Third Quarter 2015 Results 1

Resource Center: 1-800-732-6643 

Contact: Pete Bakel

202-752-2034

Date: November 5, 2015

Fannie Mae Reports Net Income of $2.0 Billion and 

Comprehensive Income of $2.2 Billion for Third Quarter 2015

• Fannie Mae reported net income of $2.0 billion and comprehensive income of $2.2 billion for the 

third quarter of 2015. 

• Fannie Mae expects to pay $2.2 billion in dividends to Treasury in December 2015. With the 

expected December dividend payment, the company will have paid a total of $144.8 billion in 

dividends to Treasury. Dividend payments do not reduce prior Treasury draws, which total $116.1 

billion since 2008.

• Fannie Mae provided approximately $132 billion in liquidity to the mortgage market in the third 

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

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

approximately 29,000 workout solutions in the third quarter of 2015 using a combination of Fannie 

Mae’s proprietary programs as well as government sponsored programs.

• Fannie Mae has increased the role of private capital in the mortgage market and reduced taxpayer 

risk through its Connecticut Avenue SecuritiesTM (CAS) and Credit Insurance Risk TransferTM

(CIRT

TM) transactions. Since October 2013, these transactions have transferred to the private 

market a significant portion of the credit risk on single-family mortgage loans with an unpaid 

principal balance of approximately $464 billion.

WASHINGTON, DC — Fannie Mae (FNMA/OTC) reported net income of $2.0 billion for the third 

quarter of 2015 and comprehensive income of $2.2 billion. The company reported a positive net worth of 

$4.0 billion as of September 30, 2015 resulting in a dividend obligation to Treasury of $2.2 billion, which 

the company expects to pay in December 2015.

Fannie Mae’s net income of $2.0 billion and comprehensive income of $2.2 billion for the third quarter of 

2015 compares to net income of $4.6 billion and comprehensive income of $4.4 billion for the second 

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

income, in the third quarter of 2015.

Fannie Mae recognized a provision for federal income taxes of $1.1 billion for the third quarter of 2015, 

reflecting an effective tax rate of 35 percent.

“I am proud of Fannie Mae’s leadership in bringing positive change to the housing finance system. We are 

delivering innovative technology to lenders to help them originate loans with greater certainty and 

efficiency, while we continue to transfer a significant amount of credit risk to private capital to better 

protect taxpayers,” said Timothy J. Mayopoulos, president and chief executive officer. “Our strong 

financial results punctuate the ongoing improvements we have made to give our partners the clarity they 

need to lend with confidence and help more families get a mortgage they can afford.”
Third Quarter 2015 Results 2

SUMMARY OF THIRD QUARTER 2015 RESULTS

(Dollars in millions) 3Q15 2Q15 Variance 3Q15 3Q14 Variance

Net interest income $ 5,588 $ 5,677 $ (89) $ 5,588 $ 5,184 $ 404

Fee and other income 259 556 (297) 259 826 (567)

Net revenues 5,847 6,233 (386) 5,847 6,010 (163)

Investment gains, net 299 514 (215) 299 171 128

Fair value gains (losses), net (2,589) 2,606 (5,195) (2,589) (207) (2,382)

Administrative expenses (952) (689) (263) (952) (706) (246)

Credit-related income (expense)

Benefit (provision) for credit losses 1,550 (1,033) 2,583 1,550 1,085 465

Foreclosed property expense (497) (182) (315) (497) (249) (248)

Total credit-related income (expense) 1,053 (1,215) 2,268 1,053 836 217

Temporary Payroll Tax Cut Continuation Act of 2011

(“TCCA”) fees (413) (397) (16) (413) (351) (62)

Other non-interest expenses(1) (215) (202) (13) (215) (61) (154)

Net gains (losses) and income (expenses) (2,817) 617 (3,434) (2,817) (318) (2,499)

Income before federal income taxes 3,030 6,850 (3,820) 3,030 5,692 (2,662)

Provision for federal income taxes (1,070) (2,210) 1,140 (1,070) (1,787) 717

Net income attributable to Fannie Mae $ 1,960 $ 4,640 $ (2,680) $ 1,960 $ 3,905 $ (1,945)

Total comprehensive income attributable to Fannie Mae $ 2,213 $ 4,359 $ (2,146) $ 2,213 $ 4,000 $ (1,787)

Dividends distributed or available for distribution to

senior preferred stockholder $ (2,202) $ (4,359) $ 2,157 $ (2,202) $ (3,999) $ 1,797

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

Net revenues, which consist of net interest income and fee and other income, were $5.8 billion for the 

third quarter of 2015, compared with $6.2 billion for the second quarter of 2015. 

Net interest income, which includes guaranty fee revenue, was $5.6 billion for the third quarter of 2015

compared with $5.7 billion for the second quarter of 2015. Net interest income for the third quarter was 

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

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

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

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

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

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

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

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

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

the second quarter of 2015. Fair value losses for the third quarter of 2015 were due primarily to decreases 

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

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

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

activity related to these financial instruments. 

Credit-related income, which consists of a benefit for credit losses and foreclosed property expense, was 

$1.1 billion in the third quarter of 2015, compared with credit-related expense of $1.2 billion in the second 

quarter of 2015. Credit-related income in the third quarter of 2015 was due to a benefit for credit losses for 

the quarter driven primarily by an increase in home prices and a decrease in mortgage interest rates during 

the quarter, partially offset by foreclosed property expense. 
Third Quarter 2015 Results 4

VARIABILITY OF FINANCIAL RESULTS 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SUMMARY OF THIRD QUARTER 2015 BUSINESS SEGMENT RESULTS

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

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

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

the U.S. housing market recover.

(Dollars in millions) 3Q15 2Q15 Variance 3Q15 3Q14 Variance

Single-Family Segment:

Guaranty fee income(1) $ 3,145 $ 3,092 $ 53 $ 3,145 $ 2,945 $ 200

Credit-related income (expense) 1,029 (1,238) 2,267 1,029 748 281

TCCA fees(1) (413) (397) (16) (413) (351) (62)

Other expense, net(2) (682) (412) (270) (682) (443) (239)

Income before federal income taxes 3,079 1,045 2,034 3,079 2,899 180

Provision for federal income taxes (1,040) (419) (621) (1,040) (837) (203)

Net income $ 2,039 $ 626 $ 1,413 $ 2,039 $ 2,062 $ (23)

Multifamily Segment:

Guaranty fee income $ 367 $ 357 $ 10 $ 367 $ 332 $ 35

Credit-related income 24 23 1 24 88 (64)

Other(3) (50) 27 (77) (50) 1 (51)

Income before federal income taxes 341 407 (66) 341 421 (80)

Provision for federal income taxes (17) (41) 24 (17) (37) 20

Net income $ 324 $ 366 $ (42) $ 324 $ 384 $ (60)

Capital Markets Segment:

Net interest income $ 1,401 $ 1,513 $ (112) $ 1,401 $ 1,845 $ (444)

Investment gains, net 1,608 1,562 46 1,608 1,516 92

Fair value gains (losses), net (2,697) 2,555 (5,252) (2,697) (335) (2,362)

Other(4) (322) (230) (92) (322) 169 (491)

Income (loss) before federal income taxes (10) 5,400 (5,410) (10) 3,195 (3,205)

Provision for federal income taxes (13) (1,750) 1,737 (13) (913) 900

Net income (loss) $ (23) $ 3,650 $ (3,673) $ (23) $ 2,282 $ (2,305)

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

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

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

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

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

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

Single-Family Business

• Single-Family net income was $2.0 billion in the third quarter of 2015, compared with $626 million in 

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

fee income and credit-related income.

• Single-Family guaranty fee income was $3.1 billion in both the third quarter of 2015 and the second 

quarter of 2015. 
Third Quarter 2015 Results 6

• The Single-Family guaranty book of business was $2.83 trillion as of both September 30, 2015 and 

June 30, 2015. 

• Single-Family credit-related income was $1.0 billion in the third quarter of 2015, compared with 

credit-related expense of $1.2 billion in the second quarter of 2015. Credit-related income in the third 

quarter of 2015 was due to a benefit for credit losses for the quarter driven primarily by an increase in 

home prices and a decrease in mortgage interest rates during the quarter, partially offset by foreclosed 

property expense. 

Multifamily Business

• Multifamily net income was $324 million in the third quarter of 2015, compared with $366 million in 

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

by guaranty fee income.

• Multifamily guaranty fee income was $367 million for the third quarter of 2015, compared with $357 

million for the second quarter of 2015. Multifamily guaranty fee income increased in the third quarter 

of 2015 compared with the second quarter of 2015 as loans with higher guaranty fees have become a 

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

fees continue to liquidate. 

• The Multifamily guaranty book of business was $212.1 billion as of September 30, 2015, compared 

with $213.2 billion as of June 30, 2015.

Capital Markets

• Capital Markets had a net loss of $23 million in the third quarter of 2015, compared with net income 

of $3.7 billion in the second quarter of 2015. Capital Markets’ net loss in the third quarter of 2015 was 

driven primarily by net fair value losses, partially offset by net interest income and net investment 

gains.

• Capital Markets net fair value losses were $2.7 billion in the third quarter of 2015, compared with net 

fair value gains of $2.6 billion in the second quarter of 2015. Net fair value losses for the third quarter 

of 2015 were due primarily to fair value losses on risk management derivatives driven by decreases in 

longer-term interest rates during the quarter.

• Capital Markets net investment gains were $1.6 billion in both the third quarter of 2015 and the second 

quarter of 2015. Net investment gains for the third quarter of 2015 were due primarily to the sale of 

mortgage-related securities during the quarter.

• Capital Markets net interest income was $1.4 billion for the third quarter of 2015, compared with $1.5 

billion for the second quarter of 2015. Net interest income was driven primarily by interest earned on 

the retained mortgage portfolio.

• Capital Markets retained mortgage portfolio balance decreased to $370.5 billion as of September 30, 

2015, compared with $390.3 billion as of June 30, 2015, resulting from purchases of $67.7 billion and 

sales and liquidations of $87.6 billion during the third quarter of 2015. 
Third Quarter 2015 Results 7

BUILDING A SUSTAINABLE HOUSING FINANCE SYSTEM

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

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

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

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

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

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

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

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

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

ABOUT FANNIE MAE’S CONSERVATORSHIP

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

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

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

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

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

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

cumulative draws totaling $116.1 billion and paid $142.5 billion in dividends to Treasury. Under the 

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

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

stock. 

Treasury Draws and Dividend Payments

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

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

not offset prior Treasury draws.

(2) Fannie Mae expects to pay a dividend for the fourth quarter of 2015 calculated based on the company’s net worth of $4.0 billion as 

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

(3) Amounts may not sum due to rounding.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2014.

CREDIT QUALITY

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

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

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

sustainable homeownership and stability in the housing market. Fannie Mae actively monitors on an 

ongoing basis the credit risk profile and credit performance of the company’s single-family loan 

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

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

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

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

original loan-to-value ratio of 75 percent.

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

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

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

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

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

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

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

The single-family serious delinquency rate for Fannie Mae’s book of business has decreased for 22 

consecutive quarters since the first quarter of 2010, and was 1.59 percent as of September 30, 2015, 

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

solutions, foreclosure alternatives and completed foreclosures, improved loan payment performance, as 

well as the company’s acquisition of loans with stronger credit profiles since the beginning of 2009. The 

company’s single-family serious delinquency rate and the period of time that loans remain seriously 

delinquent continue to be negatively impacted by the length of time required to complete a foreclosure in 

some states. High levels of foreclosures, changes in state foreclosure laws, new federal and state servicing 

requirements imposed by regulatory actions and legal settlements, and the need for servicers to adapt to 

these changes have lengthened the time it takes to foreclose on a mortgage loan in a number of states, 

particularly in New York, Florida, and New Jersey. Other factors such as the pace of loan modifications, 

the timing and volume of future sales the company makes of nonperforming loans, changes in home 

prices, unemployment levels, and other macroeconomic conditions also influence serious delinquency 

rates. 

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

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

loans, decreased to $30.0 billion as of September 30, 2015 from $32.1 billion as of June 30, 2015. The 

company’s loss reserves have declined substantially from their peak and are expected to decline further. 
Third Quarter 2015 Results 10

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET

Liquidity

Fannie Mae provided approximately $132 billion in liquidity to the mortgage market in the third quarter of 

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

approximately: 

• 297,000 home purchases 

• 275,000 mortgage refinancings 

• 118,000 units of multifamily housing 

The company was one of the largest issuers of single-family mortgage-related securities in the secondary 

market in the third quarter of 2015, with an estimated market share of new single-family mortgage-related 

securities issuances of 36 percent, compared with 37 percent in the second quarter of 2015 and 38 percent 

in the third quarter of 2014. The company’s market share decreased in the third quarter of 2015 compared 

with the second quarter of 2015 primarily as a result of competition from Ginnie Mae.

Fannie Mae also remained a continuous source of liquidity in the multifamily market. As of June 30, 2015 

(the latest date for which information is available), the company owned or guaranteed approximately 19

percent of the outstanding debt on multifamily properties.

Refinancing Initiatives

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

borrowers and includes HARP, the company acquired approximately 45,000 loans in the third quarter of 

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

borrowers’ monthly mortgage payments by an average of $182. The company expects the volume of 

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

loans that have high LTV ratios who are willing to refinance and would benefit from refinancing.
Third Quarter 2015 Results 11

Home Retention Solutions and Foreclosure Alternatives

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

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

such as loan modifications. 

For the Nine Months Ended September 30,

2015 2014

Unpaid

Principal

Balance

Number of

Loans

Unpaid

Principal

Balance

Number of

Loans

(Dollars in millions)

Home retention solutions:

Modifications $12,560 75,113 $ 16,425 96,915

Repayment plans and forbearances completed 667 4,795 752 5,607

Total home retention solutions 13,227 79,908 17,177 102,522

Foreclosure alternatives:

Short sales 2,396 11,593 3,866 18,691

Deeds-in-lieu of foreclosure 895 5,723 1,414 8,944

Total foreclosure alternatives 3,291 17,316 5,280 27,635

Total loan workouts $16,518 97,224 $ 22,457 130,157

Loan workouts as a percentage of single-family guaranty book of business 0.78% 0.75% 1.05% 0.99%

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

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

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

alternatives.

• Fannie Mae provided approximately 29,000 loan workouts during the third quarter of 2015

enabling borrowers to avoid foreclosure.

• Fannie Mae completed approximately 22,000 loan modifications during the third quarter of 2015.
Third Quarter 2015 Results 12

FORECLOSURES AND REO

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

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

can hurt local home values and destabilize communities.

For the Nine Months Ended September 30,

2015 2014

Single-family foreclosed properties (number of properties):

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

Total properties acquired through foreclosure 61,886 91,372

Dispositions of REO (87,991) (102,215)

End of period inventory of single-family foreclosed properties (REO) 60,958 92,386

Carrying value of single-family foreclosed properties (dollars in millions) $ 7,245 $ 10,209

Single-family foreclosure rate 0.48% 0.70%

• Fannie Mae acquired 17,725 single-family REO properties, primarily through foreclosure, in the 

third quarter of 2015, compared with 19,845 in the second quarter of 2015. 

• As of September 30, 2015, the company’s inventory of single-family REO properties was 60,958, 

compared with 68,717 as of June 30, 2015. The carrying value of the company’s single-family 

REO was $7.2 billion as of September 30, 2015.

• The company’s single-family foreclosure rate was 0.48 percent for the nine months ended 

September 30, 2015. This reflects the annualized total number of single-family properties acquired 

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

Fannie Mae’s single-family guaranty book of business.

Fannie Mae’s financial statements for the third quarter of 2015 are available in the accompanying Annex; 

however, investors and interested parties should read the company’s Third Quarter 2015 Form 10-Q, 

which was filed today with the Securities and Exchange Commission and is available on Fannie Mae’s 

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

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

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

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

Supplement” at www.fanniemae.com.

# # #

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

statements regarding: its future dividend payments to Treasury; the impact of the company’s credit risk transfer transactions; the sources of its 

future net interest income; the company’s future profitability; the level of the company’s earnings in 2015 and future years as compared with 

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

affect the company’s future financial results; the factors that will affect the company’s future single-family serious delinquency rates; the 

future volume of its HARP refinancings; the future fair value of the company’s financial instruments; the company’s future loss reserves; and 

the impact of the company’s actions to reduce credit losses. These estimates, forecasts, expectations, and statements are forward-looking 

statements based on the company’s current assumptions regarding numerous factors, including future interest rates and home prices, the 

future performance of its loans and the future guaranty fee rates applicable to the loans the company acquires. Actual results, and future 

projections, could be materially different from what is set forth in the forward-looking statements as a result of: home price changes; interest 

rate changes; unemployment rates; other macroeconomic and housing market variables; the company’s future serious delinquency rates; the 

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

government policy; credit availability; changes in borrower behavior, including increases in the number of underwater borrowers who 
Third Quarter 2015 Results 13

strategically default on their mortgage loans; the volume of loans it modifies; the effectiveness of its loss mitigation strategies; significant 

changes in modification and foreclosure activity; the volume and pace of future nonperforming loan sales and their impact on the company’s 

results and serious delinquency rates; the effectiveness of its management of its real estate owned inventory and pursuit of contractual 

remedies; changes in the fair value of its assets and liabilities; future legislative or regulatory requirements or changes that have a significant 

impact on the company’s business, such as a requirement that the company implement a principal forgiveness program or the enactment of 

housing finance reform legislation; future updates to the company’s models relating to loss reserves, including the assumptions used by these 

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

counterparties meet their obligations in full; effects from activities the company takes to support the mortgage market and help borrowers; 

the company’s future objectives and activities in support of those objectives, including actions the company may take to reach additional 

underserved creditworthy borrowers; actions the company may be required to take by FHFA, as its conservator or as its regulator, such as 

changes in the type of business the company does or the implementation of a single GSE security; the conservatorship and its effect on the 

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

the company faces in retaining and hiring qualified employees; the deteriorated credit performance of many loans in the company’s guaranty 

book of business; a decrease in the company’s credit ratings; defaults by one or more institutional counterparties; resolution or settlement 

agreements the company may enter into with its counterparties; operational control weaknesses; changes in the fiscal and monetary policies 

of the Federal Reserve, including any change in the Federal Reserve’s policy toward the reinvestment of principal payments of mortgagebacked securities or any future sales of such securities; changes in the structure and regulation of the financial services industry; the 

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

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

natural disasters, terrorist attacks, pandemics, or other major disruptive events; information security breaches; and many other factors, 

including those discussed in the “Risk Factors” section of and elsewhere in the company’s annual report on Form 10-K for the year ended 

December 31, 2014 and the company’s quarterly report on Form 10-Q for the quarter ended September 30, 2015, and elsewhere in this 

release.

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

Web sites is not part of this release. 

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

Visit us at www.fanniemae.com/progress

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

ANNEX

FANNIE MAE

(In conservatorship)

Condensed Consolidated Balance Sheets — (Unaudited)

(Dollars in millions, except share amounts)

As of

September 30, December 31,

2015 2014

ASSETS

Cash and cash equivalents $ 19,915 $ 22,023

Restricted cash (includes $25,809 and $27,515, respectively, related to consolidated trusts) 30,281 32,542

Federal funds sold and securities purchased under agreements to resell or similar arrangements 26,600 30,950

Investments in securities:

Trading, at fair value 38,009 31,504

Available-for-sale, at fair value (includes $351 and $596, respectively, related to consolidated trusts) 22,007 30,654

Total investments in securities 60,016 62,158

Mortgage loans:

Loans held for sale, at lower of cost or fair value 3,716 331

Loans held for investment, at amortized cost:

Of Fannie Mae 241,294 272,360

Of consolidated trusts 2,804,581 2,782,344

Total loans held for investment (includes $14,605 and $15,629, respectively, at fair value) 3,045,875 3,054,704

Allowance for loan losses (29,135) (35,541)

Total loans held for investment, net of allowance 3,016,740 3,019,163

Total mortgage loans 3,020,456 3,019,494

Accrued interest receivable, net (includes $7,371 and $7,169, respectively, related to consolidated trusts) 8,137 8,193

Acquired property, net 7,691 10,618

Deferred tax assets, net 39,012 42,206

Other assets 18,674 19,992

Total assets $ 3,230,782 $ 3,248,176

LIABILITIES AND EQUITY

Liabilities:

Accrued interest payable (includes $8,156 and $8,282, respectively, related to consolidated trusts) $ 10,016 $ 10,232

Federal funds purchased and securities sold under agreements to repurchase 118 50

Debt:

Of Fannie Mae (includes $9,975 and $6,403, respectively, at fair value) 417,458 460,443

Of consolidated trusts (includes $23,143 and $19,483, respectively, at fair value) 2,788,787 2,761,712

Other liabilities (includes $426 and $503, respectively, related to consolidated trusts) 10,400 12,019

Total liabilities 3,226,779 3,244,456

Commitments and contingencies — —

Fannie Mae stockholders’ equity:

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

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

Common stock, no par value, no maximum authorization—1,308,762,703 shares issued and 1,158,082,750 shares

outstanding 687 687

Accumulated deficit (127,206) (127,618)

Accumulated other comprehensive income 1,613 1,733

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

Total Fannie Mae stockholders’ equity 3,972 3,680

Noncontrolling interest 31 40

Total equity 4,003 3,720

Total liabilities and equity $ 3,230,782 $ 3,248,176

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

FANNIE MAE

(In conservatorship)

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

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

For the Three Months For the Nine Months

Ended September 30, Ended September 30,

2015 2014 2015 2014

Interest income:

Trading securities $ 99 $ 151 $ 330 $ 421

Available-for-sale securities 261 395 931 1,249

Mortgage loans (includes $24,537 and $25,217, respectively, for the three months ended and

$73,426 and $76,704, respectively, for the nine months ended related to consolidated

trusts) 26,980 27,779 80,706 84,532

Other 37 29 104 77

Total interest income 27,377 28,354 82,071 86,279

Interest expense:

Short-term debt 37 26 99 67

Long-term debt (includes $19,891 and $21,094, respectively, for the three months ended and

$59,934 and $64,862, respectively, for the nine months ended related to consolidated

trusts) 21,752 23,144 65,640 71,386

Total interest expense 21,789 23,170 65,739 71,453

Net interest income 5,588 5,184 16,332 14,826

Benefit for credit losses 1,550 1,085 1,050 3,498

Net interest income after benefit for credit losses 7,138 6,269 17,382 18,324

Investment gains, net 299 171 1,155 749

Fair value losses, net (2,589) (207) (1,902) (2,331)

Debt extinguishment gains (losses), net (11) 11 — 49

Fee and other income 259 826 1,123 5,564

Non-interest income (loss) (2,042) 801 376 4,031

Administrative expenses:

Salaries and employee benefits 317 337 999 981

Professional services 219 263 741 780

Occupancy expenses 43 47 129 144

Other administrative expenses 373 59 495 170

Total administrative expenses 952 706 2,364 2,075

Foreclosed property expense (income) 497 249 1,152 (227)

Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees 413 351 1,192 1,008

Other expenses, net 204 72 412 479

Total expenses 2,066 1,378 5,120 3,335

Income before federal income taxes 3,030 5,692 12,638 19,020

Provision for federal income taxes (1,070) (1,787) (4,150) (6,123)

Net income 1,960 3,905 8,488 12,897

Other comprehensive income (loss):

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

adjustments and taxes (177) 63 (548) 480

Other 430 32 428 32

Total other comprehensive income (loss) 253 95 (120) 512

Total comprehensive income 2,213 4,000 8,368 13,409

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

Total comprehensive income attributable to Fannie Mae $ 2,213 $ 4,000 $ 8,368 $ 13,408

Net income $ 1,960 $ 3,905 $ 8,488 $ 12,897

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

Net income attributable to Fannie Mae 1,960 3,905 8,488 12,896

Dividends available for distribution to senior preferred stockholder (2,202) (3,999) (8,357) (13,403)

Net income (loss) attributable to common stockholders $ (242) $ (94) $ 131 $ (507)

Earnings (loss) per share:

Basic (0.04) (0.02) 0.02 (0.09)

Diluted (0.04) (0.02) 0.02 (0.09)

Weighted-average common shares outstanding:

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

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

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

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Cash Flows— (Unaudited)

(Dollars in millions)

For the Nine Months

Ended September 30,

2015 2014

Net cash provided by (used in) operating activities $ (6,375) $ 960

Cash flows provided by investing activities:

Proceeds from maturities and paydowns of trading securities held for investment 633 1,046

Proceeds from sales of trading securities held for investment 1,028 1,241

Proceeds from maturities and paydowns of available-for-sale securities 3,477 4,505

Proceeds from sales of available-for-sale securities 6,919 2,461

Purchases of loans held for investment (146,577) (93,029)

Proceeds from repayments and sales of loans acquired as held for investment of Fannie Mae 21,460 19,765

Proceeds from repayments and sales of loans acquired as held for investment of consolidated trusts 376,169 281,787

Net change in restricted cash 2,261 477

Advances to lenders (92,345) (71,268)

Proceeds from disposition of acquired property and preforeclosure sales 16,306 19,533

Net change in federal funds sold and securities purchased under agreements to resell or similar arrangements 4,350 9,525

Other, net 103 (178)

Net cash provided by investing activities 193,784 175,865

Cash flows used in financing activities:

Proceeds from issuance of debt of Fannie Mae 337,748 284,266

Payments to redeem debt of Fannie Mae (381,487) (339,528)

Proceeds from issuance of debt of consolidated trusts 259,254 188,719

Payments to redeem debt of consolidated trusts (397,025) (296,612)

Payments of cash dividends on senior preferred stock to Treasury (8,075) (16,594)

Other, net 68 25

Net cash used in financing activities (189,517) (179,724)

Net decrease in cash and cash equivalents (2,108) (2,899)

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

Cash and cash equivalents at end of period $ 19,915 $ 16,329

Cash paid during the period for:

Interest $ 78,584 $ 81,947

Income taxes 470 2,475

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