our earnings and financial condition, and we could be dependent on Freddie Mac and on the senior 

preferred stock purchase agreements that we and Freddie Mac each have with Treasury to avoid a liquidity event or a 

default under our guaranty. Our current risk exposure to Freddie Mac-issued securities is provided in “MD&A—Guaranty 

Book of Business.” 

In addition, UMBS have created significant interdependence between the single-family mortgage securitization 

programs of Fannie Mae and Freddie Mac. Accordingly, the market value and liquidity profile of single-family Fannie 

Mae MBS could be affected by financial and operational incidents relating to Freddie Mac, even if those incidents do not 

directly relate to Fannie Mae or Fannie Mae MBS. Similarly, any disruption in Freddie Mac’s securitization activities or 

any adverse events affecting Freddie Mac’s significant mortgage sellers and servicers also could adversely affect the 

market value of single-family Fannie Mae MBS. 

Our reliance on CSS and the common securitization platform exposes us to significant third-party risk.

We rely on CSS and its common securitization platform for the operation of a majority of our single-family securitization 

activities. Although we jointly own CSS with Freddie Mac, there are limitations on our ability to control CSS. 

The CSS Board of Managers has two members designated by each GSE, as well as a Board Chair, the CSS CEO, and 

up to three additional Board members. Board actions must be approved by a majority vote and, while we and Freddie 

Mac both remain in conservatorship, FHFA has the right to designate the Board members not designated by the GSEs, 

and the Board may not take any actions absent the Chair’s consent. Once either GSE has exited conservatorship and is 

not in receivership, the Board Chair and the three additional Board members may be removed or designated by the 

Board. Although the limited liability company agreement would require our approval for certain “material decisions” if 

either we or Freddie Mac have exited conservatorship, the Board may approve a number of actions even after 

conservatorship over the objection of the members we and Freddie Mac designate, including: approval of the annual 

budget and strategic plan for CSS (so long as it does not involve a material business change); withdrawal of capital by a 

member; and requiring capital contributions necessary to support CSS’s ordinary business operations. It is possible that 

FHFA may require us to make additional changes to the CSS limited liability company agreement, or may otherwise 

impose restrictions or provisions relating to CSS or UMBS, that may adversely affect us.

We do not currently pay service fees to CSS under our customer services agreement; its operations are funded entirely 

through capital contributions from Fannie Mae and Freddie Mac pursuant to the limited liability company agreement. 

During conservatorship, FHFA can direct us to enter into an amendment of the customer services agreement, or enter 

such an amendment on our behalf, that could provide for a fee structure that would survive an exit from conservatorship 

absent a further amendment to the customer services agreement, which a majority of the Board would have to approve. 

Although implementation of any fee changes could require a further amendment to the customer services agreement, 

we might not have significant leverage to negotiate that amendment and the associated fee changes given our 

dependence on CSS.

Risk Factors | GSE and Conservatorship Risk

Fannie Mae 2022 Form 10-K 40
Our securitization activities are complex and present significant operational and technological challenges and risks. Any 

measures we take to mitigate these challenges and risks might not be sufficient to prevent a disruption to our 

securitization activities. Our business activities could be adversely affected and the market for single-family Fannie Mae 

MBS could be disrupted if the common securitization platform were to fail or otherwise become unavailable to us or if 

CSS were unable to perform its obligations to us. Any such failure or unavailability could have a significant adverse 

impact on our business and could adversely affect the liquidity or market value of our single-family MBS. In addition, a 

failure by CSS to maintain effective controls and procedures could result in material errors in our reported results or 

disclosures that are not complete or accurate.

We are limited in our ability to diversify our business and undertake activities that management believes would 

benefit our business.

As a federally chartered corporation, we are subject to the limitations imposed by the Charter Act, extensive regulation, 

supervision and examination by FHFA, and regulation by other federal agencies, including Treasury, HUD and the SEC. 

The Charter Act defines our permissible business activities. For example, we may not originate mortgage loans or 

purchase single-family loans in excess of the conforming loan limits, and our business is limited to the U.S. housing 

finance sector. FHFA, as our regulator, may impose and has imposed additional limitations on our business. For 

example, the GSE Act requires us to obtain prior approval from FHFA for new products and to provide advance notice to 

FHFA of new activities. In December 2022, FHFA published a final rule implementing these requirements that permits 

FHFA to establish conditions or limitations on any new product or new activity. In addition, as described in previous risk 

factors, our business activities are subject to significant restrictions as a result of the conservatorship and the senior 

preferred stock purchase agreement, as well as under FHFA’s UMBS rule. 

The limitations on our business have and are expected to continue to delay or prevent us from undertaking some new 

business activities management believes would benefit our business. Further, as a result of the limitations on our ability 

to diversify our operations, our financial condition and results of operations depend almost entirely on conditions in a 

single sector of the U.S. economy, specifically, the U.S. housing market. Weak or unstable conditions in the U.S. 

housing market can therefore have a significant adverse effect on our business that we cannot mitigate through 

diversification. For a discussion of current U.S. housing market conditions, see “MD&A—Key Market Economic 

Indicators.”

An active trading market in our equity securities may cease to exist, which would adversely affect the market 

price and liquidity of our common and preferred stock.

Our common stock and preferred stock are now traded exclusively in the over-the-counter market, and are not currently 

listed on any securities exchanges. We cannot predict the actions of market makers, investors or other market 

participants, and can offer no assurances that the market for our securities will be stable. If there is no active trading 

market in our equity securities, the market price and liquidity of the securities will be adversely affected. In addition, the 

market price of our common stock and preferred stock is subject to significant volatility, which may be due to other 

factors described in these “Risk Factors,” as well as speculation regarding our future, economic and political conditions 

generally, liquidity in the over-the-counter market in which our stock trades, and other factors, many of which are 

beyond our control. Such factors could cause the market price of our common stock and preferred stock to decline 

significantly from their current levels, which may result in significant losses to holders of our common stock and 

preferred stock. For example, the market price of our common stock declined from a closing stock price of 82 cents per 

share as of December 31, 2021 to a closing stock price of 35 cents per share as of December 30, 2022.

Credit Risk

We may incur significant provisions for credit losses and write-offs on the loans in our book of business. 

We are exposed to a significant amount of mortgage credit risk on our $4.1 trillion guaranty book of business. Borrowers 

may fail to make required payments on mortgage loans we own or guaranty. This exposes us to the risk of credit losses. 

In general, significant home price or multifamily property value declines or increased loan delinquencies could materially 

increase our provision for credit losses and our write-offs. Loan delinquencies, among other factors, are influenced by 

income growth rates and unemployment levels, which affect borrowers’ ability to repay their mortgage loans. Changes in 

home prices or multifamily property values affect the amount of equity that borrowers have in their properties. As home 

prices and multifamily property values increase, the severity of losses we incur on defaulted loans that we hold or 

guarantee decreases because the amount we can recover from the properties securing the loans increases. 

Conversely, declines in home prices and multifamily property values increase the losses we incur on defaulted loans. As 

described in “MD&A—Key Market Economic Indicators,” home prices declined on a national basis in the second half of 

2022, and we expect they will decline further. If home prices or multifamily property values decline rapidly and a large 

number of borrowers default on their loans, we could experience significant credit losses on our book of business. Many 

borrowers who experienced COVID-19-related financial difficulties in recent years resolved their forbearance through a 

Risk Factors | GSE and Conservatorship Risk

Fannie Mae 2022 Form 10-K 41
loan modification. Some of these borrowers may not continue to perform under the modified terms of the loan, which 

could increase our credit losses. We may ultimately experience greater losses than we currently expect and may have 

high provisions for credit losses in future periods. 

Changes in interest rates can also affect our credit losses, as we describe in a risk factor below in “Market and Industry 

Risk.” Also see “MD&A—Multifamily Business—Multifamily Mortgage Credit Risk Management—Multifamily Portfolio 

Diversification and Monitoring” for a discussion of factors that are negatively affecting the credit risk profile of our 

multifamily seniors housing portfolio.

Given our expectation of home price declines, an economic recession and higher unemployment rates in 2023, we 

expect the credit performance of the loans in our guaranty book of business will likely decline compared to recent 

performance, which is reflected in our allowance for credit losses as of December 31, 2022. If home price declines, 

multifamily property values, economic conditions or unemployment rates are worse than we currently expect, we could 

experience materially higher provisions for credit losses and write-offs. See “MD&A—Key Market Economic Indicators” 

for a discussion of our expectations for home prices, economic growth and unemployment rates. 

We present detailed information about the risk characteristics of our single-family conventional guaranty book of 

business in “MD&A—Single-Family Business” and our multifamily guaranty book of business in “MD&A—Multifamily 

Business.” 

The credit enhancements we use provide only limited protection against potential future credit losses. These 

transactions also increase our expenses.

While we use certain credit enhancements to mitigate some of our potential future credit losses, we may not be able to 

obtain as much protection from our credit enhancements as we would like, for a number of reasons: 

• Some of the credit enhancements we use, such as mortgage insurance, Credit Insurance Risk TransferTM

(“CIRTTM”) transactions and DUS lender loss-sharing arrangements, are subject to the risk that the 

counterparties may not meet their obligations to us, which we discuss in a risk factor below. 

• Our credit risk transfer transactions have limited terms, after which they provide limited or no further credit 

protection on the covered loans. 

• Our credit risk transfer transactions are not designed to shield us from all losses because we retain a portion of 

the risk of future losses on loans covered by these transactions, including all or a portion of the first loss

position in most transactions. 

• In the event of a sufficiently severe economic downturn or other adverse market conditions, we may not be able 

to enter into new back-end credit risk transfer transactions for our recent acquisitions on economically 

advantageous terms.

• Mortgage insurance does not protect us from all losses on covered loans. For example, mortgage insurance 

does not cover property damage that is not already covered by the hazard or flood insurance we require, and 

such damage may result in a reduction to, or a denial of mortgage insurance benefits. A property damaged by a 

flood that was outside a Federal Emergency Management Agency (“FEMA”)-designated Special Flood Hazard 

Area, where we require coverage, or a property damaged by an earthquake are the most likely scenarios where 

property damage may result in a default not covered by hazard insurance.

In addition, the costs associated with credit risk transfer transactions are significant and may increase. Changes in 

regulatory guidance, such as requirements under the enterprise regulatory capital framework, may cause us to modify 

our credit risk transfer activities. 

In January 2023, the SEC issued a proposed rule that, if adopted as proposed, could affect or prohibit our ability to 

enter into credit risk transfer transactions following our exit from conservatorship. Further, while the SEC indicated in the 

proposing release its intent to exempt us from the rule while we are in conservatorship, questions remain regarding the 

proposed rule and we are still assessing the potential impact of the rule on our credit risk transfer transactions during 

conservatorship. In addition, there can be no assurance that the final rule will not reflect important modifications, 

including with respect to the exception for our asset-backed securities prior to our exit from conservatorship.

One or more of our institutional counterparties may fail to fulfill their contractual obligations to us, resulting in 

financial losses, business disruption and decreased ability to manage risk. 

We rely on our institutional counterparties to provide services and credit enhancements that are critical to our business. 

We face the risk that one or more of our institutional counterparties may fail to fulfill their contractual obligations to us. If 

an institutional counterparty defaults on its obligations to us, it could also negatively impact our ability to operate our 

business, as we outsource some of our critical functions to third parties, such as mortgage servicing, single-family 

Fannie Mae MBS issuance and administration, and certain technology functions. 

Risk Factors | Credit Risk

Fannie Mae 2022 Form 10-K 42
Our primary exposures to institutional counterparties are with:

• credit guarantors that provide credit enhancements on the mortgage assets in our guaranty book of business, 

including mortgage insurers and reinsurers, including those that participate in our CIRT transactions, and 

multifamily lenders with risk-sharing arrangements; 

• mortgage servicers that service the loans in our guaranty book of business; 

• mortgage sellers and servicers that are obligated to repurchase loans from us or reimburse us for losses in 

certain circumstances; and 

• the financial institutions that issue the investments held in our other investments portfolio. 

We also have counterparty exposure to: derivatives counterparties; custodial depository institutions; mortgage 

originators, investors and dealers; debt security dealers; central counterparty clearing institutions; and document 

custodians.

The concentration of our counterparties in similar or related businesses heightens our counterparty risk exposure. We 

routinely enter into a high volume of transactions with counterparties in the financial services industry, including brokers 

and dealers, mortgage lenders and commercial banks, and mortgage insurers, resulting in a significant credit 

concentration with respect to this industry. We may also have multiple exposures to particular counterparties, as many 

of our counterparties perform several types of services for us. For example, our lenders or their affiliates may also act 

as derivatives counterparties, mortgage servicers, custodial depository institutions or document custodians. Accordingly, 

if one of these counterparties were to become insolvent or otherwise default on its obligations to us, it could harm our 

business and financial results in a variety of ways.

An institutional counterparty may default on its obligations to us for a number of reasons, such as changes in financial 

condition that affect its credit rating, changes in its servicer rating, a reduction in liquidity, operational failures or 

insolvency. In the event of a bankruptcy or receivership of one of our counterparties, we may be required to establish 

our ownership rights to the assets these counterparties hold on our behalf to the satisfaction of the bankruptcy court or 

receiver, which could result in a delay in accessing these assets causing a decline in their value. Counterparty defaults 

or limitations on their ability to do business with us could result in significant financial losses or hamper our ability to do 

business or manage the risks to our business. In addition, if we are unable to replace a defaulting counterparty that 

performs services critical to our business, it could adversely affect our ability to conduct our operations and manage 

risk. The expected shift in market conditions in 2023, including an expected lower volume of mortgage originations and 

an expected economic recession, could materially adversely affect the financial results and condition of some of our 

institutional counterparties, particularly non-depository mortgage sellers and servicers.

We have significant exposure to institutions in the financial services industry relating to derivatives, funding, short-term 

lending, securities, and other transactions. We depend on our ability to enter into derivatives transactions with our 

derivatives counterparties in order to manage the duration and prepayment risk of our retained mortgage portfolio. If we 

lose access to our derivatives counterparties, it could adversely affect our ability to manage these risks. 

We use clearinghouses to facilitate many of our derivative trades. If the clearinghouse or the clearing member we use to 

access the clearinghouse defaults, we could lose margin that we have posted with the clearing member or 

clearinghouse. We are also a clearing member of two divisions of Fixed Income Clearing Corporation (“FICC”), a central 

counterparty (“CCP”). One FICC division clears our trades involving securities purchased under agreements to resell, 

securities sold under agreements to repurchase, and other non-mortgage related securities. The other division clears 

our forward purchase and sale commitments of mortgage-related securities, including dollar roll transactions. As a 

clearing member of FICC, we are exposed to the risk of losses if the CCP or one or more of the CCP’s clearing 

members fails to perform its obligations, because each FICC clearing member is required to absorb a portion of the 

losses incurred by other clearing members if they fail to meet their obligations to the clearinghouse. We could also incur 

losses associated with replacing contracts cleared through FICC in the event of a default by or the financial or 

operational failure of FICC. For more information, see “MD&A—Risk Management—Institutional Counterparty Credit 

Risk Management—Other Counterparties—Central Counterparty Clearing Institutions.”

Our financial condition or results of operations may be adversely affected if mortgage servicers fail to perform 

their obligations to us.

We delegate the servicing of the mortgage loans in our guaranty book of business to mortgage servicers; we do not 

have our own servicing function. Functions performed by mortgage servicers on our behalf include collecting and 

delivering principal and interest payments, administering escrow accounts, monitoring and reporting delinquencies, 

performing default prevention activities and other functions. A servicer’s inability or other failure to perform these 

functions or to follow our requirements could negatively impact our ability to, among other things: 

• manage our book of business;

Risk Factors | Credit Risk

Fannie Mae 2022 Form 10-K 43
• collect amounts due to us;

• actively manage troubled loans; and 

• implement our homeownership assistance, foreclosure prevention and other loss mitigation efforts. 

A decline in a servicer’s performance, such as delayed or missed opportunities for loan workouts, foreclosure 

alternatives or foreclosures, could significantly affect our ability to mitigate credit losses and could affect the overall 

credit performance of the loans in our guaranty book of business. Servicers may experience financial and other 

difficulties due to the advances they are required to make to us on delinquent mortgages, including mortgages subject 

to forbearance plans. We could be adversely affected if our servicers lack appropriate controls, experience a failure in 

their controls, or experience a disruption in their ability to service loans, including as a result of legal or regulatory 

actions or ratings downgrades. 

A large portion of our single-family guaranty book is serviced by non-depository servicers, particularly our delinquent 

single-family loans. Non-depository servicers also service a large portion of our multifamily guaranty book. The 

potentially lower financial strength and liquidity of non-depository mortgage servicers compared with depository 

mortgage servicers may negatively affect their ability to fully satisfy their financial obligations or to properly service the 

loans on our behalf. Non-depository servicers also are generally not subject to the same level of regulatory oversight as 

our mortgage servicer counterparties that are depository institutions. In January 2023, our largest single-family 

mortgage servicer, Wells Fargo Bank, announced its plan to reduce the size of its servicing portfolio. We anticipate that 

this may increase the concentration of our single-family conventional guaranty book serviced by non-depository 

servicers.

If we replace a mortgage servicer, we could incur costs and potential increases in servicing fees and could also face 

operational risks. If a mortgage servicer fails, it could result in a temporary disruption in servicing and loss mitigation 

activities relating to the loans serviced by that mortgage servicer, particularly if there is a loss of experienced servicing 

personnel. We may also face challenges in transferring a large servicing portfolio. Although we have contingency plans 

in the event of a failure of one or more of our top mortgage servicers, there can be no assurance that we will be able to 

successfully execute against those plans in times of severe economic stress in the mortgage servicing industry.

Multifamily mortgage servicing is typically performed by the lenders who sell the mortgages to us, including nondepository servicers. We are exposed to the risk that multifamily servicers could come under financial pressure, which 

could potentially result in a decline in the quality of the servicing they provide us or a default by the servicer. A decline in 

servicing quality or a default by a multifamily servicer could increase our losses on multifamily loans.

The actions we have taken to mitigate our credit risk exposure to mortgage servicers may not be sufficient to prevent us 

from experiencing significant financial losses or business interruptions in the event they cannot fulfill their obligations to 

us. 

We may incur losses as a result of claims under our mortgage insurance policies not being paid in full or at all. 

We rely heavily on mortgage insurers to provide insurance against borrower defaults on single-family conventional 

mortgage loans with LTV ratios over 80% at the time of acquisition. Although our primary mortgage insurer 

counterparties currently approved to write new business must meet risk-based asset requirements, there is still a risk 

that these counterparties may fail to fulfill their obligations to pay our claims under insurance policies. If a mortgage 

insurer fails to meet its obligations to reimburse us for claims, our credit losses could increase. In addition, if a regulator 

determines that a mortgage insurer lacks sufficient capital to pay all claims when due, the regulator could take action 

that might affect the timing and amount of claim payments made to us by our approved mortgage insurer counterparties. 

We face similar risks with respect to our credit insurance risk transfer counterparties.

With respect to primary mortgage insurers that we have approved to write coverage on loans sold to us, we currently do 

not differentiate pricing based on counterparty strength or operational performance. Additionally, we would not revoke a 

primary mortgage insurer’s status as an eligible insurer unless there was a material violation of our private mortgage 

insurer eligibility requirements. Further, we do not generally select the provider of primary mortgage insurance on a 

specific loan, because the selection is usually made by the lender at the time the loan is originated. Accordingly, we 

have limited ability to manage our concentration risk with respect to primary mortgage insurers.

On at least a quarterly basis, we assess our mortgage insurer counterparties’ respective abilities to fulfill their 

obligations to us, and our loss reserves take into account this assessment. If our assessment indicates their ability to 

pay claims has deteriorated significantly or if our projected claim amounts have increased, we could experience a 

material increase in our provision for credit losses and write-offs. 

Mortgage fraud could result in significant financial losses and harm to our reputation. 

We use a process of delegated underwriting in which lenders make specific representations and warranties about the 

characteristics of the mortgage loans we purchase and securitize. As a result, we do not independently verify most 

Risk Factors | Credit Risk

Fannie Mae 2022 Form 10-K 44
borrower information that is provided to us. This exposes us to the risk that one or more of the parties involved in a 

transaction (the borrower, seller, broker, appraiser, title agent, lender or servicer) will engage in fraud by misrepresenting 

facts about a mortgage loan. Similarly, we rely on delegated servicing of loans and use of a variety of external resources 

to manage our REO inventory. We have experienced financial losses resulting from mortgage fraud, including 

institutional fraud perpetrated by counterparties. In the future, we may experience additional financial losses or 

reputational damage as a result of mortgage fraud. 

We may suffer losses if borrowers suffer property damage as a result of a hazard for which the borrower has 

no or insufficient insurance.

In general, we require borrowers to obtain and maintain property insurance to cover the risk of damage to their homes 

or properties resulting from hazards such as fire, wind and, for properties in a FEMA-designated Special Flood Hazard 

Area, flooding. To the extent that borrowers suffer property damage as a result of a hazard for which we do not generally 

require insurance, such as earthquake damage or flood damage on a property located outside a Special Flood Hazard 

Area, borrowers’ claims under insurance policies are not paid, borrowers’ insurance is insufficient to cover their losses 

or borrowers fail to maintain insurance and suffer property damage, they may not pay their mortgage loans, which would 

negatively impact our provision for credit losses and our write-offs. Hazard insurers may experience financial strain and 

be unable to make payments on related claims during a period in which significant numbers of mortgaged properties are 

damaged by natural or other disasters.

Only a small portion of loans in our guaranty book of business as of December 31, 2022 was located in a Special Flood 

Hazard Area, for which we require flood insurance: 3.3% of loans in our single-family guaranty book of business and 

6.8% of loans in our multifamily guaranty book of business. We believe that only a small portion of borrowers in most 

places outside of a Special Flood Hazard Area obtain flood insurance. The risk of significant flooding in places outside 

of a Special Flood Hazard Area (that is, in places where we do not require flood insurance) is expected to increase in 

the coming years as a result of climate change. Single-family borrowers who obtain flood insurance generally rely on the 

National Flood Insurance Program (“NFIP”), which was recently extended through September 30, 2023. If Congress 

fails to extend or re-authorize the program upon future expirations, FEMA may not have sufficient funds to pay claims 

for flood damage, and borrowers may not be able to renew their flood insurance coverage or obtain new policies 

through the NFIP. In addition, NFIP insurance does not cover temporary living expenses, and the maximum limit of 

coverage available under NFIP for a single-family residential property is $250,000, which may not be sufficient to cover 

all losses. 

Increases in the intensity or frequency of floods or other weather-related disasters as a result of climate change are 

expected to increase the foregoing risks. In some areas, some insurers have ceased writing new coverage or have 

significantly increased insurance premiums for certain perils. As coverage becomes unavailable or prohibitively 

expensive in an area, home prices or multifamily property values may be negatively impacted, and fewer loans in the 

area may be eligible for acquisition by Fannie Mae. Ultimately, the desirability of areas that frequently experience 

hurricanes, wildfires or other natural disasters may diminish over time, which can depress home prices and multifamily 

property values or adversely affect the region’s economy, which may negatively impact our financial results. In addition, 

investors may place greater weight on climate change risks when making investment decisions, which could increase 

our cost or ability to transfer credit risk.

The occurrence of major natural or other disasters in the United States or its territories and the impact of 

climate change could materially increase our provision for credit losses and our write-offs. 

We conduct our business in the single-family and multifamily residential mortgage markets and own or guarantee the 

performance of mortgage loans throughout the United States and its territories. The occurrence of a major natural or 

environmental disaster, terrorist attack, cyber attack, pandemic, or similar event (a “major disruptive event”) in the 

United States or its territories could negatively impact our provision for credit losses and our write-offs on loans in the 

affected geographic area or, depending on the magnitude, scope and nature of the event, nationally, in a number of 

ways.

A major disruptive event that either damages or destroys single-family or multifamily real estate securing mortgage 

loans in our book of business or negatively impacts the ability of borrowers to make principal and interest payments on 

mortgage loans in our book of business could increase our delinquency rates, default rates and average loan loss 

severity of our book of business in the affected region or regions. Further, a major disruptive event or a long-lasting 

increase in the vulnerability of an area to disasters that affects borrowers’ ability to make payments on their mortgages, 

discourages housing activity, including homebuilding or home buying, or causes a deterioration in housing conditions or 

the general economy in the affected region could lower the volume of originations in the mortgage market, influence 

Risk Factors | Credit Risk

Fannie Mae 2022 Form 10-K 45
home prices and property values in the affected region or in adjacent regions and increase delinquency rates and 

default rates. Any of these outcomes could generate significant provisions for credit losses and write-offs.

Recent years have seen frequent and severe natural disasters in the U.S., including wildfires, hurricanes, high winds, 

severe flooding, mudslides, and environmental contamination. We believe the frequency and intensity of major weatherrelated events in recent years are indicative of the impact of climate change, the impacts of which are expected to 

persist and worsen in the future. Population growth and an increase in people living in high-risk areas, such as coastal 

areas vulnerable to severe storms and flooding, have also increased the impact of these events. Although our financial 

exposure from these events is mitigated to the extent our book of business is geographically diverse, we remain 

exposed to risk, particularly in connection with the risk of geographically widespread weather events and changes in 

weather patterns, as well as geographic areas where our book of business is more heavily concentrated. For a 

description of the geographic concentration of our single-family guaranty book of business, see “MD&A—Single-Family 

Business—Single-Family Mortgage Credit Risk Management—Single-Family Portfolio Diversification and Monitoring.”

As a result, any continuation or increase in recent weather trends or their unpredictability, or any single natural disaster 

of significant scope or intensity, could have a material impact on our results of operations and financial condition. In 

addition, the unpredictability of natural disasters and the complexity of forecasting long-term climate change negatively 

affect our ability to predict the potential impacts from such events, particularly over the long term. 

In addition to the impact of natural disasters, longer-term shifts in climate patterns could result in chronic risks such as 

sustained higher temperatures, sea level rise, water scarcity and increased wildfires that negatively affect certain 

regions, which could negatively affect home prices and multifamily property values in those regions, as well as the 

ability of borrowers in those regions to pay their mortgage loans. Further, legal or regulatory responses to concerns 

about global climate change may impact the housing markets and, as a result, our business. Steps to address the risks 

of climate change could result in a potentially disruptive transition away from carbon-intense industries. Such a 

transition could negatively impact certain industries and regional economies, affecting the ability of borrowers in those 

industries or regions to pay their mortgage loans. Transition risks also could include a change in borrower and renter 

preferences for certain areas of the country or certain types of housing. The migration of communities and individuals 

due to climate-related risk and economic factors could lead to changes in home prices and multifamily property values 

in affected regions or an increase in lower income households living in high-risk areas. Transition risks of climate 

change also include potential additional regulatory and legislative requirements that could increase our expenses or the 

cost of housing.

The timing and severity of climate change events or societal changes in reaction to them are difficult to predict. As a 

result, while we are taking steps to integrate climate risk considerations into our Enterprise Risk Management 

framework, our risk management strategies may not be effective in mitigating our climate risk exposure. As regulators 

begin to mandate additional disclosure of climate-related information by companies across sectors, there may continue 

to be a lack of information needed for more robust climate-related risk analyses. Third-party exposures to climaterelated risks and other data generally are limited in availability and variable in quality. Modeling capabilities to analyze 

climate-related risks and interconnections are improving but remain incomplete. We believe these limitations will affect 

our ability to manage climate-related risks.

Operational Risk

A failure in our operational systems or infrastructure, or those of third parties, could materially adversely affect 

our business, impair our liquidity, cause financial losses and harm our reputation.

Shortcomings or failures in our internal processes, people, or systems, or external events, could disrupt our business or 

have a material adverse effect on our risk management, liquidity, financial statement reliability, financial condition and 

results of operations. Such a failure could result in legislative or regulatory intervention or sanctions, liability to 

counterparties, financial losses, business disruptions and damage to our reputation. For example, our business is highly 

dependent on our ability to manage and process, on a daily basis, an extremely large number of transactions, many of 

which are highly complex, across numerous and diverse markets that continuously and rapidly change and evolve. 

These transactions are subject to various legal, accounting and regulatory standards. Our financial, accounting, data 

processing or other operating systems and facilities may fail to operate properly or become disabled or damaged as a 

result of a number of factors, including events that are wholly or partially beyond our control, adversely affecting our 

ability to process these transactions or manage associated data with reliability and integrity. In addition, we rely on 

information provided by third parties in processing many of our transactions; that information may be incorrect or we 

may fail to properly manage or analyze it or properly monitor its data quality. 

We rely upon business processes that are highly dependent on people, technology, data and the use of numerous 

complex systems and models to manage our business and produce information upon which our financial statements 

and risk reporting are prepared. This reliance increases the risk that we may be exposed to financial, reputational or 

other losses as a result of inadequately designed internal processes or data management architecture, inflexible 

Risk Factors | Credit Risk

Fannie Mae 2022 Form 10-K 46
technology or the failure of our systems. In addition, our use of third-party service providers for some of our business 

and technology functions increases the risk that an operational failure by a third party will adversely affect us. For 

example, we use third-party service providers for cloud infrastructure services. We have experienced interruptions in 

access to our platforms as a result of connectivity issues with third-party cloud-based platforms and related data centers 

and could experience disruptions again if there is a lapse of service, interruption of internet service provider connectivity 

or damage to third-party cloud-based platforms or any related data centers. The risk of these disruptions is exacerbated 

by key fourth-party relationships, in which some of our third-party service providers have engaged subcontractors to 

provide key services and our ability to assess the fourth party’s operational controls is limited. While we continue to 

enhance our technology, infrastructure, operational controls and organizational structure in order to reduce our 

operational risk, these actions may not be effective to manage these risks.

Our ability to manage and aggregate data may be limited by the effectiveness of our policies, programs, processes, 

systems and practices that govern how data is acquired, validated, stored, protected, processed and shared. Failure to 

manage data effectively and to aggregate data in an accurate and timely manner may limit our ability to manage current 

and emerging risks, as well as to manage changing business needs. The increasing use of new third-party and open 

source artificial intelligence tools poses additional risks relating to the protection of data, including the potential 

exposure of our proprietary confidential information to unauthorized recipients and the misuse of our intellectual 

property.

We have begun to use artificial intelligence and machine learning technology to help manage some of the operational 

risks we face, including with respect to business resiliency. Our use of this new technology may present new risks, 

including the potential for outages, inefficiencies, and bias or errors in the technology’s analysis and conclusions while 

the technology and our use of the technology matures. 

We also face the risk of operational failure, termination or capacity constraints of any of the clearing agents, paying 

agents, exchanges, clearinghouses or other financial intermediaries, including the Federal Reserve, we use to facilitate 

our securities and derivatives transactions. Moreover, the consolidation and interconnectivity among clearing agents, 

exchanges and clearing houses increases the risk of operational failure, on both an individual basis and an industrywide basis. Any such failure, termination or constraint could adversely affect our ability to effect transactions or manage 

our exposure to risk. 

Most of our employees and business operations functions are consolidated in two metropolitan areas: Washington, DC 

and Dallas, Texas. While we have reduced the risk posed by this concentration of our employees and facilities in recent 

years through our business continuity strategies and our transition to a hybrid work environment, a major disruptive 

event at either location could impact our ability to operate. Moreover, because of the concentration of our employees in 

the Washington, DC and Dallas metropolitan areas, a regional disruption, particularly a disruption with a sustained 

impact, in one of these areas could prevent our employees from accessing our facilities, working remotely, or 

communicating with or traveling to other locations. Accordingly, the occurrence of one or more major disruptive events 

could materially adversely affect our ability to conduct our business and lead to financial losses.

A breach of the security of our systems or facilities, or those of third parties with which we do business, 

including as a result of cyber attacks, could damage or disrupt our business or result in the disclosure or 

misuse of confidential or other information (including personal information), which could damage our 

reputation, result in regulatory sanctions and/or increase our costs and cause losses that have a material 

adverse impact on our business, financial results and financial condition.

Our operations rely on the secure receipt, processing, storage and transmission of confidential and other information in 

our computer systems and networks and with our business partners, including proprietary, confidential or personal 

information that is subject to privacy laws, regulations or contractual obligations. Information security risks for large 

institutions like us have significantly increased in recent years in part because of the proliferation of new technologies 

and the use of the Internet, telecommunications and cloud technologies to conduct or automate financial transactions. A 

number of financial services companies, consumer-based companies and other organizations have reported the 

unauthorized disclosure of client, customer or other confidential information (including personal information), as well as 

cyber attacks involving the dissemination, theft and destruction of corporate information, intellectual property, cash or 

other valuable assets. There have also been several highly publicized ransomware cyber attacks where hackers have 

requested “ransom” payments in exchange for not disclosing stolen customer information (including personal 

information) or for unlocking or not disabling the target company’s computer or other systems.

We have been, and expect to continue to be, the target of cyber attacks, computer viruses, malicious code, social 

engineering attacks, including phishing attacks, denial of service attacks and other information security threats. To date, 

cyber attacks have not had a material impact on our financial condition, financial results or business. However, we could 

suffer material financial or other losses, as well as significant reputational damage, as a result of cyber attacks, and 

Risk Factors | Operational Risk

Fannie Mae 2022 Form 10-K 47
these attacks and their impacts are hard to predict. Our risk and exposure to these matters remains heightened 

because of, among other things:

• the evolving nature of these threats, including the increased capability of the technology, artificial intelligence 

and service offerings that can be used maliciously; 

• our prominent size and scale and our role in the financial services industry; 

• the outsourcing of some of our business operations; 

• the ongoing shortage of qualified cybersecurity professionals; 

• our migration to cloud-based systems; 

• our use of employee-owned devices for business communication;

• the interconnectivity and interdependence of third parties to our systems; and 

• the current global economic and political environment. 

For example, the current tensions between the United States and Russia due to the Russian invasion of Ukraine that 

began in February 2022 and the resulting actions by the United States and a number of other countries in response 

(including economic sanctions imposed on Russia and the provision of military supplies to Ukraine) could result in 

retaliatory cyber attacks by Russian threat actors on our business or on third parties with which we do business that 

have a material impact on our business.

Despite our efforts to ensure the integrity of our software, computers, systems and information, we may not be able to 

anticipate, detect or recognize threats to our systems and assets, or to implement effective preventive measures against 

all cyber threats, especially because the techniques used are increasingly sophisticated, change frequently, are 

complex, and are often not recognized until launched. In addition, large-scale cyber attacks in recent years suggest that 

the risk of damaging cyber attacks impacting us and/or third parties with which we do business is increasing. We expect 

cyber attack and breach incidents to continue, and we are unable to predict the direct or indirect impact of future attacks 

or breaches on our business operations. 

We routinely identify cyber threats as well as vulnerabilities in our systems and work to address them. Some cyber 

vulnerabilities take a substantial amount of time to resolve. In addition, efforts to resolve them may be unsuccessful. 

Further, these efforts involve costs that can be significant as cyber attack methods continue to rapidly evolve. Cyber 

attacks can originate from a variety of sources, including external parties who are affiliated with foreign governments or 

are involved with organized crime or terrorist organizations. Cybersecurity risks also derive from human error, fraud or 

malice on the part of our employees or third parties. Third parties have, and we expect will continue to, attempt to 

induce employees, lenders, servicers or other users of our systems to disclose sensitive information or provide access 

to our systems or network, or to our data or that of our counterparties or borrowers, and these types of risks may be 

difficult to detect or prevent. 

The occurrence of a cyber attack, breach, unauthorized access, misuse, computer virus or other malicious code or other 

cybersecurity event could jeopardize or result in the unauthorized disclosure, gathering, monitoring, misuse, corruption, 

loss or destruction of confidential and other information (including personal information) that belongs to us, our lenders, 

our servicers, our counterparties, third-party service providers or borrowers that is processed and stored in, and 

transmitted through, our computer systems and networks. The occurrence of such an event could also result in damage 

to our software, computers or systems, or otherwise cause interruptions or malfunctions in our, our lenders’, our 

counterparties’ or third parties’ operations. This could result in significant financial losses, loss of customers and 

business opportunities, reputational damage, litigation, regulatory fines, penalties or intervention, reimbursement or 

other compensatory costs that have a material adverse impact on our business, financial results and financial condition. 

Cyber attacks can occur and persist for an extended period of time without detection. Investigations of cyber attacks are 

inherently unpredictable, and it takes time to complete an investigation and have full and reliable information. While we 

are investigating a cyber attack, we do not necessarily know the extent of the harm or how best to remediate it, and we 

can repeat or compound certain errors or actions before we discover and remediate them. In addition, announcing that 

a cyber attack has occurred increases the risk of additional cyber attacks, and preparing for this elevated risk can delay 

the announcement of a cyber attack. All or any of these challenges could further increase the costs and consequences 

of a cyber attack. These factors may also inhibit our ability to provide rapid, complete and reliable information about a 

cyber attack to our lenders, servicers, counterparties and regulators, as well as the public. 

In addition, we may be required to expend significant additional resources to modify our protective measures and to 

investigate and remediate vulnerabilities or other exposures arising from operational and security risks. Although we 

maintain insurance coverage relating to cybersecurity risks, our insurance may not be sufficient to provide adequate 

loss coverage in all circumstances (including if the insurer denies future claims) and may not continue to be available to 

Risk Factors | Operational Risk

Fannie Mae 2022 Form 10-K 48
us on economically reasonable terms, or at all. Further, we cannot ensure that any limitations of liability provisions in our 

agreements with lenders, servicers, vendors and other third parties with which we do business would be enforceable or 

adequate or would otherwise protect us from liabilities or damages with respect to a particular claim in connection with a 

cyber attack or other information security incident. 

Because we are interconnected with and dependent on third-party vendors, exchanges, clearing houses, fiscal and 

paying agents, and other financial intermediaries, including CSS, we could be materially adversely impacted if any of 

them is subject to a successful cyber attack or other information security event. Third parties with which we do business 

may also be sources of cybersecurity or other technological risks. We outsource certain functions and these 

relationships allow for the external storage and processing of our information, as well as lender, servicer, counterparty 

and borrower information, including on cloud-based systems. We also share this type of information with regulatory 

agencies and their vendors. While we engage in actions to mitigate our exposure resulting from our information-sharing 

activities, ongoing threats may result in unauthorized access, loss or destruction of data or other cybersecurity incidents 

that could materially adversely affect our business and result in legal liabilities, fines, regulatory action and reputational 

harm that have a material adverse impact on our business, financial results and financial condition.

We routinely transmit and receive personal, confidential and proprietary information by electronic means. In addition, 

our lenders and servicers maintain personal, confidential and proprietary information, including personal borrower 

information. We have discussed and worked with lenders, servicers, vendors, service providers, counterparties and 

other third parties to develop secure transmission capabilities and protect against cyber attacks, but we do not have, 

and may be unable to put in place, secure capabilities with all of our lenders, servicers, vendors, service providers, 

counterparties and other third parties, and we may not be able to ensure that these third parties have appropriate 

controls in place to protect the confidentiality of the information. An interception, misuse or mishandling of personal, 

confidential or proprietary information being sent to, received from, or maintained by a lender, servicer, vendor, service 

provider, counterparty or other third party could result in legal liability, fines, regulatory action and reputational harm that 

have a material adverse impact on our business, financial results or financial condition. From time to time, our lenders 

and servicers have experienced data breaches or other cybersecurity incidents relating to our borrower information. 

While such breaches and incidents have not been material to our business to date, they could result in legal liabilities, 

fines, regulatory action and reputational harm that have a material adverse impact on our business, financial results and 

financial condition. 

The legal and regulatory environment related to data privacy and cybersecurity is constantly changing. Privacy and 

cybersecurity are currently areas of considerable legislative and regulatory attention, with new or modified laws, 

regulations, rules and standards being frequently adopted and potentially subject to divergent interpretation or 

application in different states in a manner that may create inconsistent or conflicting requirements for businesses. The 

uncertainty and compliance risks created by these legislative and regulatory developments are compounded by the 

rapid pace of technology development, such as artificial intelligence and advances in data science, that may affect the 

use or security of data, including personal information. Privacy and cybersecurity laws and regulations often impose 

strict requirements on the collection, storage, handling, use, disclosure, transfer, security, and other processing of 

personal information. These laws and regulations, combined with our evolving data footprint, are expected to increase 

our compliance costs and require changes to our business and operations. An actual or perceived failure by us, lenders, 

servicers, vendors, service providers, counterparties or other third parties to comply with privacy, data protection and 

information security laws, regulations, standards, policies and contractual obligations could result in legal liabilities, 

fines, regulatory action and reputational harm that have a material adverse impact on our business, financial results and 

financial condition.

Our concurrent implementation of multiple new initiatives may increase our operational risk and result in one 

or more material weaknesses in our internal control over financial reporting.

We are currently implementing a number of initiatives in furtherance of both our and our conservator’s strategic 

objectives. The magnitude of the many new initiatives we are undertaking may increase our operational risk. Many of 

these initiatives involve significant changes to our business processes, controls, systems and infrastructure, require 

substantial attention from management, and present significant operational challenges for us. Some business initiatives 

that we are currently developing or executing against include our environmental, social and governance initiatives, 

enhancements and efficiencies to our operational processes, and enhancements to our existing and development of 

new information technology and other systems. For example, for the past several years we have been transitioning our 

core information technology systems to third-party cloud-based platforms. If completing this initiative is delayed or we 

fail to complete it in a well-managed, secure and effective manner, we may experience unplanned service disruptions or 

unforeseen costs, which could result in material harm to our business and results of operations. In addition, FHFA as 

our conservator is requiring that we undertake a number of initiatives, including those set forth in their 2023 scorecard. 

While implementation of each individual initiative creates operational challenges, implementing multiple initiatives during 

the same time period significantly increases these challenges. Due to the operational complexity associated with these 

Risk Factors | Operational Risk

Fannie Mae 2022 Form 10-K 49
changes and the limited time periods for implementing them, we believe there is a risk that implementing these changes 

could result in one or more material weaknesses in our internal control over financial reporting in a future period. If this 

were to occur, we could experience material errors in our reported financial results. In addition, FHFA, Treasury, other 

agencies of the U.S. government or Congress may require us to implement additional initiatives in the future that could 

further increase our operational risk.

Material weaknesses in our internal control over financial reporting could result in errors in our reported 

results or disclosures that are not complete or accurate.

Management has determined that, as of the date of this filing, we have ineffective disclosure controls and procedures 

that result in a material weakness in our internal control over financial reporting. In addition, our independent registered 

public accounting firm, Deloitte & Touche LLP, has expressed an adverse opinion on our internal control over financial 

reporting because of the material weakness. Our ineffective disclosure controls and procedures and material weakness 

could result in errors in our reported results or disclosures that are not complete or accurate, which could have a 

material adverse effect on our business and operations.

Our material weakness relates specifically to the impact of the conservatorship on our disclosure controls and 

procedures. Because we are under the control of FHFA, some of the information that we may need to meet our 

disclosure obligations may be solely within the knowledge of FHFA. As our conservator, FHFA has the power to take 

actions without our knowledge that could be material to our shareholders and other stakeholders, and could significantly 

affect our financial performance or our continued existence as an ongoing business. Because FHFA currently functions 

as both our regulator and our conservator, there are inherent structural limitations on our ability to design, implement, 

operate and test effective disclosure controls and procedures relating to information known to FHFA. As a result, we 

have not been able to update our disclosure controls and procedures in a manner that adequately ensures the 

accumulation and communication to management of information known to FHFA that is needed to meet our disclosure 

obligations under the federal securities laws, including disclosures affecting our financial statements. Given the 

structural nature of this material weakness, we do not expect to remediate this weakness while we are under 

conservatorship. See “Controls and Procedures” for further discussion of management’s conclusions on our disclosure 

controls and procedures and internal control over financial reporting. 

Failure of our models to produce reliable results may adversely affect our ability to manage risk and make 

effective business decisions, as well as create regulatory and reputational risk.

We make significant use of quantitative models to measure and monitor our risk exposures and to manage our 

business. For example, we use models to measure and monitor our exposures to interest rate, credit and market risks, 

and to forecast credit losses. We use this information in making business decisions relating to strategies, initiatives, 

transactions, pricing and products. 

Models are inherently imperfect predictors of actual results because they are based on historical data and assumptions 

regarding factors such as future loan demand, borrower behavior, creditworthiness and home price trends. Other 

potential sources of inaccurate or inappropriate model results include errors in computer code, inaccurate or incomplete 

data, misuse of data, or use of a model for a purpose outside the scope of the model’s design. Modeling often assumes 

that historical data or experience can be relied upon as a basis for forecasting future events, an assumption that may be 

especially tenuous in the face of unprecedented events, such as the COVID-19 pandemic and long-term climate 

change.

Given the challenges of predicting future behavior, management judgment is used throughout the modeling process, 

from model design decisions regarding core underlying assumptions, to interpreting and applying final model output. 

When market conditions change quickly and in unforeseen ways, there is an increased risk that the model assumptions 

and data inputs for our models are not representative of the most recent market conditions, which requires management 

to apply its judgment to make adjustments or overrides to our models. In a rapidly changing environment, it may not be 

possible to update existing models quickly enough to properly account for the most recently available data and events.

In addition to internally-developed models, we also use select third-party models. While the use of such models may 

reduce our risk where no internal model is available, it exposes us to additional risk, as we often have limited visibility 

into the third party’s model methodology and change management process. In addition, in some instances we rely on 

third-party data providers to develop and provide estimates for our models. This reliance on third-party data providers 

exposes us to risk should the data provider cease to provide the data going forward or change its methodology, which 

would require that we find a suitable replacement for the data and could result in the need to re-estimate our models 

with the new data.

We also expect to gradually increase the use of artificial intelligence and machine learning in our models. The use 

of new artificial intelligence and machine learning technology in our models may present new risks, such as the 

Risk Factors | Operational Risk

Fannie Mae 2022 Form 10-K 50
risk of undetected bias in the model and the limited ability to understand and challenge the model due to a limited 

ability to observe the internal workings of many machine learning models.

To the extent our internal models or the third-party models that we use fail to produce reliable results on an 

ongoing basis, we may not make appropriate business and risk management decisions, including decisions 

affecting loan purchases, guaranty fee pricing, management of credit losses, and asset and liability management. 

While we employ strategies to manage and govern the risks associated with our use of models, they have not 

always been fully effective. Errors have been discovered in some of the models we use, as well as deficiencies in 

our current processes for managing model risk. As noted in “MD&A—Risk Management—Operational Risk 

Management—Model Risk Management,” we are currently working on a number of remediation activities relating 

to our models, including improving our processes for model governance, development, implementation and 

testing. Until these remediation activities are completed, we face a higher risk that we may make inappropriate 

business or risk management decisions based on unreliable model results, which could negatively affect our 

financial results and condition.

Errors in our models can also result in errors in our external disclosures. As described in “Business—Legislation 

and Regulation—GSE-Focused Matters—Stress Testing,” we discovered errors in a model used to prepare our 

annual stress test results that affected our stress test results for 2022 and prior years. We could discover 

additional errors in our models in the future that result in further errors in our external disclosures that create 

regulatory and reputational risk.

Also see a risk factor below in “General Risk” for a discussion of the risks associated with the use of models in our 

accounting methods.

Liquidity and Funding Risk

Limitations on our ability to access the debt capital markets could have a material adverse effect on our ability 

to fund our operations, and our liquidity contingency plans may be difficult or impossible to execute during a 

sustained liquidity crisis.

Our ability to fund our business depends in part on our ongoing access to the debt capital markets. Market concerns 

about matters such as the extent of government support for our business and debt securities, the future of our business 

(including future profitability, future structure, regulatory actions and our status as a government-sponsored enterprise) 

and the creditworthiness of the U.S. government could cause a severe negative effect on our access to the unsecured 

debt markets, particularly for long-term debt. We believe that our ability in recent years to issue debt of varying 

maturities at attractive pricing resulted from federal government support of our business. As a result, we believe that our 

status as a government-sponsored enterprise and continued federal government support are essential to maintaining 

our access to debt funding. Changes or perceived changes in federal government support of our business, our debt 

securities or our status as a government-sponsored enterprise could materially and adversely affect our ability to fund 

our business. There can be no assurance that the government will continue to support our business or our debt 

securities, or that our current level of access to debt funding will continue. If our senior preferred stock purchase 

agreement with Treasury is amended in the future to reduce its support for our debt securities issued after such 

amendment, it could materially increase our borrowing costs or materially adversely affect our access to the debt capital 

markets. 

Future changes or disruptions in the financial markets could significantly change the amount, mix and cost of funds we 

obtain, as well as our liquidity position. If we are unable to issue a sufficient amount of short- and long-term debt 

securities at attractive rates, it could interfere with the operation of our business and have a material adverse effect on 

our liquidity, results of operations, financial condition and net worth.

Our liquidity contingency plans may be difficult or impossible to execute during a sustained market liquidity crisis. If the 

financial markets experience substantial volatility in the future similar to or more intensely than in 2020, it could 

significantly adversely affect the amount, mix and cost of funds we obtain, as well as our liquidity position. If we cannot 

access the unsecured debt markets, our ability to repay maturing indebtedness and fund our operations could be 

significantly impaired. In this event, our alternative source of liquidity, our other investments portfolio, may not be 

sufficient to meet our liquidity needs. In addition, as noted in a risk factor below in “Market and Industry Risk,” in January 

2023, the outstanding debt of the United States reached the statutory debt limit and Treasury has been taking 

extraordinary measures to prevent the United States from defaulting on its obligations. If the United States government 

were to default on its obligations, or if the market anticipates such a default is likely, it could materially adversely affect 

the value of our other investments portfolio, as a large portion of this portfolio consists of U.S. Treasury securities.

Risk Factors | Operational Risk

Fannie Mae 2022 Form 10-K 51
A decrease in the credit ratings on our senior unsecured debt could have an adverse effect on our ability to 

issue debt on reasonable terms, particularly if such a decrease were not based on a similar action on the credit 

ratings of the U.S. government. A decrease in our credit ratings also could require that we post additional 

collateral for our derivatives contracts.

A reduction in our credit ratings could materially adversely affect our liquidity, our ability to conduct our normal business 

operations, our financial condition and our results of operations. Credit ratings on our senior unsecured debt, as well as 

the credit ratings of the U.S. government, are primary factors that could affect our borrowing costs and our access to the 

debt capital markets. Credit ratings on our debt are subject to revision or withdrawal at any time by the rating agencies. 

Actions by governmental entities impacting the support our business or our debt securities receive from Treasury could 

adversely affect the credit ratings on our senior unsecured debt. If our senior preferred stock purchase agreement with 

Treasury is amended to reduce its support for our debt securities issued after such amendment, it could result in a 

downgrade in the credit ratings on our senior unsecured debt.

Because we rely on the U.S. government for capital support, in recent years, when a rating agency has taken an action 

relating to the U.S. government’s credit rating, they have taken a similar action relating to our ratings at approximately 

the same time. Standard & Poor’s Global Ratings (“S&P”), Moody’s Investors Service (“Moody’s”) and Fitch Ratings 

Limited (“Fitch”) have all indicated that they would likely lower their ratings on the debt of Fannie Mae and certain other 

government-related entities if they were to lower their ratings on the U.S. government. As a result, if a future 

government shutdown, a default by the United States government on its obligations, or other event results in 

downgrades of the government’s credit rating, our credit ratings may be similarly downgraded. As noted in a risk factor 

below in “Market and Industry Risk,” in January 2023, the outstanding debt of the United States reached the statutory 

debt limit and Treasury has been taking extraordinary measures to prevent the United States from defaulting on its 

obligations. We currently cannot predict the potential impact of a credit ratings downgrade on demand for our securities 

or on our business. 

A reduction in our credit ratings also could cause derivatives clearing organizations or their members to demand that we 

post additional collateral for our derivative contracts. Our credit ratings and ratings outlook are included in “MD&A—

Liquidity and Capital Management—Liquidity Management—Credit Ratings.”

Market and Industry Risk

Changes in interest rates or our loss of the ability to manage interest-rate risk successfully could adversely 

affect our financial results and condition, and increase our interest-rate risk.

We are subject to interest-rate risk, which is the risk that movements in interest rates will adversely affect the value of 

our assets or liabilities or our future earnings or capital. Our exposure to interest-rate risk primarily arises from two 

sources: (1) our “net portfolio,” which we define as: our retained mortgage portfolio assets, our other investments 

portfolio, outstanding debt of Fannie Mae used to fund the retained mortgage portfolio assets and other investments 

portfolio, mortgage commitments and risk management derivatives; and (2) our consolidated MBS trusts. We describe 

these risks in more detail in “MD&A—Risk Management—Market Risk Management, including Interest-Rate Risk 

Management.” Changes in interest rates affect both the value of our mortgage and other assets and prepayment rates 

on our mortgage loans, which could have a material adverse effect on our financial results and condition, as well as our 

liquidity. 

Our ability to manage interest-rate risk depends on our ability to issue debt instruments with a range of maturities and 

other features, including call provisions, at attractive rates and to engage in derivatives transactions. We must exercise 

judgment in selecting the amount, type and mix of debt and derivative instruments that will most effectively manage our 

interest-rate risk. The amount, type and mix of financial instruments that are available to us may not offset possible 

future changes in the spread between our borrowing costs and the interest we earn on our mortgage assets. We mark 

to market changes in the estimated fair value of our derivatives through our earnings on a quarterly basis, but we do not 

similarly mark to market changes in some of the financial instruments that generate our interest-rate risk exposures. As 

a result, changes in interest rates, particularly significant changes, can have an adverse effect on our earnings and net 

worth, depending on the nature of the changes and the derivatives and short-term investments we hold at that time. 

We have experienced significant fair value losses in some periods due to changes in interest rates. Our hedge 

accounting program is specifically designed to address the volatility of our financial results associated with changes in 

fair value related to changes in the benchmark interest rates. As such, earnings variability driven by other factors, such 

as spreads or changes in cost basis amortization recognized in net interest income, remains. We describe how changes 

in amortization affect net interest income in “MD&A—Consolidated Results of Operations—Net Interest Income.” In 

addition, our ability to effectively reduce earnings volatility is dependent on having the right mix and volume of interestrate swaps available. As our portfolio of interest-rate swaps varies over time, our ability to reduce earnings volatility 

through hedge accounting may vary as well. 

Risk Factors | Liquidity and Funding Risk

Fannie Mae 2022 Form 10-K 52
Changes in interest rates also can affect our credit losses. Interest rates increased significantly during 2022 and may 

increase further. When interest rates increase, our credit losses from loans with adjustable payment terms may increase 

as borrower payments increase at their reset dates, which increases the borrower’s risk of default. Rising interest rates 

may also reduce the opportunity for these borrowers to refinance into a fixed-rate loan. Similarly, many borrowers may 

have additional debt obligations, such as home equity lines of credit and second liens, that also have adjustable 

payment terms. If a borrower’s payment on his or her other debt obligations increases due to rising interest rates or a 

change in amortization, it increases the risk that the borrower may default on a loan we own or guarantee. Rising 

interest rates also typically reduce expected future loan prepayments, which tends to lengthen the expected life of our 

loans and therefore generally increases the probability of default on the loans and therefore our loss reserves. 

Increases in interest rates may also reduce the ability of multifamily borrowers to refinance their loans, which often have 

balloon balances at maturity. In addition, in a rising interest rate environment, multifamily borrowers with adjustable-rate 

mortgages may have difficulty paying higher monthly payments if property operating income is not increasing at a 

similar pace. While we generally require multifamily borrowers with adjustable-rate mortgages to purchase an interest 

rate cap to protect against large movements in interest rates, purchasing or replacing these required interest rate caps, 

especially those with longer terms and/or lower strike rates, becomes more expensive as interest rates rise. As a result, 

the cost of interest rate caps has increased substantially in recent months.

Changes in interest rates also typically affect our business volume. A higher interest rate environment generally results 

in lower business volumes, as fewer loans may benefit from refinancing. Higher interest rates also generally result in 

lower housing sales activity, as the higher cost of borrowing reduces affordability, driving lower purchase mortgage 

volumes.

Changes in spreads could materially impact our results of operations, net worth and the fair value of our net 

assets.

Spread risk is the risk from changes in an instrument’s value that relate to factors other than changes in interest rates. 

We can experience losses from changes in the spreads between our mortgage assets, including mortgage purchase 

and sale commitments, and the debt and derivatives we use to hedge our position. Changes in market conditions, 

including changes in interest rates, liquidity, prepayment and default expectations, and the level of uncertainty in the 

market for a particular asset class may cause fluctuations in spreads. Changes in mortgage spreads have contributed to 

significant volatility in our financial results in certain periods, due to fluctuations in the estimated fair value of the 

financial instruments that we mark to market through our earnings, and this could occur again in a future period. 

Changes in mortgage spreads could cause significant fair value losses, and could adversely affect our near-term 

financial results and net worth. We do not actively manage or hedge our spread risk after we purchase mortgage 

assets, other than through asset monitoring and disposition.

Uncertainty relating to the discontinuance of LIBOR may adversely affect our results of operations, financial 

condition, liquidity and net worth.

ICE Benchmark Administration, the administrator of LIBOR, ceased publication of one-week and two-month U.S. dollar 

LIBOR after December 2021, and has stated its intention to cease publication of overnight, one-month, three-month, 

six-month and one-year U.S. dollar LIBOR tenors after June 2023. We have exposure to one-month, three-month, sixmonth and one-year LIBOR, including in financial instruments that mature after June 2023.

While many of our LIBOR-indexed financial instruments allow us to take discretionary action to select an alternative 

reference rate if LIBOR is discontinued, our use of an alternative reference rate may be subject to legal challenges. As 

described in “Business—Legislation and Regulation—Industry and General Matters—Transition from LIBOR and 

Alternative Reference Rates,” in March 2022, the LIBOR Act was signed into law. The LIBOR Act establishes a safe 

harbor for market participants that act in accordance with such legislation, shielding them from litigation for selecting 

and implementing the Federal Reserve-identified replacement rate and related conforming changes. While the LIBOR 

Act has reduced the risks to us associated with the approaching cessation of LIBOR, we believe there is still the 

potential for disputes and litigation with counterparties, investors, and borrowers in connection with our selection and 

implementation of alternative reference rates. Divergent industry or market participant actions could result after LIBOR 

is no longer available, representative, or viable. It is uncertain what effect any divergent industry practices will have on 

the performance of financial instruments, including those that we own, have issued or will issue. Alternative reference 

rates that replace LIBOR may not yield the same or similar economic results over the lives of the financial instruments, 

which could adversely affect the value of and return on these instruments.

These developments could have a material impact on us, adjustable-rate mortgage borrowers, investors, and our 

lenders and counterparties. This could result in losses, reputational damage, litigation or costs, or otherwise adversely 

affect our business. 

Risk Factors | Market and Industry Risk

Fannie Mae 2022 Form 10-K 53
Our business and financial results are affected by general economic conditions, including home prices and 

employment trends, and changes in economic conditions or financial markets may materially adversely affect 

our business and financial condition.

In general, a prolonged period of slow growth in the U.S. economy or any deterioration in general economic conditions 

or financial markets could materially adversely affect our results of operations, net worth and financial condition. Our 

business is significantly affected by the status of the U.S. economy, including home prices and employment trends, as 

well as economic output levels, interest rates and inflation rates. For example, see a risk factor above in “Credit Risk” for 

a discussion of how home price declines, an economic recession and higher unemployment can negatively affect the 

performance of loans in our guaranty book of business and result in higher provisions for credit losses and write-offs. 

Deterioration in economic conditions also typically results in reduced housing market activity, which reduces our 

business volume. A reduction in our business volume can reduce our net interest income and adversely affect our 

financial results. As described in “MD&A—Key Market Economic Indicators,” we currently expect that a modest 

recession is likely to occur beginning in the first half of 2023, resulting in an increase in the unemployment rate. In 

addition, home prices declined on a national basis in the second half of 2022, and we expect they will decline further.

Global economic conditions can also adversely affect our business and financial results. Changes or volatility in market 

conditions resulting from deterioration in or uncertainty regarding global economic conditions can adversely affect the 

value of our assets, which could materially adversely affect our results of operations, net worth and financial condition. 

To the extent global economic conditions negatively affect the U.S. economy, they also could negatively affect the credit 

performance of the loans in our book of business. 

Volatility or uncertainty in global or domestic political conditions also can significantly affect economic conditions and 

financial markets. Global or domestic political unrest also could affect growth and financial markets. For example, the 

Russian war in Ukraine and related economic sanctions imposed on Russia, as well as any further actions by Russia, 

the United States or others relating to this conflict, may further impact the global economy and financial markets, which 

could further increase inflationary pressure and interest rates, as well as negatively affect economic growth and result in 

disruptions in the financial markets. 

In January 2023, the outstanding debt of the United States reached the statutory debt limit and, since that time, 

Treasury has been taking extraordinary measures to prevent the United States from defaulting on its obligations. In 

January 2023, the Treasury Secretary notified Congress that, while Treasury is not currently able to provide an estimate 

of how long extraordinary measures will enable it to continue to pay the government’s obligations, it is unlikely that cash 

and extraordinary measures will be exhausted before early June 2023. If Congress does not increase or suspend the 

debt limit before the government’s cash and extraordinary measures are exhausted, it could cause significant harm to 

the U.S. economy and global financial stability.

We describe above the risks to our business posed by changes in interest rates and changes in spreads. In addition, 

future changes or disruptions in financial markets could significantly change the amount, mix and cost of funds we 

obtain, as well as our liquidity position.

Actions by the Federal Reserve can materially affect our business and financial condition, including our 

business volumes and demand for our mortgage-backed securities. 

Our business is significantly affected by shifts in fiscal and monetary policies, particularly actions taken by the Federal 

Reserve. In recent years, the Federal Reserve has purchased a significant amount of mortgage-backed securities 

issued by us, Freddie Mac and Ginnie Mae. The Federal Reserve began to taper these purchases in November 2021 

and concluded its asset purchase program in March 2022. In June 2022, the Federal Reserve began the process of 

reducing its holdings of agency mortgage-backed securities by reinvesting principal payments from agency debt and 

agency mortgage-backed securities into agency mortgage-backed securities only to the extent those payments exceed 

monthly caps; the cap was initially set at $17.5 billion per month beginning on June 1, 2022, and increased to $35 billion 

per month in September 2022. We believe the Federal Reserve’s reduction in its purchases of agency mortgage-backed 

securities has reduced demand for our mortgage-backed securities. At the time of this filing, the Federal Reserve has 

not announced any plans to begin selling the mortgage-backed securities in its portfolio. If the Federal Reserve 

announces such a plan or changes its announced strategy to reduce its MBS holdings, it could further reduce demand 

for our mortgage-backed securities, which could adversely affect our results of operations, net worth and financial 

condition.

In addition, the Federal Reserve has raised the target range for the federal funds rate several times over the past year 

to address inflation, and in February 2023 stated that it anticipates that ongoing increases in the target range will be 

appropriate. The strength in inflation also contributed to the sharp rise in mortgage rates in 2022, and mortgage rates 

may rise further in 2023. The increase in mortgage interest rates has already led to a slowdown in housing demand and 

a reduction in our business volume. Due to higher interest rates and increases in mortgage spreads, we have been 

issuing MBS with higher coupon yields in recent periods compared with 2021. While the demand for and liquidity of our 

Risk Factors | Market and Industry Risk

Fannie Mae 2022 Form 10-K 54
higher coupon MBS has improved in recent months, the demand for and liquidity of some of our higher MBS coupon 

yields remains lower than typical demand and liquidity for our MBS. Further interest rate increases or higher levels of 

interest rate volatility could reduce our business volume and the demand for and the liquidity of our MBS, which could 

adversely affect our results of operations, net worth and financial condition. Further interest rate increases also could 

result in greater home price declines or declines in multifamily property values, which also could adversely affect our 

results of operations, net worth and financial condition.

Legal and Regulatory Risk

Regulatory changes in the financial services industry may negatively impact our business.

Changes in the regulation of the financial services industry are affecting and are expected to continue to affect many 

aspects of our business. Changes to financial regulations could affect our business directly or indirectly if they affect our 

lenders and counterparties. Examples of regulatory changes that have affected us or may affect us in the future include 

the Dodd-Frank Act risk retention and single-counterparty credit limit requirements. 

Additional changes in regulations applicable to U.S. banks could affect the volume and characteristics of mortgage 

loans available in the market and could also affect demand for our debt securities and MBS, as U.S. banks purchase a 

large amount of our debt securities and MBS. New or revised liquidity or capital requirements applicable to U.S. banks 

could materially affect banks’ willingness to deliver loans to us and demand by those banks for our debt securities and 

MBS. Developments in connection with the single-counterparty credit limit regulations, including those taken in 

anticipation of our eventual exit from conservatorship, could also cause our lenders and investors to change their 

business practices.

The actions of Treasury, the Commodity Futures Trading Commission, the CFPB, the SEC, the Federal Deposit 

Insurance Corporation, the Federal Reserve and international central banking authorities directly or indirectly impact 

financial institutions’ cost of funds for lending, capital-raising and investment activities, which could increase our 

borrowing costs or make borrowing more difficult for us. Changes in monetary policy are beyond our control and can be 

difficult to anticipate. 

Overall, these legislative and regulatory changes could affect us in substantial and unforeseeable ways and could have 

a material adverse effect on our business, results of operations, financial condition, liquidity and net worth.

Legislative, regulatory or judicial actions could negatively impact our business, results of operations, financial 

condition or net worth.

Legislative, regulatory or judicial actions at the federal, state or local level could negatively impact our business, results 

of operations, financial condition, liquidity or net worth. Legislative, regulatory or judicial actions could affect us in a 

number of ways, including by imposing significant additional costs on us and diverting management attention or other 

resources from other matters. We could also be affected by:

• Further actions taken by the U.S. Congress, Treasury, the Federal Reserve, FHFA or other national, state or 

local government agencies or legislatures in response to the COVID-19 pandemic or other emergencies, such 

as expanding or extending our obligations to help borrowers, renters or counterparties. 

• Legislative or regulatory changes that expand our, or our servicers’, responsibility and liability for securing, 

maintaining or otherwise overseeing properties prior to foreclosure, which could increase our costs. 

• Court decisions concluding that we or our affiliates are governmental actors, which could impose additional 

burdens and requirements on us.

• Designation as a systemically important financial institution by the Financial Stability Oversight Council (the 

“FSOC”). We have not been designated as a systemically important financial institution; however, the FSOC 

announced in 2020 that it will continue to monitor the secondary mortgage market activities of the GSEs to 

ensure potential risks to financial stability are adequately addressed. Designation as a systemically important 

financial institution would result in our becoming subject to additional regulation and oversight by the Federal 

Reserve Board.

• Other agencies of the U.S. government or Congress asking us to take actions to support the housing and 

mortgage markets or in support of other goals. For example, in December 2011, Congress enacted the TCCA 

under which we increased our guaranty fee on all single-family mortgages delivered to us by 10 basis points. 

The revenue generated by this fee increase is paid to Treasury. In November 2021, the Infrastructure 

Investment and Jobs Act was enacted, which extended to October 1, 2032 our obligation under the TCCA to 

collect 10 basis points in guaranty fees on single-family residential mortgages delivered to us and pay the 

associated revenue to Treasury. 

Risk Factors | Market and Industry Risk

Fannie Mae 2022 Form 10-K 55
Our business and financial results could be materially adversely affected by legal or regulatory proceedings.

We are a party to various claims and other legal proceedings. We are periodically involved in government 

investigations. We may be required to establish accruals and to make substantial payments in the event of adverse 

judgments or settlements of any such claims, investigations or proceedings, which could have a material adverse effect 

on our business, results of operations, financial condition, liquidity and net worth. Any legal proceeding or governmental 

investigation, even if resolved in our favor, could result in negative publicity, reputational harm or cause us to incur 

significant legal and other expenses. In addition, responding to these matters could divert significant internal resources 

away from managing our business.

In addition, a number of lawsuits have been filed against the U.S. government relating to the senior preferred stock 

purchase agreement and the conservatorship. See “Note 16, Commitments and Contingencies” and “Legal 

Proceedings” for a description of these lawsuits. These lawsuits, and actions Treasury or FHFA may take in response to 

these lawsuits, could have a material impact on our business. 

General Risk

The COVID-19 pandemic may continue to adversely affect our business and financial results.

The COVID-19 pandemic had a significant adverse effect on the U.S. economy, particularly in the second quarter of 

2020. Although certain economic conditions in the United States improved after the initial impact of the pandemic in 

2020, the pandemic continues to evolve and risks to the U.S. and global economy from the COVID-19 pandemic remain 

that could negatively affect our business and financial results. If the pandemic’s impact on the U.S. and global economy 

worsens, it could impact the ability of borrowers and renters to make their monthly payments, which could negatively 

affect our business and financial results. 

Factors that may impact the extent to which the COVID-19 pandemic affects our business, financial results and financial 

condition include: the prevalence and severity of future outbreaks; the actions taken to contain the virus, or treat its 

impact, including government actions to mitigate the economic impact of the pandemic; borrower and renter behavior in 

response to the pandemic and its economic impact; the short-term and long-term impact of COVID-19 infections on the 

U.S. workforce; and future economic and operating conditions, including the economic impact of outbreaks or increases 

in the number or severity of COVID-19 cases. To the extent the COVID-19 pandemic adversely affects our business and 

financial results, it may also have the effect of heightening many of the other risks described in these risk factors.

Changes in accounting standards and policies can be difficult to predict and can materially impact how we 

record and report our financial results.

Our accounting policies and methods are fundamental to how we record and report our financial condition, results of 

operations and cash flows. From time to time, the FASB or the SEC changes the financial accounting and reporting 

standards or the policies that govern the preparation of our financial statements. In addition, FHFA provides guidance 

that affects our adoption or implementation of financial accounting or reporting standards. These changes can be 

difficult to predict and expensive to implement, and can materially impact how we record and report our financial 

condition, results of operations and cash flows. We could be required to apply new or revised guidance retrospectively, 

which may result in the revision of prior-period financial statements by material amounts. The implementation of new or 

revised accounting guidance could have a material adverse effect on our financial results or net worth. 

In many cases, our accounting policies and methods, which are fundamental to how we report our financial 

condition and results of operations, require management to make judgments and estimates about matters that 

are inherently uncertain. Management also relies on models in making these estimates.

Our management must exercise judgment in applying many of our accounting policies and methods so that they comply 

with GAAP and reflect management’s judgment of the most appropriate manner to report our financial condition and 

results of operations. In some cases, management must select the appropriate accounting policy or method from two or 

more acceptable alternatives, any of which might be reasonable under the circumstances but might affect the amounts 

of assets, liabilities, revenues and expenses that we report. See “Note 1, Summary of Significant Accounting Policies” 

for a description of our significant accounting policies. 

We have identified one of our accounting estimates, allowance for loan losses, as critical to the presentation of our 

financial condition and results of operations, as described in “MD&A—Critical Accounting Estimates.” We believe this 

estimate is critical because it involves significant judgments and assumptions about highly complex and inherently 

uncertain matters, and the use of reasonably different judgments and assumptions could have a material impact on our 

reported results of operations or financial condition.

Because our financial statements involve estimates for amounts that are very large, even a small change in the estimate 

can have a significant impact for the reporting period. For example, because our allowance for loan losses is so large, 

Risk Factors | Legal and Regulatory Risk

Fannie Mae 2022 Form 10-K 56
even a change that has a small impact relative to the size of this allowance can have a meaningful impact on our results 

for the quarter in which we make the change. 

Many of our accounting methods involve substantial use of models, which are inherently imperfect predictors of actual 

results because they are based on assumptions, including about future events. For example, we use models to 

determine expected lifetime losses on loans and other financial instruments subject to Accounting Standards Update 

2016-13, Financial Instruments—Credit Losses, Measurement of Credit Losses on Financial Instruments and related 

amendments (referred to as the “CECL standard”). Our actual results could differ significantly from those generated by 

our models. As a result, the estimates that we use to prepare our financial statements, as well as our estimates of our 

future results of operations, may be inaccurate, perhaps significantly. For more discussion of the risks associated with 

our use of models, see a risk factor in “Operational Risk” above.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

There are no physical properties that are material to us. 

Item 3. Legal Proceedings

This item describes our material legal proceedings. We describe additional material legal proceedings in “Note 16, 

Commitments and Contingencies,” which is incorporated herein by reference. In addition to the matters specifically 

described or incorporated by reference in this item, we are involved in legal and regulatory proceedings that arise in the 

ordinary course of business that we do not expect will have a material impact on our business or financial condition. 

However, litigation claims and proceedings of all types are subject to many factors and their outcome and effect on our 

business and financial condition generally cannot be predicted accurately.

We establish an accrual for legal claims only when a loss is probable and we can reasonably estimate the amount of 

such loss. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for 

those claims. If certain of these matters are determined against us, FHFA or Treasury, it could have a material adverse 

effect on our results of operations, liquidity and financial condition, including our net worth.

Senior Preferred Stock Purchase Agreements Litigation

Since June 2013, preferred and common stockholders of Fannie Mae and Freddie Mac filed lawsuits in multiple federal 

courts against one or more of the United States, Treasury and FHFA, challenging actions taken by the defendants 

relating to the Fannie Mae and Freddie Mac senior preferred stock purchase agreements and the conservatorships of 

Fannie Mae and Freddie Mac. Some of these lawsuits also contain claims against Fannie Mae and Freddie Mac. The 

legal claims being advanced by one or more of these lawsuits include challenges to the net worth sweep dividend 

provisions of the senior preferred stock that were implemented pursuant to August 2012 amendments to the 

agreements, the payment of dividends to Treasury under the net worth sweep dividend provisions, and FHFA’s decision 

to require Fannie Mae and Freddie Mac to draw funds from Treasury to pay dividends to Treasury prior to the August 

2012 amendments. The plaintiffs seek various forms of equitable and injunctive relief as well as damages. The cases 

that remain pending or were terminated after September 30, 2022 are as follows:

District of Columbia (In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action 

Litigations and Fairholme Funds v. FHFA). Fannie Mae is a defendant in two cases in the U.S. District Court for the 

District of Columbia, including a consolidated class action. The cases were consolidated for trial and a trial was 

conducted from October 17, 2022 to November 1, 2022. The jury was not able to reach a verdict and the judge declared 

a mistrial on November 7, 2022. A new trial is scheduled to begin on July 24, 2023. See “Note 16, Commitments and 

Contingencies” for additional information.

Southern District of Texas (Collins, et al. v. Yellen, et al.). On October 20, 2016, preferred and common stockholders 

filed a complaint against FHFA and Treasury in the U.S. District Court for the Southern District of Texas. On May 22, 

2017, the court dismissed the case. On September 6, 2019, the U.S. Court of Appeals for the Fifth Circuit, sitting en 

banc, affirmed the district court’s dismissal of claims against Treasury, but reversed the dismissal of claims against 

FHFA. 

On June 23, 2021, the U.S. Supreme Court held that FHFA did not exceed its statutory powers as conservator when it 

agreed to the net worth sweep dividend provisions of the third amendment to the senior preferred stock purchase 

agreements in August 2012. The court also held that the provision of the Housing and Economic Recovery Act of 2008 

Risk Factors | General Risk

Fannie Mae 2022 Form 10-K 57
that restricts the President’s power to remove the FHFA Director without cause violates the Constitution’s separation of 

powers and, thus, the FHFA Director may be removed by the President for any reason. The court rejected plaintiffs’ 

request to rescind the third amendment to the senior preferred stock purchase agreements. However, the Supreme 

Court remanded the case to the Fifth Circuit for further proceedings on the sole issue of whether the stockholders 

suffered compensable harm related to the constitutional claim during the limited time-period when a Senate-confirmed 

FHFA Director was in office. On March 4, 2022, the Fifth Circuit remanded the case to the district court for further 

proceedings on the compensable harm issue. On June 3, 2022, the stockholders filed an amended complaint and on 

July 18, 2022, FHFA and Treasury moved to dismiss that complaint. On November 21, 2022, the district court dismissed 

the case and on December 5, 2022, plaintiffs filed a notice of appeal. 

Western District of Michigan (Rop et al. v. FHFA et al.). On June 1, 2017, preferred and common stockholders of Fannie 

Mae and Freddie Mac filed a complaint for declaratory and injunctive relief against FHFA and Treasury in the U.S. 

District Court for the Western District of Michigan. FHFA and Treasury moved to dismiss the case on September 8, 

2017, and plaintiffs filed a motion for summary judgment on October 6, 2017. On September 8, 2020, the court denied 

plaintiffs’ motion for summary judgment and granted defendants’ motion to dismiss. On October 4, 2022, the U.S. Court 

of Appeals for the Sixth Circuit reversed the dismissal and remanded the case to the district court to determine whether 

the stockholders suffered compensable harm. On February 2, 2023, plaintiffs filed a petition with the Supreme Court 

seeking review of the Sixth Circuit’s decision.

District of Minnesota (Bhatti et al. v. FHFA et al.). On June 22, 2017, preferred and common stockholders of Fannie 

Mae and Freddie Mac filed a complaint for declaratory and injunctive relief against FHFA and Treasury in the U.S. 

District Court for the District of Minnesota. The court dismissed the case on July 6, 2018. On October 6, 2021, the U.S. 

Court of Appeals for the Eighth Circuit affirmed in part and reversed in part the district court’s ruling and remanded the 

case to the district court to determine whether the stockholders suffered compensable harm. On January 26, 2022, 

plaintiffs filed an amended complaint. On March 11, 2022 and March 14, 2022, Treasury and FHFA each filed motions to 

dismiss the new complaint. On December 16, 2022, the district court dismissed the case and on January 9, 2023, the 

plaintiffs filed a notice of appeal.

Eastern District of Pennsylvania (Wazee Street Opportunities Fund IV L.P. et al. v. FHFA et al.). On August 16, 2018, 

common stockholders of Fannie Mae and Freddie Mac filed a complaint for declaratory and injunctive relief against 

FHFA and Treasury in the U.S. District Court for the Eastern District of Pennsylvania. FHFA and Treasury moved to 

dismiss the case on November 16, 2018, and plaintiffs filed a motion for summary judgment on December 21, 2018. 

This case is currently stayed.

U.S. Court of Federal Claims. Numerous cases were filed against the United States in the U.S. Court of Federal Claims, 

with four of those cases listing Fannie Mae as a nominal defendant: Fisher v. United States of America, filed on 

December 2, 2013; Rafter v. United States of America, filed on August 14, 2014; Perry Capital LLC v. United States of 

America, filed on August 15, 2018; and Fairholme Funds Inc. v. United States, which was originally filed on July 9, 2013, 

and amended to include Fannie Mae as a nominal defendant on October 2, 2018. Plaintiffs in these cases alleged that 

the net worth sweep dividend provisions of the senior preferred stock that were implemented pursuant to the August 

2012 amendment constituted a taking of Fannie Mae’s property without just compensation in violation of the U.S. 

Constitution; certain plaintiffs alleged other claims, including breach of contract and breach of fiduciary duty. The Fisher

plaintiffs are pursuing only derivative claims on behalf of Fannie Mae, while the plaintiffs in Rafter, Perry Capital and 

Fairholme Funds alleged direct claims against the United States, in addition to derivative claims on behalf of Fannie 

Mae. The United States filed a motion to dismiss the Fisher, Rafter and Fairholme Funds cases, as well as other cases 

that did not list Fannie Mae as a nominal defendant, on August 1, 2018. On December 6, 2019, the court entered an 

order in the Fairholme Funds case that granted the government’s motion to dismiss all the direct claims but denied the 

motion as to the derivative claims brought on behalf of Fannie Mae. In the Fisher case, the court denied the 

government’s motion to dismiss on May 8, 2020 and, on August 21, 2020, the Federal Circuit denied the Fisher 

plaintiffs’ request for interlocutory appeal. The plaintiffs in Fairholme Funds and other cases affected by the court’s 

December 6, 2019 decision appealed that decision to the Federal Circuit. On February 22, 2022, the Federal Circuit 

affirmed the dismissal of the plaintiffs’ direct claims but reversed the U.S. Court of Federal Claims’ ruling on plaintiffs’ 

derivative claims, holding that those claims should also be dismissed. On July 22, 2022, the plaintiffs in Fairholme 

Funds and in other cases that did not list Fannie Mae as a nominal defendant filed petitions with the Supreme Court 

seeking review of the Federal Circuit’s decision. On January 9, 2023, the Supreme Court denied these petitions. The 

Perry Capital case was dismissed on January 30, 2023 and the Fairholme Funds case was dismissed on February 1, 

2023. 

Item 4. Mine Safety Disclosures

None.

Legal Proceedings

Fannie Mae 2022 Form 10-K 58
PART II

Item 5. Market for Registrant’s Common Equity, Related 

Stockholder Matters and Issuer Purchases of Equity 

Securities

Common Stock

Our common stock is traded in the over-the-counter market and quoted on the OTCQB, operated by OTC Markets 

Group Inc., under the ticker symbol “FNMA.” Over-the-counter market quotations for our common stock reflect interdealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. 

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A., and its address is 

P.O. Box 43006, Providence, RI 02940-3006 or, for overnight correspondence, 150 Royall St., Suite 101, Canton, MA 

02021. 

Holders

As of February 1, 2023, we had approximately 8,000 registered holders of record of our common stock. In addition, as 

of February 1, 2023, Treasury held a warrant giving it the right to purchase shares of our common stock equal to 79.9% 

of the total number of shares of our common stock outstanding on a fully diluted basis on the date of exercise.

Equity Compensation Plan Information

As of December 31, 2022, we had no outstanding options, warrants or rights under any equity compensation plan. 

Although we have a legacy equity compensation plan that was previously approved by shareholders, our 1985 

Employee Stock Purchase Plan, we do not anticipate issuing additional shares under that plan. Moreover, we are 

prohibited from issuing any stock or other equity securities as compensation without the approval of FHFA and the prior 

written consent of Treasury under the senior preferred stock purchase agreement, except under limited circumstances. 

Recent Sales of Unregistered Equity Securities

Under the terms of our senior preferred stock purchase agreement with Treasury, we are prohibited from selling or 

issuing our equity interests, without the prior written consent of Treasury except under limited circumstances described 

in “Conservatorship and Treasury Agreements—Treasury Agreements—Covenants under Treasury Agreements.”

During the quarter ended December 31, 2022, we did not sell any equity securities. 

Information about Certain Securities Issuances by Fannie Mae

Pursuant to SEC regulations, public companies are required to disclose certain information when they incur a material 

direct financial obligation or become directly or contingently liable for a material obligation under an off-balance sheet 

arrangement. The disclosure must be made in a current report on Form 8-K under Item 2.03 or, if the obligation is 

incurred in connection with certain types of securities offerings, in prospectuses for that offering that are filed with the 

SEC.

Because the securities we issue are exempted securities under the Securities Act of 1933, we do not file registration 

statements or prospectuses with the SEC with respect to our securities offerings. To comply with the disclosure 

requirements of Form 8-K relating to the incurrence of material financial obligations, in accordance with a “no-action” 

letter we received from the SEC staff in 2004, we report our incurrence of these types of obligations in offering circulars 

or prospectuses (or supplements thereto) that we post on our website within the same time period that a prospectus for 

a non-exempt securities offering would be required to be filed with the SEC. To the extent we incur a material financial 

obligation that is not disclosed in this manner, we would file a Form 8-K if required to do so under applicable Form 8-K 

requirements.

The website address for disclosure about our debt securities is www.fanniemae.com/debtsearch. From this address, 

investors can access the offering circular and related supplements for debt securities offerings under Fannie Mae’s 

universal debt facility, including pricing supplements for individual issuances of debt securities.

Disclosure about our obligations pursuant to the MBS we issue, some of which may be off-balance sheet obligations, 

can be found at www.fanniemae.com/mbsdisclosure. From this address, investors can access information and 

documents about our MBS, including prospectuses and related prospectus supplements.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Fannie Mae 2022 Form 10-K 59
We are providing our website address solely for your information. Information appearing on our website is not 

incorporated into this report.

Our Purchases of Equity Securities

We did not repurchase any of our equity securities during the fourth quarter of 2022. 

Item 6. [Reserved]

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Fannie Mae 2022 Form 10-K 60
Item 7. Management’s Discussion and Analysis of Financial 

Condition and Results of Operations

You should read this MD&A together with our consolidated financial statements as of December 31, 2022 and the 

accompanying notes. This MD&A does not discuss 2020 performance or a comparison of 2020 versus 2021

performance for select areas where we have determined the omitted information is not necessary to understand our 

current-period financial condition, changes in our financial condition, or our results. The omitted information may be 

found in our 2021 Form 10-K, filed with the SEC on February 15, 2022, in MD&A sections titled “Consolidated Results of 

Operations,” “Single-Family Business,” “Multifamily Business,” and “Liquidity and Capital Management.”

Key Market Economic Indicators

Below we discuss how varying macroeconomic conditions can influence our financial results across different business 

and economic environments. Our forecasts and expectations are based on many assumptions, subject to many 

uncertainties and may change, perhaps substantially, from our current forecasts and expectations. See “ForwardLooking Statements” and “Risk Factors” for a discussion of factors that could cause actual results to differ materially 

from our current forecasts and expectations. For further discussion on housing activity, see “Single-Family Business—

Single-Family Mortgage Market” and “Multifamily Business—Multifamily Mortgage Market.”

Selected Benchmark Interest Rates

4.55%

3.74%

2.67%

3.11%

6.42%

3.50%

2.71%

1.34%

2.07%

5.39%

2.68%

1.92%

0.91%

1.51%

3.88%

2.71%

1.90%

0.93%

1.58%

3.84%

2.81%

1.91%

0.24%

0.21%

4.77%

3.00%

1.55%

0.07% 0.05%

4.30%

30-year FRM rate1 30-year Fannie Mae MBS par coupon rate2 10-year Treasury rate2 10-year swap rate2 3-month London Inter-Bank Offered Rate (LIBOR)2 Secured Overnight Financing Rate (SOFR)3 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22

(1) Refers to the U.S. weekly average fixed-rate mortgage rate according to Freddie Mac's Primary Mortgage Market Survey®

. These rates are 

reported using the latest available data for a given period.

(2) According to Bloomberg.

(3) Refers to the daily rate per the Federal Reserve Bank of New York.

How Interest Rates Can Affect Our Financial Results

• Net interest income. In a rising interest-rate environment, our mortgage loans tend to prepay more slowly as 

borrowers are less likely to refinance. We amortize various cost basis adjustments over the life of the mortgage 

loan, including those relating to loan-level price adjustments we receive as upfront fees at the time we acquire 

single-family loans. As a result, any prepayment of a loan results in an accelerated realization of those upfront 

fees as income. Therefore, as loan prepayments slow, the accelerated realization of amortization income also 

MD&A | Key Market Economic Indicators

Fannie Mae 2022 Form 10-K 61
slows. Conversely, in a declining interest-rate environment, our mortgage loans tend to prepay faster as 

borrowers are more likely to refinance, typically resulting in the opposite trend of higher amortization income 

from cost basis adjustments on mortgage loans. Interest rates also affect the amount of interest income we 

earn on our assets. Our other investments portfolio and certain mortgage related assets typically earn more 

interest income in a higher interest-rate environment and less interest income in a lower interest-rate 

environment. See “Consolidated Results of Operations—Net Interest Income” for a discussion of how interest 

rate changes impacted our financial results. 

• Fair value gains (losses). We have exposure to fair value gains and losses resulting from changes in interest 

rates, primarily through our mortgage commitment derivatives and risk management derivatives, which we 

mark to market through earnings. Fair value gains and losses on our mortgage commitment derivatives 

fluctuate depending on how interest rates and prices move between the time a commitment is opened and 

when it settles. The net position and composition across the yield curve of our risk management derivatives 

changes over time. As a result, interest rate changes (increases or decreases) and yield curve changes 

(parallel, steepening or flattening shifts) will generate varying amounts of fair value gains or losses in a given 

period.

• Benefit (provision) for credit losses. Increases in mortgage interest rates tend to lengthen the expected lives of 

our loans, as our borrowers are less likely to refinance, which generally increases the expected impairment and 

provision for credit losses on loans, particularly those modified in troubled debt restructuring (“TDR”) 

arrangements. Decreases in mortgage interest rates tend to shorten the expected lives of our loans as 

borrowers are more likely to refinance, which generally reduces the impairment and provision for credit losses 

on such loans. See “Consolidated Results of Operations—Benefit (Provision) for Credit Losses” and “Note 1, 

Summary of Significant Accounting Policies” for additional information on our adoption of Accounting Standards 

Update “ASU”) 2022-02, Financial Instruments – Credit Losses (Topic 326) Troubled Debt Restructurings and 

Vintage Disclosures (“ASU 2022-02”) effective January 1, 2022, which resulted in the prospective 

discontinuation of TDR accounting, and its impact on our financial results.

Single-Family Annual Home Price Growth Rate(1)

5.0% 4.3%

10.4%

18.6%

9.2%

Fannie Mae national home price index 2018 2019 2020 2021 2022

(1) Calculated internally using property data on loans purchased by Fannie Mae, Freddie Mac, and other third-party home sales data. Fannie 

Mae’s home price index is a weighted repeat transactions index, measuring average price changes in repeat sales on the same properties. 

Fannie Mae’s home price index excludes prices on properties sold in foreclosure. Fannie Mae’s home price estimates are based on nonseasonally adjusted preliminary data and are subject to change as additional data becomes available.

How Home Prices Can Affect Our Financial Results

• Actual and forecasted home prices impact our provision or benefit for credit losses as well as the growth and 

size of our guaranty book of business.

• Changes in home prices affect the amount of equity that borrowers have in their homes. Borrowers with less 

equity typically have higher delinquency and default rates, particularly in times of economic stress.

• As home prices increase, the severity of losses we incur on defaulted loans that we hold or guarantee 

decreases because the amount we can recover from the properties securing the loans increases. Declines in 

home prices increase the losses we incur on defaulted loans.

MD&A | Key Market Economic Indicators

Fannie Mae 2022 Form 10-K 62
• As home prices rise, the principal balance of loans associated with newly acquired purchase money mortgages 

may increase, causing growth in the size of our guaranty book. Additionally, rising home prices can increase the 

amount of equity borrowers have in their home, which may lead to an increase in origination volumes for cashout refinance loans with higher principal balances than the existing loan. Replacing existing loans with newly 

acquired cash-out refinances can affect the growth and size of our guaranty book. 

• Home price growth on a national basis decreased from 18.6% in 2021 to 9.2% in 2022. Annual home price 

growth in 2022 reflected home price increases in the first half of 2022, partially offset by home price declines of 

1.4% in the second half of 2022. Home price declines in the second half of 2022 were primarily driven by 

elevated mortgage interest rates and affordability constraints. We expect these trends to continue and result in 

estimated home price declines of 4.2% in 2023. We also expect regional variation in the timing and rate of 

home price changes.

New Housing Starts(1)

1,250 1,290

1,380

1,601 1,553

876 888

991

1,127

1,008

374 402

389

474

545

3.2% 1.4%

11.6%

13.8%

(10.6)%

5.7%

7.5%

(3.3)%

21.8%

15.1%

% change in multifamily housing starts % change in single-family housing starts Multifamily starts (in thousands) Single-family starts (in thousands)

2018 2019 2020 2021 2022

(1) According to U.S. Census Bureau and subject to revision.

How Housing Activity Can Affect Our Financial Results

• Housing is among the most interest-rate-sensitive sectors of the economy. In addition to interest rates, two key 

aspects of economic activity that can impact supply and demand for housing, and thus our business and 

financial results, are the rates of household formation and housing construction.

• Household formation is a key driver of demand for both single-family and multifamily housing as a newly formed 

household will either rent or purchase a home. Thus, changes in the pace of household formation can affect 

home prices, multifamily property values and credit performance as well as the degree of loss on defaulted 

loans.

• Growth of household formation stimulates homebuilding. Homebuilding has typically been a cyclical leader, 

weakening prior to a slowdown in U.S. economic activity and accelerating prior to a recovery, which contributes 

to the growth of GDP and employment.

• A decline in housing starts results in fewer new homes being available for purchase and potentially a lower 

volume of mortgage originations. Construction activity can also affect credit losses through its impact on home 

prices. If the growth of demand exceeds the growth of supply, prices will appreciate and impact the risk profile 

of newly originated home purchase mortgages, depending on where in the housing cycle the market is. A 

reduced pace of construction is often associated with a broader economic slowdown and may signal expected 

increases in delinquency and losses on defaulted loans. 

MD&A | Key Market Economic Indicators

Fannie Mae 2022 Form 10-K 63
• Single-family housing starts fell in 2022 in response to anticipated decreases in demand. In 2023, we expect 

home sales and single-family and multifamily housing starts to decline compared with 2022 due to elevated 

mortgage rates, continued low home affordability, and an expected modest recession.

GDP, Unemployment Rate and Personal Consumption

(6.2)%

(32.1)%

43.0%

3.9%

10.8% 12.1%

3.0% 3.1% 1.3% 2.0% 2.3% 2.1%

(4.6)%

(29.9)%

35.3% 3.9%

6.3% 7.0%

2.7%

7.0%

(1.6)%

(0.6)%

3.2%

2.9%

4.4%

11.0%

7.9% 6.7% 6.1% 5.9% 4.8% 3.9% 3.6% 3.6% 3.5% 3.5%

U.S. personal consumption, annualized percentage change1 Growth in GDP, annualized percentage change U.S. unemployment rate, as of period end2 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22

(1) Real GDP growth (decline) and personal consumption growth (decline) are based on the quarterly series calculated by the Bureau of 

Economic Analysis and are subject to revision. 

(2) According to the U.S. Bureau of Labor Statistics and subject to revision.

How GDP, the Unemployment Rate and Personal Consumption Can Affect Our 

Financial Results

• Changes in GDP, the unemployment rate and personal consumption can affect several mortgage market 

factors, including the demand for both single-family and multifamily housing and the level of loan delinquencies, 

which impacts credit losses.

• Economic growth is a key factor for the performance of mortgage-related assets. In a growing economy, 

employment and income are typically rising, thus allowing borrowers to meet payment requirements, existing 

homeowners to consider purchasing and moving to another home, and renters to consider becoming 

homeowners. Homebuilding typically increases to meet the rise in demand. Mortgage delinquencies typically 

fall in an expanding economy, thereby decreasing credit losses. 

• In a slowing economy, income growth and housing activity typically slow as an early indicator of reduced 

economic activity, followed by slowing employment. Typically, as an economic slowdown intensifies, 

households reduce their spending. This reduction in consumption then accelerates the slowdown. An economic 

slowdown can lead to employment losses, impairing the ability of borrowers and renters to meet mortgage and 

rental payments, thus causing loan delinquencies to rise. Home sales and mortgage originations also typically 

fall in a slowing economy.

• While GDP grew in 2022, we expect that a modest recession is likely to occur beginning in the first half of 2023, 

resulting in an increase in the unemployment rate. We expect our economic outlook will be influenced by a 

number of factors that are subject to change, such as the persistence of inflationary pressures, the speed at 

which expected monetary policy tightening is adjusted and the risk of international financial market disruptions.

MD&A | Key Market Economic Indicators

Fannie Mae 2022 Form 10-K 64
See “Risk Factors—Credit Risk” and “Risk Factors—Market and Industry Risk” for further discussion of risks to our 

business and financial results associated with interest rates, home prices, housing activity and economic conditions.

Consolidated Results of Operations

This section discusses our consolidated results of operations and should be read together with our consolidated 

financial statements and the accompanying notes.

Summary of Consolidated Results of Operations

For the Year Ended December 31, Variance

2022 2021 2020 2022 vs. 2021 2021 vs. 2020

(Dollars in millions)

Net interest income(1) $ 29,423 $ 29,587 $ 24,866 $ (164) $ 4,721 

Fee and other income 312 361 462 (49) (101) 

Net revenues 29,735 29,948 25,328 (213) 4,620 

Investment gains (losses), net (297) 1,352 907 (1,649) 445 

Fair value gains (losses), net(1) 1,284 155 (2,501) 1,129 2,656 

Administrative expenses (3,329) (3,065) (3,068) (264) 3 

Benefit (provision) for credit losses (6,277) 5,130 (678) (11,407) 5,808 

TCCA fees (3,369) (3,071) (2,673) (298) (398) 

Credit enhancement expense(2) (1,323) (1,051) (1,361) (272) 310 

Change in expected credit enhancement recoveries(3) 727 (194) 233 921 (427) 

Other expenses, net(4) (918) (1,255) (1,308) 337 53 

Income before federal income taxes 16,233 27,949 14,879 (11,716) 13,070 

Provision for federal income taxes (3,310) (5,773) (3,074) 2,463 (2,699) 

Net income $ 12,923 $ 22,176 $ 11,805 $ (9,253) $ 10,371 

Total comprehensive income $ 12,920 $ 22,098 $ 11,790 $ (9,178) $ 10,308 

(1) In January 2021, we began applying fair value hedge accounting. For qualifying hedging relationships, fair value changes attributable to 

movements in the designated benchmark interest rates for hedged mortgage loans and funding debt and the fair value change of the 

designated portion of the paired interest-rate swaps are recognized in “Net interest income.” In 2020, all fair value changes for interest-rate 

swaps were recognized in “Fair value gains (losses), net.” See “Fair Value Gains (Losses), Net” and “Note 1, Summary of Significant 

Accounting Policies” for more information about our hedge accounting program.

(2) Consists of costs associated with our freestanding credit enhancements, which primarily include our Connecticut Avenue Securities®

(“CAS”) and CIRT programs, enterprise-paid mortgage insurance (“EPMI”) and certain lender risk-sharing programs. 

(3) Includes estimated changes in benefits, as well as any realized amounts, from our freestanding credit enhancements. 

(4) Consists of debt extinguishment gains and losses, foreclosed property income (expense), gains and losses from partnership investments, 

housing trust fund expenses, loan subservicing costs, and servicer fees paid in connection with certain loss mitigation activities.

Net Interest Income

Our primary source of net interest income is guaranty fees we receive for managing the credit risk on loans underlying 

Fannie Mae MBS held by third parties.

Guaranty fees consist of two primary components: 

• base guaranty fees that we receive over the life of the loan; and

• upfront fees that we receive at the time of loan acquisition primarily related to single-family loan-level price

adjustments and other fees we receive from lenders, which are amortized into net interest income as cost basis 

adjustments over the contractual life of the loan. We refer to this as amortization income.

We recognize almost all of our guaranty fee revenue in net interest income because we consolidate the substantial 

majority of loans underlying our Fannie Mae MBS in consolidated trusts in our consolidated balance sheets. Guaranty 

fees from these loans account for the difference between the interest income on loans in consolidated trusts and the 

interest expense on the debt of consolidated trusts.

The timing of when we recognize amortization income can vary based on a number of factors, the most significant of 

which is a change in mortgage interest rates. In a rising interest-rate environment, our mortgage loans tend to prepay 

more slowly, which typically results in lower amortization income. Conversely, in a declining interest-rate environment, 

our mortgage loans tend to prepay faster, typically resulting in higher amortization income. 

MD&A | Key Market Economic Indicators

Fannie Mae 2022 Form 10-K 65
We also recognize net interest income on the difference between interest income earned on the assets in our retained 

mortgage portfolio and our other investments portfolio (collectively, our “portfolios”) and the interest expense associated 

with the debt that funds those assets. See “Retained Mortgage Portfolio” and “Liquidity and Capital Management—

Liquidity Management—Other Investments Portfolio” for more information about our portfolios.

Since January 2021, we have recognized fair value changes attributable to movements in benchmark interest rates for 

mortgage loans and funding debt, and for related interest-rate swaps in hedging relationships, as a component of net 

interest income, including the amortization of hedge-related basis adjustments on mortgage loans or funding debt and 

any related interest accrual on the swaps. The net income or expense associated with this activity is presented in the 

“Income (expense) from hedge accounting” line item in the table below. 

For the years ended December 31, 2022 and 2021, we recognized $3.2 billion and $1.5 billion, respectively, in net fair 

value gains on our hedged loans and funding debt as cost basis adjustments, which substantially offset net fair value 

losses on designated interest-rate swaps. These cost basis adjustments on our hedged loans and funding debt will be 

amortized as net expenses over the remaining contractual life of the respective hedged items as a component of “Net 

interest income.” See “Note 1, Summary of Significant Accounting Policies” and “Note 8, Derivative Instruments” for 

more information about our hedge accounting program, as well as “Fair Value Gains (Losses), Net” below.

The table below displays the components of our net interest income from our guaranty book of business, which we 

discuss in “Guaranty Book of Business,” and from our portfolios, as well as from hedge accounting. 

Components of Net Interest Income

For the Year Ended December 31, Variance

2022 2021 2020 2022 vs. 2021 2021 vs. 2020

(Dollars in millions)

Net interest income from guaranty book of business:

Base guaranty fee income(1) $ 16,072 $ 14,159 $ 11,157 $ 1,913 $ 3,002 

Base guaranty fee income related to TCCA(2) 3,369 3,071 2,673 298 398 

Net amortization income(3) 7,099 11,243 9,121 (4,144) 2,122 

Total net interest income from guaranty book of business 26,540 28,473 22,951 (1,933) 5,522 

Net interest income from portfolios(4) 2,954 941 1,915 2,013 (974) 

Income (expense) from hedge accounting(5) (71) 173 — (244) 173 

Total net interest income $ 29,423 $ 29,587 $ 24,866 $ (164) $ 4,721 

Income (expense) from hedge accounting included 

in net interest income:

Fair value gains (losses) on designated risk 

management derivatives in fair value hedges(5) $ (2,536) $ (1,453) $ — $ (1,083) $ (1,453) 

Fair value gains (losses) on hedged mortgage loans 

held for investment and debt of Fannie Mae(6) 3,188 1,510 — 1,678 1,510 

Contractual interest income (expense) accruals 

related to interest-rate swaps designated as 

hedging instruments(5) (227) 211 — (438) 211 

Discontinued hedge-related basis adjustment 

amortization (496) (95) — (401) (95) 

Total income (expense) from hedge accounting in net 

interest income $ (71) $ 173 $ — $ (244) $ 173 

(1) Excludes revenues generated by the 10 basis point guaranty fee increase we implemented pursuant to the TCCA, the incremental revenue 

from which is remitted to Treasury and not retained by us.

(2) Represents revenues generated by the 10 basis point guaranty fee increase we implemented pursuant to the TCCA, the incremental 

revenue from which is remitted to Treasury and not retained by us. 

(3) Net amortization income refers primarily to the amortization of premiums and discounts on mortgage loans and debt of consolidated trusts. 

These cost basis adjustments represent the difference between the initial fair value and the carrying value of these instruments as well as 

upfront fees we receive at the time of loan acquisition. It does not include the amortization of cost basis adjustments resulting from hedge 

accounting, which is included in income (expense) from hedge accounting.

(4) Includes interest income from assets held in our retained mortgage portfolio and our other investments portfolio, as well as other assets 

used to support lender liquidity. Also includes interest expense on our funding debt, including outstanding Connecticut Avenue Securities 

debt.

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 66
(5) Prior to the adoption of hedge accounting in 2021, the corresponding activity was included in “Fair value gains (losses), net.” Upon 

application of hedge accounting in January 2021, these items are presented in “Net interest income.”

(6) Amounts are recorded as cost basis adjustments on the hedged loans or debt and amortized over the hedged item’s remaining contractual 

life beginning at the termination of the hedging relationship. 

Net interest income remained relatively flat in 2022 compared with 2021. The primary offsetting drivers of net interest 

income were lower amortization income offset by higher income from portfolios and higher base guaranty fee income. 

More specifically, our net interest income was impacted in the periods by:

• Lower net amortization income. Lower amortization income was driven by a higher interest rate environment in 

2022, which slowed refinancing activity driving lower prepayment volumes compared with 2021. For a 

description of how fewer loan prepayments results in lower amortization income, refer to “Key Market Economic 

Indicators—How Interest Rates Can Affect Our Financial Results—Net Interest Income.”

• Higher income from portfolios. Higher income from portfolios in 2022 compared with 2021 was primarily driven 

by higher yields on assets in our other investments portfolio as a result of increases in interest rates, as well as 

a decrease in interest expense on our long-term funding debt due to a decrease in the average outstanding 

balance compared with 2021.

• Higher base guaranty fee income. An increase in the size of our guaranty book of business combined with 

higher average charged guaranty fees were the primary drivers of the increase in base guaranty fee income in 

2022 compared with 2021.

Net interest income increased in 2021 compared with 2020, driven by higher base guaranty fee income and higher net 

amortization income, partially offset by lower income from portfolios.

• Higher base guaranty fee income. An increase in the size of our single-family and multifamily guaranty book of 

business combined with higher average base guaranty fees on loans that now comprise a larger portion of our 

book contributed to the increases in base guaranty fee income in 2021 and 2020.

For single-family, higher base guaranty fee income was primarily due to the increase in the size of our guaranty 

book of business, driven by record home price appreciation in 2020 and 2021 having led to higher average loan 

balances. In addition, our average charged fees increased as a result of better pricing in the low-interest rate 

environment. 

For multifamily, higher base guaranty fee income in 2021 compared with 2020 was similarly the result of an 

increase in our multifamily guaranty book of business combined with an increase in average charged guaranty 

fees. In addition, we realized higher multifamily yield maintenance revenue related to the prepayment of 

multifamily loans in 2021 compared with 2020.

• Higher net amortization income. Throughout all of 2021 and much of 2020 we were in a low interest rate 

environment, which led to significant prepayment volumes as loans refinanced, resulting in nearly two-thirds of 

our single-family book of business being originated since the beginning of 2020. As loans refinance, we 

accelerate the amortization of cost basis adjustments on the mortgage loans and any related debt of 

consolidated trusts, resulting in elevated amortization income for the periods.

Amortization income was greater in 2021 than in 2020 primarily because the loans that prepaid in 2021, and 

the related debt of consolidated trusts that liquidated, had a greater amount of net unamortized deferred 

income associated with them. Generally, the loans that prepaid in 2021 had been outstanding for less time than 

those that prepaid in 2020, and a greater portion of loans that prepaid in 2021 were issued in a low-interest-rate 

environment, which resulted in a greater amount of net deferred income associated with them.

• Lower income from portfolios. Lower income from portfolios in 2021 was primarily due to the reduced average 

balance and lower yields on our retained mortgage portfolio, combined with lower yields on assets in our other 

investments portfolio as a result of the low interest rate environment. This reduction in income was partially 

offset by a decrease in interest expense on our funding debt due to a decrease in average borrowing costs, 

primarily as a result of lower average interest rates on our long-term debt. 

The decrease in the average balance of our retained mortgage portfolio for 2021 compared with 2020 was 

primarily due to a decrease in our lender liquidity portfolio, which was driven by lower acquisitions through our 

whole loan conduit in the second half of 2021 as mortgage refinance activity slowed. In addition, sales of 

reperforming and nonperforming mortgage loans drove a decrease in our loss mitigation portfolio. 

Refinancing activity was significantly lower in 2022 compared with 2021 levels as the rise in interest rates resulted in 

fewer borrowers who could benefit from refinancing. We expect refinancing activity to remain low in 2023 compared with 

the levels in 2020 and 2021, as we expect average 30-year fixed rate mortgage interest rates to remain significantly 

higher than the interest rates of most outstanding single-family loans. As of December 29, 2022, the U.S. weekly 

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 67
average interest rate for a single-family 30-year fixed-rate mortgage was 6.42%, according to Freddie Mac’s Primary 

Mortgage Market Survey®. Nearly 95% of our single-family conventional guaranty book of business as of December 31, 

2022 had an interest rate below 5.50%, resulting in a low likelihood these loans would refinance at current rates. In 

addition, approximately 75% of our single-family conventional guaranty book of business as of December 31, 2022 had 

an interest rate below 4.00%. Accordingly, even if interest rates decline meaningfully from current levels, most of the 

loans in our single-family conventional guaranty book of business still would not be incentivized to refinance.

We expect significantly lower amortization income in 2023 compared with 2022, driven by our expectation that 

refinancing activity will remain low as we expect most single-family loans in our guaranty book of business will continue 

to have interest rates significantly lower than current market rates. However, we expect the decline in our amortization 

income in 2023 to be partially offset by higher interest income on our other investments portfolio.

Analysis of Net Interest Income

The table below displays an analysis of our net interest income, average balances and related yields earned on assets 

and incurred on liabilities. For most components of the average balances, we use a daily weighted average of unpaid 

principal balance net of unamortized cost basis adjustments. When daily average balance information is not available, 

such as for mortgage loans, we use monthly averages. 

Analysis of Net Interest Income and Yield(1)

For the Year Ended December 31, 

2022 2021 2020

Average

Balance

Interest

Income/

(Expense)

Average

Rates

Earned/

Paid

Average

Balance

Interest

Income/

(Expense)

Average

Rates

Earned/

Paid

Average

Balance

Interest

Income/

(Expense)

Average

Rates

Earned/

Paid

(Dollars in millions)

Interest-earning assets:

Mortgage loans of Fannie Mae $ 60,587 $ 2,835 4.68 % $ 89,603 $ 2,953 3.30 % $ 114,132 $ 3,917 3.43 %

Mortgage loans of consolidated trusts 4,019,332 114,978 2.86 3,746,113 95,977 2.56 3,369,573 102,399 3.04 

Total mortgage loans(2) 4,079,919 117,813 2.89 3,835,716 98,930 2.58 3,483,705 106,316 3.05 

Investments in securities(3) 128,245 1,828 1.41 168,702 582 0.34 133,011 972 0.72 

Securities purchased under agreements 

to resell 25,374 524 2.04 46,165 21 0.04 41,807 146 0.34 

Advances to lenders 5,170 132 2.52 9,086 142 1.54 8,551 135 1.55 

Total interest-earning assets $ 4,238,708 $ 120,297 2.84 % $ 4,059,669 $ 99,675 2.46 % $ 3,667,074 $ 107,569 2.93 %

Interest-bearing liabilities:

Short-term funding debt $ 4,429 $ (76) 1.69 $ 5,748 $ (4) 0.07 $ 33,068 $ (182) 0.54 

Long-term funding debt 139,098 (2,481) 1.78 231,344 (2,707) 1.17 204,832 (3,181) 1.55 

CAS debt 8,658 (511) 5.90 13,896 (581) 4.18 17,915 (857) 4.78 

Total debt of Fannie Mae 152,185 (3,068) 2.02 250,988 (3,292) 1.31 255,815 (4,220) 1.65 

Debt securities of consolidated trusts 

held by third parties 4,030,467 (87,806) 2.18 3,778,755 (66,796) 1.77 3,403,052 (78,483) 2.31 

Total interest-bearing liabilities $ 4,182,652 $ (90,874) 2.17 % $ 4,029,743 $ (70,088) 1.74 % $ 3,658,867 $ (82,703) 2.26 %

Net interest income/net interest yield $ 29,423 0.69 % $ 29,587 0.73 % $ 24,866 0.68 %

(1) Includes the effects of discounts, premiums and other cost basis adjustments. For the year ended December 31, 2022 and 2021, includes 

cost basis adjustments related to hedge accounting. 

(2) Average balance includes mortgage loans on nonaccrual status. Interest income from yield maintenance revenue and the amortization of 

loan fees, primarily consisting of upfront cash fees, was $5.1 billion, $10.1 billion and $9.3 billion for the years ended 2022, 2021 and 2020, 

respectively. 

(3) Consists of cash, cash equivalents, U.S. Treasury securities and mortgage-related securities.

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 68
The table below displays the change in our net interest income between periods and the extent to which that variance is 

attributable to: (1) changes in the volume of our interest-earning assets and interest-bearing liabilities or (2) changes in 

the interest rates of these assets and liabilities.

Rate/Volume Analysis of Changes in Net Interest Income

2022 vs. 2021 2021 vs. 2020

Total 

Variance

Variance Due to:(1)

Total 

Variance

Variance Due to:(1)

Volume Rate Volume Rate

(Dollars in millions)

Interest income:

Mortgage loans of Fannie Mae $ (118) $ (1,131) $ 1,013 $ (964) $ (814) $ (150) 

Mortgage loans of consolidated trusts 19,001 7,314 11,687 (6,422) 10,696 (17,118) 

Total mortgage loans 18,883 6,183 12,700 (7,386) 9,882 (17,268) 

Investments in securities(2) 1,246 (170) 1,416 (390) 214 (604) 

Securities purchased under agreements to resell 503 (14) 517 (125) 14 (139) 

Advances to lenders (10) (77) 67 7 8 (1) 

Total interest income 20,622 5,922 14,700 (7,894) 10,118 (18,012) 

Interest expense:

Short-term funding debt (72) 1 (73) 178 86 92 

Long-term funding debt 226 1,324 (1,098) 474 (377) 851 

CAS debt 70 262 (192) 276 177 99 

Total debt of Fannie Mae 224 1,587 (1,363) 928 (114) 1,042 

Debt securities of consolidated trusts held by third parties (21,010) (4,680) (16,330) 11,687 (8,069) 19,756 

Total interest expense (20,786) (3,093) (17,693) 12,615 (8,183) 20,798 

Net interest income $ (164) $ 2,829 $ (2,993) $ 4,721 $ 1,935 $ 2,786 

(1) Combined rate/volume variances are allocated between rate and volume based on the relative size of each variance.

(2) Consists of cash, cash equivalents, U.S. Treasury securities and mortgage-related securities.

Analysis of Deferred Amortization Income

We initially recognize mortgage loans and debt of consolidated trusts in our consolidated balance sheets at fair value. 

The difference between the initial fair value and the carrying value of these instruments is recorded as a cost basis 

adjustment, either as a premium or a discount, in our consolidated balance sheets. We amortize these cost basis 

adjustments over the contractual lives of the loans or debt. On a net basis, for mortgage loans and debt of consolidated 

trusts, we are in a premium position with respect to debt of consolidated trusts, which represents deferred income we 

will recognize in our consolidated statements of operations and comprehensive income as amortization income in future 

periods. Our net premium position on debt of consolidated MBS trusts decreased as of December 31, 2022, compared 

with December 31, 2021, primarily as a result of increasing interest rates throughout much of 2022, which resulted in 

recognizing primarily net discounts on newly issued MBS debt as prices declined.

Deferred Amortization Income Represented by Net Premium Position 

on Debt of Consolidated Trusts

(Dollars in billions)

$28.5

$26.3

$22.4

12/31/2020 12/31/2021 12/31/2022

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 69
Investment Gains (Losses), Net

Investment gains (losses), net primarily consists of the sale of single-family held for sale (“HFS”) loans, lower of cost or 

fair value adjustments on HFS loans, gains and losses recognized on the consolidation and deconsolidation of 

securities, and gains and losses recognized from the sale of available-for-sale (“AFS”) securities.

Net investment losses in 2022 were primarily driven by a significant decrease in the market value of single-family loans, 

which resulted in valuation losses on loans held-for-sale as of December 31, 2022, as well as lower prices on loans sold 

during the year. Net investment gains in 2021 were driven by strong loan pricing coupled with a high volume of singlefamily loan sales during the year. 

Fair Value Gains (Losses), Net

The estimated fair value of our derivatives, trading securities and other financial instruments carried at fair value may 

fluctuate substantially from period to period because of changes in interest rates, the yield curve, mortgage and credit 

spreads and implied volatility, as well as activity related to these financial instruments.

In January 2021, we began applying fair value hedge accounting to reduce earnings volatility in our financial statements 

driven by changes in benchmark interest rates as discussed below in “Impact of Hedge Accounting on Fair Value Gains 

(Losses), Net.” Accordingly, since then, we have recognized the fair value gains and losses and the contractual interest 

income and expense associated with risk management derivatives designated in qualifying hedging relationships in net 

interest income. 

As discussed in more detail below, we had fair value gains in 2022, primarily driven by the impact of rising interest rates 

and widening of the secondary spread, which led to price declines. As a result of the price declines, we recognized 

gains on our mortgage commitment derivatives and long-term debt of consolidated trusts held at fair value, partially 

offset by fair value losses on fixed-rate trading securities. We had fair value gains in 2021 primarily driven by the impact 

of rising interest rates on the fair value of our mortgage commitment derivatives and long-term debt of consolidated 

trusts held at fair value, partially offset by fair value losses on fixed-rate trading securities.

The table below displays the components of our fair value gains and losses.

Fair Value Gains (Losses), Net

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Risk management derivatives fair value gains (losses) attributable to:

Net contractual interest income (expense) on interest-rate swaps $ (492) $ 227 $ (261) 

Net change in fair value during the period (1,891) (1,284) (99) 

Impact of hedge accounting 2,763 1,242 — 

Risk management derivatives fair value gains (losses), net 380 185 (360) 

Mortgage commitment derivatives fair value gains (losses), net 2,708 551 (2,654) 

Credit enhancement derivatives fair value gains (losses), net (97) (178) 182 

Total derivatives fair value gains (losses), net 2,991 558 (2,832) 

Trading securities gains (losses), net (3,504) (1,060) 513 

Long-term debt fair value gains (losses), net 2,265 631 (432) 

Other, net(1) (468) 26 250 

Fair value gains (losses), net $ 1,284 $ 155 $ (2,501) 

(1) Consists primarily of fair value gains and losses on mortgage loans held at fair value.

Impact of Hedge Accounting on Fair Value Gains (Losses), Net

Our earnings can experience volatility due to interest-rate changes and differing accounting treatments that apply to 

certain financial instruments on our balance sheet. To help address this volatility, we began applying fair value hedge 

accounting in January 2021 to reduce the current-period impact on our earnings related to changes in specified 

benchmark interest rates. Hedge accounting aligns the timing of when we recognize fair value changes in hedged items 

attributable to these benchmark interest-rate movements with fair value changes in the hedging instrument. For 

additional discussion on the purpose and structure of our hedge accounting program, see “Risk Management—Market 

Risk Management, including Interest-Rate Risk Management—Earnings Exposure to Interest-Rate Risk.” For additional 

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 70
discussion of our fair value hedge accounting policy and related disclosures, see “Note 1, Summary of Significant 

Accounting Policies” and “Note 8, Derivative Instruments.”

The table below displays the amount of contractual interest accruals and fair value losses related to designated interestrate swaps in qualifying hedging relationships that are recognized in “Net interest income” rather than “Fair value gains 

(losses), net” as a result of hedge accounting. Derivatives not in hedging relationships are not affected. 

Impact of Hedge Accounting on Fair Value Gains (Losses), Net

For the Year Ended 

December 31,

2022 2021 2020

(Dollars in millions)

Net contractual interest (expense) income accruals related to interest-rate swaps designated as hedging 

instruments recognized in net interest income $ (227) $ 211 $ — 

Fair value losses on derivatives designated as hedging instruments recognized in net interest income (2,536) (1,453) — 

Fair value losses, net recognized in net interest income from hedge accounting $ (2,763) $ (1,242) $ — 

Risk Management Derivatives Fair Value Gains (Losses), Net

Risk management derivative instruments are an integral part of our interest-rate risk management strategy. We 

supplement our issuance of debt securities with derivative instruments to further reduce duration risk, which includes 

prepayment risk. We purchase option-based risk management derivatives to economically hedge prepayment risk. In 

cases where options obtained through callable debt issuances are not needed for risk management derivative 

purposes, we may sell options in the over-the-counter (“OTC”) derivatives market in order to offset the options obtained 

in the callable debt. Our principal purpose in using derivatives is to manage our aggregate interest-rate risk profile within 

prescribed risk parameters. We generally use only derivatives that are relatively liquid and straightforward to value. We 

consider the cost of derivatives used in our management of interest-rate risk to be an inherent part of the cost of funding 

and hedging our mortgage investments and economically similar to the interest expense that we recognize on the debt 

we issue to fund our mortgage investments.

We present, by derivative instrument type, the fair value gains and losses on our derivatives in “Note 8, Derivative 

Instruments.” The primary factors that may affect the fair value of our risk management derivatives include the following:

• Changes in interest rates. Our primary derivative instruments are interest-rate swaps, including pay-fixed and 

receive-fixed interest-rate swaps. Pay-fixed swaps decrease in value and receive-fixed swaps increase in value 

as swap rates decrease (with the opposite being true when swap rates increase). Because the composition of 

our pay-fixed and receive-fixed derivatives varies across the yield curve, different yield curve changes (that is, 

parallel, steepening or flattening) will generate different gains and losses. Changes in the fair value of 

derivatives in hedging relationships are recorded in “Net interest income.”

• Changes in our derivative activity. The mix and balance of our derivative portfolio changes from period to period 

as we enter into or terminate derivative instruments to respond to changes in interest rates and changes in the 

balances and modeled characteristics of our assets and liabilities. Changes in the composition of our derivative 

portfolio affect the derivative fair value gains and losses we recognize in a given period. 

Additional factors that affect the fair value of our risk management derivatives include implied interest-rate volatility and 

the time value of purchased or sold options.

We recognized net fair value gains on risk management derivatives in 2022 and 2021 primarily as a result of increases 

in the fair value of our pay-fixed interest-rate swaps, partially offset by decreases in the fair value of receive-fixed 

interest-rate swaps driven by increasing interest rates in both years. 

For additional information on our use of derivatives to manage interest-rate risk, see “Risk Management—Market Risk 

Management, including Interest-Rate Risk Management—Interest-Rate Risk Management.”

Mortgage Commitment Derivatives Fair Value Gains (Losses), Net

We account for certain commitments to purchase or sell mortgage-related securities and to purchase single-family 

mortgage loans as derivatives. For open mortgage commitment derivatives, we include changes in their fair value in our 

consolidated statements of operations and comprehensive income. When derivative purchase commitments settle, we 

include the fair value of the commitment on the settlement date in the cost basis of the loan or security we purchase. 

When derivative commitments to sell securities settle, we include the fair value of the commitment on the settlement 

date in the cost basis of the security we sell. Purchases of securities issued by our consolidated MBS trusts are treated 

as extinguishments of debt; we recognize the fair value of the commitment on the settlement date as a component of 

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 71
debt extinguishment gains and losses in “Other expenses, net.” Sales of securities issued by our consolidated MBS 

trusts are treated as issuances of consolidated debt; we recognize the fair value of the commitment on the settlement 

date as a component of debt in the cost basis of the debt issued. 

We recognized fair value gains on our mortgage commitments in 2022 primarily due to gains on commitments to sell 

mortgage-related securities as prices decreased during the commitment period due to rising interest rates and widening 

of the secondary spread, which is the spread between the 30-year MBS current coupon yield and 10-year U.S. Treasury 

rate.

We recognized fair value gains on our mortgage commitments in 2021 primarily due to gains on commitments to sell 

mortgage-related securities as prices decreased during the commitment period due to rising interest rates.

Trading Securities Gains (Losses), Net

Losses on trading securities in 2022 were primarily driven by increases in U.S. Treasury yields, which resulted in losses 

on fixed-rate securities held in our other investments portfolio.

Losses on trading securities in 2021 were primarily driven by increases in interest rates, which resulted in losses on 

fixed-rate securities held in our other investments portfolio.

Long-Term Debt Fair Value Gains (Losses), Net

We elect the fair value option for our long-term debt of consolidated trusts that contain embedded derivatives that would 

otherwise require bifurcation. The fair value of our long-term consolidated trust debt held at fair value is reported in 

“Debt of consolidated trusts” in our consolidated balance sheets. The changes in the fair value of our long-term 

consolidated trust debt held at fair value are included in “Long-term debt fair value gains (losses), net” in the table 

above.

We recognized fair value gains in 2022 due to decreases in the fair value of long-term debt of consolidated trusts held at 

fair value driven by rising interest rates and widening of the secondary spread.

We recognized fair value gains in 2021 due to decreases in the fair value of long-term debt of consolidated trusts held at 

fair value driven by rising interest rates.

Other, Net

We elect the fair value option for mortgage loans that contain embedded derivatives that would otherwise require 

bifurcation. The fair value of our mortgage loans held at fair value is reported as “Mortgage loans” in our consolidated 

balance sheets. The changes in fair value of our mortgage loans held at fair value are included in “Other, net” in the 

table above.

We recognized fair value losses on our mortgage loans held at fair value in 2022 due to increases in interest rates, 

which led to lower prices.

Benefit (Provision) for Credit Losses

Our benefit or provision for credit losses can vary substantially from period to period based on a number of factors, such 

as changes in actual and forecasted home prices or property valuations, fluctuations in actual and forecasted interest 

rates, borrower payment behavior, events such as natural disasters or pandemics, the types, volume and effectiveness 

of our loss mitigation activities, including forbearances and loan modifications, the volume of foreclosures completed 

and the volume and pricing of loans redesignated from held for investment (“HFI”) to HFS. 

In recent periods, changes in actual and projected interest rates have been a significant driver of our benefit or provision 

for credit losses as these changes drive prepayment speeds, which impacts the measurement of the economic 

concessions granted to borrowers on modified loans. Pursuant to our adoption of Accounting Standards Update (“ASU”) 

2022-02 effective January 1, 2022, we prospectively discontinued TDR accounting and no longer measure the 

economic concession for restructurings occurring on or after the adoption date. This accounting also results in the 

elimination of any existing economic concession related to a loan that was previously designated as a TDR if such loan 

is restructured on or after January 1, 2022. Although increases in interest rates were a meaningful driver of our benefit 

or provision for credit losses in recent years, we expect the decrease in the balance of loans that were previously 

designated as TDRs will reduce the sensitivity of our benefit or provision for credit losses to interest rate volatility over 

time. See “Note 1, Summary of Significant Accounting Policies—New Accounting Guidance” and “Note 3, Mortgage 

Loans” for more information about our adoption of ASU 2022-02. 

Our benefit or provision for credit losses and our related loss reserves can also be impacted by updates to the models, 

assumptions and data used in determining our allowance for loan losses. Although we believe the estimates underlying 

our allowance as of December 31, 2022 are reasonable, they are subject to uncertainty. Changes in future economic 

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 72
conditions and loan performance from our current expectations may result in volatility in our allowance for loan losses 

and, as a result, our benefit or provision for credit losses. See “Critical Accounting Estimates” for additional information 

about how our estimate of credit losses is subject to uncertainty. See “Risk Factors—Credit Risk” for a discussion of 

factors that could result in significant provisions for credit losses on the loans in our book of business.

The table below provides a quantitative analysis of the drivers of our single-family and multifamily benefit or provision for 

credit losses and the change in expected credit enhancement recoveries. The benefit or provision for credit losses 

includes our benefit or provision for loan losses, accrued interest receivable losses and our guaranty loss reserves, and 

excludes credit losses on our AFS securities. It also excludes the transition impact of adopting the CECL standard, 

which was recorded as an adjustment to retained earnings as of January 1, 2020. Many of the drivers that contribute to 

our benefit or provision for credit losses overlap or are interdependent. The attribution shown below is based on internal 

allocation estimates. 

Components of Benefit (Provision) for Credit Losses and Change in Expected Credit 

Enhancement Recoveries

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Single-family benefit (provision) for credit losses:

Changes in loan activity(1)(2) $ (1,347) $ 201 $ (31) 

Redesignation of loans from HFI to HFS (306) 1,233 672 

Actual and forecasted home prices (2,867) 3,026 1,536 

Actual and projected interest rates (1,072) (639) 1,085 

Release of economic concessions(3) 793 — — 

Changes in assumptions regarding COVID-19 forbearance 

and loan delinquencies(2)

 — 713 (3,021) 

Other(4) (230) 64 (314) 

Single-family benefit (provision) for credit losses (5,029) 4,598 (73) 

Multifamily benefit (provision) for credit losses:

Changes in loan activity(1)(2) (150) (202) (234) 

Actual and projected interest rates (279) 9 210 

Actual and projected economic data 105 571 — 

Estimated impact of the COVID-19 pandemic(2)

 — 119 (648) 

Other(4) (924) 33 70 

Multifamily benefit (provision) for credit losses (1,248) 530 (602) 

Total benefit (provision) for credit losses $ (6,277) $ 5,128 $ (675) 

Change in expected credit enhancement recoveries for 

active loans:

Single-family $ 470 $ (86) $ 89 

Multifamily 257 (123) 137 

Change in expected credit enhancement recoveries for active 

loans $ 727 $ (209) $ 226 

(1) Primarily consists of loan acquisitions, liquidations, amortization of modification concessions granted to borrowers and write-offs of 

amounts determined to be uncollectible. For multifamily, “changes in loan activity” also includes changes in the allowance due to loan 

delinquencies and the impact of changes in DSCRs based on updated property financial information, which is used to assess loan credit 

quality.

(2) Beginning January 1, 2022, changes in assumptions regarding COVID-19 forbearance and loan delinquencies are included in “Changes in 

loan activity.”

(3) Represents the benefit from the release of economic concessions related to loans previously designated as TDRs that received loss 

mitigation arrangements during the period due to the adoption of ASU 2022-02 effective January 1, 2022.

(4) Includes provision for allowance on accrued interest receivable. For single-family, also includes changes in the reserve for guaranty losses 

that are not separately included in the other components. For multifamily, 2022 primarily consists of provision for our seniors housing 

portfolio and 2021 includes the impact of model enhancements.

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 73
Single-Family Benefit (Provision) for Credit Losses 

The primary factors that contributed to our single-family provision for credit losses in 2022 were:

• Net provision from actual and forecasted home prices. Provision from home price changes was primarily driven 

by our home price forecast, which estimates home price declines in 2023 and 2024. Lower forecasted home 

prices increase the likelihood that loans will default and increase the amount of credit loss on loans that do 

default, which increases our estimate of loss reserves and provision for credit losses. See “Key Market 

Economic Indicators” for additional information about how home prices affect our credit loss estimates, 

including a discussion of home price growth and declines, and our home price forecast. Also see “Critical 

Accounting Estimates” for more information about our home price forecast.

• Provision from changes in loan activity, which includes provision on newly acquired loans. The portion of our 

single-family acquisitions consisting of purchase loans increased in 2022 compared with 2021. As we shift to 

more purchase loans, the credit profile of our acquisitions weakens as purchase loans generally have higher 

origination LTV ratios than refinance loans. This drove a higher estimated risk of default and loss severity in the 

allowance and therefore a higher credit loss provision for those loans at the time of acquisition. In addition, in 

2022, our credit loss provision also increased as our more negative home price forecast increased our estimate 

of losses on newly acquired loans. See “Single-Family Business—Single-Family Mortgage Credit Risk 

Management” for more information on our loan acquisitions in 2022.

• Provision from higher actual and projected interest rates. As mortgage rates increase, we expect a decrease in 

future prepayments on single-family loans, including modified loans accounted for as TDRs. Lower expected 

prepayments extend the expected lives of these loans resulting in an increase in expected losses. For TDR 

loans, longer expected lives also increase the expected impairment relating to economic concessions provided 

on them, resulting in a provision for credit losses. 

The primary factors that contributed to our single-family benefit for credit losses in 2021 were:

• Benefit from actual and forecasted home prices. In 2021, actual home price growth was at record levels. Higher 

home prices decrease the likelihood that loans will default and reduce the amount of credit loss on loans that 

do default, which impacts our estimate of losses and ultimately reduces our loss reserves and provision for 

credit losses.

• Benefit from the redesignation of loans from HFI to HFS. We redesignated certain nonperforming and 

reperforming single-family loans from HFI to HFS, as we no longer intended to hold them for the foreseeable 

future or to maturity. Upon redesignation of these loans, we recorded the loans at the lower of cost or fair value 

with a write-off against the allowance for loan losses. Amounts recorded in the allowance related to these loans 

exceeded the amounts written off, resulting in a net benefit for credit losses.

• Benefit from changes in assumptions regarding COVID-19 forbearance and loan delinquencies. During the first 

half of 2021, management used its judgment to supplement the loss projections developed by our credit loss 

model to account for uncertainty arising from the COVID-19 pandemic that was not represented in historical 

data or otherwise captured by our credit model. For the second half of 2021, management removed the 

remaining non-modeled adjustment as the effects of the government’s economic stimulus, the vaccine rollout, 

and the effectiveness of COVID-19-related loss mitigation strategies were much less uncertain. 

The impact of these factors was partially offset by provision for higher actual and projected interest rates, which reduced 

our single-family benefit for credit losses recognized in 2021.

Multifamily Benefit (Provision) for Credit Losses

The primary factors that contributed to our multifamily provision for credit losses in 2022 were:

• Approximately $900 million in provision relating to our multifamily seniors housing portfolio, which is included in 

“Other” in the table above. As of December 31, 2022, our estimate of credit losses reflected an increased 

probability of default and greater expected severity of loss on our seniors housing portfolio. As of December 31, 

2022, nearly all of the seniors housing loans in our guaranty book of business were current on their payments. 

However, our seniors housing portfolio has been disproportionately impacted by recent market conditions, 

which has resulted in higher expected losses on this portfolio.

Seniors housing has been negatively impacted by elevated vacancy rates and higher operating costs, which 

have been exacerbated by recent inflation pressures. This has reduced the net operating income on many 

seniors housing properties, which in turn has led to lower estimated property values. These factors, combined 

with increased costs associated with adjustable-rate mortgages due to a sharp rise in short-term interest rates 

during the latter half of 2022, have put additional stress on our seniors housing portfolio and increased our 

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 74
estimate of credit losses on these loans. As of December 31, 2022, our seniors housing portfolio had an unpaid 

principal balance of $16.6 billion, of which 39% were adjustable-rate mortgages. See “Multifamily Business—

Multifamily Portfolio Diversification and Monitoring” for more information about our seniors housing portfolio.

• Provision for higher actual and projected interest rates. Rising interest rates may reduce the ability of 

multifamily borrowers to refinance their loans, which often have balloon balances at maturity, increasing our 

provision for credit losses. Additionally, rising interest rates increase the chance that multifamily borrowers with 

adjustable-rate mortgages may default due to higher payments if the property net operating income is not 

increasing at a similar pace.

The primary factors that contributed to our multifamily benefit for credit losses in 2021 were: 

• Benefit from actual and projected economic data. In 2021, property value forecasts increased due to continued 

demand for multifamily housing. In addition, improved job growth led to an increase in projected average 

property net operating income, which reduced the probability of loan defaults, resulting in a benefit for credit 

losses.

• Benefit from lower expected credit losses as a result of the COVID-19 pandemic. Similar to our single-family 

benefit for credit losses described above, for the first half of 2021 management used its judgment to 

supplement the loss projections developed by our credit loss model to account for uncertainty arising from the 

COVID-19 pandemic. For the second half of 2021, management removed the remaining non-modeled 

adjustment as the effects of the economic stimulus, the vaccine rollout, and the effectiveness of COVID-19-

related loss mitigation strategies were much less uncertain. 

TCCA Fees

Pursuant to the TCCA, in 2012 FHFA directed us to increase our single-family guaranty fees by 10 basis points and 

remit this increase to Treasury. This TCCA-related revenue is included in “Net interest income” and the expense is 

recognized as “TCCA fees” in our consolidated financial statements. 

TCCA fees increased in 2022 compared with 2021 as our book of business subject to the TCCA increased over the prior 

year. See “Business—Legislation and Regulation—GSE-Focused Matters—Guaranty Fees and Pricing” for further 

discussion of the TCCA. 

Credit Enhancement Expense

Credit enhancement expense consists of costs associated with our freestanding credit enhancements, which primarily 

include our CAS and CIRT programs, enterprise-paid mortgage insurance (“EPMI”), and amortization expense for 

certain lender risk-sharing programs. For our CAS and CIRT programs, this expense is generally based on the average 

balance of the covered reference pool. Therefore, the periodic expense at the transaction or security level generally 

increases or decreases as the covered balance increases or decreases. We exclude from this expense costs related to 

our CAS transactions accounted for as debt instruments and credit risk transfer programs accounted for as derivative 

instruments.

Credit enhancement expense increased in 2022 compared with 2021 as the average balance of loans covered by CAS 

and CIRT transactions increased in 2022. We discuss the transfer of mortgage credit risk in “Single-Family Business—

Single-Family Mortgage Credit Risk Management—Single-Family Credit Enhancement and Transfer of Mortgage Credit 

Risk” and “Multifamily Business—Multifamily Mortgage Credit Risk Management—Transfer of Multifamily Mortgage 

Credit Risk.” 

Change in Expected Credit Enhancement Recoveries

Change in expected credit enhancement recoveries consists of the change in benefits recognized from our freestanding 

credit enhancements, including any realized amounts. Change in expected credit enhancement recoveries switched 

from expense in 2021 to income in 2022 driven by an increase in provision for credit losses in 2022 as our allowance for 

loan losses increased, which drove an increase in our expected recoveries. 

Other Expenses, Net

We recognized other expenses, net of $918 million in 2022 compared with $1.3 billion in 2021. The decrease in other 

expenses, net in 2022 was primarily due to the decrease in our housing trust fund expenses, which are based upon new 

business purchases volumes. Purchase volumes, particularly in our single-family business, declined significantly in 

2022 compared with 2021. See “Certain Relationships and Related Transactions, and Director Independence—

Transactions with Related Persons—Treasury Interest in Affordable Housing Allocations” for more information on these 

expenses.

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 75
Federal Income Taxes

We recognized provisions for federal income taxes of $3.3 billion in 2022, $5.8 billion in 2021 and $3.1 billion in 2020. 

Our provision for federal income taxes decreased in 2022 compared with 2021 primarily because of the decrease in our 

pre-tax income. Similarly, our provision for federal income taxes increased in 2021 compared with 2020 because of the 

increase in our pre-tax income.

Our effective tax rates were 20.4% in 2022, and 20.7% in 2021 and 2020. See “Note 9, Income Taxes” for additional 

information on our income taxes. 

Consolidated Balance Sheet Analysis

This section discusses our consolidated balance sheets and should be read together with our consolidated financial 

statements and the accompanying notes. 

Summary of Consolidated Balance Sheets

As of December 31,

2022 2021 Variance

(Dollars in millions)

Assets

Cash and cash equivalents and securities purchased under agreements to resell $ 72,552 $ 63,191 $ 9,361 

Restricted cash and cash equivalents 29,854 66,183 (36,329) 

Investments in securities, at fair value 50,825 89,043 (38,218) 

Mortgage loans:

Of Fannie Mae 54,085 66,127 (12,042) 

Of consolidated trusts 4,071,698 3,907,744 163,954 

Allowance for loan losses (11,347) (5,629) (5,718) 

Mortgage loans, net of allowance for loan losses 4,114,436 3,968,242 146,194 

Deferred tax assets, net 12,911 12,715 196 

Other assets 24,710 29,792 (5,082) 

Total assets $ 4,305,288 $ 4,229,166 $ 76,122 

Liabilities and equity

Debt:

Of Fannie Mae $ 134,168 $ 200,892 $ (66,724) 

Of consolidated trusts 4,087,720 3,957,299 130,421 

Other liabilities 23,123 23,618 (495) 

Total liabilities 4,245,011 4,181,809 63,202 

Fannie Mae stockholders’ equity:

Senior preferred stock 120,836 120,836 — 

Other net deficit (60,559) (73,479) 12,920 

Total equity 60,277 47,357 12,920 

Total liabilities and equity $ 4,305,288 $ 4,229,166 $ 76,122 

Restricted Cash and Cash Equivalents

The decrease in restricted cash and cash equivalents from December 31, 2021 to December 31, 2022 was primarily 

driven by a decrease in prepayments due to lower refinance volumes for loans of consolidated trusts, resulting in lower 

cash balances held in trust at period-end. For information on our accounting policy for restricted cash and cash 

equivalents, see “Note 1, Summary of Significant Accounting Policies.”

Investments in Securities, at Fair Value

Investments in securities, at fair value decreased from December 31, 2021 to December 31, 2022 as we primarily used 

short-term liquid assets that accumulated in prior periods to fund our operations and to pay off maturing debt. For further 

discussion, see “Liquidity and Capital Management—Liquidity Management.”

MD&A | Consolidated Results of Operations

Fannie Mae 2022 Form 10-K 76
Mortgage Loans, Net of Allowance

The mortgage loans reported in our consolidated balance sheets are classified as either HFS or HFI and include loans 

owned by Fannie Mae and loans held in consolidated trusts. 

Mortgage loans, net of allowance for loan losses increased from December 31, 2021 to December 31, 2022 driven by 

loan acquisitions outpacing liquidations and sales.

For additional information on our mortgage loans, see “Note 3, Mortgage Loans,” and for information on changes in our 

allowance for loan losses, see “Note 4, Allowance for Loan Losses.”

Debt

Debt of consolidated trusts represents the amount of Fannie Mae MBS issued from consolidated trusts and held by 

third-party certificateholders. Debt of Fannie Mae is the primary means of funding our mortgage purchases. Debt of 

Fannie Mae also includes CAS debt, which we issued in connection with our transfer of mortgage credit risk. 

The decrease in debt of Fannie Mae from December 31, 2021 to December 31, 2022 was primarily due to the maturity 

of long-term debt, which outpaced new issuances as our funding needs remained low. The increase in debt of 

consolidated trusts from December 31, 2021 to December 31, 2022 was primarily driven by sales of Fannie Mae MBS, 

which are accounted for as issuances of debt of consolidated trusts in our consolidated balance sheets, since the MBS 

certificate ownership is transferred from us to a third party. See “Liquidity and Capital Management—Liquidity 

Management—Debt Funding” for a summary of activity in debt of Fannie Mae and a comparison of the mix between our 

outstanding short-term and long-term debt. Also see “Note 7, Short-Term and Long-Term Debt” for additional information 

on our total outstanding debt.

Stockholders’ Equity

Our stockholders’ equity (also referred to as our net worth) increased to $60.3 billion as of December 31, 2022, 

compared with $47.4 billion as of December 31, 2021, due to the $12.9 billion in comprehensive income recognized 

during 2022.

The aggregate liquidation preference of the senior preferred stock increased to $180.3 billion as of December 31, 2022

from $163.7 billion as of December 31, 2021. The aggregate liquidation preference of the senior preferred stock will 

further increase to $181.8 billion as of March 31, 2023, due to the $1.4 billion increase in our net worth in the fourth 

quarter of 2022. For more information about how this liquidation preference is determined see “Business—

Conservatorship and Treasury Agreements—Treasury Agreements—Senior Preferred Stock.”

MD&A | Consolidated Balance Sheet Analysis

Fannie Mae 2022 Form 10-K 77
Retained Mortgage Portfolio

We use our retained mortgage portfolio primarily to provide liquidity to the mortgage market through our whole loan 

conduit and to support our loss mitigation activities, particularly in times of economic stress when other sources of 

liquidity to the mortgage market may decrease or withdraw. Previously, we also used our retained mortgage portfolio for 

investment purposes.

Our retained mortgage portfolio consists of mortgage loans and mortgage-related securities that we own, including 

Fannie Mae MBS and non-Fannie Mae mortgage-related securities. Assets held by consolidated MBS trusts that back 

mortgage-related securities owned by third parties are not included in our retained mortgage portfolio.

The chart below separates the instruments within our retained mortgage portfolio, measured by unpaid principal 

balance, into three categories based on each instrument’s use:

• Lender liquidity, which includes balances related to our whole loan conduit activity, supports our efforts to 

provide liquidity to the single-family and multifamily mortgage markets. 

• Loss mitigation supports our loss mitigation efforts through the purchase of delinquent loans from our MBS 

trusts. 

• Other represents assets that were previously purchased for investment purposes. The majority of the balance 

of “Other” as of December 31, 2022 and 2021 consisted of Fannie Mae reverse mortgage securities and 

reverse mortgage loans. We expect the amount of assets in “Other” will continue to decline over time as they 

liquidate, mature or are sold.

Retained Mortgage Portfolio

(Dollars in billions)

$50.7

$23.7

$37.6

$38.5

$20.9

$15.5

$109.2

$77.7

Lender liquidity Loss mitigation Other

12/31/2021 12/31/2022

The decrease in our retained mortgage portfolio as of December 31, 2022 compared with December 31, 2021 was 

primarily due to a decrease in our lender liquidity portfolio driven by a decline in mortgage refinance activity, leading to 

lower acquisition volumes through the whole loan conduit.

MD&A | Retained Mortgage Portfolio

Fannie Mae 2022 Form 10-K 78
The table below displays the components of our retained mortgage portfolio, measured by unpaid principal balance. 

Based on the nature of the asset, these balances are included in either “Investments in securities, at fair value” or 

“Mortgage loans of Fannie Mae” in our “Summary of Consolidated Balance Sheets” table shown above.

Retained Mortgage Portfolio

As of December 31,

2022 2021

(Dollars in millions)

Lender liquidity:

Agency securities(1) $ 16,410 $ 34,509 

Mortgage loans 7,329 16,174 

Total lender liquidity 23,739 50,683 

Loss mitigation mortgage loans(2) 38,458 37,601 

Other:

Reverse mortgage loans(3) 6,565 9,908 

Mortgage loans 3,365 3,954 

Reverse mortgage securities(4) 4,811 6,146 

Other(5) 804 929 

Total other 15,545 20,937 

Total retained mortgage portfolio $ 77,742 $ 109,221 

Retained mortgage portfolio by segment:

Single-family mortgage loans and mortgage-related securities $ 73,769 $ 101,518 

Multifamily mortgage loans and mortgage-related securities $ 3,973 $ 7,703 

(1) Consists of Fannie Mae, Freddie Mac and Ginnie Mae mortgage-related securities, including Freddie Mac securities guaranteed by Fannie 

Mae. Excludes Fannie Mae and Ginnie Mae reverse mortgage securities and Fannie Mae-wrapped private-label securities.

(2) Includes single-family loans on nonaccrual status of $7.1 billion and $11.0 billion as of December 31, 2022 and 2021, respectively. Includes 

multifamily loans on nonaccrual status of $243 million and $340 million as of December 31, 2022 and 2021, respectively.

(3) We stopped acquiring newly originated reverse mortgages in 2010.

(4) Consists of Fannie Mae and Ginnie Mae reverse mortgage securities.

(5) Consists of private-label and other securities, Fannie Mae-wrapped private-label securities and mortgage revenue bonds.

The amount of mortgage assets that we may own was previously capped at $250 billion and decreased to $225 billion

on December 31, 2022 under the terms of our senior preferred stock purchase agreement with Treasury. In addition, we 

are currently required to further cap our mortgage assets at $202.5 billion per instructions from FHFA. See “Business—

Conservatorship and Treasury Agreements” for additional information on our mortgage asset cap.

We include 10% of the notional value of the interest-only securities we hold in calculating the size of the retained 

portfolio for the purpose of determining compliance with the senior preferred stock purchase agreement retained 

portfolio limits and associated FHFA guidance. As of December 31, 2022, 10% of the notional value of our interest-only 

securities was $1.7 billion, which is not included in the table above.

Under the terms of our MBS trust documents, we have the option or, in some instances, the obligation, to purchase 

mortgage loans that meet specific criteria from an MBS trust. The purchase price for these loans is the unpaid principal 

balance of the loan plus accrued interest. If a delinquent loan remains in a single-family MBS trust, the servicer is 

responsible for advancing the borrower’s missed scheduled principal and interest payments to the MBS holders for up 

to four months, after which time we must make these missed payments. In addition, we must reimburse servicers for 

advanced principal and interest payments.

In support of our loss mitigation strategies, we purchased $16.4 billion of loans from our single-family MBS trusts during 

2022, the substantial majority of which were delinquent, compared with $10.4 billion of loans purchased from singlefamily MBS trusts during 2021. The increase in loans bought out of trusts in 2022 was primarily driven by loans exiting 

COVID-19-related forbearance that required a modification. The size of our retained mortgage portfolio will be impacted 

by the volume of loans we ultimately buy, the timing of those purchases, and the length of time those loans remain in 

our retained mortgage portfolio.

MD&A | Retained Mortgage Portfolio

Fannie Mae 2022 Form 10-K 79
Guaranty Book of Business

Our “guaranty book of business” consists of: 

• Fannie Mae MBS outstanding, excluding the portions of any structured securities we issue that are backed by 

Freddie Mac securities; 

• mortgage loans of Fannie Mae held in our retained mortgage portfolio; and 

• other credit enhancements that we provide on mortgage assets. 

“Total Fannie Mae guarantees” consists of: 

• our guaranty book of business; and 

• the portions of any structured securities we issue that are backed by Freddie Mac securities. 

Some Fannie Mae MBS that we issue are backed in whole or in part by Freddie Mac securities. When we resecuritize 

Freddie Mac securities into Fannie Mae-issued structured securities, such as Supers and REMICs, our guaranty of 

principal and interest extends to the underlying Freddie Mac securities. However, Freddie Mac continues to guarantee 

the payment of principal and interest on the underlying Freddie Mac securities that we have resecuritized. Although our 

guaranty of the underlying Freddie Mac securities requires us to hold additional capital under the enterprise regulatory 

capital framework, prior to July 1, 2022, we did not charge an incremental fee to create structured securities that include 

Freddie Mac securities. Effective July 1, 2022, we began charging an upfront fee to include Freddie Mac securities in 

our structured securities, calculated as 50 basis points on the portion of securities made up of Freddie Mac-issued 

collateral. Effective April 1, 2023, we will be reducing this fee to 9.375 basis points. References to our single-family 

guaranty book of business exclude Freddie Mac-acquired mortgage loans underlying Freddie Mac securities that we 

have resecuritized.

Our issuance of structured securities backed in whole or in part by Freddie Mac securities creates additional off-balance 

sheet exposure. Our guaranty extends to the underlying Freddie Mac security included in the structured security, but we 

do not have control over the Freddie Mac mortgage loan securitizations. Because we do not have the power to direct 

matters (primarily the servicing of mortgage loans) that impact the credit risk to which we are exposed, which constitute 

control of these securitization trusts, we do not consolidate these trusts in our consolidated balance sheet, giving rise to 

off-balance sheet exposure. See “Liquidity and Capital Management—Liquidity Management—Off-Balance Sheet 

Arrangements” and “Note 6, Financial Guarantees” for information regarding our maximum exposure to loss on 

unconsolidated Fannie Mae MBS and Freddie Mac securities.

The table below displays the composition of our guaranty book of business based on unpaid principal balance.

Composition of Fannie Mae Guaranty Book of Business

As of December 31,

2022 2021

SingleFamily Multifamily TotalSingleFamily Multifamily Total

(Dollars in millions)

Conventional guaranty book of business(1) $ 3,646,981 $ 442,067 $ 4,089,048 $ 3,536,613 $ 419,463 $ 3,956,076 

Government guaranty book of business(2) 12,450 572 13,022 16,777 718 17,495 

Guaranty book of business 3,659,431 442,639 4,102,070 3,553,390 420,181 3,973,571 

Freddie Mac securities guaranteed by Fannie Mae(3) 234,023 — 234,023 212,259 — 212,259 

Total Fannie Mae guarantees $ 3,893,454 $ 442,639 $ 4,336,093 $ 3,765,649 $ 420,181 $ 4,185,830 

(1) Refers to mortgage loans and mortgage-related securities that are not guaranteed or insured, in whole or in part, by the U.S. government. 

(2) Refers to mortgage loans and mortgage-related securities guaranteed or insured, in whole or in part, by the U.S. government.

(3) Consists of off-balance sheet arrangements of approximately (i) $193.9 billion and $177.8 billion in unpaid principal balance of Freddie 

Mac-issued UMBS backing Fannie Mae-issued Supers as of December 31, 2022 and 2021, respectively; and (ii) $40.1 billion and $34.5 

billion in unpaid principal balance of Freddie Mac securities backing Fannie Mae-issued REMICs as of December 31, 2022 and 2021, 

respectively. See “Liquidity and Capital Management—Liquidity Management—Off-Balance Sheet Arrangements” for more information 

regarding our maximum exposure to loss on consolidated Fannie Mae MBS and Freddie Mac securities. 

The GSE Act requires us to set aside each year an amount equal to 4.2 basis points of the unpaid principal balance of 

our new business purchases and to pay this amount to specified HUD and Treasury funds in support of affordable 

housing. In March 2022, we paid $598 million to the funds based on our new business purchases in 2021. For 2022, we 

recognized an expense of $287 million related to this obligation based on $684.5 billion in new business purchases 

MD&A | Guaranty Book of Business

Fannie Mae 2022 Form 10-K 80
during the year. We expect to pay this amount to the funds in 2023. See “Business—Legislation and Regulation—GSEFocused Matters—Affordable Housing Allocations” for more information regarding this obligation.

Business Segments

We have two reportable business segments: Single-Family and Multifamily. The Single-Family business operates in the 

secondary mortgage market relating to single-family mortgage loans, which are secured by properties containing four or 

fewer residential dwelling units. The Multifamily business operates in the secondary mortgage market relating primarily 

to multifamily mortgage loans, which are secured by properties containing five or more residential units.

We conduct business in the U.S. residential mortgage markets and the global securities market. According to the 

Federal Reserve, total U.S. residential mortgage debt outstanding was estimated to be approximately $15.2 trillion as of 

September 30, 2022 (the latest date for which information is available). We owned or guaranteed mortgage assets 

representing approximately 27% of total U.S. residential mortgage debt outstanding as of September 30, 2022. 

The chart below displays net revenues and net income for each of our business segments. Net revenues consist of net 

interest income and fee and other income.

Business Segment Net Revenues and Net Income

(Dollars in billions)

$21.9

$25.7 $24.9

$3.4

$4.2

$25.3 $4.8

$29.9 $29.7

$9.9

$19.1

$10.8

$1.9

$3.1

$2.1

$11.8

$22.2

$12.9

Single-Family net revenues Multifamily net revenues

Single-Family net income Multifamily net income

2020 2021 2022

Segment Allocation Methodology

The majority of our assets, revenues and expenses are directly associated with each respective business segment and 

are included in determining its asset balance and operating results. Those assets, revenues and expenses that are not 

directly attributable to a particular business segment are allocated based on the size of each segment’s guaranty book 

of business. The substantial majority of our gains and losses associated with our risk management derivatives are 

allocated to our Single-Family business segment. 

In the following sections, we describe each segment’s primary business activities, customers, competitive and market 

conditions, business metrics, and financial results. We also describe how each segment manages mortgage credit risk 

and its credit metrics.

MD&A | Guaranty Book of Business

Fannie Mae 2022 Form 10-K 81
Single-Family Business

Single-Family Primary Business Activities

Providing Liquidity for Single-Family Mortgage Loans

Working with lenders, our Single-Family business provides liquidity to the mortgage market primarily by acquiring singlefamily loans from lenders and securitizing those loans into Fannie Mae MBS, which are either delivered to the lenders or 

sold to investors or dealers. We describe our securitization transactions and the types of Fannie Mae MBS that we issue 

in “Business—Mortgage Securitizations.” Our Single-Family business also supports liquidity in the mortgage market and 

the businesses of our lenders through other activities, such as issuing structured Fannie Mae MBS backed by singlefamily mortgage assets and buying and selling single-family agency mortgage-backed securities. 

Our Single-Family business securitizes and purchases primarily conventional (not federally insured or guaranteed) 

single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these 

types of loans. We also securitize or purchase loans insured by FHA, loans guaranteed by the VA, loans guaranteed by 

the Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured 

housing mortgage loans and other mortgage-related securities.

Single-Family Mortgage Servicing

Our single-family mortgage loans are serviced by mortgage servicers on our behalf. Some loans are serviced by the 

lenders that initially sold the loans to us. In other cases, loans are serviced by third-party servicers that did not originate 

or sell the loans to us. For loans we own or guarantee, the lender or servicer must obtain our approval before selling 

servicing rights to another servicer.

Our mortgage servicers typically collect and deliver principal and interest payments, administer escrow accounts, 

monitor and report on loan performance, perform early delinquency intervention activities, evaluate transfers of 

ownership interests, respond to requests for partial releases of security, and handle proceeds from casualty and 

condemnation losses. Our mortgage servicers are the primary point of contact for borrowers and perform a key role in 

the effective implementation of our servicing policies, negotiation of workouts for delinquent and troubled loans, and 

other loss mitigation activities. If necessary, mortgage servicers inspect and preserve properties and process 

foreclosures and bankruptcies. For information on the risks of our reliance on servicers, refer to “Risk Factors—Credit 

Risk.” 

We compensate servicers primarily by permitting them to retain a specified portion of each interest payment on a 

serviced mortgage loan as a servicing fee. Servicers also generally retain assumption fees, late payment charges and 

other similar charges, to the extent they are collected from borrowers, as additional servicing compensation. We also 

compensate servicers for negotiating workouts on problem loans.

Our servicers are required to develop, follow and maintain written procedures relating to loan servicing and legal 

compliance in accordance with our Servicing Guide. We oversee servicer compliance with our Servicing Guide 

requirements and execution of our loss mitigation programs by conducting reviews of select servicers. These reviews 

are designed to test a servicer’s quality control processes and compliance with our requirements across key servicing 

functions. Issues identified through these Servicing Guide compliance reviews are provided to the servicer with 

prescribed corrective actions and expected resolution due dates, and we monitor servicers’ remediation of their 

compliance issues.

We employ a servicer performance management program, called the Servicer Total Achievement and RewardsTM

(STAR®) Program, which provides our largest servicers a transparent framework of key metrics and operational 

assessments to recognize strong performance and identify areas of weakness. Performance management staff 

measure, monitor and manage overall servicer performance by conducting regular servicer performance reviews in an 

effort to promote optimal performance, mitigate risk and explore best practices or areas of opportunity to take action and 

improve performance where necessary.

Repercussions for poor performance by a servicer may include performance improvement plans, lost incentive income, 

compensatory fees, monetary and non-monetary remedies, and reduced opportunity for STAR Program recognition. If 

poor performance persists, servicing may ultimately be transferred to a different servicer.

Single-Family Credit Risk and Credit Loss Management

Our Single-Family business: 

• Prices and manages the credit risk on loans in our single-family guaranty book of business through our loan 

acquisition policies.

MD&A | Single-Family Business | Single-Family Primary Business Activities

Fannie Mae 2022 Form 10-K 82
• Works to reduce costs of defaulted single-family loans through, among other things, home retention solutions 

and foreclosure alternatives, management of foreclosures and our REO inventory, and pursuing contractual 

remedies from lenders, servicers and providers of credit enhancements.

• Enters into transactions that transfer a portion of the credit risk on some of the loans in our single-family 

guaranty book of business through our credit risk transfer programs.

See “Single-Family Mortgage Credit Risk Management” below for discussion of our strategies for managing credit risk 

and credit losses on single-family loans.

Single-Family Lenders and Investors

In support of our mission to facilitate equitable and sustainable access to homeownership and quality affordable rental 

housing across America, we work with lenders that operate within the primary mortgage market where mortgage loans 

are originated and funds are loaned to borrowers. Our lenders include mortgage banking companies, savings and loan 

associations, savings banks, commercial banks, credit unions, community banks, private mortgage originators, and 

state and local housing finance agencies. Lenders originating mortgages in the primary mortgage market often sell them 

in the secondary mortgage market in the form of whole loans or in the form of mortgage-related securities.

During 2022, approximately 1,200 lenders delivered single-family mortgage loans to us. We acquire a significant portion 

of our single-family mortgage loans from several large mortgage lenders. During 2022, our top five lenders, in the 

aggregate, accounted for 28% of our single-family business volume, compared with 31% in 2021. Rocket Companies, 

Inc. was the only lender that accounted for 10% or more of our single-family business volume in 2022, representing 

11%.

We have a diversified funding base of domestic and international investors. Purchasers of single-family Fannie Mae 

MBS include asset managers, commercial banks, pension funds, insurance companies, Treasury, central banks, 

corporations, state and local governments, and other municipal authorities. Our CAS investors include asset managers, 

real estate investment trusts, hedge funds and insurance companies, while our CIRT transaction counterparties are 

insurers and reinsurers.

Single-Family Competition

We compete to acquire single-family mortgage assets in the secondary market. We also compete for the issuance of 

single-family mortgage-related securities to investors. Competition in these areas is affected by many factors, including 

the number of residential mortgage loans offered for sale in the secondary market by loan originators and other market 

participants, the nature of the residential mortgage loans offered for sale (for example, whether the loans represent 

refinancings), the current demand for mortgage assets from mortgage investors, the interest-rate risk investors are 

willing to assume and the yields they will require as a result, and the credit risk and prices associated with available 

mortgage investments.

Competition to acquire mortgage assets is significantly affected by both our and our competitors’ pricing and eligibility 

standards, as well as investor demand for UMBS and for our and our competitors’ other mortgage-related securities. 

Our competitive environment also may be affected by many other factors, including our risk appetite and capital 

requirements; new or existing legislation or regulations applicable to us, our lenders or our investors; and digital 

innovation and disruption in our markets. In competing to acquire loans in the secondary market, we focus on 

understanding what drives our lenders’ execution decisions and identifying how to best deliver value while supporting 

our mission. See “Business—Conservatorship and Treasury Agreements,” “Business—Legislation and Regulation,” and 

“Risk Factors” for information on matters that could affect our business and competitive environment.

Our competitors for the acquisition of single-family mortgage assets are financial institutions and government agencies 

that manage residential mortgage credit risk or invest in residential mortgage loans, including Freddie Mac, FHA, the 

VA, Ginnie Mae (which primarily guarantees securities backed by FHA-insured loans and VA-guaranteed loans), the 

FHLBs, U.S. banks and thrifts, securities dealers, insurance companies, pension funds, investment funds and other 

mortgage investors. Currently, our primary competitors for the issuance of single-family mortgage-related securities are 

Freddie Mac, Ginnie Mae and private market competitors. Competition for investors and counterparties in our credit risk 

transfer transactions comes primarily from other issuers of mortgage credit risk transactions, such as Freddie Mac and 

private mortgage insurers. We also compete for investor funds against other credit-related securitized products, such as 

private-label residential mortgage-backed securities (“RMBS”), commercial RMBS, and collateralized loan obligations. 

As noted above, the nature of our primary competitors and the overall levels of competition we face could change as a 

result of a variety of factors, many of which are outside our control.

MD&A | Single-Family Business | Single-Family Primary Business Activities

Fannie Mae 2022 Form 10-K 83
Single-Family Mortgage Market

In the charts below we present macroeconomic factors that affect the single-family mortgage market in which our 

Single-Family business operates. Home sales and the supply of unsold homes are indicators of the underlying demand 

for mortgage loans, which impacts our acquisition volumes. 

Total Single-Family Home Sales and 

Months’ Supply of Unsold Homes(1) 

Single-Family Mortgage Originations and 

Mortgage Debt Outstanding(2)

(Home sales units in thousands) (Dollars in trillions)

6,462

6,891

5,674

822 771 644

5,640

6,120

5,030

4.8

6.4

9.7

1.9 1.7

2.9

2020 2021 2022

$4.37

$4.57

$2.36

$11.65

$12.54

$13.19

29% 28% 28%

2020 2021 2022

Months’ supply of new single-family

unsold homes, as of year end

Fannie Mae’s percentage of total single-family mortgage 

debt outstanding, as of period end

Months’ supply of existing single-family

unsold homes, as of year end

Single-family U.S. mortgage debt outstanding, as of period 

end

Existing home sales Single-family mortgage loan originations

New home sales

(1) Total existing home sales data according to National Association of REALTORS®

. New single-family home sales data according to the U.S. 

Census Bureau. Certain previously reported data has been updated to reflect revised historical data from one or both of these 

organizations. 

(2) 2022 information is as of September 30, 2022 and is based on the Federal Reserve’s December 2022 mortgage debt outstanding release, 

the latest date for which the Federal Reserve has estimated mortgage debt outstanding for single-family residences. Prior-period amounts 

have been changed to reflect revised historical data from the Federal Reserve.

Additional Information

• The 30-year fixed mortgage rate averaged 6.36% in December 2022 compared with 3.10% in December 2021

according to Freddie Mac’s Primary Mortgage Market Survey®.

• We forecast that total originations in the U.S. single-family mortgage market in 2023 will decrease from 2022

levels by approximately 29%, from an estimated $2.36 trillion in 2022 to $1.69 trillion in 2023, and the amount 

of refinance originations in the U.S. single-family mortgage market will decrease from an estimated $704 billion

in 2022 to $367 billion in 2023. See “Key Market Economic Indicators” for additional discussion of how housing 

activity can affect our financial results. 

MD&A | Single-Family Business | Single-Family Mortgage Market

Fannie Mae 2022 Form 10-K 84
Single-Family Mortgage-Related Securities Issuances Share

Our single-family Fannie Mae MBS issuances were $628 billion in 2022, compared with $1.39 trillion in 2021 and $1.34 

trillion in 2020. This decrease was driven by a significantly lower volume of refinance activity in 2022 due to higher 

mortgage rates. Based on the latest data available, the chart below displays our estimated share of single-family 

mortgage-related securities issuances in 2022 as compared with that of our primary competitors for the issuance of 

single-family mortgage-related securities. 

2022 Single-Family Mortgage-Related

Securities Issuances Share

Fannie Mae: 35%

Freddie Mac: 31%

Ginnie Mae: 29%

Private-label securities: 5%

We estimate our share of single-family mortgage-related securities issuances was 38% in 2021 and 41% in 2020. 

Presentation of Our Single-Family Conventional Guaranty Book of Business

For purposes of the information reported in this “Single-Family Business” section, we measure the single-family 

conventional guaranty book of business using the unpaid principal balance of our mortgage loans underlying Fannie 

Mae MBS outstanding. By contrast, the single-family conventional guaranty book of business presented in the 

“Composition of Fannie Mae Guaranty Book of Business” table in the “Guaranty Book of Business” section is based on 

the unpaid principal balance of the Fannie Mae MBS outstanding, rather than the unpaid principal balance of the 

underlying mortgage loans. These amounts differ primarily as a result of payments we receive on underlying loans that 

have not yet been remitted to the MBS holders or instances where we have advanced missed borrower payments on 

mortgage loans to make required distributions to related MBS holders. As measured for purposes of the information 

reported below, our single-family conventional guaranty book of business was $3,635.2 billion as of December 31, 2022, 

$3,483.1 billion as of December 31, 2021 and $3,200.9 billion as of December 31, 2020.

Single-Family Business Metrics

Select Business Metrics

Net interest income for our Single-Family business is driven by the guaranty fees we charge and the size of our singlefamily conventional guaranty book of business. The guaranty fees we charge are based on the characteristics of the 

loans we acquire. We may adjust our guaranty fees in light of market conditions and to achieve return targets. As a 

result, the average charged guaranty fee on new acquisitions may fluctuate based on the credit quality and product mix 

of loans acquired, as well as market conditions and other factors. 

MD&A | Single-Family Business | Single-Family Mortgage-Related Securities Issuances Share

Fannie Mae 2022 Form 10-K 85
The charts below display our average charged guaranty fees, net of TCCA fees, on our single-family conventional 

guaranty book of business and on new single-family conventional loan acquisitions, along with our average single-family 

conventional guaranty book of business and our single-family conventional loan acquisitions for the periods presented. 

Select Single-Family Business Metrics 

(Dollars in billions)

44.4 bps 46.4 bps 45.7 bps 46.2 bps 48.6 bps 49.4 bps 2020 2021 2022

$3,060.4

$3,351.0

$3,585.7

$1,358.8 $1,354.7

$614.8

2020 2021 2022

Average charged guaranty fee on single-family 

conventional guaranty book of business, net of TCCA 

fees(1)(3)

Average single-family conventional guaranty book 

of business(2)

Average charged guaranty fee on new single-family 

conventional acquisitions, net of TCCA fees(1)(3)

Single-family conventional acquisitions

(1) Excludes the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which is 

remitted to Treasury and not retained by us.

(2) Our single-family conventional guaranty book of business primarily consists of single-family conventional mortgage loans underlying 

Fannie Mae MBS outstanding. It also includes single-family conventional mortgage loans of Fannie Mae held in our retained mortgage 

portfolio, and other credit enhancements that we provide on single-family conventional mortgage assets. Our single-family conventional 

guaranty book of business does not include: (a) mortgage loans guaranteed or insured, in whole or in part, by the U.S. government; (b) 

Freddie Mac-acquired mortgage loans underlying Freddie Mac-issued UMBS that we have resecuritized; or (c) non-Fannie Mae singlefamily mortgage-related securities held in our retained mortgage portfolio for which we do not provide a guaranty. Our average singlefamily conventional guaranty book of business is based on quarter-end balances.

(3) In 2022, we enhanced the method we use to estimate average loan life at acquisition. Charged fees reported for prior periods have been 

updated in this report to reflect this updated methodology.

As shown in the chart above, our 2022 single-family conventional acquisitions decreased compared with 2021 and 

2020, driven by higher interest rates, which decreased refinancing acquisitions as fewer borrowers could benefit from 

refinancing.

Average charged guaranty fee on newly acquired conventional single-family loans is a metric management uses to 

measure the price we earn as compensation for the credit risk we manage and to assess our return. Average charged 

guaranty fee represents, on an annualized basis, the average of the base guaranty fees charged during the period for 

our single-family conventional guaranty arrangements, which we receive monthly over the life of the loan, plus the 

recognition of any upfront cash payments, including loan-level price adjustments, based on an estimated average life at 

the time of acquisition. The calculation of single-family conventional charged guaranty fees at acquisition is sensitive to 

changes in inputs used in the calculation, including assumptions about the weighted average life of the loan, therefore 

changes in charged guaranty fees are not necessarily indicative of a change in pricing.

Our average charged guaranty fee on newly acquired conventional single-family loans, net of TCCA fees, increased in 

2022 compared with 2021 and 2020. The increase in average charged guaranty fee on newly acquired single-family 

loans was primarily driven by the overall weaker credit risk profile of our 2022 acquisitions. We generally charge higher 

guaranty fees on loans with weaker credit risk characteristics. The weaker credit profile of our 2022 acquisitions was 

MD&A | Single-Family Business | Single-Family Business Metrics

Fannie Mae 2022 Form 10-K 86
primarily driven by the increased share of our acquisitions that were purchase loans in 2022 compared with a higher 

share of refinance loans in 2021 and 2020, as purchase loans generally have higher origination LTV ratios than 

refinance loans. See “Single-Family Mortgage Credit Risk Management—Single-Family Portfolio Diversification and 

Monitoring” below for a description of key risk characteristics of our single-family acquisitions in 2022, 2021 and 2020.

Recent and Future Price Changes

FHFA has announced the following price changes on our single-family loan acquisitions since January 2022, along with 

the dates the changes are effective. These price changes also apply to Freddie Mac’s single-family loan acquisitions.

• April 2022 high-balance and second home loan price increases. In January 2022, FHFA announced targeted 

increases to the upfront fees we charge for certain high-balance loans and second home loans, which we 

implemented on April 1, 2022. High-balance loans are mortgages originated in certain designated areas above 

the baseline conforming loan limit. 

• December 2022 elimination of upfront fees for certain borrowers and affordable mortgage products. In October 

2022, FHFA announced targeted changes to our guaranty fee pricing to eliminate upfront fees for the following 

borrowers and products:

• First-time homebuyers at or below 100% of area median income in most of the United States and 

below 120% of area median income in high-cost areas;

• HomeReady® loans;

• HFA PreferredTM loans; and

• Single-family loans supporting the Duty-to-Serve program.

We eliminated these upfront fees effective December 1, 2022.

• February 2023 cash-out refinance loan price increase. In October 2022, FHFA also announced increases in 

upfront fees for some cash-out refinance loans, which we implemented on February 1, 2023.

• May 2023 updates to upfront fee matrices for purchase, rate-term refinance, cash-out refinance loans and other 

loan characteristics. In January 2023, FHFA announced further changes to our single-family pricing framework 

by introducing redesigned and recalibrated upfront fee matrices for purchase, rate-term refinance, and cash-out 

refinance loans. These price changes will take effect on May 1, 2023.

These pricing changes broadly impact purchase and rate-term refinance loans and build on the upfront fee 

changes announced in January and October 2022 discussed above, which have been integrated into the new 

pricing matrices. The revised matrices include higher upfront fees on certain types of loans unrelated to 

affordable housing, such as investor loans, second home loans, high-balance loans, and cash-out refinances. 

We believe these new price changes will enhance our ability to achieve FHFA’s return targets for our 

acquisitions, as well as enhance our ability to improve our capital position over time. 

Along with the support of FHFA, we will continue to review our pricing to ensure we operate in a safe and sound 

manner, and we are positioned to fulfill our mission of providing stability and liquidity to the mortgage market.

Changes in our pricing can significantly affect our loan acquisition volumes, the credit risk profile of our acquisitions, our 

competitive position, and the type and mix of loans we acquire. The price changes we implemented in December 2022 

for certain first-time homebuyers, low-income borrowers, and underserved communities described above could 

negatively impact the credit risk profile of our new single-family acquisitions and investor interest in our future singlefamily credit risk transfer transactions, as these loan types generally have a higher credit risk profile than our other 

single-family loan acquisitions.

As described in “Risk Factors—GSE and Conservatorship Risk,” FHFA’s control over our guaranty fee pricing can 

constrain our ability to address changing market conditions, pursue certain strategic objectives, or manage the mix of 

loans we acquire. See “Business—Legislation and Regulation—GSE-Focused Matters—Guaranty Fees and Pricing” for 

a description of regulatory and conservatorship requirements relating to our guaranty fee pricing.

MD&A | Single-Family Business | Single-Family Business Metrics

Fannie Mae 2022 Form 10-K 87
Single-Family Business Financial Results

This section provides a discussion of the primary components of net income for our Single-Family Business. This 

information complements the discussion of financial results in “Consolidated Results of Operations.”

Single-Family Business Financial Results(1)

For the Year Ended December 31, Variance

2022 2021 2020 2022 vs. 2021 2021 vs. 2020

(Dollars in millions)

Net interest income(2) $ 24,736 $ 25,429 $ 21,502 $ (693) $ 3,927 

Fee and other income 224 269 368 (45) (99) 

Net revenues 24,960 25,698 21,870 (738) 3,828 

Investment gains (losses), net (223) 1,392 728 (1,615) 664 

Fair value gains (losses), net 1,364 167 (2,539) 1,197 2,706 

Administrative expenses (2,789) (2,557) (2,559) (232) 2 

Benefit (provision) for credit losses (5,029) 4,600 (75) (9,629) 4,675 

TCCA fees(2) (3,369) (3,071) (2,673) (298) (398) 

Credit enhancement expense (1,062) (812) (1,141) (250) 329 

Change in expected credit enhancement recoveries(3) 470 (86) 89 556 (175) 

Other expenses, net(4) (778) (1,208) (1,212) 430 4 

Income before federal income taxes 13,544 24,123 12,488 (10,579) 11,635 

Provision for federal income taxes (2,774) (4,996) (2,607) 2,222 (2,389) 

Net income $ 10,770 $ 19,127 $ 9,881 $ (8,357) $ 9,246 

(1) See “Note 10, Segment Reporting” for information about our segment allocation methodology.

(2) Reflects the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which is 

remitted to Treasury. The resulting revenue is included in “Net interest income” and the expense is recognized as “TCCA fees.” 

(3) Includes estimated changes in benefits, as well as any realized amounts, from our single-family freestanding credit enhancements, which 

primarily relate to our CAS and CIRT programs. 

(4) Consists of debt extinguishment gains and losses, foreclosed property income (expense), gains and losses from partnership investments, 

housing trust fund expenses, loan subservicing costs, and servicer fees paid in connection with certain loss mitigation activities.

Net interest income

(Dollars in millions)

$21,502

$25,429 $24,736

2020 2021 2022

Single-family net interest income decreased in 2022 

compared with 2021, driven by lower amortization 

income, which was partially offset by higher income from 

portfolios and higher base guaranty fee income.

Single-family net interest income increased in 2021 

compared with 2020, primarily driven by higher base 

guaranty fee income and higher amortization income, 

partially offset by lower income from portfolios.

See “Consolidated Results of Operations—Net Interest 

Income” for more information on the factors that impact 

our single-family net interest income.

_____________________________________________________________________________

MD&A | Single-Family Business | Single-Family Business Financial Results

Fannie Mae 2022 Form 10-K 88
Investment gains (losses), net

(Dollars in millions)

$728

$1,392

$(223)

2020 2021 2022

Net investment losses in 2022 were primarily driven by a 

significant decrease in the market value of single-family 

loans, which resulted in valuation losses on loans held-forsale as of December 31, 2022, as well as lower prices on 

loans sold during the year.

Net investment gains in 2021 were driven by strong loan 

pricing coupled with a high volume of single-family loan 

sales during the year. 

The drivers of investment gains (losses), net for the 

Single-Family segment are consistent with the drivers of 

investment gains (losses), net in our consolidated 

statements of operations and comprehensive income, 

which we discuss in “Consolidated Results of Operations

—Investment Gains (Losses), Net.”

_____________________________________________________________________________

Fair value gains (losses), net

(Dollars in millions)

$(2,539)

$167

$1,364

2020 2021 2022

Fair value gains, net in 2022 were primarily driven by the 

impact of rising interest rates and widening of the 

secondary spread, which led to price declines. As a result 

of the price declines, we recognized gains on our 

commitments to sell mortgage-related securities and longterm debt of consolidated trusts held at fair value. These 

gains were partially offset by fair value losses on fixed-rate 

trading securities.

Fair value gains, net in 2021 were primarily driven by 

gains as a result of increases in the fair value of mortgage 

commitment derivatives and our long-term debt of 

consolidated trusts held at fair value, which were partially 

offset by losses on trading securities.

The drivers of fair value gains (losses), net for the SingleFamily segment are consistent with the drivers of fair 

value gains (losses), net in our consolidated statements of 

operations and comprehensive income, which we discuss 

in “Consolidated Results of Operations—Fair Value Gains 

(Losses), Net.” 

_____________________________________________________________________________

MD&A | Single-Family Business | Single-Family Business Financial Results

Fannie Mae 2022 Form 10-K 89
Benefit (provision) for credit losses

(Dollars in millions)

$(75)

$4,600

$(5,029)

2020 2021 2022

Provision for credit losses in 2022 was primarily driven by 

decreases in forecasted home prices, the overall credit 

risk profile of our newly acquired loans, and rising interest 

rates. 

Benefit for credit losses in 2021 was driven primarily by 

record levels of actual home price growth, the 

redesignation of certain nonperforming and reperforming 

single-family loans from HFI to HFS and a reduction in our 

estimate of losses we expected to incur as a result of the 

COVID-19 pandemic. The impact of those factors was 

partially offset by higher actual and projected interest 

rates.

See “Consolidated Results of Operations—Benefit 

(Provision) for Credit Losses” for more information on the 

primary factors that contributed to our single-family benefit 

or provision for credit losses.

Single-Family Mortgage Credit Risk Management

Our strategy for managing single-family mortgage credit risk consists of four primary components: 

• our acquisition and servicing policies along with our underwriting and servicing standards;

• portfolio diversification and monitoring;

• the transfer of credit risk through risk transfer transactions and the use of credit enhancements; and

• management of problem loans.

We typically obtain our single-family credit information from the sellers or servicers of the mortgage loans in our 

guaranty book of business and receive representations and warranties from them as to the accuracy of the information. 

While we perform various quality assurance checks by sampling loans to assess compliance with our underwriting and 

eligibility criteria, we do not independently verify all reported information and we rely on lender representations and 

warranties regarding the accuracy of the characteristics of loans in our guaranty book of business. See “Risk Factors” 

for a discussion of the risk that we could experience mortgage fraud as a result of this reliance on lender 

representations and warranties.

Single-Family Acquisition and Servicing Policies and Underwriting and 

Servicing Standards

Overview

Our Single-Family business, with the oversight of our Enterprise Risk Management division, is responsible for setting 

underwriting and servicing standards and pricing, and managing credit risk relating to our single-family guaranty book of 

business.

Underwriting and Servicing Standards

The Fannie Mae Single-Family Selling Guide (“Selling Guide”) sets forth our underwriting and eligibility guidelines, as 

well as our policies and procedures related to selling single-family mortgages to us. Our Servicing Guide sets forth our 

policies for servicing the loans in our single-family guaranty book.

Desktop Underwriter

Our proprietary automated underwriting system, Desktop Underwriter® (“DU®”), is used by mortgage lenders to evaluate 

the substantial majority of our single-family loan acquisitions. DU measures credit risk by assessing the primary risk 

factors of a mortgage and provides a comprehensive risk assessment of a borrower’s loan application and eligibility of 

the loan for sale to us. Risk factors evaluated by DU include the key loan attributes described under “Single-Family 

Portfolio Diversification and Monitoring” below. DU applies our own assessment of the borrower’s credit data, including 

using trended credit data when available. DU analyzes the results of this risk and eligibility evaluation to arrive at the 

underwriting recommendation for the loan case file. As part of our comprehensive risk management approach, we 

periodically update DU to reflect changes to our underwriting and eligibility guidelines. As part of normal business 

MD&A | Single-Family Business | Single-Family Business Financial Results

Fannie Mae 2022 Form 10-K 90
operations, we regularly review DU to determine whether its risk analysis and eligibility assessment are appropriate 

based on the current market environment and loan performance information. We also regularly review DU’s underlying 

risk assessment models and recalibrate these models to improve DU’s ability to effectively analyze risk and avoid 

excessive risk layering. Factors we take into account in these evaluations include the profile of loans delivered to us, 

loan performance and current market conditions. 

Consistent with this risk management approach, in July 2022 we implemented updates to DU’s risk and eligibility 

assessment in response to changing market conditions. These changes have resulted in a reduction in loans eligible for 

acquisition through DU, particularly for cash-out refinance transactions when multiple high-risk factors are present. In 

addition, in January 2023, we announced further updates to DU’s risk and eligibility assessment that we plan to 

implement in late February 2023. These changes may result in a reduction in loans we acquire that have high LTV ratios 

and high DTI ratios when multiple high-risk factors are present. We will continue to closely monitor loan acquisitions and 

market conditions and, as appropriate, make changes to DU, including its eligibility criteria, to ensure that the loans we 

acquire are consistent with our risk appetite and mission.

Other Underwriting Standards

DU was used to evaluate over 90% of the single-family loans we acquired in 2022. However, we also purchase and 

securitize mortgage loans that have been underwritten using other automated underwriting systems, as well as 

manually underwritten mortgage loans that meet our stated underwriting requirements or meet agreed-upon standards 

that differ from our standard underwriting and eligibility criteria. The majority of loans we acquired in 2022 that were not 

underwritten with DU were underwritten through a third-party automated underwriting system, such as Freddie Mac’s 

Loan Product Advisor®.

Servicing Policies

Our servicing policies establish the requirements our servicers must follow in:

• processing and remitting loan payments; 

• working with delinquent borrowers on loss mitigation activities; 

• managing and protecting Fannie Mae’s interest in the pledged property; and 

• processing bankruptcies and foreclosures. 

Our goal is to ensure that our policies support credit risk management over the life of the mortgage loan by enabling 

early delinquency outreach by servicers, promoting loss mitigation in the event of default and providing for the 

preservation and protection of the collateral supporting the mortgage loan. See “Single-Family Primary Business 

Activities—Single-Family Mortgage Servicing” above for more information on the servicing of our single-family mortgage 

loans.

New Credit Score Models and Expected Change to Credit Report Requirement

Fannie Mae uses credit scores to establish a minimum credit threshold for mortgage lending, provide a foundation for 

risk-based pricing, and support disclosures to investors. We currently use the “classic FICO® Score” from Fair Isaac 

Corporation as our credit score model, which FHFA has approved.

In October 2022, FHFA announced the validation and approval of two new credit score models for use by Fannie Mae 

and Freddie Mac: the FICO® Score 10 T credit score model and the VantageScore® 4.0 credit score model. FHFA’s 

announcement stated that they expect implementation of these new credit score models will be a multiyear effort. Once 

implemented, lenders will be required to deliver both FICO Score 10 T and VantageScore 4.0 credit scores with each 

loan sold to us when available, replacing the classic FICO Score model. The new models are expected to improve both 

the accuracy and inclusivity of borrower credit scores, including by capturing new payment histories for borrowers when 

available, such as rent, utilities and telecom payments. 

FHFA also announced in October 2022 that Fannie Mae and Freddie Mac will work toward changing the requirement 

that lenders provide credit reports from all three nationwide consumer reporting agencies. Instead, we will require 

lenders to provide credit reports from any two of the three nationwide consumer reporting agencies. FHFA expects this 

change will reduce costs and encourage innovation, without introducing additional risk to Fannie Mae and Freddie Mac.

Quality Control Process

Our quality control process includes using automated tools to help us determine whether a loan meets our underwriting 

and eligibility guidelines, performing in-depth reviews, and selecting random samples of performing loans for quality 

control review shortly after delivery. 

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 91
Repurchase Requests and Representation and Warranty Framework

If we determine that a mortgage loan did not meet our Selling Guide requirements, then our mortgage sellers and/or 

servicers are obligated to repurchase the loan, reimburse us for our losses or provide other remedies, unless the loan is 

eligible for relief under our representation and warranty framework. We refer to our demands that mortgage sellers and 

servicers meet these obligations as repurchase requests. As of December 31, 2022, we had issued repurchase 

requests on approximately 0.27% of the $1.2 trillion in unpaid principal balance of single-family loans delivered to us 

during the twelve months ended March 31, 2022. In comparison, we had issued repurchase requests on approximately 

0.21% of the $1.6 trillion in unpaid principal balance of single-family loans delivered to us during the twelve months 

ended March 31, 2021.

Our total outstanding repurchase requests as of December 31, 2022 were $783 million, compared with $757 million as 

of December 31, 2021. As of December 31, 2022, 5% of our total outstanding repurchase requests were over 180 days 

outstanding, compared with 4% as of December 31, 2021. The dollar amounts of our outstanding repurchase requests 

are based on the unpaid principal balance of the loans underlying the repurchase request, which often differs from the 

amount collected or reimbursed from mortgage sellers and/or servicers depending on the type of remedy agreed upon.

Under our representation and warranty framework, lenders can obtain relief from repurchase liability for violations of 

certain underwriting representations and warranties. Loans with 36 months of consecutive monthly payments and 

minimal delinquencies over a specified time period or with satisfactory conclusion of a full-file quality control review are 

eligible for relief. However, no relief may be granted for violations of “life of loan” representations and warranties, such 

as those relating to whether a loan was originated in compliance with applicable laws or conforms to our charter 

requirements. As of December 31, 2022, 32% of the outstanding loans in our single-family conventional guaranty book 

of business that were acquired and are subject to this framework have obtained relief based solely on payment history 

or the satisfactory conclusion of a full-file quality control review, and an additional 65% remain eligible for relief in the 

future.

In addition, lenders may obtain relief from liability for violations of a more narrow set of representations and warranties 

through the use of specified underwriting tools. This primarily includes relief for:

• borrower income, asset and employment data that has been validated through DU; and

• appraised property value for appraisals that have received a qualifying risk score in Collateral Underwriter®, our 

appraisal review tool.

Single-Family Portfolio Diversification and Monitoring

Overview

The composition of our single-family conventional guaranty book of business is diversified by product type, loan 

characteristics and geography, all of which influence credit quality and performance and may reduce our credit risk. We 

monitor various loan attributes, in conjunction with housing market and economic conditions, to determine if our pricing, 

eligibility and underwriting criteria are appropriately calibrated to ensure the risk associated with loans we acquire fits 

within our corporate risk appetite and meets our other mission and return objectives. In some cases, we may decide to 

significantly reduce our participation in riskier loan product categories. We also review the payment performance of 

loans in order to help identify potential problem loans early in the delinquency cycle and to guide the development of our 

loss mitigation strategies.

The profile of our single-family conventional guaranty book of business includes the following key risk characteristics:

• LTV ratio. LTV ratio is a strong predictor of credit performance. The likelihood of default and the severity of a 

loss in the event of default are typically lower as LTV ratio decreases. This also applies to estimated mark-tomarket LTV ratios, particularly those over 100%, as this indicates that the borrower’s mortgage balance 

exceeds the property value.

• Product type. Certain loan product types have features that may result in increased risk. Generally, 

intermediate-term, fixed-rate mortgages exhibit the lowest default rates, followed by long-term, fixed-rate 

mortgages. Historically, adjustable-rate mortgages (“ARMs”), including negative-amortizing and interest-only 

loans, and balloon/reset mortgages have exhibited higher default rates than fixed-rate mortgages, partly 

because the borrower’s payments rose, within limits, as interest rates changed.

• Number of units. Mortgages on one-unit properties tend to have lower credit risk than mortgages on two-, threeor four-unit properties.

• Property type. Certain property types have a higher risk of default. For example, condominiums generally are 

considered to have higher credit risk than single-family detached properties.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 92
• Occupancy type. Mortgages on properties occupied by the borrower as a primary or secondary residence tend 

to have lower credit risk than mortgages on investment properties.

• Credit score. Credit score is a measure often used by the financial services industry, including us, to assess 

borrower credit quality and the likelihood that a borrower will repay future obligations as expected. A higher 

credit score typically indicates lower credit risk. 

• DTI ratio. DTI ratio refers to the ratio of a borrower’s outstanding debt obligations (including both mortgage debt 

and certain other long-term and significant short-term debts) to that borrower’s reported or calculated monthly 

income, to the extent the income is used to qualify for the mortgage. As a borrower’s DTI ratio increases, the 

associated risk of default on the loan generally increases, especially if other higher-risk factors are present. 

From time to time, we revise our guidelines for determining a borrower’s DTI ratio. The amount of income 

reported by a borrower and used to qualify for a mortgage may not represent the borrower’s total income; 

therefore, the DTI ratios we report may be higher than borrowers’ actual DTI ratios.

• Loan purpose. Loan purpose refers to how the borrower intends to use the funds from a mortgage loan—either 

for a home purchase or refinancing of an existing mortgage. Cash-out refinancings have a higher risk of default 

than either mortgage loans used for the purchase of a property or other refinancings that restrict the amount of 

cash returned to the borrower.

• Geographic concentration. Local economic conditions affect borrowers’ ability to repay loans and the value of 

collateral underlying loans. Geographic diversification reduces mortgage credit risk.

• Loan age. We monitor year of origination and loan age, which is defined as the number of years since 

origination. Credit losses on mortgage loans typically do not peak until the third through fifth year following 

origination; however, this range can vary based on many factors, including changes in macroeconomic 

conditions and foreclosure timelines.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 93
The following table displays our single-family conventional business volumes and our single-family conventional 

guaranty book of business, based on certain key risk characteristics that we use to evaluate the risk profile and credit 

quality of our single-family loans. 

We provide additional information on the credit characteristics of our single-family loans in quarterly financial 

supplements, which we furnish to the SEC with current reports on Form 8-K and make available on our website. 

Information in our quarterly financial supplements is not incorporated by reference into this report.

Key Risk Characteristics of Single-Family Conventional Business Volume and Guaranty Book 

of Business(1)

Percent of Single-Family Conventional 

Business Volume at Acquisition(2)

For the Year Ended December 31,

Percent of Single-Family Conventional 

Guaranty Book of Business(3)

As of December 31,

2022 2021 2020 2022 2021 2020

Original LTV ratio:(4)

<= 60% 22 % 32 % 27 % 26 % 27 % 23 %

60.01% to 70% 13 16 16 15 15 14 

70.01% to 80% 33 31 34 33 33 35 

80.01% to 90% 12 9 11 10 10 11 

90.01% to 95% 15 9 10 11 10 11 

95.01% to 100% 5 3 2 4 4 4 

Greater than 100% — * * 1 1 2 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Weighted average 75 % 69 % 71 % 72 % 72 % 74 %

Average loan amount $ 301,887 $ 281,530 $ 279,800 $ 206,049 $ 198,865 $ 185,047 

Loan count (in thousands) 2,037 4,812 4,856 17,643 17,515 17,298 

Estimated mark-to-market LTV 

ratio:(5)

<= 60% 66 % 61 % 52 %

60.01% to 70% 16 19 17 

70.01% to 80% 10 13 18 

80.01% to 90% 5 5 9 

90.01% to 100% 3 2 4 

Greater than 100% * * *

Total 100 % 100 % 100 %

Weighted average 52 % 54 % 58 %

FICO credit score at origination:(6)

< 620 * % * % * % 1 % 1 % 1 %

620 to < 660 4 3 2 4 4 4 

660 to < 680 4 3 2 4 3 4 

680 to < 700 8 6 5 6 7 7 

700 to < 740 22 19 18 19 19 20 

>= 740 62 69 73 66 66 64 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Weighted average 747 756 760 752 753 750 

DTI ratio at origination:(7)

<= 43% 68 % 77 % 79 % 75 % 77 % 77 %

43.01% to 45% 10 8 8 9 9 9 

Greater than 45% 22 15 13 16 14 14 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Weighted average 37 % 34 % 34 % 35 % 34 % 35 %

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 94
Percent of Single-Family Conventional 

Business Volume at Acquisition(2)

For the Year Ended December 31,

Percent of Single-Family Conventional 

Guaranty Book of Business(3)

As of December 31,

2022 2021 2020 2022 2021 2020

Product type:

Fixed-rate:(8)

Long-term 90 % 83 % 85 % 86 % 84 % 85 %

Intermediate-term 9 16 15 13 15 14 

Total fixed-rate 99 99 100 99 99 99 

Adjustable-rate 1 1 * 1 1 1 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Number of property units:

1 unit 98 % 98 % 98 % 98 % 97 % 97 %

2-4 units 2 2 2 2 3 3 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Property type:

Single-family homes 91 % 91 % 92 % 91 % 91 % 91 %

Condo/Co-op 9 9 8 9 9 9 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Occupancy type:

Primary residence 91 % 92 % 92 % 91 % 90 % 90 %

Second/vacation home 3 3 4 3 4 4 

Investor 6 5 4 6 6 6 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Loan purpose:

Purchase 62 % 33 % 30 % 40 % 36 % 38 %

Cash-out refinance 25 24 19 22 21 20 

Other refinance 13 43 51 38 43 42 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Geographic concentration:(9)

Midwest 13 % 13 % 14 % 14 % 14 % 14 %

Northeast 13 14 12 16 16 17 

Southeast 26 22 21 23 23 22 

Southwest 23 19 20 19 18 19 

West 25 32 33 28 29 28 

Total 100 % 100 % 100 % 100 % 100 % 100 %

Origination year:

2016 and prior 19 % 23 % 38 %

2017 3 4 7 

2018 2 3 6 

2019 5 6 11 

2020 25 30 38 

2021 32 34 — 

2022 14 — — 

Total 100 % 100 % 100 %

 * Represents less than 0.5% of single-family conventional business volume or guaranty book of business.

(1) Second-lien mortgage loans held by third parties are not reflected in the original LTV or the estimated mark-to-market LTV ratios in this 

table. 

(2) Calculated based on the unpaid principal balance of single-family loans for each category at time of acquisition.

(3) Calculated based on the aggregate unpaid principal balance of single-family loans for each category divided by the aggregate unpaid 

principal balance of loans in our single-family conventional guaranty book of business as of the end of each period.

(4) The original LTV ratio generally is based on the original unpaid principal balance of the loan divided by the appraised property value 

reported to us at the time of acquisition of the loan. Excludes loans for which this information is not readily available.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 95
(5) The aggregate estimated mark-to-market LTV ratio is based on the unpaid principal balance of the loan as of the end of each reported 

period divided by the estimated current value of the property, which we calculate using an internal valuation model that estimates periodic 

changes in home value. Excludes loans for which this information is not readily available.

(6) Loans with unavailable FICO credit scores represent less than 0.5% of single-family conventional business volume or guaranty book of 

business, and therefore are not presented separately in this table.

(7) Excludes loans for which this information is not readily available.

(8) Long-term fixed-rate consists of mortgage loans with maturities greater than 15 years, while intermediate-term fixed-rate loans have 

maturities equal to or less than 15 years. 

(9) Midwest consists of IL, IN, IA, MI, MN, NE, ND, OH, SD and WI. Northeast consists of CT, DE, ME, MA, NH, NJ, NY, PA, PR, RI, VT and 

VI. Southeast consists of AL, DC, FL, GA, KY, MD, MS, NC, SC, TN, VA and WV. Southwest consists of AZ, AR, CO, KS, LA, MO, NM, OK, 

TX and UT. West consists of AK, CA, GU, HI, ID, MT, NV, OR, WA and WY.

Characteristics of our New Single-Family Loan Acquisitions

Refinancing activity was significantly lower in 2022 compared with 2021 levels as the rise in interest rates resulted in 

fewer borrowers who could benefit from refinancing. Accordingly, the share of our single-family loan acquisitions 

consisting of refinance loans (versus home purchase loans) decreased to 38% in 2022 compared with 67% in 2021. 

Typically, home purchase loans have higher LTV ratios than refinance loans. This trend contributed to an increase in the 

percentage of our single-family loan acquisitions with LTV ratios over 80%, from 21% in 2021 to 32% in 2022. The 

decline in refinance share also contributed to a decline in the percentage of loans we acquired with a FICO credit score 

of 740 or greater, from 69% in 2021 to 62% in 2022. In addition, our acquisitions of loans from first-time home buyers 

increased from 16% of our single-family loan acquisitions in 2021 to 29% in 2022. 

Our share of acquisitions of loans with DTI ratios above 45% increased to 22% in 2022 compared with 15% in 2021. 

This increase was driven by the higher share of home purchase acquisitions, which tend to have higher DTI ratios than 

refinance loan acquisitions. It also reflects the impact of higher interest rates and inflation on borrowers’ monthly 

obligations. 

The credit profile of our future acquisitions will depend on many factors, including: 

• our future guaranty fee pricing and our competitors’ pricing, and any impact of that pricing on the volume and 

mix of loans we acquire; 

• our internal risk limits; 

• our future eligibility standards and those of mortgage insurers, FHA and VA; 

• the percentage of loan originations representing refinancings; 

• changes in interest rates; 

• our future objectives and activities in support of those objectives, including actions we may take to reach 

additional underserved creditworthy borrowers; 

• government and regulatory policy; 

• market and competitive conditions; and

• our capital requirements. 

We expect the ultimate performance of our loans will be affected by borrower behavior, public policy and 

macroeconomic trends, including unemployment, the economy and home prices. In addition, if lenders retain more of 

the higher-quality loans they originate, it could negatively affect the credit profile of our new single-family acquisitions.

High-Balance Loans

The standard conforming loan limit for a one-unit property was $548,250 for 2021, $647,200 for 2022 and increased to 

$726,200 for 2023. As we discuss in “Business—Our Mission, Strategy and Charter—Our Charter,” we are permitted to 

acquire loans with higher balances in certain areas, which we refer to as high-balance loans. 

The following table displays the amount of high-balance loans in our single-family conventional guaranty book of 

business.

Single-Family High-Balance Loans

As of December 31,

2022 2021

Unpaid principal balance (in billions) $ 237.3 $ 237.6 

Percentage of single-family conventional guaranty book of business 7 % 7 %

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 96
Adjustable-Rate Mortgages

ARMs are mortgage loans with an interest rate that adjusts periodically over the life of the mortgage based on changes 

in a specified index. The table below displays the unpaid principal balance for ARMs in our single-family conventional 

guaranty book of business by the year of their next scheduled contractual reset date. The contractual reset is either an 

adjustment to the loan’s interest rate or a scheduled change to the loan’s monthly payment to begin to reflect the 

payment of principal. The timing of the actual reset dates may differ from those presented due to a number of factors, 

including refinancing or exercising of other provisions within the terms of the mortgage. 

Single-Family Adjustable-Rate Mortgages(1)

Reset Year

2023 2024 2025 2026 2027 Thereafter Total

(Dollars in millions)

ARMs(2) $ 13,441 $ 1,296 $ 973 $ 1,661 $ 2,865 $ 10,911 $ 31,147 

(1) Excludes loans for which there is not an additional reset for the remaining life of the loan.

(2) Includes $3.5 billion of interest-only and negative-amortizing loans. We have not acquired interest-only loans since 2014, and we have not 

acquired negative-amortizing loans since 2007.

Single-Family Credit Enhancement and Transfer of Mortgage Credit Risk

One of the key components of our credit risk management strategy is the transfer of mortgage credit risk to third parties. 

The table below displays information about the loans in our single-family conventional guaranty book of business 

covered by one or more forms of credit enhancement, including mortgage insurance or a credit risk transfer transaction. 

Our approved monoline mortgage insurers’ financial ability and willingness to pay claims is an important determinant of 

our overall credit risk exposure. For a discussion of our exposure to and management of the counterparty credit risk 

associated with the providers of these credit enhancements, see “Risk Management—Institutional Counterparty Credit 

Risk Management” and “Note 13, Concentrations of Credit Risk.” 

Single-Family Loans with Credit Enhancement

As of December 31,

2022 2021

Unpaid 

Principal 

Balance

Percentage of 

Single-Family 

Conventional 

Guaranty Book 

of Business

Unpaid 

Principal 

Balance

Percentage of 

Single-Family 

Conventional 

Guaranty Book 

of Business

(Dollars in billions)

Primary mortgage insurance and other $ 754 21 % $ 697 20 %

Connecticut Avenue Securities 726 20 512 14 

Credit Insurance Risk Transfer 323 9 168 5 

Lender risk-sharing 57 2 70 2 

Less: Loans covered by multiple credit enhancements (351) (10) (253) (7) 

Total single-family loans with credit enhancement $ 1,509 42 % $ 1,194 34 %

Mortgage Insurance

Our charter generally requires credit enhancement on any single-family conventional mortgage loan that we purchase or 

securitize if it has an LTV ratio over 80% at the time of acquisition. We generally achieve this through primary mortgage 

insurance. Primary mortgage insurance transfers varying portions of the credit risk associated with a mortgage loan to a 

third-party insurer. For us to receive a payment in settlement of a claim under a primary mortgage insurance policy, the 

insured loan must be in default and the borrower’s interest in the property securing the loan must have been 

extinguished, generally in a foreclosure action, short sale or a deed-in-lieu of foreclosure. Claims are generally paid 

three to six months after title to the property has been transferred. For a discussion of our policies that govern mortgage 

insurers’ claim-paying obligations to us, see “Risk Management—Institutional Counterparty Credit Risk Management.”

Credit Risk Transfer Transactions 

Our Single-Family business has developed other risk-sharing capabilities to transfer portions of our single-family 

mortgage credit risk to the private market. Our credit risk transfer transactions are designed to transfer a portion of the 

losses we expect would be incurred in an economic downturn or a stressed credit environment. Generally, loss 

reimbursement payments are received after the underlying property has been liquidated and all applicable proceeds, 

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 97
including private mortgage insurance benefits, have been applied to reduce the loss. We continually evaluate our credit 

risk transfer transactions which, in addition to managing our credit risk, also affect our returns on capital. 

In March 2022, FHFA published a final rule amending the enterprise regulatory capital framework. Among other 

changes, the amendment refined the risk-based capital treatment of credit risk transfer transactions. These changes to 

the enterprise regulatory capital framework increase the capital relief afforded by credit risk transfer transactions.

In 2022, we transferred a portion of the mortgage credit risk on single-family mortgage loans with an unpaid principal 

balance of $535.4 billion at the time of the transactions; substantially all of the loans in these credit risk transfer 

transactions were acquired in 2021. The rise in interest rates throughout 2022, increased macroeconomic and housing 

market uncertainty, and the increased issuance of credit risk transfer transactions from Fannie Mae, Freddie Mac and 

mortgage insurers throughout much of 2022 has negatively impacted investor demand and reinsurer capacity for our 

credit risk transfer transactions. As a result, investors have required increased premiums in our more recent credit risk 

transfer transactions. Taking into account the increasing cost of these transactions, the resulting capital relief, and the 

credit risk transfer market capacity, we have chosen to increase the first loss position retained by Fannie Mae compared 

with prior transactions.

The factors that we expect will affect the extent to which we engage in single-family credit risk transfer transactions in 

the future and the structure of those transactions include our risk appetite, future market conditions, the cost of the 

transactions, FHFA guidance or requirements (including FHFA’s scorecard), the capital relief provided by the 

transactions, and our overall business and capital plans.

Categories of Our Credit Risk Transfer Transactions

CAS Debt • We transferred to investors a portion of the 

mortgage credit risk associated with losses on a 

reference pool of mortgage loans. 

• We created a reference pool consisting of 

recently acquired single-family mortgage loans 

included in our guaranty book of business and 

create a hypothetical securitization structure with 

notional credit risk positions, or tranches (that is, 

first loss, mezzanine and senior).

• CAS debt was issued related to the first loss, 

mezzanine and senior loss risk positions.

• We retained the senior loss and all or a portion of 

the first loss tranche in CAS transactions. In 

addition, we retained a pro rata share of risk 

equal to approximately 5% of all notes sold in 

mezzanine tranches.

• CAS debt is recognized as “debt of Fannie Mae” 

in our consolidated balance sheets. CAS debt 

issued to investors beginning January 2016 

through October 2018 is recognized at amortized 

cost. CAS debt we issued prior to 2016 is 

recognized at fair value.

• We stopped issuing this form of CAS in October 

2018.

• The principal balance of CAS debt decreases as a 

result of credit losses on loans in the related reference 

pool. These write downs of the principal balance 

reduce the total amount of payments we are obligated 

to make to investors on the CAS debt.

• Credit losses on the loans in the reference pool for a 

CAS transaction are first applied to reduce the 

outstanding principal balance of the first loss tranche.

• If credit losses on these loans exceed the outstanding 

principal balance of the first loss tranche, losses would 

then be applied to reduce the outstanding principal 

balance of the mezzanine loss tranche.

• Generally issued with a stated final maturity date of 

either 10 or 12.5 years from issuance. 

• After maturity, CAS debt provides no further credit 

protection with respect to the remaining loans in the 

reference pool underlying that CAS transaction.

• Significant lag exists between the time when we 

recognize a provision for credit losses and when we 

recognize the related recovery from the CAS 

transaction.

• Presents minimal counterparty risk as we receive the 

proceeds that would reimburse us for certain credit 

events on the related loans upon the issuance of CAS.

Transaction Description Other Key Characteristics

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 98
CAS REMIC CAS REMIC®

 transactions are similar to CAS debt 

transactions, with some key differences: 

• CAS REMIC offerings are structured as notes that 

qualify as interests in a REMIC issued by a nonconsolidated trust, not as corporate debt, but we 

obtain credit protection through arrangements 

that we execute with the trust. 

• We recognize the cost of credit protection in 

“Credit enhancement expense” in our 

consolidated statements of operations and 

comprehensive income.

• We recognize the expected benefits from the 

credit protection in “Change in expected credit 

enhancement recoveries” in our consolidated 

statements of operations and comprehensive 

income.

CAS REMICs have characteristics similar to CAS debt 

transactions, with some key differences: 

• Enables expanded participation by real estate 

investment trusts and certain international investors. 

• Aligns the timing of our recognition of credit losses 

with the related recovery from CAS REMIC 

transactions. We record the expected benefit and the 

loss in the same period.

• Beginning with our July 2019 issuances: extended the 

stated final maturity date from 12.5 to 20 years from 

issuance, shortened the call option from 10 years to 7 

years; and retained a smaller first loss position. These 

updates were primarily designed to further reduce the 

capital requirements associated with loans in the 

reference pool.

• Presents minimal counterparty risk as the CAS trust 

receives the proceeds that will reimburse us for certain 

credit events on the related loans upon the issuance 

of the CAS REMIC.

CAS Creditlinked notes 

(“CLN”)

CAS CLN transactions are similar to CAS REMIC 

transactions, with some key differences: 

• In December 2019 we began offering CAS CLNs 

in addition to CAS REMICs. CAS CLNs allow us 

to obtain credit protection on reference pools 

containing seasoned loans such as Refi PlusTM

loans.

• Since the loans used in our CAS CLNs were not 

tagged for use in a REMIC transaction at the time 

of acquisition, CAS CLNs do not qualify as 

interests in a REMIC. Since May 2018, we have 

taken a REMIC election on the majority of singlefamily loans we acquire.

• CAS CLNs do not provide as broad of a range of 

investor participation as CAS REMICs. 

CIRT • Insurance transactions whereby we obtain actual 

loss coverage on pools of loans either directly 

from an insurance provider that retains the risk, or 

from an insurance provider that simultaneously 

cedes all of its risk to one or more reinsurers. 

• In CIRT deals, we generally retain an initial 

portion of losses on the loans in the pool (for 

example the first 0.4% of the initial pool unpaid 

principal balance). Reinsurers cover losses above 

this retention amount up to a detachment point 

(for example the next 3.0% of the initial pool 

unpaid principal balance). We retain all losses 

above this detachment point.

• We make premium payments on CIRT deals that 

we recognize in “Credit enhancement expense” in 

our consolidated statements of operations and 

comprehensive income.

• The insurance layer typically provides coverage for 

losses on the pool that are likely to occur only in a 

stressed economic environment. 

• Insurance benefits are received after the underlying 

property has been liquidated and all applicable 

proceeds, including private mortgage insurance 

benefits, have been applied to the loss.

• A portion of the insurers’ or reinsurers’ obligations is 

collateralized with highly-rated liquid assets held in a 

trust account initially determined according to the 

ratings of such insurer or reinsurer. Contractual 

provisions require additional collateral to be posted in 

the event of adverse developments with the 

counterparty, such as a ratings downgrade.

• Generally written for 10 or 12-1/2 year terms.

Lender risksharing• Customized lender risk-sharing transactions. 

• In most transactions, lenders invest directly in a 

portion of the credit risk on mortgage loans they 

originate and/or service.

• Transactions are generally structured so that a portion 

of the credit risk on the underlying mortgage loans is 

shared without increasing our counterparty exposure.

Transaction Description Other Key Characteristics

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 99
The table below displays the aggregate mortgage credit risk transferred to third parties and retained by Fannie Mae 

pursuant to our single-family credit risk transfer transactions. The table does not include the credit risk transferred on 

single-family transactions that were cancelled or terminated as of December 31, 2022. The table below also excludes 

coverage obtained through primary mortgage insurance.

Outstanding as of December 31, 2022

(Dollars in billions)

Senior Fannie Mae(1)

Outstanding 

Reference 

Pool(4)(6)

$1,058

Mezzanine Fannie Mae(1) CIRT(2)(3) CAS(2)

Lender RiskSharing(2)

$6 $12 $10 $4 $1,113

First Loss Fannie Mae(1) CAS(2)(5)

Lender RiskSharing(2)

$11 $10 $2

(1) Credit risk retained by Fannie Mae in CAS, CIRT and lender risk-sharing transactions. Tranche sizes vary across programs.

(2) Credit risk transferred to third parties. Tranche sizes vary across programs. 

(3) Includes mortgage pool insurance transactions covering loans with an aggregate unpaid principal balance of approximately $1.3 billion

outstanding as of December 31, 2022.

(4) For CIRT and some lender risk-sharing transactions, “Reference Pool” reflects a pool of covered loans. 

(5) For CAS transactions, “First Loss” represents all B tranche balances.

(6) For CAS and some lender risk-sharing transactions, represents outstanding reference pools, not the outstanding unpaid principal balance 

of the underlying loans. The outstanding unpaid principal balance for all loans covered by credit risk transfer programs, including all loans 

on which risk has been transferred in lender risk-sharing transactions, was $1,106 billion as of December 31, 2022. 

We have designed our credit risk transfer transactions so that the principal payment and loss performance of the 

transactions correspond to the performance of the loans in the underlying reference pools. Losses are applied in 

reverse sequential order starting with the first loss tranche. Principal repayments may be allocated to reduce the 

mezzanine amounts outstanding; however, these payments may be subject to certain lock-out periods and performance 

triggers in order to build additional credit protection for the senior tranches retained by us. For CAS transactions, all 

principal payments and losses assigned to the mezzanine tranches are allocated pro rata between the sold notes and 

the portion we retain, when performance is above a certain threshold.

While these deals are expected to mitigate some of our potential future credit losses (generally net of any proceeds 

received from front-end credit enhancements, such as primary mortgage insurance), these deals are not designed to 

shield us from all losses. We retain a portion of the risk of future credit losses on loans covered by CAS and CIRT 

transactions, including all or a portion of the first loss positions and all of the senior loss positions. In addition, on our 

CAS transactions, we retain a pro rata share of risk equal to approximately 5% of all notes sold in mezzanine tranches. 

The risk in force of these transactions, which refers to the maximum amount of losses that could be absorbed by credit 

risk transfer investors, was approximately $38 billion as of December 31, 2022, compared with approximately $35 billion

as of December 31, 2021. 

Our credit risk transfer transactions issued prior to 2021 were impacted by high levels of refinancing activity. As a result, 

the losses on the remaining covered reference pools must generally be higher before we would receive a benefit from 

those credit risk transfer transactions. In addition, home price appreciation since we entered into the transactions 

reduces the likelihood that we will incur losses on the covered loans large enough to receive a benefit from these 

transactions. As of December 31, 2022, approximately 47% of the outstanding risk in force of our single-family credit 

risk transfer transactions was from transactions issued prior to 2021. 

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 100
The following table displays information about the credit enhancement recovery receivables we have recognized within 

“Other assets” in our consolidated balance sheets. The increase in our single-family freestanding credit enhancement 

receivables as of December 31, 2022 compared to December 31, 2021, was primarily a result of an increase in our 

estimate of credit losses in 2022. As our estimate for credit losses increases, so does the benefit we expect to receive 

from our freestanding credit enhancements.

Single-Family Credit Enhancement Receivables

As of

December 31, 2022 December 31, 2021

(Dollars in millions)

Freestanding credit enhancement receivables $ 565 $ 99 

Primary mortgage insurance receivables, net of allowance(1) 53 54 

(1) Amount is net of a valuation allowance of $462 million and $479 million as of December 31, 2022 and December 31, 2021, respectively. 

The vast majority of this valuation allowance related to deferred payment obligations associated with unpaid claim amounts for which 

collectability is uncertain.

The following table displays the approximate cash paid or transferred to investors for credit risk transfer transactions. 

The cash represents the portion of the guaranty fee paid to investors as compensation for taking on a share of the credit 

risk.

Credit Risk Transfer Transactions

For the Year Ended December 31,

2022 2021

Cash paid or transferred for: (Dollars in millions)

CAS transactions(1) $ 882 $ 812 

CIRT transactions 325 264 

Lender risk-sharing transactions 154 244 

(1) Consists of cash paid for interest expense net of LIBOR or SOFR, as applicable, on outstanding CAS debt and amounts paid for both CAS 

REMIC® and CAS CLN transactions.

Cash paid or transferred to investors for CIRT transactions includes cancellation fees paid on certain CIRT transactions 

where we determined that the cost of these deals exceeded the expected remaining benefit. The table excludes cash 

paid upon the repurchase of legacy CAS debt. In 2022, we paid $4.0 billion to repurchase a portion of our outstanding 

CAS debt.

The following table displays the primary characteristics of the loans in our single-family conventional guaranty book of 

business without credit enhancement. 

Single-Family Loans Currently without Credit Enhancement

As of

December 31, 2022 December 31, 2021

Unpaid 

Principal 

Balance

Percentage of 

Single-Family 

Conventional 

Guaranty Book 

of Business

Unpaid 

Principal 

Balance

Percentage of 

Single-Family 

Conventional 

Guaranty Book 

of Business

(Dollars in billions)

Low LTV ratio or short-term(1) $ 1,171 32 % $ 1,167 34 %

Pre-credit risk transfer program inception(2) 265 7 324 9 

Recently acquired(3) 403 11 983 28 

Other(4) 669 18 565 16 

Less: Loans in multiple categories (382) (10) (750) (21) 

Total single-family loans currently without credit enhancement $ 2,126 58 % $ 2,289 66 %

(1) Represents loans with an LTV ratio less than or equal to 60% or loans with an original maturity of 20 years or less.

(2) Represents loans that were acquired before the inception of our credit risk transfer programs. Also includes Refi Plus loans.

(3) Represents loans that were recently acquired and have not been included in a reference pool.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 101
(4) Includes adjustable-rate mortgage loans, loans with a combined LTV ratio greater than 97%, non-Refi Plus loans acquired after the 

inception of our credit risk transfer programs that became 30 or more days delinquent prior to inclusion in a credit risk transfer transaction, 

and loans that were delinquent as of December 31, 2022 or December 31, 2021.

Single-Family Problem Loan Management

Overview

Our problem loan management strategies focus primarily on reducing defaults to avoid losses that would otherwise 

occur and pursuing foreclosure alternatives to mitigate the severity of the losses we incur. If a borrower does not make 

required payments, or is in jeopardy of not making payments, we work with the loan servicer to offer workout solutions 

to minimize the likelihood of foreclosure as well as the severity of loss. When appropriate, we seek to move to 

foreclosure expeditiously. 

Below we describe the following:

• delinquency statistics on our problem loans;

• efforts undertaken to manage our problem loans, including the role of servicers in loss mitigation, forbearance

plans, loan workouts, and sales of nonperforming and reperforming loans;

• metrics regarding our loan workout activities;

• REO management; and

• other single-family credit-related information, including our credit loss performance and credit loss 

concentration metrics.

We also provide ongoing credit performance information on loans underlying single-family Fannie Mae MBS and loans 

covered by single-family credit risk transfer transactions. For loans backing Fannie Mae MBS, see the “Forbearance 

and Delinquency Dashboard” available in the MBS section of our Data Dynamics® tool, which is available at 

www.fanniemae.com/datadynamics. For loans covered by credit risk transfer transactions, see the “Deal Performance 

Data” report available in the CAS and CIRT sections of the tool. Information on our website is not incorporated into this 

report. Information in Data Dynamics may differ from similar measures presented in our financial statements and other 

public disclosures for a variety of reasons, including as a result of variations in the loan population covered, timing 

differences in reporting and other factors.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 102
Delinquency 

The tables below display the delinquency status of loans and changes in the volume of seriously delinquent loans in our 

single-family conventional guaranty book of business based on the number of loans. Single-family seriously delinquent 

loans are loans that are 90 days or more past due or in the foreclosure process, expressed as a percentage of our 

single-family conventional guaranty book of business based on loan count. Management monitors the single-family 

serious delinquency rate as an indicator of potential future credit losses and loss mitigation activities. Serious 

delinquency rates are reflective of our performance in assessing and managing credit risk associated with single-family 

loans in our guaranty book of business. Typically, higher serious delinquency rates result in a higher allowance for loan 

losses. 

For purposes of our disclosures regarding delinquency status, we report loans receiving COVID-19-related payment 

forbearance as delinquent according to the contractual terms of the loan. Pursuant to the Coronavirus Aid, Relief, and 

Economic Security Act (“CARES Act”), for purposes of reporting to the credit bureaus, servicers must report a borrower 

receiving a COVID-19-related payment accommodation during the covered period, such as a forbearance plan or loan 

modification, as current if the borrower was current prior to receiving the accommodation and the borrower makes all 

required payments in accordance with the accommodation. 

Delinquency Status and Activity of Single-Family Conventional Loans

As of December 31,

2022 2021 2020

Delinquency status:

30 to 59 days delinquent 0.96 % 0.86 % 1.02 %

60 to 89 days delinquent 0.23 0.20 0.36 

Seriously delinquent (“SDQ”): 0.65 1.25 2.87 

Percentage of SDQ loans that have been delinquent for more than 180 days 55 75 67 

Percentage of SDQ loans that have been delinquent for more than two years 16 9 3 

For the Year Ended December 31,

2022 2021 2020

Single-family SDQ loans (number of loans):

Beginning balance 218,329 495,806 112,434 

Additions 171,437 232,411 833,719 

Removals:

Modifications and other loan workouts (164,707) (328,165) (246,524) 

Liquidations and sales (46,476) (86,020) (58,019) 

Cured or less than 90 days delinquent (63,623) (95,703) (145,804) 

Total removals (274,806) (509,888) (450,347) 

Ending balance 114,960 218,329 495,806 

Our single-family serious delinquency rate decreased in 2022 compared with 2021 and 2020 as a result of single-family 

borrowers exiting forbearance through a loan workout or by otherwise reinstating their loan. As of December 31, 2022, 

single-family loans in forbearance comprised 28% of our single-family seriously delinquent loans compared with 36% as 

of December 31, 2021, and 78% as of December 31, 2020. 

Factors that affect our single-family serious delinquency rate include:

• the percentage of our loans that receive forbearance and the length of time they remain in forbearance;

• the pace and effectiveness of payment deferrals, loan modifications and other workouts;

• the timing and volume of nonperforming loan sales we execute;

• pandemics and natural disasters; 

• servicer performance; and

• changes in home prices, unemployment levels and other macroeconomic conditions.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 103
The table below displays the serious delinquency rates for, and the percentage of our seriously delinquent single-family 

conventional loans represented by, the specified loan categories. Percentage of book amounts represent the unpaid 

principal balance of loans for each category divided by the unpaid principal balance of our total single-family 

conventional guaranty book of business. The reported categories are not mutually exclusive.

Single-Family Conventional Seriously Delinquent Loan Concentration Analysis

As of December 31,

2022 2021 2020

Percentage 

of Book 

Outstanding

Percentage 

of Seriously 

Delinquent 

Loans(1)

Serious 

Delinquency 

Rate

Percentage 

of Book 

Outstanding

Percentage 

of Seriously 

Delinquent 

Loans(1)

Serious 

Delinquency 

Rate

Percentage 

of Book 

Outstanding

Percentage 

of Seriously 

Delinquent 

Loans(1)

Serious 

Delinquency 

Rate

States:

California 19 % 9 % 0.46 % 19 % 11 % 1.01 % 19 % 12 % 2.62 %

Florida 6 9 0.90 6 8 1.59 6 9 4.17 

Illinois 3 5 0.86 3 5 1.55 3 5 3.10 

New Jersey 3 4 0.85 3 5 1.90 3 5 4.57 

New York 5 7 1.12 5 7 2.24 5 7 4.79 

All other states 64 66 0.62 64 64 1.16 64 62 2.59 

Vintages:

2008 and prior 2 23 2.78 3 24 4.90 4 24 8.39 

2009-2022 98 77 0.53 97 76 1.01 96 76 2.39 

Estimated markto-market LTV 

ratio:

<= 60% 66 74 0.63 61 73 1.27 52 56 2.52 

60.01% to 70% 16 14 0.77 19 16 1.37 17 18 3.73 

70.01% to 80% 10 8 0.69 13 8 1.08 18 14 3.05 

80.01% to 90% 5 3 0.68 5 2 0.88 9 9 4.17 

90.01% to 100% 3 1 0.40 2 1 0.51 4 2 1.85 

Greater than 

100% * * 4.04 * * 12.41 * 1 22.43 

Credit 

 enhanced:(2)

Primary MI & 

other(3) 21 31 1.19 20 29 2.14 21 27 4.36 

Credit risk 

transfer(4) 31 28 0.66 21 32 1.80 30 37 3.69 

Non-credit 

enhanced 58 54 0.55 66 53 0.98 58 51 2.36 

 * Represents less than 0.5% of single-family conventional guaranty book of business.

(1) Calculated based on the number of single-family loans that were seriously delinquent for each category divided by the total number of 

single-family conventional loans that were seriously delinquent.

(2) The credit-enhanced categories are not mutually exclusive. A loan with primary mortgage insurance that is also covered by a credit risk 

transfer transaction will be included in both the “Primary MI & other” category and the “Credit risk transfer” category. As a result, the “Credit 

enhanced” and “Non-credit enhanced” categories do not sum to 100%. The total percentage of our single-family conventional guaranty 

book of business with some form of credit enhancement as of December 31, 2022 was 42%.

(3) Refers to loans included in an agreement used to reduce credit risk by requiring primary mortgage insurance, collateral, letters of credit, 

corporate guarantees, or other agreements to provide an entity with some assurance that it will be compensated to some degree in the 

event of a financial loss. Excludes loans covered by credit risk transfer transactions unless such loans are also covered by primary 

mortgage insurance.

(4) Refers to loans included in reference pools for credit risk transfer transactions, including loans in these transactions that are also covered 

by primary mortgage insurance. For CAS and some lender risk-sharing transactions, this represents the outstanding unpaid principal 

balance of the underlying loans on the single-family mortgage credit book, not the outstanding reference pool, as of the specified date. 

Loans included in our credit risk transfer transactions have all been acquired since 2009.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 104
Forbearance Plans

A forbearance plan is a short-term loss mitigation option which grants a period of time (typically in 6-month increments 

and generally do not exceed a total of 12 months) during which the borrower’s monthly payment obligations are reduced 

or suspended. Borrowers may exit a forbearance plan by repaying all past due amounts to fully reinstate the loan, 

paying off the loan in full, or entering into another loss mitigation option, such as a repayment plan, a payment deferral, 

or a loan modification. The vast majority of forbearance plans offered since 2020 relate to a COVID-19-related financial 

hardship where we have authorized our servicers to offer a forbearance plan for up to 18 months for eligible borrowers.

As of December 31, 2022, the unpaid principal balance of single-family loans in forbearance was $11.9 billion compared 

with $23.6 billion as of December 31, 2021. The percentage of loans in our single-family conventional guaranty book of 

business in forbearance has declined to 0.3% as of December 31, 2022 compared with 0.7% as of December 31, 2021. 

As of December 31, 2022, 62% of the single-family loans in forbearance were seriously delinquent compared with 66%

as of December 31, 2021.

Loan Workout Metrics

As a part of our credit risk management efforts, loan workouts represent actions we take to help reinstate loans to 

current status and help homeowners stay in their home or to otherwise avoid foreclosure. Our loan workouts reflect 

various types of home retention solutions, including repayment plans, payment deferrals, and loan modifications. Our 

loan workouts also include foreclosure alternatives, such as short sales and deeds-in-lieu of foreclosure.

We work with our servicers to implement our home retention solution and foreclosure alternative initiatives, and we 

emphasize the importance of early contact with borrowers and early entry into a home retention solution. We require 

that servicers first evaluate borrowers for eligibility under a workout option before considering foreclosure. The existence 

of a second lien may limit our ability to provide borrowers with loan workout options, particularly those that are part of 

our foreclosure prevention efforts; however, we are not required to contact a second lien holder to obtain their approval 

prior to providing a borrower with a loan modification.

Home Retention Solutions

When a borrower cannot bring the loan current by reinstating the loan or through a repayment plan, we use our 

payment deferral and loan modification workout options to help resolve the loan’s delinquency. A payment deferral is a 

loss mitigation option which defers the repayment of the delinquent principal and interest payments and other eligible 

default-related amounts that were advanced on behalf of the borrower by converting them into a non-interest-bearing 

balance due at the earlier of the payoff date, the maturity date, or sale or transfer of the property. The remaining 

mortgage terms, interest rate, payment schedule, and maturity date remain unchanged, and no trial period is required. 

The number of months of payments deferred varies based on the types of hardships the borrower is facing.

Our loan modifications include the following concessions: 

• capitalization of past due amounts, a form of payment delay, which capitalizes interest and other eligible default 

related amounts that were advanced on behalf of the borrower that are past due into the unpaid principal 

balance; and 

• a term extension, which typically extends the contractual maturity date of the loan to 40 years from the effective 

date of the modification.

In addition to these concessions, loan modifications may also include an interest rate reduction, which reduces the 

contractual interest rate of the loan, or a principal forbearance, which is another form of payment delay that includes 

forbearing repayment of a portion of the principal balance as a non-interest bearing amount that is due at the earlier of 

the payoff date, the maturity date, or sale or transfer of the property.

Our primary loan modification program is currently the Flex Modification program, which offers payment relief for eligible 

borrowers. 

Foreclosure Alternatives

We offer foreclosure alternatives for borrowers who are unable to retain their homes. Foreclosure alternatives may be 

more appropriate if the borrower has experienced a significant adverse change in financial condition due to events such 

as long-term unemployment or reduced income, divorce, or unexpected issues like medical bills, and is therefore no 

longer able to make the required mortgage payments. To avoid foreclosure and satisfy the first-lien mortgage obligation, 

our servicers work with a borrower to:

• accept a deed-in-lieu of foreclosure, whereby the borrower voluntarily signs over the title to their property to the 

servicer; or

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 105
• sell the home prior to foreclosure in a short sale, whereby the borrower sells the home for less than the full 

amount owed to Fannie Mae under the mortgage loan.

These alternatives are designed to reduce our credit losses while helping borrowers avoid having to go through a 

foreclosure. We work to obtain the highest price possible for the properties sold in short sales. 

In the event there is a covered loss after the borrower defaults and title to the property is subsequently transferred 

through a foreclosure, short-sale, or a deed-in-lieu of foreclosure, we may be entitled to proceeds from primary 

mortgage insurance. For the year ended December 31, 2022, we received $89 million of mortgage insurance proceeds 

related to covered losses compared with $127 million for the year ended December 31, 2021 and $279 million for the 

year ended December 31, 2020. For more information about how mortgage insurance claims are paid, as well as a 

description of our other credit enhancement programs, see “Single-Family Business—Single-Family Mortgage Credit 

Risk Management—Single-Family Credit Enhancement and Transfer of Mortgage Credit Risk.” For a discussion of our 

policies that govern mortgage insurers’ claim-paying obligations to us, see “Risk Management—Institutional 

Counterparty Credit Risk Management.”

The chart below displays the unpaid principal balance of our completed single-family loan workouts by type, as well as 

the number of loan workouts. This table does not include loans in an active forbearance arrangement, trial 

modifications, loans to certain borrowers who have received bankruptcy relief and repayment plans that have been 

initiated but not completed.

Completed Loan Workout Activity

(Dollars in billions)

$5.3

$8.4

$16.6

$56.0

$62.1

$18.4

$62.9

$71.4

$35.3

299.2

342.7

167.3

Modifications1 Other2 Payment deferrals Number of loan workouts (in thousands)

2020 2021 2022

(1) There were approximately 15,800 loans, 39,100 loans and 14,400 loans in a trial modification period that was not yet complete as of 

December 31, 2022, 2021 and 2020, respectively.

(2) Other was $313 million, $866 million and $1.6 billion for the year ended December 31, 2022, 2021 and 2020, respectively. Includes 

repayment plans and foreclosure alternatives. Repayment plans reflect only those plans associated with loans that were 60 days or more 

delinquent. 

The overall decline in loan workout activity was primarily driven by fewer outstanding COVID-19-related forbearances 

during 2022 compared with 2021 and 2020. The total amount of principal and interest deferred to the end of the loan 

term for single-family loans that received a payment deferral was $990 million for the year ended December 31, 2022, of 

which $599 million was deferred interest. For the year ended December 31, 2021, the total amount of principal and 

interest deferred was $3.9 billion, of which $2.4 billion was deferred interest. For the year ended December 31, 2020, 

the total amount of principal and interest deferred was $1.5 billion, of which $928 million was deferred interest.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 106
The table below displays the percentage of our single-family loan modifications completed during 2021 and 2020 that 

were current or paid off one year after modification and, for modifications completed during 2020, two years after 

modification. 

Percentage of Single-Family Completed Loan Modifications That Were Current or Paid Off at 

One and Two Years Post-Modification

2021 Modifications 2020 Modifications

Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

One Year Post-Modification 88% 90% 91% 92% 93% 94% 71% 65%

Two Years Post-Modification 96 97 82 80

Nonperforming and Reperforming Loan Sales

We also undertake efforts to mitigate credit losses and manage our problem loans by selling our nonperforming and 

reperforming loans, thereby removing them from our guaranty book of business. This problem loan management 

strategy is intended to reduce: the number of seriously-delinquent loans, the severity of losses incurred on these loans, 

and the capital we would be required to hold for such loans. During 2022, we sold approximately 8,200 nonperforming 

loans with an aggregate unpaid principal balance of $1.4 billion and approximately 29,700 reperforming loans with an 

aggregate unpaid principal balance of $5.0 billion. During 2021, we sold approximately 18,300 nonperforming loans with 

an aggregate unpaid principal balance of $3.2 billion and approximately 94,400 reperforming loans with an aggregate 

unpaid principal balance of $13.6 billion.

In February 2023, FHFA instructed us to put sales of nonperforming and reperforming loans on hold until further notice. 

FHFA is currently assessing our nonperforming and reperforming loan sale program.

REO Management

If a loan defaults, we may acquire the property through foreclosure or a deed-in-lieu of foreclosure. The table below 

displays our REO activity by region. Regional REO acquisition trends generally follow a pattern that is similar to, but 

lags, that of regional delinquency trends.

Single-Family REO Properties

For the Year Ended December 31,

2022 2021 2020

Single-family REO properties (number of properties):

Beginning of period inventory of single-family REO properties(1) 7,166 7,973 17,501 

Acquisitions by geographic area:(2)

Midwest 1,606 1,166 1,507 

Northeast 1,049 1,077 1,237 

Southeast 1,136 1,076 1,859 

Southwest 768 570 1,021 

West 322 231 433 

Total REO acquisitions(1) 4,881 4,120 6,057 

Dispositions of REO (3,268) (4,927) (15,585) 

End of period inventory of single-family REO properties(1) 8,779 7,166 7,973 

Carrying value of single-family REO properties (dollars in millions) $ 1,293 $ 959 $ 1,149 

Single-family foreclosure rate(3) 0.03 % 0.02 % 0.04 %

REO net sales price to unpaid principal balance(4) 114 111 88 

Short sales net sales price to unpaid principal balance(5) 91 84 81 

(1) Includes held-for-use properties, which are reported in our consolidated balance sheets as a component of “Other assets.”

(2) See footnote 9 to the “Key Risk Characteristics of Single-Family Conventional Business Volume and Guaranty Book of Business” table for 

states included in each geographic region.

(3) Reflects the total number of properties acquired through foreclosure or deeds-in-lieu of foreclosure as a percentage of the total number of 

loans in our single-family conventional guaranty book of business as of the end of each period.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 107
(4) Calculated as the amount of sale proceeds received on disposition of REO properties during the respective periods, excluding those 

subject to repurchase requests made to our sellers or servicers, divided by the aggregate unpaid principal balance of the related loans at 

the time of foreclosure. Net sales price represents the contract sales price less selling costs for the property and other charges paid by the 

seller at closing.

(5) Calculated as the amount of sale proceeds received on properties sold in short sale transactions during the respective periods divided by 

the aggregate unpaid principal balance of the related loans. Net sales price includes borrower relocation incentive payments and 

subordinate lien(s) negotiated payoffs. 

We market and sell the majority of our foreclosed properties through local real estate professionals. Our primary 

objectives for our REO inventory are to facilitate equitable and sustainable access to homeownership, quality affordable 

rental housing, and housing for owner occupant and community-minded purchasers, while obtaining the highest price 

possible. In some cases, we use alternative methods of disposition, including selling homes to municipalities, other 

public entities or non-profit organizations, and selling properties through public auctions. We also engage in third-party 

sales at foreclosure, which allow us to avoid maintenance and other REO expenses we would have incurred had we 

acquired the property.

In April 2022, FHFA announced a suspension of foreclosure activities for up to 60 days for borrowers who apply for 

assistance under Treasury’s Homeowner Assistance Fund.

As shown in the chart below, the majority of our REO properties are unable to be marketed at any given time because 

the properties are occupied, under repair, or are subject to state or local redemption or confirmation periods, which 

delays the marketing and disposition of these properties. REO Property Status

As of December 31, 2022

Unable to market: 69%

Available for sale: 9%

Pending sale settlement: 5%

Pending appraisals to be

listed for sale: 17%

Other Single-Family Credit Information

Single-Family Credit Loss Performance Metrics and Loan Sale Performance

The single-family credit loss performance metrics and loan sale performance measures below present information about 

losses or gains we realized on our single-family loans during the periods presented. The amount of these losses or 

gains in a given period is driven by foreclosures, pre-foreclosure sales, post-foreclosure REO activity, mortgage loan 

redesignations, and other events that trigger write-offs and recoveries. The single-family credit loss metrics we present 

are not defined terms and may not be calculated in the same manner as similarly titled measures reported by other 

companies. Management uses these measures to evaluate the effectiveness of our single-family credit risk 

management strategies in conjunction with leading indicators such as serious delinquency and forbearance rates, which 

are potential indicators of future realized single-family credit losses. We believe these measures provide useful 

information about our single-family credit performance and the factors that impact it.

Because sales of nonperforming and reperforming loans have been a part of our credit loss mitigation strategy in recent 

periods, we also provide information in the table below on our loan sale performance through the “Gains (losses) on 

sales and other valuation adjustments” line item.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 108
The table below displays the components of our single-family credit loss performance metrics and loan sale 

performance.

Single-Family Credit Loss Performance Metrics and Loan Sale Performance

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Write-offs $ (211) $ (51) $ (177) 

Recoveries 288 430 111 

Foreclosed property expense (55) (14) (157) 

Credit gains (losses) 22 365 (223) 

Write-offs on the redesignation of mortgage loans from HFI to HFS(1) (679) (372) (291) 

Net credit losses and write-offs on redesignations (657) (7) (514) 

Gains (losses) on sales and other valuation adjustments(2) (207) 1,312 704 

Net credit gains (losses), write-offs on redesignations and gains (losses) on sales 

and other valuation adjustments $ (864) $ 1,305 $ 190 

Credit gain (loss) ratio (in bps)(3) 0.1 1.1 (0.7) 

Net credit gains (losses), write-offs on redesignations and gains (losses) on sales 

and other valuation adjustments ratio (in bps)(3) (2.4) 3.9 0.6 

(1) Consists of the lower of cost or fair value adjustment at time of redesignation.

(2) Consists of gains or losses realized on the sales of nonperforming and reperforming mortgage loans during the period and temporary 

lower-of-cost-or-market adjustments on HFS loans, which are recognized in “Investment gains (losses), net” in our consolidated 

statements of operations and comprehensive income.

(3) Calculated based on the amount of “Credit gains (losses)” and “Net credit gains (losses), write-offs on redesignations and gains (losses) on 

sales and other valuation adjustments” divided by the average single-family conventional guaranty book of business during the period.

The increase in our single-family write-offs in 2022 compared with 2021 was largely driven by an increase in foreclosure 

activity, due in part to the expiration of the CFPB rule that prohibited certain new single-family foreclosures on mortgage 

loans secured by the borrower’s principal residence until after December 31, 2021, as well as a decrease in the 

estimated proceeds from sales of REO as a result of the recent decline in home prices. At the time of foreclosure, we 

record a write off to the extent that estimated proceeds from the sale of REO, less the estimated cost to sell the property 

net of any insurance proceeds, exceeds the carrying value of the loan.

The increase in our single-family write-offs on the redesignation of mortgage loans from HFI to HFS in 2022 compared 

with 2021 was primarily driven by price declines on our HFS loans at the time of redesignation as interest rates rose.

Market conditions in 2022, including higher interest rates, reduced the demand for reperforming loans and led to price 

declines on our HFS loans. This resulted in losses on sales and other valuation adjustments in 2022. We recognize 

valuation adjustments on HFS loans measured at lower-of-cost-or-market when price changes occur after the loans 

have been redesignated. By contrast, we had gains on sales in 2021 driven by price increases on our HFS loans as a 

result of the market recovery following the onset of the COVID-19 pandemic.

For information on our benefit or provision for credit losses, which includes changes in our allowance, see “Consolidated 

Results of Operations—Benefit (Provision) for Credit Losses” and “Single-Family Business Financial Results.”

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 109
The table below displays concentrations of our single-family credit gains (losses) based on geography, credit 

characteristics and loan vintages.

Single-Family Credit Gain (Loss) Concentration Analysis 

Percentage of Single-Family 

Conventional Guaranty Book 

of Business Outstanding(1)

Amount of Single-Family 

Credit Gains (Losses) and 

Redesignation Write-offs(2)

As of December 31, As of December 31,

2022 2021 2022 2021

(Dollars in millions)

Geographical distribution:

California 19 % 19 % $ (94) $ (24) 

Florida 6 6 (23) 35 

Illinois 3 3 (69) (23) 

New Jersey 3 3 (29) 13 

New York 5 5 (73) 32 

All other states 64 64 (369) (40) 

Total 100 % 100 % $ (657) $ (7) 

Vintages:(3)

2008 and prior 2 % 3 % $ (100) $ 133 

2009 - 2022 98 97 (557) (140) 

Total 100 % 100 % $ (657) $ (7) 

(1) Calculated based on the aggregate unpaid principal balance of single-family loans for each category divided by the aggregate unpaid 

principal balance of loans in our single-family conventional guaranty book of business as of the end of each period.

(2) Credit gains (losses) and redesignation write-offs do not include gains (losses) on sales and other valuation adjustments. Excludes the 

impact of recoveries resulting from resolution agreements related to representation and warranty matters and compensatory fee income 

related to servicing matters that have not been allocated to specific loans.

(3) Credit losses on mortgage loans typically do not peak until the third through fifth years following origination; however, this range can vary 

based on many factors, including changes in macroeconomic conditions and foreclosure timelines.

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 110
Single-Family Maturity Information

The below table shows the contractual maturities and interest rate sensitivities of our single-family mortgage loan 

portfolio as recorded on our consolidated balance sheets. Although the loans in our consolidated portfolio have varying 

contractual terms (for example, 15-year, 30-year, etc.), the actual life of the loans is likely to be significantly less than 

their contractual term as a result of prepayment. Therefore, the contractual term is not a reliable indicator of the loans’ 

expected lives. Single-family mortgages can be prepaid in whole or in part at any time without penalty.

Single-Family Loans: Maturities and Terms of the Consolidated Mortgage Loan Portfolio(1)

As of December 31, 2022

Due within 1 

year(2)

Greater than 1 

year but 

within 5 years

Greater than 5 

years but 

within 15 

years

Greater than 

15 years Total

(Dollars in millions)

Single-family mortgage loans:

Loans held for sale $ 266 $ 170 $ 518 $ 1,513 $ 2,467 

Loans held for investment

Of Fannie Mae 7,775 4,202 11,934 28,493 52,404 

Of consolidated trusts 128,289 534,418 1,351,674 1,575,410 3,589,791 

Total unpaid principal balance of 

single-family mortgage loans 136,330 538,790 1,364,126 1,605,416 3,644,662 

Cost basis adjustments, net 49,806 

Total single-family mortgage loans(3) $ 136,330 $ 538,790 $ 1,364,126 $ 1,605,416 $ 3,694,468 

Single-family mortgage loans by interest rate sensitivity:

Fixed-rate $ 125,892 $ 534,039 $ 1,351,335 $ 1,592,977 $ 3,604,243 

Adjustable-rate 10,438 4,751 12,791 12,439 40,419 

Total unpaid principal balance of singlefamily mortgage loans $ 136,330 $ 538,790 $ 1,364,126 $ 1,605,416 $ 3,644,662 

(1) We report the scheduled repayments in the maturity category in which the payment is due, such that a loan’s balance may be presented 

across multiple maturity categories.

(2) Due within 1 year includes reverse mortgages for which there is no defined maturity date of $9.5 billion as of December 31, 2022.

(3) Excludes accrued interest receivable. The unpaid principal balance of single family loans is based on the amount of contractual unpaid 

principal balance due and excludes any write-offs for amounts deemed uncollectible. Those write-offs are presented as a component of 

cost basis adjustments, net.

Multifamily Business

Multifamily Primary Business Activities

Providing Liquidity for Multifamily Mortgage Loans

Our Multifamily business provides mortgage market liquidity primarily for properties with five or more residential units, 

which may be apartment communities, cooperative properties, seniors housing, dedicated student housing or 

manufactured housing communities. Our Multifamily business works with our multifamily lenders to provide funds to the 

mortgage market primarily by securitizing multifamily mortgage loans acquired from these lenders into Fannie Mae 

MBS, which are sold to investors or dealers. We also purchase multifamily mortgage loans and provide credit 

enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. Our 

Multifamily business also supports liquidity in the mortgage market through other activities, such as issuing structured 

MBS backed by Fannie Mae multifamily MBS and buying and selling multifamily agency mortgage-backed securities. 

We also continue to invest in low-income housing tax credit (“LIHTC”) multifamily projects to help support and preserve 

the supply of affordable housing. 

MD&A | Single-Family Business | Single-Family Mortgage Credit Risk Management 

Fannie Mae 2022 Form 10-K 111
Key Characteristics of the Multifamily Business

The Multifamily business has a number of key characteristics that distinguish it from our Single-Family business.

• Collateral: Multifamily loans are collateralized by properties that generate cash flows and effectively operate as 

businesses, such as garden and high-rise apartment complexes, seniors housing communities, cooperatives, 

dedicated student housing and manufactured housing communities.

• Borrowers and sponsors: Multifamily borrowing entities are typically owned, directly or indirectly, by for-profit 

corporations, limited liability companies, partnerships, real estate investment trusts and individuals who invest 

in real estate for cash flow and expected returns in excess of their original contribution of equity. Borrowing 

entities are typically single-asset entities, with the property as their only asset. The ultimate owner of a 

multifamily borrowing entity is referred to as the “sponsor.” We evaluate both the borrowing entity and its 

sponsor when considering a new transaction or managing our business. We refer to both the borrowing entities 

and their sponsors as “borrowers.” When considering a multifamily borrower, creditworthiness is evaluated 

through a combination of quantitative and qualitative data including liquid assets, net worth, number of units 

owned, experience in a market and/or property type, multifamily portfolio performance, access to additional 

liquidity, debt maturities, asset/property management platform, senior management experience, reputation, and 

exposures to lenders and Fannie Mae. 

• Recourse: Multifamily loans are generally non-recourse to the borrowers. 

• Lenders: During 2022, we executed multifamily transactions with 27 lenders. Of these, 23 lenders delivered 

loans to us under our DUS program described below. In determining whether to partner with a multifamily 

lender, we consider the lender’s financial strength, multifamily underwriting and servicing experience, portfolio 

performance and willingness and ability to share in the risk of loss associated with the multifamily loans they 

originate.

• Loan size: The average size of a loan in our multifamily guaranty book of business is $16 million.

• Underwriting process: Multifamily loans require detailed underwriting of the property’s operating cash flow. Our 

underwriting includes an evaluation of the property’s ability to support the loan, property quality, market and 

submarket factors, and ability to exit at maturity. 

• Term and lifecycle: In contrast to the standard 30-year single-family residential loan, multifamily loans typically 

have original loan terms between 7 and 15 years, with 10 year terms being the most common.

• Prepayment terms: To protect against prepayments, most multifamily Fannie Mae loans and MBS impose 

prepayment premiums, primarily yield maintenance, consistent with standard commercial investment terms. 

This is in contrast to single-family loans, which typically do not have prepayment protection.

Delegated Underwriting and Servicing

Fannie Mae’s DUS program, which was initiated in 1988, is a unique business model in the commercial mortgage 

industry. Our DUS model aligns the interests of the lender and Fannie Mae. Our current 24-member DUS lender 

network, which is composed of large financial institutions and independent mortgage lenders, continues to be our 

principal source of multifamily loan deliveries. DUS lenders are pre-approved and delegated the authority to underwrite 

and service loans on behalf of Fannie Mae in accordance with our standards and requirements. Delegation permits 

lenders to respond to customers more rapidly, as the lender generally has the authority to approve a loan within 

prescribed parameters. Based on a given loan’s unique characteristics and Fannie Mae’s established delegation 

criteria, lenders assess whether a loan must be reviewed for a decision by Fannie Mae. If review is required, Fannie 

Mae’s internal credit team will assess the loan’s risk profile to determine if it meets our risk tolerances. DUS lenders are 

required to share with us the risk of loss over the life of the loan, as discussed in more detail in “Multifamily Mortgage 

Credit Risk Management.” Since DUS lenders share in the credit risk, the servicing fee to the lenders includes 

compensation for credit risk.

Multifamily Mortgage Servicing

Multifamily mortgage servicing is typically performed by the lenders who sell mortgages to us. Because of our losssharing arrangements with our multifamily lenders, transfers of multifamily servicing rights are infrequent, and we 

monitor our servicing relationships and enforce our right to approve servicing transfers. As a seller-servicer, the lender is 

responsible for ongoing evaluation of the financial condition of properties and property owners, administering various 

types of loan and property-level agreements (including agreements covering replacement reserves, completion or 

repair, and operations and maintenance), as well as conducting routine property inspections.

MD&A | Multifamily Business | Multifamily Primary Business Activities

Fannie Mae 2022 Form 10-K 112
Multifamily Credit Risk and Credit Loss Management

Our Multifamily business: 

• Prices and manages the credit risk on loans in our multifamily guaranty book of business. Lenders retain a 

portion of the credit risk in most multifamily transactions.

• Enters into transactions that transfer an additional portion of Fannie Mae’s credit risk on some of the loans in 

our multifamily guaranty book of business through back-end credit risk transfer transactions.

• Works to help maintain the credit quality of the multifamily guaranty book of business, prevents foreclosures 

through certain loss mitigation strategies such as forbearance or modification, reduces costs of defaulted 

multifamily loans, manages our REO inventory, and pursues contractual remedies from lenders, servicers, 

borrowers, and providers of credit enhancement.

See “Multifamily Mortgage Credit Risk Management” for a discussion of our strategies for managing credit risk and 

credit losses on multifamily loans.

The Multifamily Markets in Which We Operate

In the multifamily mortgage market, we aim to address the rental housing needs of a wide range of the population in 

markets across the country, with the substantial majority of our focus on supporting rental housing that is affordable to 

households earning at or below the median income in their area. We serve the market steadily, rather than moving in 

and out depending on market conditions. Through the secondary mortgage market, we support rental housing for the 

workforce population, for senior citizens and students, and for households with the greatest economic need. Over 95%

of the multifamily units we financed in 2022 that were potentially eligible for housing goals credit were affordable to 

those earning at or below 120% of the median income in their area, providing support for both workforce housing and 

affordable housing. 

Our Multifamily business is organized and operated as an integrated commercial real estate finance business, 

addressing the spectrum of multifamily housing finance needs, including the need for smaller multifamily property 

financing and financing that serves low- and very low-income households. 

• To meet the growing need for smaller multifamily property financing, we focus on the acquisition of small 

multifamily loans, which includes loans of up to $6 million in original unpaid principal balance. As of December 

31, 2022, small loans represented 38% of our multifamily guaranty book of business by loan count and 6%

based on unpaid principal balance.

• To serve low- and very low-income households, we have a team that focuses exclusively on relationships with 

lenders financing privately-owned multifamily properties that receive public subsidies in exchange for 

maintaining long-term affordable rents. We work with borrowers that may utilize housing programs and 

subsidies provided by local, state and federal agencies; examples include tax incentives (such as those 

provided through LIHTC or tax abatement) and rent subsidies (such as project-based Section 8 rental 

assistance or tenant vouchers). The public subsidy programs are largely targeted to provide housing to those 

earning less than 60% of area median income (as defined by HUD) and are structured to ensure that the lowand very low-income households who benefit from the programs pay no more than 30% of their gross monthly 

income for rent and utilities. As of December 31, 2022, affordable loans represented approximately 12% of our 

multifamily guaranty book of business, based on unpaid principal balance, including $7.6 billion in bond credit 

enhancements.

Our acquisition of loans financing smaller multifamily properties and serving low-and very-low income households help 

us meet our multifamily housing goals and FHFA’s requirement for us that a portion of our multifamily volume be 

focused on affordable and underserved markets. We discuss our housing goals in “Business—Legislation and 

Regulation—GSE-Focused Matters—Housing Goals” and our requirement to focus on affordable and underserved 

markets in “Multifamily Business Metrics—Multifamily Business Volume Cap.”

Multifamily Lenders and Investors

In support of equitable and sustainable access to quality affordable rental housing across America, our multifamily 

business works primarily with mortgage banking companies, large diversified financial institutions, and banks. During 

2022, our top five multifamily lenders, in the aggregate, accounted for 49% of our multifamily business volume, 

compared with 46% in 2021. One of our lenders, Walker & Dunlop, accounted for 17% of our 2022 multifamily business 

volume. No other lender accounted for 10% or more of our multifamily business volume in 2022.

We have a diversified funding base of domestic and international investors. Purchasers of multifamily Fannie Mae MBS 

include fund managers, commercial banks, pension funds, insurance companies, corporations, state and local 

MD&A | Multifamily Business | Multifamily Primary Business Activities

Fannie Mae 2022 Form 10-K 113
governments, and other municipal authorities. Our Multifamily Connecticut Avenue SecuritiesTM (“MCASTM”) investors 

include fund managers, hedge funds and insurance companies, while our Multifamily CIRTTM (“MCIRTTM”) transactions 

are executed with insurers and reinsurers.

Multifamily Competition

Competition to acquire mortgage assets is significantly affected by both our and our competitors’ pricing, credit 

standards and loan structures, lender preferences, investor demand for our and our competitors’ mortgage-related 

securities, and actions we take to support affordable multifamily housing. Our competitive environment also may be 

affected by many other factors, including direction from FHFA; changes in our obligations under our senior preferred 

stock purchase agreement with Treasury or in our capital requirements; new legislation or regulations applicable to us, 

our lenders or investors; and digital innovation and disruption in our markets. Our competitive environment in 2022 was 

largely influenced by FHFA’s requirement that a portion of our new multifamily business be focused on affordable and 

underserved markets, as well as volatility in overall market conditions. We expect that these factors will continue to 

influence our competitive landscape.

Our primary competitors for the acquisition of multifamily mortgage assets and issuance of multifamily mortgage-related 

securities are Freddie Mac, life insurers, U.S. banks and thrifts, other institutional investors, Ginnie Mae and privatelabel issuers of commercial mortgage-backed securities. See “Business—Conservatorship and Treasury Agreements,” 

“Business—Legislation and Regulation,” and “Risk Factors” for information on matters that could affect our business 

and competitive environment.

Multifamily Mortgage Market

Multifamily market fundamentals, which include factors such as vacancy rates and rents, weakened during the fourth 

quarter of 2022, despite positive job growth and favorable demographics. 

• Vacancy rates. Based on preliminary third-party data, we estimate that the national multifamily vacancy rate for 

institutional investment-type apartment properties was 5.5% as of December 31, 2022, an increase from an 

estimated 5.0% as of September 30, 2022 and December 31, 2021. Although the national multifamily vacancy 

rate increased to an estimated 5.5%, it remained below its average rate of about 5.8% over the last 15 years.

• Rents. Based on preliminary third-party data, we estimate that effective rents decreased by 0.8% during the 

fourth quarter of 2022, compared with an increase of 1.0% during the third quarter of 2022 and an increase of 

3.0% in the fourth quarter of 2021. As a result, we believe annualized rent growth for 2022 was an estimated 

4.8%.

Vacancy rates and rents are important to loan performance because multifamily loans are generally repaid from the 

cash flows generated by the underlying property. Several years of improvement in these fundamentals have helped to 

increase property values in most metropolitan areas. Based on preliminary multifamily property sales data, transaction 

volumes for much of 2022 remained elevated but decreased significantly in the fourth quarter of 2022. Despite this 

decline in transaction volumes, capitalization rates did not rise but instead have remained stable throughout much of 

2022. While total annual multifamily property sales were elevated in 2022, they did not reach 2021 levels, as higher 

interest rates appear to have contributed to softened investment demand in the multifamily sector.

Multifamily construction underway remains elevated. Preliminary data shows that more than 470,000 multifamily units 

were delivered in 2022. More than 780,000 multifamily units are slated to be delivered in 2023, which would be a peak 

over the past 10 years.

Based on a drop-off in rental demand observed during the fourth quarter 2022, coupled with inflation and slowing job 

growth in December, we believe that the multifamily sector will be impacted by softening demand, leading to higher 

vacancy levels and stagnant rent growth in 2023.

MD&A | Multifamily Business | Multifamily Primary Business Activities

Fannie Mae 2022 Form 10-K 114
Multifamily Market Activity

We remained a continuous source of liquidity in the multifamily market in 2022. We owned or guaranteed approximately 

21% of the outstanding debt on multifamily properties as of September 30, 2022 (the latest date for which information is 

available). 

Multifamily Mortgage Debt Outstanding(1)

(Dollars in trillions)

$1.75

$1.89

$2.01

21% 21% 21%

Total multifamily U.S. mortgage debt outstanding

Fannie Mae percentage of total multifamily mortgage debt outstanding

12/31/2020 12/31/2021 9/30/2022

(1) The mortgage debt outstanding as of September 30, 2022, is based on the Federal Reserve’s December 2022 mortgage debt outstanding 

release, the latest date for which the Federal Reserve has estimated mortgage debt outstanding for multifamily residences. Prior-period 

amounts have been updated to reflect revised historical data from the Federal Reserve.

Multifamily Business Metrics

The multifamily loans we acquired in 2022 had a strong overall credit risk profile, consistent with our acquisition policy 

and standards, which we describe in “Multifamily Mortgage Credit Risk Management—Multifamily Acquisition Policy and 

Underwriting Standards.”

Multifamily New Business Volume

(Dollars in billions)

$76.0

$69.5 $69.2

745,000

623,000

598,000

Multifamily new business volume1 Multifamily new units financed2 2020 2021 2022

(1) Reflects unpaid principal balance of multifamily Fannie Mae MBS issued, multifamily loans purchased, and credit enhancements provided 

on multifamily mortgage assets during the period.

(2) Reflects new units financed by first liens; excludes second liens on units for which we had financed the first lien, as well as manufactured 

housing rentals. Units financed reported for prior periods have been updated in this report to exclude previously included second liens and 

manufactured housing rentals. Second liens and manufactured housing rentals are included in unpaid principal balance.

MD&A | Multifamily Business | Multifamily Market Activity

Fannie Mae 2022 Form 10-K 115
Multifamily Business Volume Cap

In November 2022, FHFA announced a 2023 multifamily loan purchase cap of $75 billion for new business volume. This 

is a reduction from the $78 billion cap applicable for 2022. Consistent with the 2022 cap, a minimum of 50% of our 2023 

multifamily loan purchases must be mission-driven, focused on specified affordable and underserved market segments; 

however, FHFA has revised the multifamily requirements for mission-driven, affordable housing for 2023, including by:

• Removing the requirement that 25% of multifamily loan purchases must be affordable to residents earning 60% 

or less of area median income to reduce inconsistencies with FHFA’s housing goals; and

• Within the mission-driven eligibility criteria, creating a new category focused on preserving affordability in 

workforce housing to encourage financing of loans on properties with rent or income restrictions affordable at 

levels that meet market needs.

Our 2022 multifamily new business volume remained under the cap, and we have met the mission requirements 

established by FHFA. See “Risk Factors—GSE and Conservatorship Risk” for information on how conservatorship may 

affect our business activities.

Multifamily Securities Issuances

Our multifamily business securitizes the vast majority of multifamily mortgage loans we acquire through lender swap 

transactions. We also support liquidity in the market by issuing structured MBS backed by multifamily Fannie Mae MBS, 

including through our Fannie Mae GeMS program.

Multifamily Fannie Mae MBS Issuances

(Dollars in billions)

$75.7

$69.4 $69.2

$9.1 $8.5 $5.3

Multifamily Fannie Mae MBS issuances Multifamily Fannie Mae structured securities issuances1 2020 2021 2022

(1) A portion of structured securities issuances may be backed by Fannie Mae MBS issued during the same period and held by Fannie Mae. 

Structured securities backed by Fannie Mae MBS held by a third party are not included in the multifamily Fannie Mae MBS structured 

security issuance amounts.

MD&A | Multifamily Business | Multifamily Business Metrics

Fannie Mae 2022 Form 10-K 116
Presentation of Our Multifamily Guaranty Book of Business

For purposes of the information reported in this “Multifamily Business” section, we measure our multifamily guaranty 

book of business using the unpaid principal balance of mortgage loans underlying Fannie Mae MBS. By contrast, the 

multifamily guaranty book of business presented in the “Composition of Fannie Mae Guaranty Book of Business” table 

in the “Guaranty Book of Business” section is based on the unpaid principal balance of Fannie Mae MBS outstanding.

These amounts differ primarily as a result of payments we receive on underlying loans that have not yet been remitted 

to the MBS holders. 

Multifamily Guaranty Book of Business

(Dollars in billions)

$384.5

$413.1

$440.4

74.5

78.4 78.5

Unpaid principal balance of multifamily guaranty book of business1 Average charged guaranty fee rate on multifamily guaranty book of business (in basis points), at end of period

12/31/20 12/31/21 12/31/22

(1) Our multifamily guaranty book of business primarily consists of multifamily mortgage loans underlying Fannie Mae MBS outstanding, 

multifamily mortgage loans of Fannie Mae held in our retained mortgage portfolio, and other credit enhancements that we provide on 

multifamily mortgage assets. It does not include non-Fannie Mae multifamily mortgage-related securities held in our retained mortgage 

portfolio for which we do not provide a guaranty.

Average charged guaranty fee represents our effective revenue rate relative to the size of our multifamily guaranty book 

of business. Management uses this metric to assess the return we earn as compensation for the multifamily credit risk 

we manage. Average charged guaranty fee is impacted by the rate at which loans in our book of business turn over as 

well as the guaranty fees we charge, which are set at the time we acquire the loans. Our multifamily guaranty fee pricing 

is primarily based on the individual credit risk characteristics of the loans we acquire and the aggregate credit risk 

characteristics of our multifamily guaranty book of business. Our multifamily guaranty fee pricing is also influenced by 

external forces such as the availability of other sources of liquidity, our mission-related goals, the FHFA volume cap, 

interest rates, MBS spreads, and the management of the overall composition of our multifamily guaranty book of 

business. While our average charged guaranty fee remained flat in 2022 compared with 2021, these internal and 

external factors may be volatile and therefore lead to variability in our multifamily guaranty fees.

MD&A | Multifamily Business | Multifamily Business Metrics

Fannie Mae 2022 Form 10-K 117
Multifamily Business Financial Results

This section provides a discussion of the primary components of net income for our Multifamily Business.

Multifamily Business Financial Results(1)

For the Year Ended December 31, Variance

2022 2021 2020 2022 vs. 2021 2021 vs. 2020

(Dollars in millions)

Net interest income $ 4,687 $ 4,158 $ 3,364 $ 529 $ 794 

Fee and other income 88 92 94 (4) (2) 

Net revenues 4,775 4,250 3,458 525 792 

Fair value gains (losses), net (80) (12) 38 (68) (50) 

Administrative expenses (540) (508) (509) (32) 1 

Benefit (provision) for credit losses (1,248) 530 (603) (1,778) 1,133 

Credit enhancement expense(2) (261) (239) (220) (22) (19) 

Change in expected credit enhancement recoveries(3) 257 (108) 144 365 (252) 

Other income (expenses), net(4) (214) (87) 83 (127) (170) 

Income before federal income taxes 2,689 3,826 2,391 (1,137) 1,435 

Provision for federal income taxes (536) (777) (467) 241 (310) 

 Net income $ 2,153 $ 3,049 $ 1,924 $ (896) $ 1,125 

(1) See “Note 10, Segment Reporting” for information about our segment allocation methodology.

(2) Primarily consists of costs associated with our MCIRTTM and MCASTM programs as well as amortization expense for certain lender risksharing programs.

(3) Consists of change in benefits recognized from our freestanding credit enhancements that primarily relate to our DUS®

 lender risk-sharing.

(4) Consists of investment gains or losses, foreclosed property income (expense), gains or losses from partnership investments, debt 

extinguishment gains or losses, and other income or expenses.

Net interest income

(Dollars in millions)

$3,364

$4,158

$4,687

2020 2021 2022

Multifamily net interest income increased in 2022

compared with 2021 primarily due to higher guaranty 

fee income as a result of an increase in our 

multifamily guaranty book of business combined with 

increased interest income earned on our other 

investments portfolio as a result of the high interest 

rate environment.

Multifamily net interest income increased in 2021 

compared with 2020 primarily due to higher guaranty 

fee income as a result of an increase in our 

multifamily guaranty book of business combined with 

an increase in average charged guaranty fees and 

higher yield maintenance revenue related to the 

prepayment of multifamily loans.

_____________________________________________________________________________

MD&A | Multifamily Business | Multifamily Business Financial Results

Fannie Mae 2022 Form 10-K 118
Benefit (provision) for credit losses

(Dollars in millions)

$(603)

$530

$(1,248)

2020 2021 2022

Provision for credit losses in 2022 was primarily driven 

by our expectation of increased probability of default 

and greater expected severity of loss on our seniors 

housing portfolio, as well as higher actual and 

projected interest rates. 

Benefit for credit losses in 2021 was primarily driven 

by a benefit from actual and projected economic data 

and lower expected credit losses as a result of the 

COVID-19 pandemic. 

Benefit (provision) for credit losses during the periods 

were partially offset by changes in expected credit 

enhancement recoveries, which captures changes to 

expected benefits from our freestanding credit 

enhancements.

See “Consolidated Results of Operations—Benefit 

(Provision) for Credit Losses” for more information on 

our multifamily benefit or provision for credit losses. 

Multifamily Mortgage Credit Risk Management

The credit risk profile of a loan in our multifamily guaranty book of business is influenced by:

• the current and anticipated cash flows from the property;

• the type and location of the property; 

• the condition and value of the property; 

• the financial strength of the borrower; 

• market trends; and

• the structure of the financing. 

These and other factors affect both the amount of expected credit loss on a given loan and the sensitivity of that loss to 

changes in the economic environment. 

Multifamily Acquisition Policy and Underwriting Standards

Our Multifamily business is responsible for pricing and managing the credit risk on our multifamily guaranty book of 

business, with oversight from our Enterprise Risk Management division. Multifamily loans that we purchase or that back 

Fannie Mae MBS are underwritten by a Fannie Mae-approved lender and may be subject to our underwriting review 

prior to closing, depending on the product type, loan size, market and/or other factors. Our underwriting standards 

generally include, among other things, property cash flow analysis and third-party appraisals. 

Additionally, our standards for multifamily loans specify maximum original LTV ratio and minimum original DSCR values 

that vary based on loan characteristics. Our experience has been that original LTV ratio and DSCR values have been 

reliable indicators of future credit performance. At underwriting, we evaluate the DSCR based on both actual and 

underwritten debt service payments. The original DSCR is calculated using the underwritten debt service payments for 

the loan, which assumes both principal and interest payments, including stressed assumptions in certain cases, rather 

than the actual debt service payments. Depending on the loan’s interest rate and structure, using the underwritten debt 

service payments will often result in a more conservative estimate of the debt service payments (for example, loans with 

an interest-only period). This approach is used for all loans, including those with full and partial interest-only terms.

Key Risk Characteristics of Multifamily Guaranty Book of Business

As of December 31,

2022 2021 2020

Weighted-average original LTV ratio 64 % 65 % 66 %

Original LTV ratio greater than 80% 1 1 1 

Original DSCR less than or equal to 1.10 12 11 10 

Full term interest-only loans 38 33 30 

Partial term interest-only loans(1) 49 51 51 

Adjustable-rate mortgages 11 9 10 

(1) Consists of mortgage loans that were underwritten with an interest-only term, regardless of whether the loan is currently in its interest-only 

period.

MD&A | Multifamily Business | Multifamily Business Financial Results

Fannie Mae 2022 Form 10-K 119
We provide additional information on the credit characteristics of our multifamily loans in quarterly financial 

supplements, which we furnish to the SEC with current reports on Form 8-K. Information in our quarterly financial 

supplements is not incorporated by reference into this report. 

Transfer of Multifamily Mortgage Credit Risk

Lender risk-sharing is a cornerstone of our Multifamily business. We primarily transfer risk through our DUS program, 

which delegates to DUS lenders the ability to underwrite and service multifamily loans, in accordance with our standards 

and requirements. DUS lenders receive credit risk-related revenues for their respective portion of credit risk retained, 

and, in turn, are required to fulfill any loss-sharing obligation. This aligns the interests of the lender and Fannie Mae 

throughout the life of the loan. We monitor the capital resources and loss-sharing capacity of our DUS lenders on an 

ongoing basis.

Our DUS model typically results in our lenders sharing approximately one-third of the credit risk on our multifamily 

loans, either on a pro-rata or tiered basis. Lenders who share on a tiered basis cover loan-level credit losses up to the 

first 5% of the unpaid principal balance of the loan and then share with us any remaining losses up to a prescribed limit. 

Loans serviced by DUS lenders and their affiliates represented substantially all of our multifamily guaranty book of 

business as of December 31, 2022 and 2021. In certain situations, to effectively manage our counterparty risk, we do 

not allow the lenders to fully share in one-third of the credit risk but have them share in a smaller portion.

While not a large portion of our multifamily guaranty book of business, our non-DUS lenders typically also have lender 

risk-sharing, where the lenders typically share or absorb losses based on a negotiated percentage of the loan or the 

pool balance.

These lender risk-sharing agreements not only transfer credit risk, but also better align our interests with those of the 

lenders. Our maximum potential loss recovery from lenders under current risk-sharing agreements represented over 

20% of the unpaid principal balance of our multifamily guaranty book of business as of December 31, 2022 and 2021. 

To complement our front-end lender-risk sharing program, we engage in back-end credit risk transfer transactions 

through our MCIRT and MCAS transactions. Through these transactions, we transfer a portion of the credit risk 

associated with a reference pool of multifamily mortgage loans to insurers, reinsurers, or investors.

Our back-end multifamily credit-risk sharing transactions were primarily designed to further reduce the capital 

requirements associated with loans in the reference pool with the related benefit of additional credit risk protection in the 

event of a stress environment. We transfer multifamily credit risk through lender risk-sharing at the time of acquisition, 

but our multifamily back-end credit risk transfer activity occurs later, typically up to a year or more after acquisition.

In 2022, we entered into one new credit risk transfer transaction, transferring mortgage credit risk through our MCIRT

program. The factors that we expect will affect the extent to which we engage in multifamily credit risk transfer 

transactions in the future and the structure of those transactions include our risk appetite, future market conditions, the 

cost of the transactions, FHFA guidance or requirements (including FHFA’s scorecard), the capital relief provided by the 

transactions, and our overall business and capital plans.

The table below displays the total unpaid principal balance of multifamily loans and the percentage of our multifamily 

guaranty book of business, based on unpaid principal balance, that is covered by a back-end credit risk transfer 

transaction. The table does not reflect front-end lender risk-sharing arrangements, as only a small portion of our 

multifamily guaranty book of business is not covered by these arrangements.

Multifamily Loans in Back-End Credit Risk Transfer Transactions

As of December 31,

2022 2021

Unpaid 

Principal 

Balance

Percentage of 

Multifamily 

Guaranty Book 

of Business

Unpaid 

Principal 

Balance

Percentage of 

Multifamily 

Guaranty Book 

of Business

(Dollars in millions)

MCIRT $ 87,682 20 % $ 84,894 20 %

MCAS 25,071 6 27,088 7 

Total $ 112,753 26 % $ 111,982 27 %

MD&A | Multifamily Business | Multifamily Mortgage Credit Risk Management

Fannie Mae 2022 Form 10-K 120
Multifamily Portfolio Diversification and Monitoring

Diversification within our multifamily guaranty book of business by geographic concentration, term to maturity, interest 

rate structure, borrower concentration, loan size, property type, and credit enhancement coverage are important factors 

that influence credit performance and may help reduce our credit risk. 

As part of our ongoing credit risk management process, we and our lenders monitor the performance and risk 

characteristics of our multifamily loans and the underlying properties on an ongoing basis throughout the loan term at 

the asset and portfolio level. We require lenders to provide quarterly and annual financial updates for the loans for which 

we are contractually entitled to receive such information. We closely monitor loans with an estimated current DSCR 

below 1.0, as that is an indicator of heightened default risk. The percentage of loans in our multifamily guaranty book of 

business, calculated based on unpaid principal balance, with a current DSCR less than 1.0 was approximately 3% as of 

December 31, 2022 and 2% as of December 31, 2021. Our estimates of current DSCRs are based on the financial 

statements for the included properties, including the related debt service.

We monitor and manage changes in interest rates, which can impact multiple aspects of our multifamily loans. Interest 

rates increased significantly during 2022 and may increase further. Increases in interest rates may reduce the ability of 

multifamily borrowers to refinance their loans, which often have balloon balances at maturity. We have a team that 

proactively manages upcoming loan maturities to minimize losses on maturing loans. This team assists lenders and 

borrowers with timely and appropriate refinancing of maturing loans with the goal of reducing defaults and foreclosures 

related to these loans.

Additionally, in a rising interest rate environment, multifamily borrowers with adjustable-rate mortgages may have 

difficulty paying higher monthly payments if property net operating income is not increasing at a similar pace. We 

generally require multifamily borrowers with adjustable-rate mortgages to purchase interest rate caps to protect against 

large movements in rates. A cap must be in place at the initial closing of the loan, and escrows are established and 

structured to provide for the replacement of the initial cap at its maturity, typically in 2 to 3 years. Purchasing or 

replacing required interest rate caps, especially those with longer terms and/or lower strike rates, becomes more 

expensive as interest rates rise. As a result, the cost of interest rate caps has increased substantially in recent months.

In addition to the factors discussed above, we track the following credit risk characteristics to determine loan credit 

quality indicators, which are the internal risk categories we use and which are further discussed in “Note 3, Mortgage 

Loans”:

• the physical condition of the property; 

• delinquency status; 

• the relevant local market and economic conditions that may signal changing risk or return profiles; and 

• other risk factors. 

For example, we closely monitor rental payment trends and vacancy levels in local markets, as well as capitalization 

rates, to identify loans that merit closer attention or loss mitigation actions. The primary asset management 

responsibilities for our multifamily loans are performed by our DUS and other multifamily lenders. We periodically 

evaluate these lenders’ performance for compliance with our asset management criteria.

We also monitor for risks manifesting within specific property types. A property type we are monitoring closely is seniors 

housing; in our multifamily book of business, this primarily includes independent living and assisted living facilities that 

may have a limited portion of their capacity devoted to memory care. Seniors housing loans constituted 4% of our 

multifamily guaranty book of business as of December 31, 2022, based on unpaid principal balance. Seniors housing 

properties have been disproportionately affected by the COVID-19 pandemic and economic trends. While beginning to 

recover from the peak of the pandemic, vacancy rates in seniors housing continue to be elevated compared to prepandemic levels. These properties also have higher operating expenses than conventional multifamily properties due to 

specialized labor and stricter post-pandemic operating protocols. These costs have increased further due to higher 

inflation in recent periods. In combination, these factors have resulted in lower property operating income for seniors 

housing properties, which in turn has negatively impacted estimated property values. Moreover, 39% of the seniors 

housing loans in our multifamily guaranty book as of December 31, 2022 were adjustable-rate mortgages, compared 

with 11% for our entire multifamily guaranty book of business. The increase in short-term interest rates has further 

increased costs for those borrowers, including both higher monthly payments, which reduce debt service coverage, and 

the higher cost to maintain required interest rate caps to protect against large interest rate movements. 

While nearly all seniors housing loans in our guaranty book of business were current on their payments as of December 

31, 2022, a select number of seniors housing loan borrowers notified us in the fourth quarter of 2022 about the negative 

impact of recent market conditions on their ability to continue to meet their loan payment obligations in the future. We 

MD&A | Multifamily Business | Multifamily Mortgage Credit Risk Management

Fannie Mae 2022 Form 10-K 121
continue to monitor the seniors housing portfolio closely and actively manage loans that may be at risk of further 

deterioration or default.

As a result of the recent market conditions impacting this portfolio, as described further in “Consolidated Results of 

Operations—Benefit (Provision) for Credit Losses,” we recognized approximately $900 million in provision on our 

seniors housing portfolio in 2022 to reflect the increased probability of default and greater expected severity of loss on 

the seniors housing portfolio.

Multifamily Problem Loan Management and Foreclosure Prevention

In addition to the credit performance information on our multifamily loans provided below, we provide additional 

information about the performance of our multifamily loans that back MBS and whole loan REMICs in the “Data 

Collections” section of our DUS Disclose® tool, available at www.fanniemae.com/dusdisclose. Information on our 

website is not incorporated into this report.

We periodically refine our underwriting standards in response to market conditions and employ proactive portfolio 

management and monitoring which are each designed to keep credit losses and delinquencies to a low level relative to 

our multifamily guaranty book of business.

Delinquency Statistics on our Multifamily Problem Loans

The percentage of our multifamily loans classified as substandard increased to 5.4% of our multifamily guaranty book of 

business as of December 31, 2022, compared with 4.6% as of December 31, 2021. Substandard loans are loans that 

have a well-defined weakness that could impact their timely full repayment. While the majority of the substandard loans 

in our multifamily guaranty book of business are currently making timely payments, we continue to monitor the 

performance of our substandard loan population. Loans classified as substandard increased as of December 31, 2022

compared to December 31, 2021, primarily as a result of an increase in the number of properties reporting low DSCRs 

in their latest operating statement. This increase was largely driven by seniors housing loans, which were impacted by 

the factors described in “Multifamily Portfolio Diversification and Monitoring” above. For more information on our credit 

quality indicators, including our population of substandard loans, see “Note 3, Mortgage Loans.”

Our multifamily serious delinquency rate decreased to 0.24% as of December 31, 2022, compared with 0.42% as of 

December 31, 2021, primarily as a result of loans that received forbearance resolving their delinquency through 

completion of their repayment plans or otherwise reinstating. Our multifamily serious delinquency rate consists of 

multifamily loans that were 60 days or more past due based on unpaid principal balance, expressed as a percentage of 

our multifamily guaranty book of business. The percentage of loans in our multifamily guaranty book of business that 

were 180 days or more delinquent was 0.15% as of December 31, 2022 compared with 0.23% as of December 31, 

2021. Our multifamily serious delinquency rate could increase as a result of an increase in seniors housing loans in our 

guaranty book of business, especially those that are rated substandard, becoming delinquent.

Management monitors the multifamily serious delinquency rate as an indicator of potential future credit losses and loss 

mitigation activities. Serious delinquency rates are reflective of our performance in assessing and managing credit risk 

associated with multifamily loans in our guaranty book of business. Typically, higher serious delinquency rates result in 

a higher allowance for loan losses.

Multifamily Loan Forbearance

As of December 31, 2022, there were 13 multifamily loans with an unpaid principal balance of $41 million in active 

forbearance, compared with 22 loans with an unpaid principal balance of $363 million as of December 31, 2021. Most of 

our multifamily loans in active forbearance as of December 31, 2022 were granted forbearance at their maturity date to 

allow for additional time to refinance. The decrease in the number of multifamily loans in forbearance was primarily due 

to loans resolving their forbearance arrangement, including those that entered a repayment plan.

Multifamily REO Management

The number of multifamily foreclosed properties held for sale was 28 properties with a carrying value of $278 million as 

of December 31, 2022, compared with 31 properties with a carrying value of $302 million as of December 31, 2021. 

Other Multifamily Credit Information

Multifamily Credit Loss Performance Metrics

The amount of multifamily credit loss or income we realize in a given period is driven by foreclosures, pre-foreclosure 

sales, REO activity and write-offs, net of recoveries. Our multifamily credit loss performance metrics are not defined 

terms and may not be calculated in the same manner as similarly titled measures reported by other companies. We 

believe our multifamily credit losses and our multifamily credit losses, net of freestanding loss-sharing arrangements, 

MD&A | Multifamily Business | Multifamily Mortgage Credit Risk Management

Fannie Mae 2022 Form 10-K 122
may be useful to stakeholders because they display our credit losses in the context of our multifamily guaranty book of 

business, including changes to the benefit we expect to receive from loss-sharing arrangements. Management views 

multifamily credit losses, net of freestanding loss-sharing arrangements as a key metric related to our multifamily 

business model and our strategy to share multifamily credit risk. 

The table below displays the components of our multifamily credit loss performance metrics, as well as our multifamily 

initial write-off severity rate and write-off loan count. 

Multifamily Credit Loss Performance Metrics

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Write-offs(1) $ (43) $ (59) $ (136) 

Recoveries 23 49 1 

Foreclosed property expense (40) (19) (20) 

Credit losses (60) (29) (155) 

Change in expected benefits from freestanding loss-sharing 

arrangements(2) (2) 21 21 

Credit losses, net of freestanding loss-sharing arrangements $ (62) $ (8) $ (134) 

Credit loss ratio (in bps)(3) (1.4) (0.7) (4.3) 

Credit loss ratio, net of freestanding loss-sharing arrangements (in 

bps)(2)(3) (1.5) (0.2) (3.7) 

Multifamily initial write-off severity rate(4) 5 % 13 % 23 %

Multifamily write-off loan count 9 26 11 

(1) Write-offs associated with non-REO sales are net of loss sharing.

(2) Represents changes to the benefit we expect to receive only from write-offs as a result of certain freestanding loss-sharing arrangements, 

primarily multifamily DUS lender risk-sharing transactions. Changes to the expected benefits we will receive are recorded in “Change in 

expected credit enhancement recoveries” in our consolidated statements of operations and comprehensive income.

(3) Calculated based on the amount of “Credit losses” and “Credit losses, net of freestanding loss-sharing arrangements,” divided by the 

average multifamily guaranty book of business during the period. 

(4) Rate is calculated as the initial write-off amount divided by the average defaulted unpaid principal balance. The rate excludes write-offs not 

associated with foreclosures or other liquidation events (such as a deed-in-lieu of foreclosure or a short-sale) and any costs, gains or 

losses associated with REO after initial acquisition through final disposition. Write-offs are net of lender loss-sharing agreements. 

MD&A | Multifamily Business | Multifamily Mortgage Credit Risk Management

Fannie Mae 2022 Form 10-K 123
Multifamily Maturity Information

The below table shows the contractual maturities and interest rate sensitivities of our multifamily mortgage loan portfolio 

as recorded on our consolidated balance sheets. Although loans in our consolidated portfolio have varying contractual 

terms, the actual life of the loans may be less than their contractual term as a result of prepayment.

Multifamily Loans: Maturities and Terms of the Consolidated Mortgage Loan Portfolio(1)

As of December 31, 2022

Due within 1 

year

Greater than 1 

year but 

within 5 years

Greater than 5 

years but 

within 15 

years

Greater than 

15 years Total

(Dollars in millions)

Multifamily mortgage loan portfolio:(2)

Loans held for investment:

Of Fannie Mae $ 135 $ 574 $ 192 $ 26 $ 927 

Of consolidated trusts 8,830 105,303 309,693 6,801 430,627 

Total unpaid principal balance of 

multifamily mortgage loans 8,965 105,877 309,885 6,827 431,554 

Cost basis adjustments, net (239) 

Total multifamily mortgage loans(2) $ 8,965 $ 105,877 $ 309,885 $ 6,827 $ 431,315 

Multifamily mortgage loan portfolio by interest rate sensitivity:

Fixed-rate $ 8,553 $ 94,393 $ 279,733 $ 6,670 $ 389,349 

 Adjustable-rate 412 11,484 30,152 157 42,205 

Total unpaid principal balance of 

multifamily mortgage loans $ 8,965 $ 105,877 $ 309,885 $ 6,827 $ 431,554 

(1) We report the scheduled repayments in the maturity category in which the payment is due, such that a loan’s balance may be presented 

across multiple maturity categories.

(2) Excludes accrued interest receivable. The unpaid principal balance of multifamily loans is based on the amount of contractual unpaid 

principal balance due and excludes any write-offs for amounts deemed uncollectible. Those write-offs are presented as a component of 

cost basis adjustments, net.

MD&A | Multifamily Business | Multifamily Mortgage Credit Risk Management

Fannie Mae 2022 Form 10-K 124
Consolidated Credit Ratios and Select Credit Information

The table below displays select credit ratios on our single-family conventional guaranty book of business and our 

multifamily guaranty book of business, as well as the inputs used in calculating these ratios.

Consolidated Credit Ratios and Select Credit Information

As of

December 31, 2022 December 31, 2021

Singlefamily Multifamily TotalSinglefamily Multifamily Total

(Dollars in millions)

Credit loss reserves as a 

percentage of:

Guaranty book of business 0.26 % 0.43 % 0.28 % 0.15 % 0.17 % 0.15 %

Nonaccrual loans at amortized 

cost 90.69 86.86 90.03 25.63 54.49 27.35 

Nonaccrual loans as a 

percentage of:

Guaranty book of business 0.29 % 0.50 % 0.31 % 0.57 % 0.30 % 0.54 %

Select financial information used 

in calculating credit ratios:

Credit loss reserves(1) $ (9,554) $ (1,911) $ (11,465) $ (5,088) $ (686) $ (5,774) 

Guaranty book of business(2) 3,635,237 440,424 4,075,661 3,483,054 413,090 3,896,144 

Nonaccrual loans at amortized 

cost 10,535 2,200 12,735 19,851 1,259 21,110 

Components of credit loss 

reserves:

Allowance for loan losses $ (9,443) $ (1,904) $ (11,347) $ (4,950) $ (679) $ (5,629) 

Allowance for accrued interest 

receivable (111) — (111) (138) (2) (140) 

Reserve for guaranty losses(3) — (7) (7) — (5) (5) 

Total credit loss reserves(1) $ (9,554) $ (1,911) $ (11,465) $ (5,088) $ (686) $ (5,774) 

(1) Our multifamily credit loss reserves exclude the expected benefit of freestanding credit enhancements on multifamily loans of $492 million

as of December 31, 2022 and $235 million as of December 31, 2021, which are recorded in “Other assets” in our consolidated balance 

sheets.

(2) Represents conventional guaranty book of business for single-family.

(3) Reserve for guaranty losses is recorded in “Other liabilities” in our consolidated balance sheets.

Our single-family nonaccrual loans decreased as of December 31, 2022 compared with December 31, 2021 primarily as 

a result of loan modifications, as borrowers continued to exit forbearance. Modifications bring a loan current and, for 

single-family loans, generally require completion of a trial period of three to four months. 

Our credit loss reserves increased as of December 31, 2022 compared with December 31, 2021 primarily as a result of 

a provision for credit losses, which we describe in “Consolidated Results of Operations—Benefit (Provision) for Credit 

Losses.”

 MD&A | Consolidated Credit Ratios and Select Credit Information

Fannie Mae 2022 Form 10-K 125
Consolidated Write-off Ratio and Select Credit Information

For the Year Ended December 31,

2022 2021 2020

Singlefamily Multifamily TotalSinglefamily Multifamily TotalSinglefamily Multifamily Total

(Dollars in millions)

Select credit ratio:

Write-offs, net of 

recoveries 

annualized, as a 

percentage of the 

average guaranty 

book of business 

(in bps) 1.7 0.5 1.6 * 0.2 * 1.2 3.7 1.4

Select financial 

information used 

in calculating 

credit ratio:

Write-offs $ 890 $ 43 $ 933 $ 423 $ 59 $ 482 $ 468 $ 136 $ 604 

Recoveries (288) (23) (311) (430) (49) (479) (111) (1) (112) 

Write-offs, net of 

recoveries $ 602 $ 20 $ 622 $ (7) $ 10 $ 3 $ 357 $ 135 $ 492 

Average guaranty 

book of 

business(1) 3,585,714 425,695 4,011,409 3,351,036 401,358 3,752,394 3,060,384 358,673 3,419,057 

* Represents less than 0.05 bps.

(1) Average guaranty book of business is based on quarter-end balances.

For discussion on the drivers of single-family write-offs, see “Single-Family Business—Single-Family Problem Loan 

Management—Single-Family Credit Loss Metrics and Loan Sale Performance.”

Liquidity and Capital Management

Liquidity Management

Our business activities require that we maintain adequate liquidity to fund our operations. Our liquidity risk management 

requirements are designed to address our liquidity and funding risk, which is the risk that we will not be able to meet our 

obligations when they come due, including the risk associated with the inability to access funding sources or manage 

fluctuations in funding levels. Liquidity and funding risk management involves forecasting funding requirements, 

maintaining sufficient capacity to meet our needs based on our ongoing assessment of financial market liquidity and 

adhering to our regulatory requirements. 

Primary Sources and Uses of Funds

Our liquidity depends largely on our ability to issue debt in the capital markets, including both corporate debt and sales 

of our MBS securities. We believe that our status as a government-sponsored enterprise and continued federal 

government support are essential to maintaining our access to the debt markets. Substantially all of our sources and 

uses of funds identified below are both short-term and long-term in nature.

Our primary sources of cash include: 

• issuance of long-term and short-term corporate debt;

• proceeds from the sale of mortgage-related securities, mortgage loans and other investments portfolio, 

including proceeds from sales of foreclosed real estate assets;

• principal and interest payments received on mortgage loans, mortgage-related securities and non-mortgage 

investments we own;

• guaranty fees received on Fannie Mae MBS, including the TCCA fees collected by us on behalf of Treasury;

• payments received from mortgage insurance counterparties and other providers of credit enhancement; and

 MD&A | Consolidated Credit Ratios and Select Credit Information

Fannie Mae 2022 Form 10-K 126
• borrowings we may make under a secured intraday funding line of credit or against mortgage-related securities 

and other investment securities we hold pursuant to repurchase agreements and loan agreements.

Our primary uses of funds include: 

• the repayment of matured, redeemed and repurchased debt; 

• the purchase of mortgage loans (including delinquent loans from MBS trusts), mortgage-related securities and 

other investments;

• interest payments on outstanding debt; 

• administrative expenses;

• losses, including advances for past due principal and interest, incurred in connection with our Fannie Mae MBS 

guaranty obligations; 

• payments of federal income taxes;

• payments of TCCA fees to Treasury; and

• payments associated with our credit risk transfer programs. 

Liquidity and Funding Risk Management Practices and Contingency Planning

Many factors, both internal and external to our business, could influence our debt activity, affect the amount, mix and 

cost of our debt funding, reduce demand for our debt securities, increase our liquidity or roll over risk, or otherwise have 

a material adverse impact on our liquidity position, including: 

• changes or perceived changes in federal government support of our business or our debt securities; 

• changes in or the elimination of our status as a government-sponsored enterprise; 

• actions taken by FHFA, the Federal Reserve, Treasury or other government agencies;

• legislation relating to us or our business; 

• a change or perceived change in the creditworthiness of the U.S. government, due to our reliance on the U.S. 

government’s support;

• a U.S. government payment default on its debt obligations; 

• a downgrade in the credit ratings of our senior unsecured debt or the U.S. government’s debt from the major 

ratings organizations;

• future changes or disruptions in the financial markets; 

• a systemic event leading to the withdrawal of liquidity from the market; 

• an extreme market-wide widening of credit spreads; 

• public statements by key policy makers; 

• a significant decline in our net worth; 

• potential investor concerns about the adequacy of funding available to us under or about changes to the senior 

preferred stock purchase agreement; 

• loss of demand for our debt, or certain types of our debt from a significant number of investors; 

• a significant credit or operational event involving one of our major institutional counterparties; or

• a sudden catastrophic operational failure in the financial sector.

See “Risk Factors” for a discussion of the risks we face relating to: 

• the uncertain future of our company; 

• our reliance on the issuance of debt securities to obtain funds for our operations and the relative cost to obtain 

these funds;

• our liquidity contingency plans; 

• our credit ratings; and

• other factors that could adversely affect our ability to obtain adequate debt funding or otherwise negatively 

impact our liquidity, including the factors listed above.

Also see “Business—Conservatorship and Treasury Agreements—Treasury Agreements.”

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 127
We maintain a liquidity management framework and conduct liquidity contingency planning to prepare for an event in 

which our access to the unsecured debt markets becomes limited.

Our liquidity requirements have four components we must meet:

• a short-term cash flow metric that requires us to meet our expected cash outflows and continue to provide 

liquidity to the market over a 30-day period of stress, plus an additional $10 billion buffer; 

• an intermediate cash flow metric that requires us to meet our expected cash outflows and continue to provide 

liquidity to the market over a 365-day period of stress; 

• a specified minimum long-term debt to less-liquid asset ratio. Less-liquid assets are those that are not eligible 

to be pledged as collateral to Fixed Income Clearing Corporation; and

• a requirement that we fund our assets with liabilities that have a specified minimum term relative to the term of 

the assets. 

As of December 31, 2022, we were in compliance with these requirements. 

We run routine operational testing of our ability to rely upon mortgage and U.S. Treasury collateral to obtain financing. 

We enter into relatively small repurchase agreements in order to confirm that we have the operational and systems 

capability to do so. In addition, we have provided collateral in advance to clearing banks in the event we seek to enter 

into repurchase agreements in the future. We do not, however, have committed repurchase agreements with specific 

counterparties, as historically we have not relied on this form of funding. As a result, our use of such facilities and our 

ability to enter into them in significant dollar amounts may be challenging in a stressed market environment. See “Other 

Investments Portfolio” for further discussions of our alternative sources of liquidity if our access to the debt markets 

were to become limited.

While our liquidity contingency planning attempts to address stressed market conditions and our status in 

conservatorship, we believe those plans could be difficult or impossible to execute under stressed conditions for a 

company of our size in our circumstances. See “Risk Factors—Liquidity and Funding Risk” for a description of the risks 

associated with our ability to fund operations and our liquidity contingency planning.

Debt Funding

We separately present the debt from consolidations (“Debt of consolidated trusts”) and the debt issued by us (“Debt of 

Fannie Mae”) in our consolidated balance sheets. This discussion regarding debt funding focuses on the debt of Fannie 

Mae. In addition to MBS issuances, we fund our business through the issuance of a variety of short-term and long-term 

debt securities in the domestic and international capital markets. Accordingly, we are subject to “roll over,” or 

refinancing, risk on our outstanding debt. 

Our debt securities are actively traded in the over-the-counter market. We have a diversified funding base of domestic 

and international investors. Purchasers of our debt securities are geographically diversified and include fund managers, 

commercial banks, pension funds, insurance companies, foreign central banks, corporations, state and local 

governments, and other municipal authorities. We compete for low-cost debt funding with institutions that hold mortgage 

portfolios, including Freddie Mac and the FHLBs.

Our debt funding needs and debt funding activity may vary from period to period depending on market conditions, 

including refinance volumes, our capital and liquidity management, and the size of our retained mortgage portfolio. See 

“Retained Mortgage Portfolio” for information about our retained mortgage portfolio and limits on its size. 

Our debt limit under our senior preferred stock purchase agreement with Treasury decreased from $300 billion to 

$270 billion as of December 31, 2022. The unpaid principal balance of our aggregate indebtedness was $139.3 billion

as of December 31, 2022. Pursuant to the terms of the senior preferred stock purchase agreement, we are prohibited 

from issuing debt without the prior consent of Treasury if it would result in our aggregate indebtedness exceeding our 

outstanding debt limit. The calculation of our indebtedness for purposes of complying with our debt limit reflects the 

unpaid principal balance and excludes debt basis adjustments and debt of consolidated trusts. 

Outstanding Debt 

Total outstanding debt of Fannie Mae includes short-term and long-term debt and excludes debt of consolidated trusts. 

Short-term debt of Fannie Mae consists of borrowings with an original contractual maturity of one year or less and, 

therefore, does not include the current portion of long-term debt. Long-term debt of Fannie Mae consists of borrowings 

with an original contractual maturity of greater than one year. 

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 128
The following chart and table display information on our outstanding short-term and long-term debt based on original 

contractual maturity. Our long-term debt continued to decrease in 2022 as our funding needs remained low and were 

primarily satisfied through cash and other liquid assets that accumulated in prior periods, as well as earnings retained 

from our operations. As a result, we did not replace all the long-term debt that matured during the year.

Debt of Fannie Mae1

(Dollars in billions)

$65.6

$23.3

$132.5

$100.7

$200.9

$134.2

Short-term debt2 Long-term debt maturing within one year Long-term debt, excluding portion maturing within one year 12/31/2021 12/31/2022

(1) Outstanding debt balance consists of the unpaid principal balance, premiums and discounts, fair value adjustments, hedge-related basis 

adjustments and other cost basis adjustments. Reported amounts include net discount unamortized cost basis adjustments and fair value 

adjustments of $5.1 billion and $1.6 billion as of December 31, 2022 and 2021, respectively.

(2) Short-term debt was $10.2 billion and $2.8 billion as of December 31, 2022 and 2021, respectively.

Selected Debt Information

As of December 31,

2022 2021

(Dollars in billions)

Selected Weighted-Average Interest Rates(1)

Interest rate on short-term debt 3.93 % 0.03 %

Interest rate on long-term debt, including portion maturing within one year 2.23 1.55 

Interest rate on callable debt 1.79 1.44 

Selected Maturity Data

Weighted-average maturity of debt maturing within one year (in days) 156 109 

Weighted-average maturity of debt maturing in more than one year (in months) 52 57 

Other Data

Outstanding callable debt(2) $ 43.3 $ 47.0 

Connecticut Avenue Securities debt(3) 5.2 11.2 

(1) Excludes the effects of fair value adjustments and hedge-related basis adjustments.

(2) Includes short-term callable debt of $590 million as of December 31, 2022. We had no short-term callable debt as of December 31, 2021.

(3) Represents CAS debt issued prior to November 2018. See “Single-Family Business—Single-Family Mortgage Credit Risk Management—

Single-Family Credit Enhancement and Transfer of Mortgage Credit Risk—Credit Risk Transfer Transactions” for information regarding our 

Connecticut Avenue Securities.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 129
We intend to repay our short-term and long-term debt obligations as they become due primarily through cash from 

business operations, the sale of other liquid assets and the issuance of additional debt securities.

For information on the maturity profile of our outstanding long-term debt for each of the years 2023 through 2027 and 

thereafter, see “Note 7, Short-Term and Long-Term Debt.”

Debt Funding Activity 

The table below displays activity in debt of Fannie Mae. This activity excludes the debt of consolidated trusts and 

intraday borrowing. The reported amounts of debt issued and paid off during each period represent the face amount of 

the debt at issuance and redemption.

Activity in Debt of Fannie Mae

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Issued during the period:

Short-term:

Amount $ 137,310 $ 122,819 $ 194,604 

Weighted-average interest rate(1) 1.56 % 0.01 % 1.04 %

Long-term:(2)

Amount $ 1,961 $ 2,815 $ 198,528 

Weighted-average interest rate 3.54 % 0.59 % 0.52 %

Total issued:

Amount $ 139,271 $ 125,634 $ 393,132 

Weighted-average interest rate 1.59 % 0.03 % 0.77 %

Paid off during the period:(3)

Short-term:

Amount $ 129,877 $ 132,199 $ 209,595 

Weighted-average interest rate(1) 1.26 % 0.02 % 1.09 %

Long-term:(2) 

Amount $ 72,570 $ 80,938 $ 76,308 

Weighted-average interest rate 1.35 % 0.75 % 1.77 %

Total paid off:

Amount $ 202,447 $ 213,137 $ 285,903 

Weighted-average interest rate 1.29 % 0.30 % 1.27 %

(1) Includes interest generated from negative interest rates on certain repurchase agreements, which offset our short-term funding costs. 

(2) Includes credit risk-sharing securities issued as CAS debt prior to November 2018. For information on our credit risk transfer transactions, 

see “Single-Family Business—Single-Family Mortgage Credit Risk Management—Single-Family Credit Enhancement and Transfer of 

Mortgage Credit Risk—Credit Risk Transfer Transactions.”

(3) Consists of all payments on debt, including regularly scheduled principal payments, payments at maturity, payments resulting from calls 

and payments for any other repurchases. Repurchases of debt and early retirements of zero-coupon debt are reported at original face 

value, which does not equal the amount of actual cash payment.

Off-Balance Sheet Arrangements

We enter into certain business arrangements to facilitate our statutory purpose of providing liquidity to the secondary 

mortgage market and to reduce our exposure to interest rate fluctuations. Some of these arrangements are not 

recorded in our consolidated balance sheets or may be recorded in amounts different from the full contract or notional 

amount of the transaction, depending on the nature or structure of, and the accounting required to be applied to, the 

arrangement. These arrangements are commonly referred to as “off-balance sheet arrangements” and expose us to 

potential losses in excess of the amounts recorded in our consolidated balance sheets.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 130
Our off-balance sheet arrangements result primarily from the following: 

• our guaranty of mortgage loan securitization and resecuritization transactions over which we have no control, 

which are reflected in our unconsolidated Fannie Mae MBS net of any beneficial ownership interest we retain, 

and other financial guarantees that we do not control;

• liquidity support transactions; and 

• partnership interests. 

The total amount of our off-balance sheet exposure related to unconsolidated Fannie Mae MBS net of any beneficial 

interest that we retain, and other financial guarantees was $246.7 billion as of December 31, 2022 and $226.4 billion as 

of December 31, 2021. The majority of the other financial guarantees consists of Freddie Mac securities backing Fannie 

Mae structured securities. See “Guaranty Book of Business” and “Note 6, Financial Guarantees” for more information 

regarding our maximum exposure to loss on unconsolidated Fannie Mae MBS and Freddie Mac securities.

Our total outstanding liquidity commitments to advance funds for securities backed by multifamily housing revenue 

bonds totaled $4.8 billion as of December 31, 2022 and $5.4 billion as of December 31, 2021. These commitments 

require us to advance funds to third parties that enable them to repurchase tendered bonds or securities that are unable 

to be remarketed. We hold cash and cash equivalents in our other investments portfolio in excess of these 

commitments to advance funds.

We make investments in various limited partnerships and similar legal entities, which consist of low-income housing tax 

credit investments, community investments and other entities. When we do not have a controlling financial interest in 

those entities, our consolidated balance sheets reflect only our investment rather than the full amount of the 

partnership’s assets and liabilities. See “Note 2, Consolidations and Transfers of Financial Assets—Unconsolidated 

VIEs” for information regarding our limited partnerships and similar legal entities.

Equity Funding

At this time, as a result of the covenants under the senior preferred stock purchase agreement, Treasury’s ownership of 

the warrant to purchase up to 79.9% of the total shares of our common stock outstanding and the uncertainty regarding 

our future, we do not have access to equity funding except through draws under the senior preferred stock purchase 

agreement. For a description of the funding available and the covenants under the senior preferred stock purchase 

agreement, see “Business—Conservatorship and Treasury Agreements—Treasury Agreements.”

Contractual Obligations

We have contractual obligations that affect our liquidity and capital resource requirements. These contractual obligations 

primarily consist of debt obligations (and associated interest payment obligations) and mortgage purchase commitments 

recognized on our consolidated balance sheet. 

• For information about the amounts, maturities and contractual interest rates of our obligations related to debt, 

see “Note 7, Short-Term and Long-Term Debt.”

• For information about our mortgage purchase commitments, leases and other purchase obligations, see “Note 

16, Commitments and Contingencies.”

Our contractual obligations also include $1.9 billion in cash received as collateral and future cash payments due under 

our unconditional and legally binding obligations to fund low-income housing tax credit partnership investments and 

other partnerships. These amounts are recognized on our consolidated balance sheets under “Other liabilities.”

In addition, our short- and long-term liquidity and capital resource needs may be affected by our contractual obligations 

to make the payments listed below. The amounts of these payments are uncertain and will depend on future events:

• payments on our obligations to stand ready to perform under our guarantees relating to Fannie Mae MBS and 

other financial guarantees, including Fannie Mae commingled structured securities. The amount and timing of 

payments under these arrangements are generally contingent upon the occurrence of future events. For a 

description of the amount of our on- and off-balance sheet Fannie Mae MBS and other financial guarantees as 

of December 31, 2022, see “Guaranty Book of Business” and “Off-Balance Sheet Arrangements;”

• payments associated with our CIRT, CAS REMIC, MCAS, and CAS CLN transactions, the amount and timing of 

which are contingent upon the occurrence of future credit and prepayment events for the related reference pool 

of mortgage loans. For further details on these transactions, please see “Single-Family Business—SingleFamily Mortgage Credit Risk Management—Single-Family Credit Enhancement and Transfer of Mortgage 

Credit Risk—Categories of Our Credit Risk Transfer Transactions” and “Multifamily Business—Multifamily 

Mortgage Credit Risk Management—Transfer of Multifamily Mortgage Credit Risk;” and

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 131
• payments related to our interest-rate risk management derivatives that may require cash settlement in future 

periods, the amount and timing of which depend on changes in interest rates. For further details on these 

transactions, please see “Note 8, Derivative Instruments.”

Other Investments Portfolio

The chart below displays information on the composition of our other investments portfolio. The balance of our other 

investments portfolio fluctuates as a result of changes in our cash flows, liquidity in the fixed-income markets, and our 

liquidity risk management framework and practices. Our other investments portfolio decreased during 2022 primarily as 

a result of declines in our corporate debt due to maturities, which reduced the balances available for investment. 

Additionally, we used cash and other liquid assets to fund our operations during 2022.

In the first quarter of 2021, we began to invest funds held by consolidated trusts directly in eligible short-term third-party 

investments. As the funds underlying these investments are restricted per the trust agreements, these securities are not 

considered in our sources of liquidity and are excluded from our other investments portfolio. Prior to this change, funds 

held by consolidated trusts were invested in Fannie Mae short-term debt, as allowed by the trust agreements. Those 

unrestricted proceeds were then invested in short-term investments, which were included in our other investments 

portfolio. This change did not materially alter our liquidity position. 

Other Investments Portfolio

(Dollars in billions)

$38.3 $42.4

$58.0

$28.2

$7.2

$11.1

$130.5

$83.6 $46.9

$197.0

$133.2

$116.0

Cash and cash equivalents1 Securities purchased under agreements to resell

U.S. Treasury securities

12/31/2020 12/31/2021 12/31/2022

(1) Cash equivalents are composed of overnight repurchase agreements and U.S. Treasuries that have a maturity at the date of acquisition of 

three months or less.

Credit Ratings

Our credit ratings from the major credit ratings organizations, as well as the credit ratings of the U.S. government, are 

primary factors that could affect our ability to access the capital markets and our cost of funds. In addition, our credit 

ratings are important when we seek to engage in certain long-term transactions, such as derivative transactions. S&P, 

Moody’s and Fitch have all indicated that, if they were to lower the sovereign credit ratings on the U.S., they would likely 

lower their ratings on the debt of Fannie Mae and certain other government-related entities. In addition, actions by 

governmental entities impacting Treasury’s support for our business or our debt securities could adversely affect the 

credit ratings of our senior unsecured debt. See “Risk Factors—Liquidity and Funding Risk” for a discussion of the risks 

to our business relating to a decrease in our credit ratings, which could include an increase in our borrowing costs, limits 

on our ability to issue debt, and additional collateral requirements under our derivatives contracts.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 132
The table below displays the credit ratings issued by the three major credit rating agencies.

Fannie Mae Credit Ratings

As of December 31, 2022

S&P Moody’s Fitch

Long-term senior debt AA+ Aaa AAA

Short-term senior debt A-1+ P-1 F1+

Preferred stock D Ca(hyb) C/RR6

Outlook Stable Stable Stable

(for Long-Term Senior Debt) (for AAA rated Long-Term 

Issuer Default Ratings)

Cash Flows

Year Ended December 31, 2022. Cash, cash equivalents and restricted cash and cash equivalents decreased from 

$108.6 billion as of December 31, 2021 to $87.8 billion as of December 31, 2022. The decrease was primarily driven by 

cash outflows from (1) payments on outstanding debt of consolidated trusts, (2) the redemption of funding debt, which 

outpaced issuances, primarily for the reasons described above, and (3) purchases of loans held for investment.

Partially offsetting these cash outflows were cash inflows primarily from (1) proceeds from repayments and sales of 

loans, (2) the sale of Fannie Mae MBS to third parties, and (3) proceeds from our investment in U.S. Treasury 

securities.

Year Ended December 31, 2021. Cash, cash equivalents and restricted cash and cash equivalents decreased from 

$115.6 billion as of December 31, 2020 to $108.6 billion as of December 31, 2021. The decrease was primarily driven 

by cash outflows from (1) payments on outstanding debt of consolidated trusts, (2) purchases of loans held for 

investment, and (3) the redemption of funding debt, which outpaced issuances, primarily for the reasons described 

above.

Partially offsetting these cash outflows were cash inflows primarily from (1) the sale of Fannie Mae MBS to third parties, 

(2) proceeds from repayments and sales of loans, and (3) a decrease in our investment in U.S. Treasury securities.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 133
Capital Management

Capital Requirements

The table below sets forth information about our capital requirements under the standardized approach of the enterprise 

regulatory capital framework. Available capital for purposes of the enterprise regulatory capital framework excludes the 

stated value of the senior preferred stock ($120.8 billion) and other amounts specified in footnote 3 to the table below. 

Because of these exclusions, we had a deficit in available capital as of December 31, 2022, even though we had 

positive net worth under GAAP of $60.3 billion as of December 31, 2022. See “Business—Legislation and Regulation—

GSE-Focused Matters—Capital Requirements” for a description of our capital requirements under the enterprise 

regulatory capital framework. Although the enterprise regulatory capital framework went into effect in February 2021, we 

are not required to hold capital according to the framework’s requirements until the date of termination of our 

conservatorship, or such later date as may be ordered by FHFA.

We had a $258 billion shortfall of our available capital (deficit) to the adjusted total capital requirement (including 

buffers) of $184 billion under the standardized approach of the rule as of December 31, 2022. 

Capital Metrics under the Enterprise Regulatory Capital Framework as of December 31, 2022(1)

(Dollars in billions)

Stress capital buffer $ 34 

Stability capital buffer 45 

Adjusted total assets $ 4,552 Countercyclical capital buffer — 

Risk-weighted assets 1,316 Prescribed capital conservation buffer amount $ 79 

Minimum 

Capital Ratio 

Requirement

Minimum 

Capital 

Requirement

Applicable 

Buffers(2)

Total Capital 

Requirement 

(including 

Buffers)

Available 

Capital 

(Deficit)(3)

Capital 

Shortfall(4)

Risk-based capital:

Total capital (statutory)(5) 8.0 % $ 105 N/A $ 105 $ (49) $ (154) 

Common equity tier 1 capital 4.5 59 $ 79 138 (93) (231) 

Tier 1 capital 6.0 79 79 158 (74) (232) 

Adjusted total capital 8.0 105 79 184 (74) (258) 

Leverage capital:

Core capital (statutory)(6) 2.5 114 N/A 114 (61) (175) 

Tier 1 capital 2.5 114 23 137 (74) (211) 

(1) Ratios are calculated as a percentage of risk-weighted assets for risk-based capital metrics and as a percentage of adjusted total assets 

for leverage capital metrics.

(2) The applicable buffer for common equity tier 1 capital, tier 1 capital, and adjusted total capital is the PCCBA, which is composed of a stress 

capital buffer, a stability capital buffer, and a countercyclical capital buffer. The applicable buffer for tier 1 capital (leverage based) is the 

PLBA. The stress capital buffer and countercyclical capital buffer are each calculated by multiplying prescribed factors by adjusted total 

assets as of the last day of the previous calendar quarter. The 2022 stability capital buffer is calculated by multiplying a factor determined 

based on our share of mortgage debt outstanding by adjusted total assets as of December 31, 2020. The prescribed leverage buffer for 

2022 is set at 50% of the 2022 stability buffer. Going forward the stability buffer and the prescribed leverage buffer will be updated with an 

effective date that depends on whether the stability capital buffer increases or decreases relative to the previously calculated value.

(3) Available capital (deficit) for all line items excludes the stated value of the senior preferred stock ($120.8 billion). Available capital (deficit) 

for all line items except total capital and core capital also deducts a portion of deferred tax assets. Deferred tax assets arising from 

temporary differences between GAAP and tax requirements are deducted from capital to the extent they exceed 10% of common equity. 

As of December 31, 2022, this resulted in the full deduction of deferred tax assets ($12.9 billion) from our available capital (deficit). 

Available capital (deficit) for common equity tier 1 capital also excludes the value of the perpetual non-cumulative preferred stock 

($19.1 billion).

(4) Our capital shortfall consists of the difference between the applicable capital requirement (including buffers) and the applicable available 

capital (deficit).

(5) The sum of (a) core capital (see definition in footnote 6 below); and (b) a general allowance for foreclosure losses, which (i) shall include 

an allowance for portfolio mortgage losses, an allowance for non-reimbursable foreclosure costs on government claims, and an allowance 

for liabilities reflected on the balance sheet for estimated foreclosure losses on mortgage-backed securities; and (ii) shall not include any 

reserves made or held against specific assets; and (c) any other amounts from sources of funds available to absorb losses that the 

Director of FHFA by regulation determines are appropriate to include in determining total capital.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 134
(6) The sum of (a) the stated value of our outstanding common stock (common stock less treasury stock); (b) the stated value of our 

outstanding non-cumulative perpetual preferred stock; (c) our paid-in capital; and (d) our retained earnings (accumulated deficit). Core 

capital does not include: (a) accumulated other comprehensive income or (b) senior preferred stock.

As a result of our capital shortfall, our maximum payout ratio under the enterprise regulatory capital framework as of 

December 31, 2022 was 0%. While it is not applicable until the date of termination of our conservatorship, our maximum 

payout ratio represents the percentage of eligible retained income that we are permitted to pay out in the form of 

distributions or discretionary bonus payments under the enterprise regulatory capital framework. The maximum payout 

ratio for a given quarter is the lowest of the payout ratios determined by our capital conservation buffer and our leverage 

buffer. See “Note 12, Regulatory Capital Requirements” for information on our capital ratios as of December 31, 2022

under the enterprise regulatory capital framework.

The table below presents certain components of our regulatory capital.

Regulatory Capital Components

(Dollars in billions)

As of 

December 31, 2022

Total equity $ 60 

Less:

Senior preferred stock 121 

Preferred stock 19 

Common equity (80) 

Less: deferred tax assets arising from temporary differences that exceed 10% of common 

equity tier 1 capital and other regulatory adjustments 13 

Common equity tier 1 capital (deficit) (93) 

Add: perpetual non-cumulative preferred stock 19 

Tier 1 capital (deficit) (74) 

Tier 2 capital adjustments — 

Adjusted total capital (deficit) $ (74) 

The table below presents certain components of our core capital.

Statutory Capital Components

(Dollars in billions)

As of 

December 31, 2022

Total equity $ 60 

Less:

Senior preferred stock 121 

Accumulated other comprehensive income (loss), net of taxes — 

Core capital (deficit) (61) 

Less: general allowance for foreclosure losses (12) 

Total capital (deficit) $ (49) 

Capital Activity

Under the terms governing the senior preferred stock, no dividends were payable to Treasury for the fourth quarter of 

2022 and none are payable for the first quarter of 2023. 

Under the terms governing the senior preferred stock, through and including the capital reserve end date, any increase 

in our net worth during a fiscal quarter results in an increase in the same amount of the aggregate liquidation preference 

of the senior preferred stock in the following quarter. The capital reserve end date is defined as the last day of the 

second consecutive fiscal quarter during which we have had and maintained capital equal to, or in excess of, all of the 

capital requirements and buffers under the enterprise regulatory capital framework.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 135
As a result of these terms governing the senior preferred stock, the aggregate liquidation preference of the senior 

preferred stock increased to $180.3 billion as of December 31, 2022 due to the $2.4 billion increase in our net worth in 

the third quarter of 2022. The aggregate liquidation preference of the senior preferred stock will further increase to 

$181.8 billion as of March 31, 2023, due to the $1.4 billion increase in our net worth in the fourth quarter of 2022. See 

“Business—Conservatorship and Treasury Agreements—Treasury Agreements” for more information on the terms of 

our senior preferred stock, including how the aggregate liquidation preference is determined.

Increases in our net worth improve our capital position and our ability to absorb losses; however, increases in our net 

worth also increase the aggregate liquidation preference of the senior preferred stock by the same amount until the 

capital reserve end date as discussed above.

Treasury Funding Commitment

Treasury made a commitment under the senior preferred stock purchase agreement to provide funding to us under 

certain circumstances if we have a net worth deficit. As of December 31, 2022, the remaining amount of Treasury’s 

funding commitment to us was $113.9 billion. See “Note 11, Equity” for more information on the funding commitment 

provided by Treasury under the senior preferred stock purchase agreement.

Risk Management

We manage the risks that arise from our business activities through our enterprise risk management program. Our risk 

management activities are aligned with the requirements of FHFA’s Enterprise Risk Management Advisory Bulletin, 

which are consistent with the general principles set forth by the Committee of Sponsoring Organizations of the 

Treadway Commission’s (“COSO”) Enterprise Risk Management (“ERM”): Integrating with Strategy and Performance 

framework. 

We are exposed to the following major risk categories:

• Credit Risk. Credit risk is the risk of loss arising from another party’s failure to meet its contractual obligations. 

For financial securities or instruments, credit risk is the risk of not receiving principal, interest or other financial 

obligation on a timely basis. Our credit risk exposure exists primarily in connection with our guaranty book of 

business and our institutional counterparties.

• Market Risk. Market risk is the risk of loss resulting from changes in the economic environment. Market risk 

arises from fluctuations in interest rates, exchange rates and other market rates and prices. Market risk 

includes interest-rate risk, which is the risk that movements in interest rates will adversely affect the value of 

our assets or liabilities or our future earnings or capital. Market risk also includes spread risk, which is the risk 

from changes in an instrument’s value that relate to factors other than changes in interest rates. 

• Liquidity and Funding Risk. Liquidity and funding risk is the risk to our financial condition and resilience 

arising from an inability to meet obligations when they come due, including the risk associated with the inability 

to access funding sources or manage fluctuations in funding levels.

• Operational Risk. Operational risk is the risk of loss resulting from inadequate or failed internal processes, 

people and systems or disruptions from external events. Operational risk includes cyber/information security 

risk, third-party risk and model risk.

We are also exposed to these additional risk categories:

• Strategic Risk. Strategic risk is the risk of loss resulting from poor business decisions, poor implementation of 

business decisions or the failure to respond appropriately to changes in the industry or external environment.

• Compliance Risk. Compliance risk is the risk of legal or regulatory sanctions, damage to current or projected 

financial condition, damage to business resilience or damage to reputation resulting from nonconformance with 

compliance obligations. These obligations include laws or regulations, prescribed practices, MBS trust 

agreements, supervisory guidance, conservator instruction, internal policies and procedures or ethical 

standards governing how we operate. Compliance risk exposes us to adverse actions by regulators, law 

enforcement or other government agencies, or private civil action, and financial losses incurred through fines, 

legal judgments, voiding of contracts or civil penalties. Compliance risk can result in damaged or diminished 

reputation, limited business opportunities and lessened expansion potential. 

• Reputational Risk. Reputational risk is the risk that substantial negative publicity may cause a decline in public 

perception of us, a decline in our customer base, costly litigation, revenue reductions or losses.

We are also exposed to climate risk. We view climate risk as a transverse risk driver that can manifest through a variety 

of the existing risk categories across our risk taxonomy.

MD&A | Liquidity and Capital Management

Fannie Mae 2022 Form 10-K 136
For a more detailed discussion of these and other risks that could materially adversely affect our business, results of 

operations, financial condition, liquidity and net worth, see “Risk Factors.”

Components of Risk Management

Our risk management program is composed of four inter-related components that are designed to work together as a 

comprehensive risk management system aimed at enhancing our performance.

MD&A | Risk Management

Fannie Mae 2022 Form 10-K 137
Risk Management Governance

We manage risk by using the industry standard “three lines of defense” structure. Our Board of Directors and 

management-level risk committees are also integral to our risk management program.

Mortgage Credit Risk Management Overview

Mortgage credit risk arises from the risk of loss resulting from the failure of a borrower to make required mortgage 

payments. We are exposed to credit risk on our book of business because we either hold mortgage assets, have issued 

a guaranty in connection with the creation of Fannie Mae MBS backed by mortgage assets or have provided other credit 

enhancements on mortgage assets. For more information on how we manage mortgage credit risk, see “Business—

Managing Mortgage Credit Risk,” “Single-Family Business—Single-Family Mortgage Credit Risk Management,” and 

“Multifamily Business—Multifamily Mortgage Credit Risk Management.”

Climate and Natural Disaster Risk Management

Overview

There are risks and opportunities related to climate change that may impact an organization. Climate risks are divided 

into two main categories: risks related to the physical impacts of climate change; and risks related to a potential 

transition to a lower-carbon economy. Physical risks resulting from climate change can be event-driven risks relating to 

shorter-term extreme weather events, such as hurricanes, floods and tornadoes (referred to as acute risks) or related to 

longer-term shifts in climate patterns, such as sustained higher temperatures, sea level rise, water scarcity and 

increased wildfires (referred to as chronic risks). Climate change presents both immediate and long-term risks to our 

business and other stakeholders in the housing system, including borrowers, renters, lenders, investors and insurers.

Recent years have seen frequent and severe natural disasters in the U.S., including hurricanes, wildfires and floods. 

Population growth and an increase in people living in high-risk areas, such as coastal areas vulnerable to severe storms 

and flooding, have also increased the impact of these events. Low- and moderate-income and minority households are 

disproportionately exposed to risks from severe weather events due in large part to historical under-investment in 

MD&A | Risk Management

Fannie Mae 2022 Form 10-K 138
infrastructure in their communities; these households typically have limited financial resources to withstand the 

economic impact of severe weather events. 

We believe the frequency and intensity of major weather-related events in recent years are indicative of climate change, 

the impacts of which are expected to persist and worsen in the future. The Intergovernmental Panel on Climate Change, 

the United Nations’ climate science research group, released their Sixth Assessment Report, Climate Change 2021: The 

Physical Science Basis, in 2021. The report notes that it is unequivocal that human activities have warmed the climate. 

Climate-Related Risk Exposure and Risk Mitigation

Major weather events or other natural disasters expose us to credit risk in a variety of ways, including by damaging 

properties that secure mortgage loans in our book of business and by negatively impacting the ability of borrowers to 

make payments on their mortgage loans. The amount of losses we incur as a result of a major weather event or natural 

disaster depends significantly on the extent to which the resulting property damage is covered by hazard or flood 

insurance and whether borrowers are able and willing to continue making payments on their mortgages. The amount of 

losses we incur can also be affected by the extent that a disaster impacts the region, especially if it depresses the local 

economy, and by the availability of federal, state, or local assistance to borrowers affected by a disaster. To date, our 

losses from natural disasters have been limited by geographic diversity in our book of business, the availability of 

insurance coverage for damages sustained, the availability of federal, state or local disaster assistance, and borrowers 

with equity in their homes continuing to pay their mortgages.

For our multifamily loans, our multifamily lenders typically share with us approximately one-third of the credit risk 

through our DUS program. For single-family and multifamily loans covered in back-end credit risk transfer transactions, 

we retain a portion of the risk of future losses, including all or a portion of the first loss position in most transactions. To 

the extent weather and disaster-related losses on loans covered by these transactions were to exceed the amount of 

first loss we retain, a portion of those losses would be covered by the transactions. Mortgage insurance does not protect 

us from default risk for properties that suffer damages not covered by the hazard or flood insurance we require. For 

more information on our single-family credit risk transfer transactions, see “Single-Family Business—Single-Family 

Mortgage Credit Risk Management—Single-Family Credit Enhancement and Transfer of Mortgage Credit Risk—Credit 

Risk Transfer Transactions” and for more information on our multifamily credit risk transfer transactions and our DUS 

program, see “Multifamily Business—Multifamily Mortgage Credit Risk Management—Transfer of Multifamily Mortgage 

Credit Risk.”

In general, we require borrowers to obtain and maintain property insurance to cover the risk of damage to their property 

resulting from hazards such as fire, wind and, for properties in areas identified by FEMA as Special Flood Hazard Areas, 

flooding. At the time of origination, a borrower is required to provide proof of such insurance, and our servicers have the 

right and the obligation to obtain such insurance, at the borrower’s cost, if the borrower allows the required coverage to 

lapse. We do not generally require property insurance to cover damages from flooding in areas outside a Special Flood 

Hazard Area, or to cover earthquake damage to single-family properties or to multifamily properties unless required by a 

seismic-risk assessment.

In October 2021, FEMA launched Risk Rating 2.0, which is an actuarial and risk-based approach to pricing flood 

insurance premiums for properties based on their flood risk, irrespective of whether they are located in a Special Flood 

Hazard Area. Since October 1, 2021, all new flood insurance policies through FEMA’s National Flood Insurance 

Program (“NFIP”) have been subject to Risk Rating 2.0 premiums, and all remaining policies that renew after April 1, 

2022 are subject to the premiums. We expect the majority of households with insurance through the NFIP will 

experience a premium decrease or a slight increase. However, we expect a small fraction of those households will 

encounter significant increases in their annual flood insurance premiums. There is a statutory limit of annual increases 

in flood insurance premiums of 18%, which will mean some households will experience multiple years of increases. As 

Risk Rating 2.0 becomes applicable to an increasing number of policyholders and premiums increase in the coming 

years, the significant increase in premiums that will apply to some properties and communities may impact insurance 

affordability, uptake, and the maintenance of ongoing coverage, as well as property values. From the launch of FEMA’s 

Risk Rating 2.0 in October 2021 through October 2022, according to FEMA data, the total number of structures with an 

NFIP flood insurance contract in force has declined by 5.2%. Data is not available on the portion of these structures 

without flood insurance coverage or with replacement private flood insurance coverage. As of December 31, 2022, 3.3%

of loans in our single-family guaranty book of business and 6.8% of loans in our multifamily guaranty book of business 

were located in a Special Flood Hazard Area, for which we require flood insurance.

In the event of a natural or other disaster, our servicers work with affected borrowers to develop a plan that addresses 

the borrower’s specific situation. Depending on the circumstances, the plan may include one or more of the following: a 

payment forbearance plan; a repayment or reinstatement plan; a payment deferral; loan modification; coordination with 

insurance companies and administration of insurance proceeds; and, if appropriate, foreclosure alternatives such as 

short sales and deeds-in-lieu of foreclosure, or foreclosure. In addition, Fannie Mae’s Disaster Response NetworkTM

MD&A | Risk Management | Climate and Natural Disaster Risk Management

Fannie Mae 2022 Form 10-K 139
offers renters and single-family borrowers free financial counseling from HUD-approved housing counselors, including 

help in developing a recovery assessment and action plan, filing claims, working with mortgage servicers, and 

identifying and navigating sources of federal, state and local assistance. We also have a dedicated team at Fannie Mae 

focused on coordinating company-wide efforts to support communities affected by natural disasters as they recover. 

These activities are designed to assist renters and borrowers affected by disasters and also help reduce our losses, and 

we continue to evaluate their impact and seek new options and resources to deploy in response to disasters. 

Climate Risk Governance

The Board’s Risk Policy and Capital Committee has primary oversight of climate-related risks to the company. The 

Board’s Community Responsibility and Sustainability Committee oversees development and implementation of the 

company’s climate risk strategy. The Audit Committee provides oversight of ESG-related reporting, which includes 

climate risk-related reporting. Several of our management-level committees have roles in climate risk oversight, 

escalation and decision-making. We have a Chief Climate Officer who leads a Climate Impact team.

Climate Risk Actions 

We recognize that the increased frequency and intensity of major natural disasters poses risks for all stakeholders in the 

housing system, including borrowers, renters, lenders, investors, insurers and us. Our Climate Impact team is actively 

working to understand our exposures, identify best practices and strategies to mitigate the impacts such events can 

have on our guaranty book, sellers, servicers, and borrowers, and increase awareness on this issue. We continue to 

integrate climate considerations into our organization. Our approach to identifying, assessing, mitigating, and reporting 

on climate-related risks is informed by the recommendations of the Task Force on Climate-Related Financial 

Disclosures. 

FHFA’s 2023 conservatorship scorecard also includes objectives relating to climate risks and climate risk management. 

For information on FHFA’s 2023 conservatorship scorecard objectives, see our Current Report on Form 8-K filed with 

the SEC on January 10, 2023.

We continue to focus on analyzing our physical and transition risks, while also reviewing the landscape of modeling 

approaches and data needs to improve predictive results. We continue to develop our climate scenario methodologies 

and assess the addition of third-party climate models. 

In 2022, we continued to prioritize raising awareness on issues related to climate risk, including taking the following 

actions: 

• Assisted select communities with climate analytics as a part of our Equitable Housing Finance Plan with the 

goal of trying to understand how climate information could be beneficial for potential future action.

• Launched a flood risk awareness campaign in select markets focused on educating homeowners both inside 

and outside FEMA-designated Special Flood Hazard Areas about the risks of flooding. We hope to increase 

homeowners’ understanding of flood risk and hazards, as well as educate them on the importance of taking 

flood risk mitigation measures. 

• Worked on updates to the disclosure process and documents for our REO sales to increase transparency on 

and access to flood-related information. Under current residential real estate disclosure rules, which vary from 

state to state, potential homebuyers rarely receive information related to historical flooding and flood risk during 

the homebuying process. To help reduce this information gap, Fannie Mae requires property listing agents to 

disclose known flood events to prospective purchasers of our REO properties where a listing agent has 

knowledge or reports of prior flooding events. 

• Initiated a new nationwide flood survey and aim to share our insights and analysis with external stakeholders in 

2023.

We are also focused on external outreach to help solve climate-related challenges. For example, we are working with 

the National Institute of Building Sciences to develop a roadmap on mitigation investment to help prepare for and better 

respond to the effects of climate change.

As the risks associated with climate change become an increasing focus for our business, we are taking steps to 

integrate climate risk considerations into our Enterprise Risk Management framework. We are focused on developing 

and implementing a comprehensive, integrated approach to the identification, assessment, and management of climaterelated risks and opportunities. In furtherance of this goal, during 2022 we: 

• Incorporated climate-related considerations into aspects of our key business decision review process. 

• Established annual cadence guidelines for climate-related discussions at relevant management-level risk 

committees. 

MD&A | Risk Management | Climate and Natural Disaster Risk Management

Fannie Mae 2022 Form 10-K 140
• Continued to assess data gaps relating to our assessment of climate-related risk.

• Continued to review policies to identify changes to address climate-related risks.

Addressing climate and natural disaster risks will be critical to Fannie Mae’s overall housing mission. We are exploring 

the role we, along with FHFA and others, can play in helping to address some of these risks. For example, we are 

working with internal and external stakeholders to develop and support climate and natural disaster resiliency 

standards. Given that improving resiliency of properties will take time, we are also focused on examining insurance 

requirements to promote financial stability of households impacted by severe weather. One other consideration is the 

impact of resiliency or energy efficiency standards on affordability. A key challenge will be to appropriately balance 

improvements in climate resiliency and energy efficiency with affordability, particularly in historically underserved 

communities. Developing solutions to these challenges is complicated by the range and diversity of affected 

stakeholders, the possible need for legislative or regulatory action, industry insurance capacity, and the need to balance 

risk mitigation, affordability and sustainability. 

See “Risk Factors—Credit Risk” for additional information on the risks we face from the occurrence of major natural or 

other disasters and the impact of climate change.

Institutional Counterparty Credit Risk Management

Overview

Institutional counterparty credit risk is the risk of loss resulting from the failure of an institutional counterparty to fulfill its 

contractual obligations to us. Our primary exposure to institutional counterparty credit risk exists with our:

• credit guarantors, including mortgage insurers, reinsurers and multifamily lenders with risk sharing 

arrangements;

• mortgage sellers and servicers; and

• financial institutions that issue investments included in our other investments portfolio.

We also have counterparty exposure to: derivatives counterparties, custodial depository institutions; mortgage 

originators, investors and dealers; debt security dealers; central counterparty clearing institutions; and document 

custodians.

We routinely enter into a high volume of transactions with counterparties in the financial services industry resulting in a 

significant credit concentration with respect to this industry. We also may have multiple exposures to particular 

counterparties, as many of our institutional counterparties perform several types of services for us. Accordingly, if one of 

these counterparties were to become insolvent or otherwise default on its obligations to us, it could harm our business 

and financial results in a variety of ways. Our overall objective in managing institutional counterparty credit risk is to 

maintain individual and portfolio-level counterparty exposures within acceptable ranges based on our risk-based rating 

system. We seek to achieve this objective through the following: 

• establishment and observance of counterparty eligibility standards appropriate to each exposure type and level;

• establishment of risk limits; 

• requiring collateralization of exposures where appropriate; and 

• exposure monitoring and management.

The expected shift in market conditions in 2023, including an expected lower volume of mortgage originations and an 

expected economic recession, could materially adversely affect the financial results and condition of some of our 

institutional counterparties, particularly non-depository mortgage sellers and servicers. See “Risk Factors—Credit Risk” 

for additional discussion of the risks to our business if one or more of our institutional counterparties fails to fulfill their 

contractual obligations to us. 

Establishment and Observance of Counterparty Eligibility Standards

The institutions with which we do business vary in size, complexity and geographic footprint. Because of this, 

counterparty eligibility criteria vary depending upon the type and magnitude of the risk exposure incurred. We use a riskbased approach to assess the credit risk of our counterparties through regular examination of their financial statements, 

confidential communication with the management of those counterparties and regular monitoring of publicly available 

credit rating information. This and other information is used to develop proprietary credit rating metrics that we use to 

assess credit quality. Factors including corporate or third-party support or guarantees, our knowledge of the 

counterparty and its management, reputation, quality of operations and experience are also important in determining the 

initial and continuing eligibility of a counterparty. 

MD&A | Risk Management | Climate and Natural Disaster Risk Management

Fannie Mae 2022 Form 10-K 141
Establishment of Risk Limits

Institutions are assigned a risk limit to ensure that our risk exposure is maintained at a level appropriate for the 

institution’s credit assessment and the time horizon for the exposure, as well as to diversify exposure so that we 

adequately manage our concentration risk. A corporate risk limit is first established at the counterparty level for the 

aggregate of all activity and then is divided among our individual business units. Our business units may further 

subdivide limits among products or activities.

Collateralization of Exposures

We may require collateral, letters of credit or investment agreements as a condition to approving exposure to a 

counterparty. Collateral requirements are determined after a comprehensive review of the credit quality and the level of 

risk exposure of each counterparty. We may require that a counterparty post collateral in the event of an adverse event 

such as a ratings downgrade. Collateral requirements are monitored and generally adjusted daily.

Exposure Monitoring and Management

The risk management functions of the individual business units are responsible for managing the counterparty 

exposures associated with their activities within risk limits. An oversight team that reports to our Chief Risk Officer is 

responsible for establishing and enforcing corporate policies and procedures regarding counterparties, establishing 

corporate limits and aggregating and reporting institutional counterparty exposure. We regularly update exposure limits 

for individual institutions and communicate changes to the relevant business units. We regularly report exposures 

against the risk limits to the Risk Policy and Capital Committee of the Board of Directors. 

Mortgage Insurers

We are generally required, pursuant to our charter, to obtain credit enhancements on single-family conventional 

mortgage loans that we purchase or securitize with LTV ratios over 80% at the time of purchase. We use several types 

of credit enhancements to manage our single-family mortgage credit risk, including primary and pool mortgage 

insurance coverage. Our primary exposure associated with mortgage insurers is that they will fail to fulfill their 

obligations to reimburse us for claims under our insurance policies. 

Actions we take to manage this risk include: 

• maintaining financial and operational eligibility requirements that an insurer must meet to become and remain a 

qualified mortgage insurer;

• regularly monitoring our exposure to individual mortgage insurers and mortgage insurer credit ratings, including 

in-depth financial reviews and analyses of the insurers’ portfolios and capital adequacy under hypothetical 

stress scenarios;

• requiring certification and supporting documentation annually from each mortgage insurer; and

• performing periodic reviews of mortgage insurers to confirm compliance with eligibility requirements and to 

evaluate their management, control and underwriting practices. 

The master policies issued by our primary mortgage insurers govern their claim-paying obligations to us, including 

circumstances in which significant underwriting or servicing defects might permit the mortgage insurer to rescind 

coverage or deny a claim. Where a claim has not been properly paid as a result of lender non-compliance with their 

obligation to maintain coverage, the lender is required to make us whole for losses not covered by the insurer. In recent 

years, the risk of coverage rescission has been mitigated both by the quality control standards required by private 

mortgage insurer eligibility requirements (“PMIERs”), which have helped reduce the number of significant underwriting 

defects, and also by rescission relief principles we require in mortgage insurer master policies. Generally, the rescission 

relief principles align with our representation and warranty framework and require our primary mortgage insurers to 

waive their rescission rights after a mortgage has performed for at least 36 months or if they have completed a full 

review of the loan and found no significant defects. See below for a discussion of the PMIERs.

In describing our mortgage insurance coverage, “insurance in force” refers to the unpaid principal balance of singlefamily loans in our conventional guaranty book of business covered under the applicable mortgage insurance policies. 

Our total mortgage insurance in force was $744.3 billion, or 20% of our single-family conventional guaranty book of 

business, as of December 31, 2022, compared with $692.3 billion, or 20% of our single-family conventional guaranty 

book of business, as of December 31, 2021. 

“Risk in force” refers to the maximum potential loss recovery under the applicable mortgage insurance policies in force 

and is generally based on the loan-level insurance coverage percentage and, if applicable, any aggregate pool loss 

limit, as specified in the policy. As of December 31, 2022, our total mortgage insurance risk in force was $193.8 billion, 

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 142
or 5% of our single-family conventional guaranty book of business, compared with $176.8 billion, or 5% of our singlefamily conventional guaranty book of business, as of December 31, 2021.

Our total mortgage insurance in force and risk in force excludes insurance coverage provided by federal government 

entities and credit insurance obtained through CIRT deals.

The charts below display our mortgage insurer counterparties that provided 10% or more of the risk-in-force mortgage 

insurance coverage on the single-family loans in our conventional guaranty book of business. 

Mortgage Insurer Concentration(1)

As of December 31, 2021

19%

19%

17%

17%

16%

11%

1%

As of December 31, 2022

18%

19%

17%

17%

16%

12%

1%

Arch Capital Group Ltd. Radian Guaranty, Inc. Mortgage Guaranty Insurance Corp.

Enact Mortgage Insurance Corp.(2) Essent Guaranty, Inc. National Mortgage Insurance Corp.

Others

(1) Insurance coverage amounts provided for each counterparty may include coverage provided by affiliates and subsidiaries of the 

counterparty.

(2) Genworth Mortgage Insurance Corp. was renamed Enact Mortgage Insurance Corp. effective February 7, 2022.

As of December 31, 2022 and 2021, 1% of our total risk-in-force coverage was held with three mortgage insurers that 

are in run-off, and therefore are no longer approved to write new insurance with us.

Mortgage insurers must meet and maintain compliance with PMIERs to be eligible to write mortgage insurance on loans 

acquired by Fannie Mae. The PMIERs are designed to ensure that mortgage insurers have sufficient liquid assets to 

pay all claims under a hypothetical future stress scenario.

See “Risk Factors—Credit Risk” for a discussion of the risks to our business of claims under our mortgage insurance 

policies not being paid in full or at all. 

Reinsurers

We use CIRT deals to transfer credit risk on a pool of loans to an insurance provider that retains the risk, or to an 

insurance provider that simultaneously cedes all of its risk to one or more reinsurers. In CIRT transactions, we select the 

insurance providers and approve the allocation of coverage that may be simultaneously transferred to reinsurers by a 

direct provider of our CIRT insurance coverage. We take certain steps to increase the likelihood that we will recover on 

the claims we file with the insurers, including the following:

• In our approval and selection of CIRT insurers and reinsurers, we take into account the financial strength of 

those companies and the concentration risk that we have with those counterparties. 

• We monitor the financial strength of CIRT insurers and reinsurers to confirm compliance with our requirements 

and to minimize potential exposure. Changes in the financial strength of an insurer or reinsurer may impact our 

future allocation of new CIRT insurance coverage to those providers. In addition, a material deterioration of the 

financial strength of a CIRT insurer or reinsurer may permit us to terminate existing CIRT coverage pursuant to 

terms of the CIRT insurance policy.

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 143
• We require a portion of the insurers’ or reinsurers’ obligations in a CIRT transaction to be collateralized with 

highly-rated liquid assets held in a trust account. The required amount of collateral is initially determined 

according to the ratings of the insurer or reinsurer. Contractual provisions require additional collateral to be 

posted in the event of adverse developments with the counterparty, such as a ratings downgrade.

The charts below display the concentration of our credit risk exposure to our top five CIRT counterparties, measured by 

maximum liability to us, excluding the benefit of collateral we hold to secure the counterparties’ obligations. 

CIRT Counterparty Concentration

As of December 31, 2021

42%

58%

As of December 31, 2022

50% 50%

Top 5 Others

• As of December 31, 2022, our CIRT counterparties had a maximum liability to us of $14.8 billion.

• As of December 31, 2022, $4.2 billion in liquid assets securing CIRT counterparties’ obligations were held in 

trust accounts. 

• Our top five CIRT counterparties had a maximum liability to us of $7.4 billion as of December 31, 2022, 

compared with $5.4 billion as of December 31, 2021.

For information on our credit risk transfer transactions, see “Single-Family Business—Single-Family Mortgage Credit 

Risk Management—Single-Family Credit Enhancement and Transfer of Mortgage Credit Risk—Credit Risk Transfer 

Transactions” and “Multifamily Business—Multifamily Mortgage Credit Risk Management—Transfer of Multifamily 

Mortgage Credit Risk.” 

Multifamily Lenders with Risk Sharing

We enter into risk sharing agreements with multifamily lenders, primarily through the DUS program, pursuant to which 

the lenders agree to bear all or some portion of the credit losses on the covered loans. Our maximum potential loss 

recovery from lenders under risk sharing agreements on multifamily loans was $103.9 billion as of December 31, 2022, 

compared with $97.6 billion as of December 31, 2021. As of December 31, 2022, 53% of our maximum potential loss 

recovery on multifamily loans was from five DUS lenders as compared with 52% as of December 31, 2021. 

As noted above in “Multifamily Business—Multifamily Mortgage Credit Risk Management—Transfer of Multifamily 

Mortgage Credit Risk,” our primary multifamily delivery channel is our DUS program, which is composed of lenders that 

range from large depositories to independent non-bank financial institutions. As of December 31, 2022, approximately 

32% of the unpaid principal balance of loans in our multifamily guaranty book of business serviced by our DUS lenders 

was from institutions with an external investment grade credit rating or a guaranty from an affiliate with an external 

investment grade credit rating, compared with approximately 33% as of December 31, 2021. Given the recourse nature 

of the DUS program, DUS lenders are bound by eligibility standards that dictate, among other items, minimum capital 

and liquidity levels, and the posting of collateral at a highly rated custodian to secure a portion of the lenders’ future 

obligations. We actively monitor the financial condition of these lenders to help ensure the level of risk remains within 

our standards and to ensure required capital levels are maintained and are in alignment with actual and modeled loss 

projections. 

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 144
Mortgage Servicers and Sellers

The primary risk associated with mortgage servicers that service the loans in our guaranty book of business is that they 

will fail to fulfill their servicing obligations. See “Single-Family Business—Single-Family Primary Business Activities—

Single-Family Mortgage Servicing” and “Multifamily Business—Multifamily Primary Business Activities—Multifamily 

Mortgage Servicing” for more discussion on the services performed by our mortgage servicers. 

A servicing contract breach could result in credit losses for us or could cause us to incur the cost of finding a 

replacement servicer. We could incur costs and potential increases in servicing fees and could also face operational 

risks if we replace a mortgage servicer. If a mortgage servicer fails, it could result in a temporary disruption in servicing 

and loss mitigation activities relating to the loans serviced by that mortgage servicer, particularly if there is a loss of 

experienced servicing personnel. See “Risk Factors—Credit Risk” for a discussion of additional risks to our business 

and financial results associated with mortgage servicers. 

We mitigate these risks in several ways, including by: 

• establishing minimum standards and financial requirements for our servicers;

• monitoring financial and portfolio performance as compared with peers and internal benchmarks; 

• for our largest mortgage servicers, conducting periodic financial reviews to confirm compliance with servicing 

guidelines and servicing performance expectations; and

• identifying a group of servicers as potential contingency sub-servicers to which we could transfer the servicing 

of some of the loans in our single-family guaranty book in the event one or more of our top mortgage servicers 

is not able or permitted to continue servicing our loans on our behalf.

We may take one or more of the following actions to mitigate our credit exposure to mortgage servicers that present a 

higher risk:

• require a guaranty of obligations by higher-rated entities;

• transfer exposure to third parties;

• require collateral;

• establish more stringent financial requirements;

• work with underperforming major servicers to improve operational processes; and

• suspend or terminate the selling and servicing relationship if deemed appropriate.

A large portion of our single-family guaranty book is serviced by non-depository servicers, particularly our delinquent 

single-family loans. Non-depository servicers also service a large portion of our multifamily guaranty book. Compared 

with depository financial institutions, these institutions pose additional risks to us because they generally do not have 

the same financial strength and liquidity as our mortgage servicer counterparties that are depository institutions. Unlike 

for depository servicers, much of the capital of non-depository servicers is represented by the value of mortgage 

servicing rights, which is subject to variability based on market conditions and therefore is an important factor in 

determining capital adequacy. Non-depository servicers also are generally not subject to the same level of regulatory 

oversight as our mortgage servicer counterparties that are depository institutions. We require non-depository servicers 

to meet minimum liquidity requirements to maintain eligibility with Fannie Mae. We actively monitor the financial 

condition and capital adequacy of non-depository servicers, including their compliance with our requirements.

In August 2022, FHFA announced updated minimum financial eligibility requirements for Fannie Mae and Freddie Mac 

single-family mortgage sellers and servicers. We use these financial eligibility requirements to monitor and manage our 

risk exposures to non-depository single-family sellers and servicers while largely relying on banking regulators’ 

prudential capital and liquidity standards as financial requirements for depository single-family sellers and servicers. 

Under the financial eligibility requirements, both depository and non-depository single-family sellers and servicers are 

subject to the same tangible net worth requirements. These new requirements will increase capital and liquidity 

requirements for our single-family non-depository sellers and servicers, including some requirements that apply only to 

large non-depository sellers and servicers. The majority of the new financial eligibility requirements are effective on 

September 30, 2023, with the remaining requirements going into effect on December 31, 2023 or March 31, 2024.

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 145
The charts below display the percentage of our single-family conventional guaranty book of business serviced by our 

top five depository single-family mortgage servicers and top five non-depository single-family mortgage servicers.

Single-Family Mortgage Servicer Concentration

As of December 31, 2021

21%

23%

56%

As of December 31, 2022

22%

23%

55%

Top 5 depository servicers Top 5 non-depository servicers Others

As of December 31, 2022, Wells Fargo Bank, N.A., together with its affiliates, serviced approximately 9% of our singlefamily conventional guaranty book of business, compared with 10% as of December 31, 2021. In January 2023, Wells 

Fargo Bank announced its plan to reduce the size of its servicing portfolio. We anticipate that this may increase the 

concentration of our single-family conventional guaranty book serviced by non-depository servicers. See “Risk Factors

—Credit Risk” for more information about risks relating to non-depository servicers.

The charts below display the percentage of our multifamily guaranty book of business serviced by our top five 

depository multifamily mortgage servicers and top five non-depository multifamily mortgage servicers.

Multifamily Mortgage Servicer Concentration

As of December 31, 2021

29%

42%

29%

As of December 31, 2022

28%

43%

29%

Top 5 depository servicers Top 5 non-depository servicers Others

• As of December 31, 2022 and 2021, two of our multifamily mortgage servicers, together with their affiliates,

serviced 10% or more of our multifamily guaranty book of business: Walker & Dunlop, LLC and Wells Fargo 

Bank, N.A.

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 146
Counterparty Credit Exposure Relating to our Other Investments Portfolio

The primary credit exposure associated with assets held in our other investments portfolio is that issuers will not repay 

principal and interest in accordance with the contractual terms. If one of these counterparties fails to meet its obligations 

to us under the terms of the investments, it could result in financial losses to us and have a material adverse effect on 

our earnings, liquidity, financial condition and net worth. We believe the risk of default is low because our other 

investments portfolio primarily consists of cash and cash equivalents, reverse repurchase agreements with a central 

counterparty clearing institution or The Federal Reserve Bank of New York and U.S. Treasury securities. 

As of December 31, 2022, our other investments portfolio totaled $116.0 billion and included $46.9 billion of U.S. 

Treasury securities. As of December 31, 2021, our other investments portfolio totaled $133.2 billion and included $83.6 

billion of U.S. Treasury securities. We mitigate our risk by monitoring the credit risk position of our other investments 

portfolio. As of December 31, 2022, we held $11.0 billion in overnight unsecured deposits with five financial institutions, 

compared with $7.7 billion held with four financial institutions as of December 31, 2021. The short-term credit ratings for 

each of these financial institutions by S&P, Moody’s and Fitch were at least A-1 or the Moody’s or Fitch equivalent of 

A-1. 

See “Liquidity and Capital Management—Liquidity Management—Other Investments Portfolio” for more information on 

our other investments portfolio. See “Risk Factors—Liquidity and Funding Risk” for a discussion of the potential adverse 

impact on the value of our other investments portfolio if the U.S. government were to default on its obligations or if the 

market anticipates such a default is likely.

Other Counterparties

Derivative Counterparty Credit Exposure

The primary credit exposure that we have on a derivative transaction is that a counterparty will default on payments 

due, which could result in us having to acquire a replacement derivative from a different counterparty at a higher cost or 

we may be unable to find a suitable replacement. Our derivative counterparty credit exposure relates principally to 

interest-rate derivative contracts. 

Derivative instruments may be privately negotiated contracts, which are often referred to as OTC derivatives, or they 

may be listed and traded on an exchange where they are accepted for clearing by a derivatives clearing organization as 

our cleared derivative transactions.

Actions we take to manage our derivative counterparty credit exposure relating to our OTC derivative transactions 

include:

• entering into enforceable master netting arrangements with these counterparties, which allow us to net 

derivative assets and liabilities with the same counterparty; and

• requiring counterparties to post collateral, which includes cash, U.S. Treasury securities, agency debt and 

agency mortgage-related securities.

We manage our credit exposure relating to our cleared derivative transactions through enforceable master netting 

arrangements. These arrangements allow us to net our exposure to cleared derivatives by clearing organization and by 

clearing member.

Our cleared derivative transactions are submitted to a derivatives clearing organization on our behalf through a clearing 

member of the organization. A contract accepted by a derivatives clearing organization is governed by the terms of the 

clearing organization’s rules and arrangements between us and the clearing member of the clearing organization. As a 

result, we are exposed to the institutional credit risk of both the derivatives clearing organization and the member who is 

acting on our behalf. As of December 31, 2022, approximately 82% of our derivatives transactions were cleared through 

a clearing organization, compared with 70% as of December 31, 2021.

See “Note 8, Derivative Instruments” and “Note 14, Netting Arrangements” for additional information on our derivative 

contracts as of December 31, 2022 and 2021.

Counterparty Credit Risk Exposure Arising from the Resecuritization of Freddie Mac-Issued Securities

We have been resecuritizing Freddie Mac-issued securities since June 2019 when we began issuing UMBS, which has 

increased our credit risk exposure and operational risk exposure to Freddie Mac. Although we have an indemnification 

agreement with Freddie Mac, in the event Freddie Mac were to fail (for credit or operational reasons) to make a 

payment on Freddie Mac securities that we had resecuritized in a Fannie Mae-issued structured security, we would be 

responsible for making the entire payment on the Freddie Mac securities included in that structured security in order to 

make payments on any of our outstanding single-family Fannie Mae MBS to be paid on that payment date. Accordingly 

if Freddie Mac were to fail to meet its obligations under the terms of these securities, it could have a material adverse 

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 147
effect on our earnings and financial condition. We believe the risk of default by Freddie Mac is negligible because of the 

funding commitment available to Freddie Mac through its senior preferred stock purchase agreement with Treasury.

As of December 31, 2022, $234.0 billion in Freddie Mac securities were backing Fannie Mae-issued structured 

securities, compared with $212.3 billion as of December 31, 2021. See “Business—Mortgage Securitizations—Uniform 

Mortgage-Backed Securities, or UMBS” and “Risk Factors—GSE and Conservatorship Risk” for more information on 

risks associated with our issuance of UMBS. 

Central Counterparty Clearing Institutions 

Fannie Mae is a clearing member of two divisions of Fixed Income Clearing Corporation (“FICC”), a central counterparty 

(“CCP”). One FICC division clears our trades involving securities purchased under agreements to resell, securities sold 

under agreements to repurchase, and other non-mortgage related securities. The other division clears our forward 

purchase and sale commitments of mortgage-related securities, including dollar roll transactions. As a result of these 

trades, we are required to post initial and variation margin payments as well as settle certain positions daily in cash. As 

a clearing member of FICC, we are exposed to the risk that the FICC or one or more of the CCP’s clearing members 

fails to perform its obligations as described below. 

• A default by or the financial or operational failure of FICC would require us to replace contracts cleared through 

FICC, thereby increasing operational costs and potentially resulting in losses. 

• We may also be exposed to losses if a clearing member of FICC defaults on its obligations as each clearing 

member is required to absorb a portion of those fellow-clearing member losses. As a result, we could lose the 

margin that we have posted to FICC. Moreover, our exposure could exceed the amount of margin that we 

previously posted to FICC, since FICC’s rules require non-defaulting clearing members to cover, on a pro rata 

basis, losses caused by a clearing member’s default. 

We are unable to develop an estimate of the maximum potential amount of future payments that we could be required to 

make to FICC under these arrangements as our exposure is dependent on the volume of trades FICC clearing 

members execute now and in the future, which varies daily. Although we are unable to develop an estimate of our 

maximum exposure, we expect that losses caused by any clearing member would be partially offset by the fair value of 

margin posted by the defaulting clearing member and any other available assets of the CCP for those purposes. We 

believe that the risk of a material loss is remote due to the FICC's margin and settlement requirements, guarantee funds 

and other resources that are available in the event of a default.

We actively monitor the risks associated with the FICC in order to effectively manage this counterparty risk and our 

associated liquidity exposure.

Custodial Depository Institutions

Our mortgage servicer counterparties are required by our Servicing Guide to use custodial depository institutions to hold 

remittances of borrower payments of principal and interest on our behalf. If a custodial depository institution were to fail 

while holding such remittances, we would be exposed to risk for balances in excess of the deposit insurance protection 

and might not be able to recover all of the principal and interest payments being held by the depository on our behalf, or 

there might be a substantial delay in receiving these amounts. If this were to occur, we would be required to replace 

these amounts with our own funds to make payments that are due to Fannie Mae MBS certificateholders. Accordingly, 

the insolvency of one of our principal custodial depository institutions could result in significant financial losses to us. To 

mitigate these risks, our Servicing Guide requires our mortgage servicer counterparties to use custodial depository 

institutions that are insured, that are rated as “well capitalized” by their regulator and that meet certain minimum 

financial ratings from third-party agencies.

Mortgage Originators, Investors and Dealers

We are routinely exposed to pre-settlement risk through the purchase or sale of mortgage loans and mortgage-related 

securities with mortgage originators, mortgage investors and mortgage dealers. The risk is the possibility that the 

counterparty will be unable or unwilling to either deliver mortgage assets or compensate us for the cost to cancel or 

replace the transaction. We manage this risk by determining position limits with these counterparties, based upon our 

assessment of their creditworthiness, and by monitoring and managing these exposures.

Debt Security Dealers

The credit risk associated with dealers that commit to place our debt securities is that they will fail to honor their 

contracts to take delivery of the debt, which could result in delayed issuance of the debt through another dealer. We 

manage these risks by establishing approval standards, monitoring our exposure positions and monitoring changes in 

the credit quality of dealers.

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 148
Document Custodians

We use third-party document custodians to provide loan document certification and custody services for some of the 

loans that we purchase and securitize. In many cases, our lenders or their affiliates also serve as document custodians 

for us. Our ownership rights to the mortgage loans that we own or that back our Fannie Mae MBS could be challenged if 

a lender intentionally or negligently pledges or sells the loans that we purchased or fails to obtain a release of prior liens 

on the loans that we purchased, which could result in financial losses to us. When a lender or one of its affiliates acts as 

a document custodian for us, the risk that our ownership interest in the loans may be adversely affected is increased, 

particularly in the event the lender were to become insolvent. We mitigate these risks through legal and contractual 

arrangements with these custodians that identify our ownership interest, as well as by establishing qualifying standards 

for document custodians and requiring removal of the documents to our possession or to an independent third-party 

document custodian if we have concerns about the solvency or competency of the document custodian.

The MERS System

The MERS® System is an electronic registry owned by Intercontinental Exchange that is widely used by participants in 

the mortgage finance industry to track servicing rights and ownership of loans in the United States. A large portion of the 

loans we own or guarantee are registered and tracked in the MERS System. Though we believe it is unlikely, if we are 

unable to use the MERS System, or if our use of the MERS System adversely affects our ability to enforce our rights 

with respect to our loans registered and tracked in the MERS System, it could create operational and legal risks for us 

and increase the costs and time it takes to record loans or foreclose on loans.

Market Risk Management, including Interest-Rate Risk Management

We are subject to market risk, which includes interest-rate risk and spread risk. These risks arise primarily from our 

mortgage asset investments. Interest-rate risk is the risk that movements in interest rates will adversely affect the value 

of our assets or liabilities or our future earnings or capital. Spread risk is the risk from changes in an instrument’s value

that relate to factors other than changes in interest rates. 

Interest-Rate Risk Management

Our goal is to manage market risk from our net portfolio to be neutral to movements in interest rates and volatility, 

subject to model constraints and prevailing market conditions. We define our net portfolio as: our retained mortgage 

portfolio assets; our other investments portfolio; outstanding debt of Fannie Mae used to fund the retained mortgage 

portfolio assets and other investments portfolio; mortgage commitments; and risk management derivatives. 

We employ an integrated interest-rate risk management strategy that allows for informed risk taking within pre-defined 

corporate risk limits. Decisions regarding our strategy in managing interest-rate risk are based upon our corporate 

market risk policy and limits that are approved by our Board of Directors.

We monitor current market conditions, including the interest-rate environment, to assess the impact of these conditions 

on individual positions and our interest-rate risk profile. In addition to qualitative factors, we use various quantitative risk 

metrics in determining the appropriate composition of our retained mortgage portfolio, our investments in non-mortgage 

securities and relative mix of debt and derivatives positions in order to remain within pre-defined risk tolerance levels 

that we consider acceptable. We regularly disclose two interest-rate risk metrics that estimate our interest-rate 

exposure: (1) fair value sensitivity to changes in interest-rate levels and the slope of the yield curve and (2) duration 

gap.

The metrics used to measure our interest-rate exposure are generated using internal models. Our internal models, 

consistent with standard practice for models used in our industry, require numerous assumptions. There are inherent 

limitations in any methodology used to estimate the exposure to changes in market interest rates. The reliability of our 

prepayment estimates and interest-rate risk metrics depends on the availability and quality of historical data for each of 

the types of securities in our net portfolio, as discussed below. When market conditions change rapidly and dramatically, 

the assumptions of our models may no longer accurately capture or reflect the changing conditions. See “Risk Factors

—Operational Risk” for a discussion of the risks associated with our reliance on models to manage risk.

Sources of Interest-Rate Risk Exposure

Our mortgage assets consist mainly of single-family and multifamily mortgage loans. For single-family loans, borrowers 

have the option to prepay at any time before the scheduled maturity date. This prepayment uncertainty results in a 

potential mismatch between the timing of receipt of cash flows related to our assets and the timing of payment of cash 

flows related to our liabilities. Changes in interest rates, as well as other factors, influence mortgage prepayment rates 

and duration and also affect the value of our mortgage assets. When interest rates decrease, prepayment rates on 

fixed-rate mortgages generally accelerate because borrowers usually can pay off their existing mortgages and refinance 

at lower rates. Accelerated prepayment rates have the effect of shortening the duration and average life of the fixed-rate 

MD&A | Risk Management | Institutional Counterparty Credit Risk Management

Fannie Mae 2022 Form 10-K 149
mortgage assets we hold in our net portfolio. In a declining interest-rate environment, existing mortgage assets held in 

our net portfolio tend to increase in value or price because these mortgages are likely to have higher interest rates than 

new mortgages, which are being originated at the then-current lower interest rates. Conversely, when interest rates 

increase, prepayment rates generally slow, which extends the duration and average life of our mortgage assets and 

results in a decrease in value. Interest rates also affect the value of our non-mortgage assets, which are primarily fixedrate securities. As interest rates decline, the value of our fixed-rate securities tend to increase with the opposite impact 

when rates rise. 

We are also exposed to interest-rate risk in connection with cost basis adjustments related to mortgage assets, mainly 

single-family and multifamily mortgage loans, held by our consolidated MBS trusts. These cost basis adjustments often 

result from upfront cash fees exchanged at the time of loan acquisition, which include buy-ups, buy-downs, and loanlevel risk-based price adjustments. The timing of when we recognize amortization income related to cost basis 

adjustments may be affected by prepayments, thereby impacting our earnings. Changes in the timing of income 

recognition related to cost basis adjustments impact the present value of this income. See “Consolidated Results of 

Operations—Net Interest Income—Analysis of Deferred Amortization Income” for more information on our outstanding 

net cost basis adjustments related to consolidated MBS trusts.

We are also exposed to interest-rate risk in connection with the float income earned by MBS trusts on the short-term 

reinvestment of loan payments received from borrowers in highly liquid investments with short maturities, such as U.S. 

Treasury securities. This float income is paid to us as trust management income and recorded within “Net interest 

income” in our consolidated financial statements. Changes in interest rates impact the amount of float income generated 

by MBS trusts and our float reinvestment yields. Typically, interest-rate driven changes in the timing of income 

recognition related to cost basis amortization are partially offset by interest-rate driven changes in the amount of float 

income earned. 

For additional discussion of how interest rates can affect our financial results, see “Key Market Economic Indicators—

How Interest Rates Can Affect Our Financial Results.”

Interest-Rate Risk Management Strategy

Our goal for managing the interest-rate risk of our net portfolio is to be neutral to movements in interest rates and 

volatility. This involves asset selection and structuring of our liabilities to match and offset the interest-rate 

characteristics of our retained mortgage portfolio and our investments in non-mortgage securities. We have actively 

managed the interest-rate risk of our net portfolio through a strategy incorporating the following principal elements: 

• Debt Instruments. We issue a broad range of both callable and non-callable debt instruments to manage the 

duration and prepayment risk of expected cash flows of the mortgage assets we own.

• Derivative Instruments. We supplement our issuance of debt with derivative instruments to further reduce 

duration and prepayment risks.

• Monitoring and Active Portfolio Rebalancing. We continually monitor our risk positions and actively rebalance 

our portfolio of interest rate-sensitive financial instruments to maintain a close match between the duration of 

our assets and liabilities.

• Fair Value Hedge Accounting. We utilize fair value hedge accounting to align the timing of when we recognize 

the interest-rate driven fair value changes in hedged mortgage loans and funding debt with derivative hedging 

instruments to mitigate GAAP earnings exposure to interest-rate changes, including any short-term earnings 

volatility that might result from economic hedging.

We do not currently actively manage or hedge, on an economic basis, our spread risk, or the interest-rate risk arising 

from cost basis adjustments and float income associated with mortgage assets held by our consolidated MBS trusts. 

Our spread risk includes the impact of changes in the spread between our mortgage assets and debt (referred to as 

mortgage-to-debt spreads) after we purchase mortgage assets. For mortgage assets in our portfolio that we intend to 

hold to maturity to realize the contractual cash flows, we accept period-to-period volatility in our financial performance 

attributable to changes in mortgage-to-debt spreads that occur after our purchase of mortgage assets. See “Risk 

Factors—Market and Industry Risk” for a discussion of the risks to our business posed by changes in interest rates and 

changes in spreads. See “Earnings Exposure to Interest-Rate Risk” below for the impact of market risk on our earnings. 

Debt Instruments

Historically, the primary tool we have used to fund the purchase of mortgage assets and manage the interest-rate risk 

implicit in our mortgage assets is the variety of debt instruments we issue. The debt we issue is a mix that typically 

consists of short- and long-term, non-callable and callable debt. The varied maturities and flexibility of these debt 

combinations help us in reducing the mismatch of cash flows between assets and liabilities in order to manage the 

duration risk associated with an investment in long-term fixed-rate assets. Callable debt helps us manage the 

MD&A | Risk Management | Market Risk Management, including Interest-Rate Risk Management

Fannie Mae 2022 Form 10-K 150
prepayment risk associated with fixed-rate mortgage assets because the duration of callable debt changes when 

interest rates change in a manner similar to changes in the duration of mortgage assets. See “Liquidity and Capital 

Management—Liquidity Management—Debt Funding” for additional information on our debt activity.

Derivative Instruments

Derivative instruments also are an integral part of our strategy in managing interest-rate risk. See “Note 8, Derivative 

Instruments” for a description of the derivatives we use for interest-rate risk management purposes and the factors we 

consider in deciding whether to use derivatives.

We use interest-rate swaps, interest-rate options and futures, in combination with our issuance of debt securities, to 

better match the duration of our assets with the duration of our liabilities. We are generally an end-user of derivatives; 

our principal purpose in using derivatives is to manage our aggregate interest-rate risk profile within prescribed risk 

parameters. We generally only use derivatives that are relatively liquid and straightforward to value. We use derivatives 

for four primary purposes:

• as a substitute for notes and bonds that we issue in the debt markets;

• to achieve risk management objectives not obtainable with debt market securities;

• to quickly and efficiently rebalance our portfolio; and

• to hedge foreign currency exposure.

Decisions regarding the repositioning of our derivatives portfolio are based upon current assessments of our interestrate risk profile and economic conditions, including the composition of our retained mortgage portfolio, our investments 

in non-mortgage securities and relative mix of our debt and derivative positions, the interest-rate environment and 

expected trends.

Measurement of Interest-Rate Risk

Below we present two quantitative metrics that provide estimates of our interest-rate risk exposure: (1) fair value 

sensitivity of our net portfolio to changes in interest-rate levels and slope of yield curve; and (2) duration gap. The 

metrics presented are calculated using internal models that require standard assumptions regarding interest rates and 

future prepayments of principal over the remaining life of our securities. These assumptions are derived based on the 

characteristics of the underlying structure of the securities and historical prepayment rates experienced at specified 

interest-rate levels, taking into account current market conditions, the current mortgage rates of our existing outstanding 

loans, loan age and other factors. On a regular basis, management makes judgments about the appropriateness of the 

risk assessments and will make adjustments as necessary to properly assess our interest-rate exposure and manage 

our interest-rate risk. The methodologies used to calculate risk estimates are periodically changed on a prospective 

basis to reflect improvements in the underlying estimation process.

Interest-Rate Sensitivity to Changes in Interest-Rate Level and Slope of Yield Curve

Pursuant to a disclosure commitment with FHFA, we disclose on a monthly basis the estimated adverse impact on the 

fair value of our net portfolio that would result from the following hypothetical situations:

• a 50 basis point shift in interest rates; and

• a 25 basis point change in the slope of the yield curve.

In measuring the estimated impact of changes in the level of interest rates, we assume a parallel shift in all maturities of 

the U.S. LIBOR interest-rate swap curve.

In measuring the estimated impact of changes in the slope of the yield curve, we assume a constant 7-year rate and a 

shift of 16.7 basis points for the 1-year rate and shorter tenors and an opposite shift of 8.3 basis points for the 30-year 

rate. Rate shocks for remaining maturity points are interpolated. Our practice is to allow interest rates to go below zero 

in the downward shock models unless otherwise prevented through contractual floors. We believe the aforementioned 

interest-rate shocks for our monthly disclosures represent moderate movements in interest rates over a one-month 

period.

Duration Gap

Duration gap measures the price sensitivity of our assets and liabilities in our net portfolio to changes in interest rates by 

quantifying the difference between the estimated durations of our assets and liabilities. Our duration gap analysis 

reflects the extent to which the estimated maturity and repricing cash flows for our assets are matched, on average, 

over time and across interest-rate scenarios to those of our liabilities. A positive duration gap indicates that the duration 

of our assets exceeds the duration of our liabilities. We disclose duration gap on a monthly basis under the caption 

MD&A | Risk Management | Market Risk Management, including Interest-Rate Risk Management

Fannie Mae 2022 Form 10-K 151
“Interest Rate Risk Disclosures” in our Monthly Summary, which is available on our website and announced in a press 

release.

While our goal is to reduce the price sensitivity of our net portfolio to movements in interest rates, various factors can 

contribute to a duration gap that is either positive or negative. For example, changes in the market environment can 

increase or decrease the price sensitivity of our mortgage assets relative to the price sensitivity of our liabilities because 

of prepayment uncertainty associated with our assets. In a declining interest-rate environment, prepayment rates tend to 

accelerate, thereby shortening the duration and average life of the fixed-rate mortgage assets we hold in our net 

portfolio. Conversely, when interest rates increase, prepayment rates generally slow, which extends the duration and 

average life of our mortgage assets. Our debt and derivative instrument positions are used to manage the interest-rate 

sensitivity of our retained mortgage portfolio and our investments in non-mortgage securities. As a result, the degree to 

which the interest-rate sensitivity of our retained mortgage portfolio and our investments in non-mortgage securities is 

offset will be dependent upon, among other factors, the mix of funding and other risk management derivative 

instruments we use at any given point in time.

The market value sensitivities of our net portfolio are a function of both the duration and the convexity of our net 

portfolio. Duration provides a measure of the price sensitivity of a financial instrument to changes in interest rates while 

convexity reflects the degree to which the duration of the assets and liabilities in our net portfolio changes in response to 

a given change in interest rates. We use convexity measures to provide us with information about how quickly and by 

how much our net portfolio’s duration may change in different interest-rate environments. The market value sensitivity of 

our net portfolio will depend on a number of factors, including the interest-rate environment, modeling assumptions and 

the composition of assets and liabilities in our net portfolio, which vary over time. 

Results of Interest-Rate Sensitivity Measures

The interest-rate risk measures discussed below exclude the impact of changes in the fair value of our guaranty assets 

and liabilities resulting from changes in interest rates. We exclude our guaranty business from these sensitivity 

measures based on our current assumption that the guaranty fee income generated from future business activity will 

largely replace guaranty fee income lost due to mortgage prepayments.

The table below displays the pre-tax market value sensitivity of our net portfolio to changes in the level of interest rates 

and the slope of the yield curve as measured on the last day of each period presented. The table below also provides 

the daily average, minimum, maximum and standard deviation values for duration gap and for the most adverse market 

value impact on the net portfolio to changes in the level of interest rates and the slope of the yield curve for the three 

months ended December 31, 2022 and 2021.

The sensitivity measures displayed in the table below, which we disclose on a quarterly basis pursuant to a disclosure 

commitment with FHFA, are an extension of our monthly sensitivity measures discussed above. There are three primary 

differences between our monthly sensitivity disclosure and the quarterly sensitivity disclosure presented below: 

• the quarterly disclosure is expanded to include the sensitivity results for larger rate level shocks of positive or 

negative 100 basis points; 

• the monthly disclosure reflects the estimated pre-tax impact on the market value of our net portfolio calculated 

based on a daily average, while the quarterly disclosure reflects the estimated pre-tax impact calculated based 

on the estimated financial position of our net portfolio and the market environment as of the last business day of 

the quarter; and 

• the monthly disclosure shows the most adverse pre-tax impact on the market value of our net portfolio from the 

hypothetical interest-rate shocks, while the quarterly disclosure includes the estimated pre-tax impact of both 

up and down interest-rate shocks.

MD&A | Risk Management | Market Risk Management, including Interest-Rate Risk Management

Fannie Mae 2022 Form 10-K 152
Interest-Rate Sensitivity of Net Portfolio to Changes in Interest-Rate Level and Slope of Yield 

Curve

As of December 31,(1)(2)

2022 2021

(Dollars in millions)

Rate level shock:

-100 basis points $ (10) $ (184) 

-50 basis points 5 (69) 

+50 basis points (14) 54 

+100 basis points (35) 75 

Rate slope shock:

-25 basis points (flattening) (8) (8) 

+25 basis points (steepening) 10 8 

For the Three Months Ended December 31,(1)(3)

2022 2021

Duration 

Gap

Rate Slope 

Shock 25 bps

Rate Level 

Shock 50 bps

Duration 

Gap

Rate Slope 

Shock 25 bps

Rate Level 

Shock 50 bps

Market Value Sensitivity Market Value Sensitivity

(In years) (Dollars in millions) (In years) (Dollars in millions)

Average — $ (5) $ (16) (0.05) $ (5) $ (77) 

Minimum (0.04) (10) (36) (0.09) (10) (110) 

Maximum 0.04 — (3) 0.00 1 (25) 

Standard deviation 0.02 2 8 0.02 3 17 

(1) Computed based on changes in U.S. LIBOR interest-rates swap curve.

(2) Measured on the last business day of each period presented. 

(3) Computed based on daily values during the period presented.

The market value sensitivity of our net portfolio varies across a range of interest-rate shocks depending upon the 

duration and convexity profile of our net portfolio. The market value sensitivity of the net portfolio is measured by 

quantifying the change in the present value of the cash flows of our financial assets and liabilities that would result from 

an instantaneous shock to interest rates, assuming spreads are held constant. For the subset of floating-rate liabilities 

and assets that are indexed to LIBOR or SOFR, the interest component of their future cash flows is calculated using the 

projection of the corresponding index rate. For all assets and liabilities, the discount factor used to calculate the present 

value of the future cash flows is constructed using the LIBOR yield curve.

LIBOR rate quotes will cease on June 30, 2023, and after that date the interest accrued on floating-rate instruments that 

are contractually indexed to LIBOR will reset based on SOFR. Before that LIBOR cessation date, the portfolio interestrate risk measurement process will transition from using LIBOR to using SOFR as the benchmark interest rate. This 

change is not expected to have a significant impact on the measurement of our interest-rate risk or our financial results.

We use derivatives to help manage the residual interest-rate risk exposure between the assets and liabilities in our net 

portfolio. Derivatives have enabled us to keep our economic interest-rate risk exposure at consistently low levels in a 

wide range of interest-rate environments. The table below displays an example of how derivatives impacted the net 

market value exposure for a 50 basis point parallel interest-rate shock. For additional information on our derivative 

positions, see “Note 8, Derivative Instruments.” 

Derivative Impact on Interest-Rate Risk (50 Basis Points)

As of December 31,(1)

2022 2021

(Dollars in millions)

Before derivatives $ (177) $ (539) 

After derivatives (14) (69) 

Effect of derivatives 163 470 

MD&A | Risk Management | Market Risk Management, including Interest-Rate Risk Management

Fannie Mae 2022 Form 10-K 153
(1) Measured on the last business day of each period presented.

Earnings Exposure to Interest-Rate Risk

While we manage the interest-rate risk of our net portfolio with the objective of remaining neutral to movements in 

interest rates and volatility on an economic basis, our earnings can experience volatility due to interest-rate changes 

and differing accounting treatments that apply to certain financial instruments on our balance sheet. Specifically, we 

have exposure to earnings volatility that is driven by changes in interest rates in two primary areas: our net portfolio and 

our consolidated MBS trusts. The exposure in the net portfolio is primarily driven by changes in the fair value of risk 

management derivatives, mortgage commitments, and certain assets, primarily securities, that are carried at fair value. 

The exposure related to our consolidated MBS trusts relates to changes in our credit loss reserves and to the 

amortization of cost basis adjustments resulting from changes in interest rates. 

In January 2021, we began applying fair value hedge accounting to address some of the exposure to interest rates, 

particularly the earnings volatility related to changes in benchmark interest rates, including LIBOR and SOFR. Our 

hedge accounting program is specifically designed to address the volatility of our financial results associated with 

changes in fair value related to changes in the benchmark interest rates. As such, earnings variability driven by other 

factors, such as spreads or changes in cost basis amortization recognized in net interest income, remains. In addition, 

our ability to effectively reduce earnings volatility is dependent upon the volume and type of interest-rate swaps 

available, which is driven by our interest-rate risk management strategy discussed above. As our range of available 

interest-rate swaps varies over time, our ability to reduce earnings volatility through hedge accounting may vary as well.

When the shape of the yield curve shifts significantly from period to period, hedge accounting may be less effective. In 

our current program, we establish new hedging relationships daily to provide flexibility in our overall risk management 

strategy. 

See “Note 1, Summary of Significant Accounting Policies” and “Note 8, Derivative Instruments” for additional information 

on our fair value hedge accounting policy and related disclosures.

Liquidity and Funding Risk Management

See “Liquidity and Capital Management” for a discussion of how we manage liquidity and funding risk.

Operational Risk Management

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or from 

external events. Our corporate operational risk framework aligns with our Enterprise Risk policy and has evolved based 

on the changing needs of our business and FHFA regulatory guidance. The Operational Risk Management group is 

responsible for overseeing and monitoring compliance with our operational risk program’s requirements. The 

Operational Risk Management group reports to the Chief Risk Officer and works in conjunction with other second line of 

defense teams, such as Compliance and Ethics, to oversee and aggregate the full range of operational risks, including 

fraud, resiliency, business interruptions, processing errors, damage to physical assets, workplace safety and 

employment practices. To quantify our operational risk exposure, we rely on the Basel Standardized Approach, which is 

based on a percentage of gross income. In addition, where appropriate, we purchase insurance policies to mitigate the 

impact of operational losses.

See “Risk Factors—Operational Risk” for more information regarding our operational risk and “Risk Management” for 

more information regarding our governance of operational risk management.

Cybersecurity Risk Management

Our operations rely on the secure receipt, processing, storage and transmission of confidential and other information in 

our computer systems and networks and with our business partners, including proprietary, confidential or personal 

information that is subject to privacy laws, regulations or contractual obligations. Information security risks for large 

institutions like us have significantly increased in recent years and from time to time we have been, and expect to 

continue to be, the target of attempted cyber attacks and other information security threats. These risks are an 

unavoidable result of being in business, and managing these risks is part of our business activities. 

We have developed and continue to enhance our cybersecurity risk management program to protect the security of our 

computer systems, software, networks and other technology assets against unauthorized attempts to access 

confidential information or to disrupt or degrade business operations. Our cybersecurity risk management program 

aligns to the National Institute of Standards and Technology Framework for Improving Critical Infrastructure 

Cybersecurity, and has evolved based on the changing needs of our business, the evolving threat environment and 

FHFA regulatory guidance. Our cybersecurity risk management program extends to oversight of third parties that could 

be a source of cybersecurity risk, including lenders that use our systems and third-party service providers. We examine 

the effectiveness and maturity of our cyber defenses through various means, including internal audits, targeted testing, 

MD&A | Risk Management | Market Risk Management, including Interest-Rate Risk Management

Fannie Mae 2022 Form 10-K 154
incident response exercises, maturity assessments and industry benchmarking. We continue to strengthen our 

partnerships with the appropriate government and law enforcement agencies and with other businesses and 

cybersecurity services in order to understand the full spectrum of cybersecurity risks in the environment, enhance our 

defenses and improve our resiliency against cybersecurity threats. We also maintain insurance coverage relating to 

cybersecurity risks. To date, we have not experienced any material losses relating to cyber attacks. However, largescale cyber attacks in recent years suggest that the risk of damaging cyber attacks is increasing. As a result, we 

continue to invest in our cybersecurity infrastructure. For a discussion of our Board of Directors’ role in overseeing the 

company’s cybersecurity risk management, see “Directors, Executive Officers and Corporate Governance—Corporate 

Governance—Risk Management Oversight—Board’s Role in Cybersecurity Risk Oversight.”

Despite our efforts to ensure the integrity of our software, computers, systems and information, we may not be able to 

anticipate, detect or recognize threats to our systems and assets, or to implement effective preventive measures against 

all cyber threats, especially because the techniques used are increasingly sophisticated, change frequently, are 

complex and are often not recognized until launched. We have discussed and worked with lenders, servicers, vendors, 

service providers, counterparties and other third parties to develop secure transmission capabilities and protect against 

cyber attacks, but we do not have, and may be unable to put in place, secure capabilities with all of our lenders, 

servicers, vendors, service providers, counterparties and other third parties, and we may not be able to ensure that 

these third parties have appropriate controls in place to protect the confidentiality of the information. See “Risk Factors

—Operational Risk” for additional discussion of cybersecurity risks to our business.

Model Risk Management

Model risk is the potential for adverse consequences from decisions based on incorrect, misused or misinterpreted 

model outputs. The use of models requires numerous assumptions and there are inherent limitations in any 

methodology used to estimate macroeconomic factors such as home prices, unemployment and interest rates, and their 

impact on borrower behavior. When market conditions change rapidly and dramatically, the assumptions used by 

models may no longer accurately capture or reflect the changing conditions. Given the challenges of predicting future 

behavior, management judgment is used throughout the modeling process, from model design decisions regarding core 

underlying assumptions, to interpreting and applying final model output.

We manage model risk through a model risk management framework that establishes the roles and responsibilities for 

managing model risk through the model life cycle, as well as related governance requirements. Under our model risk 

management framework, model owners and users have responsibility for monitoring whether models are performing 

accurately and complying with the framework’s control requirements. We have an independent model risk management 

team within our Enterprise Risk Management division that is responsible for establishing and maintaining the model risk 

management framework, as well as providing independent review and approval of models prior to use. We also have a 

management-level Model Risk Oversight Committee that oversees risk management activities related to model risk. In 

addition to internally-developed models, we also use select third-party models. 

While we employ strategies to manage and govern the risks associated with our use of models, they have not always 

been fully effective. Errors have been discovered in some of the models we use, as well as deficiencies in our current 

processes for managing model risk. We are currently working on a number of remediation activities relating to our 

models, including improving our processes for model governance, development, implementation and testing. 

See “Risk Factors—Operational Risk” for a discussion of the risks associated with the use of models, including our use 

of third-party models and third-party data providers.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires management to make a number of 

judgments, estimates and assumptions that affect the reported amount of assets, liabilities, income and expenses in our 

consolidated financial statements. Understanding our accounting policies and the extent to which we use management 

judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our 

most significant accounting policies in “Note 1, Summary of Significant Accounting Policies.”

We evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update 

them as necessary based on changing conditions. Management has discussed any significant changes in judgments 

and assumptions in applying our critical accounting estimates with the Audit Committee of our Board of Directors. See 

“Risk Factors—General Risk” for a discussion of the risks associated with the need for management to make judgments 

and estimates in applying our accounting policies and methods. We have identified one of our accounting estimates, 

allowance for loan losses, as critical because it involves significant judgments and assumptions about highly complex 

MD&A | Risk Management | Operational Risk Management

Fannie Mae 2022 Form 10-K 155
and inherently uncertain matters, and the use of reasonably different judgments and assumptions could have a material 

impact on our reported results of operations or financial condition.

Allowance for Loan Losses

The allowance for loan losses is an estimate of single-family and multifamily HFI loan receivables that we expect will not 

be collected related to loans held by Fannie Mae or by consolidated Fannie Mae MBS trusts. The expected credit losses 

are deducted from the amortized cost basis of HFI loans to present the net amount expected to be received. 

The allowance for loan losses involves substantial judgment on a number of matters including the development and 

weighting of macroeconomic forecasts, the reversion period applied, the assessment of similar risk characteristics, 

which determines the historic loss experience used to derive probability of loan default, the valuation of collateral, and 

the determination of a loan’s remaining expected life. Our most significant judgments involved in estimating our 

allowance for loan losses relate to the macroeconomic data used to develop reasonable and supportable forecasts for 

key economic drivers, which are subject to significant inherent uncertainty. Most notably, for single-family, the model 

uses forecasted single-family home prices as well as a range of possible future interest rate environments, which drive 

prepayment speeds and impact the measurement of the economic concession provided on loans modified in a 

restructuring which are accounted for as a TDR. For multifamily, the model uses forecasted rental income and property 

valuations over the remaining life of each mortgage loan. In developing a reasonable and supportable forecast, the 

model simulates multiple paths of interest rates, rental income and property values based on current market conditions.

Pursuant to our adoption of ASU 2022-02 effective January 1, 2022, we prospectively discontinued TDR accounting and 

no longer measure the economic concession for loan modifications occurring on or after the adoption date. In addition, 

modifications to loans previously designated as TDRs that occur on or after January 1, 2022, are accounted for under 

the newly adopted ASU and result in the elimination of any prior economic concession recorded in the allowance related 

to such loans, which results in a benefit for loan losses. Although increases in interest rates were a meaningful driver of 

our provision for credit losses in 2022, we expect the decrease in the balance of loans that were previously designated 

as TDRs will reduce the sensitivity of our single-family benefit (provision) for credit losses to interest rate volatility over 

time. See “Note 1, Summary of Significant Accounting Policies—New Accounting Guidance” for more information about 

our adoption of ASU 2022-02.

Quantitative Component

We use a discounted cash flow method to measure expected credit losses on our single-family mortgage loans and an 

undiscounted loss method to measure expected credit losses on our multifamily mortgage loans. The models use 

reasonable and supportable forecasts for key macroeconomic drivers. 

Our modeled loan performance is based on our historical experience of loans with similar risk characteristics adjusted to 

reflect current conditions and reasonable and supportable forecasts. Our historical loss experience and our loan loss 

estimates capture the possibility of a multitude of events, including remote events that could result in credit losses on 

loans that are considered low risk. Our credit loss models, including the macroeconomic forecast data used as key 

inputs, are subject to our model oversight and review processes as well as other established governance and controls. 

Qualitative Component

Our process for measuring expected credit losses is complex and involves significant management judgment, including 

a reliance on historical loss information and current economic forecasts that may not be representative of credit losses 

we ultimately realize. Management adjustments may be necessary to take into consideration external factors and 

current macroeconomic events that have occurred but are not yet reflected in the data used to derive the model outputs. 

Qualitative factors and events not previously observed by the models through historical loss experience may also be 

considered, as well as the uncertainty of their impact on credit loss estimates.

Macroeconomic Variables and Sensitivities

Our benefit or provision for credit losses can vary substantially from period to period based on forecasted 

macroeconomic drivers; primarily home prices and interest rates related to our single-family book of business, which for 

the purposes of macroeconomic model inputs, we have determined are the most significant judgments used in our 

estimation of credit losses. We develop regional forecasts for single-family home prices using a multi-path simulation 

that captures home price projections over a five-year period, which is the period for which we can develop reasonable 

and supportable forecasts. After the five-year period, the home price forecast reverts to a historical long-term growth 

rate. Additionally, our model projects the range of possible interest rate scenarios over the life of the loan. This process 

captures multiple possible outcomes of what could be more or less favorable economic environments for the borrower, 

and therefore will increase or decrease the likelihood of default or prepayment depending on the environment in each 

path of the simulation. 

MD&A | Critical Accounting Estimates

Fannie Mae 2022 Form 10-K 156
The table below provides information about our most significant key macroeconomic inputs used in determining our 

single-family allowance for loan losses: forecasted home price growth rates and interest rates. Although the model 

consumes a wide range of possible regional home price forecasts and interest rate scenarios that take into account 

inherent uncertainty, the forecasts below represent the mean path of those simulations used in determining the 

allowance for each quarter during the years ended December 31, 2021 and 2022, and how those forecasts have 

changed between periods of estimate. Below we present the two succeeding periods used in our estimate of expected 

credit losses. The forecasts consider periods beyond those presented below. 

Select Single-Family Macroeconomic Model Inputs(1)

Forecasted home price growth (decline) rate by period of estimate:(2)

For the Full Year ending December 31,

2022 2023 2024

Fourth Quarter 2022 8.4 % (4.2) % (2.3) %

Third Quarter 2022 9.0 (1.5) (1.4) 

Second Quarter 2022 16.0 4.4 0.5 

First Quarter 2022 10.8 3.2 1.3 

For the Full Year ending December 31,

2021 2022 2023

Fourth Quarter 2021 18.8 % 8.2 % 2.9 %

Third Quarter 2021 18.4 7.9 2.4 

Second Quarter 2021 14.8 5.4 2.5 

First Quarter 2021 8.8 2.5 1.7 

Forecasted 30-year interest rates by period of estimate:(3)

Through the end 

of December 31,

For the Full Year ending 

December 31,

2022 2023 2024

Fourth Quarter 2022 6.5 % 6.5 % 6.0 %

Third Quarter 2022 6.8 6.7 6.2 

Second Quarter 2022 5.7 5.4 5.2 

First Quarter 2022 4.7 4.8 4.7 

Through the end 

of December 31,

For the Full Year ending 

December 31,

2021 2022 2023

Fourth Quarter 2021 3.2 % 3.5 % 3.7 %

Third Quarter 2021 3.1 3.4 3.7 

Second Quarter 2021 3.1 3.4 3.6 

First Quarter 2021 3.1 3.3 3.6 

(1) These forecasts are provided here solely for the purpose of providing insight into our credit loss model. Forecasts for future periods are 

subject to significant uncertainty, which increases for periods that are further in the future. We provide our most recent forecasts for certain 

macroeconomic and housing market conditions in “Key Market Economic Indicators.” In addition, each month our Economic & Strategic 

Research group provides its forecast of economic and housing market conditions, which are available in the “Research and Insights” 

section of our website, www.fanniemae.com. Information on our website is not incorporated into this report.

(2) These estimates are based on our national home price index, which is calculated differently from the S&P/Case-Shiller U.S. National Home 

Price Index and therefore results in different percentages for comparable growth. We periodically update our home price growth estimates 

and forecasts as new data become available. As a result, the forecast data in this table may also differ from the forecasted home price 

growth (decline) rate presented in “Key Market Economic Indicators,” because that section reflects our most recent forecast as of the filing 

date of this report, while this table reflects the quantitative forecast data we used in our model to estimate credit losses for the periods 

shown. Management continues to monitor macroeconomic updates to our inputs in our credit loss model from the time they are approved 

as part of our established governance process, to ensure the reasonableness of the inputs used to calculate estimated credit losses. The 

forecast data excludes the impact of any qualitative adjustments. 

MD&A | Critical Accounting Estimates

Fannie Mae 2022 Form 10-K 157
(3) Forecasted 30-year interest rates represent the mean of possible future interest rate environments that are simulated by our interest rate 

model and used in the estimation of credit losses. Forecasts through the years ended December 31, 2022 and 2021, represent the 

average forecasted rate from the quarter-end through the calendar year end of December 31st. The fourth quarter of 2022 and 2021

interest rates represent the 30-year interest rate as of December 31, 2022 and December 31, 2021, respectively. This table reflects the 

forecasted interest rate data we used in estimating credit losses for the periods shown and does not reflect changes in interest rates that 

occurred after the forecast date. 

It is difficult to estimate how potential changes in any one factor or input might affect the overall credit loss estimates, 

because management considers a wide variety of factors and inputs in estimating the allowance for loan losses. 

Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all 

geographies or loan types, and changes in factors and inputs may be directionally inconsistent, such that improvement 

in one factor or input may offset deterioration in others. Changes in our assumptions and forecasts of economic 

conditions could significantly affect our estimate of expected credit losses and lead to significant changes in the 

estimate from one reporting period to the next. 

As noted above, our allowance for loan losses is sensitive to changes in home prices and interest rate changes. To 

consider the impact of a hypothetical change in home prices, assuming a positive one-percentage point change in the 

home price growth rate for the first twelve months of the forecast, on a normalized basis, with all other factors held 

constant, the single-family allowance for loan losses as of December 31, 2022 would decrease by approximately 4%. 

Conversely, assuming a negative one-percentage point change in the home price growth rate for the first twelve months 

of the forecast, on a normalized basis, the single-family allowance for loan losses would increase by approximately 4%.

To consider the impact of a hypothetical change in 30-year interest rates, assuming a 50-basis point increase in 

estimated 30-year interest rates, with all other factors held constant, the single-family allowance for loan losses as of 

December 31, 2022 would increase by approximately 1%. Conversely, assuming a 50-basis point decrease in 30-year 

interest rates, the single-family allowance for loan losses would decrease by approximately 2%.

These sensitivity analyses are hypothetical and are provided solely for the purpose of providing insight into our credit 

loss model inputs. In addition, sensitivities for home price and interest rate changes are non-linear. As a result, changes 

in these estimates are not incrementally proportional. The purpose of this analysis is to provide an indication of the 

impact of home price appreciation and 30-year interest rates on the estimate of the allowance for credit losses. For 

example, it is not intended to imply management’s expectation of future changes in our forecasts or any other variables 

that may change as a result. 

We provide more detailed information on our accounting for the allowance for loan losses in “Note 1, Summary of 

Significant Accounting Policies.” See “Note 4, Allowance for Loan Losses” for additional information about our current 

period benefit (provision) for loan losses.

See “Key Market Economic Indicators” for additional information about how home prices can affect our credit loss 

estimates, including a discussion of home price growth/decline rates and our home price forecast. Also see 

“Consolidated Results of Operations—Benefit (Provision) for Credit Losses” for information on how our home price 

forecast impacted our single-family benefit (provision) for credit losses.

Impact of Future Adoption of New Accounting Guidance

We have not identified recently issued accounting changes that are expected to materially impact our future 

consolidated financial statements. See “Note 1, Summary of Significant Accounting Policies” for recently implemented 

accounting guidance.

Glossary of Terms Used in This Report

Terms used in this report have the following meanings, unless the context indicates otherwise. 

“Agency mortgage-related securities” refers to mortgage-related securities issued by Fannie Mae, Freddie Mac and 

Ginnie Mae. 

“Amortization income” refers to income resulting from the amortization of cost basis adjustments, including premiums 

and discounts on mortgage loans and securities, as a yield adjustment over the contractual life of the loan or security. 

These basis adjustments often result from upfront fees that we receive at the time of loan acquisition primarily related to 

single-family loan-level price adjustments or other fees we receive from lenders, which are amortized over the 

contractual life of the loan.

“Back-end credit enhancements” refers to credit enhancements that we obtain after acquiring a loan.

MD&A | Critical Accounting Estimates

Fannie Mae 2022 Form 10-K 158
“Business volume” refers to the sum in any given period of the unpaid principal balance of: (1) the mortgage loans and 

mortgage-related securities we purchase for our retained mortgage portfolio; (2) the mortgage loans we securitize into 

Fannie Mae MBS that are acquired by third parties; and (3) credit enhancements that we provide on our mortgage 

assets. It excludes mortgage loans we securitize from our portfolio and the purchase of Fannie Mae MBS for our 

retained mortgage portfolio. 

“CECL standard” refers to Accounting Standards Update 2016-13, Financial Instruments—Credit Losses, Measurement 

of Credit Losses on Financial Instruments and related amendments.

“Connecticut Avenue Securities” or “CAS” refers to a type of security that allows Fannie Mae to transfer a portion of the 

credit risk from loan reference pools, consisting of certain mortgage loans in our guaranty book of business, to thirdparty investors.

“Connecticut Avenue Securities Credit-Linked Notes” or “CAS CLNs” refers to Connecticut Avenue Securities that are 

structured as securities issued by trusts that do not qualify as REMICs.

“Connecticut Avenue Securities REMICs” or “CAS REMICs” refers to Connecticut Avenue Securities that are structured 

as notes issued by trusts that qualify as REMICs.

“Conventional mortgage” refers to a mortgage loan that is not guaranteed or insured by the U.S. government or its 

agencies, such as the VA, the FHA or the Rural Development Housing and Community Facilities Program of the 

Department of Agriculture. 

“Credit enhancement” refers to an agreement used to reduce credit risk by requiring collateral, letters of credit, 

mortgage insurance, corporate guarantees, inclusion in a credit risk transfer transaction reference pool, or other 

agreements to provide an entity with some assurance that it will be compensated to some degree in the event of a 

financial loss. 

“Credit Insurance Risk Transfer” or “CIRT” refers to insurance transactions whereby we obtain actual loss coverage on 

pools of loans either directly from an insurance provider that retains the risk, or from an insurance provider that 

simultaneously cedes all of its risk to one or more reinsurers.

“Desktop Underwriter” or “DU” refers to our proprietary automated underwriting system used by mortgage lenders to 

evaluate the substantial majority of our single-family loan acquisitions.

“Delegated Underwriting and Servicing Program” or “DUS Program” refers to our multifamily business program whereby 

DUS lenders, who must be pre-approved by us, are delegated the authority to underwrite and service loans for delivery 

to us in accordance with our standards and requirements.

“FHFA” refers to the Federal Housing Finance Agency. FHFA is an independent agency of the federal government with 

general supervisory and regulatory authority over Fannie Mae, Freddie Mac and the Federal Home Loan Banks. FHFA 

is our safety and soundness regulator and our mission regulator. FHFA also has been acting as our conservator since 

September 6, 2008. For more information on FHFA’s authority as our conservator and as our regulator, see “Business—

Conservatorship and Treasury Agreements” and “Business—Legislation and Regulation—GSE-Focused Matters.”

“Front-end credit enhancements” refers to credit enhancements that we obtain at the time we acquire a loan.

“GSE Act” refers to the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended, 

including by the Housing and Economic Recovery Act of 2008. 

“Guaranty book of business” refers to the sum of the unpaid principal balance of: (1) Fannie Mae MBS outstanding 

(excluding the portions of any structured securities Fannie Mae issues that are backed by Freddie Mac securities); 

(2) mortgage loans of Fannie Mae held in our retained mortgage portfolio; and (3) other credit enhancements that we 

provide on mortgage assets. It also excludes non-Fannie Mae mortgage-related securities held in our retained mortgage 

portfolio for which we do not provide a guaranty. 

“HFI loans” or “held-for-investment loans” refer to mortgage loans we acquire for which we have the ability and intent to 

hold for the foreseeable future or until maturity. 

“HFS loans” or “held-for-sale loans” refer to mortgage loans we acquire that we intend to sell or securitize via trusts that 

will not be consolidated.

“Loans,” “mortgage loans” and “mortgages” refer to both whole loans and loan participations, secured by residential real 

estate, cooperative shares or by manufactured housing units. 

“Loss reserves” consists of our allowance for loan losses and our reserve for guaranty losses.

“Mortgage assets,” when referring to our assets, refers to both mortgage loans and mortgage-related securities we hold 

in our retained mortgage portfolio. For purposes of the senior preferred stock purchase agreement, the definition of 

mortgage assets is based on the unpaid principal balance of such assets and does not reflect market valuation 

MD&A | Glossary of Terms Used in This Report

Fannie Mae 2022 Form 10-K 159
adjustments, allowance for loan losses, impairments, unamortized premiums and discounts and the impact of our 

consolidation of variable interest entities. Our mortgage asset calculation also includes 10% of the notional value of 

interest-only securities we hold. We disclose the amount of our mortgage assets for purposes of the senior preferred 

stock purchase agreement on a monthly basis in the “Endnotes” to our Monthly Summaries, which are available on our 

website and announced in a press release.

“Mortgage-backed securities” or “MBS” refers generally to securities that represent beneficial interests in pools of 

mortgage loans or other mortgage-related securities. These securities may be issued by Fannie Mae or by others.

“Multifamily Connecticut Avenue Securities” or “MCAS” refers to Connecticut Avenue Securities that are structured as 

notes issued by trusts to transfer credit risk on our multifamily guaranty book of business to third-party investors.

“Multifamily mortgage loan” refers to a mortgage loan secured by a property containing five or more residential dwelling 

units. 

“New business purchases” refers to single-family and multifamily whole mortgage loans purchased during the period 

and single-family and multifamily mortgage loans underlying Fannie Mae MBS issued during the period pursuant to 

lender swaps.

“Notional amount” refers to the hypothetical dollar amount in an interest rate swap transaction on which exchanged 

payments are based. The notional amount in an interest rate swap transaction generally is not paid or received by either 

party to the transaction, or generally perceived as being at risk. The notional amount is typically significantly greater 

than the potential market or credit loss that could result from such transaction. 

“Outstanding Fannie Mae MBS” refers to the total unpaid principal balance of any type of mortgage-backed security that 

we issue, including UMBS, Supers, REMICs and other types of single-family or multifamily mortgage-backed securities 

that are held by third-party investors or in our retained mortgage portfolio. For securities held by third-party investors, it 

excludes the portions of any structured securities Fannie Mae issues that are backed by Freddie Mac-issued securities.

“Private-label securities” refers to mortgage-related securities issued by entities other than agency issuers Fannie Mae, 

Freddie Mac or Ginnie Mae. 

“Refi Plus loans” refers to loans we acquired under our Refi Plus initiative, which offered refinancing flexibility to eligible 

Fannie Mae borrowers who were current on their loans and who applied prior to the initiative’s December 31, 2018 

sunset date. Refi Plus had no limits on maximum LTV ratio and provided mortgage insurance flexibilities for loans with 

LTV ratios greater than 80%.

“REMIC” or “Real Estate Mortgage Investment Conduit” refers to a type of mortgage-related security in which interest 

and principal payments from mortgages or mortgage-related securities are structured into separately traded securities. 

“REO” refers to real-estate owned by Fannie Mae because we have foreclosed on the property or obtained the property 

through a deed-in-lieu of foreclosure. 

“Representations and warranties” refers to a lender’s assurance that a mortgage loan sold to us complies with the 

standards outlined in our Mortgage Selling and Servicing Contract, which incorporates the Selling and Servicing Guides, 

including underwriting and documentation. Violation of any representation or warranty is a breach of the lender contract, 

including the warranty that the loan complies with all applicable requirements of the contract, which provides us with 

certain rights and remedies.

“Retained mortgage portfolio” refers to the mortgage-related assets we own (excluding the portion of assets that back 

mortgage-related securities owned by third parties).

“Single-family mortgage loan” refers to a mortgage loan secured by a property containing four or fewer residential 

dwelling units. 

“Structured Fannie Mae MBS” refers to Fannie Mae securitizations that are resecuritizations of UMBS or previouslyissued structured securities. Our structured securities can be commingled—that is, they can include both Fannie Mae 

securities and Freddie Mac securities as the underlying collateral for the security. 

“TCCA fees” refers to the expense recognized as a result of the 10 basis point increase in guaranty fees on all singlefamily residential mortgages delivered to us on or after April 1, 2012 pursuant to the Temporary Payroll Tax Cut 

Continuation Act of 2011 and as extended by the Infrastructure Investment and Jobs Act, which we remit to Treasury on 

a quarterly basis. 

“TDR” or “troubled debt restructuring” refers to a modification to the contractual terms of a loan that results in granting a 

concession to a borrower experiencing financial difficulties. Effective January 1, 2022, we adopted ASU 2022-02, which 

eliminated TDR accounting prospectively for all restructurings occurring on or after January 1, 2022.

MD&A | Glossary of Terms Used in This Report

Fannie Mae 2022 Form 10-K 160
“Uniform Mortgage-Backed Securities” or “UMBS” refers to the securities each of Fannie Mae and Freddie Mac issues 

and guarantees that are directly backed by mortgage loans it has acquired as described in “Business—Mortgage 

Securitizations—Uniform Mortgage-Backed Securities, or UMBS.”

“Write-off” refers to loan amounts written off as uncollectible bad debts. These loan amounts are removed from our 

consolidated balance sheet and charged against our loss reserves when the balance is deemed uncollectible, which is 

generally at foreclosure or other liquidation events (such as a deed-in-lieu of foreclosure or a short-sale). Also includes 

write-offs related to the redesignation of loans from held for investment to held for sale.

Item 7A. Quantitative and Qualitative Disclosures about 

Market Risk

Information about market risk is set forth in “MD&A—Risk Management—Market Risk Management, including InterestRate Risk Management.”

Item 8. Financial Statements and Supplementary Data

Our consolidated financial statements and notes thereto are included elsewhere in this annual report on Form 10-K as 

described below in “Exhibits, Financial Statement Schedules.” 

Item 9. Changes in and Disagreements with Accountants on 

Accounting and Financial Disclosure

None. 

Item 9A. Controls and Procedures

Overview

We are required under applicable laws and regulations to maintain controls and procedures, which include disclosure 

controls and procedures as well as internal control over financial reporting, as further described below.

Evaluation of Disclosure Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures refer to controls and other procedures designed to provide reasonable assurance 

that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, 

summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and 

procedures include, without limitation, controls and procedures designed to provide reasonable assurance that 

information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated 

and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to 

allow timely decisions regarding our required disclosure. In designing and evaluating our disclosure controls and 

procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can 

provide only reasonable assurance of achieving the desired control objectives, and management was required to apply 

its judgment in evaluating and implementing possible controls and procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, management has evaluated, with the participation of our Chief 

Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures in effect as of 

December 31, 2022, the end of the period covered by this report. As a result of management’s evaluation, our Chief 

Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at 

a reasonable assurance level as of December 31, 2022 or as of the date of filing this report.

Our disclosure controls and procedures were not effective as of December 31, 2022 or as of the date of filing this report 

because they did not adequately ensure the accumulation and communication to management of information known to 

FHFA that is needed to meet our disclosure obligations under the federal securities laws. As a result, we were not able 

to rely upon the disclosure controls and procedures that were in place as of December 31, 2022 or as of the date of this 

filing, and we continue to have a material weakness in our internal control over financial reporting. This material 

weakness is described in more detail below under “Management’s Report on Internal Control Over Financial Reporting

MD&A | Glossary of Terms Used in This Report

Fannie Mae 2022 Form 10-K 161
—Description of Material Weakness.” Based on discussions with FHFA and the structural nature of this material 

weakness, we do not expect to remediate this material weakness while we are under conservatorship.

Management’s Report on Internal Control Over Financial Reporting

Overview 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. 

Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed 

by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our Board of 

Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial 

reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control 

over financial reporting includes those policies and procedures that: 

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and 

dispositions of our assets; 

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial 

statements in accordance with GAAP, and that our receipts and expenditures are being made only in 

accordance with authorizations of our management and our Board of Directors; and 

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or 

disposition of our assets that could have a material effect on our financial statements. 

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives 

because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence 

and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control 

over financial reporting also can be circumvented by collusion or improper override. Because of such limitations, there is 

a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial 

reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to 

design into the process safeguards to reduce, though not eliminate, this risk. 

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In 

making its assessment, management used the criteria established in the Internal Control—Integrated Framework issued 

by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in May 2013. Management’s 

assessment of our internal control over financial reporting as of December 31, 2022 identified a material weakness, 

which is described below. Because of this material weakness, management has concluded that our internal control over 

financial reporting was not effective as of December 31, 2022 or as of the date of filing this report. 

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued an audit report on our internal 

control over financial reporting, expressing an adverse opinion on the effectiveness of our internal control over financial 

reporting as of December 31, 2022. This report is included below under the heading “Report of Independent Registered 

Public Accounting Firm.” 

Description of Material Weakness

The Public Company Accounting Oversight Board’s Auditing Standard 2201 defines a material weakness as a 

deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable 

possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or 

detected on a timely basis.

Management has determined that we continued to have the following material weakness as of December 31, 2022 and 

as of the date of filing this report:

• Disclosure Controls and Procedures. We have been under the conservatorship of FHFA since September 6, 

2008. Under the GSE Act, FHFA is an independent agency that currently functions as both our conservator and 

our regulator with respect to our safety, soundness and mission. Because of the nature of the conservatorship 

under the GSE Act, which places us under the “control” of FHFA (as that term is defined by securities laws), 

some of the information that we may need to meet our disclosure obligations may be solely within the 

knowledge of FHFA. As our conservator, FHFA has the power to take actions without our knowledge that could 

be material to our shareholders and other stakeholders, and could significantly affect our financial performance 

or our continued existence as an ongoing business. Although we and FHFA attempted to design and implement 

disclosure policies and procedures that would account for the conservatorship and accomplish the same 

objectives as a disclosure controls and procedures policy of a typical reporting company, there are inherent 

structural limitations on our ability to design, implement, operate and test effective disclosure controls and 

procedures. As both our regulator and our conservator under the GSE Act, FHFA is limited in its ability to design 

Controls and Procedures

Fannie Mae 2022 Form 10-K 162
and implement a complete set of disclosure controls and procedures relating to Fannie Mae, particularly with 

respect to current reporting pursuant to Form 8-K. Similarly, as a regulated entity, we are limited in our ability to 

design, implement, operate and test the controls and procedures for which FHFA is responsible.

Due to these circumstances, we have not been able to update our disclosure controls and procedures in a 

manner that adequately ensures the accumulation and communication to management of information known to 

FHFA that is needed to meet our disclosure obligations under the federal securities laws, including disclosures 

affecting our consolidated financial statements. As a result, we did not maintain effective controls and 

procedures designed to ensure complete and accurate disclosure as required by GAAP as of December 31, 

2022 or as of the date of filing this report. Based on discussions with FHFA and the structural nature of this 

weakness, we do not expect to remediate this material weakness while we are under conservatorship.

Mitigating Actions Related to Material Weakness

As described above under “Management’s Report on Internal Control Over Financial Reporting—Description of Material 

Weakness,” we continue to have a material weakness in our internal control over financial reporting relating to our 

disclosure controls and procedures. However, we and FHFA have engaged in the following practices intended to permit 

accumulation and communication to management of information needed to meet our disclosure obligations under the 

federal securities laws:

• FHFA has established the Division of Conservatorship Oversight and Readiness, which is intended to facilitate 

operation of the company with the oversight of the conservator.

• We have provided drafts of our SEC filings to FHFA personnel for their review and comment prior to filing. We 

also have provided drafts of external press releases, statements and speeches to FHFA personnel for their 

review and comment prior to release.

• FHFA personnel, including senior officials, have reviewed our SEC filings prior to filing, including this annual 

report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”), and engaged in discussions 

regarding issues associated with the information contained in those filings. Prior to filing our 2022 Form 10-K, 

FHFA provided Fannie Mae management with written acknowledgment that it had reviewed the 2022 Form 10-

K, and it was not aware of any material misstatements or omissions in the 2022 Form 10-K and had no 

objection to our filing the 2022 Form 10-K.

• Our senior management meets regularly with senior leadership at FHFA, including, but not limited to, the 

Director.

• FHFA representatives attend meetings frequently with various groups within the company to enhance the flow 

of information and to provide oversight on a variety of matters, including accounting, credit and market risk 

management, external communications and legal matters.

• Senior officials within FHFA’s Office of the Chief Accountant have met frequently with our senior finance 

executives regarding our accounting policies, practices and procedures.

In view of these activities, we believe that our consolidated financial statements for the year ended December 31, 2022

have been prepared in conformity with GAAP.

Changes in Internal Control Over Financial Reporting

Management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, whether 

any changes in our internal control over financial reporting that occurred during our last fiscal quarter have materially 

affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no changes 

in our internal control over financial reporting from October 1, 2022 through December 31, 2022 that management 

believes have materially affected, or are reasonably likely to materially affect, our internal control over financial 

reporting.

In the ordinary course of business, we review our system of internal control over financial reporting and make changes 

that we believe will improve these controls and increase efficiency, while continuing to ensure that we maintain effective 

internal controls. Changes may include implementing new, more efficient systems, automating manual processes and 

updating existing systems. 

Controls and Procedures

Fannie Mae 2022 Form 10-K 163
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Fannie Mae:

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Fannie Mae and consolidated entities (in 

conservatorship) (the “Company”) as of December 31, 2022, based on criteria established in Internal Control – 

Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission 

(COSO). In our opinion, because of the effect of the material weakness identified below on the achievement of the 

objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of 

December 31, 2022, based on the criteria established in Internal Control – Integrated Framework (2013) issued by 

COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United 

States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the 

Company and our report dated February 14, 2023, expressed an unqualified opinion on those financial statements and 

included an explanatory paragraph regarding the Company’s dependence upon the continued support from various 

agencies of the United States Government, including the United States Department of Treasury and the Company’s 

conservator and regulator, the Federal Housing Finance Agency.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its 

assessment of the effectiveness of internal control over financial reporting, included in the accompanying 

Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the 

Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with 

the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal 

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and 

perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was 

maintained in all material respects. Our audit included obtaining an understanding of internal control over financial 

reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating 

effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered 

necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding 

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with 

generally accepted accounting principles. A company’s internal control over financial reporting includes those policies 

and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the 

transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are 

recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting 

principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of 

management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely 

detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on 

the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become 

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may 

deteriorate.

Controls and Procedures

Fannie Mae 2022 Form 10-K 164
Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such 

that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial 

statements will not be prevented or detected on a timely basis. The following material weakness has been identified and 

included in management’s assessment:

• Disclosure Controls and Procedures – The Company’s disclosure controls and procedures did not adequately 

ensure the accumulation and communication to management of information known to the Federal Housing 

Finance Agency (as conservator) that is needed to meet their disclosure obligations under the federal securities 

laws as they relate to financial reporting.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit 

of the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and this 

report does not affect our report on such financial statements.

/s/ Deloitte & Touche LLP

McLean, Virginia

February 14, 2023

Controls and Procedures

Fannie Mae 2022 Form 10-K 165
Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that 

Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate 

Governance

Directors

Our current directors are listed below. They have provided the following information about their principal occupation, 

business experience and other matters.

Priscilla Almodovar

Age 55

Chief Executive Officer

Director since December 2022

Board committees:

 • None

Ms. Almodovar has been Chief Executive Officer of Fannie Mae since December 2022. She previously served as 

President and Chief Executive Officer of Enterprise Community Partners, Inc. (“Enterprise”), which invests in 

communities nationwide to address affordable housing challenges and expand access to investment capital, from 

September 2019 to November 2022. Ms. Almodovar previously was a Managing Director at JPMorgan Chase, Inc. from 

January 2010 to September 2019, where she led national real estate businesses that focused on commercial real estate 

and on community development. Prior to joining JPMorgan Chase, from January 2007 to December 2009, Ms. 

Almodovar was the President and Chief Executive Officer of New York state’s housing finance and mortgage agencies. 

In 2015, Ms. Almodovar also served as the co-chair of the New York State Health Innovation Council, an advisory body 

of the New York State Department of Health. Ms. Almodovar began her career at the global law firm, White & Case LLP, 

where as an equity partner she specialized in international project finance and capital markets. Ms. Almodovar has 

served on the Board of Directors of Realty Income, Inc., a real estate investment trust, since November 2021, where 

she serves on the Board’s Audit Committee. She previously served on the Board of Directors and Audit Committee of 

VEREIT, Inc., which was acquired by Realty Income, Inc., from February to November 2021.

Amy E. Alving

Age 60

Independent director since October 2013

Board committees:

 • Nominating and Corporate Governance (Vice Chair)

 • Risk Policy and Capital (Chair)

Dr. Alving served as Chief Technology Officer and Senior Vice President at Science Applications International 

Corporation (“SAIC”), now known as Leidos Holdings, Inc., a scientific, engineering and technology applications 

company, from 2007 to 2013. Dr. Alving’s prior positions include director of the Special Projects Office at the Defense 

Advanced Research Projects Agency, White House Fellow, and tenured faculty member at the University of Minnesota. 

Other Information

Fannie Mae 2022 Form 10-K 166
Dr. Alving is currently a member of the Board of Directors of DXC Technology Company and is a member of the Board 

of Directors of Howmet Aerospace Inc. (formerly Arconic Inc.), where she serves as Chair of the Governance and 

Nominating Committee. Dr. Alving also serves as a member of the Department of the Air Force Scientific Advisory 

Board, a body that advises the Secretary of the Air Force and other Air Force senior leaders on scientific and technical 

matters. Dr. Alving previously served on the Board of Directors of Arconic Inc. from November 2016 to May 2017 and 

rejoined its Board of Directors in May 2018. From 2010 to 2015, Dr. Alving was a member of the Board of Directors of 

Pall Corporation, where she served as a member of the Audit Committee and the Nominating/Governance Committee. 

In addition, she is a Trustee of Princeton University.

Christopher J. Brummer

Age 47

Independent director since February 2021

Board committees:

 • Community Responsibility and Sustainability (Vice Chair)

 • Risk Policy and Capital 

Mr. Brummer is the Faculty Director of the Institute of International Economic Law and Agnes N. Williams Research 

Professor of Law at the Georgetown University Law Center, where he began teaching in 2009. Prior to that time, he 

served as an assistant professor of law at Vanderbilt Law School from 2006 to 2009 and as an academic fellow at the 

Securities and Exchange Commission’s Office of International Affairs from 2008 to 2009. Prior to his position at 

Vanderbilt, Mr. Brummer was an attorney in private practice in New York and London from 2004 to 2006. Mr. Brummer is 

the founder of DC Fintech Week, a public policy conference on finance and technology, a co-founder of the Fintech Beat 

podcast and newsletter for CQ Roll Call, and the author of a number of publications. He is currently a nonresident senior 

fellow for the Atlantic Council’s GeoEconomics Center, a member of the Commodity Futures Trading Commission’s 

Subcommittee on Virtual Currencies, an advisory council member for the Alliance for Innovative Regulation and an 

advisory group member for the Digital Dollar Project. Mr. Brummer serves as an advisor to the investment fund 

Paradigm Operations LP and as an advisor to Paypal. He is also a member of the Board of Directors of Open to the 

Public Investing, Inc. and K2 Integrity. Mr. Brummer served as a member of the Biden-Harris Presidential Transition 

Team from October 2020 to January 2021, a member of the Financial Innovation Standing Committee of the European 

Securities and Markets Authority (“ESMA”) Consultative Working Group from February 2019 to December 2020, a 

member of Nasdaq delisting panels from 2010 to 2016, a senior fellow for the Milken Institute’s Center for Financial 

Markets from 2011 to 2017, and a member of FINRA’s National Adjudicatory Council from 2013 to 2015. 

Renée Lewis Glover

Age 73

Independent director since January 2016

Board committees:

 • Audit

 • Community Responsibility and Sustainability

 • Nominating and Corporate Governance (Chair)

Ms. Glover is the Founder and Managing Member of The Catalyst Group, LLC, a national consulting firm focused on 

urban revitalization, real estate development and community building, urban policy, and business transformation. Ms. 

Glover is currently a member of the Board of Directors of Tricon Residential Inc., where she serves on the Audit 

Committee. Ms. Glover was a member of the Board of Trustees of Enterprise Community Partners, Inc., where she 

served on the Executive Committee and as Chair of the Compensation and Human Resources Committee, until 

December 2022. Ms. Glover served on the Board of Directors of Habitat for Humanity International from 2006 to 2015, 

including serving as Chair of the Board of Directors from 2013 to 2015. Committees on which she served during her 

time as a member of the Board of Directors of Habitat for Humanity International included the Audit Committee, Finance 

Committee, Operations Committee and Executive Committee. Ms. Glover served as a member of the Board of Directors 

of the Federal Reserve Bank of Atlanta from 2009 to 2014, where she served on the Audit and Operational Risk 

Committee. She also served as a Commissioner of the Bipartisan Policy Center Housing Commission from 2011 to 

2014. The Commission was responsible for developing a set of bipartisan recommendations concerning federal housing 

Directors, Executive Officers and Corporate Governance | Directors

Fannie Mae 2022 Form 10-K 167
policy and housing finance. Ms. Glover served as president and chief executive officer of the Atlanta Housing Authority 

and its affiliates from 1994 to 2013. Prior to joining the Atlanta Housing Authority, Ms. Glover was a corporate finance 

attorney in Atlanta and New York. Ms. Glover served on the Board of Trustees of Starwood Waypoint Homes from 

February 2017 to November 2017, where she served on the Nominating and Corporate Governance Committee and the 

Audit Committee. Ms. Glover serves on the Advisory Board of the Penn Institute for Urban Research, the Azimuth GRC 

Advisory Board, and the Advisory Board for the J. Ronald Terwilliger Center for Housing Policy.

Michael J. Heid

Age 65

Independent director since May 2016

Board Chair since May 2022

Board committees:

 • None

Mr. Heid served as Executive Vice President (Home Lending) of Wells Fargo & Company from 1997 to his retirement in 

January 2016. He served in a number of positions at Wells Fargo Home Mortgage, the mortgage banking division of 

Wells Fargo, including as president from 2011 to 2015, as co-president from 2004 to 2011, and earlier as chief financial 

officer and head of Loan Servicing. Mr. Heid was employed by Wells Fargo or its predecessors since 1988. Mr. Heid is 

currently a member of the Board of Directors of Roosevelt Management Company LLC, where he also serves as Chair 

of the Risk Committee and a member of the Strategy Committee. Mr. Heid is also on the Advisory Board for Home 

Partners of America and Promontory Mortgage Path.

Robert H. Herz

Age 69

Independent director since June 2011

Board committees:

 • Audit (Chair)

 • Compensation and Human Capital

 • Nominating and Corporate Governance

Mr. Herz serves as President of Robert H. Herz LLC, providing consulting services on financial reporting and other 

matters. He previously served as a senior advisor to and as a member of the Advisory Board of Workiva Inc. (formerly 

WebFilings LLC), a provider of financial reporting software, from 2011 to 2014. From 2002 to 2010, Mr. Herz was 

Chairman of the Financial Accounting Standards Board, or FASB. He was also a part-time member of the International 

Accounting Standards Board, or IASB, from 2001 to 2002. He was a partner in PricewaterhouseCoopers LLP from 1985 

until his retirement in 2002. Mr. Herz is currently a member of the Board of Directors of Morgan Stanley, where he 

serves as Chair of the Audit Committee and as a member of the Governance and Sustainability Committee. Mr. Herz is 

also a current member of the Board of Directors of Workiva Inc., where he serves as a member of the Audit Committee 

and Nominating and Governance Committee, and a member of the Board of Directors of Paxos National Trust 

Company. He also serves on the Board of Directors of the International Foundation for Valuing Impacts and on the 

Advisory Boards of the following entities: AccountAbility; the Continuous Auditing and Reporting Lab at Rutgers 

Business School; Lukka, Inc.; and RS Metrics. Mr. Herz also serves as a member of the G7 Impact Taskforce’s Working 

Group on Impact Transparency, Integrity, and Reporting and as an executive in residence at the Columbia Business 

School.

Directors, Executive Officers and Corporate Governance | Directors

Fannie Mae 2022 Form 10-K 168
Simon Johnson

Age 60

Independent director since February 2021

Board committees:

 • Audit (Vice Chair)

 • Community Responsibility and Sustainability

Mr. Johnson has served as a professor at the Massachusetts Institute of Technology (“MIT”) Sloan School of 

Management since 1997. He is currently the Ronald A. Kurtz Professor of Entrepreneurship and head of the Global 

Economics and Management Group at the MIT Sloan School of Management. Mr. Johnson is also currently a research 

associate for the National Bureau of Economic Research, a private nonpartisan organization that facilitates cutting-edge 

investigation and analysis of major economic issues. Mr. Johnson was a member of the Center for a New Economy’s 

Growth Commission on Puerto Rico from January 2017 to June 2019, a member of the Financial Research Advisory 

Committee of the U.S. Department of the Treasury’s Office of Financial Research from 2014 to December 2016, where 

he chaired the Global Vulnerabilities Working Group, a member of the Federal Deposit Insurance Corporation’s 

Systemic Resolution Advisory Committee from 2011 to December 2016, a member of the Congressional Budget Office’s 

Panel of Economic Advisers from 2009 to 2015, a senior follow at the Peterson Institute for International Economics 

from 2008 to November 2019, and Chief Economist at the International Monetary Fund from 2007 to 2008. He is 

currently co-chair of the CFA Institute Systemic Risk Council, a public interest group that monitors progress on the 

implementation of financial reforms, an advisory board member for the Institute for New Economic Thinking, and an 

advisory board member for Intelligence Squared. Mr. Johnson is the co-founder of Baselinescenario.com and the author 

of numerous publications.

Karin J. Kimbrough

Age 54

Independent director since March 2019

Board committees:

 • Community Responsibility and Sustainability (Chair)

 • Compensation and Human Capital (Vice Chair)

Ms. Kimbrough has served as Chief Economist for LinkedIn Corporation since January 2020. Ms. Kimbrough previously 

served as Assistant Treasurer for Google from October 2017 to December 2019. Prior to that time, Ms. Kimbrough 

served as a Managing Director and Head of Macroeconomic Policy at Bank of America Merrill Lynch from 2014 to 

October 2017. Ms. Kimbrough worked at the Federal Reserve Bank of New York from 2005 to 2014, serving as Vice 

President and a director for the Financial Stability Monitoring Function in the Markets Group from 2010 to 2014 and as a 

manager for Analytical Development from 2005 to 2010. Ms. Kimbrough previously worked as an economist and 

strategist at Morgan Stanley from 2000 to 2005. Ms. Kimbrough currently serves as a member of the Board of Directors 

of Bread Financial Holdings, Inc., where she serves as a member of the Compensation and Risk Committees. She also 

serves as an economic advisor to 3x5 Partners Funds III, LP.

Diane C. Nordin

Age 64

Independent director since November 2013; Board Vice Chair since April 2019

Board committees:

 • Audit

 • Compensation and Human Capital (Chair)

 • Risk Policy and Capital

Ms. Nordin served as a partner of Wellington Management Company, LLP, a private asset management company, from 

1995 to 2011, and originally joined Wellington in 1991. She served in many global leadership roles at Wellington, most 

Directors, Executive Officers and Corporate Governance | Directors

Fannie Mae 2022 Form 10-K 169
notably as head of Fixed Income, Vice Chair of the Compensation Committee and Audit Chair of the Wellington 

Management Trust Company. Ms. Nordin spent over three decades in the investment business, having previously been 

employed by Fidelity Investments and Putnam Investments. Ms. Nordin is a Chartered Financial Analyst. Following her 

retirement from the asset management industry, Ms. Nordin served as an Advanced Leadership Initiative Fellow at 

Harvard University from 2011 to 2012. Ms. Nordin currently serves as a member of the Board of Directors of Principal 

Financial Group, where she serves as Chair of the Audit Committee and as a member of the Finance Committee. She 

also serves as a member of the Board of Directors of Antares Midco, Inc., where she serves as Chair of the 

Compensation Committee. Ms. Nordin also serves as a trustee of the Financial Accounting Foundation. Previously, she 

served as Chair of the Board of Governors of the CFA Institute, where she also served as Chair of the Governance 

Committee.

Manuel “Manolo” Sánchez Rodríguez

Age 57

Independent director since September 2018

Board committees:

 • Compensation and Human Capital

 • Nominating and Corporate Governance

 • Risk Policy and Capital (Vice Chair)

Mr. Sánchez was the President and Chief Executive Officer of Compass Bank, Inc. (“Compass Bank”), a U.S. subsidiary 

of Banco Bilbao Vizcaya Argentaria, S.A. (“BBVA”), from 2008 to January 2017. Mr. Sánchez also served as a member 

of BBVA’s worldwide Executive Committee and was BBVA’s Country Manager for U.S. operations from 2010 to January 

2017. In addition, Mr. Sánchez became Chairman of the Board of Directors of Compass Bank and its holding company, 

BBVA Compass Bancshares, Inc., in 2010 and served in these roles until November 2017. Mr. Sánchez joined BBVA in 

1990 and served in a number of other roles at BBVA prior to becoming President and Chief Executive Officer of 

Compass Bank in 2008. Mr. Sánchez currently serves as a member of the Board of Directors of Stewart Information 

Services Corporation, where he serves as a member of the Audit Committee and the Nominating and Corporate 

Governance Committee. Mr. Sánchez also serves as a member of the Board of Directors of Elevate Credit, Inc., where 

he serves as a member of the Audit Committee and the Risk Committee. From July 2019 to July 2021, Mr. Sánchez 

served on the Board of Directors of BanCoppel S.A. Institución de Banca Múltiple in Mexico City. From November 2018 

to October 2020, Mr. Sánchez served as a member of the Board of Directors of On Deck Capital, Inc., where he was a 

member of the Audit Committee and the Compensation Committee. Mr. Sánchez is Founder of Adelante Ventures LLC 

and serves as a Board member or advisor to several fintech companies, including Topl and Spring Labs. He is an 

Adjunct Professor at Rice University’s Jones Graduate School of Business, where he teaches disruption in financial 

services with a focus on crypto currencies and blockchain. Mr. Sánchez also currently serves as a trustee or member of 

the Board of Directors of a number of civic, cultural and educational institutions, including the KIPP Texas Public 

Schools, the Center for Houston’s Future and Texas Children’s Hospital.

Corporate Governance

Conservatorship and Board Authorities 

On September 6, 2008, the Director of FHFA appointed FHFA as our conservator in accordance with the GSE Act. As 

conservator, FHFA succeeded to all rights, titles, powers and privileges of Fannie Mae, and of any shareholder, officer 

or director of Fannie Mae with respect to Fannie Mae and its assets. As a result, our Board of Directors no longer had 

the power or duty to manage, direct or oversee our business and affairs.

As conservator, FHFA reconstituted our Board of Directors and provided the Board with specified functions and 

authorities. Our directors serve on behalf of the conservator and exercise their authority as directed by and with the 

approval, where required, of the conservator. Our directors owe their fiduciary duties of care and loyalty solely to the 

conservator. Thus, while we are in conservatorship, the Board has no fiduciary duties to the company or its 

stockholders.

Our Board of Directors exercises specified functions and authorities provided to it pursuant to an order from FHFA, as 

our conservator. The conservator also provided instructions regarding matters for which conservator decision or 

notification is required. The conservator retains the authority to amend or withdraw its order and instructions at any time.

Directors, Executive Officers and Corporate Governance | Directors

Fannie Mae 2022 Form 10-K 170
FHFA’s instructions require that we obtain the conservator’s decision before taking action on matters that require the 

consent of or consultation with Treasury under the senior preferred stock purchase agreement. See “Business—

Conservatorship and Treasury Agreements—Treasury Agreements—Covenants under Treasury Agreements” and “Note 

11, Equity” for matters that require the approval of Treasury under the senior preferred stock purchase agreement. 

FHFA’s instructions also require us to obtain the conservator’s decision before taking action in the areas identified in the 

table below. For some matters, FHFA’s instructions specify that our Board must review and approve the matter before 

we request FHFA decision, and for other matters the Board is expected to determine the appropriate level of its 

engagement. For some of the matters specified in the table below that require prior Board review and approval, the 

Board is permitted to delegate authority to a relevant Board committee.

Matters requiring prior Board review and approval: Other matters:

• redemptions or repurchases of our subordinated debt, 

except as may be necessary to comply with the senior 

preferred stock purchase agreement;

• creation of any subsidiary or affiliate, or entering into a 

substantial transaction with a subsidiary or affiliate, 

except for routine ongoing transactions with CSS or the 

creation of, or a transaction with, a subsidiary or affiliate 

undertaken in the ordinary course of business;

• changes to or removal of Board risk limits that would 

result in an increase in the amount of risk that we may 

take;

• retention and termination of the external auditor;

• terminations of law firms serving as consultants to the 

Board; 

• proposed amendments to our bylaws or to charters of our 

Board committees;

• setting or increasing the compensation or benefits 

payable to members of the Board; and

• establishing the annual operating budget.

• material changes in accounting policy;

• proposed changes in our business operations, activities, 

and transactions that in the reasonable business 

judgment of management are more likely than not to 

result in a significant increase in credit, market, 

reputational, operational or other key risks;

• matters that impact or question the conservator’s powers, 

our conservatorship status, the legal effect of the 

conservatorship, interpretations of the senior preferred 

stock purchase agreement or the Financial Agency 

Agreement with Treasury or our performance under the 

Financial Agency Agreement;

• agreements relating to litigation, lawsuits, claims, 

demands, prosecutions, regulatory proceedings or tax 

matters where the amount in dispute exceeds a specified 

threshold, including related matters that aggregate to 

more than the threshold; 

• mergers, acquisitions and changes in control of key 

counterparties where we have a direct contractual right to 

cease doing business with the entity or object to the 

merger or acquisition; 

• changes to requirements, policies, frameworks, standards 

or products that are aligned with Freddie Mac’s, pursuant 

to FHFA’s direction;

• credit risk transfer transactions that are a new transaction 

type, involve a material change in terms, or involve a new 

type of collateral;

• transfers of mortgage servicing rights that meet minimum 

size thresholds and would increase the transferee’s 

servicing of Fannie Mae seriously delinquent loans by 

more than a specified threshold; and 

• changes in employee compensation that could 

significantly impact our employees, including special 

incentive plans, merit increase pool funding, and retention 

awards for executives.

FHFA’s instructions also require us to provide timely notice to FHFA of: activities that represent a significant change in 

current business practices, operations, policies or strategies not otherwise addressed in the instructions; exceptions and 

waivers to aligned requirements, policies, frameworks, standards or products if not otherwise submitted to FHFA for 

decision as required above; and accounting error corrections to previously-issued financial statements that are not de 

minimis. FHFA will then determine whether any such items require its decision as conservator. For more information on 

the conservatorship, refer to “Business—Conservatorship and Treasury Agreements.”

Composition of Board of Directors

FHFA has directed that our Board of Directors should have a minimum of nine and not more than thirteen directors. 

There is a non-executive Chair of the Board, and our Chief Executive Officer is the only corporate officer serving as a 

director. Our Corporate Governance Guidelines, in accordance with FHFA corporate governance regulations, require a 

majority of Fannie Mae’s directors to be independent. The Board currently has ten members, nine of whom are 

independent. See “Certain Relationships and Related Transactions, and Director Independence—Director 

Independence” for a description of our director independence requirements and a discussion of the Board’s review of 

the independence of all current Board members.

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 171
Our conservator appointed directors in 2008. Subsequent vacancies have been and may continue to be filled by the 

Board, subject to review by the conservator. FHFA’s 2008 order appointing directors provided that each director serves 

on the Board until the earlier of (1) resignation or removal by the conservator or (2) the election of a successor director 

at an annual meeting of shareholders. Because FHFA as our conservator has all powers of our shareholders, we have 

not held shareholders’ meetings since entering into conservatorship. 

Under the Charter Act, each director is elected for a term ending on the date of our next annual shareholders’ meeting. 

Fannie Mae’s bylaws provide that each director holds office for the term for which he or she was elected or appointed 

and until his or her successor is chosen and qualified or until he or she dies, resigns, retires or is removed from office in 

accordance with applicable law or regulation, whichever occurs first. As noted above, however, the conservator 

appointed an initial group of directors to our Board following our entry into conservatorship, provided the Board with the 

authority to appoint directors to subsequent vacancies subject to conservator review, and defined the term of service of 

directors during conservatorship. Our Corporate Governance Guidelines were amended in 2021 to provide that, absent 

death, resignation or retirement, each director first appointed in 2021 or thereafter will serve until the earliest of: (1) the 

third anniversary of the effective date of such director’s appointment while the company is in conservatorship; (2) the 

date on which the director is removed by the conservator while the company is in conservatorship; or (3) the date on 

which the director’s successor is elected at an annual meeting of shareholders. This three-year term applicable while 

the company is in conservatorship applies to two of the company’s current directors—Christopher Brummer and Simon 

Johnson; all other directors were appointed prior to 2021. In addition, absent a waiver from FHFA, FHFA corporate 

governance regulations limit service on our Board to ten years or age 72, whichever comes first. In 2021, FHFA 

approved a waiver of the ten-year Board term limit applicable to Mr. Herz, allowing him to serve on the Board through 

June 30, 2024, as well as a waiver of the Board age limit applicable to Ms. Glover, allowing her to serve on the Board 

through November 12, 2025. In 2022, FHFA approved waivers of the ten-year Board term limit applicable to Ms. Alving, 

allowing her to serve on the board through October 2026, and to Ms. Nordin, allowing her to serve on the board through 

November 2026.

Under the Charter Act, our Board shall at all times have as members at least one person from each of the homebuilding, 

mortgage lending and real estate industries, and at least one person from an organization that has represented 

consumer or community interests for not less than two years or one person who has demonstrated a career 

commitment to the provision of housing for low-income households. In addition, our Corporate Governance Guidelines 

provide that the Board, as a group, must be knowledgeable in business, finance, capital markets, accounting, risk 

management, public policy, mortgage lending, real estate, low-income housing, homebuilding, regulation of financial 

institutions, technology, environmental, social and governance (“ESG”), and any other areas as may be relevant to the 

safe and sound operation of Fannie Mae. In addition to expertise in the areas noted above, our Corporate Governance 

Guidelines specify that the Nominating and Corporate Governance Committee also seeks Board members who possess 

the highest personal values, judgment and integrity, and who understand the regulatory and policy environment in which 

Fannie Mae does business. The Nominating and Corporate Governance Committee also considers whether a 

prospective Board candidate has the ability to attend meetings and fully participate in the activities of the Board.

The Nominating and Corporate Governance Committee also considers diversity when evaluating the composition of the 

Board. Our Corporate Governance Guidelines specify that the Nominating and Corporate Governance Committee is 

committed to considering minorities, women and individuals with disabilities in the identification and evaluation process 

for prospective Board candidates, and that the Committee seeks Board members who represent diversity in ideas and 

perspectives. These provisions of our Corporate Governance Guidelines implement FHFA regulations that require the 

company to implement and maintain policies and procedures that, among other things, encourage the consideration of 

diversity in nominating or soliciting nominees for positions on our Board.

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 172
Our directors have a variety of backgrounds and overall experience. Over half of Fannie Mae’s Board members are 

women and/or racial or ethnic minorities. Our Board also has a balance of longer-serving directors with institutional 

knowledge and newer directors with fresh perspectives. The charts below provide information on the composition of our 

Board by demographic background and Board tenure.

Board Diversity

Gender

5 5

Race/Ethnicity

3

2

5

Age

1

3

5

1

Tenure

3

2

5

Black/African 

Women American 40’s < 2 Years

Men White 50’s 2-4 Years

Hispanic/Latino 60’s 5+ Years

70’s

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 173
The Nominating and Corporate Governance Committee evaluates the qualifications and performance of current 

directors on an annual basis, taking into consideration factors related to a Board member’s contribution to the effective 

functioning of the Board. In its assessment of current directors and evaluation of potential candidates for director, the 

Nominating and Corporate Governance Committee considers these factors, as well as each individual’s particular 

experience, qualifications, attributes and skills in the areas identified in our Corporate Governance Guidelines. In 

concluding our current directors should serve as directors, the Nominating and Corporate Governance Committee took 

into account their knowledge in these areas as indicated in the table below, which they gained from their experience 

described in “Directors.”

Director Experience, Qualifications, Attributes and Skills

Board Leadership Structure 

FHFA corporate governance regulations and our Corporate Governance Guidelines require separate Chair of the Board 

and Chief Executive Officer positions, and require that the Chair of the Board be an independent director. A nonexecutive Chair structure enables non-management directors to raise issues and concerns for Board consideration 

without immediately involving management and is consistent with the Board’s emphasis on independent oversight of 

management, including independent risk oversight.

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 174
Our Board has five standing committees: the Audit Committee, the Community Responsibility and Sustainability 

Committee, the Compensation and Human Capital Committee, the Nominating and Corporate Governance Committee, 

and the Risk Policy and Capital Committee. Pursuant to FHFA direction, with such exceptions as the conservator may 

direct, the Board and the standing Board committees function in accordance with:

• their designated duties and authorities as set forth in the Charter Act, other applicable federal law, FHFA’s 

corporate governance rules, FHFA’s prudential management and operations standards, FHFA written 

supervisory guidance and direction, and, to the extent not inconsistent with the foregoing, Delaware law (insofar 

as Fannie Mae has adopted its provisions for corporate governance purposes);

• Fannie Mae’s bylaws and the applicable charters of Fannie Mae’s Board committees; and 

• such other duties or authorities as the conservator may provide. 

Such duties or authorities may be modified by the conservator at any time. 

Committee Charters and Corporate Governance

Our Corporate Governance Guidelines and charters for each of the Board’s standing committees are posted on our 

website, www.fanniemae.com, in the “About Us—Corporate Governance” section. Although our equity securities are no 

longer listed on the New York Stock Exchange (“NYSE”), we are required by FHFA corporate governance regulations to 

follow specified NYSE corporate governance requirements relating to, among other things, the independence of our 

directors and the charter, independence, composition, expertise, duties, responsibilities and other requirements of our 

Board committees.

Risk Management Oversight

Our Board of Directors oversees risk management primarily through the Risk Policy and Capital Committee of the 

Board. FHFA corporate governance regulations set forth risk management requirements for our Board and our Risk 

Policy and Capital Committee, as described below. These regulations require that our Board approve, have in effect at 

all times, and periodically review an enterprise-wide risk management program that establishes our risk appetite, aligns 

the risk appetite with our strategies and objectives, and addresses our exposure to credit risk, market risk, liquidity risk, 

business risk and operational risk. Our risk management program must align with our risk appetite and include risk 

limitations appropriate to each line of business, appropriate policies and procedures relating to risk management 

governance, risk oversight infrastructure, and processes and systems for identifying and reporting risks, including 

emerging risks. Our program must also include provisions for monitoring compliance with our risk limit structure and 

policies relating to risk management governance, risk oversight, and effective and timely implementation of corrective 

actions. Additional provisions must specify management’s authority and independence to carry out risk management 

responsibilities and the integration of risk management with management’s goals and compensation structure. FHFA 

corporate governance regulations require our Risk Policy and Capital Committee to assist the Board in carrying out its 

oversight of our risk management program. These regulations also require that our Risk Policy and Capital Committee 

must:

• be chaired by a director not serving Fannie Mae in a management capacity;

• have at least one member with risk management experience that is commensurate with our capital structure, 

risk appetite, complexity, activities, size and other appropriate risk-related factors;

• have committee members with a practical understanding of risk management principles and practices relevant 

to Fannie Mae; 

• fully document and maintain records of its meetings; and

• report directly to the Board and not as part of, or combined with, another committee.

FHFA corporate governance regulations set forth specific responsibilities for our Risk Policy and Capital Committee, 

including that it must: 

• periodically review and recommend for Board approval an appropriate enterprise-wide risk management 

program that is commensurate with our capital structure, risk appetite, complexity, activities, size and other 

appropriate risk-related factors;

• receive and review regular reports from our Chief Risk Officer; and

• periodically review the capabilities for, and adequacy of resources allocated to, enterprise-wide risk 

management.

Our Risk Policy and Capital Committee Charter also sets forth the Risk Policy and Capital Committee’s duties and 

responsibilities in overseeing risk management for all of our major categories of risk and any other emerging risks. For 

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 175
more information on the role of our Board and management in risk oversight, see “MD&A—Risk Management—Risk 

Management Governance.”

Board’s Role in Cybersecurity Risk Oversight

Cybersecurity risk is overseen by the Board and the Risk Policy and Capital Committee. The Board has also delegated 

oversight authority for specified cybersecurity risk matters to certain management-level committees. The Board and the 

Risk Policy and Capital Committee engaged in discussions throughout the year with management on cybersecurity risk 

matters and received periodic reports from the company’s chief information security officer and other officers, including 

updates on our cybersecurity program, the external threat environment, and the steps the company is taking to address 

and mitigate the risks associated with the evolving cybersecurity threat environment. Management also discussed 

cybersecurity developments with the Chair of the Risk Policy and Capital Committee and other Board members 

between Board and committee meetings, as appropriate. The company has procedures to escalate information 

regarding certain cybersecurity incidents to the appropriate members of the Board in a timely fashion. The Board 

reviews and approves the company’s Cybersecurity Risk Policy and Operational Risk Policy at least annually. The 

Board and its committees also have authority, as they deem appropriate to fulfill Board or committee responsibilities, to 

engage outside consultants or advisors, including technology consultants and cybersecurity experts.

Human Capital Management Oversight

The Compensation and Human Capital Committee of the Board has oversight of the company’s human capital 

management and its diversity and inclusion program and related policies and practices. As part of its oversight role, the 

Committee reviews the company’s primary compensation programs and benefits, succession planning for executives, 

as well as corporate culture and employee engagement. 

Codes of Conduct

We have a Code of Conduct that is applicable to all officers and employees (our “Employee Code of Conduct”) and a 

Code of Conduct for the Board of Directors (our “Director Code of Conduct”). Our Employee Code of Conduct also 

serves as the code of ethics for our Chief Executive Officer and senior financial officers required by the Sarbanes-Oxley 

Act of 2002 and implementing regulations of the SEC. We have posted these codes on our website, 

www.fanniemae.com, under “Code of Conduct” in the “About Us—Corporate Governance” section. We intend to 

disclose any changes to or waivers from these codes that apply to any of our executive officers, our controller or our 

directors by posting this information on our website.

Audit Committee Membership

Our Board of Directors has a standing Audit Committee consisting of Mr. Herz, who is the Chair, Mr. Johnson, who is the 

Vice Chair, Ms. Glover and Ms. Nordin, all of whom are financially literate and all of whom are independent under the 

requirements of independence set forth in FHFA corporate governance regulations (which requires the standard of 

independence adopted by the NYSE), Fannie Mae’s Corporate Governance Guidelines, and other SEC rules and 

regulations applicable to audit committees. The Board has determined that each member of the Audit Committee has 

the requisite experience, as discussed in “Directors,” to qualify as an “audit committee financial expert” under the rules 

and regulations of the SEC and has designated each of them as such.

Executive Sessions

Our non-management directors meet in executive session on a regularly scheduled basis. Our Board of Directors 

reserves time for an executive session at every regularly scheduled Board meeting. The non-executive Chair of the 

Board presides over these sessions.

Communications with Directors or Audit Committee

Interested parties wishing to communicate any concerns or questions about Fannie Mae to the non-executive Chair of 

the Board or to our non-management directors individually or as a group may do so by electronic mail addressed to 

“board@fanniemae.com,” or by U.S. mail addressed to Board of Directors, c/o Office of the Corporate Secretary, Fannie 

Mae, 1100 15th Street, NW, Washington, DC 20005. Communications may be addressed to a specific director or 

directors, including Mr. Heid, the Board Chair, or to groups of directors, such as the independent or non-management 

directors.

Interested parties wishing to communicate with the Audit Committee regarding accounting, internal accounting controls 

or auditing matters may do so by electronic mail addressed to “auditcommittee@fanniemae.com,” or by U.S. mail 

addressed to Audit Committee, c/o Office of the Corporate Secretary, Fannie Mae, 1100 15th Street, NW, Washington, 

DC 20005.

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 176
The Office of the Corporate Secretary is responsible for processing all communications to a director or directors. 

Communications that are deemed by the Office of the Corporate Secretary to be commercial solicitations, ordinary 

course customer inquiries or complaints, incoherent or obscene are not forwarded to directors.

Director Nominations; Shareholder Proposals

Under the GSE Act, FHFA, as conservator, has all rights, titles, powers and privileges of the shareholders and Board of 

Directors of Fannie Mae. As a result, Fannie Mae’s common shareholders no longer have the ability to recommend 

director nominees or elect the directors of Fannie Mae or bring business before any meeting of shareholders pursuant 

to the procedures in our bylaws. We currently do not plan to hold an annual meeting of shareholders in 2023. 

ESG Matters

Our ESG strategy builds upon our mission to facilitate equitable and sustainable access to homeownership and quality 

affordable rental housing across America. This includes working to address the underlying historical causes of the 

barriers to stable, affordable housing for underserved populations and helping to mitigate risks to the housing system 

due to environmental challenges such as climate change. Since 2018, we have conducted periodic assessments to 

deepen our understanding of the overall landscape, prioritize the areas that are most relevant to our business and 

stakeholders from an ESG perspective, and adapt our ESG strategy and disclosures accordingly. ESG considerations 

are embedded in our corporate strategic priorities. 

For additional information on ESG matters, see our 2021 Environmental, Social, and Governance Report, which 

includes indices identifying certain SASB Standards and TCFD framework elements that are addressed in the report. 

The report can be found on our website, www.fanniemae.com, under “ESG” in the “About Us” section.

Some ESG-related information is also included in this report, including in the following sections:

• Business—Human Capital

• Business—Conservatorship and Treasury Agreements—Equitable Housing Finance Plan

• “Housing Goals” and “Duty to Serve Underserved Markets” in Business—Legislation and Regulation—GSEFocused Matters

• MD&A—Risk Management—Climate and Natural Disaster Risk Management and

• MD&A—Risk Management—Operational Risk Management—Cybersecurity Risk Management

Report of the Audit Committee of the Board of Directors

The Audit Committee’s charter sets forth the Audit Committee’s duties and responsibilities, and provides that the Audit 

Committee’s purpose is to: 

• oversee (a) the accounting, reporting, and financial practices of the company and its subsidiaries, including the 

integrity of the company’s financial statements and internal control over financial reporting, (b) the company’s 

compliance with legal and regulatory requirements, (c) the external auditor’s qualifications, independence, and 

performance, and (d) the qualifications, independence, and performance of the company’s internal audit 

function and chief audit executive;

• approve, or recommend for Board approval, as appropriate, certain of the company’s policies relating to the 

Audit Committee’s oversight of the external auditor relationship, internal audit function, and the compliance 

department; and

• prepare the report required by the rules of the SEC to be included in the company’s annual proxy statement in 

years in which Fannie Mae holds an Annual Meeting of Stockholders and files a proxy statement.

In accordance with this purpose, the Audit Committee has the authority to appoint, compensate, retain, oversee, 

evaluate and terminate the company’s independent external auditor (referred to as the “independent auditor”); however, 

the Audit Committee is required to consult and obtain the decision of the conservator before exercising some of these 

authorities. The independent auditor reports directly to the Audit Committee. The Audit Committee is responsible for fee 

negotiations with the independent auditor and pre-approves the fees for and the terms of all audit and permissible nonaudit services to be provided by the independent auditor. The Audit Committee has delegated to its Chair the authority 

to pre-approve such services up to $1 million per engagement, which pre-approval must be ratified by the Audit 

Committee at its next scheduled meeting. The Audit Committee has the authority to retain counsel, accountants, experts 

and other advisors to assist the Audit Committee members in carrying out their duties; however, the Audit Committee’s 

authority to terminate law firms serving as consultants to the Committee is subject to the conservator’s decision.

Directors, Executive Officers and Corporate Governance | Corporate Governance

Fannie Mae 2022 Form 10-K 177
As described in “Corporate Governance—Audit Committee Membership,” the Board has determined that all members of 

Fannie Mae’s Audit Committee are financially literate and all are independent under the independence requirements set 

forth in FHFA corporate governance regulations (which require compliance with the independence standards adopted by 

the NYSE) and that all members of the Audit Committee are “audit committee financial experts” under the rules and 

regulations of the SEC.

The Audit Committee serves in an oversight capacity. Management is responsible for the financial reporting process, 

including the system of internal controls, for the preparation of consolidated financial statements in accordance with 

GAAP and for the report on the company’s internal control over financial reporting. The company’s independent auditor, 

Deloitte & Touche LLP (“Deloitte”), is responsible for planning and conducting an independent audit of those financial 

statements and expressing an opinion as to their conformity with GAAP and expressing an opinion on the effectiveness 

of the company’s internal control over financial reporting. The Audit Committee’s responsibility is to oversee the financial 

reporting process and to review and discuss management’s report on the company’s internal control over financial 

reporting. The Audit Committee relies, without independent verification, on the information provided to it and on the 

representations made by management, the internal audit function and the independent auditor, representatives of whom 

generally attend each Audit Committee meeting.

For the year ended December 31, 2022, the Audit Committee, among other things:

• reviewed and discussed the company’s quarterly earnings releases, quarterly reports on Form 10-Q and this 

Annual Report on Form 10-K, including the consolidated financial statements;

• together with the Board and the other Board Committees, including the Risk Policy and Capital Committee, 

reviewed the company’s major legal and compliance risk exposures and the guidelines and policies that govern 

the process for risk assessment and risk management;

• reviewed and discussed reports from management on the company’s policies regarding applicable legal and 

regulatory requirements;

• reviewed and discussed the plan and scope of the 2022 audit work for the independent auditor;

• reviewed and discussed with management the company’s 2021 ESG Report;

• reviewed, discussed and approved the 2022 internal audit plan and budget, and reviewed and discussed 

summaries of the significant reports by the internal audit function;

• reviewed the performance and compensation of the Chief Audit Executive and Chief Compliance Officer; 

• reviewed the engagement, independence and quality control procedures of the independent auditor, as 

described in further detail below;

• met with and/or received reports from senior representatives of the following divisions or departments of the 

company: Finance, Legal, Compliance, Internal Audit, Chief Operating Officer and Enterprise Risk 

Management; and

• met regularly in executive sessions with each of Deloitte, the internal audit function and company management, 

including the Chief Financial Officer, the Chief Compliance Officer and the Chief Audit Executive, which 

provided an additional opportunity for Deloitte and the others noted to provide candid feedback to the 

Committee.

The Audit Committee also reviewed and discussed with management, the Chief Audit Executive and Deloitte: 

• the audited consolidated financial statements for 2022; 

• the critical accounting estimates that are set forth in this Annual Report on Form 10-K; 

• management’s annual report on the company’s internal control over financial reporting; and 

• Deloitte’s opinion on the consolidated financial statements, including the critical audit matters addressed during 

the audit, and the effectiveness of the company’s internal control over financial reporting.

The Audit Committee has discussed with Deloitte the matters required to be discussed by the applicable requirements 

of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has received from 

Deloitte the written communications required by applicable requirements of the PCAOB regarding Deloitte’s 

communications with the Audit Committee concerning independence, and also has discussed with Deloitte its 

independence from the company. 

In evaluating Deloitte’s independence, the Audit Committee considered whether services it provided to the company 

beyond those rendered in connection with its audit of the company’s consolidated financial statements, reviews of the 

company’s interim condensed consolidated financial statements included in its quarterly reports on Form 10-Q and its 

Directors, Executive Officers and Corporate Governance | Report of the Audit Committee of the Board of Directors

Fannie Mae 2022 Form 10-K 178
opinion on the effectiveness of the company’s internal control over financial reporting would impair its independence. 

The Committee also reviewed and pre-approved, among other things, the audit, audit-related and non-audit-related 

services performed by Deloitte. The Committee received regular updates on the amount of fees and scope of audit, 

audit-related and non-audit-related services provided. The Committee concluded that the provision of services by 

Deloitte did not impair its independence.

Deloitte has served as the company’s independent auditor since 2005. The Audit Committee selects Deloitte’s lead audit 

partner who, along with the concurring partner, rotates every five years. Pursuant to this schedule, in 2022 the Audit 

Committee selected a new lead audit partner to begin in the role with the fiscal year 2023 audit. The Audit Committee 

evaluates the independent auditor’s qualifications, performance and independence on at least an annual basis. The 

factors the Audit Committee considered in evaluating and approving Deloitte’s appointment as the company’s 

independent auditor included:

• Deloitte’s technical expertise and industry experience; 

• its institutional knowledge of the company’s business, significant accounting practices and system of internal 

control over financial reporting;

• audit effectiveness, including the quality of Deloitte’s audit work, its quality control procedures, the expertise 

and performance of the lead audit partner, and the professionalism and demonstrated objectivity and 

skepticism of Deloitte’s team;

• the frequency and quality of Deloitte’s communication with the Committee, and the level of support provided to 

the Committee;

• external data on audit quality and performance and legal and regulatory matters involving Deloitte, including the 

results of PCAOB inspection reports and Deloitte’s peer review reports, and actions by Deloitte to continue to 

enhance the quality of its audit practice; and

• Deloitte’s independence and its policies and procedures regarding independence.

Based on the reviews, reports, meetings and discussions referred to above, and subject to the limitations on the Audit 

Committee’s role and responsibilities described above and in the Audit Committee Charter, the Audit Committee 

recommended to the Board of Directors that the company’s audited consolidated financial statements for 2022 be 

included in this Annual Report on Form 10-K for filing with the SEC. In addition, the Audit Committee approved the 

appointment of Fannie Mae’s independent auditor, Deloitte & Touche LLP, for 2023. FHFA, as the company’s 

conservator, approved Deloitte’s appointment as Fannie Mae’s independent auditor for 2023.

Audit Committee:

Robert H. Herz, Chair 

Simon Johnson, Vice Chair

Renée Lewis Glover

Diane C. Nordin

Directors, Executive Officers and Corporate Governance | Report of the Audit Committee of the Board of Directors

Fannie Mae 2022 Form 10-K 179
Executive Officers

Under our bylaws, each executive officer holds office until their successor is chosen and qualified or until they die, 

resign, retire or are removed from office, whichever occurs first. 

Ms. Almodovar, our Chief Executive Officer, has served as a member of our Board of Directors since December 2022. 

Information about her business experience and other matters is provided in “Directors.” As of February 14, 2023, we 

have seven other executive officers: 

David C. Benson

Age 63 President

Joined Fannie Mae in 2002

Mr. Benson has been President since August 2018. He also served as the company's Interim Chief Executive Officer, 

from May to December 2022, as its Interim Chief Financial Officer, from May to November 2021, and as the interim 

head of Fannie Mae’s Single-Family business, from January to May 2021. Mr. Benson previously served as Executive 

Vice President and Chief Financial Officer from 2013 to August 2018, as Executive Vice President—Capital Markets, 

Securitization & Corporate Strategy from 2012 to 2013 and as Executive Vice President—Capital Markets from 2009 to 

2012. He also served as Treasurer from 2010 to 2012. Mr. Benson previously served as Fannie Mae’s Executive Vice 

President—Capital Markets and Treasury from 2008 to 2009, as Fannie Mae’s Senior Vice President and Treasurer 

from 2006 to 2008, and as Fannie Mae’s Vice President and Assistant Treasurer from 2002 to 2006. Prior to joining 

Fannie Mae, Mr. Benson was Managing Director in the fixed income division of Merrill Lynch & Co. From 1988 through 

2002, he served in several capacities at Merrill Lynch in the areas of risk management, trading, debt syndication and ecommerce based in New York and London.

H. Malloy Evans

Age 49 Executive Vice President—Single-Family

Joined Fannie Mae in 2004

Mr. Evans has served as Executive Vice President—Single-Family since May 2021. Prior to that time, Mr. Evans served 

as Fannie Mae’s Senior Vice President and Chief Credit Officer for Single-Family from February 2019 to May 2021. Mr. 

Evans served as Fannie Mae’s Vice President—Single-Family Credit Policy from January 2018 to February 2019, as 

Vice President—Single-Family Customer Risk Management from October 2016 to January 2018, and as Vice President

—Credit Portfolio Management and Making Home Affordable from 2014 to October 2016. Prior to that time, Mr. Evans 

served as Fannie Mae’s Vice President—Default Management from 2011 to 2014 and as Vice President and Deputy 

General Counsel—Government Initiatives from 2009 to 2011. Mr. Evans joined Fannie Mae in 2004 as an Associate 

General Counsel.

Directors, Executive Officers and Corporate Governance | Executive Officers

Fannie Mae 2022 Form 10-K 180
Michele M. Evans

Age 59 Executive Vice President—Multifamily 

Joined Fannie Mae in 1992

Ms. Evans has served as Executive Vice President—Multifamily since August 2020. Prior to that time, Ms. Evans served 

as Multifamily Chief Operating Officer from 2009 to August 2020, first as Vice President from 2009 to 2012, and then as 

Senior Vice President from 2012 to August 2020. Ms. Evans served as Vice President for Corporate Affairs from 2006 to 

2009. Prior to that time, Ms. Evans served in various director-level positions in the Multifamily business area from 1998 

to 2006, and in various manager-level positions at the company from 1994 to 1998. Ms. Evans joined Fannie Mae in 

1992 as an analyst.

Chryssa C. Halley

Age 56 Executive Vice President and Chief Financial Officer

Joined Fannie Mae in 2006

Ms. Halley has served as Executive Vice President and Chief Financial Officer since November 2021. Prior to that time, 

Ms. Halley served as Senior Vice President and Controller of Fannie Mae from May 2017 to November 2021. Ms. Halley 

previously served as Senior Vice President and Deputy Controller of Fannie Mae from 2013 to May 2017. Prior to that 

time, Ms. Halley served as Vice President and Assistant Controller for Capital Markets and Operations from 2012 to 

2013; Vice President for Tax, Debt and Derivatives and Securities Accounting from 2010 to 2012; and Vice President for 

Corporate Tax from 2007 to 2010. Ms. Halley joined Fannie Mae in 2006 as Director, Corporate Tax.

Jeffery R. Hayward

Age 66 Executive Vice President and Chief Administrative 

Officer

Joined Fannie Mae in 1987

Mr. Hayward has served as Fannie Mae’s Executive Vice President and Chief Administrative Officer since August 2020. 

Mr. Hayward has served in various roles at Fannie Mae for over 30 years. Mr. Hayward served as Head of Multifamily 

from 2012 to August 2020, first as Senior Vice President from 2012 to 2014 and then as Executive Vice President from 

2014 to August 2020. He was Fannie Mae’s Senior Vice President—National Servicing Organization from 2010 to 2012. 

He also served as Senior Vice President of Community Lending in Fannie Mae’s Multifamily division from 2004 to 2010. 

Prior to that time, Mr. Hayward served as both a Senior Vice President and a Vice President in Fannie Mae’s SingleFamily division, including as Senior Vice President in the National Business Center from 2001 to 2004, as Vice 

President for Single-Family Business Strategy from 1999 to 2001, as Vice President for Asset Management Services 

from 1998 to 1999 and as Vice President for Quality Control and Operations from 1996 to 1998. Mr. Hayward also 

served as Vice President for Risk Management from 1993 to 1996. Before that, he served as Director, Loan Acquisition 

from 1992 to 1993, as Director, Marketing from 1989 to 1992, and as Senior Negotiator from 1988 to 1989. Mr. Hayward 

joined the company in 1987 as a senior MBS representative.

Directors, Executive Officers and Corporate Governance | Executive Officers

Fannie Mae 2022 Form 10-K 181
Anthony Moon

Age 58 Executive Vice President and Chief Risk Officer

Joined Fannie Mae in 2022

Mr. Moon has served as Fannie Mae’s Executive Vice President and Chief Risk Officer since December 2022. Mr. Moon 

has over 30 years of experience in financial services and over 25 years of experience in risk management. Mr. Moon 

previously served as Chief Risk Officer for the Wealth Management Division and the Morgan Stanley Private Bank at 

Morgan Stanley, from 2015 to December 2022. In that role, he was responsible for risk management oversight for 

market, credit, operational, liquidity, model, and strategic risks. He previously held risk leadership positions at GE 

Capital, Bank of Tokyo-Mitsubishi, and Bankers Trust. Mr. Moon also serves as a Board Member for the Cortland 

College Foundation. 

Stergios “Terry” Theologides

Age 56 Executive Vice President, General Counsel, and 

Corporate Secretary

Joined Fannie Mae in 2019

Mr. Theologides has served as Executive Vice President, General Counsel, and Corporate Secretary since March 2019. 

Mr. Theologides previously was in private legal practice at Theologides Law, P.C. from October 2017 to February 2019. 

He served as Senior Vice President, General Counsel and Secretary of CoreLogic, Inc. from 2010 to September 2017, 

and served as Senior Vice President and General Counsel, Information Solutions Group, of The First American 

Corporation, CoreLogic’s predecessor, from 2009 to 2010. Mr. Theologides was Executive Vice President and General 

Counsel for Morgan Stanley’s U.S. residential mortgage businesses from 2007 to 2009. He was Executive Vice 

President, General Counsel and Secretary for New Century Financial Corporation from 1998 to 2007. Mr. Theologides 

was in private legal practice at O’Melveny & Myers LLP from 1992 to 1996. 

Item 11. Executive Compensation

Compensation Discussion and Analysis

Named Executives for 2022

This Compensation Discussion and Analysis focuses on our compensation decisions and arrangements for 2022

relating to the following executive officers, whom we refer to as our “named executives”: 

• Priscilla Almodovar Chief Executive Officer (beginning December 2022)

• David C. Benson President; Former Interim Chief Executive Officer (May 2022 to December 2022)

• Hugh R. Frater Former Chief Executive Officer (until May 2022)

• Chryssa C. Halley Executive Vice President and Chief Financial Officer

• H. Malloy Evans Executive Vice President—Single-Family

• Jeffery R. Hayward Executive Vice President and Chief Administrative Officer 

• Terry Theologides Executive Vice President, General Counsel, and Corporate Secretary

We refer to our 2022 compensation arrangements with our named executives, other than our non-interim Chief 

Executive Officers, as the “2022 executive compensation program.” 

Directors, Executive Officers and Corporate Governance | Executive Officers

Fannie Mae 2022 Form 10-K 182
Executive Summary

Due to our conservatorship status and other legal requirements, FHFA, our conservator and regulator, has substantial 

oversight and approval rights over our executive compensation arrangements and determinations. Congress has also 

enacted legislation that significantly impacts the compensation we pay our named executives. We describe these 

requirements and legislation in “2022 Executive Compensation Program; Chief Executive Officer Compensation—Legal, 

Regulatory and Conservator Restrictions on Executive Compensation.”

Total annual direct compensation for our Chief Executive Officer is limited by statute to base salary at an annual rate of 

$600,000 while we are in conservatorship or receivership. The 2022 executive compensation program applicable to our 

other named executives was developed by FHFA in consultation with Treasury. These named executives receive two 

principal elements of compensation: base salary, which is paid in regular installments throughout the year, and deferred 

salary, which is paid after a deferral period of one or two years. There are two components to deferred salary: (1) a fixed 

portion that is generally subject to reduction if an executive leaves the company within one year following the end of the 

performance year, unless they have met specified age and years of service requirements; and (2) an at-risk portion that 

is subject to reduction based on corporate and individual performance. Named executives do not receive bonuses or 

any form of equity compensation.

We had a successful year in 2022 despite external challenges posed by volatile macroeconomic conditions and a rapid 

rise in mortgage interest rates, as well as internal challenges driven by significant turnover in senior leadership, 

including in the Chief Executive Officer role, and the lingering effects of the global pandemic. Under the leadership of 

our executives, including our named executives, we provided $684 billion in liquidity to the market in 2022 and, as 

discussed in “Determination of 2022 Compensation,” had many additional accomplishments. We completed or 

substantially completed, and in some cases exceeded, the corporate performance goals for 2022 set by FHFA as our 

conservator, which we refer to as the 2022 scorecard. In addition, the Compensation and Human Capital Committee of 

our Board of Directors concluded that, taking a holistic view of our 2022 performance, management should be credited 

with 100% achievement of the Board of Directors’ goals.

While conserving taxpayer resources is an important objective of FHFA’s design of our executive compensation 

program, we and FHFA understand that this objective must be balanced with our need to attract and retain qualified and 

experienced executives to prudently manage our $4.1 trillion guaranty book of business. 

2022 Executive Compensation Program; Chief Executive Officer Compensation

Overview of 2022 Executive Compensation Program

Compensation for our Chief Executive Officer is limited by statute, as we discuss more fully below. Accordingly, our 

2022 executive compensation program did not apply to Ms. Almodovar, our current Chief Executive Officer, or Mr. 

Frater, our former Chief Executive Officer. Mr. Benson, who served as our President for all of 2022 and as our Interim 

Chief Executive Officer for a portion of 2022, continued to be compensated under our 2022 executive compensation 

program for his service as our President while he was also serving as Interim Chief Executive Officer. 

FHFA has advised us that the design of our executive compensation program is intended to fulfill and balance three 

primary objectives: 

• Maintain Lower Pay Levels to Conserve Taxpayer Resources. Given our conservatorship status, our executive 

compensation program is designed generally to provide for lower pay levels relative to large financial services 

firms that are not in conservatorship. 

• Attract and Retain Executive Talent. Our executive compensation program is intended to attract and retain 

executive talent with the specialized skills and knowledge necessary to effectively manage a large financial 

services company. Executives with these qualifications are needed for us to continue to fulfill our important role 

in providing liquidity to the mortgage market and supporting the housing market, as well as to prudently 

manage our $4.1 trillion guaranty book of business. We face competition for qualified executives from other 

companies. The Compensation and Human Capital Committee regularly considers the level of our executives’ 

compensation and whether changes are needed to attract and retain executives. 

• Reduce Pay if Goals Are Not Achieved. To support FHFA’s goals for our conservatorship and encourage 

performance in furtherance of these goals, 30% of an executive’s total target direct compensation consists of 

at-risk deferred salary subject to reduction based on corporate and individual performance.

FHFA’s objectives for our executive compensation program and the legal, regulatory and conservator restrictions on our 

executive compensation described below limit our ability to make changes to the program and limit the amount and type 

of compensation we may pay our executives.

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 183
Legal, Regulatory and Conservator Restrictions on Executive Compensation

We describe below legal, regulatory and conservator requirements that significantly affect our executive compensation 

program and policies.

Requirements Applicable During Conservatorship

While we are in conservatorship, we are subject to additional legal, regulatory and conservator requirements relating to 

our executive compensation, including the following:

• Equity in Government Compensation Act. The Equity in Government Compensation Act of 2015 limits the 

compensation and benefits for our Chief Executive Officer to the same level in effect as of January 1, 2015 

while we are in conservatorship or receivership. This law also provides that compensation and benefits for our 

Chief Executive Officer may not be increased while we are in conservatorship or receivership. Accordingly, 

annual direct compensation for our Chief Executive Officer is limited to base salary at an annual rate of 

$600,000.

• STOCK Act. Pursuant to the STOCK Act and related FHFA regulations, our senior executives, including the 

named executives, are prohibited from receiving bonuses during conservatorship. FHFA defines a bonus as a 

payment that rewards an employee for work performed, where details of the award (such as the decision to 

grant it or its amounts) are determined after the performance period using discretion or inherently subjective 

measures.

• FHFA Instructions—Executive Compensation. The powers of FHFA as our conservator include the authority to 

set executive compensation. As our conservator, FHFA has retained the authority to approve the terms and 

amounts of our executive compensation. In its instructions to us, FHFA directed that management obtain 

FHFA’s decision before entering into new compensation arrangements or increasing amounts or benefits 

payable under existing compensation arrangements of named executives or other executive officers as defined 

in SEC rules. 

• FHFA Instructions—Other Compensation. Pursuant to FHFA instructions, FHFA’s decision as conservator is 

required with regard to any changes in employee compensation that could significantly impact our employees, 

including but not limited to special incentive plans, merit increase pool funding, and retention awards for 

executives.

• FHFA Directives. As our conservator, from time to time FHFA issues or updates directives that relate to 

compensation of our executives and other employees. Pursuant to its currently applicable directives, FHFA has 

directed us to:

◦ limit base salaries for all executives to no more than $600,000; 

◦ adjust the mandatory deferral period for at-risk deferred salary as described under “Change to At-Risk 

Deferred Salary Deferral Period;” and

◦ include in our policies and procedures penalties for executive officers and certain other covered 

employees who are found to have engaged in specified restricted activity, including the clawback of 

compensation in appropriate circumstances to the extent permitted by law. See “Other Executive 

Compensation Considerations—Compensation Recoupment Policies—Clawback Provision under 

Confidentiality and Proprietary Rights Agreement” for a description of the compensation forfeiture and 

recoupment provisions we have implemented pursuant to this FHFA directive.

• FHFA Guidance. As our conservator, FHFA has directed that we may target between the 25th and 50th 

percentiles of appropriate market data for both new executive hires and compensation increase requests for 

existing executives, unless FHFA has granted an exception.

• Shareholder Powers. As our conservator, FHFA has all powers of our shareholders. Accordingly, we have not 

held shareholders’ meetings since entering into conservatorship, nor have we held any shareholder advisory 

votes on executive compensation.

• Golden Parachute Regulation. A golden parachute payment generally refers to a compensatory payment that is 

contingent on or provided in connection with termination of employment. FHFA regulation pursuant to the GSE 

Act generally prohibits us from making golden parachute payments to any current or former director, officer, or 

employee of the company during any period in which we are in conservatorship, receivership or other troubled 

condition, unless either a specific exemption applies or the Director of FHFA approves the payments. Specific 

exemptions include qualified pension or retirement plans, nondiscriminatory employee plans or programs that 

meet specified requirements, and bona fide deferred compensation plans or arrangements that meet specified 

requirements.

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 184
Other Applicable Requirements

We are also subject to legal and regulatory requirements relating to our executive compensation that apply whether or 

not we are in conservatorship, including the following:

• Senior Preferred Stock Purchase Agreement. Under the terms of our senior preferred stock purchase 

agreement with Treasury, until the senior preferred stock is repaid or redeemed in full:

◦ We may not enter into any new compensation arrangements with, or increase amounts or benefits 

payable under existing compensation arrangements of, any named executives or other executive 

officers as defined in SEC rules without the consent of the Director of FHFA, in consultation with the 

Secretary of the Treasury.

◦ We may not sell or issue any equity securities without the prior written consent of Treasury except 

under limited circumstances, which effectively eliminates our ability to offer stock-based compensation.

• Charter Act. Under the Charter Act and related FHFA regulations, FHFA as our regulator must approve any 

termination benefits we offer to our named executives and certain other officers identified by FHFA.

• GSE Act. Pursuant to the GSE Act and related FHFA regulations, FHFA as our regulator has specified oversight 

authority over our executive compensation. The GSE Act directs FHFA to prohibit us from providing 

compensation to our named executives and certain other officers identified by FHFA that is not reasonable or 

comparable with compensation for employment in other similar businesses (including other publicly held 

financial institutions or major financial services companies) involving similar duties and responsibilities. FHFA 

may at any time review the reasonableness and comparability of an executive officer’s compensation and may 

require us to withhold any payment to the officer during such review. The GSE Act also provides that, if we are 

classified as significantly undercapitalized, FHFA’s prior written approval is required to pay any bonus to an 

executive officer or to provide certain increases in compensation to an executive officer.

Chief Executive Officer Compensation

Direct compensation for our Chief Executive Officer consists solely of a base salary at an annual rate of $600,000 and 

has been limited to this amount by statute since the enactment of the Equity in Government Compensation Act of 2015. 

For purposes of this disclosure, “direct compensation” includes salary and other cash compensation, but excludes 

certain health and welfare, retirement, relocation and other similar benefits. See “Compensation Tables and Other 

Information—Summary Compensation Table” for information about our Chief Executive Officer’s total 2022

compensation. 

Limits on our Chief Executive Officer compensation affect our ability to attract and retain executive talent. Despite these 

limits, we were able to successfully hire a new Chief Executive Officer, Ms. Almodovar, in 2022. Total direct 

compensation for our Chief Executive Officer is approximately 95% below the market median for 2021 chief executive 

officer compensation at comparable firms. Our inability to offer market-based compensation to our Chief Executive 

Officer hinders our succession planning for our chief executive officer role. See “Risk Factors” for a discussion of the 

risks associated with executive retention and succession planning.

Elements of 2022 Executive Compensation Program

Direct Compensation

The table below summarizes the principal elements, objectives and key features of our 2022 executive compensation 

program for our named executives. Ms. Almodovar, our current Chief Executive Officer, and Mr. Frater, our former Chief 

Executive Officer, received only base salary and no deferred salary in 2022. Although Mr. Benson served as our Interim 

Chief Executive Officer for a portion of 2022, he also served as our President for all of 2022 and continued to be 

compensated under our 2022 executive compensation program for his service as our President. All elements of our 

named executives’ direct compensation are paid in cash. 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 185
Base Salary Fixed cash 

payments, which are 

paid during the year 

on a biweekly basis.

Attract and 

retain named 

executives by 

providing a 

fixed level of 

current cash 

compensation.

Base salary reflects each named executive’s level of 

responsibility and experience, as well as individual 

performance over time. 

Base salary rate may not exceed $600,000 for any 

executive while we are in conservatorship.

Deferred Salary(1)

(Not applicable to 

Ms. Almodovar or 

Mr. Frater)

Deferred salary is 

earned in biweekly 

increments over the 

course of the 

performance year 

and paid in quarterly 

installments in 

March, June, 

September and 

December of the first 

or second year 

following the 

performance year.

There are two 

elements of deferred 

salary: 

• a fixed portion that 

is generally subject 

to reduction if an 

executive leaves 

the company within 

one year following 

the end of the 

performance year, 

unless they have 

met specified age 

and years of 

service 

requirements; and

• an at-risk portion 

that is subject to 

reduction based on 

assessments of 

corporate and 

individual 

performance 

following the end of 

the performance 

year. 

Interest accrues on 

deferred salary at 

one-half of the oneyear Treasury Bill rate 

in effect on the last 

business day 

immediately 

preceding the year in 

which the deferred 

salary is earned.

Fixed Deferred Salary

Retain named 

executives.

Earned but unpaid fixed deferred salary is generally 

subject to reduction if a named executive leaves the 

company within one year following the end of the 

performance year, unless they have met the age and 

years of service requirements specified below. The 

amount of earned but unpaid fixed deferred salary 

received by the named executive will be reduced by 

2% for each full or partial month by which the 

executive’s separation date precedes January 31 of 

the second year following the performance year (or, if 

later, the end of the twenty-fourth month following the 

month in which the named executive first earned 

deferred salary). 

The reduction provisions applicable to payments of 

earned but unpaid fixed deferred salary do not apply 

if an officer’s employment terminates other than for 

cause at or after age 62, or age 55 with 10 years of 

service with Fannie Mae, or as a result of death or 

long-term disability.

At-Risk Deferred Salary

Retain named 

executives and 

encourage 

them to 

achieve 

corporate and 

individual 

performance 

objectives.

Equal to 30% of each named executive’s total target 

direct compensation. Half of at-risk deferred salary 

was subject to reduction based on corporate 

performance against the 2022 scorecard as 

determined by FHFA in its discretion. The remaining 

half of at-risk deferred salary was subject to reduction 

based on individual performance as determined by 

the Board of Directors, with FHFA’s review, taking into 

account corporate performance against the 2022

Board of Directors’ goals.

There is no potential for at-risk deferred salary to be 

paid out at greater than 100% of target; at-risk 

deferred salary is subject only to reduction. 

If the executive’s employment terminates due to 

death or long-term disability prior to the Board of 

Directors’ and FHFA’s determinations of performance, 

the reduction provisions applicable to payments of 

earned but unpaid at-risk deferred salary do not 

apply.

Compensation

Element Form

Primary 

Compensation

Objectives Key Features

(1) Fixed deferred salary is paid in the first year following the performance year. As described in “Change to At-Risk 

Deferred Salary Deferral Period” below, for our named executives, half of 2022 at-risk deferred salary will be paid in 

2023 and the other half in 2024. At-risk deferred salary earned beginning January 1, 2023 will be paid in the second 

year following the performance year.

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 186
Employee Benefits

Our employee benefits serve as an important tool in attracting and retaining senior executives. We describe the 

employee benefits available in 2022 to our named executives in the table below. We provide more detail on our 

retirement plans in “Compensation Tables and Other Information.”

401(k) Plan (“Retirement 

Savings Plan”)

The Retirement Savings Plan is a tax-qualified 

defined contribution plan (“401(k) plan”) available to 

our employee population as a whole.

Attract and retain named 

executives by providing 

retirement savings in a 

tax-efficient manner.

Non-qualified Deferred 

Compensation (“Supplemental 

Retirement Savings Plan”)

The Supplemental Retirement Savings Plan is an 

unfunded, non-tax-qualified defined contribution 

plan. The plan supplements our Retirement Savings 

Plan by providing benefits to participants whose 

annual eligible earnings exceed the IRS limit on 

eligible compensation for 401(k) plans.

Attract and retain named 

executives by providing 

additional retirement 

savings.

Health, Welfare and Other 

Benefits

In general, the named executives are eligible for the 

same benefits available to our employee population 

as a whole, including our medical insurance plans, 

life insurance program and matching charitable gifts 

program. The named executives are also eligible to 

participate in our voluntary supplemental long-term 

disability plan, which is available to many of our 

employees.

Provide for the well-being 

of the named executive 

and their family.

Benefit Form Primary Objective

Sign-on Awards and Relocation Benefits 

In addition to the direct compensation and employee benefits described in the tables above, from time to time we may 

offer a sign-on award to a new executive to attract the executive to join Fannie Mae and/or to compensate the executive 

for compensation forfeited upon leaving a prior employer. We also from time to time may offer relocation benefits to a 

new executive to attract the executive by reimbursing them for costs associated with moving to the Washington, DC 

area. 

Ms. Almodovar became our Chief Executive Officer in December 2022. In connection with her hire, we are providing her 

benefits under our relocation plan. They are conditioned on Ms. Almodovar’s continued employment with Fannie Mae 

for a minimum of 18 months from her start date as Chief Executive Officer. She must reimburse Fannie Mae 100% of 

these benefits paid to her if her employment terminates (either voluntarily or involuntarily due to misconduct) within 12 

months, or 50% if her employment terminates from the 13th through the 18th month, following her hire. 

Severance Benefits

We have not entered into agreements with any of our named executives that entitle the executive to severance benefits. 

Under the 2022 executive compensation program, a named executive is entitled to receive a specified portion of their 

earned but unpaid deferred salary if their employment is terminated for any reason other than for cause. See 

“Compensation Tables and Other Information—Potential Payments Upon Termination or Change-in-Control” for 

information on compensation that we may pay to a named executive in certain circumstances in the event the 

executive’s employment is terminated.

Change to At-Risk Deferred Salary Deferral Period

In 2019, FHFA directed us to increase the mandatory deferral period for at-risk deferred salary received by senior vice 

presidents and above from one year to two years. For executives hired or promoted to senior vice president on or after 

January 1, 2020, this change was effective for at-risk deferred salary earned beginning January 1, 2020. For executives 

hired before January 1, 2020, this change became effective for at-risk deferred salary earned beginning January 1, 

2022; however, pursuant to an FHFA directive issued in June 2022, for these executives hired before January 1, 2020, 

one-half of at-risk deferred salary earned in 2022 will be paid in quarterly installments in the first year following the 

performance year and the remaining one-half of at-risk deferred salary earned in 2022 will be paid in quarterly 

installments in the second year following the performance year. For compensation earned in 2023 and thereafter, all atrisk deferred salary will be paid in quarterly installments in the second year following the performance year. This 

mandatory deferral period for at-risk deferred salary applies for so long as we are in conservatorship.

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 187
Determination of 2022 Compensation

2022 Compensation Actions

The table below displays the 2022 direct compensation targets for each of our named executives who were our 

employees as of December 31, 2022 compared to the actual amounts that will be paid to the named executives based 

on the assessments and determinations by FHFA, the Compensation and Human Capital Committee, and the Board of 

Directors. This table is presented on a different basis from, and is not intended to replace, the Summary Compensation 

Table required under applicable SEC rules, which is included in “Compensation Tables and Other Information—

Summary Compensation Table” and includes additional forms of compensation not included in the table below. Mr.

Frater is excluded from the table below due to his departure from the company in May 2022.

In 2022, the Board of Directors and FHFA approved increases in the total direct compensation targets and in the base 

salaries of some of our named executives. Mr. Benson’s compensation as President was increased to better align his 

compensation with the market. Mr. Evans, Ms. Halley and Mr. Theologides also received compensation increases to 

better align their compensation with the market. For Mr. Evans and Ms. Halley, these increases were in lieu of smaller 

compensation increases that had been approved by the Board of Directors and FHFA in 2021 and went into or were 

scheduled to go into effect in 2022 in connection with the increased responsibilities, scope and complexity of new roles 

each assumed in 2021. In December 2022 and January 2023, the Board of Directors and FHFA approved additional 

compensation increases for Mr. Evans and Ms. Halley to better align their compensation with the market and approved 

adjustments to the base salaries and fixed deferred salaries of Mr. Theologides and Mr. Hayward to increase their base 

salaries to $600,000 without changing their total target direct compensation; these changes became effective in 2023 

and are not reflected in the table below.

Summary of 2022 Compensation Actions

2022 Corporate 

Performance-Based 

At-Risk Deferred 

Salary(1)

2022 Individual 

Performance-Based 

At-Risk Deferred 

Salary(2) Total

Name and Principal Position

2022 Base 

Salary

2022 Fixed 

Deferred 

Salary Target

Actual 

% of 

Target Target

Actual 

% of 

Target Target Actual

Priscilla Almodovar(3) $ 46,154 $ — $ — — % $ — — % $ 46,154 $ 46,154 

Chief Executive Officer

David Benson(4) 600,000 2,200,000 600,000 97 600,000 100 4,000,000 3,982,000 

President; Former Interim Chief 

Executive Officer

Chryssa Halley(5) 500,000 1,018,462 325,384 97 325,385 100 2,169,231 2,159,469 

Executive Vice President and Chief 

Financial Officer

H. Malloy Evans(6) 500,000 1,029,231 327,692 97 327,693 100 2,184,616 2,174,785 

Executive Vice President—SingleFamily

Jeffery Hayward(7) 500,000 1,460,000 420,000 97 420,000 100 2,800,000 2,787,400 

Executive Vice President and Chief 

Administrative Officer

Terry Theologides(8) 500,000 1,223,077 369,231 97 369,231 100 2,461,539 2,450,462 

Executive Vice President, General 

Counsel, and Corporate Secretary

(1) As described in “2022 Executive Compensation Program; Chief Executive Officer Compensation—Elements of 2022

Executive Compensation Program,” half of the named executives’ at-risk deferred salary (15% of total target direct 

compensation) was subject to reduction based on corporate performance against the 2022 scorecard as determined by 

FHFA in its discretion. See “Assessment of Corporate Performance Against 2022 Scorecard” for a description of FHFA’s 

assessment of the company’s performance against the 2022 scorecard.

(2) As described in “2022 Executive Compensation Program; Chief Executive Officer Compensation—Elements of 2022

Executive Compensation Program,” half of the named executives’ at-risk deferred salary (15% of total target direct 

compensation) was subject to reduction based on individual performance as determined by the Board of Directors, with 

FHFA’s review, taking into account corporate performance against the 2022 Board of Directors’ goals. See “Assessment of 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 188
Corporate Performance against 2022 Board of Directors’ Goals” and “Assessment of 2022 Individual Performance” for a 

description of the Board’s assessment of performance against the 2022 Board of Directors’ goals and the Board’s 

assessment of the named executives’ individual performance.

(3) Ms. Almodovar joined Fannie Mae as Chief Executive Officer on December 5, 2022 and has a base salary rate of $600,000 

per year. The amount shown consists of the prorated amount of base salary that was paid to her for 2022.

(4) Amounts shown reflect increases that became effective in July 2022 in Mr. Benson’s fixed deferred salary and at-risk 

deferred salary, prorated based on their effective date. Since then, Mr. Benson’s total annual direct compensation target 

has been $4,400,000, consisting of base salary of $600,000, fixed deferred salary of $2,480,000 and at-risk deferred salary 

of $1,320,000. 

(5) Amounts shown reflect increases that became effective in July 2022 in Ms. Halley’s fixed deferred salary and at-risk 

deferred salary, prorated based on their effective date. Effective in January 2023, Ms. Halley’s total annual direct 

compensation target increased to $3,000,000, consisting of base salary of $600,000, fixed deferred salary of $1,500,000 

and at-risk deferred salary of $900,000. The January 2023 increase did not affect Ms. Halley’s 2022 compensation shown 

in this table.

(6) Amounts shown reflect increases that became effective in July 2022 in Mr. Evans’s fixed deferred salary and at-risk 

deferred salary, prorated based on their effective date. Effective in January 2023, Mr. Evans’s total annual direct 

compensation target increased to $3,000,000, consisting of base salary of $600,000, fixed deferred salary of $1,500,000 

and at-risk deferred salary of $900,000. The January 2023 increase did not affect Mr. Evans’s 2022 compensation shown in 

this table.

(7) After adjustments to increase his base salary rate that became effective in early January 2023, Mr. Hayward’s total annual 

direct compensation target of $2,800,000 consists of base salary of $600,000, fixed deferred salary of $1,360,000 and atrisk deferred salary of $840,000. The January 2023 adjustment did not affect Mr. Hayward’s 2022 compensation shown in 

this table.

(8) Amounts shown reflect increases that became effective in September 2022 in Mr. Theologides’s fixed deferred salary and 

at-risk deferred salary, prorated based on their effective date. At that time, Mr. Theologides’s total annual direct 

compensation target increased to $2,600,000. After adjustments to increase his base salary rate that became effective in 

early January 2023, this amount consists of base salary of $600,000, fixed deferred salary of $1,220,000, and at-risk 

deferred salary of $780,000. The January 2023 adjustment did not affect Mr. Theologides’s 2022 compensation shown in 

this table.

Assessment of Corporate Performance against 2022 Scorecard 

Overview

In November 2021, FHFA issued the 2022 scorecard, a set of corporate performance objectives and related targets for 

2022. The elements of the 2022 scorecard are shown below under “FHFA Assessment.” FHFA developed these 

objectives and related targets with input from management. Half of 2022 at-risk deferred salary, or 15% of overall 2022

total target direct compensation for each named executive other than Ms. Almodovar and Mr. Frater, was subject to 

reduction based on FHFA’s assessment in its discretion of our performance against the 2022 scorecard and related 

objectives, including the assessment criteria identified below. 

As part of the 2022 scorecard, FHFA established that, in addition to the specific scorecard items outlined in the table 

below, our performance would be assessed based on the extent to which:

• Our products and programs foster sustainable and equitable housing finance markets that support safe, decent, 

and affordable homeownership and rental opportunities;

• We conduct business in a safe and sound manner;

• We meet expectations under all FHFA requirements, including those pertaining to capital, liquidity, and credit 

risk transfer;

• We continue to manage operations while in conservatorship in a manner that preserves and conserves assets 

through the prudent stewardship of our resources;

• We cooperate and collaborate with FHFA to meet the conservator’s priorities, directives, and guidance 

throughout the course of the year;

• We deliver work products that are high quality, thorough, creative, effective, and timely, and that consider 

effects on borrowers and renters, Fannie Mae and Freddie Mac, the industry, and other stakeholders; and

• We ensure that diversity, equity, and inclusion remain top priorities in strategic planning, operations, and 

business development. 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 189
FHFA Assessment

We provided updates to and maintained a dialogue with FHFA throughout 2022 on our performance against the 2022

scorecard, including our performance against FHFA’s expectations for diversity and inclusion. In January 2023, FHFA 

reviewed and assessed our performance against the 2022 scorecard, with input from management, and determined that 

the portion of 2022 at-risk deferred salary for senior executives that is based on corporate performance would be paid at 

97% of target. In assessing our performance against the 2022 scorecard, the factors considered by FHFA included our 

completion or substantial completion of all of the 2022 scorecard objectives and our performance against the qualitative 

assessment criteria referenced above. 

The table below sets forth the 2022 scorecard and a summary of FHFA’s assessment of our achievement against the 

scorecard objectives and targets. For purposes of the 2022 scorecard, “Enterprise” refers to each of Fannie Mae and 

Freddie Mac.

Promote Sustainable and Equitable Access to Affordable Housing (50%)

Conduct business and undertake initiatives that support affordable, sustainable, and equitable access to homeownership 

and rental housing, and fulfill all statutory mandates.

Take significant actions to ensure that all borrowers and renters have 

equitable access to long-term affordable housing opportunities

• Develop strategies to support sustainable homeownership and affordable 

rental housing.

◦ Improve availability of small-balance purchase and refinance 

mortgages.

• Develop high-quality Equitable Housing Finance Plans and take 

meaningful actions to achieve the goals and objectives of the plans.

• Meet Housing Goals and Duty-to-Serve requirements.

• Identify strategies and activities to facilitate greater affordable housing 

supply within the limits of charter authorities and submit 

recommendations to FHFA. 

• Update the current pricing framework to increase support for core 

mission borrowers, while ensuring a level playing field for small and large 

sellers, fostering capital accumulation, and achieving viable returns on 

capital.

• Continue mortgage selling, servicing, and asset management efforts that 

promote sustainable home-retention solutions for borrowers affected by 

the COVID-19 pandemic.

The objectives were completed.

FHFA noted that we showed initiative 

and took a proactive role in driving 

progress in assessing the efficacy of 

existing home retention solutions, 

working cooperatively with Freddie 

Mac. 

FHFA raised a concern in connection 

with our implementation of our capital 

plan, noting that we continue to work 

through the errors in a model we use 

to forecast. These model errors are 

referenced in “Business—Legislation 

and Regulation—GSE-Focused 

Matters—Stress Testing.”

Foster competition and efficiency in housing finance markets 

• Modernize the single-family appraisal process to foster efficiency in 

mortgage markets, and address barriers to equitable valuation.

• Complete the final phase of validation and approval of credit score 

models and begin planning for implementation. 

• Leverage technology and data to further promote efficiency and cost 

savings in mortgage processes.

• Research and assess opportunities to increase access for small and 

regional lenders to Enterprise multifamily products.

The objectives were completed 

except for one objective that was 

substantially completed.

One project related to leveraging 

technology and data was determined 

by FHFA to be “substantially 

complete,” meaning that there is 

minimal work that remains to be 

completed.

Manage new multifamily purchases to remain within the multifamily cap 

requirements described in Appendix A to the 2022 scorecard, including 

expanded affordability requirements.

The objectives were completed.

FHFA 2022 Scorecard

Objectives Performance Assessment

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 190
Operate the Business in a Safe and Sound Manner (50%)

Operate with heightened focus on safety and soundness and with a prudent risk profile consistent with continued support 

for housing finance markets throughout the economic cycle, while minimizing the risk of requiring a draw against the 

Treasury commitment in stressed scenarios. 

Ensure that the Enterprise is resilient to operational, market, credit, 

economic, and climate risks.

• Address examination and supervision findings promptly.

• Maintain liquidity at levels required by FHFA and sufficient to sustain 

Enterprise operations through severe stress events. 

• Maintain effective risk management systems appropriate for entities that 

need to minimize risk to capital as they rebuild their capital buffers.

• Ensure a governance structure exists to prioritize the effects of climate 

change throughout Enterprise decision making.

• Continue to ensure a successful transition away from LIBOR to approved 

alternative reference rates by continuing systems development and 

announcing plans for the transition of legacy products.

The objectives were completed.

Transfer a significant amount of credit risk to private investors, reducing 

risk to taxpayers.

The objectives were completed.

FHFA 2022 Scorecard

Objectives Performance Assessment

Assessment of Corporate Performance against 2022 Board of Directors’ Goals

In February 2022, the Board of Directors adopted a set of 2022 Board of Directors’ goals and, after obtaining FHFA’s 

feedback on the goals, in July 2022 the Board updated the 2022 goals. The final 2022 goals were approved by FHFA in 

September 2022. The revised 2022 Board of Directors’ goals are presented in the table below. Performance against 

these goals was a factor the Board of Directors used to determine individual performance for purposes of the individual 

performance-based component of the named executives’ 2022 at-risk deferred salary. 

In December 2022 and January 2023, the Compensation and Human Capital Committee reviewed our performance 

against the 2022 Board of Directors’ goals. In connection with the Compensation and Human Capital Committee’s 

review, management provided the Compensation and Human Capital Committee with a report assessing management’s 

performance against the goals, which was reviewed for reasonableness by our Internal Audit group. The Compensation 

and Human Capital Committee also discussed performance against the goals with the Chair of the Audit Committee and 

the Chair of the Risk Policy and Capital Committee. The Compensation and Human Capital Committee considered 

management’s assessment of its performance against the goals and also discussed the company’s performance and 

the individual performance of our named executives (other than Mr. Benson) with Mr. Benson, our President, and the 

individual performance of some of our named executives with Mr. Hayward, our Executive Vice President and Chief 

Administrative Officer. 

The Compensation and Human Capital Committee concluded that management performed well in the face of external 

challenges posed by volatile macroeconomic conditions and a rapid rise in mortgage interest rates, as well as internal 

challenges driven by significant turnover in senior leadership, including in the Chief Executive Officer role, and the 

lingering effects of the global pandemic. The Committee concluded that, taking a holistic view of our 2022 performance, 

management should be credited with 100% achievement of the Board of Directors’ goals. In assessing management’s 

performance, the Compensation and Human Capital Committee noted that management smoothly transitioned senior 

leadership roles and delivered strong financial results while operating within risk limits, consistent with regulatory 

commitments. The Committee commended Fannie Mae’s focus on bolstering its capital position while prudently 

managing risk. The Compensation and Human Capital Committee also noted several control inadequacies and process 

failures identified in 2022, including errors in a model that affected our previously reported stress test results. The 

Committee noted that in response to identifying these issues, management swiftly assessed their impact and took steps 

to strengthen the company’s controls in an effort to avoid similar issues in the future. The Committee indicated its strong 

belief that management must prioritize identifying areas of control weakness and ensuring accuracy in its modeling.

The Board of Directors did not assign any relative weight to the Board of Directors’ goals and the Compensation and 

Human Capital Committee used its judgment in determining the overall level of company performance. In January 2023, 

following its review of management’s and the company’s performance in 2022, and after discussions among the 

independent members of the Board of Directors, the Compensation and Human Capital Committee recommended, and 

the Board of Directors determined, that corporate performance against the 2022 Board of Directors’ goals was 100% 

overall. 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 191
The Compensation and Human Capital Committee and the Board of Directors also assessed the 2022 individual 

performance of each named executive in January 2023. Following these assessments, the Compensation and Human 

Capital Committee recommended, and the Board of Directors determined, each eligible named executive’s individual 

performance-based at-risk deferred salary amount for 2022, as described in “Assessment of 2022 Individual 

Performance” below.

The Compensation and Human Capital Committee provided FHFA with its assessment of corporate performance 

against the 2022 Board of Directors’ goals. In February 2023, FHFA approved the performance-based at-risk deferred 

salary payments for the eligible named executives. 

The table below sets forth our 2022 Board of Directors’ goals and a summary of the Compensation and Human Capital 

Committee’s assessment of our achievement against these goals. 

Goals Relating to Strategic Objectives

Housing Access and ESG

Housing Access: Take action to ensure borrowers 

and renters have equitable access to long-term 

affordable housing opportunities.

Diversity and Inclusion (D&I): Promote diversity and 

the inclusion and utilization of minorities, women, and 

individuals with disabilities in all aspects of our 

business to enable pursuit of our mission.

Climate: Take targeted action to address climaterelated risks to Fannie Mae while also guiding efforts to 

support sustainable housing.

The goal was achieved. The Compensation and Human 

Capital Committee believes the company met its single-family 

and multifamily housing goals, its duty-to-serve obligations, its 

goals under the Equitable Housing Finance Plan, and its goals 

in support of sustainable housing. The Committee’s 

determination regarding the company’s single-family housing 

goals performance is partly based on its expectation of the level 

of goals-eligible originations in the primary mortgage market in 

2022. FHFA will make the final determination on whether the 

company has met its 2022 housing goals and duty to serve 

obligations.

The company also met its diversity and inclusion goals and 

continued to build foundational management capabilities and 

increased awareness and understanding of climate risk.

Financially Secure

Manage the company’s risk and financial position to 

ensure safety and soundness and to enable the pursuit 

of our mission-first approach to business.

The goal was achieved. Fannie Mae adhered to Boardapproved risk limits; limited administrative expenses at or below 

Board-approved limits; met FHFA-required levels of return 

measures on new acquisitions; and responded to FHFA’s 

directive regarding single-family pricing.

Digital Transformation

Increase our operational agility, stability, and efficiency 

while modernizing our technology platforms to support 

the broader housing finance system.

The goal was achieved. Fannie Mae made progress in cloud 

migrations and asset retirements. Fannie Mae also increased 

efficiency by expanding its adoption of development, security 

and operations (“DevSecOps”) capabilities and continued to 

strengthen its information security capabilities. 

Goals Relating to Other Objectives

Workforce

Develop and maintain our workforce to ensure

continuity of operations, support our strategy, and

enhance our culture.

The goal was achieved. Fannie Mae successfully developed 

and executed on a human capital strategy and evolved our 

approach and made significant progress on succession 

planning.

Regulatory

Ensure we are meeting commitments to FHFA.

The goal was achieved. Fannie Mae met or substantially met 

all the objectives in the 2022 FHFA scorecard and timely 

submitted requested documents and remediation plans to FHFA 

for all FHFA-identified risk and control matters within 

established timeframes or mutually acceptable extensions.

The Committee viewed delivering against FHFA’s 2022 

scorecard and collaboration and respectful engagement 

between Fannie Mae and FHFA as a paramount priority and 

commended Fannie Mae for prioritizing transparency and being 

proactive in its engagements with FHFA throughout the year.

Board of Directors’ Goals

Goals Performance Assessment

Assessment of 2022 Individual Performance 

Half of 2022 at-risk deferred salary, or 15% of overall 2022 total target direct compensation for each named executive 

other than Ms. Almodovar and Mr. Frater, was subject to reduction based on individual performance in 2022, as 

determined by the Board of Directors with FHFA’s approval. 

The Board’s determinations regarding individual performance were based on the recommendation of the Compensation 

and Human Capital Committee, which assessed the 2022 performance of our named executives. Because Mr. Frater 

left the company in May 2022, and because Ms. Almodovar joined the company in December 2022, their 2022 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 192
performance was not assessed. The Committee received input from Mr. Benson, our President, in assessing the 2022 

performance of named executives other than Mr. Benson. The Committee also received input from Mr. Hayward, our 

Executive Vice President and Chief Administrative Officer, and from our Chief Human Resources Officer in assessing 

the 2022 performance of some of our named executives. Upon recommendation from the Compensation and Human 

Capital Committee, the Board of Directors determined the performance of each eligible named executive and approved 

each eligible named executive’s individual performance-based at-risk deferred salary for 2022. The Board of Directors’ 

determinations and highlights of each named executive’s performance in 2022 are discussed below. FHFA approved the 

performance-based at-risk deferred salary payments for the eligible named executives in February 2023. 

For more information on the named executives’ 2022 individual performance-based at-risk deferred salary, see 

“Compensation Tables and Other Information—Summary Compensation Table,” including footnote 4 to the Summary 

Compensation Table for 2022, 2021 and 2020.

David Benson

President

Former Interim Chief 

Executive Officer

Mr. Benson has been President of Fannie Mae since 2018. In addition to serving as President 

in 2022, Mr. Benson served as the company’s Interim Chief Executive Officer from May to 

December 2022. The Board determined that Mr. Benson’s individual performance-based atrisk deferred salary for 2022 would be paid at 100% of his target. Mr. Benson’s continued 

strong leadership in 2022 was critical to the company’s success in achieving the 2022

scorecard and 2022 Board of Directors’ goals. His 2022 accomplishments included:

• achieved a smooth transition upon the departure of the former Chief Executive Officer 

and the former Board Chairwoman, improved working relationships with FHFA 

leadership and the Board of Directors, and served as a source of continuity for 

employees;

• to help prepare Fannie Mae for a forecasted recession, refocused the company’s 

strategy, 2022 Board of Directors’ goals, administrative budget, and risk appetite and 

limits to reflect current conditions, business fundamentals, and FHFA objectives;

• oversaw performance against our 2022 FHFA scorecard objectives and the 2022 Board 

of Directors’ goals, as well as our accomplishments in connection with our Equitable 

Housing Finance Plan, our work to support sustainable housing and to meet our 2022 

housing goals and duty-to-serve obligations;

• oversaw Fannie Mae’s thought leadership in delivering multiple mission-focused white 

papers and the launch of the Single-Family Social Index, which provides insights into 

socially oriented lending activities on the loans we acquire;

• recruited top talent in key executive positions, including a Chief Diversity Officer, a Chief 

Human Resources Officer, a Chief Audit Executive and a Chief Risk Officer; reorganized 

the division that reported to our former Chief Operating Officer and elevated a leader 

into the Chief Information Officer role; and served on the Board working group for the 

Chief Executive Officer search;

• promoted inclusive recruiting and internal development; and

• supported new management committee members – as well as those more established 

members – during leadership changes at FHFA, on the Board of Directors, and within 

our executive ranks.

Chryssa Halley

Executive Vice 

President and Chief 

Financial Officer

The Board determined that Ms. Halley’s individual performance-based at-risk deferred salary 

for 2022 would be paid at 100% of her target. Ms. Halley’s many accomplishments in 2022

provided critical support to Fannie Mae’s achievement of the company’s 2022 goals. Her 2022

accomplishments included: 

• supported the reorganization of the division that reported to our former Chief Operating 

Officer, including assuming responsibility for the modeling and strategy teams;

• oversaw successful implementation of a new general ledger in January 2022;

• worked on prioritization and capacity-based planning, including launching a 

management committee subgroup to review budget challenges and prioritization;

• launched a project to develop vision for forecasting in the future state; and

• oversaw divisional accomplishments including: development of the company’s first 

capital plan and capital reporting disclosure; work on the transition from LIBOR to 

SOFR; the public release of Fannie Mae’s Home Price Forecast and Refinance 

Application Loan Index (RALI); work on the refreshed corporate strategic plan; progress 

on resolving model governance issues; and advanced resolution planning.

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 193
Malloy Evans

Executive Vice 

President—SingleFamily

The Board determined that Mr. Evans’s individual performance-based at-risk deferred salary 

for 2022 would be paid at 100% of his target. Mr. Evans’s many accomplishments in 2022

contributed to Fannie Mae’s achievement of the company’s 2022 goals. His 2022

accomplishments included: 

• managed competing business objectives relating to risks, returns and our mission 

during a rapidly changing and challenging market environment;

• advanced the single-family team’s ability to prioritize work and capacity to deliver on 

high-value business outcomes, which is expected to enable resource and business 

agility and improve team member satisfaction related to delivering results; and

• with his leadership team, strengthened relationships with FHFA senior staff through 

transparency, thought leadership and problem solving, establishing credibility that 

facilitated significant work with FHFA on a wide array of matters including FHFA’s singlefamily pricing directive, risk limits management, appraisal modernization, and 

development of the social disclosures for Fannie Mae’s single-family MBS.

Jeffery Hayward

Executive Vice 

President and Chief 

Administrative Officer 

The Board determined that Mr. Hayward’s individual performance-based at-risk deferred 

salary for 2022 would be paid at 100% of his target. Mr. Hayward’s strong leadership in 2022

contributed to the company’s achievement of its 2022 goals in a number of significant ways. 

His 2022 accomplishments included:

• accomplished or supported accomplishment of FHFA 2022 scorecard items relating to 

housing goals, duty-to-serve obligations, the Equitable Housing Finance Plan and 

objectives relating to supporting sustainable housing, including, with the single-family 

and legal divisions, developing and launching a special purpose credit program pilot 

with a number of lenders;

• oversaw his team in hiring five new members of the company’s management committee 

through competitive external searches and activating succession plans upon the 

departure of our former Chief Operating Officer; and

• engaged leaders across the organization to develop the company’s human capital plan, 

including establishing and applying an organizational health framework for Fannie Mae 

and key metrics.

Terry Theologides

Executive Vice 

President, General 

Counsel, and 

Corporate Secretary

The Board determined that Mr. Theologides’s individual performance-based at-risk deferred 

salary for 2022 would be paid at 100% of his target. Mr. Theologides’s successful leadership 

of the Legal department provided critical support to Fannie Mae’s achievement of the 

company’s 2022 goals. His 2022 accomplishments included:

• expanded his contribution beyond legal issues to support our former Interim Chief 

Executive Officer in addressing issues relating to strategy, culture, enterprise safety and 

soundness, and Board- and FHFA-related matters; and

• enhanced legal department expertise, capacity, and succession depth to support new 

initiatives and challenges including model risk, capital planning, social disclosures for 

Fannie Mae MBS, resolution planning, and special purpose credit programs.

Other Executive Compensation Considerations 

Role of Compensation Consultants 

The Compensation and Human Capital Committee’s independent compensation consultant is Frederic W. Cook & Co., 

Inc. (“FW Cook”). Management’s outside compensation consultant is McLagan. 

For 2022, consultants from FW Cook attended meetings and advised the Compensation and Human Capital Committee 

and the Board of Directors on various executive compensation matters, including:

• preparing an analysis of compensation for our Chief Executive Officer and Chief Financial Officer positions in 

comparison to comparable positions at companies in our primary comparator group, based on information in 

proxy statements and other reports filed by those companies with the SEC;

• reviewing McLagan’s analysis of market compensation data for select senior management positions; 

• reviewing various management proposals relating to compensation structures and levels, and for new hires and 

promotions;

• reviewing our risk assessment of our 2022 compensation program;

• assisting the Compensation and Human Capital Committee in its evaluation of our performance against the 

2022 Board of Directors’ goals; 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 194
• facilitating the Compensation and Human Capital Committee’s evaluation of our President and former Interim 

Chief Executive Officer’s performance;

• informing the Compensation and Human Capital Committee of regulatory updates and market trends in 

compensation and benefits; and

• assisting with the preparation of executive compensation disclosure in our Annual Report on Form 10-K.

For 2022, consultants from McLagan attended meetings as needed and advised management and the Compensation 

and Human Capital Committee on various compensation and human resources matters, including:

• providing guidance and feedback on our 2022 executive compensation program;

• defining the protocol regarding benchmarking for executives;

• advising on market trends, competitive pay levels and various compensation proposals for new hires and 

promotions; 

• providing market compensation data for senior management positions, including the named executives’ 

positions (other than the Chief Executive Officer and Chief Financial Officer); and

• reviewing market data and trends, and providing Compensation and Human Capital Committee members with 

an opportunity to ask questions and discuss implications of trends on Fannie Mae.

Compensation Consultant Independence Assessment

Pursuant to SEC and NYSE rules, the Compensation and Human Capital Committee assessed the independence of 

FW Cook and McLagan most recently in December 2022. Based on its assessments, the Compensation and Human 

Capital Committee determined that FW Cook is independent from Fannie Mae management and has no conflicts of 

interest. 

Because McLagan was retained by and provides services to management, it is not an independent advisor. McLagan’s 

work raises no material conflicts of interest, and we believe any conflict of interest raised by McLagan’s retention and 

provision of services to management as well as to the Compensation and Human Capital Committee is addressed by 

the Compensation and Human Capital Committee’s receipt of advice from and access to FW Cook as its independent 

compensation consultant.

Comparator Group and Role of Benchmark Data

Our Compensation and Human Capital Committee typically requests benchmark compensation data for our senior 

executives on an annual basis to assess the compensation of the company’s senior executives relative to our 

comparator group or other appropriate benchmarks described below. In 2022, the Compensation and Human Capital 

Committee used benchmark compensation data as one of a number of factors that informed its compensation 

decisions.

Finding comparable firms for purposes of benchmarking executive compensation is challenging due to our unique 

business, structure and mission, and the large size of our book of business compared to other financial services firms. 

We believe the only directly comparable firm to us is Freddie Mac. At FHFA’s request, we and Freddie Mac use the 

same comparator group of companies for benchmarking executive compensation to provide consistency in the market 

data used for compensation decisions. Factors relevant to the selection of companies for our comparator group included 

their status as U.S. public companies, the industry in which they operate (each is a commercial bank, insurance 

company, finance lessor, government-sponsored enterprise or financial technology firm) and their size (in terms of 

assets and number of employees) relative to the size of Fannie Mae. Our primary comparator group for 2022

compensation benchmarking consisted of the following 24 companies:

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 195
• The Allstate Corporation • Mastercard Incorporated

• Ally Financial Inc. • MetLife, Inc.

• American International Group, Inc. • Northern Trust Corporation

• American Express Company • The PNC Financial Services Group, Inc.

• The Bank of New York Mellon Corporation • Prudential Financial, Inc.

• Capital One Financial Corporation • Regions Financial Corporation

• Citizens Financial Group, Inc. • State Street Corporation

• Discover Financial Services • Synchrony Financial

• Fifth Third Bancorp • Truist Financial Corporation

• Freddie Mac • U.S. Bancorp 

• The Hartford Financial Services Group, Inc. • Visa Inc.

• KeyCorp • Voya Financial, Inc.

This primary comparator group was developed and approved by FHFA and the Compensation and Human Capital 

Committee in 2017, except for Truist Financial Corporation, which was created by the December 2019 merger of two 

companies in the comparator group—BB&T Corporation and SunTrust Banks, Inc.

The Compensation and Human Capital Committee follows a bifurcated approach to benchmarking the compensation of 

senior executive positions. Under this approach, while the comparator group noted above is the primary group of 

companies used for benchmarking senior management pay levels, for certain senior management roles that are more 

comparable in function and/or scope to roles at firms outside this comparator group, the Compensation and Human 

Capital Committee considers pay levels against a broader or different group of companies. The company believes this 

more comprehensive approach results in more reliable market data. 

As described in “Role of Compensation Consultants” above, in 2022, FW Cook and McLagan prepared compensation 

benchmarking data for the named executives and other senior management positions. The compensation 

benchmarking data were primarily based on 2021 performance year compensation, but in most cases 2022 base salary 

information was included if available. The named executives’ 2022 total target direct compensation was compared with 

compensation for the comparable position at other companies as follows:

• the compensation of our Chief Executive Officer (Ms. Almodovar) and our Chief Financial Officer (Ms. Halley) 

was benchmarked against our primary comparator group identified above;

• the compensation of our President (Mr. Benson) was benchmarked against our primary comparator group to 

the extent those companies had a President position (14 of the 24 companies); 

• the compensation of our Executive Vice President—Single-Family (Mr. Evans) was benchmarked against five 

of the companies in our primary comparator group (Ally Financial Inc., Fifth Third Bancorp, Freddie Mac, Truist 

Financial Corporation and U.S. Bancorp), a group of large banks (Bank of America Corporation, Citigroup Inc., 

JPMorgan Chase & Co. and Wells Fargo & Company), and certain other U.S.-based financial services firms, 

specialty mortgage lending organizations and commercial real estate firms, to the extent those firms have 

executives in comparable positions; and

• the compensation of our Executive Vice President and Chief Administrative Officer (Mr. Hayward) and our 

Executive Vice President, General Counsel, and Corporate Secretary (Mr. Theologides) was benchmarked 

against our primary comparator group and divisional leadership from the group of large banks used for 

benchmarking Mr. Evans’ compensation, to the extent those firms have executives in comparable positions (Mr. 

Hayward’s compensation was benchmarked against compensation at 13 companies and Mr. Theologides’s 

compensation was benchmarked against compensation at 22 companies).

Members of the Compensation and Human Capital Committee reviewed and discussed these data in November 2022. 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 196
Compensation Recoupment Policies

Compensation Recoupment Policy

A portion of our executive officers’ compensation is subject to forfeiture or repayment upon the occurrence of specified 

events. We provide a summary of these repayment provisions, also known as “clawback” provisions, in the table below. 

The full text of the company’s repayment provisions is provided in Exhibit 10.1 to this report. 

Materially Inaccurate Information

The executive officer has been granted deferred salary or 

incentive payments based on materially inaccurate financial 

statements or any other materially inaccurate performance 

metric criteria.

Amounts of deferred salary and incentive payments 

granted in excess of the amounts the Board of 

Directors determines would likely have been granted 

using accurate metrics.

Termination for Cause

The executive officer’s employment is terminated for cause. 

For a description of what constitutes termination for cause, see 

“Potential Payments Upon Termination or Change-in-Control—

Potential Payments to Named Executives.”

All deferred salary and incentive payments that have 

not yet become payable.

Subsequent Determination of Cause

The Board of Directors later determines (within a specified 

period of time) that the executive officer could have been 

terminated for cause and that the officer’s actions materially 

harmed the business or reputation of the company.

Deferred salary and incentive payments to the extent 

the Board of Directors deems appropriate. 

Willful Misconduct

The executive officer’s employment: 

• is terminated for cause (or the Board of Directors later 

determines that cause for termination existed within a 

specified period of time) due to willful misconduct in 

connection with the performance of their duties for the 

company; and 

• the Board of Directors determines this has materially 

harmed the business or reputation of the company. 

All deferred salary and incentive payments that have 

not yet become payable, and, to the extent the 

Board of Directors deems appropriate, deferred 

salary and annual incentives or long-term awards 

paid in the two-year period prior to the officer’s 

employment termination date.

Forfeiture Event Compensation Subject to Forfeiture/Repayment

In addition, under Section 304 of the Sarbanes-Oxley Act of 2002, certain of the incentive-based compensation for 

individuals serving as our chief executive officer or chief financial officer, including compensation received for prior 

years, could become subject to reimbursement. 

Clawback Provision under Confidentiality and Proprietary Rights Agreement

In addition to the compensation recoupment policy described above, the current named executives (other than Ms. 

Almodovar, as described below) are subject to a compensation clawback provision the company implemented in 2021 

pursuant to a Confidentiality and Proprietary Rights Agreement (the “Agreement”) and related Covered Employee 

External Employment Activities Standard (the “Standard”). All specified covered employees, including the current named 

executives, are required to enter into the Agreement and are subject to the Standard. Covered employees’ obligations 

under the Agreement include, among other things, compliance with the Standard. The Agreement provides that, unless 

otherwise required by law, covered employees’ at-risk compensation is subject to reduction, forfeiture, recoupment, and 

repayment for violations of the Standard. Covered employees are required to sign a statement acknowledging their atrisk compensation is subject to these requirements.

The Standard defines the following as restricted activity: directly or indirectly seeking, negotiating, creating, developing 

or accepting employment or other commercial and business opportunities in which the covered employee has a 

personal interest outside of Fannie Mae with firms that have, or seek to have, a business relationship with Fannie Mae 

either during, or within the six-month period following, the covered employee’s employment at Fannie Mae. To address 

the risks associated with a covered employee engaging in restricted activities, the Standard requires covered 

employees to: 

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 197
• disclose timely prospective employment discussions in alignment with applicable Fannie Mae policies; 

• abide by specified mitigation activities to address the conflicts of interest posed by such disclosures;

• for a six-month period after the termination of their Fannie Mae employment, refrain from representing any 

person (including themselves) or any commercial entity to Fannie Mae or its employees in any way with respect 

to any matter on which the covered employee had direct and substantial involvement or participation while 

employed by Fannie Mae;

• maintain the confidentiality of Fannie Mae confidential information to which they had access in connection with 

their Fannie Mae employment after termination of their Fannie Mae employment;

• inform Fannie Mae at the time of their departure whether they have accepted an offer of employment and/or 

taken steps to form a new business and provide the name of the subsequent employer/company;

• abide by the one year non-solicitation/non-inducement of key employees to leave provisions of the Agreement; 

and

• inform any subsequent employer that engages in business with Fannie Mae of these requirements of the 

Standard to the extent that they remain applicable.

A covered employee’s failure to comply with the above-listed requirements of the Standard would be a violation of the 

Standard.

At-risk compensation for the named executives consists of the at-risk portion of deferred salary and excludes base 

salary and the fixed portion of deferred salary. The current named executives may be subject to:

• forfeiture of up to 100% of at-risk deferred salary that has not yet been paid; and

• recoupment of up to 100% of at-risk deferred salary that was paid during the period one year before or ending 

one year after the violation. 

In determining whether to take these actions, the decisionmaker may consider the seriousness of the violation, the level 

and responsibilities of the covered employee, the intentional nature of the conduct of the covered employee, whether 

the covered employee was unjustly enriched, whether seeking the recovery would prejudice the company’s interests in 

any way, including in a proceeding or investigation, and any other factors they deem relevant to the determination.

Because Mr. Frater and Ms. Almodovar received only base salary in 2022, this clawback provision does not apply to 

their compensation. The full text of the company’s Confidentiality and Proprietary Rights Agreement is provided in 

Exhibit 10.20 to this report and forms of the statement covered employees are required to sign are provided in 

Exhibit 10.21 and Exhibit 10.22 to this report.

Stock Ownership Policy 

We ceased paying new stock-based compensation to our executives after entering into conservatorship in September 

2008. In 2009, our Board of Directors eliminated our stock ownership requirements. 

Hedging Policy

All Fannie Mae employees, officers and directors are prohibited from transacting in options, puts, calls or other 

derivative securities relating to Fannie Mae’s securities, on an exchange or in any other organized market. All Fannie 

Mae employees, officers and directors are also prohibited from engaging in hedging transactions relating to Fannie 

Mae’s securities, such as prepaid variable forwards, equity swaps, collars and exchange funds, and other derivatives.

Compensation Committee Report

The Compensation and Human Capital Committee of the Board of Directors of Fannie Mae has reviewed and discussed 

the Compensation Discussion and Analysis included in this Annual Report on Form 10-K with management. Based on 

such review and discussions, the Compensation and Human Capital Committee has recommended to the Board of 

Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

Compensation and Human Capital Committee:

Diane C. Nordin, Chair

Karin J. Kimbrough, Vice Chair

Robert H. Herz

Manolo Sánchez

Executive Compensation | Compensation Discussion and Analysis

Fannie Mae 2022 Form 10-K 198
Compensation Risk Assessment

Our Enterprise Risk Management division conducted a risk assessment of our 2022 employee compensation policies 

and practices. In conducting this risk assessment, the division reviewed the following, among other things:

• our performance goals and performance appraisal process; 

• our compensation structure (including incentives and pay mix);

• our severance arrangements and compensation clawback provisions;

• the restrictions on compensation applicable during conservatorship, including the limit on annual direct 

compensation for our Chief Executive Officer; and

• the oversight of aspects of our compensation by the Compensation and Human Capital Committee, the Board 

of Directors and FHFA.

The division also assessed whether mitigating factors existed that would reduce the opportunity for inappropriate risktaking driven by our compensation policies and practices. The risk assessment of the company’s 2022 compensation 

policies and practices was shared with the Compensation and Human Capital Committee.

Based on the risk assessment, management concluded that our 2022 employee compensation policies and practices do 

not create risks that are reasonably likely to have a material adverse effect on the company. A number of factors 

contributed to this conclusion, including:

• the overall design of our compensation structure does not incentivize material risk taking;

• deferred salary for our executive officers is subject to clawback provisions; 

• our control environment for compensation includes: a defined and consistently applied annual performance 

appraisal process; compensation adjustment guidelines and criteria; succession planning; and retention 

planning and monitoring;

• our performance goals (including the FHFA 2022 scorecard objectives and the 2022 Board of Directors’ goals) 

are neither designed nor intended to incentivize employees to engage in activities contrary to our Employee 

Code of Conduct, risk appetite or any other activity that would involve taking inappropriate risks or result in a 

material adverse effect on the company; and

• our Board risk limits inhibit excessive risk taking, while allowing transparency and action when the limits are 

exceeded; the Board limits define the maximum amount of risk the company is willing to take in pursuit of its 

objectives, and the company regularly monitors, reports and escalates limit levels and the actions taken to 

manage them.

Management stated in its risk assessment that the cap on our Chief Executive Officer’s compensation under the Equity 

in Government Compensation Act of 2015 continues to be a risk factor for the company. As discussed in “Risk Factors,” 

the cap on our Chief Executive Officer compensation continues to make retention and succession planning for this 

position difficult, and it may make it difficult to attract qualified candidates for this critical role in the future.

Executive Compensation | Compensation Risk Assessment

Fannie Mae 2022 Form 10-K 199
Compensation Tables and Other Information

Summary Compensation Table

The following table shows summary compensation information for the named executives.

Summary Compensation Table for 2022, 2021 and 2020

Salary

Name and Principal Position(1) Year

Base

Salary(2)

Fixed Deferred

Salary

(Service-Based)(3)

Non-Equity

Incentive Plan

Compensation(4)

All Other

Compensation(5) Total

Priscilla Almodovar 2022 $ 46,154 $ — $ — $ — $ 46,154 

Chief Executive Officer

David Benson 2022 600,000 2,200,000 1,185,457 76,590 4,062,047 

President; Former Interim 2021 600,000 1,920,000 1,010,305 87,406 3,617,711 

Chief Executive Officer 2020 623,077 1,920,000 979,727 113,710 3,636,514 

Hugh Frater 2022 212,129 — — 11,769 223,898 

Former Chief Executive 2021 600,000 — — 36,000 636,000 

Officer 2020 600,000 — — 48,000 648,000 

Chryssa Halley 2022 500,000 1,018,462 642,882 58,386 2,219,730 

Executive Vice President 2021 440,000 335,385 310,863 62,707 1,148,955 

and Chief Financial Officer

H. Malloy Evans 2022 500,000 1,029,231 647,442 64,930 2,241,603 

Executive Vice President—

Single-Family

Jeffery Hayward 2022 500,000 1,460,000 829,820 67,847 2,857,667 

Executive Vice President 2021 500,000 1,460,000 745,873 72,268 2,778,141 

and Chief Administrative 2020 519,231 1,460,000 762,010 93,145 2,834,386 

Officer

Terry Theologides 2022 500,000 1,223,077 729,513 67,385 2,519,975 

Executive Vice President, 2021 500,000 1,180,000 673,537 77,128 2,430,665 

General Counsel, and 

Corporate Secretary

(1) Ms. Almodovar joined Fannie Mae as Chief Executive Officer in December 2022. Mr. Benson has been the 

company’s President since 2018 and also served as the company’s Interim Chief Executive Officer from May to 

December 2022. Mr. Frater was the company’s Chief Executive Officer until he left the company in May 2022. 

(2) Amounts shown in this sub-column consist of base salary paid during the year on a biweekly basis.

(3) Amounts shown in this sub-column consist of the fixed, service-based portion of deferred salary. Unlike at-risk 

deferred salary, which is shown in the following column, the fixed deferred salary shown in this column for 2022

generally will be paid in installments in March, June, September and December of 2023. Deferred salary accrues 

interest at one-half of the one-year Treasury Bill rate in effect on the last business day preceding the year in which 

the deferred salary is earned. For deferred salary earned in 2022, this rate is 0.195% per year. For deferred salary 

earned in 2021 and 2020, this rate was 0.050% and 0.795% per year, respectively. Interest payable on the named 

executives’ fixed deferred salary earned in a given year is shown in the “All Other Compensation” column for that 

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 200
year. Deferred salary shown for 2021 was paid to our named executives during 2022, and deferred salary shown for 

2020 was paid to our named executives during 2021.

(4) Amounts shown in this column consist of the performance-based at-risk portion of deferred salary earned during the 

year and interest payable on that deferred salary. At-risk deferred salary shown for 2022 generally will be paid in 

installments in March, June, September and December of 2023 and 2024. The table below provides more detail on 

the 2022 at-risk deferred salary awarded to our named executives. 

Performance-Based At-Risk Deferred Salary

Name

2022 Corporate 

Performance-Based 

At-Risk Deferred 

Salary

2022 Individual 

Performance-Based 

At-Risk Deferred 

Salary

Interest 

Payable on 

2022 At-Risk 

Deferred 

Salary Total

Priscilla Almodovar $ — $ — $ — $ — 

David Benson 582,000 600,000 3,457 1,185,457 

Hugh Frater — — — — 

Chryssa Halley 315,622 325,385 1,875 642,882 

H. Malloy Evans 317,861 327,693 1,888 647,442 

Jeffery Hayward 407,400 420,000 2,420 829,820 

Terry Theologides 358,154 369,231 2,128 729,513 

(5) The table below provides more detail on the amounts reported for 2022 in the “All Other Compensation” column. 

All Other Compensation

Name

Company

Contributions

to

Retirement

Savings

(401(k)) Plan

Company

Credits to

Supplemental

Retirement

Savings

Plan

Matching 

Charitable

Award

Program

Interest 

Payable on 

2022 Fixed 

Deferred 

Salary Total

Priscilla Almodovar $ — $ — $ — $ — $ — 

David Benson 18,300 53,700 300 4,290 76,590 

Hugh Frater 11,769 — — — 11,769 

Chryssa Halley 18,300 38,100 — 1,986 58,386 

H. Malloy Evans 18,300 39,623 5,000 2,007 64,930 

Jeffery Hayward 18,300 41,700 5,000 2,847 67,847 

Terry Theologides 18,300 41,700 5,000 2,385 67,385 

All 2022 company contributions to the Retirement Savings Plan and Supplemental Retirement Savings Plan are fully 

vested.

Amounts shown in the “Matching Charitable Award Program” column consist of gifts we made on behalf of our 

named executives under our matching charitable gifts program, under which gifts made by our employees and 

directors to Internal Revenue Code Section 501(c)(3) charities were matched, up to an aggregate total of $5,000 for 

the 2022 calendar year.

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 201
Plan-Based Awards 

The following table shows the annual at-risk deferred salary targets for each of the named executives for 2022. The 

terms of 2022 at-risk deferred salary are described in “Compensation Discussion and Analysis—2022 Executive 

Compensation Program; Chief Executive Officer Compensation—Elements of 2022 Executive Compensation Program

—Direct Compensation.” Deferred salary amounts shown represent only the target performance-based at-risk portion of 

the named executives’ 2022 deferred salary.

Grants of Plan-Based Awards in 2022

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards(1)

Name Award Type Threshold Target Maximum

Priscilla Almodovar At-risk deferred salary—Corporate $ — $ — $ — 

At-risk deferred salary—Individual — — — 

Total at-risk deferred salary — — — 

David Benson At-risk deferred salary—Corporate — 600,000 600,000 

At-risk deferred salary—Individual — 600,000 600,000 

Total at-risk deferred salary — 1,200,000 1,200,000 

Hugh Frater At-risk deferred salary—Corporate — — — 

At-risk deferred salary—Individual — — — 

Total at-risk deferred salary — — — 

Chryssa Halley At-risk deferred salary—Corporate — 325,384 325,384 

At-risk deferred salary—Individual — 325,385 325,385 

Total at-risk deferred salary — 650,769 650,769 

H. Malloy Evans At-risk deferred salary—Corporate — 327,692 327,692 

At-risk deferred salary—Individual — 327,693 327,693 

Total at-risk deferred salary — 655,385 655,385 

Jeffery Hayward At-risk deferred salary—Corporate — 420,000 420,000 

At-risk deferred salary—Individual — 420,000 420,000 

Total at-risk deferred salary — 840,000 840,000 

Terry Theologides At-risk deferred salary—Corporate — 369,231 369,231 

At-risk deferred salary—Individual — 369,231 369,231 

Total at-risk deferred salary — 738,462 738,462 

(1) Amounts shown are the target amounts of the performance-based at-risk portion of the named executives’ 2022

deferred salary. Half of 2022 at-risk deferred salary was subject to reduction based on corporate performance 

against the 2022 scorecard, as determined by FHFA, and half was subject to reduction based on individual 

performance in 2022, taking into account corporate performance against the 2022 Board of Directors’ goals, as 

determined by the Board of Directors with FHFA’s review. No amounts are shown in the “Threshold” column because 

deferred salary does not specify a minimum amount payable. The amounts shown in the “Maximum” column are the 

same as the amounts shown in the “Target” column because 2022 at-risk deferred salary was only subject to 

reduction; amounts higher than the target amount could not be awarded. The actual amounts of the at-risk portion of 

2022 deferred salary that will be paid to the named executives for 2022 performance are included in the “Non-Equity 

Incentive Plan Compensation” column of the “Summary Compensation Table for 2022, 2021 and 2020.” 

Pension Benefits 

Retirement Savings Plan

The Retirement Savings Plan is a tax-qualified defined contribution plan for which all of our employees are generally 

eligible that includes a 401(k) before-tax feature, a regular after-tax feature and a Roth after-tax feature. Under the plan, 

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 202
eligible employees may allocate investment balances to a variety of investment options. We match in cash employee 

contributions up to 6% of base salary and eligible incentive compensation. Employees are 100% vested in our matching 

contributions. Prior to 2021, in addition to this 6% credit, the Retirement Savings Plan provided for an additional 2% 

credit of eligible compensation. In November 2020, we amended the Retirement Savings Plan to eliminate this 

additional 2% credit, beginning with compensation earned for the 2021 plan year. In December 2022, we amended the 

plan again to reinstitute this additional 2% credit, beginning with compensation earned for the 2023 plan year.

Nonqualified Deferred Compensation

We provide nonqualified deferred compensation to the named executives pursuant to our Supplemental Retirement 

Savings Plan. Our Supplemental Retirement Savings Plan is an unfunded, non-tax-qualified defined contribution plan. 

The Supplemental Retirement Savings Plan is intended to supplement our Retirement Savings Plan, or 401(k) plan, by 

providing benefits to participants whose eligible earnings exceed the IRS annual limit on eligible compensation for 

401(k) plans (for 2022, the annual limit was $305,000).

For 2022, we credited 6% of the eligible compensation for our named executives that exceeded the applicable IRS 

annual limit, which was immediately vested. Eligible compensation in any year consists of base salary plus any eligible 

incentive compensation (which includes deferred salary) earned for that year, up to a combined maximum of two times 

base salary. Prior to 2021, in addition to this 6% credit, the Supplemental Retirement Savings Plan provided for an 

additional 2% credit of eligible compensation. In November 2020, we amended the Supplemental Retirement Savings 

Plan to eliminate this additional 2% credit, beginning with compensation earned for the 2021 plan year. In December

2022, we amended the plan again to reinstitute this additional 2% credit, beginning with compensation earned for the 

2023 plan year. 

While the Supplemental Retirement Savings Plan is not funded, amounts credited on behalf of a participant under the 

Supplemental Retirement Savings Plan are deemed to be invested in mutual fund investments selected by the 

participant that are similar to the investments offered under our Retirement Savings Plan.

Amounts deferred under the Supplemental Retirement Savings Plan are payable to participants in the January or July 

following separation from service with us, subject to a six-month delay in payment for our 50 most highly compensated 

officers. Participants generally may not withdraw amounts from the Supplemental Retirement Savings Plan while they 

are employees.

The table below provides information on the nonqualified deferred compensation of the named executives in 2022, all of 

which was provided pursuant to our Supplemental Retirement Savings Plan. 

Non-Qualified Deferred Compensation for 2022

Name

Company

Contributions

 in 2022(1)

Aggregate

Earnings in

2022(2)

Aggregate

Balance at

December 31, 

2022(3)

Priscilla Almodovar $ — $ — $ — 

David Benson 53,700 (124,757) 858,722 

Hugh Frater — (10,735) — 

Chryssa Halley 38,100 (114,339) 632,885 

H. Malloy Evans 39,623 (125,376) 552,165 

Jeffery Hayward 41,700 (115,924) 726,036 

Terry Theologides 41,700 (23,550) 146,025 

(1) All amounts reported in this column are also reported as 2022 compensation in the “All Other Compensation” column 

of the “Summary Compensation Table for 2022, 2021 and 2020.” 

(2) None of the earnings reported in this column are reported as 2022 compensation in the “Summary Compensation 

Table for 2022, 2021 and 2020” because the earnings are neither above-market nor preferential.

(3) Amounts reported in this column reflect company contributions to the Supplemental Retirement Savings Plan that 

are also reported in the “All Other Compensation” column of the “Summary Compensation Table for 2022, 2021 and 

2020” as follows:

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 203
Balance Amounts Reported in “All Other Compensation” in the Summary Compensation Table

Name

Amounts in Aggregate Balance 

Column that Represent Company 

Contributions Reported as 

Compensation for 2021 in the 

Summary Compensation Table

Amounts in Aggregate Balance 

Column that Represent Company 

Contributions Reported as 

Compensation for 2020 in the 

Summary Compensation Table

Priscilla Almodovar $ — $ — 

David Benson 68,446 75,046 

Hugh Frater 18,600 25,200 

Chryssa Halley 45,139 — 

H. Malloy Evans — — 

Jeffery Hayward 54,138 58,738 

Terry Theologides 54,138 — 

Potential Payments Upon Termination or Change-in-Control

The information below describes and quantifies certain compensation and benefits that would have become payable to 

each of our current named executives under our existing plans and arrangements if the named executive’s employment 

had terminated on December 31, 2022 under each of the circumstances described below, taking into account the 

named executive’s compensation and service levels as of that date. The discussion below does not reflect retirement or 

deferred compensation plan benefits to which our named executives may be entitled, as these benefits are described 

above under “Pension Benefits” and “Nonqualified Deferred Compensation.” The information below also does not 

generally reflect compensation and benefits available to all salaried employees upon termination of employment with us 

under similar circumstances. We are not obligated to provide any additional compensation to our named executives in 

connection with a change-in-control.

Potential Payments to Named Executives

We have not entered into agreements with any of our named executives that would entitle the executive to severance 

benefits. Under the 2022 executive compensation program, a named executive would be entitled to receive a specified 

portion of their earned but unpaid 2022 deferred salary if their employment was terminated for any reason, other than 

for cause. 

Below we discuss various elements of the current named executives’ compensation that would become payable in the 

event a named executive dies, resigns, retires, terminates employment due to long-term disability, or the company 

terminates their employment. We then quantify the amounts that would be paid to our current named executives in 

these circumstances, in each case assuming the triggering event occurred on December 31, 2022.

• Deferred salary. If a named executive is separated from employment with the company for any reason other than 

termination for cause, they would receive the following:

◦ Fixed deferred salary. The earned but unpaid portion of their fixed deferred salary, reduced by 2% for each full 

or partial month by which the named executive’s termination precedes January 31 of the second year 

following the performance year (or, if later, the end of the twenty-fourth month following the month in which the 

named executive first earned deferred salary), except that the reduction will not apply if: (1) at the time of 

separation the named executive has reached age 62, or age 55 with 10 years of service with Fannie Mae, or 

(2) the named executive’s employment terminates as a result of death or long-term disability.

◦ At-risk deferred salary. The earned but unpaid portion of their at-risk deferred salary, subject to reduction from 

the target level for corporate and individual performance for the applicable performance year, except that the 

reduction will not apply if an officer’s employment terminates as a result of death or long-term disability prior to 

the Board of Directors’ and FHFA’s determinations of performance for at-risk deferred salary.

◦ Interest on deferred salary. Interest on deferred salary payments. Deferred salary accrues interest at one-half 

of the one-year Treasury Bill rate in effect on the last business day preceding the year in which the deferred 

salary is earned.

Payment dates. Installment payments of deferred salary and related interest would be made on the original 

payment schedule, except that payments will be made within 90 days in case of the named executive’s death.

Termination for cause. If a named executive’s employment is terminated by the company for cause, they would not 

receive any of the earned but unpaid portion of their deferred salary. The company may terminate an executive for 

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 204
cause if it determines that the executive has: (a) materially harmed the company by, in connection with the 

performance of their duties for the company, engaging in gross misconduct or performing their duties in a grossly 

negligent manner; or (b) been convicted of, or pleaded nolo contendere with respect to, a felony.

• Retiree medical benefits. We currently make certain retiree medical benefits available to our full-time employees 

who meet certain age and service requirements at the time of retirement.

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 205
The table below shows the amounts that would have become payable to each of our current named executives if their 

employment had terminated on December 31, 2022 for the reasons specified. No amounts are shown for Ms. 

Almodovar or Mr. Frater, as they did not receive deferred salary. 

Potential Payments Upon Termination as of December 31, 2022

Name

2022 Fixed

Deferred Salary(1)

2022 At-Risk

Deferred Salary(2)

Interest on 2022 

Deferred Salary(3) Total

Priscilla Almodovar

Resignation, retirement, or termination 

without cause $ — $ — $ — $ — 

Long-term disability — — — — 

Death — — — — 

Termination for cause — — — — 

David Benson

Resignation, retirement, or termination 

without cause 2,200,000 1,182,000 6,595 3,388,595 

Long-term disability 2,200,000 1,200,000 6,630 3,406,630 

Death 2,200,000 1,200,000 3,829 3,403,829 

Termination for cause — — — — 

Hugh Frater

Resignation, retirement, or termination 

without cause — — — — 

Long-term disability — — — — 

Death — — — — 

Termination for cause — — — — 

Chryssa Halley

Resignation, retirement, or termination 

without cause 1,018,462 641,007 3,236 1,662,705 

Long-term disability 1,018,462 650,769 3,255 1,672,486 

Death 1,018,462 650,769 1,791 1,671,022 

Termination for cause — — — — 

H. Malloy Evans

Resignation, retirement, or termination 

without cause 761,631 645,554 2,744 1,409,929 

Long-term disability 1,029,231 655,385 3,285 1,687,901 

Death 1,029,231 655,385 1,806 1,686,422 

Termination for cause — — — — 

Jeffery Hayward

Resignation, retirement, or termination 

without cause 1,460,000 827,400 4,460 2,291,860 

Long-term disability 1,460,000 840,000 4,485 2,304,485 

Death 1,460,000 840,000 2,717 2,302,717 

Termination for cause — — — — 

Terry Theologides

Resignation, retirement, or termination 

without cause 905,077 727,385 3,183 1,635,645 

Long-term disability 1,223,077 738,462 3,825 1,965,364 

Death 1,223,077 738,462 2,278 1,963,817 

Termination for cause — — — — 

(1) In the case of resignation, retirement or termination without cause, Mr. Evans and Mr. Theologides each would have 

received 74% of their 2022 fixed deferred salary, which is the earned but unpaid portion of their 2022 fixed deferred 

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 206
salary as of December 31, 2022, reduced by 2% for each full or partial month by which their separation from 

employment preceded January 31, 2024. Ms. Halley, Mr. Benson and Mr. Hayward each would have received 100% 

of their 2022 fixed deferred salary, with no reduction, because Ms. Halley had reached age 55 with 10 years of 

service with Fannie Mae and Mr. Benson and Mr. Hayward had reached age 62. 

(2) The amounts in this column in the event of resignation, retirement, or termination without cause reflect FHFA’s and 

the Board’s determinations of 2022 corporate performance-based at-risk deferred salary and 2022 individual 

performance-based at-risk deferred salary, as described in “Compensation Discussion and Analysis—Determination 

of 2022 Compensation.” The amounts in this column for current named executives in the event of a termination due 

to death or long-term disability do not reflect any performance-based reduction, because the hypothetical 

December 31, 2022 termination date occurred prior to FHFA’s and the Board’s performance determinations for atrisk deferred salary in early 2023.

(3) Interest payable on the deferred salary payments, which reflects that: (a) in the event of resignation, retirement, 

termination without cause, or long-term disability, installment payments of deferred salary would be paid on the 

original payment schedule; and (b) in the event of death, payments of deferred salary would be made within 90 days 

of the executive’s death. Interest on 2022 deferred salary payments accrues at an annual rate of 0.195%.

Chief Executive Officer to Median Employee Pay Ratio

The following table shows the compensation paid to our Chief Executive Officer for 2022, annualized, the total 2022

compensation of our median employee (which was calculated based on the methodology described below the table), 

and the estimated ratio of the Chief Executive Officer’s pay to the median employee’s pay for 2022. 

The total compensation for our Chief Executive Officer, Ms. Almodovar, was $46,154, consisting solely of base salary, 

as reported for 2022 in the “Total” column of the “Summary Compensation Table for 2022, 2021 and 2020. Based on her 

joining Fannie Mae on December 5, 2022, we annualized Ms. Almodovar’s base salary to $600,000, which we used to 

estimate the ratio shown below.

2022 Chief Executive Officer to Median Employee Pay Ratio

Individual Compensation Ratio

Chief Executive Officer $ 600,000 

3.8 to 1 Median Employee 156,405 

We took the following steps to identify our median employee and determine this employee’s compensation:

• We identified our employee population as of December 31, 2022, which consisted of approximately 8,000 fulltime and part-time employees. We did not include independent contractors in this population.

• For each employee (other than our Chief Executive Officer and our former Interim Chief Executive Officer), we 

determined the sum of their base salary for 2022, performance awards paid in 2022 and the value of company 

contributions made in 2022 on their behalf to retirement plans. We did not annualize the compensation of 

employees who were employed for less than the full year, nor did we make any full-time equivalent adjustments 

to part-time employees.

• Comparing the sums, we identified an employee whose compensation best reflected Fannie Mae employees’ 

median 2022 compensation (that is, the midpoint of employees ranked in order of compensation amount).

• We then determined that median employee’s total 2022 compensation using the approach required by the SEC 

when calculating our named executives’ compensation, as reported in the Summary Compensation Table.

In general, we offer employees base salary, the opportunity to receive awards for performance, company retirement 

plan contributions and other benefits. In accordance with SEC rules, the median employee compensation amount for 

2022 provided in the table above consists of base salary, an award for 2022 performance and company retirement plan 

contributions, but does not reflect benefits relating to group life or health plans generally available to all salaried 

employees, parking or transit benefits that are generally available to all salaried employees, or personal benefits with an 

aggregate value of less than $10,000.

Given the different methodologies that companies may use to determine their Chief Executive Officer pay ratios, the 

estimated ratio we report above may not be comparable to that reported by other companies.

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 207
Director Compensation 

Overview 

Our Corporate Governance Guidelines provide that compensation for members of the Board of Directors will be 

reasonable, appropriate, and commensurate with the duties and responsibilities of their Board service. Our nonmanagement directors receive cash compensation pursuant to a program authorized by FHFA in 2008. The 

compensation we provide to directors has not increased since this program was implemented in 2008. 

Three of our named executives–Ms. Almodovar, Mr. Benson and Mr. Frater–served on our Board of Directors in 2022 in 

connection with their service as Chief Executive Officer or Interim Chief Executive Officer. We did not provide them any 

additional compensation for their service on the Board of Directors in 2022.

Board Compensation Levels

Board compensation levels under the program authorized by FHFA are shown in the table below. Our directors receive 

no equity compensation and no meeting fees.

Board Compensation Levels

Board Service Cash Compensation

Annual retainer for non-executive Chair $ 290,000 

Annual retainer for non-management directors (other than the non-executive Chair) 160,000 

Committee Service Cash Compensation

Annual retainer for Audit Committee Chair $ 25,000 

Annual retainer for Risk Policy and Capital Committee Chair 15,000 

Annual retainer for all other Committee Chairs 10,000 

Annual retainer for Audit Committee members (other than the Audit Committee Chair) 10,000 

Additional Arrangements with our Non-Management Directors

Expenses. We pay for or reimburse directors for out-of-pocket expenses incurred in connection with their service on the 

Board of Directors, including travel to and from our meetings, accommodations, meals and education.

Matching Charitable Gifts Program. To further our support for charitable giving, non-employee directors are able to 

participate in our corporate matching gifts program on the same terms as our employees.

Stock Ownership Guidelines for Directors. In 2009, our Board of Directors eliminated our stock ownership requirements 

for directors.

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 208
2022 Non-Management Director Compensation

The total 2022 compensation for our non-management directors is shown in the table below.

2022 Non-Management Director Compensation Table

Name

Fees Earned

or Paid

in Cash

All Other 

Compensation(1) Total

Amy Alving $ 172,083 $ — $ 172,083 

Christopher Brummer 160,000 — 160,000 

Renée Glover 174,167 — 174,167 

Michael Heid 258,333 — 258,333 

Robert Herz 185,000 1,000 186,000 

Simon Johnson 170,000 5,000 175,000 

Karin Kimbrough 164,167 — 164,167 

Diane Nordin 180,000 5,000 185,000 

Manolo Sánchez 168,750 5,000 173,750 

Directors who resigned from the Board during 2022

Sheila Bair(2) 96,667 — 96,667 

Antony Jenkins(2) 53,333 — 53,333 

(1) Amounts shown in the “All Other Compensation” column consist of gifts we made on behalf of the directors under our 

matching charitable gifts program, under which gifts made by our employees and directors to Internal Revenue Code 

Section 501(c)(3) charities were matched, up to an aggregate total of $5,000 for the 2022 calendar year.

(2) Ms. Bair and Mr. Jenkins resigned from Fannie Mae’s Board of Directors effective May 2022.

Executive Compensation | Compensation Tables and Other Information

Fannie Mae 2022 Form 10-K 209
Item 12. Security Ownership of Certain Beneficial Owners 

and Management and Related Stockholder Matters

Beneficial Ownership

Stock Ownership of Directors and Executive Officers

The following table shows the beneficial ownership of our stock by each of our directors, each of our named executives, 

and all directors and executive officers as a group, as of February 1, 2023. As of that date, no director or named 

executive, nor all directors and executive officers as a group, owned as much as 1% of our outstanding common stock 

or owned any series of our preferred stock.

Beneficial Ownership of Stock by Directors and Executive Officers

Directors and Named Executives Position

Number of Shares of 

Common Stock 

Beneficially Owned(1)

Priscilla Almodovar Chief Executive Officer and Director 0

Amy Alving Director 0

Christopher Brummer Director 0

Renée Glover Director 0

Michael Heid Director (Board Chair) 0

Robert Herz Director 0

Simon Johnson Director 0

Karin Kimbrough Director 0

Diane Nordin Director 0

Manolo Sánchez Director 0

David Benson President 0

Hugh Frater Former Chief Executive Officer 0

Malloy Evans EVP—Single-Family 0

Chryssa Halley EVP and Chief Financial Officer 0

Jeffery Hayward EVP and Chief Administrative Officer 14,868

Terry Theologides EVP, General Counsel, and Corporate Secretary 0

All directors and executive officers as a group (17 persons)(2) 44,014 

(1) Beneficial ownership is determined in accordance with the rules of the SEC for computing the number of shares of 

common stock beneficially owned by each person and the percentage owned. Each holder has sole investment and 

voting power over the shares referenced in this table, except for 9,146 shares for which one executive officer shares 

investment and voting power with their spouse. None of our directors, named executives or other executive officers 

held any series of our preferred stock as of the date of this table.

(2)

 Group includes directors and current executive officers.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |

Beneficial Ownership

Fannie Mae 2022 Form 10-K 210
Stock Ownership of Greater-Than 5% Holders

The following table shows the beneficial ownership of our common stock by the only persons or entities we know of that 

hold more than 5% of our common stock as of February 1, 2023.

Beneficial Ownership of Stock by 5%+ Holders

5%+ Holders

Common Stock

Beneficially 

Owned

Percent

of Class

U.S. Department of the Treasury Variable(1) 79.9 %

1500 Pennsylvania Avenue, NW, Washington, DC 20220

Pershing Square Capital Management, L.P.

PS Management GP, LLC

William A. Ackman 115,569,796(2) 9.98 %

787 Eleventh Avenue, 9th Floor, New York, New York 10019 

(1) In September 2008, we issued to Treasury a warrant to purchase, for one one-thousandth of a cent ($0.00001) per 

share, shares of our common stock equal to 79.9% of the total number of shares of our common stock outstanding 

on a fully diluted basis at the time the warrant is exercised. The warrant may be exercised in whole or in part at any 

time until September 7, 2028. As of February 14, 2023, Treasury has not exercised the warrant. The information 

above assumes Treasury beneficially owns no other shares of our common stock.

(2) Information regarding these shares and their holders is based solely on information contained in a Schedule 13D 

filed with the SEC on November 15, 2013, as amended by an amendment to the Schedule 13D filed on March 31, 

2014. The Schedule 13D and its amendment were filed by these holders as well as by Pershing Square GP, LLC. 

According to the original Schedule 13D, Pershing Square Capital Management, L.P., as investment adviser for a 

number of funds for which it purchased the shares reported in the table above, and PS Management GP, LLC, its 

general partner, may be deemed to share voting and dispositive power for the shares. Pershing Square GP, LLC, as 

general partner of two of the funds, may be deemed to share voting and dispositive power for 40,114,044 of the 

shares reported in the table above, which are held by the two funds. As the Chief Executive Officer of Pershing 

Square Capital Management, L.P. and managing member of each of PS Management GP, LLC and Pershing Square 

GP, LLC, William A. Ackman may be deemed to share voting and dispositive power for all of the shares reported in 

the table above. In the amendment, the parties further reported that certain of them had entered into swap 

transactions resulting in their having additional economic exposure to approximately 15,434,715 notional shares of 

common stock under certain cash-settled total return swaps, bringing their total aggregate economic exposure to 

131,004,511 shares of common stock (approximately 11.31% of the outstanding common stock). In the amendment 

to the Schedule 13D, these parties indicated that they would forgo future reporting on Schedule 13D based on their 

determination that shares of the common stock are not voting securities as such term is used in Rule 13d-1(i) under 

the Securities Exchange Act. As a result, the information in the table above does not reflect any acquisitions or 

dispositions by these holders of Fannie Mae common stock that occurred after March 31, 2014.

Item 13. Certain Relationships and Related Transactions, 

and Director Independence

Policies and Procedures Relating to Transactions with 

Related Persons

Overview. We review transactions in which Fannie Mae is a participant and in which any of our directors or executive 

officers or their immediate family members may have a material interest to determine whether any of those persons has 

a material interest in the transaction. Our current written policies and procedures for the review, approval or ratification 

of transactions with related persons that are required to be reported under Item 404(a) of Regulation S-K are set forth in 

our:

• Director Code of Conduct;

• Corporate Governance Guidelines;

• Nominating and Corporate Governance Committee Charter;

• Board of Directors’ delegation of authorities and reservation of powers;

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |

Beneficial Ownership

Fannie Mae 2022 Form 10-K 211
• Employee Code of Conduct; and

• Oversight of Designated Executive Officers’ Conflicts of Interest and Business Courtesies Matters Policy.

In addition, depending on the circumstances, relationships and transactions with related persons may require 

conservator decision pursuant to the instructions issued to the Board of Directors by the conservator or may require the 

consent of Treasury pursuant to the senior preferred stock purchase agreement.

Director Code of Conduct. Our Director Code of Conduct prohibits our directors from engaging in any conduct or 

activity that is inconsistent with our best interests, as defined by the conservator’s express directions, its policies and 

applicable law. Our Director Code of Conduct requires our directors to excuse themselves from voting on any issue 

before the Board that could result in a conflict, self-dealing or other circumstance where their position as directors would 

be detrimental to us or result in a noncompetitive, favored or unfair advantage to either themselves or their associates. 

In addition, our directors must disclose to the Chair of the Nominating and Corporate Governance Committee, or 

another member of the Committee, any situation that involves or appears to involve a conflict of interest. This includes, 

for example, a financial interest of a director, an immediate family member of a director or a business associate of a 

director in any transaction being considered by the Board, as well as a financial interest a director has in an organization 

doing business with us. Our directors also are required to comply with the company’s procedures for the review, 

approval, or ratification of related person transactions. Each of our directors also must annually certify compliance with 

our Director Code of Conduct.

Corporate Governance Guidelines; Board Delegation of Authorities and Reservation of Powers. Our Corporate 

Governance Guidelines provide that our Board of Directors, directly or through its committees, reviews and approves 

any action that in the reasonable business judgment of management at the time the action is taken is likely to cause 

significant reputational risk to Fannie Mae or result in substantial negative publicity. Our Board’s delegation of authorities 

and reservation of powers similarly requires Board or Board committee approval for these actions. Depending on 

management’s business judgment, this requirement might include a related party transaction. 

Nominating and Corporate Governance Committee Charter; Board Delegation of Authorities and Reservation of 

Powers. The Nominating and Corporate Governance Committee Charter and our Board’s delegation of authorities and 

reservation of powers require the Nominating and Corporate Governance Committee to approve transactions with any 

director, nominee for director or executive officer, or any immediate family member of a director, nominee for director or 

executive officer that are required to be disclosed pursuant to Item 404 of Regulation S-K. 

Employee Code of Conduct. Our Employee Code of Conduct requires that our employees seek to avoid any actual or 

apparent conflicts between our business interests and the personal interests, activities and relationships of our 

employees, or that could expose the company to reputational risk. Our Employee Code of Conduct requires our 

employees to raise compliance or ethics concerns, including concerns relating to suspected or known violations of our 

Employee Code of Conduct, with the employee’s manager, another appropriate member of management, a member of 

our Human Resources division or our Compliance and Ethics division.

Designated Executive Officer Conflicts Policy. Our Oversight of Designated Executive Officers’ Conflicts of Interest 

and Business Courtesies Matters Policy (“Designated Executive Officer Conflicts Policy”) requires that our executive 

officers report to the Compliance and Ethics division any transaction with us in which the executive officer or any 

immediate family member of the executive officer has a direct or indirect interest, including any transaction that is 

required to be disclosed under Item 404(a) of Regulation S-K. The Designated Executive Officer Conflicts Policy 

provides that the Compliance and Ethics division will notify Legal department personnel with responsibility for the 

company’s periodic SEC filings as soon as possible of any such disclosure by an executive officer and work with Legal 

department personnel to ensure reporting of such transaction occurs if determined necessary or appropriate. The 

Designated Executive Officer Conflicts Policy also provides that, if the Compliance and Ethics division has determined 

the reported transaction poses a conflict or if the reported transaction involves the CEO, the division will submit its initial 

determination and any recommended mitigation activities regarding such transaction to the Nominating and Corporate 

Governance Committee to approve, deny or further condition.

Conservator Instructions. We are required by the conservator to obtain its decision for various matters, some of which 

may involve relationships or transactions with related persons. These matters include: actions requiring the consent of 

or consultation with Treasury under the senior preferred stock purchase agreement; the creation of any subsidiary or 

affiliate, or entering into a substantial transaction with a subsidiary or affiliate, except for routine ongoing transactions 

with CSS or the creation of, or a transaction with, a subsidiary or affiliate undertaken in the ordinary course of business; 

changes in employee compensation that could significantly impact our employees; new compensation arrangements 

with or increases in compensation or benefits for our executive officers; setting or increasing the compensation or 

benefits payable to members of the Board; and changes in our business operations, activities, and transactions that in 

the reasonable business judgment of management are more likely than not to result in a significant increase in credit, 

market, reputational, operational or other key risks. 

Certain Relationships and Related Transactions, and Director Independence |

Policies and Procedures Relating to Transactions with Related Persons

Fannie Mae 2022 Form 10-K 212
Senior Preferred Stock Purchase Agreement. The senior preferred stock purchase agreement requires us to obtain 

written Treasury approval of transactions with affiliates unless, among other things, the transaction is upon terms no 

less favorable to us than would be obtained in a comparable arm’s-length transaction with a non-affiliate or the 

transaction is undertaken in the ordinary course or pursuant to a contractual obligation or customary employment 

arrangement in existence at the time the senior preferred stock purchase agreement was entered into.

Director and Officer Disclosures. We require our directors and executive officers, not less than annually, to describe 

to us any transaction with us in which a director or executive officer could potentially have an interest that would require 

disclosure under Item 404 of Regulation S-K.

Transactions with Related Persons

Transactions with Treasury

Treasury beneficially owns more than 5% of the outstanding shares of our common stock by virtue of the warrant we 

issued to Treasury on September 7, 2008. The warrant entitles Treasury to purchase shares of our common stock equal 

to 79.9% of our outstanding common stock on a fully diluted basis on the date of exercise, for an exercise price of 

$0.00001 per share, and is exercisable in whole or in part at any time on or before September 7, 2028. We describe 

below our current agreements with Treasury, as well as payments we are making to Treasury pursuant to the Temporary 

Payroll Tax Cut Continuation Act of 2011, the Infrastructure Investment and Jobs Act and the GSE Act. 

FHFA, as conservator, approved the senior preferred stock purchase agreement, the amendments to the agreement 

and the letter agreements relating to the agreement and the senior preferred stock. FHFA, as conservator, also 

approved our role as program administrator for the Home Affordable Modification Program and other initiatives under 

the Making Home Affordable Program.

Treasury Senior Preferred Stock Purchase Agreement and Senior Preferred 

Stock

We issued the warrant to Treasury pursuant to the terms of the senior preferred stock purchase agreement we entered 

into with Treasury on September 7, 2008. Under the senior preferred stock purchase agreement, we also issued to 

Treasury one million shares of senior preferred stock. We issued the warrant and the senior preferred stock as an initial 

commitment fee in consideration of Treasury’s commitment to provide funds to us under the terms and conditions set 

forth in the senior preferred stock purchase agreement. The senior preferred stock purchase agreement was 

subsequently amended on September 26, 2008, May 6, 2009, December 24, 2009 and August 17, 2012. We, through 

FHFA, in its capacity as conservator, and Treasury entered into letter agreements modifying the terms of the senior 

preferred stock purchase agreement and the senior preferred stock on December 21, 2017, September 27, 2019 and 

January 14, 2021. In addition, we, through FHFA, in its capacity as conservator, and Treasury entered into a letter 

agreement on September 14, 2021 that temporarily suspended some of the provisions added to the senior preferred 

stock purchase agreement pursuant to the January 14, 2021 letter agreement. See “Business—Conservatorship and 

Treasury Agreements—Treasury Agreements” for a description of the terms, as amended, of the senior preferred stock 

purchase agreement, the senior preferred stock and the warrant.

As of December 31, 2022, we had received an aggregate of $119.8 billion from Treasury under the senior preferred 

stock purchase agreement, none of which was received in 2022, and the remaining amount of funding available to us 

under the agreement was $113.9 billion. Through December 31, 2022, we had paid an aggregate of $181.4 billion to 

Treasury in dividends on the senior preferred stock, none of which was paid in 2022.

Treasury Making Home Affordable Program

In 2009, Treasury launched the Making Home Affordable Program to help struggling homeowners avoid foreclosure and 

engaged us as program administrator for loans modified under the Home Affordable Modification Program, or HAMP, 

and other initiatives under the Making Home Affordable Program. HAMP was aimed at helping borrowers by modifying 

their mortgage loan to make their payments more affordable. In 2022, our principal activities as program administrator 

included: 

• supporting servicers and managing the process for servicers to report modification activity and program 

performance; 

• calculating incentive compensation consistent with program guidelines; 

• acting as record-keeper for executed loan modifications and program administration; and 

• performing other tasks as directed by Treasury from time to time. 

Certain Relationships and Related Transactions, and Director Independence |

Policies and Procedures Relating to Transactions with Related Persons

Fannie Mae 2022 Form 10-K 213
Although borrowers could apply for modifications under HAMP only through 2016, our role as program administrator 

continues in order to administer remaining incentives payable under the program and to continue record-keeping for 

completed modification activity and performance.

Under our arrangement, Treasury has compensated us for a significant portion of the work we have performed in our 

role as program administrator for HAMP and other initiatives under the Making Home Affordable Program. We expect 

we will have received an aggregate of approximately $559 million from Treasury for our work as program administrator 

from 2009 through 2022, as well as an additional amount of approximately $155 million for this period to be passed 

through to third-party vendors engaged by us for HAMP and other initiatives under the Making Home Affordable 

Program. We expect to receive reimbursements from Treasury for our work through the completion of our role as 

program administrator later in 2023.

Obligation to Pay TCCA Fees to Treasury

In December 2011, Congress enacted the Temporary Payroll Tax Cut Continuation Act of 2011 which, among other 

provisions, required that we increase our single-family guaranty fees by at least 10 basis points and remit this increase 

to Treasury. To meet our obligations under the TCCA and at the direction of FHFA, we increased the guaranty fee on all 

single-family residential mortgages delivered to us by 10 basis points in April 2012. In November 2021, the 

Infrastructure Investment and Jobs Act was enacted, which extended to October 1, 2032 our obligation under the TCCA 

to collect 10 basis points in guaranty fees on single-family residential mortgages delivered to us and pay the associated 

revenue to Treasury. In January 2022, FHFA advised us to continue to pay these TCCA fees to Treasury with respect to 

all single-family loans acquired by us before October 1, 2032, and to continue to remit these amounts to Treasury on 

and after October 1, 2032 with respect to loans we acquired before this date until those loans are paid off or otherwise 

liquidated. In 2022, we recognized $3.4 billion for our obligations to Treasury under the TCCA. 

Treasury Interest in Affordable Housing Allocations 

The GSE Act requires us to set aside in each fiscal year an amount equal to 4.2 basis points for each dollar of the 

unpaid principal balance of our total new business purchases and to pay this amount to specified HUD and Treasury 

funds. In December 2014, FHFA directed us to set aside amounts for these contributions during each fiscal year, except 

for any fiscal year for which a draw from Treasury was made under the terms of the senior preferred stock purchase 

agreement, or in which such allocation or transfer would cause such a draw. We paid $598 million to the funds in 2022

based on our new business purchases in 2021. Pursuant to the GSE Act and directions from FHFA, we paid 

$209 million of this amount to Treasury’s Capital Magnet Fund and $389 million of this amount to HUD’s Housing Trust 

Fund. 

Our new business purchases were $684.5 billion for the year ended December 31, 2022. Accordingly, we recognized an 

expense of $287 million related to this obligation for the year ended December 31, 2022. Of this amount, $101 million is 

payable to Treasury’s Capital Magnet Fund and $186 million is payable to HUD’s Housing Trust Fund. See “Business—

Legislation and Regulation—GSE-Focused Matters—Affordable Housing Allocations” for more information regarding the 

GSE Act’s affordable housing allocation requirements. 

Transactions with Enterprise Community Partners, Inc.

Prior to joining Fannie Mae in December 2022, Priscilla Almodovar, who is our Chief Executive Officer and a director, 

served as President and Chief Executive Officer of Enterprise Community Partners, Inc. (“Enterprise”), which invests in 

communities nationwide to address affordable housing challenges and expand access to investment capital. A portion of 

Ms. Almodovar’s 2022 compensation from Enterprise was based on Enterprise’s performance. 

We have business relationships with Enterprise or entities Enterprise owns or in which Enterprise has an interest. These 

relationships include the following:

• LIHTC equity investments. We have made and expect in the future to make equity investments in LIHTC funds 

for which a subsidiary of Enterprise serves as the LIHTC syndicator and fund manager. In 2022, we entered 

into LIHTC fund agreements with Enterprise pursuant to which we anticipate investing approximately $200 

million, only a portion of which had been funded as of December 31, 2022. Enterprise’s subsidiary receives 

syndication fees from LIHTC funds at the time of the original investment and ongoing asset management fees 

relating to managing investments of these LIHTC funds.

• Affordable loan purchases. We purchase loans that support affordable housing through various lenders. In 

some cases, Enterprise, in its capacity as a LIHTC syndicator and fund manager, has invested in and manages 

a LIHTC fund that has a limited partnership interest in the underlying borrower for a loan purchased by us.

• DUS lender relationship. Enterprise owns a controlling interest in Bellwether Enterprise Real Estate Capital, 

LLC, which is the parent company of a Fannie Mae DUS lender (“Bellwether”). We regularly enter into 

Certain Relationships and Related Transactions, and Director Independence | 

Transactions with Related Persons

Fannie Mae 2022 Form 10-K 214
transactions with Bellwether in the ordinary course of this business relationship, including securitizations of 

multifamily mortgage loans and trades in multifamily Fannie Mae MBS. As a DUS lender, Bellwether receives 

servicing fees from the borrower in connection with such loans and is obligated to share in the loss of any loan 

that it delivers to us that subsequently defaults. As of December 31, 2022, we held less than $10 billion in loans 

acquired from and serviced by Bellwether, measured by unpaid principal balance.

• Consulting and advisory services; conference sponsorship. Enterprise provides certain consulting and advisory 

services to us relating to multifamily and affordable housing and also hosts conferences on affordable housing 

issues. In 2022, we paid Enterprise approximately $250,000 in connection with these services and conference 

sponsorship.

Our relationships with Enterprise and Enterprise-related entities are customary arms’-length commercial relationships, 

comparable to those that we have with other participants in the multifamily mortgage industry. We believe our 

transactions with Enterprise and its related entities contributed to less than 15% of Enterprise’s 2021 revenue. 

Director Independence

Independence Requirements

Our Corporate Governance Guidelines, in accordance with FHFA corporate governance regulations, require a majority 

of Fannie Mae’s directors to be independent as defined under the rules set forth by the NYSE, as amended from time to 

time. Where the NYSE rules do not address a particular relationship, the Board, based upon the recommendation of the 

Nominating and Corporate Governance Committee, determines whether a relationship is material, and whether a Board 

member is independent. Our Corporate Governance Guidelines also provide that an “independent board member” must 

be determined to have no material relationship with us, either directly or through an organization that has a material 

relationship with us. A relationship is “material” if, in the judgment of the Board, it would interfere with the Board 

member’s independent judgment. Our Corporate Governance Guidelines are posted on our website, 

www.fanniemae.com, under “Corporate Governance Guidelines” in the “About Us—Corporate Governance” section. 

In addition, under FHFA corporate governance regulations, Board committees are required to comply with the 

independence requirements set forth under NYSE rules. The NYSE’s listing standards include additional independence 

criteria for members of the Audit Committee and Compensation and Human Capital Committee. 

Our Board of Directors 

Our Board of Directors, with the assistance of the Nominating and Corporate Governance Committee of the Board, has 

reviewed the independence of all current Board members pursuant to the requirements described in “Independence 

Requirements” above. Based on its review, the Board has determined that all of our current directors are independent 

under these director independence requirements other than Ms. Almodovar (who is our Chief Executive Officer). 

In determining the independence of our current Board members other than Ms. Almodovar, the Board of Directors 

considered the following relationships, transactions or arrangements and determined they were not material to the 

independence of these Board members and would not interfere with the director’s independent judgment: 

• Board Memberships with Business Partners. Ms. Alving, Ms. Glover, Mr. Heid, Mr. Herz, Ms. Nordin and Mr. 

Sánchez are or were directors or advisory Board members of companies that engage in business with Fannie Mae 

or that have an interest in one or more entities that engage in business with Fannie Mae. The Board considered 

that each of these directors was solely a director or advisory board member of such company, and none of these 

directors served in a management role or had ownership interests other than as incidental to their board service. 

The Board also considered other relevant information including, to the extent available, information regarding 

payments between these companies and Fannie Mae during the past three years. 

• Board Memberships with Companies that Invest in Our Securities. Mr. Herz and Ms. Nordin serve as directors or 

advisory Board members of companies that invest or may invest in Fannie Mae fixed-income securities. It is 

generally not possible for Fannie Mae to determine the extent of the holdings of these companies in Fannie Mae 

fixed-income securities as payments to holders are made through the Federal Reserve, and most of these 

securities are held in turn by financial intermediaries. We understand that the investments by these companies in 

Fannie Mae fixed-income securities are entered into at arm’s length in the ordinary course of business, upon 

market terms and conditions, and are not entered into at the direction of, or upon approval by, the director in his or 

her capacity as a director or advisory Board member of these companies. 

• Board Memberships with Non-Profits to Which We Have Made Payments. Ms. Glover, Mr. Herz and Ms. Nordin 

serve as Board members of non-profit organizations that have received payments from Fannie Mae. The amount 

of these payments fell substantially below the NYSE independence standards’ thresholds of materiality for a 

Certain Relationships and Related Transactions, and Director Independence | 

Transactions with Related Persons

Fannie Mae 2022 Form 10-K 215
director who is a current employee of a company to which Fannie Mae made, or from which Fannie Mae received, 

payments.

• Current Employment with Business Partners. Mr. Brummer, Mr. Johnson and Ms. Kimbrough are each employed 

at entities that engage in business with Fannie Mae.

◦ Mr. Brummer is currently a columnist at CQ Roll Call, a provider of congressional news, legislative tracking, and 

advocacy services. He is also the co-founder of a podcast that is affiliated with CQ Roll Call. Fannie Mae pays 

subscription fees to CQ Roll Call. The payments made by Fannie Mae to CQ Roll Call during the past three 

years fall below the NYSE independence standards’ thresholds of materiality for a director who is a current 

employee of a company to which Fannie Mae made, or from which Fannie Mae received, payments. 

◦ Mr. Brummer is a professor at Georgetown University Law Center and founder of the DC Fintech Week 

conference, which in 2022 was co-hosted by Georgetown University Law Center and Fannie Mae, among 

others. The payments made by Fannie Mae in co-hosting a portion of the event were not made to Georgetown 

University Law Center or to Mr. Brummer and, had they been paid to Georgetown Law Center, they would have 

fallen below the NYSE independence standards’ thresholds of materiality for a director who is a current 

employee of a company to which Fannie Mae made, or from which Fannie Mae received, payments. 

◦ Mr. Johnson is currently a professor at the MIT Sloan School of Management and engages in work for the 

National Bureau of Economic Research. Fannie Mae engages in business transactions with both of these 

entities. The payments made by Fannie Mae to these entities during the past three years fall below the NYSE 

independence standards’ thresholds of materiality for a director who is a current employee of a company to 

which Fannie Mae made, or from which Fannie Mae received, payments.

◦ Ms. Kimbrough is currently an employee of LinkedIn Corporation, a subsidiary of Microsoft Corporation. Fannie 

Mae engages in business transactions with LinkedIn and Microsoft. The payments made by Fannie Mae to 

Microsoft during the past three years fall below the NYSE independence standards’ thresholds of materiality for 

a director who is a current employee of a company to which Fannie Mae made, or from which Fannie Mae 

received, payments.

The Board also determined that each member of the Audit Committee, Compensation and Human Capital Committee, 

and Nominating and Corporate Governance Committee met the NYSE’s independence criteria for members of such 

committees.

The Board did not consider the Board’s duties to the conservator, together with the federal government’s controlling 

beneficial ownership of Fannie Mae, in determining independence of the Board members.

Each of the three persons who served as our Chief Executive Officer or Interim Chief Executive Officer during 2022, Ms. 

Almodovar, Mr. Benson and Mr. Frater, also served on our Board in connection with such service, and Ms. Almodovar 

continues to serve on the Board. Ms. Almodovar is not considered an independent director under NYSE independence 

standards because of her position as Chief Executive Officer. For the same reason, neither Mr. Frater nor Mr. Benson 

were considered independent directors during 2022.

The Board determined that Sheila Bair and Antony Jenkins, who served as members of our Board until May 2022, met 

our director independence standards when it assessed their independence in February 2022. 

Item 14. Principal Accounting Fees and Services

The Audit Committee of our Board of Directors is directly responsible for the appointment, oversight and evaluation of 

our independent registered public accounting firm, subject to conservator approval of matters relating to retention and 

termination. Deloitte & Touche LLP (Public Company Accounting Oversight Board ID No.34) was our independent 

registered public accounting firm for the years ended 2022 and 2021. Deloitte & Touche LLP has advised the Audit 

Committee that they are independent accountants with respect to the company, within the meaning of standards 

established by the Public Company Accounting Oversight Board and federal securities laws administered by the SEC.

Certain Relationships and Related Transactions, and Director Independence | Director Independence

Fannie Mae 2022 Form 10-K 216
The following table displays the aggregate estimated or actual fees for professional services provided by Deloitte & 

Touche LLP, including audit fees.

For the Year Ended 

December 31,

2022 2021

Description of fees:

Audit fees $ 38,932,500 $ 38,100,000 

Audit-related fees(1) 315,000 315,000 

All other fees(2) 219,000 587,000 

Total fees $ 39,466,500 $ 39,002,000 

(1) Consists of fees billed for attest-related services on debt offerings and compliance with the covenants in the senior preferred stock 

purchase agreement with Treasury.

(2) Consists of fees billed for non-audit engagements and trainings.

Pre-Approval Policy

In accordance with its charter, the Audit Committee must approve, in advance of the service, all audit and permissible 

non-audit services to be provided by our independent registered public accounting firm and establish policies and 

procedures for the engagement of the external auditor to provide audit and permissible non-audit services. The 

independent registered public accounting firm and management are required to present reports on the nature of the 

services provided by the independent registered public accounting firm for the past year and the fees for such services, 

categorized into audit services, audit-related services, tax services and other services. The firm may not be retained to 

perform non-audit services specified in Section 10A(g) of the Exchange Act.

The Audit Committee has delegated to its Chair the authority to pre-approve any additional audit and permissible nonaudit services up to $1 million per engagement. The Audit Committee must ratify such pre-approvals at the next 

scheduled meeting of the Audit Committee. Additionally, any services provided by Deloitte & Touche LLP outside of the 

scope of the integrated audit must be approved by the conservator.

In 2022, we paid no fees to the independent registered public accounting firm pursuant to the de minimis exception 

established by the SEC, and all services were pre-approved.

Principal Accounting Fees and Services

Fannie Mae 2022 Form 10-K 217
PART IV

Item 15. Exhibits, Financial Statement Schedules

Documents filed as part of this report 

Consolidated Financial Statements 

An index to our consolidated financial statements has been filed as part of this report beginning on page F-1 and is 

incorporated herein by reference. 

Financial Statement Schedules 

None. 

Exhibits

The table below lists exhibits that are filed with or incorporated by reference into this report.

Item Description

3.1 Fannie Mae Charter Act (12 U.S.C. § 1716 et seq.) as amended through July 25, 2019 (Incorporated by reference to Exhibit 

3.1 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed October 31, 2019)

3.2 Fannie Mae Bylaws, as amended through January 29, 2019 (Incorporated by reference to Exhibit 3.2 to Fannie Mae’s Annual 

Report on Form 10-K for the year ended December 31, 2018, filed February 14, 2019) 

4.1 Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

4.2 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series D (Incorporated by reference to Exhibit 4.1 to 

Fannie Mae’s registration statement on Form 10, filed March 31, 2003)

4.3 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series E (Incorporated by reference to Exhibit 4.2 to 

Fannie Mae’s registration statement on Form 10, filed March 31, 2003)

4.4 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series F (Incorporated by reference to Exhibit 4.3 to 

Fannie Mae’s registration statement on Form 10, filed March 31, 2003)

4.5 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series G (Incorporated by reference to Exhibit 4.4 to 

Fannie Mae’s registration statement on Form 10, filed March 31, 2003)

4.6 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series H (Incorporated by reference to Exhibit 4.5 to 

Fannie Mae’s registration statement on Form 10, filed March 31, 2003)

4.7 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series I (Incorporated by reference to Exhibit 4.6 to 

Fannie Mae’s registration statement on Form 10, filed March 31, 2003)

4.8 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series L (Incorporated by reference to Exhibit 4.7 to 

Fannie Mae’s Quarterly Report on Form 10-Q, filed August 8, 2008)

4.9 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series M (Incorporated by reference to Exhibit 4.8 to 

Fannie Mae’s Quarterly Report on Form 10-Q, filed August 8, 2008)

4.10 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series N (Incorporated by reference to Exhibit 4.9 to 

Fannie Mae’s Quarterly Report on Form 10-Q, filed August 8, 2008)

4.11 Certificate of Designation of Terms of Fannie Mae Non-Cumulative Convertible Preferred Stock, Series 2004-1 (Incorporated 

by reference to Exhibit 4.10 to Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2009, filed 

February 26, 2010)

4.12 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series O (Incorporated by reference to Exhibit 4.11 to 

Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2009, filed February 26, 2010)

4.13 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series P (Incorporated by reference to Exhibit 4.12 to 

Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2012, filed April 2, 2013)

4.14 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series Q (Incorporated by reference to Exhibit 4.13 to 

Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2012, filed April 2, 2013)

4.15 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series R (Incorporated by reference to Exhibit 4.14 to 

Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2012, filed April 2, 2013)

4.16 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series S (Incorporated by reference to Exhibit 4.15 to 

Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2012, filed April 2, 2013)

4.17 Certificate of Designation of Terms of Fannie Mae Preferred Stock, Series T (Incorporated by reference to Exhibit 4.1 to 

Fannie Mae’s Current Report on Form 8-K, filed May 19, 2008)

Exhibits, Financial Statement Schedules

Fannie Mae 2022 Form 10-K 218
4.18 Amended and Restated Certificate of Designation of Terms of Variable Liquidation Preference Senior Preferred Stock, 

Series 2008-2, amended and restated as of September 30, 2019 (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s 

Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed October 31, 2019)

4.19 Fourth Amended and Restated Certificate of Designation of Terms of Variable Liquidation Preference Senior Preferred Stock, 

Series 2008-2, amended and restated as of April 13, 2021 (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s 

Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed April 30, 2021)

4.20 Warrant to Purchase Common Stock, dated September 7, 2008 (Incorporated by reference to Exhibit 4.3 to Fannie Mae’s 

Current Report on Form 8-K, filed September 11, 2008)

4.21 Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of September 26, 2008, between the United 

States Department of the Treasury and Federal National Mortgage Association, acting through the Federal Housing Finance 

Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s Current Report on 

Form 8-K, filed October 2, 2008)

4.22 Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of May 6, 2009, between the 

United States Department of the Treasury and Federal National Mortgage Association, acting through the Federal Housing 

Finance Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.21 to Fannie Mae’s Quarterly 

Report on Form 10-Q for the quarter ended March 31, 2009, filed May 8, 2009)

4.23 Second Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of December 24, 

2009, between the United States Department of the Treasury and Federal National Mortgage Association, acting through the 

Federal Housing Finance Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s 

Current Report on Form 8-K, filed December 30, 2009)

4.24 Third Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of August 17, 2012, 

between the United States Department of the Treasury and Federal National Mortgage Association, acting through the 

Federal Housing Finance Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s 

Current Report on Form 8-K, filed August 17, 2012)

4.25 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated December 21, 2017 

(Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed December 21, 2017)

4.26 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated September 27, 2019 

(Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed October 1, 2019)

4.27 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated January 14, 2021 (Incorporated 

by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed January 20, 2021)

4.28 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated September 14, 2021 

(Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed September 20, 2021)

10.1 Repayment Provisions for SEC Executive Officers, amended and restated as of March 8, 2012† (Incorporated by reference 

to Exhibit 10.44 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed May 9, 2012)

10.2 Fannie Mae Form of Indemnification Agreement for directors and officers of Fannie Mae (Incorporated by reference to Exhibit 

10.15 to Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2008, filed February 26, 2009.)

10.3 Fannie Mae Form of Indemnification Agreement for directors and officers of Fannie Mae (Incorporated by reference to Exhibit 

10.2 to Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2016, filed February 17, 2017)

10.4 Fannie Mae Form of Indemnification Agreement for directors and officers of Fannie Mae (Incorporated by reference to Exhibit 

10.3 to Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2018, filed February 14, 2019)

10.5 Fannie Mae Supplemental Retirement Savings Plan, as amended through April 29, 2008† (Incorporated by reference to 

Exhibit 10.2 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, filed August 8, 2008)

10.6 Amendment to Fannie Mae Supplemental Retirement Savings Plan, effective October 8, 2008† (Incorporated by reference to 

Exhibit 10.32 to Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2008, filed February 26, 2009)

10.7 Amendment to Fannie Mae Supplemental Retirement Savings Plan, effective May 14, 2010† (Incorporated by reference to 

Exhibit 10.2 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, filed August 5, 2010)

10.8 Amendment to Fannie Mae Supplemental Retirement Savings plan for 2012 Executive Compensation Program, adopted May 

18, 2012† (Incorporated by reference to Exhibit 10.3 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended 

June 30, 2012, filed August 8, 2012)

10.9 Amendment to Fannie Mae Supplemental Retirement Savings Plan, effective July 1, 2013† (Incorporated by reference to 

Exhibit 10.4 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed November 7, 

2013)

10.10 Amendment to Fannie Mae Supplemental Retirement Savings Plan, effective December 31, 2020† (Incorporated by 

reference to Exhibit 10.11 to Fannie Mae's Annual Report on Form 10-K for the year ended December 31, 2020, filed 

February 12, 2021)

10.11 Amendment to Fannie Mae Supplemental Retirement Savings Plan, effective January 1, 2023†

Exhibits, Financial Statement Schedules

Fannie Mae 2022 Form 10-K 219
10.12 Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of September 26, 2008, between the United 

States Department of the Treasury and Federal National Mortgage Association, acting through the Federal Housing Finance 

Agency as its duly appointed conservator (Incorporated by reference Exhibit 4.1 to Fannie Mae’s Current Report on Form 8-

K, filed October 2, 2008)

10.13 Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of May 6, 2009, between the 

United States Department of the Treasury and Federal National Mortgage Association, acting through the Federal Housing 

Finance Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.21 to Fannie Mae’s Quarterly 

Report on Form 10-Q, filed May 8, 2009)

10.14 Second Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of December 24, 

2009, between the United States Department of the Treasury and Federal National Mortgage Association, acting through the 

Federal Housing Finance Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s 

Current Report on Form 8-K, filed December 30, 2009)

10.15 Third Amendment to Amended and Restated Senior Preferred Stock Purchase Agreement, dated as of August 17, 2012, 

between the United States Department of the Treasury and Federal National Mortgage Association, acting through the 

Federal Housing Finance Agency as its duly appointed conservator (Incorporated by reference to Exhibit 4.1 to Fannie Mae’s 

Current Report on Form 8-K, filed August 17, 2012)

10.16 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated December 21, 2017 

(Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed December 21, 2017)

10.17 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated September 27, 2019 

(Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed October 1, 2019)

10.18 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated January 14, 2021 (Incorporated 

by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed January 20, 2021)

10.19 Letter Agreement between the United States Department of the Treasury and the Federal National Mortgage Association, 

acting through the Federal Housing Finance Agency as its duly appointed conservator, dated September 14, 2021 

(Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Current Report on Form 8-K, filed September 20, 2021)

10.20 Confidentiality and Proprietary Rights Agreement† (Incorporated by reference to Exhibit 10.1 to Fannie Mae’s Quarterly 

Report on Form 10-Q for the quarter ended June 30, 2021, filed August 3, 2021)

10.21 Form of Covered Employee Statement Under Confidentiality and Proprietary Rights Agreement† (Incorporated by reference 

to Exhibit 10.20 to Fannie Mae’s Annual Report on Form 10-K for the year ended December 31, 2021, filed February 15, 

2022)

10.22 Form of Covered Employee Statement Under Confidentiality and Proprietary Rights Agreement (first used with 2023 

executive compensation)†

10.23 Form of Relocation Repayment Agreement for Officers of Fannie Mae† (Incorporated by reference to Exhibit 10.1 to Fannie 

Mae’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, filed May 1, 2019)

31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)

31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

99.1 Fourth Amended and Restated Limited Liability Company Agreement of Common Securitization Solutions, LLC, dated as of 

January 21, 2021 (Incorporated by reference to Exhibit 99.1 to Fannie Mae’s Quarterly Report on Form 10-Q for the quarter 

ended March 31, 2022, filed May 3, 2022)

101. INS Inline XBRL Instance Document* - the instance document does not appear in the Interactive Data File because its XBRL tags 

are embedded within the Inline XBRL document

101. SCH Inline XBRL Taxonomy Extension Schema* 

101. CAL Inline XBRL Taxonomy Extension Calculation*

101. DEF Inline XBRL Taxonomy Extension Definition* 

101. LAB Inline XBRL Taxonomy Extension Label* 

101. PRE Inline XBRL Taxonomy Extension Presentation* 

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

__________

† This Exhibit is a management contract or compensatory plan or arrangement.

* The financial information contained in these XBRL documents is unaudited.

Item 16. Form 10-K Summary

None.

Exhibits, Financial Statement Schedules

Fannie Mae 2022 Form 10-K 220
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Federal National Mortgage Association

 /s/ Priscilla Almodovar

Priscilla Almodovar

Chief Executive Officer

Date: February 14, 2023

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and 

appoints Priscilla Almodovar and Chryssa C. Halley, and each of them severally, his or her true and lawful attorney-infact with power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to 

do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under 

the Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange 

Commission in connection with the Annual Report on Form 10-K and any and all amendments hereto, as fully for all 

intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact 

and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue 

hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 

persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Michael J. Heid Chair of the Board of Directors February 14, 2023

Michael J. Heid

 /s/ Priscilla Almodovar Chief Executive Officer and Director February 14, 2023

Priscilla Almodovar

/s/ Chryssa C. Halley Executive Vice President and Chief Financial Officer February 14, 2023

Chryssa C. Halley

/s/ James L. Holmberg Senior Vice President and Controller February 14, 2023

James L. Holmberg

/s/ Amy E. Alving Director February 14, 2023

Amy E. Alving

Signature Title Date

Signatures

Fannie Mae 2022 Form 10-K 221
Signature Title Date

/s/ Christopher J. Brummer Director February 14, 2023

Christopher J. Brummer

/s/ Renée L. Glover Director February 14, 2023

Renée L. Glover

/s/ Robert H. Herz Director February 14, 2023

Robert H. Herz

/s/ Simon Johnson Director February 14, 2023

Simon Johnson

/s/ Karin Kimbrough Director February 14, 2023

Karin Kimbrough

/s/ Diane C. Nordin Director February 14, 2023

Diane C. Nordin

/s/ Manuel Sánchez Rodríguez Director February 14, 2023

Manuel Sánchez Rodríguez

Signatures

Fannie Mae 2022 Form 10-K 222
Index to Consolidated Financial Statements

Page

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statements of Operations and Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Consolidated Statements of Changes in Equity (Deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Note 1—Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Note 2—Consolidations and Transfers of Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-24

Note 3—Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-27

Note 4—Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-37

Note 5—Investments in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-40

Note 6—Financial Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-42

Note 7—Short-Term and Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-43

Note 8—Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-45

Note 9—Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-49

Note 10—Segment Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-50

Note 11—Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-53

Note 12—Regulatory Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-60

Note 13—Concentrations of Credit Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-63

Note 14—Netting Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-69

Note 15—Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-71

Note 16—Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-83

Index to Consolidated Financial Statements

Fannie Mae 2022 Form 10-K F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Fannie Mae:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Fannie Mae and consolidated entities (in 

conservatorship) (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of 

operations and comprehensive income, cash flows, and changes in equity (deficit) for each of the three years in the 

period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our 

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of 

December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the 

period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of 

America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United 

States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria 

established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of 

the Treadway Commission and our report dated February 14, 2023, expressed an adverse opinion on the Company’s 

internal control over financial reporting because of a material weakness.

Emphasis of a Matter

As discussed in Note 1 to the consolidated financial statements, the Company is currently under the control of its 

conservator and regulator, the Federal Housing Finance Agency (“FHFA”). Further, the Company directly and indirectly 

received substantial support from various agencies of the United States Government, including the United States 

Department of Treasury and FHFA. The Company is dependent upon continued support of the United States 

Government, various United States Government agencies and the Company’s conservator and regulator, FHFA.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an 

opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the 

PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities 

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and 

perform the audit to obtain reasonable assurance about whether the financial statements are free of material 

misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material 

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to 

those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in 

the financial statements. Our audits also included evaluating the accounting principles used and significant estimates 

made by management, as well as evaluating the overall presentation of the financial statements. We believe that our 

audits provide a reasonable basis for our opinion.

Critical Audit Matter 

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements 

that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or 

disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or 

complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial 

statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate 

opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses — Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

The Company’s allowance for loan losses is a valuation allowance that reflects an estimate of expected credit losses 

related to its recorded investment in held for investment loans. The allowance for loan losses requires consideration of a 

broad range of information about current conditions and reasonable and supportable forecast information to develop 

loan loss estimates. The Company used a discounted cash flow method to measure expected credit losses on its 

single-family mortgage loans and an undiscounted loss method to measure expected credit losses on its multifamily 

mortgage loans. The internal models used to estimate credit losses incorporate historical credit loss experience, 

adjusted for current economic forecasts and the current credit profile of the Company’s loan book of business. The 

models use reasonable and supportable forecasts for key economic drivers, such as home prices (single-family), 

interest rates (single-family), rental income (multifamily) and property valuations (multifamily). The cash flow analysis 

Report of Independent Registered Public Accounting Firm

Fannie Mae 2022 Form 10-K F-2
incorporates estimates produced by the Company’s internal models, which include the probability of prepayment, 

default rates, and loss severity in the event of default. The modeled estimates are adjusted when management believes 

the model does not capture the entirety of losses it expects to incur. Accordingly, the estimate of lifetime expected credit 

losses requires significant management judgments and assumptions about highly complex and inherently uncertain 

matters.

We identified the allowance for loan losses as a critical audit matter because of the complexity of the Company’s 

internal models and the significant assumptions used by management. Auditing the allowance for loan losses required a 

high degree of auditor judgment and an increased extent of effort, including the need to involve credit specialists when 

performing audit procedures to evaluate the reasonableness of management’s models and assumptions. 

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the internal models and assumptions used by management to estimate the allowance 

for loan losses included the following, among others:

• We tested the effectiveness of internal controls, including those related to the internal models and significant 

management assumptions.

• With the assistance of our credit specialists, we evaluated the internal models, including inputs into and the 

resulting estimates of the expected cash flows, including the probability of prepayment, default rates and loss 

severity in the event of default. 

• With the assistance of our credit specialists, we evaluated management’s assumptions. For single-family loans, 

we evaluated the assumptions for forecasted home price growth and projected interest rates. For multifamily 

loans, we evaluated management’s assumptions related to forecasts of property rental income and property 

valuations. 

• We tested the accuracy of historical loan performance data and current economic data consumed by the 

internal models used to calculate expected credit losses.

• We evaluated the appropriateness of economic and other forecasts used in internal models, including the 

reversion period applied for periods beyond the reasonable and supportable forecast period.

/s/ Deloitte & Touche LLP

McLean, Virginia

February 14, 2023

We have served as the Company’s auditor since 2005.

Report of Independent Registered Public Accounting Firm

Fannie Mae 2022 Form 10-K F-3
FANNIE MAE

(In conservatorship)

Consolidated Balance Sheets

(Dollars in millions)

As of December 31,

2022 2021

ASSETS

Cash and cash equivalents $ 57,987 $ 42,448 

Restricted cash and cash equivalents (includes $23,348 and $59,203, respectively, related to consolidated 

trusts) 29,854 66,183 

Securities purchased under agreements to resell (includes $3,475 and $13,533, respectively, related to 

consolidated trusts) 14,565 20,743 

Investments in securities, at fair value 50,825 89,043 

Mortgage loans:

Loans held for sale, at lower of cost or fair value 2,033 5,134 

Loans held for investment, at amortized cost:

Of Fannie Mae 52,081 61,025 

Of consolidated trusts 4,071,669 3,907,712 

Total loans held for investment (includes $3,645 and $4,964, respectively, at fair value) 4,123,750 3,968,737 

Allowance for loan losses (11,347) (5,629) 

 Total loans held for investment, net of allowance 4,112,403 3,963,108 

 Total mortgage loans 4,114,436 3,968,242 

Advances to lenders 1,502 8,414 

Deferred tax assets, net 12,911 12,715 

Accrued interest receivable, net (includes $9,241 and $8,878 related to consolidated trusts and net of 

allowance of $111 and $140, respectively) 9,821 9,264 

Other assets 13,387 12,114 

Total assets $ 4,305,288 $ 4,229,166 

LIABILITIES AND EQUITY

Liabilities:

Accrued interest payable (includes $9,347 and $8,517, respectively, related to consolidated trusts) $ 9,917 $ 9,186 

Debt:

Of Fannie Mae (includes $1,161 and $2,381, respectively, at fair value) 134,168 200,892 

Of consolidated trusts (includes $16,260 and $21,735, respectively, at fair value) 4,087,720 3,957,299 

Other liabilities (includes $1,748 and $1,245, respectively, related to consolidated trusts) 13,206 14,432 

Total liabilities 4,245,011 4,181,809 

Commitments and contingencies (Note 16) — — 

Fannie Mae stockholders’ equity:

Senior preferred stock (liquidation preference of $180,339 and $163,672, respectively) 120,836 120,836 

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

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

1,158,087,567 shares outstanding 687 687 

Accumulated deficit (73,011) (85,934) 

Accumulated other comprehensive income 35 38 

Treasury stock, at cost, 150,675,136 shares (7,400) (7,400) 

Total stockholders’ equity (See Note 1: Senior Preferred Stock Purchase Agreement, Senior Preferred 

Stock and Warrant for information on the related dividend obligation and liquidation preference) 60,277 47,357 

Total liabilities and equity $ 4,305,288 $ 4,229,166 

See Notes to Consolidated Financial Statements

 Financial Statements | Consolidated Balance Sheets

Fannie Mae (In conservatorship) 2022 Form 10-K F-4
FANNIE MAE

(In conservatorship)

Consolidated Statements of Operations and Comprehensive 

Income

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

For the Year Ended December 31,

2022 2021 2020

Interest income:

Investments in securities $ 1,828 $ 582 $ 972 

Mortgage loans 117,813 98,930 106,316 

Other 656 163 281 

Total interest income 120,297 99,675 107,569 

Interest expense:

Short-term debt (76) (4) (182) 

Long-term debt (90,798) (70,084) (82,521) 

Total interest expense (90,874) (70,088) (82,703) 

Net interest income 29,423 29,587 24,866 

Benefit (provision) for credit losses (6,277) 5,130 (678) 

Net interest income after benefit (provision) for credit losses 23,146 34,717 24,188 

Investment gains (losses), net (297) 1,352 907 

Fair value gains (losses), net 1,284 155 (2,501) 

Fee and other income 312 361 462 

Non-interest income (loss) 1,299 1,868 (1,132) 

Administrative expenses:

Salaries and employee benefits (1,671) (1,493) (1,554) 

Professional services (850) (817) (921) 

Other administrative expenses (808) (755) (593) 

Total administrative expenses (3,329) (3,065) (3,068) 

TCCA fees (3,369) (3,071) (2,673) 

Credit enhancement expense (1,323) (1,051) (1,361) 

Change in expected credit enhancement recoveries 727 (194) 233 

Other expenses, net (918) (1,255) (1,308) 

Total expenses (8,212) (8,636) (8,177) 

Income before federal income taxes 16,233 27,949 14,879 

Provision for federal income taxes (3,310) (5,773) (3,074) 

Net income 12,923 22,176 11,805 

Other comprehensive loss (3) (78) (15) 

Total comprehensive income $ 12,920 $ 22,098 $ 11,790 

Net income $ 12,923 $ 22,176 $ 11,805 

Dividends distributed or amounts attributable to senior preferred stock (12,920) (22,098) (11,790) 

Net income attributable to common stockholders $ 3 $ 78 $ 15 

Earnings per share:

Basic $ 0.00 $ 0.01 $ 0.00 

Diluted 0.00 0.01 0.00 

Weighted-average common shares outstanding:

Basic 5,867 5,867 5,867 

Diluted 5,893 5,893 5,893 

See Notes to Consolidated Financial Statements

Financial Statements | Consolidated Statements of Operations and Comprehensive Income

Fannie Mae (In conservatorship) 2022 Form 10-K F-5
FANNIE MAE

(In conservatorship)

Consolidated Statements of Cash Flows

(Dollars in millions)

For the Year Ended December 31,

2022 2021 2020

Cash flows provided by (used in) operating activities:

Net income $ 12,923 $ 22,176 $ 11,805 

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

Amortization of cost basis adjustments (5,731) (10,763) (9,190) 

Net impact of hedged mortgage assets and debt (423) (268) — 

Provision (benefit) for credit losses 6,277 (5,130) 678 

Valuation (gains) losses 361 (1,996) (2,618) 

Current and deferred federal income taxes (200) 300 3,152 

Net gains related to the disposition of acquired property and preforeclosure sales, including credit 

enhancements (1,782) (1,780) (924) 

Net change in accrued interest receivable (1,826) (618) (2,749) 

Net change in servicer advances (217) (2,131) 932 

Other, net (343) 438 (361) 

Net change in trading securities 34,787 46,983 (73,659) 

Net cash provided by (used in) operating activities 43,826 47,211 (72,934) 

Cash flows provided by investing activities:

Purchases of loans held for investment (247,016) (649,238) (766,699) 

Proceeds from repayments of loans acquired as held for investment of Fannie Mae 7,609 11,212 10,672 

Proceeds from sales of loans acquired as held for investment of Fannie Mae 7,501 17,130 8,744 

Proceeds from repayments and sales of loans acquired as held for investment of consolidated trusts 492,715 1,093,058 1,120,473 

Advances to lenders (178,450) (393,016) (339,043) 

Proceeds from disposition of acquired property and preforeclosure sales 2,694 3,536 5,991 

Net change in federal funds sold and securities purchased under agreements to resell 6,178 7,457 (14,622) 

Other, net (1,103) 711 1,169 

Net cash provided by investing activities 90,128 90,850 26,685 

Cash flows provided by (used in) financing activities:

Proceeds from issuance of debt of Fannie Mae 340,708 317,867 580,220 

Payments to redeem debt of Fannie Mae (403,967) (405,368) (472,795) 

Proceeds from issuance of debt of consolidated trusts 469,955 1,097,497 1,091,242 

Payments to redeem debt of consolidated trusts (561,440) (1,155,118) (1,097,692) 

Other, net — 69 (510) 

Net cash provided by (used in) financing activities (154,744) (145,053) 100,465 

Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents (20,790) (6,992) 54,216 

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period 108,631 115,623 61,407 

Cash, cash equivalents and restricted cash and cash equivalents at end of period $ 87,841 $ 108,631 $ 115,623 

Cash paid during the period for:

Interest $ 101,469 $ 106,205 $ 113,878 

Income taxes 3,511 5,500 3,950 

Non-cash activities:

Mortgage loans acquired by assuming debt or advances to lenders $ 185,205 $ 398,026 $ 369,733 

Net transfers from mortgage loans of Fannie Mae to mortgage loans of consolidated trusts 265,066 663,849 709,451 

Transfers from advances to lenders to loans held for investment of consolidated trusts 185,203 384,700 318,426 

Net transfers from mortgage loans to acquired property 2,344 3,000 3,940 

See Notes to Consolidated Financial Statements

Financial Statements | Consolidated Statements of Cash Flows

Fannie Mae (In conservatorship) 2022 Form 10-K F-6
FANNIE MAE

(In conservatorship)

Consolidated Statements of Changes in Equity (Deficit)

(Dollars and shares in millions)

Fannie Mae Stockholders’ Equity (Deficit)

Shares Outstanding

Senior

Preferred 

Stock

Preferred

Stock

Common

Stock

Accumulated

Deficit

Accumulated 

Other

Comprehensive

Income

Treasury

Stock

Total

Equity 

(Deficit)

Senior

Preferred Preferred Common

Balance as of December 31, 2019 1 556 1,158 $ 120,836 $ 19,130 $ 687 $ (118,776) $ 131 $ (7,400) $ 14,608 

Transition impact, net of tax, from the adoption of 

the current expected credit loss standard — — — — — — (1,139) — — (1,139) 

Balance as of January 1, 2020, adjusted 1 556 1,158 120,836 19,130 687 (119,915) 131 (7,400) 13,469 

Comprehensive income:

Net income — — — — — — 11,805 — — 11,805 

Other comprehensive income, net of tax effect:

Changes in net unrealized gains on availablefor-sale securities (net of taxes of $3) — — — — — — — (12) — (12) 

Reclassification adjustment for gains included 

in net income (net of taxes of $3) — — — — — — — (11) — (11) 

Other (net of taxes of $2) — — — — — — — 8 — 8 

Total comprehensive income 11,790 

Balance as of December 31, 2020 1 556 1,158 120,836 19,130 687 (108,110) 116 (7,400) 25,259 

Comprehensive income:

Net income: — — — — — — 22,176 — — 22,176 

Other comprehensive income, net of tax effect:

Changes in net unrealized gains on availablefor-sale securities (net of taxes of $4) — — — — — — — (18) — (18) 

Reclassification adjustment for gains included 

in net income (net of taxes of $13) — — — — — — — (49) — (49) 

Other (net of taxes of $3 ) — — — — — — — (11) — (11) 

Total comprehensive income 22,098 

Balance as of December 31, 2021 1 556 1,158 120,836 19,130 687 (85,934) 38 (7,400) 47,357 

Comprehensive income:

Net income — — — — — — 12,923 — — 12,923 

Other comprehensive income, net of tax effect:

Changes in net unrealized gains on availablefor-sale securities (net of taxes of $8) — — — — — — — (33) — (33) 

Reclassification adjustment for gains included 

in net income (net of taxes of $3) — — — — — — — 13 — 13 

Other (net of taxes of $4) — — — — — — — 17 — 17 

Total comprehensive income 12,920 

Balance as of December 31, 2022 1 556 1,158 $ 120,836 $ 19,130 $ 687 $ (73,011) $ 35 $ (7,400) $ 60,277 

See Notes to Consolidated Financial Statements

Financial Statements | Consolidated Statements of Changes in Equity (Deficit)

Fannie Mae (In conservatorship) 2022 Form 10-K F-7
FANNIE MAE

(In conservatorship)

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Organization

Fannie Mae is a leading source of financing for mortgages in the United States. We are a shareholder-owned 

corporation organized as a government-sponsored entity (“GSE”) and existing under the Federal National Mortgage 

Association Charter Act (the “Charter Act” or our “charter”). We were chartered by Congress to provide liquidity and 

stability to the residential mortgage market and to promote access to mortgage credit. Our regulators include the 

Federal Housing Finance Agency (“FHFA”), the U.S. Department of Housing and Urban Development (“HUD”), the 

U.S. Securities and Exchange Commission (“SEC”), and the U.S. Department of the Treasury (“Treasury”). The 

U.S. government does not guarantee our securities or other obligations.

We operate in the secondary mortgage market, primarily working with lenders who originate loans to borrowers. We do 

not originate loans or lend money directly to consumers in the primary mortgage market. Instead, we acquire and 

securitize mortgage loans originated by lenders into Fannie Mae mortgage-backed securities (“MBS”) that we 

guarantee; purchase mortgage loans and mortgage-related securities, primarily for securitization and sale at a later 

date; manage mortgage credit risk; and engage in other activities that increase the supply of affordable housing. 

We have two reportable business segments: Single-Family and Multifamily. The Single-Family business operates in the 

secondary mortgage market relating to loans secured by properties containing four or fewer residential dwelling units. 

The Multifamily business operates in the secondary mortgage market relating primarily to loans secured by properties 

containing five or more residential units. We describe the management reporting and allocation process used to 

generate our segment results in “Note 10, Segment Reporting.”

Conservatorship

On September 7, 2008, the Secretary of the Treasury and the Director of FHFA announced several actions taken by 

Treasury and FHFA regarding Fannie Mae, which included: (1) placing us in conservatorship, with FHFA acting as our 

conservator, and (2) the execution of a senior preferred stock purchase agreement by our conservator, on our behalf, 

and Treasury, pursuant to which we issued to Treasury both senior preferred stock and a warrant to purchase common 

stock. 

Under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended, including by the 

Housing and Economic Recovery Act of 2008 (together, the “GSE Act”), the conservator immediately succeeded to 

(1) all rights, titles, powers and privileges of Fannie Mae, and of any stockholder, officer or director of Fannie Mae with 

respect to Fannie Mae and its assets, and (2) title to the books, records and assets of any other legal custodian of 

Fannie Mae. The conservator subsequently issued an order that provided for our Board of Directors to exercise 

specified functions and authorities. The conservator also provided instructions regarding matters for which conservator 

decision or notification is required. The conservator retains the authority to amend or withdraw its order and instructions 

at any time.

The conservator has the power to transfer or sell any asset or liability of Fannie Mae (subject to limitations and posttransfer notice provisions for transfers of qualified financial contracts) without any approval, assignment of rights or 

consent of any party. However, mortgage loans and mortgage-related assets that have been transferred to a Fannie 

Mae MBS trust must be held by the conservator for the beneficial owners of the Fannie Mae MBS and cannot be used 

to satisfy the general creditors of Fannie Mae. Neither the conservatorship nor the terms of our agreements with 

Treasury change our obligation to make required payments on our debt securities or perform under our mortgage 

guaranty obligations.

The conservatorship has no specified termination date and there continues to be significant uncertainty regarding our 

future, including how long we will continue to exist in our current form, the extent of our role in the market, the level of 

government support of our business, how long we will be in conservatorship, what form we will have and what 

ownership interest, if any, our current common and preferred stockholders will hold in us after the conservatorship is 

terminated and whether we will continue to exist following conservatorship. Under the GSE Act, the Director of FHFA 

must place us into receivership if they make a written determination that our assets are less than our obligations or if we 

have not been paying our debts, in either case, for a period of 60 days. In addition, the Director of FHFA may place us 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-8
into receivership at the Director’s discretion at any time for other reasons set forth in the GSE Act, including if we are 

critically undercapitalized or if we are undercapitalized and have no reasonable prospect of becoming adequately 

capitalized. Should we be placed into receivership, different assumptions would be required to determine the carrying 

value of our assets, which would likely lead to substantially different financial results. Treasury has made a commitment 

under the senior preferred stock purchase agreement to provide funding to us under certain circumstances if we have a 

net worth deficit. We are not aware of any plans of FHFA (1) to fundamentally change our business model, or (2) to 

reduce the aggregate amount available to or held by the company under our equity structure, which includes the senior 

preferred stock purchase agreement.

Senior Preferred Stock Purchase Agreement, Senior Preferred Stock 

and Warrant

Senior Preferred Stock Purchase Agreement

Under our senior preferred stock purchase agreement with Treasury, in September 2008 we issued Treasury one million

shares of senior preferred stock and a warrant to purchase shares of our common stock. The senior preferred stock 

purchase agreement and the dividend and liquidation provisions of the senior preferred stock were amended in January 

2021 pursuant to a letter agreement between Fannie Mae, through FHFA in its capacity as conservator, and Treasury. 

The changes include the following:

• The dividend provisions of the senior preferred stock were amended to permit us to retain increases in our net 

worth until our net worth exceeds the amount of adjusted total capital necessary for us to meet the capital 

requirements and buffers under the enterprise regulatory capital framework discussed in “Note 12, Regulatory 

Capital Requirements.” After the “capital reserve end date,” which is defined as the last day of the second 

consecutive fiscal quarter during which we have had and maintained capital equal to, or in excess of, all of the 

capital requirements and buffers under the enterprise regulatory capital framework, the amount of quarterly 

dividends to Treasury will be equal to the lesser of any quarterly increase in our net worth and a 10% annual 

rate on the then-current liquidation preference of the senior preferred stock. 

• At the end of each fiscal quarter, through and including the capital reserve end date, the liquidation preference 

of the senior preferred stock will be increased by an amount equal to the increase in our net worth, if any, 

during the immediately prior fiscal quarter. 

• We may issue and retain up to $70 billion in proceeds from the sale of common stock without Treasury’s prior 

consent, provided that (1) Treasury has already exercised its warrant in full, and (2) all currently pending 

significant litigation relating to the conservatorship and to an amendment to the senior preferred stock purchase 

agreement made in August 2012 has been resolved, which may require Treasury’s assent.

• FHFA may release us from conservatorship without Treasury’s consent after (1) all currently pending significant 

litigation relating to the conservatorship and to the August 2012 amendment to the senior preferred stock 

purchase agreement has been resolved, and (2) our common equity tier 1 capital, together with any other 

common stock that we may issue in a public offering, equals or exceeds 3% of our adjusted total assets (as 

defined in the enterprise regulatory capital framework). 

• New restrictive covenants were added relating to our single-family and multifamily business activities.

On September 14, 2021, Fannie Mae, through FHFA acting in its capacity as Fannie Mae’s conservator, entered into a 

letter agreement with Treasury temporarily suspending certain of the restrictive business covenants that were added in 

the January 2021 letter agreement amending the senior preferred stock purchase agreement. Under the terms of the 

September 2021 letter agreement, the suspension of these provisions will terminate six months after Treasury so 

notifies us. 

Treasury has made a commitment under the senior preferred stock purchase agreement to provide funding to us under 

certain circumstances if we have a net worth deficit. Pursuant to the senior preferred stock purchase agreement, we 

have received a total of $119.8 billion from Treasury as of December 31, 2022, and the amount of remaining funding 

available to us under the agreement is $113.9 billion. We have not received any funding from Treasury under this 

commitment since the first quarter of 2018.

The aggregate liquidation preference of the senior preferred stock increased to $180.3 billion as of December 31, 2022

and will further increase to $181.8 billion as of March 31, 2023 due to the $1.4 billion increase in our net worth during 

the fourth quarter of 2022.

Both the January and September 2021 letter agreements have been accounted for as modifications of the senior 

preferred stock purchase agreement. As a result, there is no change in the carrying value of the senior preferred stock.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-9
The terms of the senior preferred stock purchase agreement, as amended, including Treasury’s funding commitment,

are described more fully in “Note 11, Equity.” The enterprise regulatory capital framework is discussed in “Note 12, 

Regulatory Capital Requirements.”

Senior Preferred Stock 

For information about the senior preferred stock, see “Note 11, Equity.”

Warrant 

On September 7, 2008, we, through FHFA in its capacity as conservator, issued to Treasury a warrant to purchase, at a 

nominal price, shares of our common stock equal to 79.9% of the total common stock outstanding on a fully diluted 

basis on the date the warrant is exercised. The warrant may be exercised, in whole or in part, at any time on or before 

September 7, 2028. We recorded the warrant at fair value in our stockholders’ equity as a component of additional paidin-capital. The fair value of the warrant was calculated using the Black-Scholes Option Pricing Model. Since the warrant 

has an exercise price of $0.00001 per share, the model is insensitive to the risk-free rate and volatility assumptions 

used in the calculation and the share value of the warrant is equal to the price of the underlying common stock. We 

estimated that the fair value of the warrant at issuance was $3.5 billion based on the price of our common stock on 

September 8, 2008, which was after the dilutive effect of the warrant had been reflected in the market price. Subsequent 

changes in the fair value of the warrant are not recognized in our financial statements. If the warrant is exercised, the 

stated value of the common stock issued will be reclassified as “Common stock” in our consolidated balance sheets. 

Because the warrant’s exercise price per share is considered non-substantive (compared to the market price of our 

common stock), the warrant was determined to have characteristics of non-voting common stock, and thus is included 

in the computation of basic and diluted earnings per share. The weighted-average shares of common stock outstanding 

for 2022, 2021 and 2020 included shares of common stock that would be issuable upon full exercise of the warrant 

issued to Treasury. 

Impact of U.S. Government Support

We continue to rely on support from Treasury to eliminate any net worth deficits we may experience in the future, which 

would otherwise trigger our being placed into receivership. Based on consideration of all the relevant conditions and 

events affecting our operations, including our reliance on the U.S. government, we continue to operate as a going 

concern and in accordance with FHFA’s provision of authority. 

In addition to MBS issuances and retained earnings, we fund our business through the issuance of short-term and longterm debt securities in the domestic and international capital markets. Accordingly, we are subject to “roll over,” or 

refinancing, risk on our outstanding debt. Our ability to issue long-term debt has been strong primarily due to actions 

taken by the federal government to support our business and our debt securities. 

We believe that our status as a government-sponsored enterprise and continued federal government support are

essential to maintaining our access to debt funding. Changes or perceived changes in federal government support of 

our business without appropriate capitalization of the company could materially and adversely affect our liquidity, 

financial condition and results of operations. Changes or perceived changes in our status as a government-sponsored 

enterprise could also materially and adversely affect our liquidity, financial condition and results of operations. In 

addition, due to our reliance on the U.S. government’s support, our access to debt funding or the cost of debt funding 

also could be materially adversely affected by a change or perceived change in the creditworthiness of the U.S 

government. A downgrade in our credit ratings could reduce demand for our debt securities and increase our borrowing 

costs. Future changes or disruptions in the financial markets could significantly impact the amount, mix and cost of 

funds we obtain, which also could increase our liquidity and “roll over” risk and have a material adverse impact on our 

liquidity, financial condition and results of operations.

Related Parties

Because Treasury holds a warrant to purchase shares of Fannie Mae common stock equal to 79.9% of the total number 

of shares of Fannie Mae common stock, we and Treasury are deemed related parties. As of December 31, 2022, 

Treasury held an investment in our senior preferred stock with an aggregate liquidation preference of $180.3 billion. See 

“Senior Preferred Stock Purchase Agreement, Senior Preferred Stock and Warrant” above for additional information on 

transactions under this agreement.

FHFA’s control of both Fannie Mae and Freddie Mac has caused Fannie Mae, FHFA and Freddie Mac to be deemed 

related parties. Additionally, Fannie Mae and Freddie Mac jointly own Common Securitization Solutions, LLC (“CSS”), a 

limited liability company created to operate a common securitization platform; as a result, CSS is deemed a related 

party. As a part of our joint ownership, Fannie Mae, Freddie Mac and CSS are parties to a limited liability company 

agreement that sets forth the overall framework for the joint venture, including Fannie Mae’s and Freddie Mac’s rights 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-10
and responsibilities as members of CSS. Fannie Mae, Freddie Mac and CSS are also parties to a customer services 

agreement that sets forth the terms under which CSS provides mortgage securitization services to us and Freddie Mac, 

including the operation of the common securitization platform, as well as an administrative services agreement. CSS 

operates as a separate company from us and Freddie Mac, with all funding and limited administrative support services 

and other resources provided to it by us and Freddie Mac.

In the ordinary course of business, Fannie Mae may purchase and sell securities issued by Treasury and Freddie Mac

in the capital markets. Some of the structured securities we issue are backed in whole or in part by Freddie Mac 

securities. Fannie Mae and Freddie Mac each have agreed to indemnify the other party for losses caused by: its failure 

to meet its payment or other specified obligations under the trust agreements pursuant to which the underlying 

resecuritized securities were issued; its failure to meet its obligations under the customer services agreement; its 

violations of laws; or with respect to material misstatements or omissions in offering documents, ongoing disclosures 

and materials relating to the underlying resecuritized securities. Additionally, we make regular income tax payments to 

and receive tax refunds from the Internal Revenue Service (“IRS”), a bureau of Treasury.

Transactions with Treasury

Treasury Making Home Affordable Program

Our administrative expenses were reduced by $15 million, $17 million and $19 million for the years ended December 

31, 2022, 2021 and 2020, respectively, due to reimbursements from Treasury and Freddie Mac for expenses incurred 

as program administrator for Treasury’s Home Affordable Modification Program (“HAMP”) and other initiatives under 

Treasury’s Making Home Affordable Program. 

Obligation to Pay TCCA Fees to Treasury

In December 2011, Congress enacted the Temporary Payroll Cut Continuation Act of 2011 (“TCCA”) which, among other 

provisions, required that we increase our single-family guaranty fees by at least 10 basis points and remit this increase 

to Treasury. To meet our obligations under the TCCA and at the direction of FHFA, we increased the guaranty fee on all 

single-family residential mortgages delivered to us by 10 basis points in April 2012. The resulting fee revenue and 

expense are recorded in “Interest income: Mortgage loans” and “TCCA fees,” respectively, in our consolidated 

statements of operations and comprehensive income.

In November 2021, the Infrastructure Investment and Jobs Act was enacted, which extended to October 1, 2032 our 

obligation under the TCCA to collect 10 basis points in guaranty fees on single-family residential mortgages delivered to 

us and pay the associated revenue to Treasury. In January 2022, FHFA advised us to continue to pay these TCCA fees 

to Treasury with respect to all single-family loans acquired by us before October 1, 2032, and to continue to remit these 

amounts to Treasury on and after October 1, 2032 with respect to loans we acquired before this date until those loans 

are paid off or otherwise liquidated.

We recognized $3.4 billion, $3.1 billion and $2.7 billion in TCCA fees during the years ended December 31, 2022, 2021

and 2020, respectively, of which $854 million and $801 million had not been remitted as of December 31, 2022 and 

2021, respectively.

Treasury Interest in Affordable Housing Allocations 

The GSE Act requires us to set aside certain funding obligations, a portion of which is attributable to Treasury’s Capital 

Magnet Fund. These funding obligations are measured as the product of 4.2 basis points and the unpaid principal 

balance of our total new business purchases for the respective period, with 35% of this amount payable to Treasury’s 

Capital Magnet Fund. We recognized $101 million, $209 million and $211 million in “Other expenses, net” in connection 

with Treasury’s Capital Magnet Fund for the years ended December 31, 2022, 2021 and 2020, respectively. We paid 

$209 million and $211 million to Treasury’s Capital Magnet Fund in 2022 and 2021, respectively. In 2023, we expect to 

pay $101 million to Treasury’s Capital Magnet Fund based on our new business purchases in 2022. 

Transactions with FHFA

The GSE Act authorizes FHFA to establish an annual assessment for regulated entities, including Fannie Mae, which is 

payable on a semi-annual basis (April and October), for FHFA’s costs and expenses, as well as to maintain FHFA’s 

working capital. We recognized FHFA assessment fees, which are recorded in “Administrative expenses” in our 

consolidated statements of operations and comprehensive income, of $132 million, $140 million and $139 million for the 

years ended December 31, 2022, 2021 and 2020, respectively.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-11
Transactions with CSS and Freddie Mac

We contributed funds to CSS, the company we jointly own with Freddie Mac, of $65 million, $76 million and $88 million

for the years ended December 31, 2022, 2021 and 2020, respectively. These contributions are recorded in “Other 

expenses, net” in our consolidated statements of operations and comprehensive income.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles 

generally accepted in the United States of America (“GAAP”). To conform to our current-period presentation, we have 

reclassified certain amounts reported in our prior periods’ consolidated financial statements.

Use of Estimates 

Preparing consolidated financial statements in accordance with GAAP requires management to make estimates and 

assumptions that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities 

as of the dates of our consolidated financial statements, as well as our reported amounts of revenues and expenses 

during the reporting periods. Management has made significant estimates in a variety of areas including, but not limited 

to, the allowance for loan losses. Actual results could be different from these estimates.

Principles of Consolidation

Our consolidated financial statements include our accounts as well as the accounts of the other entities in which we 

have a controlling financial interest. All intercompany balances and transactions have been eliminated. The typical 

condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. A controlling 

financial interest may also exist in an entity such as a variable interest entity (“VIE”) through arrangements that do not 

involve voting interests. The majority of Fannie Mae’s controlling interests arise from arrangements with VIEs.

VIE Assessment

We have interests in various entities that are considered VIEs. A VIE is an entity (1) that has total equity at risk that is 

not sufficient to finance its activities without additional subordinated financial support from other entities, (2) where the 

group of equity holders does not have the power to direct the activities of the entity that most significantly impact the 

entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s 

expected residual returns, or both, or (3) where the voting rights of some investors are not proportional to their 

obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, 

or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has 

disproportionately few voting rights.

We determine whether an entity is a VIE by performing a qualitative analysis, which requires certain subjective 

decisions including, but not limited to, the design of the entity, the variability that the entity was designed to create and 

pass along to its interest holders, the rights of the parties and the purpose of the arrangement.

The primary types of VIE entities with which we are involved are securitization trusts guaranteed by us via lender swap 

and portfolio securitization transactions, special-purpose vehicles (“SPVs”) associated with certain credit risk transfer 

programs, limited partnership investments in low-income housing tax credit (“LIHTC”) and other housing partnerships, 

as well as mortgage and asset-backed trusts that were not created by us. For more information on the primary types of 

VIE entities with which we are involved, see “Note 2, Consolidations and Transfers of Financial Assets.”

Primary Beneficiary Determination

If an entity is a VIE, we consider whether our variable interest in that entity causes us to be the primary beneficiary. We 

are deemed to be the primary beneficiary of a VIE when we have both (1) the power to direct the activities of the VIE 

that most significantly impact the entity’s economic performance, and (2) exposure to benefits and/or losses that could 

potentially be significant to the entity. The primary beneficiary of the VIE is required to consolidate and account for the 

assets, liabilities, and noncontrolling interests of the VIE in its consolidated financial statements. The assessment of 

which party has the power to direct the activities of the VIE may require significant management judgment when 

(1) more than one party has power or (2) more than one party is involved in the design of the VIE but no party has the 

power to direct the ongoing activities that could be significant.

We continually assess whether we are the primary beneficiary of the VIEs with which we are involved and therefore may 

consolidate or deconsolidate a VIE through the duration of our involvement. Examples of certain events that may 

change whether or not we consolidate the VIE include a change in the design of the entity or a change in our ownership 

in the entity.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-12
Measurement of Consolidated Assets and Liabilities

When we are the transferor of assets into a VIE that we consolidate at the time of the transfer, we continue to recognize 

the assets and liabilities of the VIE at the amounts that they would have been recognized if we had not transferred them, 

and no gain or loss is recognized. For all other VIEs that we consolidate (that is, those for which we are not the 

transferor), we recognize the assets and liabilities of the VIE in our consolidated financial statements at fair value, and 

we recognize a gain or loss for the difference between (1) the fair value of the consideration paid, fair value of 

noncontrolling interests and the reported amount of any previously held interests, and (2) the net amount of the fair 

value of the assets and liabilities recognized upon consolidation. However, for the securitization trusts established under 

our lender swap program, no gain or loss is recognized if the trust is consolidated at formation as there is no difference 

in the respective fair value of (1) and (2) above. We record gains or losses that are associated with the consolidation of 

VIEs as a component of “Investment gains (losses), net” in our consolidated statements of operations and 

comprehensive income.

If we cease to be deemed the primary beneficiary of a VIE, we deconsolidate the VIE. We use fair value to measure the 

initial cost basis for any retained interests that are recorded upon the deconsolidation of a VIE. Any difference between 

the fair value and the previous carrying amount of our investment in the VIE is recorded in “Investment gains (losses), 

net” in our consolidated statements of operations and comprehensive income. 

Purchase/Sale of Fannie Mae Securities

We actively purchase and sell guaranteed MBS that have been issued through lender swap and portfolio securitization 

transactions. The accounting for the purchase and sale of our guaranteed MBS issued by the trusts differs based on the 

characteristics of the securitization trusts and whether the trusts are consolidated and is discussed in “Single-Class 

Securitization Trusts,” “Single-Class Resecuritization Trusts” and “Multi-Class Resecuritization Trusts” below. 

Uniform Mortgage-Backed Securities (“UMBS”)

Uniform Mortgage-Backed Securities (“UMBS”) are common mortgage-backed securities issued by both Fannie Mae 

and Freddie Mac to finance fixed-rate mortgage loans backed by one- to four-unit single-family properties. We and 

Freddie Mac began issuing UMBS and resecuritizing UMBS certificates into structured securities in June 2019. The 

structured securities backed by UMBS that we issue include Supers, which are single-class resecuritization 

transactions, Real Estate Mortgage Investment Conduit securities (“REMICs”) and interest-only and principal-only strip 

securities (“SMBS”), which are multi-class resecuritization transactions. 

Since June 2019, we have resecuritized UMBS, Supers and other structured securities issued by Freddie Mac. The 

mortgage loans that serve as collateral for Freddie Mac-issued UMBS are not held in trusts that are consolidated by 

Fannie Mae. When we include Freddie Mac securities in our structured securities, we are subject to additional credit risk 

because we guarantee securities that were not previously guaranteed by Fannie Mae. However, Freddie Mac continues 

to guarantee the payment of principal and interest on the underlying Freddie Mac securities that we have resecuritized. 

We have concluded that this additional credit risk is negligible because of the funding commitment available to Freddie 

Mac through its senior preferred stock purchase agreement with Treasury. 

Single-Class Securitization Trusts 

We create single-class securitization trusts to issue single-class Fannie Mae MBS (including UMBS) that evidence an 

undivided interest in the mortgage loans held in the trust. Investors in single-class Fannie Mae MBS receive principal 

and interest payments in proportion to their percentage ownership of the MBS issuance. We guarantee to each singleclass securitization trust that we will supplement amounts received by the securitization trust as required to permit timely 

payments of principal and interest on the related Fannie Mae MBS. This guaranty exposes us to credit losses on the 

loans underlying Fannie Mae MBS. 

Single-class securitization trusts are used for lender swap and portfolio securitization transactions. A lender swap 

transaction occurs when a mortgage lender delivers a pool of single-family mortgage loans to us, which we immediately 

deposit into an MBS trust. The MBS are then issued to the lender in exchange for the mortgage loans. A portfolio 

securitization transaction occurs when we purchase mortgage loans from third-party sellers for cash and later deposit 

these loans into an MBS trust. The securities issued through a portfolio securitization are then sold to investors for cash. 

We consolidate single-class securitization trusts that are issued under these programs when our role as guarantor and 

master servicer provides us with the power to direct matters, such as the servicing of the mortgage loans, that impact 

the credit risk to which we are exposed. In contrast, we do not consolidate single-class securitization trusts when other 

organizations have the power to direct these activities (for example, when the loan collateral is subject to a Federal 

Housing Administration guaranty and related Servicing Guide). 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-13
When we purchase single-class Fannie Mae MBS issued from a consolidated trust, we account for the transaction as an 

extinguishment of the related debt in our consolidated financial statements. We record a gain or loss on the 

extinguishment of such debt to the extent that the purchase price of the MBS does not equal the carrying value of the 

related consolidated debt reported in our consolidated balance sheets (including unamortized premiums, discounts or 

other cost basis adjustments) at the time of purchase. When we sell single-class Fannie Mae MBS that were issued 

from a consolidated trust, we account for the transaction as the issuance of debt in our consolidated financial 

statements. We amortize the related premiums, discounts and other cost basis adjustments into income over the 

contractual life of the MBS. 

If a single-class securitization trust is not consolidated, we account for the purchase and subsequent sale of such 

securities as the transfer of an investment security in accordance with the accounting guidance for transfers of financial 

assets. 

Single-Class Resecuritization Trusts

Fannie Mae single-class resecuritization trusts are created by depositing MBS into a new securitization trust for the 

purpose of aggregating multiple mortgage-related securities into one combined security. Single-class resecuritization 

securities pass through directly to the holders of the securities all of the cash flows of the underlying MBS held in the 

trust. Since June 2019, these securities can be collateralized directly or indirectly by cash flows from underlying 

securities issued by Fannie Mae, Freddie Mac, or a combination of both. Resecuritization trusts backed directly or 

indirectly only by Fannie Mae MBS are non-commingled resecuritization trusts. Resecuritization trusts collateralized 

directly or indirectly by cash flows either in part or in whole from Freddie Mac MBS are commingled resecuritization 

trusts.

Securities issued by our non-commingled single-class resecuritization trusts are backed solely by Fannie Mae MBS, 

and the guaranty we provide on the trust does not subject us to additional credit risk because we have already provided 

a guarantee on the underlying securities. Further, the securities issued by our non-commingled single-class 

resecuritization trusts pass through all of the cash flows of the underlying Fannie Mae MBS directly to the holders of the 

securities. Accordingly, these securities are deemed to be substantially the same as the underlying Fannie Mae MBS 

collateral. Additionally, our involvement with these trusts does not provide us with any incremental rights or powers that 

would enable us to direct any activities of the trusts. We have concluded that we are not the primary beneficiary of and, 

as a result, we do not consolidate our non-commingled single-class resecuritization trusts. Therefore, we account for 

purchases and sales of securities issued by non-commingled single-class resecuritization trusts as extinguishments and 

issuances of the underlying MBS debt, respectively.

Securities issued by our commingled single-class resecuritization trusts are backed in whole or in part by Freddie Mac 

securities. As discussed in “Note 6, Financial Guarantees,” the guaranty we provide to the commingled single-class 

resecuritization trust subjects us to additional credit risk to the extent that we are providing a guaranty for the timely 

payment of principal and interest on the underlying Freddie Mac securities that we have not previously guaranteed. 

Accordingly, securities issued by our commingled resecuritization trusts are not deemed to be substantially the same as 

the underlying collateral. We do not have any incremental rights or powers related to commingled single-class 

resecuritization trusts that would enable us to direct any activities of the underlying trust. As a result, we have concluded 

that we are not the primary beneficiary of, and therefore do not consolidate, our commingled single-class 

resecuritization trusts unless we have the unilateral right to dissolve the trust. We have this right when we hold 100% of 

the beneficial interests issued by the resecuritization trust. Therefore, we account for purchases and sales of these 

securities as the transfer of an investment security in accordance with the accounting guidance for transfers of financial 

assets. 

Multi-Class Resecuritization Trusts

Multi-class resecuritization trusts are trusts we create to issue multi-class Fannie Mae structured securities, including 

REMICs and SMBS, in which the cash flows of the underlying mortgage assets are divided, creating several classes of 

securities, each of which represents a beneficial ownership interest in a separate portion of cash flows. We guarantee to 

each multi-class resecuritization trust that we will supplement amounts received by the trusts as required to permit 

timely guaranty payments on the related Fannie Mae structured securities. Since June 2019, these multi-class 

structured securities can be collateralized, directly or indirectly, by securities issued by Fannie Mae, Freddie Mac or a 

combination of both.

The guaranty we provide to our non-commingled multi-class resecuritization trusts does not subject us to additional 

credit risk, because the underlying assets are Fannie Mae-issued securities for which we have already provided a 

guaranty. However, for commingled multi-class structured securities, we are subject to additional credit risk to the extent 

we are providing a guaranty for the timely payment of principal and interest on the underlying Freddie Mac securities 

that we have not previously guaranteed. For both commingled and non-commingled multi-class resecuritization trusts, 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-14
we may also be exposed to prepayment risk via our ownership of securities issued by these trusts. We do not have the 

ability via our involvement with a multi-class resecuritization trust to impact either the credit risk or prepayment risk to 

which we are exposed. Therefore, we have concluded that we do not have the characteristics of a controlling financial 

interest and do not consolidate multi-class resecuritization trusts unless we have the unilateral right to dissolve the trust. 

This ability exists only when we hold 100% of the outstanding beneficial interests issued by the resecuritization trust. 

Securities issued by multi-class resecuritization trusts do not directly pass through all of the cash flows of the underlying 

securities, and therefore the issued and underlying securities are not considered substantially the same. Accordingly, we 

account for purchases and sales of securities issued by the multi-class resecuritization trusts as transfers of an 

investment security in accordance with the accounting guidance for transfers of financial assets. 

Transfers of Financial Assets

We evaluate each transfer of financial assets to determine whether the transfer qualifies as a sale. If a transfer does not 

meet the criteria for sale treatment, the transferred assets remain in our consolidated balance sheets and we record a 

liability to the extent of any proceeds received in connection with the transfer. We record transfers of financial assets in 

which we surrender control of the transferred assets as sales. 

When a transfer that qualifies as a sale is completed, we derecognize all assets transferred and recognize all assets 

obtained and liabilities incurred at fair value. The difference between the carrying basis of the assets transferred and the 

fair value of the net proceeds from the sale is recorded as a component of “Investment gains (losses), net” in our 

consolidated statements of operations and comprehensive income. Retained interests are primarily derived from 

transfers associated with our portfolio securitizations in the form of Fannie Mae securities. We separately describe the 

subsequent accounting, as well as how we determine fair value, for our retained interests in the “Investments in 

Securities” section of this note. 

We enter into repurchase agreements that involve contemporaneous trades to purchase and sell securities. These 

transactions are accounted for as secured financings since the transferor has not relinquished control over the 

transferred assets. These transactions are reported as securities purchased under agreements to resell and securities 

sold under agreements to repurchase in our consolidated balance sheets except for securities purchased under 

agreements to resell on an overnight basis, which are included in cash and cash equivalents in our consolidated 

balance sheets.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents

and Statements of Cash Flows

Short-term investments that have a maturity at the date of acquisition of three months or less and are readily convertible 

to known amounts of cash are generally considered cash equivalents. We also include securities purchased under 

agreements to resell on an overnight basis in “cash and cash equivalents” in our consolidated balance sheets. We may 

pledge as collateral certain short-term investments classified as cash equivalents. 

“Restricted cash and cash equivalents” in our consolidated balance sheets represents cash advanced to the extent such 

amounts are due to, but have not yet been remitted to, MBS certificateholders. Similarly, when we or our servicers 

collect and hold cash that is due to certain Fannie Mae MBS trusts in advance of our requirement to remit these 

amounts to the trusts, we recognize the collected cash amounts as restricted cash. In addition, we recognize restricted 

cash when we and our servicers advance payments on delinquent loans to consolidated Fannie Mae MBS trusts, which 

have not yet been remitted to MBS certificateholders. Cash may also be recognized as restricted cash as a result of 

restrictions related to certain consolidated partnership funds as well as for certain collateral arrangements for which we 

do not have the right to use the cash. Fannie Mae, in its role as trustee, invests funds held by consolidated trusts 

directly in eligible short-term third-party investments, which may include investments in cash equivalents that are 

composed of overnight repurchase agreements and U.S. Treasuries that have a maturity at the date of acquisition of 

three months or less. The funds underlying these short-term investments are restricted per the trust agreements. 

In the presentation of our consolidated statements of cash flows, we present cash flows from derivatives that do not 

contain financing elements and mortgage loans held for sale at acquisition as operating activities. We present cash 

flows from securities purchased under agreements to resell as investing activities. Cash flows from securities sold under 

agreements to repurchase are presented as financing activities in “Other, net.” We classify cash flows from trading 

securities based on their nature and purpose.

We classify cash flows related to mortgage loans acquired as held-for-investment, including loans of Fannie Mae and 

loans of consolidated trusts, as either investing activities (for principal repayments or sales proceeds) or operating 

activities (for interest received from borrowers included as a component of our net income). Cash flows related to debt 

securities issued by consolidated trusts are classified as either financing activities (for repayments of principal to 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-15
certificateholders) or operating activities (for interest payments to certificateholders included as a component of our net 

income). We distinguish between the payments and proceeds related to the debt of Fannie Mae and the debt of 

consolidated trusts, as applicable. We present our non-cash activities in the consolidated statements of cash flows at 

the associated unpaid principal balance.

Investments in Securities

Securities Classified as Trading or Available-for-Sale

We classify and account for our securities as either trading or available-for-sale (“AFS”). We measure trading securities 

at fair value in our consolidated balance sheets with unrealized and realized gains and losses included as a component 

of “Fair value gains (losses), net” in our consolidated statements of operations and comprehensive income. We include 

interest and dividends on securities in our consolidated statements of operations and comprehensive income. Interest 

income includes the amortization of cost basis adjustments, including premiums and discounts, recognized as a yield 

adjustment using the interest method over the contractual term of the security. We measure AFS securities at fair value 

in our consolidated balance sheets, with unrealized gains and losses included in accumulated other comprehensive 

income, net of income taxes. We recognize realized gains and losses on AFS securities when securities are sold. We 

calculate the gains and losses using the specific identification method and record them in “Investment gains (losses), 

net” in our consolidated statements of operations and comprehensive income. As of December 31, 2022 and 2021, we 

did not have any securities classified as held-to-maturity. 

Fannie Mae MBS included in “Investments in securities, at fair value”

When we own Fannie Mae MBS issued by unconsolidated trusts, we do not derecognize any components of the 

guaranty assets, guaranty obligations, or any other outstanding recorded amounts associated with the guaranty 

transaction because our contractual obligation to the MBS trust remains in force until the trust is liquidated. We 

determine the fair value of Fannie Mae MBS based on observable market prices because most Fannie Mae MBS are 

actively traded. For any subsequent purchase or sale, we continue to account for any outstanding recorded amounts 

associated with the guaranty transaction on the same basis of accounting.

Impairment of Available-for-Sale Securities

An AFS debt security is impaired if the fair value of the investment is less than its amortized cost basis. In these 

circumstances, we separate the difference between the amortized cost basis of the security and its fair value into the 

amount representing the credit loss, which we recognize as an allowance in “Benefit (provision) for credit losses” in our 

consolidated statements of operations and comprehensive income, and the amount related to all other factors, which we 

recognize in “Other comprehensive loss,” net of taxes, in our consolidated statements of operations and comprehensive 

income. Credit losses are evaluated on an individual security basis and are limited to the difference between the fair 

value of the debt security and its amortized cost basis. If we intend to sell a debt security or it is more likely than not that 

we will be required to sell the debt security before recovery, any allowance for credit losses on the debt security is 

reversed and the amortized cost basis of the debt security is written down to its fair value through “Investment gains 

(losses), net.” 

Mortgage Loans

Loans Held for Sale

When we acquire mortgage loans that we intend to sell or securitize via trusts that will not be consolidated, we classify 

the loans as held for sale (“HFS”). We report the carrying value of HFS loans at the lower of cost or fair value. Any 

excess of an HFS loan’s cost over its fair value is recognized as a valuation allowance, with changes in the valuation 

allowance recognized as “Investment gains (losses), net” in our consolidated statements of operations and 

comprehensive income. We recognize interest income on HFS loans on an accrual basis, unless we determine that the 

ultimate collection of contractual principal or interest payments in full is not reasonably assured. Purchased premiums, 

discounts and other cost basis adjustments on HFS loans are deferred upon loan acquisition, included in the cost basis 

of the loan, and not amortized. We determine any lower of cost or fair value adjustment on HFS loans at an individual 

loan level.

For nonperforming loans transferred from held for investment (“HFI”) to HFS, based upon a change in our intent, we 

record the loans at the lower of cost or fair value on the date of transfer. When the fair value of the nonperforming loan 

is less than its amortized cost, we record a write-off against the allowance for loan losses in an amount equal to the 

difference between the amortized cost basis and the fair value of the loan. If the amount written off upon transfer 

exceeds the allowance related to the transferred loan, we record the excess in provision for credit losses, whereas if the 

amounts written off are less than the allowance related to the loans, we recognize a benefit for credit losses. 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-16
Nonperforming loans include both seriously delinquent and reperforming loans, which are loans that were previously 

delinquent but are performing again because payments on the mortgage loan have become current with or without the 

use of a loan modification plan. Single-family seriously delinquent loans are loans that are 90 days or more past due or 

in the foreclosure process. Multifamily seriously delinquent loans are loans that are 60 days or more past due. 

In the event that we reclassify a performing loan from HFI to HFS, based upon a change in our intent, the allowance for 

loan losses previously recorded on the HFI mortgage loan is reversed through “Benefit (provision) for credit losses” at 

the time of reclassification. The mortgage loan is reclassified into HFS at its amortized cost basis and a valuation 

allowance is established to the extent that the amortized cost basis of the loan exceeds its fair value. The initial 

recognition of the valuation allowance and any subsequent changes are recorded as a gain or loss in “Investment gains 

(losses), net.”

Loans Held for Investment

When we acquire mortgage loans that we have the ability and the intent to hold for the foreseeable future or until 

maturity, we classify the loans as HFI. When we consolidate a securitization trust, we recognize the loans underlying the 

trust in our consolidated balance sheets. The trusts do not have the ability to sell mortgage loans and the use of such 

loans is limited exclusively to the settlement of obligations of the trusts. Therefore, mortgage loans acquired when we 

have the intent to securitize via consolidated trusts are generally classified as HFI in our consolidated balance sheets 

both prior to and subsequent to their securitization.

We report the carrying value of HFI loans at the unpaid principal balance, net of unamortized premiums and discounts, 

other cost basis adjustments, and allowance for loan losses. We define the amortized cost of HFI loans as unpaid 

principal balance and accrued interest receivable, net, including any unamortized premiums, discounts, and other cost 

basis adjustments. For purposes of our consolidated balance sheets, we present accrued interest receivable separately 

from the amortized cost of our loans held for investment. We recognize interest income on HFI loans on an accrual 

basis using the effective yield method over the contractual life of the loan, including the amortization of any deferred 

cost basis adjustments, such as the premium or discount at acquisition, unless we determine that the ultimate collection 

of contractual principal or interest payments in full is not reasonably assured.

Nonaccrual Loans

For single-family loans negatively impacted by the COVID-19 pandemic, we continue to recognize interest income for 

up to six months of delinquency provided that the loan was either current as of March 1, 2020 or originated after March 

1, 2020. We continue to accrue interest income beyond six months of delinquency provided that the collection of 

principal and interest continues to be reasonably assured. For multifamily loans that are in a forbearance arrangement 

and that have been negatively impacted by the pandemic, we continue to recognize interest income for up to six months 

of delinquency and then place them on nonaccrual status when the borrower is six months past due. 

For loans that have been negatively impacted by COVID-19, we establish a valuation allowance for expected credit 

losses on the accrued interest receivable balance applying the process that we have established for both single-family 

and multifamily loans. The credit expense related to this valuation allowance is classified as a component of the 

provision for credit losses. Accrued interest receivable is written off when the amount is deemed to be uncollectible. 

Loans that are in active forbearance arrangements are not evaluated for write-off. 

For loans not subject to the COVID-19-related nonaccrual policy, we discontinue accruing interest when we believe 

collectability of principal and interest is not reasonably assured, which for both single-family and multifamily loans is 

generally when the loan becomes two or more months past due according to its contractual terms. A loan is reported as 

past due if a full payment of principal and interest is not received within one month of its due date. When a loan is 

placed on nonaccrual status based on delinquency status, we write-off the accrued interest receivable and reverse 

previously accrued interest through interest income. 

For loans not subject to the COVID-19-related guidance, we have elected not to measure an allowance for credit losses 

on accrued interest receivable balances as we have a nonaccrual policy to ensure the timely reversal of unpaid accrued 

interest. Interest income previously accrued but not collected is reversed through interest income at the date the loan is 

placed on nonaccrual status. See “Note 4, Allowance for Loan Losses” for additional information about our currentperiod provision for loan losses.

For single-family loans, we recognize any contractual interest payments received on the loan while on nonaccrual status 

as a reduction of accrued interest receivable, if any, and then recognize interest income on a cash basis. For multifamily 

loans we apply any payment received on a cost recovery basis to reduce amortized cost of the mortgage loan. Thus, we 

do not recognize any interest income on a multifamily loan placed on nonaccrual status until the amortized cost of the 

loan has been reduced to zero.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-17
Cost basis adjustments on held-for-investment loans are amortized into interest income over the contractual life of the 

loan using the effective interest method. No amortization is recognized during periods in which the loan is on nonaccrual status.

A nonaccrual loan is returned to accrual status when the collectability of principal and interest in full is reasonably 

assured. We generally determine that collectability is reasonably assured when the loan returns to current payment 

status. If a loan is restructured for a borrower experiencing financial difficulty, we require a performance period of up to 6 

months before we return the loan to accrual status. Upon a loan’s return to accrual status, we resume the recognition of 

interest income and the amortization of cost basis adjustments, if any, into interest income. If interest is capitalized 

pursuant to a restructuring, any capitalized interest that had not been previously recognized as interest income or that 

had been reversed through interest income when the loan was placed on nonaccrual status is recorded as a discount to 

the loan and amortized over the remaining contractual life of the loan. 

Allowance for Loan Losses

Our allowance for loan losses is a valuation account that is deducted from the amortized cost basis of HFI loans to 

present the net amount expected to be collected on the loans. The allowance for loan losses reflects an estimate of 

expected credit losses on single-family and multifamily HFI loans held by Fannie Mae and by consolidated Fannie Mae 

MBS trusts. Estimates of credit losses are based on expected cash flows derived from internal models that estimate 

loan performance under simulated ranges of economic environments. Our modeled loan performance is based on our 

historical experience of loans with similar risk characteristics, adjusted to reflect current conditions and reasonable and 

supportable forecasts. Our historical loss experience and our credit loss estimates capture the possibility of remote 

events that could result in credit losses on loans that are considered low risk. The allowance for loan losses does not 

consider benefits from freestanding credit enhancements, such as our Connecticut Avenue Securities® (“CAS”) and 

Credit Insurance Risk TransferTM (“CIRTTM”) programs and multifamily Delegated Underwriting and Servicing (“DUS®”) 

lender risk-sharing arrangements, which are recorded in “Other assets” in our consolidated balance sheets. 

Changes to our estimate of expected credit losses, including changes due to the passage of time, are recorded through 

the “Benefit (provision) for credit losses.” When calculating our allowance for loan losses, we consider only our 

amortized cost in the loans at the balance sheet date. We record write-offs as a reduction to the allowance for loan 

losses when losses are confirmed through the receipt of assets in satisfaction of a loan, such as the underlying 

collateral upon foreclosure or cash upon completion of a short sale. Additionally, we record write-offs as a reduction to 

our allowance for loan losses when a loan is determined to be uncollectible and upon the transfer of a nonperforming 

loan from HFI to HFS. The excess of a loan’s amortized cost over its fair value is treated as a write-off loss that is 

deducted from the allowance for loan losses. We include expected recoveries of amounts previously written off and 

expected to be written off in determining our allowance for loan losses. 

Single-Family Loans

We estimate the amount expected to be collected on our single-family loans using a discounted cash flow approach. 

Our allowance for loan losses is calculated as the difference between the amortized cost basis of the loan and the 

present value of expected cash flows on the loan. Expected cash flows include payments from the borrower, net of 

servicing fees, contractually attached credit enhancements and proceeds from the sale of the underlying collateral, net 

of selling costs.

When foreclosure of a single-family loan is probable, the allowance for loan losses is calculated as the difference 

between the amortized cost basis of the loan and the fair value of the collateral as of the reporting date, adjusted for the 

estimated costs to sell the property and the amount of expected recoveries from contractually attached credit 

enhancements or other proceeds we expect to receive. 

Expected cash flows are developed using internal models that capture market and loan characteristic inputs. Market 

inputs include information such as actual and forecasted home prices, interest rates, volatility and spreads, while loan 

characteristic inputs include information such as mark-to-market loan-to-value (“LTV”) ratios, delinquency status, 

geography and borrower FICO credit scores. The model assigns a probability to borrower events including contractual 

payment, loan payoff and default under various economic environments based on historical data, current conditions and 

reasonable and supportable forecasts.

The two primary drivers of our forecasted economic environments are interest rates and home prices. Our model 

projects the range of possible interest rate scenarios over the life of the loan based on actual interest rates and 

observed option pricing volatility in the capital markets. For single-family home prices, we develop regional forecasts 

based on Metropolitan Statistical Area data using a multi-path simulation that captures home price projections over a 

five-year period, the period for which we can develop reasonable and supportable forecasts. After the five-year period, 

the home price forecast reverts to a historical long-term growth rate.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-18
Expected cash flows on the loan are discounted at the effective interest rate on the loan, adjusted for expected 

prepayments. We update the discount rate of the loan each reporting period to reflect changes in expected 

prepayments. 

We may modify loans to borrowers experiencing financial difficulty as part of our loss mitigation activities. We consider 

the effects of actual restructurings in our estimate of expected credit losses. 

Multifamily Loans

Our allowance for loan losses on multifamily loans is calculated based on estimated probabilities of default and loss 

severities to derive expected loss ratios, which are then applied to the amortized cost basis of the loans. Our 

probabilities of default and severity are estimated using internal models based on historical loss experience of loans 

with similar risk characteristics that affect credit performance, such as debt service coverage ratio (“DSCR”), mark-tomarket LTV ratio, collateral type, age, loan size, geography, prepayment penalty term and note type. Our models 

simulate a range of possible future economic scenarios, which are used to estimate probabilities of default and loss 

severities. Key inputs to our models include rental income, which drives expected DSCRs for our loans, and property 

values. Our reasonable and supportable forecasts for multifamily rental income and property values, which are 

projected based on Metropolitan Statistical Area data, extend through the contractual maturity of the loans. 

When foreclosure of a multifamily loan is probable, the allowance for loan losses is calculated as the difference between 

the amortized cost basis of the loan and the fair value of the collateral as of the reporting date, adjusted for the 

estimated costs to sell the property.

Restructured Loans

As described in “New Accounting Guidance” below, effective January 1, 2022. we adopted the guidance related to the 

elimination of the recognition and measurement of troubled debt restructurings (“TDRs”) and the enhancement of 

disclosures for loan restructurings for borrowers experiencing financial difficulty using the prospective transition method. 

Pursuant to this guidance, when a single-family loan is restructured, we continue to measure impairment on the loan 

using a discounted cash flow approach that utilizes a prepayment-adjusted discount rate that is based on the loan’s 

restructured terms. Using a post-restructuring interest rate does not result in the recognition of an economic concession 

in the allowance for loan losses. Additionally, loan modifications to single-family and multifamily borrowers are evaluated 

to determine whether they result in a new loan or a continuation of an existing loan. Modifications made by Fannie Mae 

for borrowers experiencing financial difficulty are generally accounted for as a continuation of the existing loan as the 

terms of the restructured loans are typically not at market rates.

Prior to our adoption of this guidance, most of our restructurings were accounted for as TDRs. Under the TDR 

accounting model, we used the discount rate that was in effect prior to the restructuring to measure impairment on 

single-family loans which resulted in the recognition, in the allowance for loan losses, of the economic concession that 

we granted to borrowers as part of the loan restructuring. The measurement of the impairment on multifamily loans was 

not significantly impacted by our adoption of this guidance since the allowance for these loans is not measured based 

on a discounted cash flow approach.

As we have elected a prospective transition for the TDR-elimination guidance effective January 1, 2022, the economic 

concession on a single-family loan that was previously restructured and accounted for as a TDR will continue to be 

measured in our allowance for loan losses using the discount rate that was in effect prior to the restructuring and the 

economic concession may increase or decrease as we update our cash flow assumptions related to the loan’s expected 

life. Further, the component of the allowance for loan losses representing economic concessions will decrease as the 

borrower makes payments in accordance with the restructured terms of the mortgage loan and as the loan is sold, 

liquidated, or subsequently restructured. 

In general, the effect of our current accounting for loan modifications is consistent with the accounting that we applied 

under section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to modifications of 

loans not previously restructured in a TDR. The CARES Act provided temporary relief from the accounting and reporting 

requirements for TDRs regarding certain loan modifications related to COVID-19 beginning March 2020 through

December 31, 2021.

Advances to Lenders 

Advances to lenders represent our payments of cash in exchange for the receipt of mortgage loans from lenders in a 

transfer that is accounted for as a secured lending arrangement. These transfers primarily occur when we provide early 

funding to lenders for loans that they will subsequently either sell to us or securitize into a Fannie Mae MBS that they 

will deliver to us. We individually negotiate early lender funding advances with our lenders. Early lender funding 

advances have terms up to 60 days and earn a short-term market rate of interest. 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-19
We report cash outflows from advances to lenders as an investing activity in our consolidated statements of cash flows. 

Settlements of the advances to lenders, other than through lender repurchases of loans, are not collected in cash, but 

rather in the receipt of either loans or Fannie Mae MBS. Accordingly, this activity is reflected as a non-cash transfer in 

our consolidated statements of cash flows in the line item entitled “Transfers from advances to lenders to loans held for 

investment of consolidated trusts.”

Acquired Property, Net 

We recognize foreclosed property (i.e., “Acquired property, net”) upon the earlier of the loan foreclosure event or when 

we take physical possession of the property (i.e., through a deed-in-lieu of foreclosure transaction). We present 

foreclosed property in “Other assets” in our consolidated balance sheets. We held $1.6 billion and $1.3 billion of 

acquired property, net as of December 31, 2022 and December 31, 2021, respectively. We initially measure foreclosed 

property at its fair value less its estimated costs to sell. We treat any excess of our amortized cost in the loan over the 

fair value less estimated costs to sell the property as a write-off to the “Allowance for loan losses” in our consolidated 

balance sheets. Any excess of the fair value less estimated costs to sell the property over our amortized cost in the loan 

is recognized first to recover any previously written-off amounts, then to recover any forgone, contractually due interest, 

and lastly to “Other expenses, net” in our consolidated statements of operations and comprehensive income. 

We classify foreclosed properties as HFS when we intend to sell the property and the following conditions are met at 

either acquisition or within a relatively short period thereafter: we are actively marketing the property and it is available 

for immediate sale in its current condition such that the sale is reasonably expected to take place within one year. We 

report these properties at the lower of their carrying amount or fair value less estimated selling costs. We do not 

depreciate these properties. 

We recognize a loss for any subsequent write-down of the property to its fair value less its estimated costs to sell 

through a valuation allowance with an offsetting charge to “Other expenses, net” in our consolidated statements of 

operations and comprehensive income. We recognize a recovery for any subsequent increase in fair value less 

estimated costs to sell up to the cumulative loss previously recognized through the valuation allowance. We recognize 

gains or losses on sales of foreclosed property through “Other expenses, net” in our consolidated statements of 

operations and comprehensive income. 

Properties that do not meet the criteria to be classified as HFS are classified as held for use. These properties are 

depreciated and are evaluated for impairment when circumstances indicate that the carrying amount of the property is 

no longer recoverable. 

Commitments to Purchase and Sell Mortgage Loans and Securities 

We enter into commitments to purchase and sell mortgage-backed securities and to purchase single-family and 

multifamily mortgage loans. Certain commitments to purchase or sell mortgage-backed securities and to purchase 

single-family mortgage loans are accounted for as derivatives. Our commitments to purchase multifamily loans are not 

accounted for as derivatives because they do not meet the criteria for net settlement. 

When derivative purchase commitments settle, we include the fair value on the settlement date in the cost basis of the 

loan or unconsolidated security we purchase. When derivative commitments to sell securities settle, we include the fair 

value of the commitment on the settlement date in the cost basis of the security we sell. Purchases and sales of 

securities issued by our consolidated MBS trusts are treated as extinguishments or issuances of debt, respectively. For 

commitments to purchase and sell securities issued by our consolidated MBS trusts, we recognize the fair value of the 

commitment on the settlement date as a component of debt extinguishment gains and losses or in the cost basis of the 

debt issued, respectively. 

Regular-way securities trades provide for delivery of securities within the time generally established by regulations or 

conventions in the market in which the trade occurs and are exempt from application of derivative accounting. 

Commitments to purchase or sell securities that we account for on a trade-date basis are also exempt from the 

derivative accounting requirements. We record the purchase and sale of an existing security on its trade date when the 

commitment to purchase or sell the existing security settles within the period of time that is customary in the market in 

which those trades take place. 

Additionally, contracts for the forward purchase or sale of when-issued and to-be-announced (“TBA”) securities are 

exempt from the derivative accounting requirements if there is no other way to purchase or sell that security, delivery of 

that security and settlement will occur within the shortest period possible for that type of security and it is probable at 

inception and throughout the term of the individual contract that physical delivery of the security will occur. Since our 

commitments for the purchase of when-issued and TBA securities can be net settled and we do not document that 

physical settlement is probable, we account for all such commitments as derivatives. 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-20
Derivative Instruments

We recognize our derivatives as either assets or liabilities in our consolidated balance sheets at their fair value on a 

trade date basis. Changes in fair value and interest accruals on derivatives not in qualifying fair value hedging 

relationships are recorded as “Fair value gains (losses), net” in our consolidated statements of operations and 

comprehensive income. We offset the carrying amounts of certain derivatives that are in gain positions and loss 

positions as well as cash collateral receivables and payables associated with derivative positions pursuant to the terms 

of enforceable master netting arrangements. We offset these amounts only when we have the legal right to offset under 

the contract and we have met all the offsetting conditions. For our over-the-counter (“OTC”) derivative positions, our 

master netting arrangements allow us to net derivative assets and liabilities with the same counterparty. For our cleared 

derivative contracts, our master netting arrangements allow us to net our exposure by clearing organization and by 

clearing member.

After offsetting, we report derivatives in a gain position in “Other assets” and derivatives in a loss position in “Other 

liabilities” in our consolidated balance sheets.

We evaluate financial instruments that we purchase or issue and other financial and non-financial contracts for 

embedded derivatives. To identify embedded derivatives that we must account for separately, we determine whether: (1) 

the economic characteristics of the embedded derivative are not clearly and closely related to the economic 

characteristics of the financial instrument or other contract (i.e., the host contract); (2) the financial instrument or other 

contract itself is not already measured at fair value with changes in fair value included in earnings; and (3) a separate 

instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the embedded 

derivative meets all three of these conditions, we elect to carry the hybrid contract in its entirety at fair value with 

changes in fair value recorded in earnings.

Fair Value Hedge Accounting

In January 2021, to reduce earnings volatility related to changes in benchmark interest rates, we began applying fair 

value hedge accounting to certain pools of single-family mortgage loans and certain issuances of our funding debt by 

designating such instruments as the hedged item in hedging relationships with interest-rate swaps. In these 

relationships, we have designated the change in the benchmark interest rate, either the London Inter-bank Offered Rate 

(“LIBOR”) or Secured Overnight Financing Rate (“SOFR”), as the risk being hedged. We have elected to use the last-oflayer method to hedge certain pools of single-family mortgage loans. This election involves establishing fair value 

hedging relationships on the portion of each loan pool that is not expected to be affected by prepayments, defaults and 

other events that affect the timing and amount of cash flows. The term of each hedging relationship is generally one 

business day and we establish hedging relationships daily to align our hedge accounting with our risk management 

practices. 

We apply hedge accounting to qualifying hedging relationships. A qualifying hedging relationship exists when changes 

in the fair value of a derivative hedging instrument are expected to be highly effective in offsetting changes in the fair 

value of the hedged item attributable to the risk being hedged during the term of the hedging relationship. We assess 

hedge effectiveness using statistical regression analysis. A hedging relationship is considered highly effective if the total 

change in fair value of the hedging instrument and the change in the fair value of the hedged item due to changes in the 

benchmark interest rate offset each other within a range of 80% to 125% and certain other statistical tests are met. 

If a hedging relationship qualifies for hedge accounting, the change in the fair value of the interest-rate swaps and the 

change in the fair value of the hedged item for the risk being hedged are recorded through net interest income. A 

corresponding basis adjustment is recorded against the hedged item, either the pool of mortgage loans or the debt, for 

the changes in the fair value attributable to the risk being hedged. For hedging relationships that hedge pools of singlefamily mortgage loans, basis adjustments are allocated to individual single-family loans based on the relative unpaid 

principal balance of each loan at the termination of the hedging relationship. The cumulative basis adjustments on the 

hedged item are amortized into earnings using the effective interest method over the contractual life of the hedged item, 

with amortization beginning upon termination of the hedging relationship.

All changes in fair value of the designated portion of the derivative hedging instrument (i.e., interest-rate swap), 

including interest accruals, are recorded in the same line item in the consolidated statements of operations and 

comprehensive income used to record the earnings effect of the hedged item. Therefore, changes in the fair value of the 

hedged mortgage loans and debt attributable to the risk being hedged are recognized in “Interest income” or “Interest 

expense,” respectively, along with the changes in the fair value of the respective derivative hedging instruments.

The recognition of basis adjustments on the hedged item and the subsequent amortization are noncash activities and 

are removed from net income to derive the “Net cash provided by operating activities” in our consolidated statements of 

cash flows. Cash paid or received on designated derivative instruments during a hedging relationship is reported as 

“Net cash provided by operating activities” in the consolidated statements of cash flows.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-21
See “Note 3, Mortgage Loans,” “Note 7, Short-Term and Long-Term Debt” and “Note 8, Derivative Instruments” for 

additional information on our fair value hedge accounting policy and related disclosures.

Collateral 

We enter into various transactions where we pledge and accept collateral, the most common of which are our derivative 

transactions. Required collateral levels vary depending on the credit rating and type of counterparty. We also pledge 

and receive collateral under our repurchase and reverse repurchase agreements. In order to reduce potential exposure 

to repurchase counterparties, a third-party custodian typically maintains the collateral and any margin. We monitor the 

fair value of the collateral received from our counterparties, and we may require additional collateral from those 

counterparties, as we deem appropriate. 

Cash Collateral

We record cash collateral accepted from a counterparty that we have the right to use as “Cash and cash equivalents” 

and cash collateral accepted from a counterparty that we do not have the right to use as “Restricted cash and cash 

equivalents” in our consolidated balance sheets. We net our obligation to return cash collateral pledged to us against 

the fair value of derivatives in a gain position recorded in “Other assets” in our consolidated balance sheets as part of 

our counterparty netting calculation. 

For derivative positions with the same counterparty under master netting arrangements where we pledge cash 

collateral, we remove it from “Cash and cash equivalents” and net the right to receive it against the fair value of 

derivatives in a loss position recorded in “Other liabilities” in our consolidated balance sheets as a part of our 

counterparty netting calculation. 

Non-Cash Collateral

We classify securities pledged to counterparties as either “Investments in securities, at fair value” or “Cash and cash 

equivalents” in our consolidated balance sheets. Securities pledged to counterparties that have been consolidated with 

the underlying assets recognized as loans are included as “Mortgage loans” in our consolidated balance sheets. 

Our liability to third party holders of Fannie Mae MBS that arises as the result of a consolidation of a securitization trust 

is collateralized by the underlying loans and/or mortgage-related securities. 

Debt 

Our consolidated balance sheets contain debt of Fannie Mae as well as debt of consolidated trusts. We report debt 

issued by us as “Debt of Fannie Mae” and by consolidated trusts as “Debt of consolidated trusts.” Debt issued by us 

represents debt that we issue to third parties to fund our general business activities and certain credit risk-sharing 

securities. The debt of consolidated trusts represents the amount of Fannie Mae MBS issued from such trusts that is 

held by third-party certificateholders and prepayable without penalty at any time. We report deferred items, including 

premiums, discounts and other cost basis adjustments, as adjustments to the related debt balances in our consolidated 

balance sheets. 

We classify interest expense as either short-term or long-term based on the contractual maturity of the related debt. We 

recognize the amortization of premiums, discounts and other cost basis adjustments through interest expense using the 

effective interest method usually over the contractual term of the debt. Amortization of premiums, discounts and other 

cost basis adjustments begins at the time of debt issuance.

When we purchase a Fannie Mae MBS issued from a consolidated single-class securitization trust, we extinguish the 

related debt of the consolidated trust as the MBS debt is no longer owed to a third-party. We record debt extinguishment 

gains or losses related to debt of consolidated trusts to the extent that the purchase price of the MBS does not equal the 

carrying value of the related consolidated MBS debt reported in our consolidated balance sheets (including unamortized 

premiums, discounts and other cost basis adjustments) at the time of purchase as a component of “Other expenses, 

net” in our consolidated statements of operations and comprehensive income.

Income Taxes

We recognize deferred tax assets and liabilities based on the differences in the book and tax bases of assets and 

liabilities. We measure deferred tax assets and liabilities using enacted tax rates that are applicable to the period(s) that 

the differences are expected to reverse. We adjust deferred tax assets and liabilities for the effects of changes in tax 

laws and rates in the period of enactment. We recognize investment and other tax credits through our effective tax rate 

calculation assuming that we will be able to realize the full benefit of the credits. We invest in LIHTC projects and elect 

the proportional amortization method for the associated tax credits. We amortize the cost of a LIHTC investment each 

reporting period in proportion to the tax credits and other tax benefits received. We recognize the resulting amortization 

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-22
as a component of the “provision for federal income taxes” in our consolidated statements of operations and 

comprehensive income.

We reduce our deferred tax assets by an allowance if, based on the weight of available positive and negative evidence, 

it is more likely than not (a probability of greater than 50%) that we will not realize some portion, or all, of the deferred 

tax asset.

We account for uncertain tax positions using a two-step approach whereby we recognize an income tax benefit if, based 

on the technical merits of a tax position, it is more likely than not that the tax position would be sustained upon 

examination by the taxing authority, which includes all related appeals and litigation. We then measure the recognized 

tax benefit based on the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement with 

the taxing authority, considering all information available at the reporting date. We recognize interest expense and 

penalties on unrecognized tax benefits as “Other expenses, net” in our consolidated statements of operations and 

comprehensive income.

Earnings per Share

Earnings per share (“EPS”) is presented for basic and diluted EPS. We compute basic EPS by dividing net income 

attributable to common stockholders by the weighted-average number of shares of common stock outstanding during 

the period. However, as a result of our conservatorship status and the terms of the senior preferred stock, no amounts 

would be available to distribute as dividends to common or preferred stockholders (other than to Treasury as the holder 

of the senior preferred stock). Net income attributable to common stockholders excludes amounts attributable to the 

senior preferred stock, which increase the liquidation preference as described above in “Senior Preferred Stock 

Purchase Agreement, Senior Preferred Stock and Warrant.” Weighted average common shares includes 4.7 billion

shares for the years ended December 31, 2022, 2021 and 2020, that would be issued upon the full exercise of the 

warrant issued to Treasury from the date the warrant was issued through December 31, 2022, 2021 and 2020. 

The calculation of diluted EPS includes all the components of basic earnings per share, plus the dilutive effect of 

common stock equivalents such as convertible securities and stock options. Weighted-average shares outstanding is 

increased to include the number of additional common shares that would have been outstanding if the dilutive potential 

common shares had been issued. Our diluted EPS weighted-average shares outstanding includes 26 million shares of 

convertible preferred stock for the years ended December 31, 2022, 2021 and 2020. During periods in which a net loss 

attributable to common stockholders has been incurred, potential common equivalent shares outstanding are not 

included in the calculation because it would have an anti-dilutive effect.

New Accounting Guidance

Adoption of ASU 2022-02

The Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2022-02, 

Financial Instruments – Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 

2022-02”) in March 2022. As noted above, effective January 1, 2022, we adopted the amendments within ASU 2022-02 

related to the elimination of the recognition and measurement of TDRs and the enhancement of disclosures for loan 

restructurings for borrowers experiencing financial difficulty using the prospective transition method. At adoption of this 

guidance, there was no material impact on our financial statements.

The amendments in ASU 2022-02 that we have not adopted as of December 31, 2022, as permitted in the guidance, 

require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net 

investments in leases in the existing vintage disclosures. These amendments are effective for fiscal years beginning 

after December 15, 2022 for creditors that have adopted the amendments in Accounting Standards Update 2016-13, 

Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. We plan to 

include the required disclosures in our Form 10-Q filing for the period ended March 31, 2023, which is not expected to 

have a material impact on our financial statements.

Fair Value Hedging - Portfolio Layer Method

On March 28, 2022, the FASB issued ASU 2022-01, Fair Value Hedging – Portfolio Layer Method, which clarifies the 

guidance on fair value hedge accounting of interest rate risk portfolios of financial assets. The ASU expands the scope 

of the current last-of-layer method to allow entities to apply this method, renamed the portfolio layer method, to nonprepayable financial assets and to designate multiple hedge relationships within a single closed portfolio of financial 

assets. Additionally, the ASU clarifies that basis adjustments related to existing portfolio layer hedge relationships 

should not be considered when measuring credit losses on the financial assets included in the closed portfolio. Further, 

the ASU clarifies that any reversal of fair value hedge basis adjustments associated with an actual breach should be 

recognized in interest income immediately.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-23
The ASU is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods 

within those years. The adoption of this guidance on January 1, 2023 is not expected to have a material impact on our 

financial statements.

Reference Rate Reform

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Facilitation of the Effects of 

Reference Rate Reform on Financial Reporting which extends the period of optional temporary relief provided to entities 

to ease the potential burden of transitioning away from LIBOR and other discontinued interest rates. The FASB had 

previously issued guidance that provided optional practical expedients and exceptions under GAAP related to contract 

modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued but 

had limited that relief to contract modifications made and hedging relationships entered into through December 31, 2022 

(the “sunset date”). The ASU, which is effective immediately, extends the sunset date to December 31, 2024. The 

adoption of this guidance did not have a material impact on our financial statements.

2. Consolidations and Transfers of Financial Assets

We have interests in various entities that are considered to be VIEs. The primary types of entities are: 

• securitization and resecuritization trusts, guaranteed by us via lender swap transactions; 

• portfolio securitization transactions; 

• commingled resecuritization trusts; 

• mortgage-backed trusts that were not created by us; 

• housing partnerships that are established to finance the acquisition, construction, development or rehabilitation 

of affordable multifamily and single-family housing; and 

• certain credit risk transfer transactions. 

These interests include investments in securities issued by VIEs, such as Fannie Mae MBS created pursuant to our 

securitization transactions. We consolidate the substantial majority of our single-class securitization trusts because our 

role as guarantor and master servicer provides us with the power to direct matters (primarily the servicing of mortgage 

loans) that impact the credit risk to which we are exposed. In contrast, we do not consolidate single-class securitization 

trusts when other organizations have the power to direct these activities unless we have the unilateral ability to dissolve 

the trust. We also do not consolidate our resecuritization trusts unless we have the unilateral ability to dissolve the trust. 

Historically, the vast majority of underlying assets of our resecuritization trusts were limited to Fannie Mae securities that 

were collateralized by mortgage loans held in consolidated trusts. However, with our issuance of UMBS, we include 

securities issued by Freddie Mac in some of our resecuritization trusts. The mortgage loans that serve as collateral for 

Freddie Mac-issued securities are not held in trusts that are consolidated by Fannie Mae.

Types of VIEs

Securitization and Resecuritization Trusts

Under our lender swap and portfolio securitization transactions, mortgage loans are transferred to a trust specifically for 

the purpose of issuing a single class of guaranteed securities that are collateralized by the underlying mortgage loans 

referred to as “first-level securities.” The trust’s permitted activities include receiving the transferred assets, issuing 

beneficial interests, establishing the guaranty and servicing the underlying mortgage loans. In our capacity as issuer, 

master servicer, trustee and guarantor, we earn fees for our obligations to each trust. Additionally, we may retain or 

purchase a portion of the securities issued by each trust.

In our structured securitization transactions, we earn fees for assisting lenders and dealers with the design and 

issuance of structured mortgage-related securities, referred to as “second-level securities.” In contrast to first-level 

securities, the trust assets can include both Fannie Mae securities and Freddie Mac securities as the underlying 

collateral. These structured securities include Fannie Megas® and Supers®, which are single-class resecuritizations, as 

well as REMICs and SMBS, which are multi-class resecuritizations, and separate the cash flows from underlying assets 

into separately tradable interests. When we issue a structured security backed in whole or in part by Freddie Mac 

securities, we provide a new and separate guaranty of principal and interest on the newly-formed structured security. If 

Freddie Mac were to fail to make a payment due on its securities underlying a Fannie Mae-issued structured security, 

we would be obligated under our guaranty to fund any shortfall. To the extent that the trust assets are Fannie Mae 

securities, the trust has permitted activities that are similar to those for our lender swap and portfolio securitization 

transactions. Additionally, we may retain or purchase a portion of the securities issued by each trust.

Notes to Consolidated Financial Statements | Summary of Significant Accounting Policies

Fannie Mae (In conservatorship) 2022 Form 10-K F-24
We also hold investments in or provide a guaranty of mortgage-backed securities that have been issued via privatelabel trusts. These trusts are structured to provide investors with a beneficial interest in a pool of receivables or other 

financial assets, typically mortgage loans. The trusts act as vehicles to allow loan originators to securitize assets. 

Securities are structured from the underlying pool of assets to provide for varying degrees of risk. The originators of the 

financial assets or the underwriters of the transaction create the trusts and typically own the residual interest in the 

trusts’ assets. Our involvement in these entities is typically limited to our investment in the beneficial interests that we 

have purchased or the guaranty we provide. 

Limited Partnerships

We invest in various limited partnerships that sponsor affordable housing projects utilizing the LIHTC pursuant to 

Section 42 of the Internal Revenue Code. The purpose of these investments is to increase the supply of affordable 

housing in the United States and to serve communities in need. In addition, our investments in LIHTC partnerships 

generate both tax credits and net operating losses that may reduce our federal income tax liability. Our LIHTC 

investments primarily represent limited partnership interests in entities that have been organized by a fund manager 

who acts as the general partner. These fund investments seek out equity investments in LIHTC operating partnerships 

that have been established to identify, develop and operate multifamily housing that is leased to qualifying residential 

tenants.

SPVs Associated with Our Credit Risk Transfer Programs

We transfer mortgage credit risk to investors through CAS REMIC and CAS credit-linked note (“CLN”) trusts. In October 

2019, we issued our first Multifamily Connecticut Avenue Securities (“MCAS”) transaction, which is a CAS CLN, and in 

December 2019, we issued our first single-family CAS CLN. The structure of CAS CLNs is similar to CAS REMICs; 

however, CAS CLNs allow us to transfer risk on reference pools containing seasoned loans. Since the REMIC election 

was not made on the loans in the reference pools at the time of acquisition, these trusts do not qualify as REMICs. Each 

CAS trust is a separate legal entity which issues notes that are fully collateralized by amounts deposited into a collateral 

account held by the CAS trust. To the extent that collateral held by the CAS trust and the earnings thereon are 

insufficient relative to the payments due to holders of the CAS notes, we may be required to make payments to the CAS 

trust. The CAS trusts qualify as VIEs. We do not have the power to direct significant activities of the CAS trusts while the 

CAS notes are outstanding, and, therefore, we do not consolidate CAS trusts.

Consolidated VIEs

If an entity is a VIE, we consider whether our variable interest in that entity causes us to be the primary beneficiary. The 

primary beneficiary of the VIE is required to consolidate and account for the assets, liabilities and noncontrolling 

interests of the VIE in its consolidated financial statements. An enterprise is deemed to be the primary beneficiary when 

the enterprise has the power to direct the activities of the VIE that most significantly impact the entity’s economic 

performance and exposure to benefits and/or losses could potentially be significant to the entity. In general, the 

investors in the obligations of consolidated VIEs have recourse only to the assets of those VIEs and do not have 

recourse to us, except where we provide a guaranty to the VIE. We continually assess whether we are the primary 

beneficiary of the VIEs with which we are involved and therefore may consolidate or deconsolidate a VIE through the 

duration of our involvement. 

Transfers of Financial Assets

We issue Fannie Mae MBS through portfolio securitization transactions by transferring pools of mortgage loans or 

mortgage-related securities to one or more trusts or special purpose entities. We are considered to be the transferor 

when we transfer assets from our own retained mortgage portfolio in a portfolio securitization transaction. For the years 

ended December 31, 2022, 2021 and 2020, the unpaid principal balance of portfolio securitizations was $270.5 billion, 

$682.9 billion and $745.2 billion, respectively. The substantial majority of these portfolio securitization transactions 

generally do not qualify for sale treatment. Portfolio securitization trusts that do qualify for sale treatment primarily 

consist of loans that are guaranteed or insured, in whole or in part, by the U.S. government.

We retain interests from the transfer and sale of mortgage-related securities to unconsolidated single-class and multiclass portfolio securitization trusts. As of December 31, 2022, the unpaid principal balance of retained interests was 

$910 million and its related fair value was $1.4 billion. The unpaid principal balance of retained interests was $1.1 billion

and its related fair value was $2.0 billion as of December 31, 2021. For the years ended December 31, 2022, 2021 and 

2020, the principal, interest and other fees received on retained interests was $397 million, $558 million and $700 

million, respectively.

Notes to Consolidated Financial Statements | Consolidations and Transfers of Financial Assets

Fannie Mae (In conservatorship) 2022 Form 10-K F-25
Portfolio Securitizations

As noted above, we consolidate the substantial majority of our single-class MBS trusts. The assets and liabilities of 

consolidated trusts created via portfolio securitization transactions are reported in our consolidated balance sheets.

We recognize assets obtained and liabilities incurred in qualifying sales of portfolio securitizations at fair value. 

Proceeds from the initial sale of securities from portfolio securitizations were $666 million for the year ended December 

31, 2020. We had no proceeds from the initial sale of securities from portfolio securitizations for the years ended 

December 31, 2022 and 2021. Our continuing involvement in the form of guaranty assets and guaranty liabilities with 

assets that were transferred into unconsolidated trusts is not material to our consolidated financial statements.

Unconsolidated VIEs 

We do not consolidate VIEs when we are not deemed to be the primary beneficiary. Our unconsolidated VIEs include 

securitization and resecuritization trusts, limited partnerships, and certain SPVs designed to transfer credit risk. The 

following table displays the carrying amount and classification of our assets and liabilities that relate to our involvement 

with unconsolidated securitization and resecuritization trusts.

As of December 31,

2022 2021

(Dollars in millions)

Assets and liabilities recorded in our consolidated balance sheets related to unconsolidated 

mortgage-backed trusts:

Investments in securities, at fair value $ 3,353 $ 4,709 

Other assets 40 35 

Other liabilities (45) (41) 

Net carrying amount $ 3,348 $ 4,703 

Our maximum exposure to loss generally represents the greater of our carrying value in the entity or the unpaid 

principal balance of the assets covered by our guaranty. Our involvement in unconsolidated resecuritization trusts may 

give rise to additional exposure to loss depending on the type of resecuritization trust. Fannie Mae non-commingled 

resecuritization trusts are backed entirely by Fannie Mae MBS. These non-commingled single-class and multi-class 

resecuritization trusts are not consolidated and do not give rise to any additional exposure to loss as we already 

consolidate the underlying collateral. 

Fannie Mae commingled resecuritization trusts are backed in whole or in part by Freddie Mac securities. The guaranty 

that we provide to these commingled resecuritization trusts may increase our exposure to loss to the extent that we are 

providing a guaranty for the timely payment and interest on the underlying Freddie Mac securities that we have not 

previously guaranteed. Our maximum exposure to loss for these unconsolidated trusts is measured by the amount of 

Freddie Mac securities that are held in these resecuritization trusts. 

Our maximum exposure to loss related to unconsolidated securitization and resecuritization trusts, which includes but is 

not limited to our exposure to these Freddie Mac securities, was approximately $240 billion and $220 billion as of 

December 31, 2022 and 2021, respectively. The total assets of our unconsolidated securitization and resecuritization 

trusts were approximately $240 billion and $250 billion as of December 31, 2022 and 2021, respectively. 

The maximum exposure to loss for our unconsolidated limited partnerships and similar legal entities, which consist of 

LIHTC, community investments and other entities, was $427 million and the related net carrying value was $424 million

as of December 31, 2022. As of December 31, 2021, the maximum exposure to loss was $292 million and the related 

net carrying value was $288 million. The total assets of these limited partnership investments were $4.3 billion and $3.7 

billion as of December 31, 2022 and 2021, respectively.

The maximum exposure to loss related to our involvement with unconsolidated SPVs that transfer credit risk represents 

the unpaid principal balance and accrued interest payable of obligations issued by the CAS and MCAS SPVs. The 

maximum exposure to loss related to these unconsolidated SPVs was $16.9 billion and $10.4 billion as of December 31, 

2022 and 2021, respectively. The total assets related to these unconsolidated SPVs were $17.0 billion and $10.4 billion

as of December 31, 2022 and 2021, respectively.

The unpaid principal balance of our multifamily loan portfolio was $431.4 billion as of December 31, 2022. As our 

lending relationship does not provide us with a controlling financial interest in the borrower entity, we do not consolidate 

these borrowers regardless of their status as either a VIE or a voting interest entity. We have excluded these entities 

from our VIE disclosures. However, the disclosures we have provided in “Note 3, Mortgage Loans,” “Note 4, Allowance 

for Loan Losses” and “Note 6, Financial Guarantees” with respect to this population are consistent with the FASB’s 

stated objectives for the disclosures related to unconsolidated VIEs.

Notes to Consolidated Financial Statements | Consolidations and Transfers of Financial Assets

Fannie Mae (In conservatorship) 2022 Form 10-K F-26
3. Mortgage Loans

We own single-family mortgage loans, which are secured by four or fewer residential dwelling units, and multifamily 

mortgage loans, which are secured by five or more residential dwelling units. We classify these loans as either HFI or 

HFS. For purposes of our notes to the consolidated financial statements, we report the amortized cost of HFI loans for 

which we have not elected the fair value option at the unpaid principal balance, net of unamortized premiums and 

discounts, hedge-related basis adjustments, other cost basis adjustments, and accrued interest receivable in these 

“Note 3, Mortgage Loans” disclosures. For purposes of our consolidated balance sheets, we present accrued interest 

receivable, net separately from the amortized cost of our loans held for investment. We report the carrying value of HFS 

loans at the lower of cost or fair value and record valuation changes in “Investment gains (losses), net” in our 

consolidated statements of operations and comprehensive income.

For purposes of the single-family mortgage loan disclosures below, we display loans by class of financing receivable 

type. Financing receivable classes used for disclosure consist of: “20- and 30-year or more, amortizing fixed-rate,” “15-

year or less, amortizing fixed-rate,” “Adjustable-rate” and “Other.” The “Other” class primarily consists of reverse 

mortgage loans, interest-only loans, negative-amortizing loans and second liens. 

The following table displays the carrying value of our mortgage loans and allowance for loan losses.

As of December 31,

2022 2021

(Dollars in millions)

Single-family $ 3,644,158 $ 3,495,573 

Multifamily 431,440 403,452 

Total unpaid principal balance of mortgage loans 4,075,598 3,899,025 

Cost basis and fair value adjustments, net 50,185 74,846 

Allowance for loan losses for HFI loans (11,347) (5,629) 

Total mortgage loans(1) $ 4,114,436 $ 3,968,242 

(1) Excludes $9.5 billion and $9.1 billion of accrued interest receivable, net of allowance as of December 31, 2022 and 2021.

The following table displays information about our purchase of HFI loans, redesignation of loans and the sales of 

mortgage loans during the period.

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Purchase of HFI loans:

Single-family unpaid principal balance $ 614,836 $ 1,354,705 $ 1,358,744 

Multifamily unpaid principal balance 69,206 69,185 75,517 

Single family loans redesignated from HFI to HFS:

Amortized cost $ 7,825 $ 16,606 $ 8,309 

Lower of cost or fair value adjustment at time of redesignation(1) (679) (372) (291) 

Allowance reversed at time of redesignation 373 1,605 963 

Single family loans redesignated from HFS to HFI:

Amortized cost $ 2,004 $ 5 $ 144 

Single-family loans sold:

Unpaid principal balance $ 8,069 $ 16,977 $ 9,519 

Realized gains, net 126 1,624 831 

(1) Consists of the write-off against the allowance at the time of redesignation.

The amortized cost of single-family mortgage loans for which formal foreclosure proceedings were in process was $4.6 

billion and $4.4 billion as of December 31, 2022 and 2021. As a result of our various loss mitigation and foreclosure 

prevention efforts, we expect that a portion of the loans in the process of formal foreclosure proceedings will not 

ultimately foreclose.

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-27
Aging Analysis

The following tables display an aging analysis of the total amortized cost of our HFI mortgage loans by portfolio 

segment and class of financing receivable, excluding loans for which we have elected the fair value option.

As of December 31, 2022

30 - 59 

Days 

Delinquent

60 - 89 

Days 

Delinquent

Seriously 

Delinquent(1)

Total 

Delinquent Current Total

Loans 90 

Days or 

More 

Delinquent 

and 

Accruing 

Interest

Nonaccrual 

Loans with 

No 

Allowance

(Dollars in millions)

Single-family:

20- and 30-year or 

more, 

amortizing 

fixed-rate $ 27,891 $ 6,774 $ 19,990 $ 54,655 $ 3,092,199 $ 3,146,854 $ 13,257 $ 3,254 

15-year or less, 

amortizing 

fixed-rate 1,902 314 800 3,016 488,452 491,468 666 82 

Adjustable-rate 176 38 127 341 26,767 27,108 90 24 

Other(2) 660 179 898 1,737 30,362 32,099 424 324 

Total single-family 30,629 7,305 21,815 59,749 3,637,780 3,697,529 14,437 3,684 

Multifamily(3) 173 N/A 955 1,128 431,094 432,222 11 13 

Total $ 30,802 $ 7,305 $ 22,770 $ 60,877 $ 4,068,874 $ 4,129,751 $ 14,448 $ 3,697 

As of December 31, 2021

30 - 59 

Days 

Delinquent

60 - 89 

Days 

Delinquent

Seriously 

Delinquent(1)

Total 

Delinquent Current Total

Loans 90 

Days or 

More 

Delinquent 

and 

Accruing 

Interest

Nonaccrual 

Loans with 

No 

Allowance

(Dollars in millions)

Single-family:

20- and 30-year or 

more, 

amortizing 

fixed-rate $ 22,862 $ 5,192 $ 38,288 $ 66,342 $ 2,902,763 $ 2,969,105 $ 24,236 $ 6,271 

15-year or less, 

amortizing 

fixed-rate 2,024 326 1,799 4,149 529,278 533,427 1,454 193 

Adjustable-rate 161 36 374 571 25,771 26,342 287 63 

Other(2) 786 204 1,942 2,932 35,013 37,945 1,008 545 

Total single-family 25,833 5,758 42,403 73,994 3,492,825 3,566,819 26,985 7,072 

Multifamily(3) 114 N/A 1,693 1,807 404,398 406,205 317 107 

Total $ 25,947 $ 5,758 $ 44,096 $ 75,801 $ 3,897,223 $ 3,973,024 $ 27,302 $ 7,179 

(1) Single-family seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process. Multifamily seriously 

delinquent loans are loans that are 60 days or more past due.

(2) Reverse mortgage loans included in “Other” are not aged due to their nature and are included in the current column.

(3) Multifamily loans 60-89 days delinquent are included in the seriously delinquent column.

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-28
Credit Quality Indicators

The following tables display the total amortized cost of our single-family HFI loans by class of financing receivable, year 

of origination and credit quality indicator, excluding loans for which we have elected the fair value option. The estimated 

mark-to-market loan to value (“LTV”) ratio is a primary factor we consider when estimating our allowance for loan losses 

for single-family loans. As LTV ratios increase, the borrower’s equity in the home decreases, which may negatively 

affect the borrower’s ability to refinance or to sell the property for an amount at or above the outstanding balance of the 

loan.

As of December 31, 2022, by Year of Origination(1)

2022 2021 2020 2019 2018 Prior Total

(Dollars in millions)

Estimated mark-to-market LTV ratio:(2)

20- and 30-year or more, amortizing fixed-rate:

Less than or equal to 80% $ 281,257 $ 896,977 $ 820,452 $ 149,067 $ 70,306 $ 651,297 $ 2,869,356 

Greater than 80% and less than or equal to 90% 84,864 86,335 5,904 1,152 618 1,062 179,935 

Greater than 90% and less than or equal to 100% 84,664 9,284 1,333 217 77 224 95,799 

Greater than 100% 1,230 208 56 18 12 240 1,764 

Total 20- and 30-year or more, amortizing fixed-rate 452,015 992,804 827,745 150,454 71,013 652,823 3,146,854 

15-year or less, amortizing fixed-rate:

Less than or equal to 80% 37,830 185,511 134,336 20,239 7,324 103,841 489,081 

Greater than 80% and less than or equal to 90% 1,363 410 33 3 — 2 1,811 

Greater than 90% and less than or equal to 100% 552 16 1 — — 1 570 

Greater than 100% 3 1 — — — 2 6 

Total 15-year or less, amortizing fixed-rate 39,748 185,938 134,370 20,242 7,324 103,846 491,468 

Adjustable-rate:

Less than or equal to 80% 3,971 6,383 1,865 821 906 11,226 25,172 

Greater than 80% and less than or equal to 90% 1,013 236 12 3 1 3 1,268 

Greater than 90% and less than or equal to 100% 645 21 — — 1 — 667 

Greater than 100% 1 — — — — — 1 

Total adjustable-rate 5,630 6,640 1,877 824 908 11,229 27,108 

Other:

Less than or equal to 80% — — — 29 222 22,103 22,354 

Greater than 80% and less than or equal to 90% — — — — 1 129 130 

Greater than 90% and less than or equal to 100% — — — — 1 56 57 

Greater than 100% — — — — — 57 57 

Total other — — — 29 224 22,345 22,598 

Total $ 497,393 $ 1,185,382 $ 963,992 $ 171,549 $ 79,469 $ 790,243 $ 3,688,028 

Total for all classes by LTV ratio:(2)

Less than or equal to 80% $ 323,058 $ 1,088,871 $ 956,653 $ 170,156 $ 78,758 $ 788,467 $ 3,405,963 

Greater than 80% and less than or equal to 90% 87,240 86,981 5,949 1,158 620 1,196 183,144 

Greater than 90% and less than or equal to 100% 85,861 9,321 1,334 217 79 281 97,093 

Greater than 100% 1,234 209 56 18 12 299 1,828 

Total $ 497,393 $ 1,185,382 $ 963,992 $ 171,549 $ 79,469 $ 790,243 $ 3,688,028 

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-29
As of December 31, 2021, by Year of Origination(1)

2021 2020 2019 2018 2017 Prior Total

(Dollars in millions)

Estimated mark-to-market LTV ratio:(2)

20- and 30-year or more, amortizing fixed-rate:

Less than or equal to 80% $ 798,830 $ 881,290 $ 177,909 $ 87,825 $ 111,059 $ 666,327 $ 2,723,240 

Greater than 80% and less than or equal to 90% 129,340 39,689 2,689 1,056 622 1,687 175,083 

Greater than 90% and less than or equal to 100% 66,667 2,278 544 229 57 460 70,235 

Greater than 100% 21 12 9 16 22 467 547 

Total 20- and 30-year or more, amortizing fixed-rate 994,858 923,269 181,151 89,126 111,760 668,941 2,969,105 

15-year or less, amortizing fixed-rate:

Less than or equal to 80% 196,163 157,076 25,390 9,595 20,715 121,027 529,966 

Greater than 80% and less than or equal to 90% 2,576 259 16 4 2 7 2,864 

Greater than 90% and less than or equal to 100% 579 5 — 1 1 4 590 

Greater than 100% — — — — 2 5 7 

Total 15-year or less, amortizing fixed-rate 199,318 157,340 25,406 9,600 20,720 121,043 533,427 

Adjustable-rate:

Less than or equal to 80% 6,166 2,235 1,065 1,236 2,524 12,501 25,727 

Greater than 80% and less than or equal to 90% 438 25 7 4 2 3 479 

Greater than 90% and less than or equal to 100% 135 1 — — — — 136 

Greater than 100% — — — — — — — 

Total adjustable-rate 6,739 2,261 1,072 1,240 2,526 12,504 26,342 

Other:

Less than or equal to 80% — — 34 268 655 26,930 27,887 

Greater than 80% and less than or equal to 90% — — — 3 6 275 284 

Greater than 90% and less than or equal to 100% — — — 1 2 133 136 

Greater than 100% — — — 1 1 141 143 

Total other — — 34 273 664 27,479 28,450 

Total $ 1,200,915 $ 1,082,870 $ 207,663 $ 100,239 $ 135,670 $ 829,967 $ 3,557,324 

Total for all classes by LTV ratio:(2)

Less than or equal to 80% $ 1,001,159 $ 1,040,601 $ 204,398 $ 98,924 $ 134,953 $ 826,785 $ 3,306,820 

Greater than 80% and less than or equal to 90% 132,354 39,973 2,712 1,067 632 1,972 178,710 

Greater than 90% and less than or equal to 100% 67,381 2,284 544 231 60 597 71,097 

Greater than 100% 21 12 9 17 25 613 697 

Total $ 1,200,915 $ 1,082,870 $ 207,663 $ 100,239 $ 135,670 $ 829,967 $ 3,557,324 

(1) Excludes $9.5 billion as of December 31, 2022 and 2021, of mortgage loans guaranteed or insured, in whole or in part, by the U.S. 

government or one of its agencies, which represents primarily reverse mortgages for which we do not calculate an estimated mark-tomarket LTV ratio.

(2) The aggregate estimated mark-to-market LTV ratio is based on the unpaid principal balance of the loan divided by the estimated current 

value of the property as of the end of each reported period, which we calculate using an internal valuation model that estimates periodic 

changes in home value.

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-30
The following tables display the total amortized cost of our multifamily HFI loans by year of origination and credit-risk 

rating, excluding loans for which we have elected the fair value option. Property rental income and property valuations 

are key inputs to our internally assigned credit risk ratings. 

As of December 31, 2022, by Year of Origination

2022 2021 2020 2019 2018 Prior Total

(Dollars in millions)

Internally assigned credit risk rating:

Non-classified(1) $ 57,987 $ 64,206 $ 75,596 $ 59,562 $ 48,774 $ 104,078 $ 410,203 

Classified(2) 1,415 1,580 1,388 2,816 2,496 12,324 22,019 

Total $ 59,402 $ 65,786 $ 76,984 $ 62,378 $ 51,270 $ 116,402 $ 432,222 

As of December 31, 2021, by Year of Origination

2021 2020 2019 2018 2017 Prior Total

(Dollars in millions)

Internally assigned credit risk rating:

Non-classified(1) $ 58,986 $ 79,602 $ 64,278 $ 55,552 $ 44,037 $ 87,549 $ 390,004 

Classified(2) 21 595 2,288 2,114 4,091 7,092 16,201 

Total $ 59,007 $ 80,197 $ 66,566 $ 57,666 $ 48,128 $ 94,641 $ 406,205 

(1) A loan categorized as “Non-classified” is current or adequately protected by the current financial strength and debt service capability of the 

borrower.

(2) Represents loans classified as “Substandard” or “Doubtful.” Loans classified as “Substandard” have a well-defined weakness that 

jeopardizes the timely full repayment. We had loans in our seniors housing portfolio with an amortized cost of $9.2 billion as of December 

31, 2022 and $5.6 billion as of December 31, 2021 classified as substandard. “Doubtful” refers to a loan with a weakness that makes 

collection or liquidation in full highly questionable and improbable based on existing conditions and values. We had loans with an 

amortized cost of $8 million as of December 31, 2022 and less than $1 million as of December 31, 2021 classified as doubtful.

Loss Mitigation Options for Borrowers Experiencing Financial 

Difficulty

As part of our loss mitigation activities, we may agree to modify the contractual terms of a loan to a borrower 

experiencing financial difficulty. In addition to loan modifications, we also provide other loss mitigation options to assist 

borrowers who experience financial difficulties.

Below we provide disclosures relating to loan restructurings where borrowers were experiencing financial difficulty, 

including restructurings that resulted in an insignificant payment delay. The disclosures exclude loans classified as held 

for sale and those for which we have elected the fair value option. See “Note 1, Summary of Significant Accounting 

Policies” for additional information on our accounting policies for single-family and multifamily loans that have been 

restructured.

Single-Family Loan Restructurings 

We offer several types of restructurings to single-family borrowers that may result in a payment delay, interest rate 

reduction, term extension, or combination thereof. We do not typically offer principal forgiveness.

We offer the following types of restructurings to single-family borrowers that only result in a payment delay:

• a forbearance plan is a short-term loss mitigation option which grants a period of time (typically in 6-month 

increments and generally do not exceed a total of 12 months) during which the borrower’s monthly payment 

obligations are reduced or suspended. A forbearance plan does not impact our reporting of when a loan is 

considered past due, which remains based on the contractual terms of the loan. Borrowers may exit a 

forbearance plan by repaying all past due amounts to fully reinstate the loan, paying off the loan in full, or 

entering into another loss mitigation option, such as a repayment plan, a payment deferral, or a loan 

modification. The vast majority of forbearance plans offered since 2020 relate to a COVID-19-related financial

hardship where we have authorized our servicers to offer a forbearance plan for up to 18 months for eligible 

borrowers;

• a repayment plan is a short-term loss mitigation option that allows borrowers a specific period of time to return 

the loan to current status by paying the regular monthly payment plus additional agreed-upon delinquent 

amounts (generally for a period up to 12 months and the monthly repayment plan amount must not exceed 

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-31
150% of the contractual mortgage payment). A repayment plan does not impact our reporting of when a loan is 

considered past due, which remains based on the contractual terms of the loan. At the end of the repayment 

plan, the borrower resumes making the regular monthly payment; and

• a payment deferral is a loss mitigation option which defers the repayment of the delinquent principal and 

interest payments and other eligible default-related amounts that were advanced on behalf of the borrower by 

converting them into a non-interest-bearing balance due at the earlier of the payoff date, the maturity date, or 

sale or transfer of the property. The remaining mortgage terms, interest rate, payment schedule, and maturity 

date remain unchanged, and no trial period is required. The number of months of payments deferred varies 

based on the types of hardships the borrower is facing.

We also offer single-family borrowers loan modifications, which contractually change the terms of the loan. Our loan 

modification programs generally require completion of a trial period of three to four months where the borrower makes 

reduced monthly payments prior to receiving the modification. During the trial period, the mortgage loan is not 

contractually modified and continues to be reported as past due according to its contractual terms. The reduced 

payments that are made by the borrower during the trial period will result in a payment delay with respect to the original 

contractual terms of the loan. After successful completion of the trial period, and the borrower’s execution of a 

modification agreement, the mortgage loan is contractually modified. 

Our loan modifications include the following concessions: 

• capitalization of past due amounts, a form of payment delay, which capitalizes interest and other eligible default 

related amounts that were advanced on behalf of the borrower that are past due into the unpaid principal 

balance; and 

• a term extension, which typically extends the contractual maturity date of the loan to 40 years from the effective 

date of the modification.

In addition to these concessions, loan modifications may also include an interest rate reduction, which reduces the 

contractual interest rate of the loan, or a principal forbearance, which is another form of payment delay that includes 

forbearing repayment of a portion of the principal balance as a non-interest bearing amount that is due at the earlier of 

the payoff date, the maturity date, or sale or transfer of the property. 

Multifamily Loan Restructurings

For multifamily borrowers, loan restructurings include short-term forbearance plans and loan modification programs, 

which primarily result in term extensions of up to one year with no change to the loan’s interest rate. In certain cases, 

we may make more significant modifications of terms for borrowers experiencing financial difficulty, such as reducing the 

interest rate, converting to interest-only payments, extending the maturity for longer than one year, providing principal 

forbearance, or some combination of these terms. 

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-32
Restructurings for Borrowers Experiencing Financial Difficulty

The following table displays the amortized cost of HFI mortgage loans that were restructured during the year ended 

December 31, 2022, presented by portfolio segment and class of financing receivable. 

For the Year Ended December 31, 2022

Payment Delay (Only)

Forbearance 

Plan 

Payment 

Deferral

Trial 

Modification 

and 

Repayment 

Plans

Payment 

Delay and 

Term 

Extension(1)

Payment 

Delay, Term 

Extension 

and Interest 

Rate 

Reduction(1) Total

Percentage 

of Total by 

Financing 

Class(2)

(Dollars in millions)

Single-family:

20- and 30-year 

or more, 

amortizing 

fixed-rate $ 15,697 $ 16,875 $ 5,287 $ 4,109 $ 11,342 $ 53,310 2 %

15-year or less, 

amortizing 

fixed-rate 794 875 233 3 2 1,907 *

Adjustable-rate 90 76 36 — 39 241 1 

Other 296 369 181 121 450 1,417 4 

Total single-family 16,877 18,195 5,737 4,233 11,833 56,875 2 

 Multifamily 283 — — — 40 323 *

Total(3) $ 17,160 $ 18,195 $ 5,737 $ 4,233 $ 11,873 $ 57,198 1 

* Represents less than 0.5% of total by financing class.

(1) Represents loans that received a contractual modification.

(2) Based on the amortized cost basis as of period end, divided by the period end amortized cost basis of the corresponding class of financing 

receivable. 

(3) Excludes $4.0 billion for the year ended December 31, 2022 for loans that received a loss mitigation activity during the period that paid off, 

repurchased or sold prior to period end. Also excludes loans that liquidated either through foreclosure, deed-in-lieu of foreclosure, or a 

short sale. Loans may move from one category to another, as a result of the restructuring(s) they received during the period. 

Our estimate of future credit losses uses a lifetime methodology, derived from modeled loan performance based on the 

extensive historical experience of loans with similar risk characteristics, adjusted to reflect current conditions and 

reasonable and supportable forecasts. The historical loss experience used in our single-family and multifamily credit 

loss models includes the impact of the loss mitigation options provided to borrowers experiencing financial difficulty, and 

also includes the impact of projected loss severities as a result of a loan default.

The following tables summarize the financial impacts of loan modifications and payment deferrals made to single-family 

HFI loans during the year ended December 31, 2022, presented by class of financing receivable. We discuss the 

qualitative impacts of forbearance plans, repayment plans, and trial modifications earlier in this footnote. As a result, 

those loss mitigation options are excluded from the table below. 

For the Year Ended December 31, 2022

Weighted-Average 

Interest Rate 

Reduction 

Weighted-Average 

Term Extension 

(in months)

Average Amount 

Capitalized as a 

Result of a 

Payment Delay(1) 

Loan by class of financing receivable:(2)

20- and 30-year or more, amortizing fixed-rate 1.42 % 179 $ 22,248 

15-year or less, amortizing fixed-rate 2.54 55 19,276 

Adjustable-rate 0.70 — 22,153 

Other 1.80 187 22,773 

(1) Represents the average amount of delinquency-related amounts that were capitalized as part of the loan balance. Amounts are in whole 

dollars.

(2) Excludes the financial effects of modifications for loans that were paid off or otherwise liquidated as of period end.

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-33
The following tables display the amortized cost of HFI loans that received a completed modification or payment deferral 

on or after January 1, 2022, the date we adopted ASU 2022-02, through December 31, 2022 and that defaulted in the 

period presented. The substantial majority of loans that received a completed modification or a payment deferral during 

the fourth quarter of 2022 did not default during the period. For purposes of this disclosure, we define loans that had a 

payment default as single-family loans with completed modifications that are two or more months delinquent during the 

period; or multifamily loans with completed modifications that are one or more months delinquent during the period. For 

loans that receive a forbearance plan, repayment plan or trial modification, these loss mitigation options generally 

remain in default until the loan is no longer delinquent as a result of the payment of all past-due amounts or as a result 

of a loan modification or payment deferral. Therefore, forbearance plans, repayment plans and trial modifications are 

not included in default tables below.

For the Year Ended December 31, 2022

Payment Delay 

as a Result of a 

Payment 

Deferral (Only)

Payment Delay 

and Term 

Extension

Payment Delay, 

Term Extension 

and Interest 

Rate Reduction Total

(Dollars in millions)

Single-family:

20- and 30-year or more, amortizing fixed-rate $ 1,695 $ 258 $ 648 $ 2,601 

15-year or less, amortizing fixed-rate 56 — — 56 

Adjustable-rate 7 — 3 10 

Other 41 11 42 94 

Total single-family 1,799 269 693 2,761 

 Multifamily — — — — 

Total loans that subsequently defaulted(1) $ 1,799 $ 269 $ 693 $ 2,761 

(1) Represents amortized cost as of period end. Excludes loans that liquidated either through foreclosure, deed-in-lieu of foreclosure, or a 

short sale.

The following table displays an aging analysis of HFI mortgage loans that were restructured on or after January 1, 2022, 

the date we adopted ASU 2022-02, through December 31, 2022, presented by portfolio segment and class of financing 

receivable. The substantial majority of loans that received a completed modification or a payment deferral during the 

fourth quarter of 2022 were not delinquent.

As of December 31, 2022

30-59 Days 

Delinquent 

60-89 Days 

Delinquent(1)

Seriously 

Delinquent 

Total 

Delinquent Current Total 

(Dollars in millions)

Single-family:

20- and 30-year or more, 

amortizing fixed-rate $ 4,113 $ 2,785 $ 13,995 $ 20,893 $ 27,379 $ 48,272 

15-year or less, amortizing 

fixed-rate 147 114 552 813 962 1,775 

Adjustable-rate 15 14 79 108 117 225 

Other 113 67 365 545 755 1,300 

Total single-family loans 

modified 4,388 2,980 14,991 22,359 29,213 51,572 

 Multifamily 3 N/A 265 268 55 323 

Total loans restructured(2) $ 4,391 $ 2,980 $ 15,256 $ 22,627 $ 29,268 $ 51,895 

(1) Multifamily loans 60-89 days delinquent are included in the seriously delinquent column.

(2) Represents the amortized cost basis as of period end.

Troubled Debt Restructuring Disclosures Prior to Our Adoption of ASU 2022-02

Prior to our adoption of ASU 2022-02, we accounted for a modification to the contractual terms of a loan that resulted in 

granting a concession to a borrower experiencing financial difficulties as a TDR. In addition to formal loan modifications, 

we accounted for informal restructurings as a TDR if we deferred more than three missed payments to a borrower 

experiencing financial difficulty. We also classified bankruptcy relief provided to certain borrowers as TDRs. However, 

our TDR accounting described herein was suspended for most of our loss mitigation activities through our election to 

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-34
account for certain eligible loss mitigation activities occurring between March 2020 and January 1, 2022 under the 

COVID-19 relief granted pursuant to the CARES Act and the Consolidated Appropriations Act of 2021. Effective January 

1, 2022, we adopted ASU 2022-02, which eliminated TDR accounting prospectively for all restructurings occurring on or 

after January 1, 2022. Loans that were restructured in a TDR prior to the adoption of ASU 2022-02 will continue to be 

accounted for under the historical TDR accounting until the loan is paid off, liquidated or subsequently modified. See 

“Note 1, Summary of Significant Accounting Policies” in this report for more information on our adoption of ASU 

2022-02.

The substantial majority of the loan modifications accounted for as TDRs resulted from a payment delay, term 

extension, interest rate reduction or a combination thereof. The average term extension of a single-family modified loan

was 145 months and 163 months for the years ended December 31, 2021 and 2020, respectively. The average interest 

rate reduction was 0.57 and 0.37 percentage points for the years ended December 31, 2021 and 2020, respectively. 

The following table displays the number of loans and amortized cost of loans classified as a TDR during the period.

For the Year Ended December 31,

2021 2020

Number of 

Loans

Amortized 

Cost

Number of 

Loans

Amortized 

Cost

(Dollars in millions)

Single-family:

20- and 30-year or more, amortizing fixed rate 10,815 $ 1,717 29,938 $ 5,125 

15-year or less, amortizing fixed rate 1,165 93 2,956 257 

Adjustable-rate 116 17 467 72 

Other 524 56 1,688 211 

Total single-family 12,620 1,883 35,049 5,665 

Multifamily — — — — 

Total TDRs 12,620 $ 1,883 35,049 $ 5,665 

For loans that defaulted in the period presented and that were classified as a TDR in the twelve months prior to the 

default, the following table displays the number of loans and the amortized cost of these loans at the time of payment 

default. For purposes of this disclosure, we define loans that had a payment default as: single-family and multifamily 

loans with completed modifications that liquidated during the period, either through foreclosure, deed-in-lieu of 

foreclosure, or a short sale; single-family loans with completed modifications that are two or more months delinquent 

during the period; or multifamily loans with completed modifications that are one or more months delinquent during the 

period.

For the Year Ended December 31,

2021 2020

Number of 

Loans

Amortized 

Cost

Number of 

Loans

Amortized 

Cost

(Dollars in millions)

Single-family:

20- and 30-year or more, amortizing fixed rate 7,799 $ 1,302 14,127 $ 2,578 

15-year or less, amortizing fixed rate 489 37 148 10 

Adjustable-rate 33 5 16 2 

Other 922 166 1,291 208 

Total single-family 9,243 1,510 15,582 2,798 

Multifamily — — 4 16 

Total TDRs that subsequently defaulted 9,243 $ 1,510 15,586 $ 2,814 

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-35
Nonaccrual Loans

The table below displays the accrued interest receivable written off through the reversal of interest income for 

nonaccrual loans. 

For the Year Ended December 31, 2022

2022 2021 2020

(Dollars in millions)

Accrued interest receivable written off through the 

reversal of interest income:

Single-family $ 61 $ 163 $ 206 

Multifamily 1 1 19 

The table below includes the amortized cost of and interest income recognized on our HFI single-family and multifamily 

loans on nonaccrual status by class, excluding loans for which we have elected the fair value option. 

As of December 31, For the Year Ended December 31,

2022 2021 2020 2019 2022 2021 2020

Amortized Cost Total Interest Income Recognized(1)

(Dollars in millions)

Single-family:

20- and 30-year or more, 

amortizing fixed-rate $ 9,447 $ 17,599 $ 22,907 $ 23,427 $ 207 $ 292 $ 461 

15-year or less, amortizing fixedrate 200 430 853 858 4 6 15 

Adjustable-rate 53 107 270 288 1 1 5 

Other 617 1,101 2,475 2,973 11 15 43 

Total single-family 10,317 19,237 26,505 27,546 223 314 524 

Multifamily 2,200 1,259 2,069 435 75 14 59 

Total nonaccrual loans $ 12,517 $ 20,496 $ 28,574 $ 27,981 $ 298 $ 328 $ 583 

(1) Interest income recognized includes amortization of any deferred cost basis adjustments while the loan is performing and that is not 

reversed when the loan is placed on nonaccrual status. For loans negatively impacted by the COVID-19 pandemic, also includes amounts 

accrued but not collected prior to the loan being placed on nonaccrual status. For single-family, interest income recognized includes 

payments received on nonaccrual loans held as of period end.

Notes to Consolidated Financial Statements | Mortgage Loans

Fannie Mae (In conservatorship) 2022 Form 10-K F-36
4. Allowance for Loan Losses

We maintain an allowance for loan losses for HFI loans held by Fannie Mae and by consolidated Fannie Mae MBS 

trusts, excluding loans for which we have elected the fair value option. When calculating our allowance for loan losses, 

we consider the unpaid principal balance, net of unamortized premiums and discounts, and other cost basis 

adjustments of HFI loans at the balance sheet date. We record write-offs as a reduction to our allowance for loan losses 

at the point of foreclosure, completion of a short sale, upon the redesignation of nonperforming and reperforming loans 

from HFI to HFS or when a loan is determined to be uncollectible. 

The following table displays changes in our allowance for single-family loans, multifamily loans and total allowance for 

loan losses, including the transition impact of adopting the CECL standard, on January 1, 2020.

The benefit or provision for loan losses excludes provision for accrued interest receivable losses, guaranty loss reserves 

and credit losses on available-for-sale (“AFS”) debt securities. Cumulatively, these amounts are recognized as “Benefit 

(provision) for credit losses” in our consolidated statements of operations and comprehensive income. 

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Single-family allowance for loan losses:

Beginning balance $ (4,950) $ (9,344) $ (8,759) 

Transition impact of the adoption of the CECL 

standard — — (1,229) 

Benefit (provision) for loan losses (5,061) 4,503 127 

Write-offs 883 417 457 

Recoveries (276) (419) (93) 

Other (39) (107) 153 

Ending balance $ (9,443) $ (4,950) $ (9,344) 

Multifamily allowance for loan losses: 

Beginning balance $ (679) $ (1,208) $ (257) 

Transition impact of the adoption of the CECL 

standard — — (493) 

Benefit (provision) for loan losses (1,245) 519 (593) 

Write-offs 43 59 136 

Recoveries (23) (49) (1) 

Ending balance $ (1,904) $ (679) $ (1,208) 

Total allowance for loan losses:

Beginning balance $ (5,629) $ (10,552) $ (9,016) 

Transition impact of the adoption of the CECL 

standard — — (1,722) 

Benefit (provision) for loan losses (6,306) 5,022 (466) 

Write-offs 926 476 593 

Recoveries (299) (468) (94) 

Other (39) (107) 153 

Ending balance $ (11,347) $ (5,629) $ (10,552) 

Our benefit or provision for loan losses can vary substantially from period to period based on a number of factors, such 

as changes in actual and forecasted home prices or property valuations, fluctuations in actual and forecasted interest 

rates, borrower payment behavior, events such as natural disasters or pandemics, the type, volume and effectiveness of 

our loss mitigation activities, including forbearances and loan modifications, the volume of foreclosures completed, and 

the volume and pricing of loans redesignated from HFI to HFS. Our benefit or provision can also be impacted by 

updates to the models, assumptions, and data used in determining our allowance for loan losses.

In recent periods, changes in actual and projected interest rates have been a meaningful driver of our benefit or 

provision for loan losses as these changes drive prepayment speeds and impact the measurement of the economic 

Notes to Consolidated Financial Statements | Allowance for Loan Losses

Fannie Mae (In conservatorship) 2022 Form 10-K F-37
concessions granted to borrowers on modified loans. Pursuant to our adoption of ASU 2022-02, effective January 1, 

2022, we prospectively discontinued TDR accounting and no longer measure the economic concession for 

restructurings occurring on or after the adoption date. This accounting also results in the elimination of any existing 

economic concession related to a loan that was previously designated as a TDR if such loan is restructured on or after 

January 1, 2022. See “Note 1, Summary of Significant Accounting Policies—New Accounting Guidance” for more 

information about our adoption of ASU 2022-02. 

The primary factors that contributed to our single-family provision for loan losses for 2022 were:

• Net provision from actual and forecasted home prices. Provision from home price changes was primarily driven 

by our home price forecast, which estimates home price declines in 2023 and 2024. Lower forecasted home 

prices increase the likelihood that loans will default and increase the amount of credit loss on loans that do 

default, which increases our estimate of loss reserves and provision for loan losses. 

• Provision from changes in loan activity, which includes provision on newly acquired loans. The portion of our 

single-family acquisitions consisting of purchase loans increased in 2022 compared with 2021. As we shift to 

more purchase loans, the credit profile of our acquisitions weakens as purchase loans generally have higher 

origination LTV ratios than refinance loans. This drove a higher estimated risk of default and loss severity in the 

allowance and therefore a higher loan loss provision for those loans at the time of acquisition. In addition, in 

2022, our loan loss provision also increased as our more negative home price forecast increased our estimate 

of losses on newly acquired loans. 

• Provision from higher actual and projected interest rates. As mortgage rates increase, we expect a decrease in 

future prepayments on single-family loans, including modified loans accounted for as TDRs. Lower expected 

prepayments extend the expected lives of these loans resulting in an increase in expected losses. For TDR 

loans, longer expected lives also increase the expected impairment relating to economic concessions provided 

on them, resulting in a provision for loan losses. 

The primary factors that contributed to our single-family benefit for loan losses for 2021 were:

• Benefit from actual and forecasted home prices. In 2021, actual home price growth was at record levels. Higher 

home prices decrease the likelihood that loans will default and reduce the amount of credit loss on loans that 

do default, which impacts our estimate of losses and ultimately reduces our loss reserves and provision for loan 

losses. 

• Benefit from the redesignation of loans from HFI to HFS. We redesignated certain nonperforming and 

reperforming single-family loans from HFI to HFS, as we no longer intended to hold them for the foreseeable 

future or to maturity. Upon redesignation of these loans, we recorded the loans at the lower of cost or fair value 

with a write-off against the allowance for loan losses. Amounts recorded in the allowance related to these loans 

exceeded the amounts written off, resulting in a net benefit for loan losses.

• Benefit from changes in assumptions regarding COVID-19 forbearance and loan delinquencies. During the first 

half of 2021, management used its judgment to supplement the loss projections developed by our credit loss 

model to account for uncertainty arising from the COVID-19 pandemic that was not represented in historical 

data or otherwise captured by our credit model. For the second half of 2021, management removed the 

remaining non-modeled adjustment as the effects of the government’s economic stimulus, the vaccine rollout, 

and the effectiveness of COVID-19-related loss mitigation strategies were much less uncertain. 

The impact of these factors was partially offset by provision for higher actual and projected interest rates, which reduced 

our single-family benefit for loan losses recognized in 2021.

The increase in single-family write-offs in 2022 compared with 2021 was primarily driven by higher lower-of-cost-ormarket adjustments at the time of loan redesignation due to price declines on our HFS loans as interest rates rose 

during the year. In addition, we had higher write-offs on single-family loans that went into foreclosure in 2022.

The primary factors that contributed to our multifamily provision for loan losses in 2022 were:

• Provision relating to our multifamily seniors housing portfolio. As of December 31, 2022, our estimate of credit 

losses reflected an increased probability of default and greater expected severity of loss on our seniors housing 

portfolio. As of December 31, 2022, nearly all of the seniors housing loans in our guaranty book of business 

were current on their payments. However, our seniors housing portfolio has been disproportionately impacted 

by recent market conditions, which has resulted in higher expected losses on this portfolio.

Seniors housing has been negatively impacted by elevated vacancy rates and higher operating costs, which 

have been exacerbated by recent inflation pressures. This has reduced the net operating income on many 

seniors housing properties, which in turn has led to lower estimated property values. These factors, combined 

Notes to Consolidated Financial Statements | Allowance for Loan Losses

Fannie Mae (In conservatorship) 2022 Form 10-K F-38
with increased costs associated with adjustable-rate mortgages due to a sharp rise in short-term interest rates 

during the latter half of 2022, have put additional stress on our seniors housing portfolio and increased our 

estimate of credit losses on these loans. As of December 31, 2022, our seniors housing portfolio had an unpaid 

principal balance of $16.6 billion, of which 39% were adjustable-rate mortgages.

• Provision for higher actual and projected interest rates. Rising interest rates may reduce the ability of 

multifamily borrowers to refinance their loans, which often have balloon balances at maturity, increasing our 

provision for loan losses. Additionally, rising interest rates increase the chance that multifamily borrowers with 

adjustable-rate mortgages may default due to higher payments if the property net operating income is not 

increasing at a similar pace.

The primary factors that contributed to our multifamily benefit for loan losses in 2021 were: 

• Benefit from actual and projected economic data. In 2021, property value forecasts increased due to continued 

demand for multifamily housing. In addition, improved job growth led to an increase in projected average 

property net operating income, which reduced the probability of loan defaults, resulting in a benefit for credit 

losses.

• Benefit from lower expected credit losses as a result of the COVID-19 pandemic. Similar to our single-family 

benefit for credit losses described above, for the first half of 2021 management used its judgment to 

supplement the loss projections developed by our credit loss model to account for uncertainty arising from the 

COVID-19 pandemic. For the second half of 2021, management removed the remaining non-modeled 

adjustment as the effects of the economic stimulus, the vaccine rollout, and the effectiveness of COVID-19-

related loss mitigation strategies were much less uncertain.

Notes to Consolidated Financial Statements | Allowance for Loan Losses

Fannie Mae (In conservatorship) 2022 Form 10-K F-39
5. Investments in Securities

Trading Securities

Trading securities are recorded at fair value with subsequent changes in fair value recorded as “Fair value gains 

(losses), net” in our consolidated statements of operations and comprehensive income. The following table displays our 

investments in trading securities.

As of December 31,

2022 2021

(Dollars in millions)

Mortgage-related securities (includes $427 million and $593 million, respectively, related to 

consolidated trusts) $ 3,211 $ 4,606 

Non-mortgage-related securities (includes $3.9 billion and $4.2 billion, respectively, pledged as 

collateral)(1) 46,918 83,600 

Total trading securities $ 50,129 $ 88,206 

(1) Primarily includes U.S. Treasury securities.

The following table displays information about our net trading gains (losses).

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Net trading gains (losses) $ (3,504) $ (1,060) $ 513 

Net trading gains (losses) recognized in the period related to securities still 

held at period end (2,865) (997) 252 

Available-for-Sale Securities

We record AFS securities at fair value with unrealized gains and losses, recorded net of tax, as a component of “Other 

comprehensive loss” and we recognize realized gains and losses from the sale of AFS securities in “Investment gains 

(losses), net” in our consolidated statements of operations and comprehensive income. We define the amortized cost 

basis of our AFS securities as unpaid principal balance, net of unamortized premiums and discounts, and other cost 

basis adjustments. We record an allowance for credit losses for AFS securities that reflects the impairment for credit 

losses, which are limited to the amount that fair value is less than the amortized cost. Impairment due to non-credit 

losses are recorded as unrealized losses within “Other comprehensive loss.”

The following tables display the amortized cost, allowance for credit losses, gross unrealized gains and losses in 

accumulated other comprehensive income (loss) (“AOCI”), and fair value by major security type for AFS securities.

As of December 31, 2022

Total 

Amortized 

Cost

Allowance 

for Credit 

Losses

Gross Unrealized 

Gains in AOCI

Gross Unrealized 

Losses in AOCI

Total Fair 

Value

(Dollars in millions)

Agency securities(1) $ 445 $ — $ 3 $ (22) $ 426 

Other mortgage-related securities 269 (3) 5 (1) 270 

Total $ 714 $ (3) $ 8 $ (23) $ 696 

As of December 31, 2021

Total 

Amortized 

Cost

Allowance 

for Credit 

Losses

Gross Unrealized 

Gains in AOCI

Gross Unrealized 

Losses in AOCI

Total Fair 

Value

(Dollars in millions)

Agency securities(1) $ 504 $ — $ 14 $ (11) $ 507 

Other mortgage-related securities 323 * 10 (3) 330 

Total $ 827 * $ 24 $ (14) $ 837 

s

 * Total allowance for credit losses is less than $0.5 million as of December 31, 2021.

(1) Agency securities consist of securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae.

Notes to Consolidated Financial Statements | Investments in Securities

Fannie Mae (In conservatorship) 2022 Form 10-K F-40
Our Fannie Mae and other agency AFS securities consist of securities issued by us, Freddie Mac, or Ginnie Mae. The 

principal and interest on these securities are guaranteed by the issuing agency. We believe that the guaranty provided 

by the issuing agency, the support provided to the agencies by the U.S. government, the importance of the agencies to 

the liquidity and stability in the secondary mortgage market, and the long history of zero credit losses on agency 

mortgage-related securities are all indicators that there are currently no credit losses on these securities, even if the 

security is in an unrealized loss position. In addition, we generally hold these securities that are in an unrealized loss 

position to recovery. As a result, unless we intend to sell the security, we do not recognize an allowance for credit losses 

on agency mortgage-related securities. 

The following tables display additional information regarding gross unrealized losses and fair value by major security 

type for AFS securities in an unrealized loss position, excluding allowance for credit losses.

As of December 31,

2022 2021

Less Than 12 

Consecutive Months

12 Consecutive 

Months or Longer

Less Than 12 

Consecutive Months

12 Consecutive 

Months or Longer

Gross 

Unrealized 

Losses in 

AOCI

Fair 

Value

Gross 

Unrealized 

Losses in 

AOCI

Fair 

Value

Gross 

Unrealized 

Losses in 

AOCI

Fair 

Value

Gross 

Unrealized 

Losses in 

AOCI

Fair 

Value

(Dollars in millions)

Agency securities $ (12) $ 161 $ (10) $ 159 $ (5) $ 225 $ (6) $ 102 

Other mortgage-related securities (1) 8 — — (3) 3 — — 

Total $ (13) $ 169 $ (10) $ 159 $ (8) $ 228 $ (6) $ 102 

The following table displays the gross realized gains (losses) and proceeds on sales of AFS securities.

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Gross realized gains $ — $ 59 $ 57 

Total proceeds (excludes initial sale of securities from new portfolio 

securitizations) — 582 361 

The following tables display net unrealized gains and losses on AFS securities and other amounts recorded within our 

accumulated other comprehensive income, net of tax.

As of December 31,

2022 2021 2020

(Dollars in millions)

Net unrealized gains (losses) on AFS securities for which we 

have not recorded an allowance for credit losses $ (13) $ 9 $ 74 

Net unrealized gains (losses) on AFS securities for which we 

have recorded an allowance for credit losses — (2) — 

Other 48 31 42 

Accumulated other comprehensive income $ 35 $ 38 $ 116 

Notes to Consolidated Financial Statements | Investments in Securities

Fannie Mae (In conservatorship) 2022 Form 10-K F-41
Maturity Information

The following table displays the amortized cost and fair value of our AFS securities by major security type and remaining 

contractual maturity, assuming no principal prepayments. The contractual maturity of mortgage-backed securities is not 

a reliable indicator of their expected life because borrowers generally have the right to prepay their obligations at any 

time.

As of December 31, 2022

Total 

Carrying 

Amount(1)

Total 

Fair 

Value

One Year or Less

After One Year 

Through Five Years

After Five Years 

Through Ten Years After Ten Years

Net 

Carrying 

Amount(1)

Fair 

Value

Net 

Carrying 

Amount(1)

Fair 

Value

Net 

Carrying 

Amount(1)

Fair 

Value

Net 

Carrying 

Amount(1)

Fair 

Value

(Dollars in millions)

Agency securities $ 445 $ 426 $ — $ — $ 3 $ 3 $ 12 $ 12 $ 430 $ 411 

Other mortgage-related 

securities 266 270 1 1 17 17 16 17 232 235 

Total $ 711 $ 696 $ 1 $ 1 $ 20 $ 20 $ 28 $ 29 $ 662 $ 646 

Weighted-average interest 

rate(2) 7.27 % 7.68 % 6.80 % 6.64 % 7.31 %

(1) Net carrying amount consists of amortized cost, net of allowance for credit losses on AFS securities but does not include any unrealized 

fair value gains or losses.

(2) Weighted-average interest rate includes the effects of discounts, premiums and other cost basis adjustments.

6. Financial Guarantees

We recognize a guaranty obligation for our obligation to stand ready to perform on our guarantees to unconsolidated 

trusts and other guaranty arrangements. These off-balance sheet guarantees expose us to credit losses primarily 

relating to the unpaid principal balance of our unconsolidated Fannie Mae MBS and other financial guarantees. The 

maximum remaining contractual term of our guarantees is 29 years; however, the actual term of each guaranty may be 

significantly less than the contractual term based on the prepayment characteristics of the related mortgage loans. We 

measure our guaranty reserve for estimated credit losses for off-balance sheet exposures over the contractual period 

for which they are exposed to the credit risk, unless that obligation is unconditionally cancellable by the issuer.

As the guarantor of structured securities backed in whole or in part by Freddie Mac-issued securities, we extend our 

guaranty to the underlying Freddie Mac securities in our resecuritization trusts. However, Freddie Mac continues to 

guarantee the payment of principal and interest on the underlying Freddie Mac securities that we have resecuritized. 

When we began issuing UMBS, we entered into an indemnification agreement under which Freddie Mac agreed to 

indemnify us for losses caused by its failure to meet its payment or other specified obligations under the trust 

agreements pursuant to which the underlying resecuritized securities were issued. As a result, and due to the funding 

commitment available to Freddie Mac through its senior preferred stock purchase agreement with Treasury, we have 

concluded that the associated credit risk is negligible. Accordingly, we exclude from the following table Freddie Mac 

securities backing unconsolidated Fannie Mae-issued structured securities of $234.0 billion and $212.3 billion as of 

December 31, 2022 and December 31, 2021, respectively. 

The following table displays our off-balance sheet maximum exposure, guaranty obligation recognized in our 

consolidated balance sheets and the potential maximum recovery from third parties through available credit 

enhancements and recourse related to our financial guarantees.

As of December 31,

2022 2021

Maximum 

Exposure

Guaranty 

Obligation

Maximum 

Recovery(1)

Maximum 

Exposure

Guaranty 

Obligation

Maximum 

Recovery(1)

(Dollars in millions)

Unconsolidated Fannie Mae MBS $ 3,139 $ 15 $ 3,058 $ 3,733 $ 16 $ 3,626 

Other guaranty arrangements(2) 9,573 79 2,012 10,423 85 2,117 

Total $ 12,712 $ 94 $ 5,070 $ 14,156 $ 101 $ 5,743 

(1) Recoverability of such credit enhancements and recourse is subject to, among other factors, the ability of our mortgage insurers and the 

U.S. government, as a financial guarantor, to meet their obligations to us. For information on our mortgage insurers, see “Note 13, 

Concentrations of Credit Risk.”

(2) Primarily consists of credit enhancements and long-term standby commitments.

Notes to Consolidated Financial Statements | Investments in Securities

Fannie Mae (In conservatorship) 2022 Form 10-K F-42
7. Short-Term and Long-Term Debt

In January 2021, we began applying fair value hedge accounting to certain debt issuances. The objective of our fair 

value hedges is to reduce GAAP earnings volatility related to changes in benchmark interest rates. See “Note 1, 

Summary of Significant Accounting Policies” and “Note 8, Derivative Instruments” for additional information on our fair 

value hedge accounting policy and related disclosures.

Short-Term Debt

The following table displays our outstanding short-term debt (debt with an original contractual maturity of one year or 

less) and weighted-average interest rates of this debt.

As of December 31,

2022 2021

Outstanding

WeightedAverage 

Interest Rate(1) Outstanding

WeightedAverage 

Interest Rate(1) 

(Dollars in millions)

Short-term debt of Fannie Mae $ 10,204 3.93 % $ 2,795 0.03 %

(1) Includes the effects of discounts, premiums and other cost basis adjustments.

Long-Term Debt

Long-term debt represents debt with an original contractual maturity of greater than one year. The following table 

displays our outstanding long-term debt.

As of December 31,

2022 2021

Maturities Outstanding(1)

WeightedAverage 

Interest 

Rate(2) Maturities Outstanding(1)

WeightedAverage 

Interest 

Rate(2)

(Dollars in millions)

Senior fixed: 

Benchmark notes and bonds 2023 - 2030 $ 72,261 2.35 % 2022 - 2030 $ 89,618 2.13 %

Medium-term notes(3) 2023 - 2031 39,476 0.78 2022 - 2031 38,312 0.60 

Other(4) 2023 - 2038 6,778 4.00 2023 - 2038 7,045 3.73 

Total senior fixed 118,515 1.94 134,975 1.78 

Senior floating:

Medium-term notes(3) N/A — — 2022 51,583 0.32 

Connecticut Avenue Securities(5) 2023 - 2031 5,207 8.80 2023 - 2031 11,166 4.30 

Other(6) 2037 242 10.00 2037 373 7.17 

Total senior floating 5,449 8.86 63,122 1.05 

Total long-term debt of Fannie Mae(7) 123,964 2.23 198,097 1.55 

Debt of consolidated trusts 2023 - 2062 4,087,720 2.47 2022 - 2061 3,957,299 1.89 

Total long-term debt $ 4,211,684 2.47 % $ 4,155,396 1.88 %

(1) Outstanding debt balance consists of the unpaid principal balance, premiums and discounts, fair value adjustments, hedge-related basis 

adjustments, and other cost basis adjustments.

(2) Excludes the effects of fair value adjustments and hedge-related basis adjustments.

(3) Includes long-term debt with an original contractual maturity of greater than 1 year and up to 10 years, excluding zero-coupon debt.

(4) Includes other long-term debt with an original contractual maturity of greater than 10 years and foreign exchange bonds.

(5) Consists of CAS debt issued prior to November 2018, a portion of which is reported at fair value.

(6) Consists of structured debt instruments that are reported at fair value.

(7) Includes unamortized discounts and premiums, fair value adjustments, hedge-related cost basis adjustments, and other cost basis 

adjustments in a net discount position of $5.1 billion and $1.6 billion as of December 31, 2022 and 2021, respectively.

Notes to Consolidated Financial Statements | Short-Term and Long-Term Debt

Fannie Mae (In conservatorship) 2022 Form 10-K F-43
Our long-term debt includes a variety of debt types. We issue fixed and floating-rate medium-term notes with maturities 

greater than one year that are issued through dealer banks. We also offer Benchmark Notes® that provide increased 

efficiency, liquidity and tradability to the market through regularly-scheduled issuance dates that are used if needed 

during the year. Additionally, we have historically issued notes and bonds denominated in a foreign currency but have 

not issued any foreign currency debt in the periods presented. We effectively convert all outstanding foreign currencydenominated transactions into U.S. dollars through the use of foreign currency swaps for the purpose of funding our 

mortgage assets. Our long-term debt also includes CAS securities issued prior to November 2018, which are credit risksharing securities that transfer a portion of the credit risk on specified pools of single-family mortgage loans to the 

investors in these securities. 

Our other long-term debt includes callable and non-callable securities, which include all long-term non-Benchmark 

securities, such as zero-coupon bonds, fixed rate and other long-term securities, and are generally negotiated 

underwritings with one or more dealers or dealer banks.

Characteristics of Debt 

As of December 31, 2022 and 2021, the face amount of our debt securities of Fannie Mae was $139.3 billion and 

$202.5 billion, respectively. As of December 31, 2022, we had zero-coupon debt with a face amount of $10.0 billion, 

which had an effective interest rate of 3.91%. As of December 31, 2021, we had zero-coupon debt with a face amount 

of $3.2 billion, which had an effective interest rate of 0.66%. 

We issue callable debt instruments to manage the duration and prepayment risk of expected cash flows of the mortgage 

assets we own. Our outstanding debt as of December 31, 2022 and 2021 included $43.3 billion and $47.0 billion, 

respectively, of callable debt that could be redeemed, in whole or in part, at our option on or after a specified date.

The following table displays the amount of our long-term debt as of December 31, 2022 by year of maturity for each of 

the years 2023 through 2027 and thereafter. The first column assumes that we pay off this debt at maturity or on the call 

date if the call has been announced, while the second column assumes that we redeem our callable debt at the next 

available call date. 

Long-Term Debt by

Year of Maturity

Assuming Callable Debt

Redeemed at Next

Available Call Date

(Dollars in millions)

2023 $ 23,226 $ 56,679 

2024 18,951 13,712 

2025 37,730 20,911 

2026 9,189 6,795 

2027 5,608 4,080 

Thereafter 29,260 21,787 

Total long-term debt of Fannie Mae(1) 123,964 123,964 

Debt of consolidated trusts(2) 4,087,720 4,087,720 

Total long-term debt $ 4,211,684 $ 4,211,684 

(1) Includes unamortized discounts and premiums, fair value adjustments, hedge-related cost basis adjustments, and other cost basis 

adjustments.

(2) Contractual maturity of debt of consolidated trusts is not a reliable indicator of expected maturity because borrowers of the underlying 

loans generally have the right to prepay their obligations at any time.

Notes to Consolidated Financial Statements | Short-Term and Long-Term Debt

Fannie Mae (In conservatorship) 2022 Form 10-K F-44
8. Derivative Instruments

Derivative instruments are an integral part of our strategy in managing interest-rate risk. Derivative instruments may be 

privately-negotiated, bilateral contracts, or they may be listed and traded on an exchange. We refer to our derivative 

transactions made pursuant to bilateral contracts as our OTC derivative transactions and our derivative transactions 

accepted for clearing by a derivatives clearing organization as our cleared derivative transactions. We typically do not 

settle the notional amount of our risk management derivatives; rather, notional amounts provide the basis for calculating 

actual payments or settlement amounts. The derivative contracts we use for interest-rate risk management purposes fall 

into these broad categories:

• Interest-rate swap contracts. An interest-rate swap is a transaction between two parties in which each party 

agrees to exchange payments tied to different interest rates or indices for a specified period of time, generally 

based on a notional amount of principal. The types of interest-rate swaps we use include pay-fixed swaps, 

receive-fixed swaps and basis swaps.

• Interest-rate option contracts. These contracts primarily include pay-fixed swaptions, receive-fixed swaptions, 

cancelable swaps and interest-rate caps. A swaption is an option contract that allows us or a counterparty to 

enter into a pay-fixed or receive-fixed swap at some point in the future.

• Foreign currency swaps. These swaps convert debt that we issue in foreign denominated currencies into U.S. 

dollars. We enter into foreign currency swaps only to the extent that we hold foreign currency debt.

• Futures. These are standardized exchange-traded contracts that either obligate a buyer to buy an asset at a 

predetermined date and price or a seller to sell an asset at a predetermined date and price. The types of 

futures contracts we enter into include SOFR and U.S. Treasury.

We account for certain forms of credit risk transfer transactions as derivatives. In our credit risk transfer transactions, a 

portion of the credit risk associated with losses on a reference pool of mortgage loans is transferred to a third party. We 

enter into derivative transactions that are associated with some of our credit risk transfer transactions, whereby we 

manage investment risk to guarantee that certain unconsolidated VIEs have sufficient cash flows to pay their contractual 

obligations.

We enter into forward purchase and sale commitments that lock in the future delivery of mortgage loans and mortgagerelated securities at a fixed price or yield. Certain commitments to purchase mortgage loans and purchase or sell 

mortgage-related securities meet the criteria of a derivative. We typically settle the notional amount of our mortgage 

commitments that are accounted for as derivatives.

We recognize all derivatives as either assets or liabilities in our consolidated balance sheets at their fair value on a 

trade-date basis. Fair value amounts, which are (1) netted to the extent a legal right of offset exists and is enforceable 

by law at the counterparty level and (2) inclusive of the right or obligation associated with the cash collateral posted or 

received, are recorded in “Other assets” or “Other liabilities” in our consolidated balance sheets. See “Note 15, Fair 

Value” for additional information on derivatives recorded at fair value. We present cash flows from derivatives as 

operating activities in our consolidated statements of cash flows.

Fair Value Hedge Accounting

As discussed in “Note 1, Summary of Significant Accounting Policies,” we implemented a fair value hedge accounting 

program in January 2021. Pursuant to this program, we may designate certain interest-rate swaps as hedging 

instruments in hedges of the change in fair value attributable to the designated benchmark interest rate for certain 

closed pools of fixed-rate, single-family mortgage loans or our funding debt. For hedged items in qualifying fair value 

hedging relationships, changes in fair value attributable to the designated risk are recognized as a basis adjustment to 

the hedged item. We also report changes in the fair value of the derivative hedging instrument in the same consolidated 

statements of operations and comprehensive income line item used to recognize the earnings effect of the hedged 

item’s basis adjustment. The objective of our fair value hedges is to reduce GAAP earnings volatility related to changes 

in benchmark interest rates.

Notes to Consolidated Financial Statements | Derivative Instruments

Fannie Mae (In conservatorship) 2022 Form 10-K F-45
Notional and Fair Value Position of our Derivatives

The following table displays the notional amount and estimated fair value of our asset and liability derivative 

instruments.

As of December 31,

2022 2021

Notional 

Amount

Estimated Fair Value

Notional 

Amount

Estimated Fair Value

Asset 

Derivatives

Liability 

Derivatives

Asset 

Derivatives

Liability 

Derivatives

(Dollars in millions)

Risk management derivatives designated as 

hedging instruments:

Swaps:(1)

Pay-fixed $ 5,582 $ — $ — $ 4,347 $ — $ — 

Receive-fixed 33,276 — — 40,686 — — 

Total risk management derivatives 

designated as hedging instruments 38,858 — — 45,033 — — 

Risk management derivatives not designated 

as hedging instruments:

Swaps:(1)

Pay-fixed 97,808 — — 56,817 — — 

Receive-fixed 99,799 1 (4,525) 56,874 — (1,131) 

Basis 41,250 25 — 250 152 — 

Foreign currency 300 — (98) 336 25 (34) 

Swaptions:(1)

Pay-fixed 5,286 204 (18) 4,341 52 (2) 

Receive-fixed 2,136 7 (45) 1,091 10 (21) 

Total risk management derivatives not 

designated as hedging instruments 246,579 237 (4,686) 119,709 239 (1,188) 

Netting adjustment(2) — (154) 4,662 — (237) 1,173 

Total risk management derivatives portfolio 285,437 83 (24) 164,742 2 (15) 

Mortgage commitment derivatives:

Mortgage commitments to purchase whole 

loans 2,596 4 (8) 13,192 17 (5) 

Forward contracts to purchase mortgagerelated securities 17,808 50 (57) 58,021 83 (34) 

Forward contracts to sell mortgage-related 

securities 35,302 35 (13) 111,173 69 (158) 

Total mortgage commitment derivatives 55,706 89 (78) 182,386 169 (197) 

Credit enhancement derivatives 23,784 3 (66) 19,256 — (21) 

Derivatives at fair value $ 364,927 $ 175 $ (168) $ 366,384 $ 171 $ (233) 

(1) Centrally cleared derivatives have no ascribable fair value because the positions are settled daily.

(2) The netting adjustment represents the effect of the legal right to offset under legally enforceable master netting arrangements to settle with 

the same counterparty on a net basis, including cash collateral posted and received. Cash collateral posted was $4.5 billion and $966 

million as of December 31, 2022 and 2021, respectively. Cash collateral received was $5 million and $30 million as of December 31, 2022

and 2021, respectively.

Notes to Consolidated Financial Statements | Derivative Instruments

Fannie Mae (In conservatorship) 2022 Form 10-K F-46
We record all gains and losses, including accrued interest, on derivatives while they are not in a qualifying hedging 

relationship in “Fair value gains (losses), net” in our consolidated statements of operations and comprehensive income.

The following table displays, by type of derivative instrument, the fair value gains and losses, net on our derivatives.

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Risk management derivatives:

Swaps:

Pay-fixed $ 5,541 $ 2,207 $ (2,764) 

Receive-fixed (4,788) (1,783) 2,226 

Basis (143) (51) 43 

Foreign currency (87) (26) 23 

Swaptions:

Pay-fixed 142 38 (146) 

Receive-fixed (19) (217) 595 

Futures (1) 1 (76) 

Net contractual interest income (expense) on interest-rate swaps (265) 16 (261) 

Total risk management derivatives fair value gains (losses), net 380 185 (360) 

Mortgage commitment derivatives fair value gains (losses), net 2,708 551 (2,654) 

Credit enhancement derivatives fair value gains (losses), net (97) (178) 182 

Total derivatives fair value gains (losses), net $ 2,991 $ 558 $ (2,832) 

Effect of Fair Value Hedge Accounting 

The following table displays the effect of fair value hedge accounting on our consolidated statement of operations and 

comprehensive income, including gains and losses recognized on fair value hedging relationships.

For the Year Ended December 31,

2022 2021

Interest 

Income: 

Mortgage 

Loans

Interest 

Expense: 

LongTerm 

Debt

Interest 

Income: 

Mortgage 

Loans

Interest 

Expense: 

LongTerm 

Debt

(Dollars in millions)

Total amounts presented in our consolidated statements of operations and 

comprehensive income $ 117,813 $ (90,798) $ 98,930 $ (70,084) 

Gains (losses) from fair value hedging relationships: 

Mortgage loans HFI and related interest-rate contracts:

Hedged items $ (790) $ — $ 140 $ — 

Discontinued hedge-related basis adjustment amortization 28 — (6) — 

Derivatives designated as hedging instruments 785 — (145) — 

Interest accruals on derivative hedging instruments 13 — (12) — 

Debt of Fannie Mae and related interest-rate contracts:

Hedged items — 3,978 — 1,370 

Discontinued hedge-related basis adjustment amortization — (524) — (89) 

Derivatives designated as hedging instruments — (3,321) — (1,308) 

Interest accruals on derivative hedging instruments — (240) — 223 

Gains (losses) recognized in net interest income on fair value hedging relationships $ 36 $ (107) $ (23) $ 196 

Notes to Consolidated Financial Statements | Derivative Instruments

Fannie Mae (In conservatorship) 2022 Form 10-K F-47
Hedged Items in Fair Value Hedging Relationships

The following table displays the carrying amounts of the hedged items that have been in qualifying fair value hedges 

recorded in our consolidated balance sheets, including the hedged item’s cumulative basis adjustments and the closed 

portfolio balances under the last-of-layer method. The hedged item carrying amounts and total basis adjustments 

include both open and discontinued hedges. The amortized cost and designated UPB consists only of open hedges as 

of December 31, 2022.

As of December 31, 2022

Carrying 

Amount Assets 

(Liabilities)

Cumulative Amount of Fair Value 

Hedging Basis Adjustments 

Included in the Carrying Amount

Closed Portfolio of Mortgage Loans 

Under Last-of-Layer Method

Total Basis 

Adjustments(1)(2)

Remaining 

Adjustments - 

Discontinued 

Hedge

Total Amortized 

Cost Designated UPB

(Dollars in millions)

Mortgage loans HFI $ 293,788 $ (628) $ (628) $ 98,377 $ 5,187 

Debt of Fannie Mae (73,790) 4,713 4,713 N/A N/A

As of December 31, 2021

Carrying 

Amount Assets 

(Liabilities)

Cumulative Amount of Fair Value 

Hedging Basis Adjustments 

Included in the Carrying Amount

Closed Portfolio of Mortgage Loans 

Under Last-of-Layer Method

Total Basis 

Adjustments(1)(2)

Remaining 

Adjustments - 

Discontinued 

Hedge

Total Amortized 

Cost Designated UPB

(Dollars in millions)

Mortgage loans HFI $ 174,080 $ 134 $ 134 $ 56,786 $ 4,389 

Debt of Fannie Mae (72,174) 1,281 1,281 N/A N/A

(1) No basis adjustment associated with open hedges, as all hedges are designated at the close of business, with a one-day term.

(2) Based on the unamortized balance of the hedge-related cost basis.

Derivative Counterparty Credit Exposure

Our derivative counterparty credit exposure relates principally to interest-rate derivative contracts. We are exposed to 

the risk that a counterparty in a derivative transaction will default on payments due to us, which may require us to seek 

a replacement derivative from a different counterparty. This replacement may be at a higher cost, or we may be unable 

to find a suitable replacement. We manage our derivative counterparty credit exposure relating to our risk management 

derivative transactions mainly through enforceable master netting arrangements, which allow us to net derivative assets 

and liabilities with the same counterparty or clearing organization and clearing member. For our OTC derivative 

transactions, we require counterparties to post collateral, which may include cash, U.S. Treasury securities, agency debt 

and agency mortgage-related securities.

See “Note 14, Netting Arrangements” for information on our rights to offset assets and liabilities as of December 31, 

2022 and 2021.

Notes to Consolidated Financial Statements | Derivative Instruments

Fannie Mae (In conservatorship) 2022 Form 10-K F-48
9. Income Taxes

Provision for Federal Income Taxes

We are subject to federal income tax, but we are exempt from state and local income taxes. The following table displays 

the components of our provision for federal income taxes.

For the Year Ended December 31,

2022 2021 2020

(Dollars in millions)

Current income tax benefit (provision) $ (3,505) $ (5,521) $ (3,803) 

Deferred income tax benefit (provision)(1) 195 (252) 729 

Provision for federal income taxes $ (3,310) $ (5,773) $ (3,074) 

(1) Amount excludes the current income tax effect of items recognized directly in “Total stockholders' equity.”

The following table displays the difference between the statutory corporate tax rate and our effective tax rate.

For the Year Ended December 31,

2022 2021 2020

Statutory corporate tax rate 21.0 % 21.0 % 21.0 %

Research tax credits (1.5) — — 

Equity investments in affordable housing projects (0.1) (0.1) (0.1) 

Valuation allowance 0.7 — — 

Other 0.3 (0.2) (0.2) 

Effective tax rate 20.4 % 20.7 % 20.7 %

Our effective tax rate is the provision for federal income taxes expressed as a percentage of income or loss before 

federal income taxes. Our effective tax rates for the years 2022, 2021, and 2020 were impacted by the benefits of our 

investments in housing projects eligible for low-income housing tax credits. Our effective tax rate for 2022 was also 

impacted by the benefit of the research tax credits claimed on current year and amended prior year returns, and the 

valuation allowance against the deferred tax asset relating to capital loss carryforwards.

Deferred Tax Assets and Liabilities

We evaluate our deferred tax assets for recoverability using a consistent approach which considers the relative impact 

of negative and positive evidence, including our historical profitability and projections of future taxable income. Our 

framework for assessing the recoverability of deferred tax assets requires us to weigh all available evidence, to the 

extent it exists, including:

• the sustainability of recent profitability required to realize the deferred tax assets; 

• the cumulative net income or losses in our consolidated statements of operations and comprehensive income 

in recent years;

• unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels 

on a continuing basis in future years;

• the funding available to us under the senior preferred stock purchase agreement; and

• the carryforward period for capital losses. 

As of December 31, 2022, we continued to conclude that the positive evidence in favor of the recoverability of our 

deferred tax assets, except the deferred tax asset relating to capital loss carryforwards, outweighed the negative 

evidence and that it is more likely than not that our deferred tax assets will be realized. For the deferred tax asset 

relating to capital loss carryforwards, we concluded that the negative evidence outweighed the positive evidence, and it 

is more likely than not that these capital loss carryforwards will not be utilized during the allowable five-year 

carryforward period, which will expire in 2027 if unused. Therefore, a valuation allowance has been recorded against 

our capital loss carryforward deferred tax asset, which is included in “Other, net” in the table below.

Notes to Consolidated Financial Statements | Income Taxes

Fannie Mae (In conservatorship) 2022 Form 10-K F-49
The following table displays our deferred tax assets and deferred tax liabilities. 

As of December 31,

2022 2021

(Dollars in millions)

Deferred tax assets:

Mortgage and mortgage-related assets $ 6,764 $ 7,547 

Allowance for loan losses and basis in acquired property, net 2,055 1,060 

Derivative instruments 1,153 778 

Partnership and other equity investments 52 88 

Interest-only securities 3,811 3,977 

Other, net 295 — 

Total deferred tax assets 14,130 13,450 

Deferred tax liabilities:

Debt instruments 1,104 377 

Other, net — 358 

Total deferred tax liabilities 1,104 735 

Valuation allowance (115) — 

Deferred tax assets, net $ 12,911 $ 12,715 

Unrecognized Tax Benefits

We had $60 million of unrecognized tax benefits for the year ended December 31, 2022. If these positions were to 

resolve favorably, our effective tax would be reduced in future periods by $60 million. We had no unrecognized tax

benefits for the years ended December 31, 2021 and 2020. 

Our tax years 2019 through 2021 remain open to examination by the IRS.

10. Segment Reporting

We have two reportable business segments, which are based on the type of business activities each perform: SingleFamily and Multifamily. Results of our two business segments are intended to reflect each segment as if it were a standalone business. The sum of the results for our two business segments equals our consolidated results of operations.

The section below provides a discussion of our business segments.

Single-Family Business Segment

• Works with lenders to acquire and securitize single-family mortgage loans delivered to us by lenders into 

Fannie Mae MBS. 

• Issues structured Fannie Mae MBS backed by single-family mortgage assets and provides other services to 

single-family lenders. 

• Prices and manages the credit risk on loans in our single-family guaranty book of business. Also enters into 

transactions that transfer a portion of the credit risk on some of the loans in our single-family guaranty book of 

business to third parties. 

• Works to reduce costs of defaulted single-family loans through home retention solutions and foreclosure 

alternatives, management of foreclosures and our REO inventory, selling nonperforming loans and pursuing 

contractual remedies from lenders, servicers and providers of credit enhancements.

Multifamily Business Segment

• Works with lenders to acquire and securitize multifamily mortgage loans delivered to us by lenders into Fannie 

Mae MBS. 

• Issues structured multifamily Fannie Mae MBS through our Fannie Mae Guaranteed Multifamily Structures 

(“Fannie Mae GeMSTM”) program and provides other services to our multifamily lenders. 

• Prices and manages the credit risk on loans in our multifamily guaranty book of business. Lenders retain a 

portion of the credit risk in most multifamily transactions. 

Notes to Consolidated Financial Statements | Income Taxes

Fannie Mae (In conservatorship) 2022 Form 10-K F-50
• Enters into transactions that transfer an additional portion of Fannie Mae’s credit risk on some of the loans in 

our multifamily guaranty book of business to third parties.

• Works to maintain credit quality of the book, prevent foreclosure, reduce costs of defaulted multifamily loans, 

manage our REO inventory, and pursue contractual remedies from lenders, servicers and providers of credit 

enhancements.

Segment Allocations and Results

The majority of our assets, revenues and expenses are directly associated with each respective business segment and 

are included in determining its asset balance and operating results. Those assets, revenues and expenses that are not 

directly attributable to a particular business segment are allocated based on the size of each segment’s guaranty book 

of business. The substantial majority of the gains and losses associated with our risk management derivatives, including 

the impact of hedge accounting, are allocated to our Single-Family business segment. 

The following table displays total assets by segment.

As of December 31,

2022 2021

(Dollars in millions)

Single-Family $ 3,844,092 $ 3,782,447 

Multifamily 461,196 446,719 

Total assets $ 4,305,288 $ 4,229,166 

We operate our business solely in the United States and its territories, and accordingly, we generate no revenue from 

and have no long-lived assets, other than financial instruments, in geographic locations other than the United States 

and its territories.

The following tables display our segment results. 

For the Year Ended December 31, 2022

Single-Family Multifamily Total

(Dollars in millions)

Net interest income(1)(9) $ 24,736 $ 4,687 $ 29,423 

Fee and other income(2) 224 88 312 

Net revenues 24,960 4,775 29,735 

Investment losses, net(3) (223) (74) (297) 

Fair value gains (losses), net(4)(9) 1,364 (80) 1,284 

Administrative expenses (2,789) (540) (3,329) 

Provision for credit losses(5) (5,029) (1,248) (6,277) 

TCCA fees(6) (3,369) — (3,369) 

Credit enhancement expense(7) (1,062) (261) (1,323) 

Change in expected credit enhancement recoveries(8) 470 257 727 

Other expenses, net (778) (140) (918) 

Income before federal income taxes 13,544 2,689 16,233 

Provision for federal income taxes (2,774) (536) (3,310) 

Net income $ 10,770 $ 2,153 $ 12,923 

Notes to Consolidated Financial Statements | Segment Reporting

Fannie Mae (In conservatorship) 2022 Form 10-K F-51
For the Year Ended December 31, 2021

Single-Family Multifamily Total

(Dollars in millions)

Net interest income(1)(9) $ 25,429 $ 4,158 $ 29,587 

Fee and other income(2) 269 92 361 

Net revenues 25,698 4,250 29,948 

Investment gains (losses), net(3) 1,392 (40) 1,352 

Fair value gains (losses), net(4)(9) 167 (12) 155 

Administrative expenses (2,557) (508) (3,065) 

Benefit for credit losses(5) 4,600 530 5,130 

TCCA fees(6) (3,071) — (3,071) 

Credit enhancement expense(7) (812) (239) (1,051) 

Change in expected credit enhancement recoveries(8) (86) (108) (194) 

Other expenses, net (1,208) (47) (1,255) 

Income before federal income taxes 24,123 3,826 27,949 

Provision for federal income taxes (4,996) (777) (5,773) 

Net income $ 19,127 $ 3,049 $ 22,176 

For the Year Ended December 31, 2020

Single-Family Multifamily Total

(Dollars in millions)

Net interest income(1)(9) $ 21,502 $ 3,364 $ 24,866 

Fee and other income(2) 368 94 462 

Net revenues 21,870 3,458 25,328 

Investment gains, net(3) 728 179 907 

Fair value gains (losses), net(4)(9) (2,539) 38 (2,501) 

Administrative expenses (2,559) (509) (3,068) 

Provision for credit losses(5) (75) (603) (678) 

TCCA fees(6) (2,673) — (2,673) 

Credit enhancement expense(7) (1,141) (220) (1,361) 

Change in expected credit enhancement recoveries(8) 89 144 233 

Other expenses, net (1,212) (96) (1,308) 

Income before federal income taxes 12,488 2,391 14,879 

Provision for federal income taxes (2,607) (467) (3,074) 

Net income $ 9,881 $ 1,924 $ 11,805 

(1) Net interest income primarily consists of guaranty fees received as compensation for assuming and managing the credit risk on loans 

underlying Fannie Mae MBS held by third parties for the respective business segment, and the difference between the interest income 

earned on the respective business segment’s mortgage assets in our retained mortgage portfolio and the interest expense associated with 

the debt funding those assets. Revenues from single-family guaranty fees include revenues generated by the 10 basis point increase in 

guaranty fees pursuant to the TCCA, the incremental revenue from which is remitted to Treasury and not retained by us. Also includes 

yield maintenance revenue we recognized on the prepayment of multifamily loans.

(2) Single-family fee and other income primarily consists of compensation for engaging in structured transactions and providing other lender 

services. Multifamily fee and other income consists of fees associated with Multifamily business activities, including credit enhancements 

for tax-exempt multifamily housing revenue bonds.

(3) Single-family investment gains and losses primarily consist of gains and losses on the sale of mortgage assets. Multifamily investment 

gains and losses primarily consist of gains and losses on resecuritization activity. 

(4) Single-family fair value gains and losses primarily consist of fair value gains and losses on risk management and mortgage commitment 

derivatives, trading securities, fair value option debt, and other financial instruments associated with our single-family guaranty book of 

business. Multifamily fair value gains and losses primarily consist of fair value gains and losses on MBS commitment derivatives, trading 

securities and other financial instruments associated with our multifamily guaranty book of business. 

Notes to Consolidated Financial Statements | Segment Reporting

Fannie Mae (In conservatorship) 2022 Form 10-K F-52
(5) Benefit (provision) for credit losses is based on loans underlying the segment’s guaranty book of business. 

(6) Consists of the portion of our single-family guaranty fees that is remitted to Treasury pursuant to the TCCA.

(7) Single-family credit enhancement expense consists of costs associated with our freestanding credit enhancements, which include primarily 

costs associated with our CIRTTM, CAS and enterprise-paid mortgage insurance (“EPMI”) programs. Multifamily credit enhancement 

expense primarily consists of costs associated with our Multifamily CIRTTM (“MCIRTTM”) and MCASTM programs as well as amortization 

expense for certain lender risk-sharing programs. Excludes CAS transactions accounted for as debt instruments and credit risk transfer 

programs accounted for as derivative instruments.

(8) Consists of change in benefits recognized from our freestanding credit enhancements, primarily from our CAS and CIRT programs as well 

as certain lender risk-sharing arrangements, including our multifamily DUS® program.

(9) In January 2021, we began applying fair value hedge accounting. For qualifying hedging relationships, fair value changes attributable to 

movements in the designated benchmark interest rates for hedged mortgage loans and funding debt and the fair value change of the 

designated portion of the paired interest-rate swaps are recognized in “Net interest income.” In prior years, all fair value changes for 

interest-rate swaps were recognized in “Fair value gains (losses), net.” See “Note 1, Summary of Significant Accounting Policies” and 

“Note 8, Derivative Instruments” for additional information on our fair value hedge accounting policy and related disclosures.

11. Equity

Common Stock

Shares of common stock outstanding, net of shares held as treasury stock, totaled 1.2 billion as of December 31, 2022

and 2021.

During conservatorship, the rights and powers of shareholders are suspended. Accordingly, our common shareholders 

have no ability to elect directors or to vote on other matters during the conservatorship unless FHFA elects to delegate 

this authority to them. The senior preferred stock purchase agreement with Treasury prohibits the payment of dividends 

on common stock without the prior written consent of Treasury. The conservator also has eliminated common stock 

dividends. In addition, we issued a warrant to Treasury that provides Treasury with the right to purchase for a nominal 

price shares of our common stock equal to 79.9% of the total number of shares of common stock outstanding on a fully 

diluted basis on the date of exercise, which would substantially dilute the ownership in Fannie Mae of our common 

stockholders at the time of exercise. Refer to the “Senior Preferred Stock and Common Stock Warrant” section of this 

note for more information.

Notes to Consolidated Financial Statements | Segment Reporting

Fannie Mae (In conservatorship) 2022 Form 10-K F-53
Preferred Stock

The following table displays our senior preferred stock and preferred stock outstanding. 

Issued and Outstanding as of December 31, Annual 

Dividend Rate 

as of 

December 31, 

2022

2022 2021 Stated 

Value per 

Title Issue Date Shares Amount Shares Amount Share

Redeemable on or 

After

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

Senior Preferred Stock

Series 2008-2 September 8, 2008 1 $ 120,836 1 $ 120,836 $ 120,836 (1) N/A (2) N/A (3)

Preferred Stock

Series D September 30, 1998 3 $ 150 3 $ 150 $ 50 5.250 % September 30, 1999

Series E April 15, 1999 3 150 3 150 50 5.100 April 15, 2004

Series F March 20, 2000 14 690 14 690 50 2.016 (4) March 31, 2002 (5)

Series G August 8, 2000 6 288 6 288 50 4.024 (6) September 30, 2002 (5)

Series H April 6, 2001 8 400 8 400 50 5.810 April 6, 2006

Series I October 28, 2002 6 300 6 300 50 5.375 October 28, 2007

Series L April 29, 2003 7 345 7 345 50 5.125 April 29, 2008

Series M June 10, 2003 9 460 9 460 50 4.750 June 10, 2008

Series N September 25, 2003 5 225 5 225 50 5.500 September 25, 2008

Series O December 30, 2004 50 2,500 50 2,500 50 7.000 (7) December 31, 2007

Convertible Series 

2004-I(8) December 30, 2004 — 2,492 — 2,492 100,000 5.375 January 5, 2008

Series P September 28, 2007 40 1,000 40 1,000 25 5.504 (9) September 30, 2012

Series Q October 4, 2007 15 375 15 375 25 6.750 September 30, 2010

Series R(10) November 21, 2007 21 530 21 530 25 7.625 November 21, 2012

Series S December 11, 2007 280 7,000 280 7,000 25 8.984 (11) December 31, 2010 (12)

Series T(13) May 19, 2008 89 2,225 89 2,225 25 8.250 May 20, 2013

Total 556 $ 19,130 556 $ 19,130 

(1) Initial stated value per share was $1,000. Based on our draws of funds under the senior preferred stock purchase agreement with 

Treasury, the stated value per share on December 31, 2022 was $120,836.

(2) Dividends on the senior preferred stock are currently calculated based on our net worth as of the end of the immediately preceding fiscal 

quarter less an applicable capital reserve amount. The capital reserve amount, starting with the quarterly dividend period ending on 

December 31, 2020, increased to the amount of adjusted total capital necessary for us to meet the capital requirements and buffers set 

forth in the enterprise regulatory capital framework described in “Note 12, Regulatory Capital Requirements.”

(3) Any liquidation preference of our senior preferred stock in excess of $1 billion may be repaid through an issuance of common or preferred 

stock, which would require the consent of the conservator and Treasury. The initial $1 billion liquidation preference may be repaid only in 

conjunction with termination of Treasury’s funding commitment under the senior preferred stock purchase agreement.

(4) Rate effective March 31, 2022. Variable dividend rate resets every two years at a per annum rate equal to the two-year Constant Maturity 

U.S. Treasury Rate (“CMT”) minus 0.16% with a cap of 11% per year. 

(5) Represents initial call date. Redeemable every two years thereafter.

(6) Rate effective September 30, 2022. Variable dividend rate resets every two years at a per annum rate equal to the two-year CMT rate 

minus 0.18% with a cap of 11% per year.

(7) Rate effective December 31, 2022. Variable dividend rate resets quarterly thereafter at a per annum rate equal to the greater of 7% or 10-

year CMT rate plus 2.375%. 

(8) Issued and outstanding shares were 24,922 as of December 31, 2022 and 2021.

(9) Rate effective December 31, 2022. Variable dividend rate resets quarterly thereafter at a per annum rate equal to the greater of 4.5% or 3-

Month LIBOR plus 0.75%.

(10) On November 21, 2007, we issued 20 million shares of preferred stock in the amount of $500 million. Subsequent to the initial issuance, 

we issued an additional 1.2 million shares in the amount of $30 million on December 14, 2007 under the same terms as the initial 

issuance.

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-54
(11) Rate effective December 31, 2022. Variable dividend rate resets quarterly thereafter at a per annum rate equal to the greater of 7.75% or 

3-Month LIBOR plus 4.23%. 

(12) Represents initial call date. Redeemable every five years thereafter.

(13) On May 19, 2008, we issued 80 million shares of preferred stock in the amount of $2 billion. Subsequent to the initial issuance, we issued 

an additional 8 million shares in the amount of $200 million on May 22, 2008 and 1 million shares in the amount of $25 million on June 4, 

2008 under the same terms as the initial issuance.

As described under “Senior Preferred Stock and Common Stock Warrant” below, we issued senior preferred stock that 

ranks senior to all other series of preferred stock as to both dividends and distributions upon dissolution, liquidation or 

winding down of the company. The senior preferred stock purchase agreement with Treasury also prohibits the payment 

of dividends on preferred stock (other than the senior preferred stock) without the prior written consent of Treasury. The 

conservator also has eliminated preferred stock dividends, other than dividends on the senior preferred stock.

Each series of our preferred stock has no par value, is non-participating, is non-voting and has a liquidation preference 

equal to the stated value per share. None of our preferred stock is convertible into or exchangeable for any of our other 

stock or obligations, with the exception of the Convertible Series 2004-1.

Shares of the Convertible Series 2004-1 Preferred Stock are convertible at any time, at the option of the holders, into 

shares of Fannie Mae common stock at a conversion price of $94.31 per share of common stock (equivalent to a 

conversion rate of 1,060.3329 shares of common stock for each share of Series 2004-1 Preferred Stock). The 

conversion price is adjustable, as necessary, to maintain the stated conversion rate into common stock. Events which 

may trigger an adjustment to the conversion price include certain changes in our common stock dividend rate, 

subdivisions of our outstanding common stock into a greater number of shares, combinations of our outstanding 

common stock into a smaller number of shares and issuances of any shares by reclassification of our common stock. 

No such events have occurred. 

Holders of preferred stock (other than the senior preferred stock) are entitled to receive non-cumulative, quarterly 

dividends when, and if, declared by our Board of Directors, but have no right to require redemption of any shares of 

preferred stock. Payment of dividends on preferred stock (other than the senior preferred stock) is not mandatory but 

has priority over payment of dividends on common stock, which are also declared by the Board of Directors. If dividends 

on the preferred stock are not paid or set aside for payment for a given dividend period, dividends may not be paid on 

our common stock for that period. There were no dividends declared or paid on preferred stock for the years ended 

December 31, 2022, 2021, or 2020.

After a specified period, we have the option to redeem preferred stock (other than the senior preferred stock) at its 

redemption price plus the dividend (whether or not declared) for the then-current period accrued to, but excluding, the 

date of redemption. The redemption price is equal to the stated value for all issues of preferred stock except Series O, 

which has a redemption price of $50 to $52.50 depending on the year of redemption and Convertible Series 2004-1, 

which has a redemption price of $105,000 per share.

Our preferred stock is traded in the over-the-counter market.

Senior Preferred Stock and Common Stock Warrant

On September 8, 2008, we issued to Treasury one million shares of Variable Liquidation Preference Senior Preferred 

Stock, Series 2008-2, with an aggregate stated value and initial liquidation preference of $1 billion. On September 7, 

2008, we issued a warrant to purchase common stock to Treasury. The warrant gives Treasury the right to purchase 

shares of our common stock equal to 79.9% of the total number of shares of common stock outstanding on a fully 

diluted basis on the date of exercise. The senior preferred stock and the warrant were issued to Treasury as an initial 

commitment fee in consideration of the commitment from Treasury to provide funds to us under the terms and 

conditions set forth in the senior preferred stock purchase agreement. We did not receive any cash proceeds as a result 

of issuing these shares or the warrant. We have assigned a value of $4.5 billion to Treasury’s commitment, which was 

recorded as a reduction to additional paid-in-capital at the time of the issuance and was partially offset by the aggregate 

fair value of the warrant. There was no impact to the total balance of stockholders’ equity as a result of the issuance.

Variable Liquidation Preference Senior Preferred Stock, Series 2008-2

Dividend Provisions

As a result of the January 2021 letter agreement, the dividend rate and liquidation preference of the senior preferred 

stock depend on whether we have reached the “capital reserve end date,” which is defined in the January 2021 letter 

agreement as the last day of the second consecutive fiscal quarter during which we have had and maintained capital 

equal to, or in excess of, all of the capital requirements and buffers under the enterprise regulatory capital framework 

discussed in “Note 12, Regulatory Capital Requirements.”

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-55
Treasury, as the holder of the senior preferred stock, is entitled to receive, when, as and if declared, out of legally 

available funds, cumulative quarterly cash dividends. We had no dividends declared and paid on the senior preferred 

stock for the years ended December 31, 2022, 2021, or 2020. The dividends we have paid to Treasury on the senior 

preferred stock during conservatorship have been declared by, and paid at the direction of, our conservator, acting as 

successor to the rights, titles, powers and privileges of the Board of Directors. Dividend payments we make to Treasury 

do not restore or increase the amount of funding available to us under the senior preferred stock purchase agreement. 

Dividend amount prior to capital reserve end date 

The terms of the senior preferred stock provide for dividends each quarter in the amount, if any, by which our net worth 

as of the end of the immediately preceding fiscal quarter exceeds an applicable capital reserve amount. The January 

2021 letter agreement increased the applicable capital reserve amount, starting with the quarterly dividend period 

ending on December 31, 2020, from $25 billion to the amount of adjusted total capital necessary for us to meet the 

capital requirements and buffers set forth in the enterprise regulatory capital framework. If our net worth does not 

exceed this amount as of the end of the immediately preceding fiscal quarter, then dividends will neither accumulate nor 

be payable for such period. Our net worth is defined as the amount, if any, by which our total assets (excluding 

Treasury’s funding commitment and any unfunded amounts related to the commitment) exceed our total liabilities 

(excluding any obligation with respect to capital stock), in each case as reflected on our balance sheet prepared in 

accordance with GAAP.

Dividend amount following capital reserve end date

Beginning on the first dividend period following the capital reserve end date, the applicable quarterly dividend amount 

on the senior preferred stock will be the lesser of: 

(1) a 10% annual rate on the then-current liquidation preference of the senior preferred stock; and 

(2) an amount equal to the incremental increase in our net worth during the immediately prior fiscal quarter. 

However, the applicable quarterly dividend amount will immediately increase to a 12% annual rate on the then-current 

liquidation preference of the senior preferred stock if we fail to timely pay dividends in cash to Treasury. This increased 

dividend amount will continue until the dividend period following the date we have paid, in cash, full cumulative 

dividends to Treasury (including any unpaid dividends), at which point the applicable quarterly dividend amount will 

revert to the prior calculation method.

Liquidation Preference

Shares of the senior preferred stock have no par value and have a stated value and initial liquidation preference equal 

to $1,000 per share, for an aggregate initial liquidation preference of $1 billion.

Under the terms that currently govern the senior preferred stock, the aggregate liquidation preference will be increased 

by the following: 

• any amounts Treasury pays to us pursuant to its funding commitment under the senior preferred stock 

purchase agreement (as of the date of this filing, the cumulative amount Treasury has paid to us under its 

funding commitment is $119.8 billion); 

• any quarterly commitment fees that are payable but not paid in cash (no such fees have become payable, nor 

will such fees be set until the capital reserve end date);

• any dividends that are payable but not paid in cash to Treasury, regardless of whether or not they are declared; 

and

• at the end of each fiscal quarter through and including the capital reserve end date, an amount equal to the 

increase in our net worth, if any, during the immediately prior fiscal quarter.

The aggregate liquidation preference of the senior preferred stock was $180.3 billion as of December 31, 2022 and will 

further increase to $181.8 billion as of March 31, 2023, due to the $1.4 billion increase in our net worth during the fourth 

quarter of 2022.

The senior preferred stock ranks ahead of our common stock and all other outstanding series of our preferred stock, as 

well as any capital stock we issue in the future, as to both dividends and rights upon liquidation. As a result, if we are 

liquidated, the holder of the senior preferred stock is entitled to its then current liquidation preference before any 

distribution is made to the holders of our common stock or other preferred stock. 

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-56
Limitations on Redemption and Paydown of Liquidation Preference; Requirement to Pay Net Proceeds of Capital 

Stock Issuances to Reduce Liquidation Preference

We are not permitted to redeem the senior preferred stock prior to the termination of Treasury’s funding commitment 

under the senior preferred stock purchase agreement. Moreover, we are not permitted to pay down the liquidation 

preference of the outstanding shares of senior preferred stock except to the extent of (1) accumulated and unpaid 

dividends previously added to the liquidation preference and not previously paid down; and (2) quarterly commitment 

fees previously added to the liquidation preference and not previously paid down. In addition to these exceptions, if we 

issue any shares of capital stock for cash while the senior preferred stock is outstanding, the net proceeds of the 

issuance, with the exception of up to $70 billion in aggregate gross cash proceeds from the issuance of common stock, 

must be used to pay down the liquidation preference of the senior preferred stock; however, the liquidation preference of 

each share of senior preferred stock may not be paid down below $1,000 per share prior to the termination of Treasury’s 

funding commitment. Following the termination of Treasury’s funding commitment, we may pay down the liquidation 

preference of all outstanding shares of senior preferred stock at any time, in whole or in part.

Limitations on Dividends, Distributions, etc.

The senior preferred stock provides that we may not declare or pay dividends on, make distributions with respect to, or 

redeem, purchase or acquire, or make a liquidation payment with respect to, any common stock or other securities 

ranking junior to the senior preferred stock unless (1) full cumulative dividends on the outstanding senior preferred stock 

(including any unpaid dividends added to the liquidation preference) have been declared and paid in cash; and (2) all 

amounts required to be paid with the net proceeds of any issuance of capital stock for cash (as described in the 

preceding paragraph) have been paid in cash.

Common Stock Warrant

The warrant gives Treasury the right to purchase shares of our common stock equal to 79.9% of the total number of 

shares of our common stock outstanding on a fully diluted basis on the date the warrant is exercised. The warrant may 

be exercised in whole or in part at any time on or before September 7, 2028, by delivery to Fannie Mae of:

• a notice of exercise; 

• payment of the exercise price of $0.00001 per share; and

• the warrant. 

If the market price of one share of common stock is greater than the exercise price, in lieu of exercising the warrant by 

payment of the exercise price, Treasury may elect to receive shares equal to the value of the warrant (or portion thereof 

being canceled) pursuant to the formula specified in the warrant. Upon exercise of the warrant, Treasury may assign the 

right to receive the shares of common stock issuable upon exercise to any other person. If the warrant is exercised, the 

stated value of the common stock issued will be reclassified as “Common stock” in our consolidated balance sheets. As 

of February 14, 2023, Treasury has not exercised the warrant.

Senior Preferred Stock Purchase Agreement with Treasury

Funding Commitment

Under the senior preferred stock purchase agreement, Treasury made a commitment to provide funding, under certain 

conditions, to eliminate deficits in our net worth. As of December 31, 2022, Treasury has provided us with a total of 

$119.8 billion under its senior preferred stock purchase agreement funding commitment, and the amount of funding 

remaining available to us under the agreement was $113.9 billion.

If we were to have a net worth deficit in a future period, we would be required to obtain additional funding from Treasury 

pursuant to the senior preferred stock purchase agreement to avoid being placed into receivership. If we were to draw 

additional funds from Treasury under the agreement with respect to a future period, the amount of remaining funding 

under the agreement would be reduced by the amount of our draw. 

The senior preferred stock purchase agreement provides that the deficiency amount will be calculated differently if we 

become subject to receivership or other liquidation process. The deficiency amount may be increased above the 

otherwise applicable amount upon our mutual written agreement with Treasury. In addition, if the Director of FHFA 

determines that the Director will be mandated by law to appoint a receiver for us unless our capital is increased by 

receiving funds under the commitment in an amount up to the deficiency amount (subject to the maximum amount that 

may be funded under the agreement), then FHFA, in its capacity as our conservator, may request that Treasury provide 

funds to us in such amount. The senior preferred stock purchase agreement also provides that, if we have a deficiency 

amount as of the date of completion of the liquidation of our assets, we may request funds from Treasury in an amount 

up to the deficiency amount (subject to the maximum amount that may be funded under the agreement). Any amounts 

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-57
that we draw under the senior preferred stock purchase agreement will be added to the liquidation preference of the 

senior preferred stock. No additional shares of senior preferred stock are required to be issued under the senior 

preferred stock purchase agreement.

Commitment Fee

The senior preferred stock purchase agreement provides for the payment of an unspecified quarterly commitment fee to 

Treasury to compensate Treasury for its ongoing support under the senior preferred stock purchase agreement. As 

amended by the January 2021 letter agreement, the agreement provides that (1) through and continuing until the capital 

reserve end date, the periodic commitment fee will not be set, accrue, or be payable, and (2) not later than the capital 

reserve end date, we and Treasury, in consultation with the Chair of the Federal Reserve, will agree to set the periodic 

commitment fee. 

Covenants 

The senior preferred stock purchase agreement contains covenants that prohibit us from taking a number of actions 

without the prior written consent of Treasury, including:

• declaring or paying dividends or making other distributions on or redeeming, purchasing, retiring or otherwise 

acquiring our equity securities (other than the senior preferred stock or warrant);

• selling or issuing equity securities, except for stock issuances made (1) to Treasury, (2) pursuant to obligations 

that existed at the time we entered conservatorship, and (3) as amended by the January 2021 letter agreement, 

for common stock ranking pari passu or junior to the common stock issued to Treasury in connection with the 

exercise of its warrant, provided that (i) Treasury has already exercised its warrant in full, and (ii) all currently 

pending significant litigation relating to the conservatorship and the August 2012 amendment to the senior 

preferred stock purchase agreement has been resolved, which may require Treasury’s assent. Net proceeds of 

the issuance of any shares of capital stock for cash while the senior preferred stock is outstanding, except for 

up to $70 billion in aggregate gross cash proceeds from the issuance of common stock, must be used to pay 

down the liquidation preference of the senior preferred stock;

• terminating or seeking to terminate our conservatorship, other than through a receivership, except that, as 

revised by the January 2021 letter agreement, FHFA can terminate our conservatorship without the prior 

consent of Treasury if several conditions are met, including (1) all currently pending significant litigation relating 

to the conservatorship and the August 2012 amendment to the senior preferred stock purchase agreement has 

been resolved, and (2) for two or more consecutive quarters, our common equity tier 1 capital (as defined in the 

enterprise regulatory capital framework), together with any stockholder equity that would result from a firm 

commitment public underwritten offering of common stock which is fully consummated concurrent with the 

termination of conservatorship, equals or exceeds at least 3% of our adjusted total assets (as defined in the 

enterprise regulatory capital framework);

• selling, transferring, leasing or otherwise disposing of any assets, except for dispositions for fair market value in 

limited circumstances including if (a) the transaction is in the ordinary course of business and consistent with 

past practice or (b) the assets have a fair market value individually or in the aggregate of less than $250 million;

• issuing subordinated debt;

• entering into a corporate reorganization, recapitalization, merger, acquisition or similar event; and

• engaging in transactions with affiliates other than on arm’s-length terms or in the ordinary course of business.

Covenants in the senior preferred stock purchase agreement also subject us to limits on the amount of mortgage assets 

that we may own and the total amount of our indebtedness. 

• Mortgage Asset Limit. The senior preferred stock purchase agreement limits the amount of mortgage assets we 

are permitted to own to $225 billion. We are currently managing our business to a $202.5 billion mortgage 

asset cap pursuant to instructions from FHFA. Our mortgage assets as of December 31, 2022 were 

$79.5 billion, which includes 10% of the notional value of interest-only securities we hold. This adjustment is 

based on instruction from FHFA for the purpose of measuring mortgage assets against the cap. 

• Debt Limit. Our debt limit under the senior preferred stock purchase agreement is set at 120% of the amount of 

mortgage assets we were allowed to own under the agreement on December 31 of the immediately preceding 

calendar year. This debt limit is currently $270 billion. As calculated for this purpose, our indebtedness as of 

December 31, 2022 was $139.3 billion.

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-58
Another covenant prohibits us from entering into any new compensation arrangements or increasing amounts or 

benefits payable under existing compensation arrangements with any of our executive officers (as defined by SEC 

rules) without the consent of the Director of FHFA, in consultation with the Secretary of the Treasury.

In addition to the changes described above to covenants already in the senior preferred stock purchase agreement, the 

January 2021 letter agreement added additional covenants:

• We are required to comply with the enterprise regulatory capital framework rule as published by FHFA in the 

Federal Register on December 17, 2020, disregarding any subsequent amendments or modifications to the 

rule. FHFA subsequently published additional final rules amending the enterprise regulatory capital framework 

in 2022. FHFA has instructed us to report our capital requirements under the amended enterprise regulatory 

capital framework, not under the original requirements of the framework published in December 2020. 

Accordingly, we are not in compliance with this covenant.

• Additional restrictive covenants that relate to our single-family business activities, including the type of loans we 

may acquire, which are currently in effect. 

• Additional single-family and multifamily business restrictions that were subsequently temporarily suspended 

pursuant to a letter agreement dated September 14, 2021 between us, through FHFA in its capacity as 

conservator, and Treasury.

Annual Risk Management Plan Covenant. Each year we remain in conservatorship we are required to provide Treasury 

a risk management plan that sets out our strategy for reducing our risk profile, describes the actions we will take to 

reduce the financial and operational risk associated with each of our business segments, and includes an assessment 

of our performance against the planned actions described in the prior year’s plan. We submitted our most recent risk 

management plan to Treasury in December 2022. 

Although our compliance with the covenants in the senior preferred stock purchase agreement is not a condition of 

Treasury’s funding commitment under that agreement, FHFA, as our conservator and regulator, has the authority to 

direct compliance or impose consequences for any non-compliance with that agreement.

Termination Provisions

The senior preferred stock purchase agreement provides that Treasury’s funding commitment will terminate under any 

of the following circumstances: 

• the completion of our liquidation and fulfillment of Treasury’s obligations under its funding commitment at that 

time; 

• the payment in full of, or reasonable provision for, all of our liabilities (whether or not contingent, including 

mortgage guaranty obligations); or 

• the funding by Treasury of the maximum amount under the agreement. 

In addition, Treasury may terminate its funding commitment and declare the senior preferred stock purchase agreement 

null and void if a court vacates, modifies, amends, conditions, enjoins, stays or otherwise affects the appointment of the 

conservator or otherwise curtails the conservator’s powers. Treasury may not terminate its funding commitment solely 

by reason of our being in conservatorship, receivership or other insolvency proceeding, or due to our financial condition 

or any adverse change in our financial condition.

Waivers and Amendments

The senior preferred stock purchase agreement provides that most provisions of the agreement may be waived or 

amended by mutual written agreement of the parties. No waiver or amendment of the agreement, however, may 

decrease Treasury’s aggregate funding commitment or add conditions to Treasury’s funding commitment if the waiver or 

amendment would adversely affect in any material respect the holders of our debt securities or guaranteed Fannie Mae 

MBS.

Third-party Enforcement Rights

If we default on payments with respect to our debt securities or guaranteed Fannie Mae MBS and Treasury fails to 

perform its obligations under its funding commitment, and if we and/or the conservator are not diligently pursuing 

remedies in respect of that failure, the senior preferred stock purchase agreement provides that any holder of such 

defaulted debt securities or Fannie Mae MBS may file a claim in the United States Court of Federal Claims for relief 

requiring Treasury to fund us up to (1) the amount necessary to cure the payment defaults on our debt and Fannie Mae 

MBS, (2) the deficiency amount, or (3) the amount of remaining funding under the senior preferred stock purchase 

agreement, whichever is the least. Any payment that Treasury makes under those circumstances would be treated for 

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-59
all purposes as a draw under the senior preferred stock purchase agreement that would increase the liquidation 

preference of the senior preferred stock.

12. Regulatory Capital Requirements

FHFA published a final rule establishing a new enterprise regulatory capital framework for the GSEs in December 2020. 

FHFA published three additional final rules amending the enterprise regulatory capital framework in March 2022 and 

June 2022. We refer to the rule’s requirements, as amended, as the “enterprise regulatory capital framework.” 

Although the enterprise regulatory capital framework went into effect in February 2021, we are not required to hold 

capital according to the framework’s requirements until the date of termination of our conservatorship, or such later date 

as may be ordered by FHFA.

The enterprise regulatory capital framework includes the following requirements under the standardized approach 

related to the amount and form of capital we must hold:

• Supplemental leverage and risk-based capital requirements based largely on definitions of capital used in U.S. 

banking regulators’ regulatory capital framework. Under the leverage capital requirements, we must maintain a 

tier 1 capital ratio of 2.5% of adjusted total assets. Under the risk-based capital requirements, we must maintain 

minimum common equity tier 1 capital, tier 1 capital, and adjusted total capital ratios of 4.5%, 6%, and 8%, 

respectively, of risk-weighted assets;

• A requirement that we hold prescribed capital buffers that can be drawn down in periods of financial stress and 

then rebuilt over time as economic conditions improve. If we fall below the prescribed buffer amounts, we must 

restrict capital distributions such as stock repurchases and dividends, as well as discretionary bonus payments 

to executives, until the buffer amounts are restored. The prescribed capital buffers represent the amount of 

capital we are required to hold above the minimum leverage and risk-based capital requirements.

◦ The prescribed leverage buffer amount (“PLBA”) represents the amount of tier 1 capital we are 

required to hold above the minimum tier 1 leverage capital requirement; 

◦ The risk-based capital buffers consist of three separate components: a stability capital buffer, a stress 

capital buffer, and a countercyclical capital buffer. Taken together, these risk-based buffers comprise 

the prescribed capital conservation buffer amount (“PCCBA”). The PCCBA must be comprised entirely 

of common equity tier 1 capital; and

• Specific minimum percentages, or “floors,” on the risk-weights applicable to single-family and multifamily 

exposures, as well as retained portions of credit risk transfer transactions.

Notes to Consolidated Financial Statements | Equity 

Fannie Mae (In conservatorship) 2022 Form 10-K F-60
The table below sets forth information about our capital requirements under the standardized approach of the enterprise 

regulatory capital framework. Available capital for purposes of the enterprise regulatory capital framework excludes the 

stated value of the senior preferred stock ($120.8 billion) and other amounts specified in footnote 2 to the table below. 

Because of these exclusions, we had a deficit in available capital as of December 31, 2022, even though we had 

positive net worth under GAAP of $60.3 billion as of December 31, 2022.

As of December 31, 2022, we had a $258 billion shortfall of our available capital (deficit) to the adjusted total capital 

requirement (including buffers) of $184 billion under the standardized approach of the rule as shown in the table below. 

As of December 31, 2022, our risk-based adjusted total capital requirement (including buffers) represented the amount 

of capital needed to be fully capitalized under the standardized approach to the rule.

Capital Metrics under the Enterprise Regulatory Capital Framework as of December 31, 2022(1)

(Dollars in billions)

Adjusted total assets $ 4,552 

Risk-weighted assets 1,316 

Amounts Ratios

Available 

Capital 

(Deficit)(2)

Minimum 

Capital 

Requirement

Total Capital 

Requirement 

(including 

Buffers)(4)

Available Capital 

(Deficit) Ratio(3)

Minimum 

Capital Ratio 

Requirement

Total Capital 

Requirement 

Ratio 

(including 

Buffers)

Risk-based capital:

Total capital (statutory)(5) $ (49) $ 105 $ 105 (3.7) % 8.0 % 8.0 %

Common equity tier 1 capital (93) 59 138 (7.0) 4.5 10.5 

Tier 1 capital (74) 79 158 (5.6) 6.0 12.0 

Adjusted total capital (74) 105 184 (5.6) 8.0 14.0 

Leverage capital:

Core capital (statutory)(6) (61) 114 114 (1.3) 2.5 2.5 

Tier 1 capital (74) 114 137 (1.6) 2.5 3.0 

(1) Ratios are calculated as a percentage of risk-weighted assets for risk-based capital metrics and as a percentage of adjusted total assets 

for leverage capital metrics.

(2) Available capital (deficit) for all line items excludes the stated value of the senior preferred stock ($120.8 billion). Available capital (deficit) 

for all line items except total capital and core capital also deducts a portion of deferred tax assets. Deferred tax assets arising from 

temporary differences between GAAP and tax requirements are deducted from capital to the extent they exceed 10% of common equity. 

As of December 31, 2022, this resulted in the full deduction of deferred tax assets ($12.9 billion) from our available capital (deficit). 

Available capital (deficit) for common equity tier 1 capital also excludes the value of the non-cumulative perpetual preferred stock ($19.1 

billion).

(3) Ratios are negative because we had a deficit in available capital for each tier of capital.

(4) The applicable buffer for common equity tier 1 capital, tier 1 capital, and adjusted total capital is the PCCBA, which is composed of a stress 

capital buffer, a stability capital buffer, and a countercyclical capital buffer. The applicable buffer for tier 1 capital (leverage based) is the 

PLBA. The stress capital buffer and countercyclical capital buffer are each calculated by multiplying prescribed factors by adjusted total 

assets as of the last day of the previous calendar quarter. The 2022 stability capital buffer is calculated by multiplying a factor determined 

based on our share of mortgage debt outstanding by adjusted total assets as of December 31, 2020. The prescribed leverage buffer for 

2022 is set at 50% of the 2022 stability buffer. Going forward the stability buffer and the prescribed leverage buffer will be updated with an 

effective date that depends on whether the stability capital buffer increases or decreases relative to the previously calculated value.

(5) The sum of (a) core capital (see definition in footnote 6 below); and (b) a general allowance for foreclosure losses, which (i) shall include 

an allowance for portfolio mortgage losses, an allowance for non-reimbursable foreclosure costs on government claims, and an allowance 

for liabilities reflected on the balance sheet for estimated foreclosure losses on mortgage-backed securities; and (ii) shall not include any 

reserves made or held against specific assets; and (c) any other amounts from sources of funds available to absorb losses that the 

Director of FHFA by regulation determines are appropriate to include in determining total capital.

(6) The sum of (a) the stated value of our outstanding common stock (common stock less treasury stock); (b) the stated value of our 

outstanding perpetual non-cumulative preferred stock; (c) our paid-in capital; and (d) our retained earnings (accumulated deficit). Core 

capital does not include: (a) accumulated other comprehensive income or (b) senior preferred stock.

Notes to Consolidated Financial Statements | Regulatory Capital Requirements

Fannie Mae (In conservatorship) 2022 Form 10-K F-61
As a result of our capital shortfall, our maximum payout ratio under the enterprise regulatory capital framework as of 

December 31, 2022 was 0%. While it is not applicable until the date of termination of our conservatorship, our maximum 

payout ratio represents the percentage of eligible retained income that we are permitted to pay out in the form of 

distributions or discretionary bonus payments under the enterprise regulatory capital framework. The maximum payout 

ratio for a given quarter is the lowest of the payout ratios determined by our capital conservation buffer and our leverage 

buffer.

Restrictions on Capital Distributions and Dividends

Statutory Restrictions. Under the GSE Act, FHFA has authority to prohibit capital distributions, including payment of 

dividends, if we fail to meet our capital requirements. If FHFA classifies us as significantly undercapitalized, the approval 

of the Director of FHFA is required for any dividend payment. Under the Charter Act and the GSE Act, we are not 

permitted to make a capital distribution if, after making the distribution, we would be undercapitalized. The Director of 

FHFA, however, may permit us to repurchase shares if the repurchase is made in connection with the issuance of 

additional shares or obligations in at least an equivalent amount and will reduce our financial obligations or otherwise 

improve our financial condition.

Restrictions Relating to Conservatorship. Our conservator announced on September 7, 2008 that we would not pay any 

dividends on the common stock or on any series of preferred stock, other than the senior preferred stock. In addition, 

FHFA’s regulations relating to conservatorship and receivership operations prohibit us from paying any dividends while 

in conservatorship unless authorized by the Director of FHFA. The Director of FHFA has directed us to make dividend 

payments on the senior preferred stock on a quarterly basis for every dividend period for which dividends were payable.

Restrictions Under Senior Preferred Stock Purchase Agreement and Senior Preferred Stock. The senior preferred stock 

purchase agreement prohibits us from declaring or paying any dividends on Fannie Mae equity securities (other than 

the senior preferred stock) without the prior written consent of Treasury. In addition, the provisions of the senior 

preferred stock provide for dividends each quarter through and including the capital reserve end date in the amount, if 

any, by which our net worth as of the end of the immediately preceding fiscal quarter exceeds an applicable capital 

reserve amount. Starting with the quarterly dividend period ending on December 31, 2020, the applicable capital 

reserve amount is the amount of adjusted total capital necessary for us to meet the capital requirements and buffers set 

forth in the enterprise regulatory capital framework. The capital reserve end date is defined as the last day of the second 

consecutive fiscal quarter during which we have had and maintained capital equal to, or in excess of, all of the capital 

requirements and buffers under the enterprise regulatory capital framework. After the capital reserve end date, the 

amount of quarterly dividends to Treasury will be equal to the lesser of any quarterly increase in our net worth and a 

10% annual rate on the then-current liquidation preference of the senior preferred stock. As a result, our ability to retain 

earnings in excess of the capital requirements and buffers set forth in the enterprise regulatory capital framework will be 

limited. For more information on the terms of the senior preferred stock purchase agreement and senior preferred stock, 

see “Note 1, Summary of Significant Accounting Policies” and “Note 11, Equity.”

Additional Restrictions Relating to Preferred Stock. Payment of dividends on our common stock is also subject to the 

prior payment of dividends on our preferred stock and our senior preferred stock. Payment of dividends on all 

outstanding preferred stock, other than the senior preferred stock, is also subject to the prior payment of dividends on 

the senior preferred stock.

While not currently applicable, our payment of dividends and capital distributions will be subject to the following 

restrictions under the enterprise regulatory capital framework effective on the date of termination of our conservatorship:

Restrictions Under Enterprise Regulatory Capital Framework. During a calendar quarter, we will not be permitted to pay 

dividends or make any other capital distributions (or create an obligation to make such distributions) that, in the 

aggregate, exceed the amount equal to our eligible retained income for the quarter multiplied by our maximum payout 

ratio. The maximum payout ratio for a given quarter is the lowest of the payout ratios determined by our capital 

conservation buffer and our leverage buffer. We will not be subject to this limitation on distributions if we have a capital 

conservation buffer that is greater than our prescribed capital conservation buffer amount and a leverage buffer that is 

greater than our prescribed leverage buffer amount. Notwithstanding the above-described limitations, FHFA may permit 

us to make a distribution upon our request, if FHFA determines that the distribution would not be contrary to the 

purposes of this section of the enterprise regulatory capital framework or to our safety and soundness. We will not be 

permitted to make any distributions during a quarter if our eligible retained income is negative and either (a) our capital 

conservation buffer is less than our stress capital buffer or (b) our leverage buffer is less than our prescribed leverage 

buffer amount.

Notes to Consolidated Financial Statements | Regulatory Capital Requirements

Fannie Mae (In conservatorship) 2022 Form 10-K F-62
13. Concentrations of Credit Risk

Concentrations of credit risk arise when a number of customers and counterparties engage in similar activities or have 

similar economic characteristics that make them susceptible to similar changes in industry conditions, which could affect 

their ability to meet their contractual obligations. Based on our assessment of business conditions that could impact our 

financial results, we have determined that concentrations of credit risk exist among: 

• single-family and multifamily borrowers (including geographic concentrations and loans with certain higher-risk 

characteristics); 

• mortgage insurers; 

• mortgage sellers and servicers;

• multifamily lenders with risk sharing; and

• derivative counterparties and parties associated with our off-balance sheet transactions.

Concentrations for each of these groups are discussed below.

Single-Family Loan Borrowers

Regional economic conditions may affect a borrower’s ability to repay a mortgage loan and the property value 

underlying the loan. Geographic concentrations increase the exposure of our guaranty book of business to changes in 

credit risk. Single-family borrowers are primarily affected by home prices and interest rates.

To manage credit risk and comply with our charter requirements, we typically require primary mortgage insurance or 

other credit enhancements if the current LTV ratio (i.e., the ratio of the unpaid principal balance of a loan to the current 

value of the property that serves as collateral) of a single-family conventional mortgage loan is greater than 80% when 

the loan is delivered to us. 

Multifamily Loan Borrowers

Numerous factors affect a multifamily borrower’s ability to repay the loan and the value of the property underlying the 

loan. Multifamily loans are generally non-recourse to the borrower. The most significant factors affecting credit risk are 

rental income, property valuations, and general economic conditions. The average unpaid principal balance for 

multifamily loans is significantly larger than for single-family borrowers and, therefore, individual defaults for multifamily 

borrowers can result in more significant losses. We continually monitor the performance and risk characteristics of our 

multifamily loans, underlying properties and borrowers on an ongoing basis.

As part of our multifamily risk management activities, we perform detailed loan reviews that evaluate property 

performance, borrower and geographic concentrations, lender qualifications, counterparty risk and contract compliance. 

We generally require mortgage servicers to obtain and submit periodic property operating information and condition 

reviews, allowing us to monitor the performance of individual loans. We use this information to evaluate the credit 

quality of our portfolio, identify potential problem loans and initiate appropriate loss mitigation activities.

Notes to Consolidated Financial Statements | Concentrations of Credit Risk

Fannie Mae (In conservatorship) 2022 Form 10-K F-63
Geographic Concentration

The following table displays the regional geographic concentration of single-family and multifamily loans in our guaranty 

book of business, measured by the unpaid principal balance of the loans.

Geographic Concentration(1)

Percentage of SingleFamily Conventional 

Guaranty Book of 

Business

Percentage of 

Multifamily Guaranty 

Book of Business

As of December 31, As of December 31,

2022 2021 2022 2021

Midwest 14 % 14 % 12 % 11 %

Northeast 16 16 15 15 

Southeast 23 23 27 27 

Southwest 19 18 22 22 

West 28 29 24 25 

Total 100 % 100 % 100 % 100 %

(1) Midwest consists of IL, IN, IA, MI, MN, NE, ND, OH, SD and WI. Northeast consists of CT, DE, ME, MA, NH, NJ, NY, PA, PR, RI, VT and 

VI. Southeast consists of AL, DC, FL, GA, KY, MD, MS, NC, SC, TN, VA and WV. Southwest consists of AZ, AR, CO, KS, LA, MO, NM, OK, 

TX and UT. West consists of AK, CA, GU, HI, ID, MT, NV, OR, WA and WY.

Risk Characteristics of our Guaranty Book of Business

One of the measures by which we gauge our credit risk is the delinquency status of the mortgage loans in our guaranty 

book of business. 

For single-family and multifamily loans, we use this information, in conjunction with housing market and other economic 

data, to structure our pricing and our eligibility and underwriting criteria to reflect the current risk of loans with higher-risk 

characteristics, and in some cases we decide to significantly reduce our participation in riskier loan product categories.

Management also uses this data together with other credit risk measures to identify key trends that guide the 

development of our loss mitigation strategies.

We report the delinquency status of our single-family and multifamily guaranty book of business below. We report loans 

receiving COVID-19-related payment forbearance as delinquent according to the contractual terms of the loans.

Notes to Consolidated Financial Statements | Concentrations of Credit Risk

Fannie Mae (In conservatorship) 2022 Form 10-K F-64
Single-Family Credit Risk Characteristics

For single-family loans, management monitors the serious delinquency rate, which is the percentage of single-family 

loans (based on number of loans) that are 90 days or more past due or in the foreclosure process, and loans that have 

higher risk characteristics, such as high mark-to-market LTV ratios.

The following tables display the delinquency status and serious delinquency rates for specified loan categories of our 

single-family conventional guaranty book of business. 

As of December 31,

2022 2021

30 Days 

Delinquent

60 Days 

Delinquent

Seriously 

Delinquent(1)

30 Days 

Delinquent

60 Days 

Delinquent

Seriously 

Delinquent(1)

Percentage of single-family conventional 

guaranty book of business based on UPB 0.84 % 0.20 % 0.60 % 0.73 % 0.16 % 1.20 %

Percentage of single-family conventional 

loans based on loan count 0.96 0.23 0.65 0.86 0.20 1.25 

As of December 31,

2022 2021

Percentage of

Single-Family

Conventional

Guaranty Book

of Business 

Based on UPB

Seriously 

Delinquent 

Rate(1)

Percentage of

Single-Family

Conventional

Guaranty Book

of Business 

Based on UPB

Seriously 

Delinquent 

Rate(1)

Estimated mark-to-market LTV ratio:

80.01% to 90% 5 % 0.68 % 5 % 0.88 %

90.01% to 100% 3 0.40 2 0.51 

Greater than 100% * 4.04 * 12.41 

Geographical distribution:

California 19 0.46 19 1.01 

Florida 6 0.90 6 1.59 

Illinois 3 0.86 3 1.55 

New Jersey 3 0.85 3 1.90 

New York 5 1.12 5 2.24 

All other states 64 0.62 64 1.16 

Vintages:

2008 and prior 2 2.78 3 4.90 

2009-2022 98 0.53 97 1.01 

* Represents less than 0.5% of single-family conventional book of business.

(1) Based on loan count, consists of single-family conventional loans that were 90 days or more past due or in the foreclosure process as of 

December 31, 2022 and 2021.

Notes to Consolidated Financial Statements | Concentrations of Credit Risk

Fannie Mae (In conservatorship) 2022 Form 10-K F-65
Multifamily Credit Risk Characteristics

For multifamily loans, management monitors the serious delinquency rate, which is the percentage of multifamily loans, 

based on unpaid principal balance, that are 60 days or more past due, and loans with other higher risk characteristics to 

determine our overall credit quality of our multifamily book of business. Higher risk characteristics include, but are not 

limited to, current DSCR below 1.0 and original LTV ratios greater than 80%. We stratify multifamily loans into different 

internal risk categories based on the credit risk inherent in each individual loan.

The following tables display the delinquency status and serious delinquency rates for specified loan categories of our 

multifamily guaranty book of business.

As of December 31,

2022(1) 2021(1)

30 Days 

Delinquent

Seriously 

Delinquent(2)

30 Days 

Delinquent

Seriously 

Delinquent(2)

Percentage of multifamily guaranty book of business 0.04 % 0.24 % 0.03 % 0.42 %

As of December 31,

2022 2021

Percentage of 

Multifamily 

Guaranty 

Book of 

Business(1)

Serious 

Delinquency 

Rate(2)(3)

Percentage of 

Multifamily 

Guaranty 

Book of 

Business(1)

Serious 

Delinquency 

Rate(2)(3)

Original LTV ratio:

Greater than 80% 1 % 0.85 % 1 % 0.13 %

Less than or equal to 80% 99 0.24 99 0.42 

Current DSCR below 1.0(4) 3 3.88 2 13.90 

(1) Calculated based on the aggregate unpaid principal balance of multifamily loans for each category divided by the aggregate unpaid 

principal balance of loans in our multifamily guaranty book of business.

(2) Consists of multifamily loans that were 60 days or more past due as of the dates indicated.

(3) Calculated based on the unpaid principal balance of multifamily loans that were seriously delinquent divided by the aggregate unpaid 

principal balance of multifamily loans for each category included in our multifamily guaranty book of business. 

(4) For 2022, our estimates of current DSCRs are based on the latest available income information from quarterly and annual statements for 

these properties including the related debt service. For 2021, our estimates of current DSCRs are based on the latest available annual 

statements.

Other Concentrations

Mortgage Insurers. Mortgage insurance “risk in force” refers to our maximum potential loss recovery under the 

applicable mortgage insurance policies in force and is generally based on the loan-level insurance coverage percentage 

and, if applicable, any aggregate pool loss limit, as specified in the policy. 

The following table displays our total mortgage insurance risk in force by primary and pool insurance, as well as the total 

risk-in-force mortgage insurance coverage as a percentage of the single-family conventional guaranty book of business. 

As of December 31,

2022 2021

Risk in Force

Percentage of 

Single-Family 

Conventional 

Guaranty Book 

of Business Risk in Force

Percentage of 

Single-Family 

Conventional 

Guaranty Book 

of Business

(Dollars in millions)

Mortgage insurance risk in force:

Primary mortgage insurance $ 193,549 $ 176,587 

Pool mortgage insurance 237 261 

Total mortgage insurance risk in force $ 193,786 5 % $ 176,848 5 %

Mortgage insurance only covers losses that are realized after the borrower defaults and title to the property is 

subsequently transferred, such as after a foreclosure, short-sale, or a deed-in-lieu of foreclosure. Also, mortgage 

insurance does not protect us from all losses on covered loans. For example, mortgage insurance does not cover 

Notes to Consolidated Financial Statements | Concentrations of Credit Risk

Fannie Mae (In conservatorship) 2022 Form 10-K F-66
property damage that is not covered by the hazard insurance we require, and such damage may result in a reduction to, 

or a denial of, mortgage insurance benefits. Specifically, a property damaged by a flood that was outside a Federal 

Emergency Management Agency (“FEMA”)-identified Special Flood Hazard Area, where we require coverage, or a 

property damaged by an earthquake are the most likely scenarios where property damage may result in a default not 

covered by hazard insurance. 

The table below displays our mortgage insurer counterparties that provided 10% or more of the risk in force mortgage 

insurance coverage on mortgage loans in our single-family conventional guaranty book of business. 

Percentage of Risk-in-Force 

Coverage by Mortgage Insurer

As of December 31,

2022 2021

Counterparty:(1)

Mortgage Guaranty Insurance Corp. 19 % 19 %

Arch Capital Group Ltd. 18 19 

Radian Guaranty, Inc. 17 17 

Enact Mortgage Insurance Corp.(2) 17 17 

Essent Guaranty, Inc. 16 16 

National Mortgage Insurance Corp. 12 11 

Others 1 1 

Total 100 % 100 %

(1) Insurance coverage amounts provided for each counterparty may include coverage provided by affiliates and subsidiaries of the 

counterparty.

(2) Genworth Mortgage Insurance Corp. was renamed Enact Mortgage Insurance Corp. effective February 7, 2022.

We have counterparty credit risk relating to the potential insolvency of, or non-performance by, monoline mortgage 

insurers that insure single-family loans we purchase or guarantee. There is risk that these counterparties may fail to 

fulfill their obligations to pay our claims under insurance policies. On at least a quarterly basis, we assess our mortgage 

insurer counterparties’ respective abilities to fulfill their obligations to us. Our assessment includes financial reviews and 

analyses of the insurers’ portfolios and capital adequacy. If we determine that it is probable that we will not collect all of 

our claims from one or more of our mortgage insurer counterparties, it could increase our loss reserves, which could 

adversely affect our results of operations, liquidity, financial condition and net worth.

When we estimate the credit losses that are inherent in our mortgage loans and under the terms of our guaranty 

obligations, we also consider the recoveries that we expect to receive from primary mortgage insurance, as mortgage 

insurance recoveries reduce the severity of the loss associated with defaulted loans if the borrower defaults and title to 

the property is subsequently transferred. Mortgage insurance does not cover credit losses that result from a reduction in 

mortgage interest paid by the borrower in connection with a loan modification, forbearance of principal, or forbearance 

of scheduled loan payments. We evaluate the financial condition of our mortgage insurer counterparties and adjust the 

contractually due recovery amounts to ensure that expected credit losses as of the balance sheet date are included in 

our loss reserve estimate. As a result, if our assessment of one or more of our mortgage insurer counterparties’ ability to 

fulfill their respective obligations to us worsens, it could increase our loss reserves. As of December 31, 2022 and 2021, 

our estimated benefit from mortgage insurance, which is based on estimated credit losses as of period end, reduced our 

loss reserves by $2.2 billion and $559 million, respectively.

When an insured loan held in our retained mortgage portfolio subsequently goes into foreclosure, we charge off the 

loan, eliminating any previously-recorded loss reserves, and record REO and a mortgage insurance receivable for the 

claim proceeds deemed probable of recovery, as appropriate. However, if a mortgage insurer rescinds, cancels or 

denies insurance coverage, the initial receivable becomes due from the mortgage seller or servicer. We had outstanding

receivables of $515 million recorded in “Other assets” in our consolidated balance sheets as of December 31, 2022 and 

$533 million as of December 31, 2021 related to amounts claimed on insured, defaulted loans excluding governmentinsured loans. We assessed these outstanding receivables for collectability, and established a valuation allowance of 

$462 million as of December 31, 2022 and $479 million as of December 31, 2021, which reduced our claim receivable 

to the amount considered probable of collection.

Mortgage Servicers and Sellers. Mortgage servicers collect mortgage and escrow payments from borrowers, pay taxes 

and insurance costs from escrow accounts, monitor and report delinquencies, and perform other required activities, 

including loss mitigation, on our behalf. Our mortgage servicers and sellers may also be obligated to repurchase loans 

or foreclosed properties, reimburse us for losses or provide other remedies under certain circumstances, such as if it is 

determined that the mortgage loan did not meet our underwriting or eligibility requirements, if certain loan 

Notes to Consolidated Financial Statements | Concentrations of Credit Risk

Fannie Mae (In conservatorship) 2022 Form 10-K F-67
representations and warranties are violated or if mortgage insurers rescind coverage. Our representation and warranty 

framework does not require repurchase for loans that have breaches of certain selling representations and warranties if 

they have met specified criteria for relief. 

Our business with mortgage servicers is concentrated. The table below displays the percentage of our single-family 

conventional guaranty book of business serviced by our top five depository single-family mortgage servicers and top five 

non-depository single-family mortgage servicers (i.e., servicers that are not insured depository institutions), and 

identifies one servicer that serviced 10% or more of our single-family guaranty book of business as of December 31, 

2021, based on unpaid principal balance.

Percentage of Single-Family 

Conventional

Guaranty Book of Business

As of December 31,

2022 2021

Wells Fargo Bank, N.A. (together with its affiliates) 9 % 10 %

Remaining top five depository servicers 13 11 

Top five non-depository servicers 23 23 

Total 45 % 44 %

The table below displays the percentage of our multifamily guaranty book of business serviced by our top five 

multifamily mortgage servicers, and identifies two servicers that serviced 10% or more of our multifamily guaranty book 

of business based on unpaid principal balance.

Percentage of Multifamily

Guaranty Book of Business

As of December 31,

2022 2021

Walker & Dunlop, Inc. 13 % 12 %

Wells Fargo Bank, N.A. (together with its affiliates) 11 11 

Remaining top five servicers 24 24 

Total 48 % 47 %

Multifamily Lenders with Risk Sharing. We enter into risk sharing agreements with lenders pursuant to which the lenders 

agree to bear all or some portion of the credit losses on the covered loans. Our maximum potential loss recovery from 

lenders under these risk sharing agreements on both DUS and non-DUS multifamily loans was $103.9 billion as of 

December 31, 2022, compared with $97.6 billion as of December 31, 2021. As of December 31, 2022, 53% of our 

maximum potential loss recovery on multifamily loans was from five DUS lenders, as compared with 52% as of 

December 31, 2021. 

Derivatives Counterparties. For information on credit risk associated with our derivative transactions and repurchase 

agreements see “Note 8, Derivative Instruments” and “Note 14, Netting Arrangements.”

Notes to Consolidated Financial Statements | Concentrations of Credit Risk

Fannie Mae (In conservatorship) 2022 Form 10-K F-68
14. Netting Arrangements

We use master netting arrangements, which allow us to offset certain financial instruments and collateral with the same 

counterparty, to minimize counterparty credit exposure. The tables below display information related to derivatives and 

securities purchased under agreements to resell, which are subject to an enforceable master netting arrangement or 

similar agreement that are either offset or not offset in our consolidated balance sheets.

As of December 31, 2022

Gross 

Amount 

Offset(1)

Net Amount 

Presented in our 

Consolidated 

Balance Sheets

Amounts Not Offset in our 

Consolidated Balance Sheets

Gross 

Amount

Financial 

Instruments(2) Collateral(3)

Net 

Amount

(Dollars in millions)

Assets:

OTC risk management derivatives $ 237 $ (234) $ 3 $ — $ — $ 3 

Cleared risk management derivatives — 80 80 — — 80 

Mortgage commitment derivatives 89 — 89 (50) (12) 27 

Total derivative assets 326 (154) 172 (4) (50) (12) 110 

Securities purchased under agreements 

to resell(5) 69,415 — 69,415 — (69,415) — 

Total assets $ 69,741 $ (154) $ 69,587 $ (50) $ (69,427) $ 110 

Liabilities:

OTC risk management derivatives $ (4,686) $ 4,662 $ (24) $ — $ — $ (24) 

Cleared risk management derivatives — — — — — — 

Mortgage commitment derivatives (78) — (78) 50 7 (21) 

Total liabilities $ (4,764) $ 4,662 $ (102) (4) $ 50 $ 7 $ (45) 

As of December 31, 2021

Gross 

Amount 

Offset(1)

Net Amount 

Presented in our 

Consolidated 

Balance Sheets

Amounts Not Offset in our 

Consolidated Balance Sheets

Gross 

Amount

Financial 

Instruments(2) Collateral(3)

Net 

Amount

(Dollars in millions)

Assets:

OTC risk management derivatives $ 239 $ (237) $ 2 $ — $ — $ 2 

Cleared risk management derivatives — — — — — — 

Mortgage commitment derivatives 169 — 169 (133) — 36 

Total derivative assets 408 (237) 171 (4) (133) — 38 

Securities purchased under agreements 

to resell(5) 64,843 — 64,843 — (64,843) — 

Total assets $ 65,251 $ (237) $ 65,014 $ (133) $ (64,843) $ 38 

Liabilities:

OTC risk management derivatives $ (1,188) $ 1,183 $ (5) $ — $ — $ (5) 

Cleared risk management derivatives — (10) (10) — 10 — 

Mortgage commitment derivatives (197) — (197) 133 56 (8) 

Total liabilities $ (1,385) $ 1,173 $ (212) (4) $ 133 $ 66 $ (13) 

(1) Represents the effect of the right to offset under legally enforceable master netting arrangements to settle with the same counterparty on a 

net basis, including cash collateral posted and received and accrued interest. 

(2) Mortgage commitment derivative amounts reflect where we have recognized both an asset and a liability with the same counterparty under 

an enforceable master netting arrangement but we have not elected to offset the related amounts in our consolidated balance sheets.

Notes to Consolidated Financial Statements | Netting Arrangements

Fannie Mae (In conservatorship) 2022 Form 10-K F-69
(3) Represents collateral received that has not been recognized and not offset in our consolidated balance sheets as well as collateral posted 

which has been recognized but not offset in our consolidated balance sheets. Does not include collateral held or posted in excess of our 

exposure. The fair value of non-cash collateral we pledged which the counterparty was permitted to sell or repledge was $2.1 billion and 

$2.5 billion as of December 31, 2022 and 2021, respectively. The fair value of non-cash collateral received was $69.5 billion and $64.9 

billion, of which $28.7 billion and $25.6 billion could be sold or repledged as of December 31, 2022 and 2021, respectively. None of the 

underlying collateral was sold or repledged as of December 31, 2022 and 2021.

(4) Excludes derivative assets recognized in our consolidated balance sheets of $3 million as of December 31, 2022, and derivative liabilities 

recognized in our consolidated balance sheets of $66 million and $21 million as of December 31, 2022 and 2021, respectively, that were 

not subject to enforceable master netting arrangements. We had no derivative assets recognized in our consolidated balance sheets as of 

December 31, 2021 that were not subject to enforceable master netting arrangements.

(5) Includes $45.2 billion and $29.1 billion of securities purchased under agreements to resell classified as “Cash and cash equivalents” in our 

consolidated balance sheets as of December 31, 2022 and 2021, respectively. Includes $9.7 billion and $15.0 billion in securities 

purchased under agreements to resell classified as “Restricted cash and cash equivalents” in our consolidated balance sheets as of 

December 31, 2022 and 2021, respectively.

Derivative instruments are recorded at fair value and securities purchased under agreements to resell are recorded at 

amortized cost in our consolidated balance sheets.

We determine our rights to offset the assets and liabilities presented above with the same counterparty, including 

collateral posted or received, based on the contractual arrangements entered into with our individual counterparties and 

various rules and regulations that would govern the insolvency of a derivative counterparty. The following is a 

description, under various agreements, of the nature of those rights and their effect or potential effect on our financial 

position.

The terms of the majority of our contracts for OTC risk management derivatives are governed under master agreements 

of the International Swaps and Derivatives Association Inc. (“ISDA”). These agreements provide that all transactions 

entered into under the agreement with the counterparty constitute a single contractual relationship. An event of default 

by the counterparty allows the early termination of all outstanding transactions under the same ISDA agreement and we 

may offset all outstanding amounts related to the terminated transactions including collateral posted or received.

The terms of our contracts for cleared derivatives are governed under the rules of the clearing organization and the 

agreement between us and the clearing member of that clearing organization. In the event of a clearing organization 

default, all open positions at the clearing organization are closed and a net position (on a clearing member by clearing 

member basis) is calculated. Unless otherwise transferred, in the event of a clearing member default, all open positions 

cleared through that clearing member are closed and a net position is calculated.

The terms of our contracts for mortgage commitment derivatives are primarily governed by the Fannie Mae SingleFamily Selling Guide (“Selling Guide”), for Fannie Mae-approved lenders, or Master Securities Forward Transaction 

Agreements (“MSFTA”), for counterparties that are not Fannie Mae-approved lenders. In the event of default by the 

counterparty, both the Selling Guide and the MSFTA allow us to terminate all outstanding transactions under the 

applicable agreement and offset all outstanding amounts related to the terminated transactions including collateral 

posted or received. Under the Selling Guide, upon a lender event of default, we generally may offset any amounts owed 

to a lender against any amounts a lender may owe us under any other existing agreement, regardless of whether or not 

such other agreements are in default or payments are immediately due.

The terms of our contracts for securities purchased under agreements to resell are governed by Master Repurchase 

Agreements, which are based on the guidelines prescribed by the Securities Industry and Financial Markets 

Association. Master Repurchase Agreements provide that all transactions under the agreement constitute a single 

contractual relationship. An event of default by the counterparty allows the early termination of all outstanding 

transactions under the same agreement and we may offset all outstanding amounts related to the terminated 

transactions including collateral posted or received. 

In addition to these contractual relationships, we are also a clearing member of two divisions of Fixed Income Clearing 

Corporation (“FICC”), a central counterparty (“CCP”). One FICC division clears our trades involving securities 

purchased under agreements to resell, securities sold under agreements to repurchase, and other non-mortgage 

related securities. The other division clears our forward purchase and sale commitments of mortgage-related securities, 

including dollar roll transactions. As a result of these trades, we are required to post initial and variation margin 

payments as well as settle certain positions daily in cash. As a clearing member of FICC, we are exposed to the risk that 

the FICC or one or more of the CCP’s clearing members fails to perform its obligations as described below.

• A default by or the financial or operational failure of FICC would require us to replace contracts cleared through 

FICC, thereby increasing operational costs and potentially resulting in losses. 

• We may also be exposed to losses if a clearing member of FICC defaults on its obligations as each clearing 

member is required to absorb a portion of those fellow-clearing member losses. As a result, we could lose the 

margin that we have posted to FICC. Moreover, our exposure could exceed the amount of margin that we 

Notes to Consolidated Financial Statements | Netting Arrangements

Fannie Mae (In conservatorship) 2022 Form 10-K F-70
previously posted to FICC, since FICC’s rules require non-defaulting clearing members to cover, on a pro rata 

basis, losses caused by a clearing member’s default. 

We are unable to develop an estimate of the maximum potential amount of future payments that we could be required to 

make to FICC under these arrangements as our exposure is dependent on the volume of trades FICC clearing 

members execute now and in the future, which varies daily. Although we are unable to develop an estimate of our 

maximum exposure, we expect that losses caused by any clearing member would be partially offset by the fair value of 

margin posted by the defaulting clearing member and any other available assets of the CCP for those purposes. We 

believe that the risk of a material loss is remote due to FICC’s margin and settlement requirements, guarantee funds 

and other resources that are available in the event of a default.

We actively monitor the risks associated with FICC in order to effectively manage this counterparty risk and our 

associated liquidity exposure. 

15. Fair Value

We use fair value measurements for the initial recording of certain assets and liabilities and periodic remeasurement of 

certain assets and liabilities on a recurring or nonrecurring basis. 

Fair Value Measurement

Fair value measurement guidance defines fair value, establishes a framework for measuring fair value and sets forth 

disclosures around fair value measurements. This guidance applies whenever other accounting guidance requires or 

permits assets or liabilities to be measured at fair value. The guidance establishes a three-level fair value hierarchy that 

prioritizes the inputs into the valuation techniques used to measure fair value. The fair value hierarchy gives the highest 

priority, Level 1, to measurements based on unadjusted quoted prices in active markets for identical assets or liabilities. 

The next highest priority, Level 2, is given to measurements of assets and liabilities based on limited observable inputs 

or observable inputs for similar assets and liabilities. The lowest priority, Level 3, is given to measurements based on 

unobservable inputs.

Recurring Changes in Fair Value 

The following tables display our assets and liabilities measured in our consolidated balance sheets at fair value on a 

recurring basis subsequent to initial recognition, including instruments for which we have elected the fair value option. 

Fair Value Measurements as of December 31, 2022

Quoted Prices 

in Active 

Markets for 

Identical Assets 

(Level 1)

Significant 

Other 

Observable 

Inputs

(Level 2)

Significant 

Unobservable 

Inputs

(Level 3)

Netting 

Adjustment(1)

Estimated Fair 

Value

Recurring fair value measurements: (Dollars in millions)

Assets:

Trading securities:

Mortgage-related $ — $ 3,164 $ 47 $ — $ 3,211 

Non-mortgage-related(3) 46,898 20 — — 46,918 

Total trading securities 46,898 3,184 47 — 50,129 

Available-for-sale securities:

Agency(4) — 55 371 — 426 

Other mortgage-related — 7 263 — 270 

Total available-for-sale securities — 62 634 — 696 

Mortgage loans — 3,102 543 — 3,645 

Derivative assets — 300 29 (154) 175 

Total assets at fair value $ 46,898 $ 6,648 $ 1,253 $ (154) $ 54,645 

Liabilities:

Long-term debt:

Of Fannie Mae $ — $ 919 $ 242 $ — $ 1,161 

Of consolidated trusts — 16,124 136 — 16,260 

Total long-term debt — 17,043 378 — 17,421 

Derivative liabilities — 4,764 66 (4,662) 168 

Total liabilities at fair value $ — $ 21,807 $ 444 $ (4,662) $ 17,589 

Notes to Consolidated Financial Statements | Netting Arrangements

Fannie Mae (In conservatorship) 2022 Form 10-K F-71
Fair Value Measurements as of December 31, 2021

Quoted Prices 

in Active 

Markets for 

Identical Assets 

(Level 1)

Significant 

Other 

Observable 

Inputs

(Level 2)

Significant 

Unobservable 

Inputs

(Level 3)

Netting 

Adjustment(1)

Estimated Fair 

Value

Recurring fair value measurements: (Dollars in millions)

Assets:

Cash equivalents, including restricted cash equivalents(2) $ 250 $ — $ — $ — $ 250 

Trading securities:

Mortgage-related — 4,549 57 — 4,606 

Non-mortgage-related(3) 83,581 19 — — 83,600 

Total trading securities 83,581 4,568 57 — 88,206 

Available-for-sale securities:

Agency(4) — 76 431 — 507 

Other mortgage-related — 8 322 — 330 

Total available-for-sale securities — 84 753 — 837 

Mortgage loans — 4,209 755 — 4,964 

Derivative assets — 256 152 (237) 171 

Total assets at fair value $ 83,831 $ 9,117 $ 1,717 $ (237) $ 94,428 

Liabilities:

Long-term debt:

Of Fannie Mae $ — $ 2,008 $ 373 $ — $ 2,381 

Of consolidated trusts — 21,640 95 — 21,735 

Total long-term debt — 23,648 468 — 24,116 

Derivative liabilities — 1,385 21 (1,173) 233 

Total liabilities at fair value $ — $ 25,033 $ 489 $ (1,173) $ 24,349 

(1) Derivative contracts are reported on a gross basis by level. The netting adjustment represents the effect of the legal right to offset under 

legally enforceable master netting arrangements to settle with the same counterparty on a net basis, including cash collateral posted and 

received.

(2) Cash equivalents and restricted cash equivalents are composed of U.S. Treasury securities that have a maturity at the date of acquisition 

of three months or less.

(3) Primarily includes U.S. Treasury securities.

(4) Agency securities consist of securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae.

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-72
The following tables display a reconciliation of all assets and liabilities measured at fair value on a recurring basis using 

significant unobservable inputs (Level 3). The tables also display gains and losses due to changes in fair value, 

including both realized and unrealized gains and losses, recognized in our consolidated statements of operations and 

comprehensive income for Level 3 assets and liabilities.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

For the Year Ended December 31, 2022

Total Gains (Losses)

(Realized/Unrealized)

Net 

Unrealized 

Gains 

(Losses) 

Included in 

Net Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

2022(4)(5)

Net 

Unrealized 

Gains 

(Losses) 

Included in 

OCI Related 

to Assets and 

Liabilities Still 

Held as of 

December 31, 

2022(1)

Balance, 

December 31, 

2021

Included 

in Net 

Income

Included 

in Total 

OCI 

(Loss)(1) Purchases(2) Sales(2) Issues(3) Settlements(3)

Transfers 

out of 

Level 3

Transfers 

into

Level 3

Balance, 

December 31, 

2022

(Dollars in millions)

Trading securities:

Mortgage-related $ 57 $ (8) (5)(6) $ — $ — $ — $ — $ (1) $ (54) $ 53 $ 47 $ (6) $ — 

Available-for-sale 

securities:

Agency $ 431 $ 2 $ (18) $ — $ — $ — $ (44) $ — $ — $ 371 $ — $ (14) 

Other mortgagerelated 322 (10) (2) — — — (46) (2) 1 263 — (2) 

Total available-forsale securities $ 753 $ (8) (6)(7) $ (20) $ — $ — $ — $ (90) $ (2) $ 1 $ 634 $ — $ (16) 

Mortgage loans $ 755 $ (67) (5)(6) $ — $ — $ (4) $ — $ (135) $ (82) $ 76 $ 543 $ (57) $ — 

Net derivatives 131 (204) (5) — — — — 36 — — (37) (168) — 

Long-term debt:

Of Fannie Mae $ (373) $ 131 (5) $ — $ — $ — $ — $ — $ — $ — $ (242) $ 131 $ — 

Of consolidated 

trusts (95) 6 (5)(6) — — — (86) 39 2 (2) (136) 6 — 

Total long-term debt $ (468) $ 137 $ — $ — $ — $ (86) $ 39 $ 2 $ (2) $ (378) $ 137 $ — 

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

For the Year Ended December 31, 2021

Total Gains (Losses)

(Realized/Unrealized)

Net 

Unrealized 

Gains 

(Losses) 

Included in 

Net Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

2021(4)(5)

Net 

Unrealized 

Gains 

(Losses) 

Included in 

OCI Related 

to Assets and 

Liabilities Still 

Held as of 

December 31, 

2021(1)

Balance, 

December 31, 

2020

Included 

in Net 

Income

Included 

in Total 

OCI 

(Loss)(1) Purchases(2) Sales(2) Issues(3) Settlements(3)

Transfers 

out of 

Level 3

Transfers 

into

Level 3

Balance, 

December 31, 

2021

(Dollars in millions)

Trading securities:

Mortgage-related $ 95 $ (24) (5)(6) $ — $ 18 $ — $ — $ — $ (165) $ 133 $ 57 $ — $ — 

Available-for-sale 

securities:

Agency $ 195 $ 1 $ (1) $ — $ — $ — $ (33) $ (107) $ 376 $ 431 $ — $ 2 

Other mortgagerelated 453 13 (6) — — — (138) — — 322 — (1) 

Total available-forsale securities $ 648 $ 14 

(6)(7)

$ (7) $ — $ — $ — $ (171) $ (107) $ 376 $ 753 $ — $ 1 

Mortgage loans $ 861 $ 31 (5)(6) $ — $ 89 $ (66) $ — $ (194) $ (86) $ 120 $ 755 $ 26 $ — 

Net derivatives 333 (209) (5) — — — — 7 — — 131 (202) — 

Long-term debt:

Of Fannie Mae $ (416) $ 43 (5) $ — $ — $ — $ — $ — $ — $ — $ (373) $ 43 $ — 

Of consolidated 

trusts (83) (1) 

(5)(6)

 — — — — 16 20 (47) (95) (2) — 

Total long-term debt $ (499) $ 42 $ — $ — $ — $ — $ 16 $ 20 $ (47) $ (468) $ 41 $ — 

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-73
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

For the Year Ended December 31, 2020

Total Gains (Losses)

(Realized/Unrealized)

Net 

Unrealized 

Gains 

(Losses) 

Included in 

Net Income 

Related to 

Assets and 

Liabilities Still 

Held as of 

December 31, 

2020(4)(5)

Net 

Unrealized 

Gains 

(Losses) 

Included in 

OCI Related 

to Assets and 

Liabilities Still 

Held as of 

December 31, 

2020(1)

Balance, 

December 31, 

2019

Included 

in Net 

Income

Included 

in Total 

OCI 

(Loss)(1) Purchases(2) Sales(2) Issues(3) Settlements(3)

Transfers 

out of 

Level 3

Transfers 

into

Level 3

Balance, 

December 31, 

2020

(Dollars in millions)

Trading securities:

Mortgage-related $ 46 $ (9) (5)(6) $ — $ — $ (95) $ — $ (3) $ (49) $ 205 $ 95 $ (8) $ — 

Available-for-sale 

securities:

Agency $ 171 $ 1 $ 4 $ — $ (1) $ — $ (15) $ (243) $ 278 $ 195 $ — $ — 

Other mortgagerelated 621 (9) 1 — — — (162) — 2 453 — 4 

Total available-forsale securities $ 792 $ (8) (6)(7) $ 5 $ — $ (1) $ — $ (177) $ (243) $ 280 $ 648 $ — $ 4 

Mortgage loans $ 688 $ 47 (5)(6) $ — $ — $ (21) $ — $ (132) $ (104) $ 383 $ 861 $ 11 $ — 

Net derivatives 162 233 (5) — — — — (80) 18 — 333 159 — 

Long-term debt:

Of Fannie Mae $ (398) $ (41) (5) $ — $ — $ — $ — $ 23 $ — $ — $ (416) $ (41) $ — 

Of consolidated 

trusts (75) (2) (5)(6) — — — — 18 5 (29) (83) (1) — 

Total long-term debt $ (473) $ (43) $ — $ — $ — $ — $ 41 $ 5 $ (29) $ (499) $ (42) $ — 

(1) Gains (losses) are included in “Other comprehensive loss” in our consolidated statements of operations and comprehensive income.

(2) Purchases and sales include activity related to the consolidation and deconsolidation of assets of securitization trusts.

(3) Issues and settlements include activity related to the consolidation and deconsolidation of liabilities of securitization trusts.

(4) Amount represents temporary changes in fair value. Amortization, accretion and the impairment of credit losses are not considered 

unrealized and are not included in this amount.

(5) Gains (losses) are included in “Fair value gains (losses), net” in our consolidated statements of operations and comprehensive income.

(6) Gains (losses) included in “Net interest income” in our consolidated statements of operations and comprehensive income includes 

amortization of cost basis adjustments.

(7) Gains (losses) are included in “Investment gains (losses), net” in our consolidated statements of operations and comprehensive income.

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-74
The following tables display valuation techniques and the range and the weighted average of significant unobservable 

inputs for our Level 3 assets and liabilities measured at fair value on a recurring basis, excluding instruments for which 

we have elected the fair value option. Changes in these unobservable inputs can result in significantly higher or lower 

fair value measurements of these assets and liabilities as of the reporting date.

Fair Value Measurements as of December 31, 2022

Fair 

Value

Significant Valuation 

Techniques

Significant 

Unobservable 

Inputs(1) Range(1)

Weighted - 

Average(1)(2)

(Dollars in millions)

Recurring fair value measurements:

Trading securities:

Mortgage-related(3) $ 47 Various

Available-for-sale securities:

Agency(3) 371 Consensus

Other mortgage-related 142 Discounted Cash Flow Spreads (bps) 531.0 - 582.0 557.7

 96 Single Vendor

 25 Various

Total other mortgage-related 263 

Total available-for-sale securities $ 634 

Net derivatives $ 25 Dealer Mark

 (62) Discounted Cash Flow

Total net derivatives $ (37) 

Fair Value Measurements as of December 31, 2021

Fair 

Value

Significant Valuation 

Techniques

Significant 

Unobservable 

Inputs(1) Range(1)

Weighted - 

Average(1)(2)

(Dollars in millions)

Recurring fair value measurements:

Trading securities:

Mortgage-related(3) $ 57 Various

Available-for-sale securities:

Agency(3) 379 Consensus

 52 Various

Total Agency 431 

Other mortgage-related 175 Discounted Cash Flow Spreads (bps) 409.0 - 434.0 422.0

 94 Single Vendor Spreads (bps) 9.3 - 49.4 27.2

 53 Various

Total other mortgage-related 322 

Total available-for-sale securities $ 753 

Net derivatives $ 152 Dealer Mark

 (21) Discounted Cash Flow

Total net derivatives $ 131 

(1) Valuation techniques for which no unobservable inputs are disclosed generally reflect the use of third-party pricing services or dealers, and 

the range of unobservable inputs applied by these sources is not readily available or cannot be reasonably estimated. Where we have 

disclosed unobservable inputs for consensus and single vendor techniques, those inputs are based on our validations performed at the 

security level using discounted cash flows.

(2) Unobservable inputs were weighted by the relative fair value of the instruments.

(3) Includes Fannie Mae and Freddie Mac securities.

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-75
In our consolidated balance sheets certain assets and liabilities are measured at fair value on a nonrecurring basis; that 

is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in 

certain circumstances (for example, when we evaluate loans for impairment). We held no Level 1 assets or liabilities 

that were measured at fair value on a nonrecurring basis as of December 31, 2022 or 2021. We held $30 million and 

$38 million in Level 2 assets as of December 31, 2022 and 2021, respectively, composed of mortgage loans held for 

sale that were impaired. We had no Level 2 or Level 3 liabilities that were measured at fair value on a nonrecurring 

basis as of December 31, 2022 or 2021.

The following table displays valuation techniques for our Level 3 assets measured at fair value on a nonrecurring basis. 

Fair Value 

Measurements as of 

December 31,

Valuation Techniques 2022 2021

(Dollars in millions)

Nonrecurring fair value measurements:

Mortgage loans:(1)

Mortgage loans held for sale, at lower of cost or fair value Consensus $ 1,571 $ 201 

Single Vendor 92 1,383 

Total mortgage loans held for sale, at lower of cost or fair value 1,663 1,584 

Single-family mortgage loans held for investment, at amortized cost Internal Model 1,636 867 

Multifamily mortgage loans held for investment, at amortized cost Appraisal 3 37 

Broker Price Opinion 614 118 

Internal Model 27 23 

Total multifamily mortgage loans held for investment, at amortized 

cost

 644 178 

Acquired property, net:

Single-family Accepted Offer 17 13 

Appraisal 65 73 

Internal Model 215 75 

Walk Forward 91 37 

Various 12 11 

Total single-family 400 209 

Multifamily Various 119 34 

Total nonrecurring assets at fair value $ 4,462 $ 2,872 

(1) When we measure impairment, including recoveries, based on the fair value of the loan or the underlying collateral and impairment is 

recorded on any component of the mortgage loan, including accrued interest receivable and amounts due from the borrower for advances 

of taxes and insurance, we present the entire fair value measurement amount with the corresponding mortgage loan.

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-76
We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. 

The following is a description of the valuation techniques we use for fair value measurement and disclosure as well as 

our basis for classifying these measurements as Level 1, Level 2 or Level 3 of the valuation hierarchy in more specific 

situations.

U.S Treasury 

Securities

We classify securities whose values are based on quoted market prices in active markets for 

identical assets as Level 1 of the valuation hierarchy.

Level 1

Trading Securities and 

Available-for-Sale 

Securities

We classify securities in active markets as Level 2 of the valuation hierarchy if quoted market 

prices in active markets for identical assets are not available. For all valuation techniques used for 

securities where there is limited activity or less transparency around these inputs to the valuation, 

these securities are classified as Level 3 of the valuation hierarchy.

Single Vendor: Uses one vendor price to estimate fair value. We generally validate these 

observations of fair value through the use of a discounted cash flow technique whose unobservable 

inputs (for example, spreads) are disclosed in the table above.

Consensus: Uses an average of two or more vendor prices for similar securities. We generally 

validate these observations of fair value through the use of a discounted cash flow technique 

whose unobservable inputs (for example, spreads) are disclosed in the table above.

Level 2 and 3

Discounted Cash Flow: In the absence of prices provided by third-party pricing services supported 

by observable market data, we estimate the fair value of a portion of our securities using a 

discounted cash flow technique that uses inputs such as default rates, prepayment speeds, loss 

severity and spreads based on market assumptions where available.

For private-label securities, an increase in unobservable prepayment speeds in isolation would 

generally result in an increase in fair value, and an increase in unobservable spreads, severity 

rates or default rates in isolation would generally result in a decrease in fair value. For mortgage 

revenue bonds classified as Level 3 of the valuation hierarchy, an increase in unobservable 

spreads would result in a decrease in fair value. Although we have disclosed unobservable inputs 

for the fair value of our recurring Level 3 securities above, interrelationships exist among these 

inputs such that a change in one unobservable input typically results in a change to one or more of 

the other inputs.

Mortgage Loans Held 

for Investment

Build-up: We derive the fair value of performing mortgage loans using a build-up valuation 

technique starting with the base value for our Fannie Mae MBS with similar characteristics and 

then add or subtract the fair value of the associated guaranty asset, guaranty obligation (“GO”) and 

master servicing arrangement. We set the GO equal to the estimated fair value we would receive if 

we were to issue our guaranty to an unrelated party in a stand-alone arm’s length transaction at the 

measurement date. The fair value of the GO is estimated based on our current guaranty pricing for 

loans underwritten after 2008 and our internal valuation models considering management’s best 

estimate of key loan characteristics for loans underwritten before 2008. Our performing loans are 

generally classified as Level 2 of the valuation hierarchy to the extent that significant inputs are 

observable. To the extent that unobservable inputs are significant, the loans are classified as Level 

3 of the valuation hierarchy.

Level 2 and 3

Consensus: Calculated through the extrapolation of indicative sample bids obtained from multiple 

active market participants plus the estimated value of any applicable mortgage insurance, the 

estimated fair value using the Consensus method represents an estimate of the prices we would 

receive if we were to sell these single-family nonperforming and certain reperforming loans in the 

whole loan market. The fair value of any mortgage insurance on a nonperforming or reperforming 

loan is estimated using product-specific pricing grids that have been derived from loan-level bids on 

whole loan transactions. These loans are generally classified as Level 3 of the valuation hierarchy 

because significant inputs are unobservable. To the extent that significant inputs are observable, 

the loans are classified as Level 2 of the valuation hierarchy.

We estimate the fair value for a portion of our senior-subordinated trust structures using the 

average of two or more vendor prices at the security level as a proxy for estimating loan fair value. 

These loans are classified as Level 3 of the valuation hierarchy because significant inputs are 

unobservable.

Single Vendor: We estimate the fair value of our reverse mortgages using the single vendor 

valuation technique.

Internal Model: The internal model used to value collateral contains four sub-component models: 1) 

Location Model, 2) Neighborhood Model, 3) Automated Valuation Model (“AVM”) Imputation Model 

and 4) Final Valuation Model. These models consider characteristics of the property, neighborhood, 

local housing markets, underlying loan and home price growth to derive a final estimated value. 

These loans are classified as Level 3 of the valuation hierarchy because significant inputs are 

unobservable.

Instruments Valuation Techniques Classification

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-77
Mortgage Loans Held 

for Investment

Appraisal: We use appraisals to estimate the fair value for a portion of our multifamily loans based 

on either estimated replacement cost, the present value of future cash flows, or sales of similar 

properties. Significant unobservable inputs include estimated replacement or construction costs, 

property net operating income, capitalization rates, and adjustments made to sales of comparable 

properties based on characteristics such as financing, conditions of sale, and physical 

characteristics of the property.

Broker Price Opinion: We use broker price opinions to estimate the fair value for a portion of our 

multifamily loans. This technique uses both current property value and the property value adjusted 

for stabilization and market conditions. The unobservable inputs used in this technique are property 

net operating income and market capitalization rates to estimate property value. 

Asset Manager Estimate: This technique uses the net operating income and tax assessments of 

the specific property as well as Metropolitan Statistical Area-specific market capitalization rates and 

average per unit sales values to estimate property fair value.

Level 2 and 3

An increase in prepayment speeds in isolation would generally result in an increase in the fair value 

of our mortgage loans classified as Level 3 of the valuation hierarchy, and an increase in severity 

rates, default rates or spreads in isolation would generally result in a decrease in fair value. 

Although we have disclosed unobservable inputs for the fair value of the mortgage loans classified 

as Level 3 above, interrelationships exist among these inputs such that a change in one 

unobservable input typically results in a change to one or more of the other inputs.

Mortgage Loans Held 

for Sale

Loans are reported at the lower of cost or fair value in our consolidated balance sheets. The 

valuation methodology and inputs used in estimating the fair value of HFS loans are the same as 

our HFI loans and are described above in “Mortgage Loans Held for Investment.” To the extent that 

significant inputs are unobservable, the loans are classified within level 3 of the valuation hierarchy.

Level 2 and 3

Acquired Property, Net 

and Other Assets

Single-family acquired property valuation techniques

Accepted Offer: An Offer to Purchase Real Estate that has been submitted by a potential purchaser 

of an acquired property and accepted by Fannie Mae in a pending sale.

Appraisal: An appraisal is an estimate based on recent historical data of the value of a specific 

property by a certified or licensed appraiser. Adjustments are made for differences between 

comparable properties for unobservable inputs such as square footage, location, and condition of 

the property.

Broker Price Opinion: This technique provides an estimate of what the property is worth based 

upon a real estate broker’s use of specific market research and a sales comparison approach that 

is similar to the appraisal process. This information, all of which is unobservable, is used along with 

recent and pending sales and current listings of similar properties to arrive at an estimate of value.

Level 3

Property Inspection Report with Value: This technique provides an estimate of what the property is 

worth based upon a third party model that is adjusted for condition of the property and/or any other 

factors impacting the marketability.

Appraisal and Broker Price Opinion, and Property Inspection Report with Value Walk Forward 

(“Walk Forward”): We use these techniques to adjust appraisal, broker price opinion, and property 

inspection valuations for changing market conditions by applying a walk forward factor based on 

local price movements since the time the third-party value was obtained.

Internal Model: We use an internal model to estimate fair value for distressed properties. The 

valuation methodology and inputs used are described under “Mortgage Loans Held for Investment.”

Multifamily acquired property valuation techniques

Appraisal: We use this method to estimate property values for distressed properties. The valuation 

methodology and inputs used are described under “Mortgage Loans Held for Investment.” 

Broker Price Opinion: We use this method to estimate property values for distressed properties. 

The valuation methodology and inputs used are described under “Mortgage Loans Held for 

Investment.” 

Asset Manager Estimate: We use this method to estimate property values for distressed properties. 

The valuation methodology and inputs used are described under “Mortgage Loans Held for 

Investment.” 

Instruments Valuation Techniques Classification

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-78
Asset and Liability 

Derivative Instruments 

(collectively 

“Derivatives”)

The valuation process for the majority of our risk management derivatives uses observable market 

data provided by third-party sources, resulting in Level 2 classification of the valuation hierarchy.

Single Vendor: We use one vendor price to estimate fair value. We generally validate these 

observations of fair value through the use of a discounted cash flow technique.

Clearing House: We use the clearing house-provided value for interest-rate derivatives which are 

transacted through a clearing house. 

Internal Model: We use internal models to value interest-rate derivatives which are valued by 

referencing yield curves derived from observable interest rates and spreads to project and discount 

cash flows to present value. 

Discounted Cash Flow: We use discounted cash flow to estimate fair value for credit enhancement 

derivatives related to CRT.

Dealer Mark: Certain highly complex structured swaps primarily use a single dealer mark due to 

lack of transparency in the market and may be modeled using observable interest rates and 

volatility levels as well as significant unobservable assumptions, resulting in Level 3 classification of 

the valuation hierarchy. Mortgage commitment derivatives that use observable market data, quotes 

and actual transaction price levels adjusted for market movement are typically classified as Level 2 

of the valuation hierarchy. To the extent mortgage commitment derivatives include adjustments for 

market movement that cannot be corroborated by observable market data, we classify them as 

Level 3 of the valuation hierarchy.

Level 2 and 3

Debt of Fannie Mae 

and Consolidated 

Trusts

We classify debt instruments that have quoted market prices in active markets for similar liabilities 

when traded as assets as Level 2 of the valuation hierarchy. For all valuation techniques used for 

debt instruments where there is limited activity or less transparency around these inputs to the 

valuation, these debt instruments are classified as Level 3 of the valuation hierarchy.

Consensus: Uses an average of two or more vendor prices or dealer marks that represents 

estimated fair value for similar liabilities when traded as assets.

Single Vendor: Uses a single vendor price that represents estimated fair value for these liabilities 

when traded as assets.

Discounted Cash Flow: Uses spreads based on market assumptions where available.

The valuation methodology and inputs used in estimating the fair value of MBS assets are 

described under “Trading Securities and Available-for-Sale Securities.”

Level 2 and 3

Instruments Valuation Techniques Classification

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-79
Fair Value of Financial Instruments

The following table displays the carrying value and estimated fair value of our financial instruments. The fair value of 

financial instruments we disclose includes commitments to purchase multifamily and single-family mortgage loans that 

we do not record in our consolidated balance sheets. The fair values of these commitments are included as “Mortgage 

loans held for investment, net of allowance for loan losses.” The disclosure excludes all non-financial instruments; 

therefore, the fair value of our financial assets and liabilities does not represent the underlying fair value of our total 

consolidated assets and liabilities.

As of December 31, 2022

Carrying 

Value

Quoted 

Prices in 

Active 

Markets for 

Identical 

Assets 

(Level 1)

Significant 

Other 

Observable 

Inputs 

(Level 2)

Significant 

Unobservable 

Inputs

(Level 3)

Netting 

Adjustment

Estimated 

Fair Value

(Dollars in millions)

Financial assets:

Cash and cash equivalents, including 

restricted cash and cash equivalents $ 87,841 $ 32,991 $ 54,850 $ — $ — $ 87,841 

Securities purchased under agreements 

to resell 14,565 — 14,565 — — 14,565 

Trading securities 50,129 46,898 3,184 47 — 50,129 

Available-for-sale securities 696 — 62 634 — 696 

Mortgage loans held for sale 2,033 — 48 2,029 — 2,077 

Mortgage loans held for investment, net 

of allowance for loan losses 4,112,403 — 3,437,979 171,857 — 3,609,836 

Advances to lenders 1,502 — 1,502 — — 1,502 

Derivative assets at fair value 175 — 300 29 (154) 175 

Guaranty assets and buy-ups 87 — — 166 — 166 

Total financial assets $ 4,269,431 $ 79,889 $ 3,512,490 $ 174,762 $ (154) $ 3,766,987 

Financial liabilities:

Short-term debt:

Of Fannie Mae $ 10,204 $ — $ 10,208 $ — $ — $ 10,208 

Long-term debt:

Of Fannie Mae 123,964 — 122,066 558 — 122,624 

Of consolidated trusts 4,087,720 — 3,511,958 42,150 — 3,554,108 

Derivative liabilities at fair value 168 — 4,764 66 (4,662) 168 

Guaranty obligations 94 — — 66 — 66 

Total financial liabilities $ 4,222,150 $ — $ 3,648,996 $ 42,840 $ (4,662) $ 3,687,174 

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-80
As of December 31, 2021

Carrying 

Value

Quoted 

Prices in 

Active 

Markets for 

Identical 

Assets 

(Level 1)

Significant 

Other 

Observable 

Inputs 

(Level 2)

Significant 

Unobservable 

Inputs

 (Level 3)

Netting 

Adjustment

Estimated 

Fair Value

(Dollars in millions)

Financial assets:

Cash and cash equivalents, including 

restricted cash and cash equivalents $ 108,631 $ 64,531 $ 44,100 $ — $ — $ 108,631 

Securities purchased under agreements 

to resell 20,743 — 20,743 — — 20,743 

Trading securities 88,206 83,581 4,568 57 — 88,206 

Available-for-sale securities 837 — 84 753 — 837 

Mortgage loans held for sale 5,134 — 178 5,307 — 5,485 

Mortgage loans held for investment, net 

of allowance for loan losses 3,963,108 — 3,796,917 209,090 — 4,006,007 

Advances to lenders 8,414 — 8,413 1 — 8,414 

Derivative assets at fair value 171 — 256 152 (237) 171 

Guaranty assets and buy-ups 92 — — 207 — 207 

Total financial assets $ 4,195,336 $ 148,112 $ 3,875,259 $ 215,567 $ (237) $ 4,238,701 

Financial liabilities:

Short-term debt:

Of Fannie Mae $ 2,795 $ — $ 2,795 $ — $ — $ 2,795 

Long-term debt:

Of Fannie Mae 198,097 — 205,142 799 — 205,941 

Of consolidated trusts 3,957,299 — 3,951,537 32,644 — 3,984,181 

Derivative liabilities at fair value 233 — 1,385 21 (1,173) 233 

Guaranty obligations 101 — — 101 — 101 

Total financial liabilities $ 4,158,525 $ — $ 4,160,859 $ 33,565 $ (1,173) $ 4,193,251 

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-81
The following is a description of the valuation techniques we use for fair value measurement of our financial instruments 

as well as our basis for classifying these measurements as Level 1, Level 2 or Level 3 of the valuation hierarchy in 

certain specific situations.

Instruments Description Classification

Financial Instruments 

for which Fair Value 

Approximates Carrying 

Value

We hold certain financial instruments that are not carried at fair value but for which the carrying 

value approximates fair value due to the short-term nature and negligible credit risk inherent in 

them. These financial instruments include cash and cash equivalents, the majority of advances to 

lenders, and securities sold/purchased under agreements to repurchase/resell. 

Level 1 and 2

Securities Sold/

Purchased Under 

Agreements to 

Repurchase/Resell

The carrying value for the majority of these specific instruments approximates the fair value due to 

the short-term nature and the negligible inherent credit risk, as they involve the exchange of 

collateral that is easily traded. Were we to calculate the fair value of these instruments, we would 

use observable inputs.

Level 2

Mortgage Loans Held 

for Sale

Loans are reported at the lower of cost or fair value in our consolidated balance sheets. The 

valuation methodology and inputs used in estimating the fair value of HFS loans are the same as 

for our HFI loans and are described under “Fair Value Measurement—Mortgage Loans Held for 

Investment” in the valuation techniques for assets and liabilities held at fair value table. To the 

extent that significant inputs are unobservable, the loans are classified within Level 3 of the 

valuation hierarchy.

Level 2 and 3

Mortgage Loans Held 

for Investment

For a description of loan valuation techniques, refer to “Fair Value Measurement—Mortgage Loans 

Held for Investment” in the valuation techniques for assets and liabilities held at fair value table. We 

measure the fair value of certain loans that are delivered under the Home Affordable Refinance 

Program® (“HARP®”) using a modified build-up approach while the loan is performing. Under this 

modified approach, we set the credit component of the consolidated loans (that is, the guaranty 

obligation) equal to the compensation we would currently receive for a loan delivered to us under 

the program because the total compensation for these loans is equal to their current exit price in 

the government-sponsored enterprise securitization market. If, subsequent to delivery, the 

refinanced loan becomes past due or is modified, the fair value of the guaranty obligation is then 

measured consistent with other loans that have similar characteristics.

Level 2 and 3

Advances to Lenders The carrying value for the majority of our advances to lenders approximates the fair value due to 

the short-term nature and the negligible inherent credit risk. If we were to calculate the fair value of 

these instruments, we would use discounted cash flow models that use observable inputs such as 

spreads based on market assumptions, resulting in Level 2 classification. Advances to lenders also 

include loans that do not qualify for Fannie Mae MBS securitization and are valued using a 

discounted cash flow technique that uses estimated credit spreads of similar collateral and 

prepayment speeds that consider recent prepayment activity. We classify these valuations as Level 

3 given that significant inputs are not observable or are determined by extrapolation of observable 

inputs.

Level 2 and 3

Guaranty Assets and 

Buy-ups

Guaranty assets related to our portfolio securitizations are recorded in our consolidated balance 

sheets at fair value on a recurring basis and are classified as Level 3. Guaranty assets in lender 

swap transactions are recorded in our consolidated balance sheets at the lower of cost or fair 

value. These assets, which are measured at fair value on a nonrecurring basis, are also classified 

as Level 3.

We estimate the fair value of guaranty assets by using proprietary models to project cash flows 

based on management’s best estimate of key assumptions such as prepayment speeds and 

forward yield curves. Because guaranty assets are similar to an interest-only income stream, the 

projected cash flows are discounted at rates that consider the current spreads on interest-only 

swaps that reference Fannie Mae MBS and also liquidity considerations of the guaranty assets. 

The fair value of guaranty assets includes the fair value of any associated buy-ups.

Level 3

Guaranty Obligations The fair value of all guaranty obligations, measured subsequent to their initial recognition, is our 

estimate of a hypothetical transaction price we would receive if we were to issue our guaranty to an 

unrelated party in a standalone arm’s-length transaction at the measurement date. The valuation 

methodology and inputs used in estimating the fair value of the guaranty obligations are described 

under “Fair Value Measurement—Mortgage loans held for investment—build-up” in the valuation 

techniques for assets and liabilities held at fair value. 

Level 3

Fair Value Option

We elect the fair value option for loans and debt that contain embedded derivatives that would otherwise require 

bifurcation. Under the fair value option, we elected to carry these instruments at fair value instead of bifurcating the 

embedded derivative from such instruments. 

Interest income for the mortgage loans is recorded in “Interest income: Mortgage loans” and interest expense for the 

debt instruments is recorded in “Interest expense: Long-term debt” in our consolidated statements of operations and 

comprehensive income. 

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-82
The following table displays the fair value and unpaid principal balance of the financial instruments for which we have 

made fair value elections.

As of December 31,

2022 2021

Loans(1)

Long-Term 

Debt of 

Fannie Mae

Long-Term 

Debt of 

Consolidated 

Trusts Loans(1)

Long-Term 

Debt of 

Fannie Mae

Long-Term 

Debt of 

Consolidated 

Trusts

(Dollars in millions)

Fair value $ 3,645 $ 1,161 $ 16,260 $ 4,964 $ 2,381 $ 21,735 

Unpaid principal balance 3,835 1,145 16,311 4,601 2,197 19,314 

(1) Includes nonaccrual loans with a fair value of $40 million and $86 million as of December 31, 2022 and 2021, respectively. Includes loans 

that are 90 days or more past due with a fair value of $48 million and $125 million as of December 31, 2022 and 2021, respectively.

Changes in Fair Value under the Fair Value Option Election

We recorded losses of $503 million and gains of $28 million and $263 million for the years ended December 31, 2022, 

2021 and 2020, respectively, from changes in the fair value of loans recorded at fair value in “Fair value gains (losses), 

net” in our consolidated statements of operations and comprehensive income.

We recorded gains of $2.3 billion and $631 million and losses of $432 million for the years ended December 31, 2022, 

2021 and 2020, respectively, from changes in the fair value of long-term debt recorded at fair value in “Fair value gains 

(losses), net” in our consolidated statements of operations and comprehensive income.

16. Commitments and Contingencies

We are party to various types of legal actions and proceedings, including actions brought on behalf of various classes of 

claimants. We also are subject to regulatory examinations, inquiries and investigations, and other information gathering 

requests. In some of the matters, indeterminate amounts are sought. Modern pleading practice in the U.S. permits 

considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to 

specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to 

invoke the jurisdiction of the trial court. This variability in pleadings, together with our and our counsel’s actual 

experience in litigating or settling claims, leads us to conclude that the monetary relief that may be sought by plaintiffs 

bears little relevance to the merits or disposition value of claims. 

We have substantial and valid defenses to the claims in the proceedings described below and intend to defend these 

matters vigorously. However, legal actions and proceedings of all types are subject to many uncertain factors that 

generally cannot be predicted with assurance. Accordingly, the outcome of any given matter and the amount or range of 

potential loss at particular points in time is frequently difficult to ascertain. Uncertainties can include how fact finders will 

evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how the court will apply 

the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel may view 

the evidence and applicable law. 

On a quarterly basis, we review relevant information about all pending legal actions and proceedings for the purpose of 

evaluating and revising our contingencies, accruals and disclosures. We establish an accrual only for matters when the 

likelihood of a loss is probable and we can reasonably estimate the amount of such loss. We are often unable to 

estimate the possible losses or ranges of losses, particularly for proceedings that are in their early stages of 

development, where plaintiffs seek indeterminate or unspecified damages, where there may be novel or unsettled legal 

questions relevant to the proceedings, or where settlement negotiations have not occurred or progressed. Given the 

uncertainties involved in any action or proceeding, regardless of whether we have established an accrual, the ultimate 

resolution of certain of these matters may be material to our operating results for a particular period, depending on, 

among other factors, the size of the loss or liability imposed and the level of our net income or loss for that period.

In addition to the matters specifically described below, we are involved in a number of legal and regulatory proceedings 

that arise in the ordinary course of business that we do not expect will have a material impact on our business or 

financial condition.

Notes to Consolidated Financial Statements | Fair Value

Fannie Mae (In conservatorship) 2022 Form 10-K F-83
Senior Preferred Stock Purchase Agreements Litigation

A consolidated class action (“In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action 

Litigations”) and a non-class action lawsuit, Fairholme Funds v. FHFA, filed by Fannie Mae and Freddie Mac 

shareholders against us, FHFA as our conservator, and Freddie Mac are pending in the U.S. District Court for the 

District of Columbia. The lawsuits challenge the August 2012 amendment to each company’s senior preferred stock 

purchase agreement with Treasury. 

Plaintiffs in these lawsuits allege that the net worth sweep dividend provisions of the senior preferred stock that were 

implemented pursuant to the August 2012 amendments nullified certain of the shareholders’ rights and caused them 

harm. Plaintiffs in the class action represent a class of Fannie Mae preferred shareholders and classes of Freddie Mac 

common and preferred shareholders. On September 23, 2022, the court issued a summary judgment ruling that 

permitted the plaintiffs in these lawsuits to present to a jury their claims for breach of the implied covenant of good faith 

and fair dealing. The cases were consolidated for trial and the trial was conducted from October 17, 2022 to November 

1, 2022. The jury was not able to reach a verdict and the judge declared a mistrial on November 7, 2022. A new trial is 

scheduled to begin on July 24, 2023.

In the trial, plaintiffs requested $779 million in damages from Fannie Mae and prejudgment interest on the amount of 

any damages. We estimate that prejudgment interest, if awarded in the new trial, would be calculated at a rate of 5.75%

and expect plaintiffs to seek such interest from August 17, 2012. Prejudgment interest calculated from August 17, 2012 

through December 31, 2022 based on the amount of damages plaintiffs requested would be approximately $460 million. 

The ultimate amount of prejudgment interest awarded, if any, would be impacted by the amount of damages awarded, 

the date from and through which interest is calculated, and other determinations by the court. At this time, we do not 

believe the likelihood of loss is probable; therefore, we have not established an accrual in connection with these 

lawsuits. However, it is reasonably possible that the plaintiffs could ultimately prevail in this matter and, if so, we may 

incur a loss up to the amount of damages discussed above and any related interest. 

Unconditional Purchase and Lease Commitments 

We have unconditional commitments related to the purchase of loans and mortgage-related securities. These include 

both on- and off-balance sheet commitments. A portion of these have been recorded as derivatives in our consolidated 

balance sheets. 

We lease certain premises and equipment under agreements that expire at various dates through August 31, 2037. 

Some of these leases provide for payment by the lessee of property taxes, insurance premiums, cost of maintenance 

and other costs. Rent expenses for operating leases were $101 million, $108 million and $94 million for the years ended 

December 31, 2022, 2021 and 2020, respectively.

The following table summarizes by remaining maturity, non-cancelable future commitments related to loan and 

mortgage purchases, operating leases and other agreements.

As of December 31, 2022

Loans and 

MortgageRelated 

Securities(1)

Operating 

Leases(2) Other(3)

(Dollars in millions)

2023 $ 21,117 $ 79 $ 193 

2024 — 80 49 

2025 — 82 19 

2026 — 83 7 

2027 — 84 1 

Thereafter — 657 — 

Total $ 21,117 $ 1,065 $ 269 

(1) Primarily includes mortgage commitment derivatives.

(2) Includes amounts related to office buildings and equipment leases.

(3) Includes purchase commitments for certain telecommunications services, computer software and services, and other agreements and 

commitments.

Notes to Consolidated Financial Statements | Commitments and Contingencies

Fannie Mae (In conservatorship) 2022 Form 10-K F-84