GSEs Release Q2 Earnings
August 1, 2019
The government-sponsored enterprises (GSEs) released their respective second quarter earnings reports this morning, with both recording increased revenue from the previous quarter.
Fannie Mae reported net income of $3.4 billion and comprehensive income of $3.4 billion for the second quarter, up from its first quarter earnings of $2.4 billion of net income and $2.4 billion of comprehensive income. Fannie Mae expects to pay a $3.4 billion dividend to Treasury by Sept. 30.
The GSE added that it provided $213.1 billion in liquidity to the single-family mortgage market in the first half of 2019 and was the largest issuer of single-family mortgage-related securities in the secondary market. More than 56 percent of the single-family mortgage loans that Fannie Mae acquired in the first six months of this year were affordable to families earning at or below 120 percent of the area median income, providing support for both affordable and workforce housing.
Fannie Mae’s estimated market share of new single-family mortgage-related securities issuances was 35 percent for the second quarter of 2019. It also provided $34.1 billion in multifamily financing in the first half of the year, which supported 354,000 units of multifamily housing – of which approximately 90 percent were affordable to families earning at or below 120 percent of the area median income.
“Fannie Mae’s results continue to show the strength of our business model and our ability to generate solid returns,” said CEO Hugh R. Frater. “We are sharpening our focus on capital management through the lens of FHFA’s proposed capital framework. We continue to work with industry stakeholders to identify and enable new solutions to our country’s housing challenges and increase the supply of housing. And we will continue to improve the company in order to deliver value, liquidity, and stability to the housing finance system.”
Freddie Mac reported net income of $1.5 billion and comprehensive income of $1.8 billion for the second quarter, up from its first quarter earnings of $1.4 billion of net income and $1.6 billion of comprehensive income. Freddie Mac expects to pay a $1.8 billion dividend to Treasury by Sept. 30.
During the second quarter, Freddie Mac said that it helped more than 596,000 families to own or rent a home while providing $127 billion in liquidity to the mortgage market. The GSE served 900 regional and community single-family lenders, representing 45 percent of purchase volume. And first-time homebuyers represented 48 percent of its second quarter new single-family purchase loans, while 95 percent of the eligible multifamily rental units that it financed were affordable to families earning at or below 120 percent of area median incomes.
“Freddie Mac’s second quarter continued our growing track record of strong returns, solid risk management and an unwavering commitment to our mission,” said CEO David M. Brickman. “Once again, we made home possible for hundreds of thousands of families across the country.”
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