Fannie Mae Reports $4B in Q3 Net Income

Oct 31, 2019

Fannie Mae closed the third quarter of this year with $4 billion in both net income and comprehensive income, according to the latest earnings report issued by the government-sponsored enterprise. During the second quarter, Fannie Mae generated $3.4 billion in both net income and comprehensive income.

Fannie Mae noted that it was the largest issuer of single-family mortgage-related securities in the secondary market during the first nine months of this year, and its market share of issuances was 39 percent for the third quarter. Roughly one in four single-family mortgages were financed through Fannie Mae, and more than 90 percent of the multifamily properties it financed in the third quarter were affordable to families earning at or below 120 percent of the area median income.

“Our strong quarterly results demonstrate the strength of Fannie Mae’s business and our ability to dynamically manage credit while serving the needs of our customers,” said Fannie Mae CEO Hugh R. Frater. “We are focused on preparing for an eventual exit from conservatorship and providing liquidity for housing for low- and moderate-income Americans. We will continue to work with our customers and partners to provide sustainable and stable sources of financing for affordable homes and apartments.”

The Department of the Treasury and the Federal Housing Finance Agency agreed to increase the amount of capital Fannie Mae is permitted to retain from $3 billion to $25 billion, effective with the third quarter dividend period; a similar agreement increases Freddie Mac’s retained capital level from $3 billion to $20 billion. As a result, neither entity will be required to pay a dividend on the senior preferred stock to Treasury again until its net worth amount exceeds their respective applicable capital reserve amounts.

Freddie Mac released its third quarter earnings report yesterday, with comprehensive income of $1.8 billion and net income of $1.7 billion.

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Phil Hall

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Oct 31, 2019

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