Fannie Mae is returning to the market with nearly $214 million in deeply delinquent mortgages, its first announced sale of nonperforming loans in more than a year.
The government-sponsored enterprise is marketing 969 loans with a combined unpaid principal balance of approximately $214.1 million. The offering includes one larger pool containing 943 loans totaling $207.4 million and a Community Impact Pool of 26 loans totaling $6.7 million concentrated in the Dallas-Fort Worth area.
Bids for the larger pool are due Sept. 15. Bids for the Community Impact Pool, Fannie Mae’s 28th, are due Sept. 23. BofA Securities is assisting with the sale.
The transaction marks Fannie Mae’s first announced nonperforming-loan sale since July 8, 2025, when it marketed approximately 1,384 loans totaling $296.9 million across two larger pools and a Florida-focused Community Impact Pool.
The latest offering is about 28% smaller by unpaid principal balance and contains roughly 30% fewer loans than the package initially marketed in July 2025.
Portfolio Cleanup, Not A Conventional Credit Alarm
The timing follows a broader increase in mortgage distress, but the sale does not point to a sudden breakdown in Fannie Mae’s conventional loan book.
The share of mortgages at least 90 days past due or in foreclosure rose for the fourth consecutive quarter to 2.06%, while foreclosure inventory climbed 19 basis points year over year to 0.67%.
The deterioration, however, has been concentrated largely in government-backed loans. Conventional delinquencies increased only 12 basis points from a year earlier, compared with increases of 122 basis points for Federal Housing Administration loans and 57 basis points for Department of Veterans Affairs loans.
Fannie Mae’s own single-family serious-delinquency rate remained unchanged at 0.58% at the end of the second quarter, which the company described as historically low. Fannie’s single-family guaranty book totaled approximately $3.6 trillion, making the $214.1 million sale a small disposition of seasoned problem loans rather than a broad credit warning.
Still, the transaction shows that some loans are remaining unresolved long enough to reach the expensive end of the servicing process. Nonperforming-loan sales allow Fannie Mae to remove those mortgages from its retained portfolio and transfer the credit risk, interest-rate risk, and work of resolving the defaults to private buyers.
According to the Federal Housing Finance Agency, buyer-servicer data have historically shown more favorable outcomes for borrowers whose nonperforming loans were sold than for comparable loans left in the GSEs’ portfolios through resolution.
Borrower Protections Follow The Loans
The sale does not allow buyers to move borrowers immediately toward foreclosure.
Purchasers must honor loss-mitigation arrangements that are approved or underway when the transaction closes, including loan modifications. Buyers also must offer delinquent borrowers a waterfall of loss-mitigation alternatives before initiating foreclosure, except when the property is vacant or condemned.
Those alternatives must include loan modifications and may include principal forgiveness.
If foreclosure cannot be prevented, the buyer must market the property to owner-occupants and nonprofit organizations before offering it to investors, following an approach similar to Fannie Mae’s FirstLook program.
Community Impact Pools are smaller, geographically concentrated packages intended to attract nonprofit organizations, public-sector entities, and smaller investors. A community designation, however, does not guarantee that a mission-oriented buyer will acquire the loans.
Fannie Mae’s previous Community Impact Pool, covering loans in Florida, was purchased by Residential Credit Opportunities Trust X-C, the same private investment vehicle that acquired part of the larger 2025 sale.
That distinction matters because the sale changes who controls the ultimate resolution of each mortgage. Borrowers retain the protections imposed by FHFA’s sale requirements, but their loans move outside Fannie Mae’s ordinary servicing framework and into portfolios managed by private investors and their servicers.
Consumer advocates have questioned whether those requirements provide protections equivalent to the full range of GSE loss-mitigation programs. The National Consumer Law Center called in 2023 for stronger pre-sale reviews, additional post-sale modification requirements, and more public reporting on borrower outcomes.
FHFA says its requirements have been strengthened over time, most recently in 2023. Buyers must report loan-level resolution results and are prohibited from abandoning liens on occupied properties.
The next revealing details will come when Fannie Mae identifies the winning bidders and releases the pools’ average note rates, collateral values, loan-to-value ratios, servicing arrangements, and bid pricing. Those figures will show how much investors are willing to pay for the unresolved mortgages and how much property equity supports the loans.
For lenders and servicers, the immediate message is narrower: conventional credit remains comparatively strong, but deeply delinquent loans are still accumulating costs when borrowers cannot be returned to performing status. After 13 months away, Fannie Mae has decided that nearly $214 million of that work is better resolved outside its portfolio.
