PROGRESS REPORT

2012
2 |

We also recognize that we have an outsized role 

in the market. In a properly functioning housing 

market‚ Fannie Mae would play a smaller role. 

However‚ private capital is naturally opportunistic‚

participating when times are good and moving to 

the sidelines when conditions are bad. Almost fi ve 

years after the onset of the fi nancial crisis‚ we see 

limited evidence of substantial private capital ready 

to share mortgage credit risk. By keeping funds 

fl owing when other sources are not‚ we support 

the housing recovery‚ which strengthens the U.S. 

economy.

In addition to ensuring the availability of residential 

mortgage credit‚ we are committed to doing our 

part to improve the mortgage fi nance system. What 

does a better system look like? It strikes the right 

balance‚ providing access to mortgage credit while 

protecting society from too much risk. It off ers 

everyone more visibility up front and an ability 

to price for the risk that is inherent in mortgage 

fi nance. We are working to establish and implement 

industry standards‚ develop better tools to price 

and manage credit risk‚ build new infrastructure to 

ensure a liquid and effi cient market‚ and facilitate 

the collection and reporting of data for accurate 

fi nancial reporting and improved risk management. 

2012 MARKED A TURNING 

POINT AT FANNIE MAE‚

the year in which the fruits of four years of labor 

manifested in tremendous progress. We have taken 

actions to improve our fi nancial performance‚ build a 

profi table new book of business‚ and reduce losses on 

our legacy book. In 2012‚ we reported $17.2 billion in 

net income‚ the largest net income in the company’s 

history. Our profi ts go back to taxpayers. Through 

March 31‚ 2013‚ Fannie Mae paid taxpayers $35.6 

billion in dividends. We expect to remain profi table for 

the foreseeable future.

Fannie Mae today is about more than turning a 

profi t. We are an essentially diff erent company with 

diff erent leadership and our priorities are aligned 

with the public interest. We fi ll the indispensable 

role of enabling families to buy‚ refi nance‚ or 

rent a home. To do so‚ Fannie Mae has provided 

$3.3 trillion in mortgage credit since 2009. We 

appreciate that we could not fulfi ll this important 

role without taxpayer support.

MESSAGE

FROM

THE CEO
 PROGRESS REPORT | 3

Ultimately‚ we measure our progress not only by 

paying taxpayers and improving the housing fi nance 

system‚ but also by the diff erence we make in 

people’s lives. This is where the value we deliver 

and our values intersect. 

For example‚ we help families avoid foreclosure 

– more than 1.2 million since 2009. We work 

with mortgage servicers to reach at-risk 

homeowners early‚ helping them stay in their 

homes. Unfortunately‚ many properties still enter 

foreclosure and‚ as the investor‚ the homes come to 

us. In these cases‚ we help stabilize neighborhoods 

by caring for the properties we own and selling 

them for the highest possible price. This enables 

communities to rebound and the neighbors to 

rebuild equity more quickly.

Fannie Mae also provides opportunity for new 

homeownership‚ especially for middle-income 

families‚ and we enable millions of refi nances 

every year‚ which often result in a lower monthly 

mortgage payment. Between 2009 and 2012‚ Fannie 

Mae refi nanced more than 9.7 million mortgages‚

including more than 1.3 million loans refi nanced 

through the Home Aff ordable Refi nance Program 

(HARP). Borrowers who refi nance through HARP 

have an average weekly savings of approximately $82. 

This savings would more than pay for the average 

household’s weekly clothing costs or about 50 

percent of a household’s weekly food consumption. 

We also fund the market for quality‚ aff ordable 

rental housing. It all adds up to more Americans 

having a good place to call home.

The people behind our progress are my colleagues 

at Fannie Mae. Collectively‚ we are intent on 

achieving something remarkable. More than half of 

our employees joined Fannie Mae since we entered 

conservatorship‚ signing up for the daunting tasks 

of turning around our company‚ responding to 

an unprecedented housing crisis‚ supporting our 

country’s recovery‚ and making housing better for 

the future. The other half stuck with us through 

crisis and uncertainty for the same important 

reasons. Together‚ the people of Fannie Mae are 

part of the solution. 

In the pages of this report‚ we will drill down into 

the progress Fannie Mae made in 2012. We have 

come a long way‚ but there is much important work 

ahead. While the housing market’s turnaround 

in 2012 appears poised to continue in 2013‚ the 

recovery is fragile and uneven. Many borrowers 

remain at risk in underwater mortgages and it will 

take years to rebuild lost value. Unanswered policy 

questions fuel uncertainty in the market. Against 

this backdrop‚ we maintain a focus on making 

meaningful‚ lasting contributions for the housing 

system and for the American people.

Timothy J. Mayopoulos

President and Chief Executive Offi cer‚ Fannie Mae
4 |

FANNIE MAE 

PERFORMANCE
 PROGRESS REPORT | 5

AMERICA’S HOUSING RECOVERY

requires a stable‚ steady strategy. At Fannie Mae‚ we 

are committed to supporting the housing recovery 

and building a better housing fi nance system for the 

future.

To best meet the needs of the market‚ our business 

is organized into three segments: Single-Family‚

Multifamily‚ and Capital Markets. Although each 

segment plays a distinct role in providing liquidity‚

all three engage in complementary activities 

to ensure Fannie Mae off ers the best products‚

solutions‚ and customer service to our partners 

while helping millions of middle-income families 

buy‚ refi nance‚ or rent a home.

Backing America’s Preferred Mortgages 

Long-term fi xed-rate mortgages are America’s 

preferred mortgage off ering – approximately 74 

percent of homebuyers say they prefer them over 

other mortgage products. These mortgages‚ such 

as the 30-year fi xed-rate loan‚ provide millions 

of homeowners with certainty and predictability 

in their monthly payments. At the end of 2012‚

“The 30-year fi xed-rate mortgage 

continues to play a vital role in our 

business. This important product 

provides strong stability at all 

points in the mortgage chain. 

We, and most importantly our 

customers, derive a tremendous 

amount of value from this type 

of loan. As our primary partner in 

the 30-year mortgage business, 

Fannie Mae is crucial in helping us 

ensure we can continue to make 

this popular option available to 

American homebuyers.” 

– Breck Tyler, President, 

Trustmark Bank

approximately 72 percent of Fannie Mae’s singlefamily conventional guaranty book of business was 

composed of long-term fi xed-rate mortgages.

Supporting Sustainable 

Homeownership

Laying the foundation for a better housing fi nance 

system requires a collective eff ort to establish 

and implement industry standards‚ develop better 

mechanisms to price and manage credit risk‚ build 

new infrastructure for accessing global capital 

markets‚ and facilitate the collection and reporting 

of data for accurate fi nancial reporting and improved 

risk management. This foundation must be capable 

of attracting and retaining suffi cient capital to fund 

our existing and future housing needs.

The environment that led to the housing crisis was 

characterized by an erosion of credit standards‚ an 

industry chasing volume‚ and poor visibility into loan 

quality. At Fannie Mae‚ we are charged with being a 

responsible standard setter. We‚ and the industry as 

a whole‚ have taken action to evolve standards in a 

direction to help borrowers sustain homeownership.

The aim of robust underwriting standards and 

verifi cation of the creditworthiness of borrowers 

is not to eliminate any possibility that a mortgage 

will fail over its lifetime. As we work toward a better 

system‚ creditors make reasonable and rigorous 

assessments of one’s ability to pay (including one’s 
6 |

income‚ net worth‚ and other obligations) and credit 

history‚ backed by documented evidence. This 

collective assessment will help match a qualifi ed 

borrower with an appropriate product and rate. 

But borrower eligibility is only as eff ective as the 

loan origination process that follows. To ensure 

everyone operates on a level playing fi eld‚ we 

worked with our partners to launch industry-wide 

tools and solutions. These initiatives are designed 

to clarify and streamline the underwriting process‚

create consistent sets of required loan-level and 

property appraisal data‚ and enforce checks-andbalances on loans before they are delivered to our 

doorstep. We also implemented a revised postpurchase review process to confi rm the accuracy 

of loan data‚ eligibility‚ and much more. The goal 

is greater transparency to enable all parties to see 

and evaluate risk early in the loan manufacturing 

process. 

In 2010, Fannie Mae joined FHFA, Freddie Mac, and 

other industry participants to launch the Uniform 

Mortgage Data Program® (UMDP®), which provides a 

common framework for improved and consistent data 

standards and collection processes. The program 

defi nes all required appraisal data, allows for the electronic collection of that data, and provides a common 

set of required data for single-family loans that are

delivered to Fannie Mae and Freddie Mac. 

Complementing the UMDP is Fannie Mae’s EarlyCheckTM service, which helps lenders to identify 

and correct potential eligibility and data issues 

early in their processes and before they deliver

loans to the government-sponsored enterprises (GSEs).

Together, these improved mortgage data and delivery 

standards support our lender partners and enable the 

GSEs to better manage risk, benefi ting everyone with a 

role in the mortgage market.

SINGLE-FAMILY SDQ RATE HAS 

DECLINED 11 CONSECUTIVE 

QUARTERS

Single-Family Loans prior to 2009

Single-Family Loans 2009 through 

December 31, 2012

34% 66%

NEW SINGLE-FAMILY BOOK OF 

BUSINESS AS OF DECEMBER 31, 2012

IS STRONG, PROFITABLE, AND 

GROWING

These new tools have contributed to a signifi cant 

decline in the post-purchase review defect rate. 

The improvements in underwriting and eligibility 

standards also have led to a profi table new book of 

business at Fannie Mae‚ which now accounts for 66 

percent of our overall single-family guaranty book 

of business. Our single-family serious delinquency 

(SDQ) rate has declined 11 consecutive quarters and 

is substantially lower than private-market levels. 

Overall‚ 94 percent of our 17.5 million single-family 

loans were current as of the end of 2012.

5.47%

3.29%

1Q10

4Q12
 PROGRESS REPORT | 7

Attracting Private Capital to the 

Single-Family Market

Fannie Mae has fulfi lled an essential role over 

the last fi ve years by providing liquidity when 

other funding sources exited the secondary 

mortgage market. Along with the Federal Housing 

Administration‚ Fannie Mae and Freddie Mac’s 

combined market share was nearly 85 percent

in 2012.

While we’ve taken steps to sustain critical liquidity 

for the market‚ we continue to be concerned about 

market capacity and our outsized role. We’ve seen 

signifi cant deconsolidation in the industry as major 

market participants have pulled back or left the 

market entirely. Moreover‚ lenders tell us regulatory 

concerns‚ repurchase risk‚ and lack of underwriting 

capacity limit their willingness to extend credit.

To encourage private capital participation in the 

secondary market and reduce our market share in 

a safe and sound manner‚ Fannie Mae has made 

a number of key pricing changes since 2008. Our 

strategy focuses on pricing for risk and responding 

to changing market dynamics. For example‚ the 

guaranty fees we require on loans are designed 

to align with the risk of the loan and earn an 

appropriate market return. In 2012‚ we raised our 

guaranty fees to create competition‚ entice private 

capital back to the market‚ and reduce potential 

future risk to taxpayers. 

To date‚ private capital largely remains on the 

sidelines and Fannie Mae continues to provide 

liquidity to meet market demand.

Refi nancing into Safer, 

More Aff ordable Terms 

For many homeowners‚ especially those with 

adjustable-rate loans or who bought when interest 

rates were higher‚ refi nancing is a valuable option 

that helps lower monthly payments‚ shorten the 

loan term‚ or move into a more secure fi xed-rate 

loan. We work with more than a thousand lenders 

off ering a variety of refi nancing options to help 

homeowners take advantage of lower interest 

rates and enjoy a more aff ordable and sustainable 

mortgage loan. We ensure a steady stream of credit 

availability for refi nanced mortgages‚ helping to 

keep the market liquid and active. Between 2009 

and 2012‚ Fannie Mae refi nanced more than 9.7 

million mortgages.

Our Refi PlusTM initiative provides expanded 

refi nance opportunities for eligible Fannie Mae 

borrowers and includes the Administration’s Home 

Aff ordable Refi nance Program (HARP). (Learn more 

about HARP on page 13.) The initiative is designed 

to make more homeowners eligible to refi nance 

and to make the process faster and easier for 

both borrowers and lenders. In general‚ Fannie 

Mae requires borrowers to be currently employed‚

current on their mortgage‚ and have an acceptable 

pay history during the past 12 months.

In 2012‚ Fannie Mae acquired approximately 1‚117‚000 

refi nanced loans through Refi Plus. Borrowers either 

reduced their monthly payments or switched to a 

safer‚ more sustainable mortgage. Overall‚ refi nancings 

delivered to Fannie Mae through Refi Plus in the fourth 

quarter of 2012 reduced borrowers’ monthly mortgage 

payments by an average of $237.
8 |

Our website KnowYourOptions.com provides tools 

and resources to help homeowners evaluate 

whether refi nancing is the right option for them. 

(Learn more about Know Your OptionsTM on page 13.)

A Critical Backstop in the 

Multifamily Market

With approximately one-third of all Americans 

renting a home at the end of 2012‚ and with many 

indicators suggesting even greater demand for 

rental housing in the coming years‚ the market 

requires reliable partners to provide fi nancing across 

the spectrum of multifamily rental housing needs. 

Working through our Delegated Underwriting and 

Servicing (DUS®) lender partners‚ Fannie Mae helps 

to meet this need. During the crisis‚ we never left 

the market – we were‚ and remain today‚ a vital 

source of fi nancing in the multifamily rental sector‚

SUPPORTING THE

MULTIFAMILY MARKET IN 2012

$33.8

approximately

of loans

delivered through 

mortgage-backed 

securities execution

units financed

98% of units affordable

to families at or

below area

median income

more 

than 85%

560,000 billion 

in financing

providing much-needed capital as other institutional 

sources fully re-emerge. Our multifamily credit book 

of business has performed well and continued to 

experience low delinquency rates in 2012‚ while our 

multifamily guaranty fees are priced to cover

credit risk. 
 PROGRESS REPORT | 9

Delegated Underwriting and Servicing: 

A Model in Successful Risk-Sharing

For 25 years‚ Fannie Mae’s Delegated Underwriting 

and Servicing (DUS) program‚ a unique private capital 

shared-risk model‚ has provided eff ective‚ reliable 

fi nancing solutions for multifamily housing lenders and 

borrowers. DUS lenders are pre-approved to underwrite 

and service loans on our behalf‚ which provides 

certainty‚ speed of execution‚ and competitive pricing. 

In exchange‚ the lenders share risk of potential loss over 

the life of the loan‚ which encourages strong credit risk 

management.

In 2012‚ our DUS lenders delivered 98 percent of the 

company’s multifamily loan acquisitions. Importantly‚

while our multifamily market share increased when 

private capital left the market‚ it has now returned to 

the pre-recession level of approximately one-fourth

of the market.

“The DUS program continues to 

deliver exceptional value for our 

customers. It does so because 

it refl ects Fannie Mae’s ongoing 

sensitivity to the dynamics of 

the multifamily market as well 

as its commitment to serving the 

needs of worthy borrowers who 

provide aff ordable rental housing 

throughout the country. As a DUSapproved lender, I appreciate 

Fannie Mae’s high standards, its 

timely execution, and its trust in 

its partners. Thanks in large part 

to the reliable, consistent liquidity 

that Fannie Mae provides, the 

multifamily market has proven 

remarkably resilient.” 

– Grace Huebscher, President and CEO, 

Beech Street Capital

Fannie Mae provided $33.8 billion in fi nancing to

the multifamily market in 2012. Approximately $33.1 

billion of that total was issued as multifamily MBS, 

up from $23.8 billion in 2011. We also continue to 

provide additional liquidity to the market through 

our Fannie Mae Guaranteed Multifamily Structures 

(GeMSTM) program. First introduced in 2011, the GeMS 

program packages individual MBS into larger, more 

liquid structured products. Fannie Mae GeMS structures off er collateral diversity to investors, larger investment size, and a variety of maturities. In 2012, we 

securitized more than $10 billion through the GeMS 

program. Attracting additional investors to our MBS 

products provides more consistent execution for our 

lenders and lowers costs for multifamily borrowers.

Meeting Specialty Housing Needs

We are committed to providing fi nancing for 

quality homes to meet the needs of the rental 

housing market. In 2012‚ we continued our support 

of rental housing for the workforce‚ senior citizens‚

students‚ and families.

• $3.8 billion in multifamily aff ordable housing‚ which 

provides fi nancing for rent-restricted properties 

and properties receiving other federal and state 

subsidies

• $3 billion in small loans (loans of up to $3 million‚

or $5 million in high-cost areas)

• $11.6 billion in large loans (loans $25 million or 

higher)

• $912 million in manufactured housing 

communities

• $712 million in student housing

• $1.8 billion in structured transactions

• $1.2 billion in seniors housing
10 |

Capital Markets: Investment in 

the Housing Market

Fannie Mae’s Capital Markets group supports our 

Single-Family and Multifamily businesses and off ers 

a range of products and services that enable us to 

provide liquidity to lenders and the housing fi nance 

system. Through Capital Markets‚ we purchase 

individual loans from lenders and assist them with 

selling mortgage-backed securities (MBS) into the 

secondary market‚ and also provide lenders with 

temporary funding services.

When lenders originate loans‚ they generally have 

three “execution” options: sell the loans individually 

for cash through our whole loan conduit‚ aggregate 

or “pool” the loans and swap them for an MBS‚ or

retain the loans on their balance sheet.

Through the whole loan conduit‚ nearly 1‚100 lenders 

deliver loans to us in exchange for cash‚ which they 

can use to issue more loans to homebuyers and 

multifamily property owners. Typically‚ smaller and 

mid-sized lenders who lack the scale or experience 

to participate in the MBS market use this service.

Alternatively‚ lenders can deliver loans to us 

in exchange for an MBS that they hold as an 

investment‚ sell into the secondary market‚ or sell 

to us. This execution‚ known as a “swap‚” typically is 

used by larger lenders who sell a signifi cant portion 

of their loan originations into the secondary market. 

In 2012‚ approximately 145 Fannie Mae lenders 

issued MBS.

Through our Capital Markets activities‚ Fannie Mae’s 

Single-Family and Multifamily business segments 

can provide our lender customers with a suite of 

best execution options – choices in how to sell the 

mortgages they originate so they can replenish their 

funds‚ make more loans‚ and hedge their risks in a 

cost-effi cient manner. The Capital Markets group also 

helps to promote general liquidity in the mortgage 

market.
 PROGRESS REPORT | 11

HELPING 

HOMEOWNERS 

AND 

NEIGHBORHOODS
12 |

IN OUR ROLE in the secondary mortgage 

market‚ we do not lend directly to consumers – but 

we keep them top of mind in everything we do. This 

became particularly important in the wake of the 

fi nancial and housing crisis‚ which left millions of 

Americans facing foreclosure.

Working Together to Keep People 

in Their Homes

Fannie Mae has taken a leading role in helping families 

avoid foreclosure and in stabilizing communities that 

have felt the heavy burden of a struggling housing 

market. Over the past few years‚ we have developed 

new solutions and protocols to incent servicers –

third-party entities that work directly with borrowers on 

mortgage payments and terms – to help borrowers‚

and to hold the servicers accountable for their 

performance.

Every day counts when a family is facing foreclosure. 

Together with FHFA and Freddie Mac‚ we created 

the Servicing Alignment Initiative (SAI) – a joint eff ort 

to ensure servicers are better and more consistently 

prepared to help at-risk homeowners by reaching 

them sooner and keeping them engaged throughout 

the process. As part of SAI we established Servicer 

Total Achievement and RewardsTM. STARTM combines 

operational assessments of the servicer’s capabilities 

with an objective‚ balanced scorecard that measures 

the servicer against its peers.

In cooperation with our servicers and bolstered 

by STAR‚ SAI helps families to stay in their homes 

whenever possible or fi nd suitable options that 

prevent or limit the long-term fi nancial fallout of a 

foreclosure. For example‚ we emphasize the loan 

modifi cation as an eff ective way for a servicer to 

adjust a homeowner’s existing loan so that the terms 

are more aff ordable and sustainable. Our modifi cation 

“During the recession, my 

husband and I lost our jobs 

and weren’t able to sell our 

house because we were too far 

underwater. We kept up with 

our mortgage payments and 

eventually found new work, but 

our personal fi nancial situation 

took a big hit. 

When HARP 2.0 came out, it 

eff ectively saved our home and 

our retirement planning. Even 

though our loan-to-value ratio was 

150 percent, HARP enabled us to 

refi nance into a 15-year fi xed-rate 

mortgage with a signifi cantly lower 

interest rate. Our monthly payment 

went up by $50 a month, but we 

were able to cut the loan term in 

half. Now we can look at retirement 

in a diff erent way because we know 

our home will be paid off . And that’s 

a terrifi c feeling.“

– Kim Kaplan, Homeowner

programs are designed to meet a borrower’s 

needs while accommodating the servicer’s 

capabilities. Since 2009‚ we have completed 879‚000 

modifi cations.

Homeowners in distress can learn about loan 

modifi cations‚ refi nances‚ and other options at 

our Mortgage Help Centers‚ 12 on-the-ground 

facilities located in the hardest hit communities 

across the country. Borrowers speak directly with 

the centers’ professional housing counselors by 
 PROGRESS REPORT | 13

$0 $50 $100 $150 $200 $250

Clothing $49

Health Care $75

Food $184

Refinance Weekly Savings $82

phone or in person to fi nd an appropriate workout 

solution that meets their needs. In 2012‚ the number 

of homeowners making an appointment online 

increased from around 50 to 500 per week. By the 

end of 2012‚ nearly seven out of 10 borrowers we 

helped through the centers were able to stay in 

their homes. To broaden the reach of the centers‚

we established the Mortgage Help Network (MHN). 

The MHN is a partnership with 13 HUD-approved 

housing counseling agencies that provide access 

to counseling and loss mitigation solutions in 

additional hard-hit metropolitan areas‚ and by 

phone in all 50 states through the 1-888-995-HOPE 

hotline.

In addition to our brick-and-mortar facilities‚ we off er 

innovative online tools such as KnowYourOptions.com.

The website provides a one-stop resource for people 

who are interested in getting a mortgage‚ refi nancing 

a mortgage‚ and for those interested in renting a home. 

The loan lookup tool on KnowYourOptions.com helps 

homeowners determine if Fannie Mae owns their loan‚

and the site provides resources and information for 

homeowners in distress to take action early. 

HAMP: Fannie Mae participates in the Administration’s Home Aff ordable Modifi cation Program 

(HAMP), launched in 2009 to help more troubled 

borrowers benefi t from the loan modifi cation option.

Under HAMP, eligible borrowers can have their loans 

modifi ed to an aff ordable, sustainable level, which is 

based on the family’s monthly income. Since 2009, 

more than 1.1 million homeowners have received

permanent modifi cations through HAMP.

HARP: Fannie Mae also participates in the Administration’s Home Aff ordable Refi nance Program (HARP), 

available to those with GSE-owned or guaranteed loans. 

Under HARP, homeowners whose homes have dropped 

in value (and therefore do not qualify for traditional refi -

nancing options) have the opportunity to refi nance into 

a safer loan and take advantage of lower interest rates. 

In late 2011, the program was expanded to increase 

access for more responsible homeowners. For example, certain risk-based fees were removed for those 

who refi nanced into shorter-term mortgages, and 

the 125 percent loan-to-value ceiling was lifted. From 

the program’s inception in 2009 through December 

2012, eligible homeowners have received more than

2.1 million HARP refi nancings. 

HARP REFINANCING SAVINGS COMPARED WITH

AVERAGE HOUSEHOLD WEEKLY EXPENDITURES
14 |

We expanded KnowYourOptions.com in 2012 to 

better support all borrowers – not just those facing 

foreclosure. A new refi nance overview has helped 

homeowners learn whether they’re eligible to lower 

their interest rate or adjust their loan term and type 

of mortgage‚ which can improve their fi nancial 

situation. We also made it easier for potential 

homebuyers to fi nd out what opportunities may 

be available to them and to learn how to prepare 

for homeownership‚ which helps to prevent future 

delinquencies and foreclosures. Since we launched 

it in 2010‚ the website has received approximately 

15 million page views and 2 million unique visitors. 

Improving Alternatives to Foreclosure

Sadly‚ some homeowners simply cannot aff ord to 

stay in their homes. In these circumstances‚ we 

provide alternatives that allow for a graceful exit 

and help borrowers repair their credit sooner than 

they would following a foreclosure. A short sale‚

for example‚ allows a homeowner to settle their 

mortgage debt in most cases even if the amount 

owed is greater than what the house is worth. 

Depending on the circumstances‚ the borrower 

might also qualify for fi nancial assistance to help 

them transition to a more aff ordable place to live.

Short sales are an important tool in the fi ght against 

foreclosure – but we’ve heard from our industry 

partners about the roadblocks they’ve faced when 

executing short sales. To combat this‚ we rolled out 

an assistance and escalation program that helps 

resolve delays during the handling of short sale 

off ers on Fannie Mae mortgages. In early 2013‚ we 

signifi cantly enhanced our capability and broadened 

access through the use of our HomePath.com website. 

The new page provides information to both borrowers 

and real estate professionals (REPs)‚ including a link 

for REPs to escalate a case directly to Fannie Mae 

for issues including list price assistance‚ valuation 

disputes‚ and non-responsive servicers. This is 

available to REPs across the country‚ no matter their 

location‚ increasing both transparency and availability. 

We continue to look for ways to improve and 

MORTGAGE HELP CENTERS / NETWORK

Mortgage Help Centers Mortgage Help Network

National coverage through 1-888-995-HOPE

Atlanta, GA

Chicago, IL

Dallas, TX

Greenbelt, MD

Inland Empire, CA*

Jacksonville, FL

Los Angeles, CA

Miami, FL

Philadelphia, PA

Phoenix, AZ

Sacramento, CA

St. Louis, MO

Tampa, FL

Charlotte, NC

Cleveland, OH

Denver, CO

Detroit, MI

Las Vegas, NV

New York, NY

Orlando, FL

Portland, OR

Prince Georges 

County, MD

San Diego, CA

Seattle, WA

Twin Cities, MN

*extension of Los Angeles Mortgage Help Center
 PROGRESS REPORT | 15

streamline our processes to benefi t both homeowners 

and the REPs who are trying to help.

Our Mortgage ReleaseTM program is an additional 

option for delinquent homeowners to exit their 

home gracefully. In this program‚ the homeowner 

voluntarily transfers the ownership of their property 

to Fannie Mae in exchange for a release from the 

mortgage loan and payments. Options are available 

(sometimes with a relocation incentive) to help the 

homeowner leave the home immediately; stay in the 

home for up to three months with no rental payment 

required; or lease the home (at market rates) for up 

to one year.

Since 2009‚ through a combination of foreclosure 

alternatives such as short sales and home retention 

solutions such as loan modifi cations‚ we have helped 

more than 1.2 million homeowners stay in their 

homes or fi nd other workout options.

Stabilizing Neighborhoods

Despite everyone’s best eff orts‚ some foreclosures 

are unavoidable. When a home with a loan owned 

by Fannie Mae goes into foreclosure‚ we acquire the 

property‚ which then becomes part of our inventory. 

In this scenario‚ we continue to work with the aff ected 

borrower by off ering post-sale loss mitigation 

options. For example‚ we off er relocation assistance 

in exchange for leaving the property in a clean and 

acceptable condition. We also off er the option to 

repurchase the home after foreclosure for the total 

debt owed.

Fannie Mae does not walk away from a home. We 

work to sell our properties for the highest possible 

price‚ which helps to stabilize neighborhoods and 

reduce taxpayer losses. Through our First LookTM 

initiative‚ we give preference to buyers over 

investors for the fi rst 15 days a property is listed (30 

days in Nevada). We also repair our homes when 

appropriate‚ which increases the likelihood that they 

will be fi nanceable and appealing to families. In 2012‚

we repaired more than 80‚000 properties‚ and the 

vast majority of our total inventory was sold through 

local real estate professionals (agents and brokers). 

We also work extensively with municipalities‚ 

nonprofi ts‚ and land banks to help them achieve 

their objectives for properties that aren’t suitable for 

typical borrower retail sale.

All of our properties available for sale are listed on 

HomePath.com‚ an easy-to-use property search 

and information website for both borrowers and 

real estate professionals. Potential homebuyers 

First LookTM is a key component of our foreclosure 

property sales strategy. For the fi rst 15 days a property is 

listed on our HomePath.com website, investors are not 

allowed to bid on it. We sell only to buyers who intend 

to live in the home, public entities and their partners,

or some non-profi ts during the First Look period, giving 

them the opportunity to make an off er without investor 

competition.

HELPING FAMILIES

TO AVOID FORECLOSURE

1.2

million 

families

helped

more than

>280,000

foreclosure 

alternatives

>1 million

home

retention

solutions

+ =
16 |

across the country can search for quality aff ordable 

homes‚ view pictures and property descriptions‚ and 

contact the listing agent with questions. The site also 

promotes transparency by requiring that all off ers 

to purchase Fannie Mae properties are made online 

by a real estate professional. This allows us and the 

potential buyer to know that all off ers are presented 

to us for review.

A Culture of Giving Back

At Fannie Mae‚ our role in helping families and 

stabilizing neighborhoods goes well beyond our 

business activities. We have a proud tradition of 

volunteerism‚ and we provide grants to support the 

housing recovery and to serve the homeless and those 

at risk of becoming homeless. 

We’re sensitive to our obligation to be responsible 

stewards. Our community investment model‚ strategy‚

and budget are approved by our regulator‚ and we 

monitor investments to ensure our funds are used 

appropriately and in a way that will produce the most 

meaningful impact. We also ensure that our charitable 

investments are aligned with our business priorities‚

and our community engagement eff orts are targeted 

primarily to nonprofi t organizations that are helping 

communities and markets in need.

In 2012‚ Fannie Mae made charitable investments 

nationwide in support of the housing recovery. The key 

projected outcomes from our 2012 funding include:

• Foreclosure prevention counseling for more than 

215‚000 at-risk borrowers‚ helping more than 

65‚000 families avoid foreclosure

• Post-foreclosure counseling and transitional 

counseling for more than 6‚700 homeowners

• Acquisition of more than 4‚000 foreclosed 

properties to help stabilize neighborhoods 

• Rehabilitation of more than 2‚400 foreclosed 

properties and the sale/leasing of over 3‚000 

Fannie Mae properties 

• Pre-purchase education for more than 38‚000 

potential homebuyers‚ and post-purchase and 

fi nancial literacy counseling for over 19‚000 

• Acquisition‚ development‚ and preservation of 

more than 20‚000 aff ordable housing units

• Preservation and development of more than 

16‚000 units of permanent supportive housing

Our employee volunteer eff orts also are aligned with 

and deepen the impact of Fannie Mae’s business while 

helping to build and strengthen relationships with the 

communities we serve. In 2012‚ more than 2‚000 Fannie 

Mae employees volunteered approximately 24‚000 

In 2012, Fannie Mae partnered with Home Depot, 

naming it a provider of repair services and goods for 

Fannie Mae-owned properties. An early step in Home 

Depot’s involvement with a property is often simply 

putting its sign on the lawn, helping show that the

house and neighborhood are receiving attention. 
 PROGRESS REPORT | 17

hours on a wide range of projects and initiatives to 

benefi t 261 local community organizations. Whether 

staffi ng foreclosure prevention events or rebuilding 

homes in hard-hit neighborhoods‚ refurbishing innercity schools‚ donating money to homeless service 

providers‚ or hosting food and clothing drives for 

struggling families‚ our employees rolled up their 

sleeves and donated time and money to give back to 

those in need. 

For example‚ 143 Fannie Mae employees donated 1‚015 

volunteer hours in 2012 to help struggling homeowners 

avoid foreclosure through the Making Home Aff ordable 

Program‚ Know Your Options‚ and other outreach 

events. More than 1‚060 employees volunteered nearly 

7‚500 hours to help prevent homelessness across 

the country. In the wake of Hurricane Sandy‚ Fannie 

Mae employees contributed $9‚845 to the Blanket the 

City program‚ which provided blankets and towels for 

aff ected families‚ and donated approximately $35‚000 

to the American Red Cross to help provide shelter‚

food‚ and other assistance.

In 2013‚ Fannie Mae employees will participate in

“7 Days to SERVE” – a corporate-wide engagement 

program that emphasizes seven days of community 

volunteerism. Through the initiative‚ employees can 

participate in coordinated hands-on or skills-based 

volunteer service projects that address America’s 

housing-related issues. The program bolsters our 

year-round commitment to community service through 

programs such as Help the Homeless®.

25 Years of Helping the Homeless

Since 1987‚ Fannie Mae’s Help the Homeless 

Program has provided a fundraising model to 

help build the capacity of nonprofi ts working to 

prevent and end homelessness. Each year‚ tens of 

thousands of people get involved by participating 

in a community walk‚ making a donation‚ being 

a sponsor‚ or volunteering their time to support 

organizations dedicated to serving those who are 

homeless or at risk of becoming homeless.

Help the Homeless remains the nation’s largest 

fundraising eff ort focused on homelessness. First 

launched as a Washington‚ DC-centered initiative‚

Fannie Mae has distributed approximately $100 

million to nonprofi t partners while raising awareness 

of the issue of homelessness around the country.

In 2012‚ we continued our support for nonprofi ts 

beyond the Washington‚ DC area and successfully 

introduced the program in fi ve new cities – Atlanta‚

Chicago‚ Dallas‚ Philadelphia‚ and Los Angeles.

By expanding Help the Homeless into a broader 

community-focused initiative that facilitates 

neighborhood and city walks‚ we are able to raise 

money and awareness directly in the communities in 

which we live and work. 
18 |

Our fi rst year of a decentralized Help the Homeless 

program made an impact. We held approximately 700 

local walks‚ bringing together neighbors‚ Fannie Mae 

employees‚ and benefi ciary organizations committed 

to ending homelessness in their communities. Our 

nonprofi t partners successfully transitioned to the 

new model and found innovative ways to engage their 

communities. Together‚ more than 100‚000 people 

participated‚ raising $4.5 million in 2012.

A Diverse Workforce Supporting a 

Diverse Housing Market

In 1992‚ we launched Fannie Mae’s Offi ce of Diversity 

and Inclusion to foster a culture of inclusion and 

respect for all Fannie Mae employees. The goal was 

to create an environment where our employees 

always feel confi dent bringing their whole selves 

to work and can contribute their diverse ideas 

and perspectives to help address our complex 

business challenges and meet the needs of our 

constituencies.

Twenty years later‚ the concept of diversity and 

inclusion is fully ingrained into who we are and what 

we do. We all come with diff erent backgrounds‚

experiences‚ and abilities – and we value and 

leverage those diff erences within the company and 

outside our walls. This has enabled us to make a 

bigger diff erence in the lives of the diverse families 

and communities we serve.

“Demand for our services has 

increased three-fold in the last 

four years. Without partners like 

the Help the Homeless Program, 

we would not be able to serve 

these additional people.”

 – Michael Bartscherer, Martha’s Table
 PROGRESS REPORT | 19

FORWARD
20 | PROGRESS REPORT | 20

WE UNDERSTAND that Fannie Mae is 

not going to continue in the future as it operated in 

the past and that its role and structure will change 

over time. We are determined to restore trust and 

create a positive legacy. We will do this through our 

performance. The best way to show our gratitude 

for the support we received is to pay America – 

literally as we return our profi ts to taxpayers‚ and 

in spirit as we move forward in a way that will 

improve the housing experience in our country for 

generations to come.
 PROGRESS REPORT | 21

This report includes our expectations regarding our future financial results, the outcome of our efforts to lay the foundation for 

a better housing finance system, our ability to pay taxpayers, and the growth, profitability, and caliber of the loans in our new 

single-family book of business. These expectations are forward-looking statements based on our current assumptions regarding 

numerous factors, including future home prices. Our actual results and future expectations may differ materially from our current 

expectations as a result of home price changes, unemployment rates, other macroeconomic variables, government policy, social 

behaviors, and many other factors, including those discussed in the “Risk Factors” section of and elsewhere in our annual report on 

Form 10-K for the year ended December 31, 2012. 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.
© 2013 FANNIE MAE 22 |

TRADEMARKS OF RESPECTIVE OWNERS

PUBLISHED APRIL 2, 2013