Fannie Mae Q1 2026 Earnings Report

Fannie Mae EPS Results

• Actual EPS: $0.63
• Consensus EPS: $0.63
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Fannie Mae Revenue Results

• Actual Revenue: $7.28 billion
• Expected Revenue: $7.25 billion
• Beat/Miss: Beat by +$33.14 million
• YoY Revenue Growth: N/A

Fannie Mae Announcement Details

• Quarter: Q1 2026
• Date: 4/29/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 29, 2026
• Conference Call Time: 8:00AM ET

The Federal National Mortgage Association, commonly known as Fannie Mae (OTCMKTS:FNMA) (OTCMKTS:FNMA), is a government-sponsored enterprise established by Congress in 1938 as part of the New Deal to support the U.S. housing market. Headquartered in Washington, D.C., Fannie Mae’s mission is to promote liquidity, stability and affordability in the mortgage market. The company operates by purchasing residential mortgage loans from financial institutions, pooling them into mortgage-backed securities (MBS), and providing guarantees to investors against borrower default.

In its core business, Fannie Mae works with mortgage lenders across the United States—including banks, credit unions and mortgage finance companies—to ensure a steady flow of capital for homebuyers and homeowners seeking refinancing. By securitizing mortgages into MBS, the company helps reduce risk for originators and expands access to mortgage credit, particularly for first-time and moderate-income borrowers. Through various programs and underwriting guidelines, Fannie Mae plays a central role in standardizing mortgage documentation and pricing, thereby fostering transparency and consistency in residential lending.

Since the 2008 financial crisis, Fannie Mae has operated under conservatorship overseen by the Federal Housing Finance Agency (FHFA), which supervises its financial and operational practices to maintain stability in the housing finance system. The enterprise serves a geographic footprint that spans all 50 states, the District of Columbia and U.S. territories, collaborating with a network of approved lenders and servicers. Through its guaranty book of business and ongoing innovation in credit risk transfer, Fannie Mae continues to support the housing finance market while working toward its statutory mission of affordable housing.

Fannie Mae Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Fannie Mae reported first-quarter net income of $3.7 billion (up 5% QoQ, 2% YoY) on stable net revenues, which lifted net worth to $112.7 billion.
• Positive Sentiment: Cost-cutting and efficiency actions drove non‑interest expense down 8% QoQ and 16% YoY, lowered the administrative expense ratio to 10.2%, and management plans further automation and AI to sustain a smaller cost base.
• Negative Sentiment: Multifamily credit stress increased — serious delinquencies rose, leading to higher net charge-offs and a sizable provision (including a ~$174 million PCL impact), while investment losses on MBS purchases contributed to other losses and pressured multifamily net income.
• Positive Sentiment: The firm emphasized its market role, providing $116 billion of liquidity to about 385,000 households and supporting a $4.1 trillion guarantee book that backs roughly 24% of U.S. single‑family mortgage debt.

Presentation

[Operator]

Good day, welcome to the Fannie Mae first quarter 2026 financial results webcast. At this time, I will now turn it over to your host, Terence O'Hara, Fannie Mae's Director of Enterprise Communications.

[Terence O'Hara, Director of Enterprise Communications at Fannie Mae]

Hello. Thank you for joining today's webcast to discuss Fannie Mae's first-quarter 2026 financial results. Please note this webcast includes forward-looking statements, including expectations related to housing market, economic and competitive conditions and their impact, the future performance and credit characteristics of the company's book of business, the company's future financial performance, and the company's future plans and their impact. Future events may turn out to be very different from these statements. Factors that may lead to different results are identified in the forward-looking statement section of the company's first quarter 2026 Form 10-Q filed today and the forward-looking statements and risk factors section of the company's 2025 Form 10-K, filed February 11th, 2026. A recording of this webcast may be posted on the company's website.

[Terence O'Hara, Director of Enterprise Communications at Fannie Mae]

We ask that you do not record this webcast for public broadcast and that you do not publish any full transcript. I'd now like to turn the call over to Fannie Mae's Acting Chief Executive Officer and Chief Operating Officer, Peter Akwaboah, who will be followed by Fannie Mae Chief Financial Officer, Chryssa C. Halley.

[Peter Akwaboah, Acting CEO and COO at Fannie Mae]

Good morning, and thank you for joining us today. We opened the year strong, posting first quarter net income of $3.7 billion, up 5% quarter-over-quarter and up 2% year-over-year, with stable net revenues of $7.3 billion. This performance drove our net worth to $112.7 billion and reflects the sustained health of our guaranteed business, the discipline of our execution, and the strength of our balance sheet. At Fannie Mae, our mission guides how we operate, which is especially important today as the macroeconomic environment is adding uncertainty to an already challenging housing market. We are closely monitoring these dynamics and are confident in our ability to operate efficiently and respond as conditions evolve.

[Peter Akwaboah, Acting CEO and COO at Fannie Mae]

We remain focused on providing uninterrupted liquidity in all economic cycles to support stability and affordability to the U.S. housing market. We made solid progress on our key priorities. We built on the operational efficiency progress we outlined last quarter. Our expense management efforts help drive stronger results, including lower administrative expenses this quarter. We maintained support of the secondary mortgage market through increased MBS purchases. We delivered targeted process and technology updates to address industry pain points, expand access, and strengthen our role as a preferred business partner. Since quarter end, we enabled two new credit score models, including immediate use of VantageScore 4.0 to support affordability and access through industry innovation and competition. Together, these actions enabled us to deliver on our mission.

[Peter Akwaboah, Acting CEO and COO at Fannie Mae]

During the first quarter, we provided $116 billion of liquidity, helping approximately 385,000 households to buy, refinance, or rent a home. We also assisted borrowers through foreclosure prevention solutions, allowing more than 24,000 homeowners to remain in their homes, highlighting how our role extends beyond housing access. We are proud of the positive impact we are making for households across America. With that, I will turn over to Chryssa C. Halley, our Chief Financial Officer, to walk through our financial results.

[Chryssa C. Halley, CFO at Fannie Mae]

Thank you, Peter, and good morning, everyone. Before discussing our first quarter financial results, I want to briefly address the economic and market environment. Although the markets experienced increased volatility towards the end of the quarter, these developments did not materially impact our first quarter results, and we are closely monitoring factors that could influence the credit performance of our guarantee book. We believe our strong credit profile, $112.7 billion in net worth and risk management capabilities position us to manage through periods of increased uncertainty. Turning to our first quarter performance on page 2 of the earnings presentation, we earned net income of $3.7 billion, a 5% increase from the prior quarter.

[Chryssa C. Halley, CFO at Fannie Mae]

Our core guarantee business drove strong net revenues in the first quarter, with $5.9 billion in guarantee fee revenue accounting for 81% of net revenues. We earn these guarantee fees in exchange for providing credit protection on mortgage-backed securities we issue in the secondary market. Our first quarter performance also benefited from lower non-interest expense as recent cost reduction actions translated into savings. Non-interest expense declined 8% quarter-over-quarter and 16% year-over-year, reducing the administrative expense ratio from 12.6% in the fourth quarter of 2025 to 10.2% in the first quarter. Turning to the other components of pre-tax income, other losses in the first quarter were driven by investment losses on purchases of Fannie Mae MBS for our retained mortgage portfolio.

[Chryssa C. Halley, CFO at Fannie Mae]

The $277 million credit loss provision included both single-family and multifamily provisions. Finally, to evaluate our financial performance and capital efficiency, we calculate an illustrative return on required equity measure based on annualized year-to-date net income divided by our average Common Equity Tier 1 capital requirement. The first quarter illustrative return was 10.4%, an increase of 20 basis points from the prior quarter. Page two highlights the size and stability of our guarantee business, driven by our $4.1 trillion guarantee book. At the end of 2025, we remained the largest guarantor of residential mortgage debt outstanding in the U.S., backing an estimated 24% of single-family and 21% of multifamily mortgage debt outstanding.

[Chryssa C. Halley, CFO at Fannie Mae]

While guarantee fee revenue continues to drive a substantial majority of our net interest income, our portfolio income also increased 2% quarter-over-quarter and 9% year-over-year. I will discuss our portfolios further on page 14. On page four, our net interest margin increased slightly from 2025 levels. Our total guarantee book continued to reprice higher in the first quarter as higher average guarantee fees in our larger single-family business outweighed a decline in average guarantee fees in the multifamily business. I will discuss key factors that impact pricing when I discuss our business segment results. Turning to our credit metrics on page five, single-family credit performance was relatively stable quarter-over-quarter, and our single-family serious delinquency rate remained near historically low levels.

[Chryssa C. Halley, CFO at Fannie Mae]

Our multifamily serious delinquency rate increased in the first quarter as additional loans became seriously delinquent due to sustained market challenges in recent periods. On page six, we highlight offsetting impacts that resulted in a flat allowance quarter-over-quarter. We built our single-family allowance by $14 million with $89 million in net charge-offs, more than offset by a $103 million provision for credit losses. We reduced our multifamily allowance by $14 million, with $188 million in net charge-offs, which drove the net charge-off ratio seven basis points higher than the prior quarter. The impact of these net charge-offs on the multifamily allowance was largely offset by a $174 million provision for credit losses, primarily driven by an increase in loan delinquencies and weakened property valuations on certain problem loans.

[Chryssa C. Halley, CFO at Fannie Mae]

On page seven, our first quarter administrative expense was 19% lower quarter-over-quarter and 25% lower year-over-year, driven by recent actions to reduce our workforce, spending on contractors and consultants, and our real estate footprint. While our results may vary from quarter-to-quarter, we are committed to sustaining a smaller cost base by remaining focused on operational efficiency, including by automating manual processes and increasing productivity with AI. On page eight, we discuss the drivers of our regulatory capital requirements. Risk-weighted assets and risk density increased quarter-over-quarter, driven by market risk from retained mortgage portfolio growth, credit risk on new acquisitions, and less capital relief from credit risk transfer or CRT transactions.

[Chryssa C. Halley, CFO at Fannie Mae]

Our CET1 capital requirement declined in the first quarter as an increase in the minimum requirement was more than offset by a $3 billion reduction in the stability capital buffer, which is recalibrated annually. On page nine, we highlight our success in continuing to build our net worth and make progress towards meeting our capital requirements. Since January 2020, we have increased our net worth by $99 billion, including $52 billion since we began reporting our capital position under the Enterprise Regulatory Capital Framework for the fourth quarter of 2022. On page 10, the single-family business remained a large, stable contributor to net revenues. In the first quarter, the business acquired $99 billion of loans, the highest quarterly volume since 2022, and generated $6 billion in net revenues.

[Chryssa C. Halley, CFO at Fannie Mae]

Base guarantee fee revenue was relatively stable quarter-over-quarter and year-over-year as the guarantee book continued to reprice higher, offsetting the impact of book declines. Although portfolio income was higher in the first quarter, an $86 million increase in hedge accounting expenses resulted in slightly lower net revenues quarter-over-quarter. To wrap up this page, significant reductions in non-interest expense and higher fair value gains in the first quarter, partially offset by higher investment losses, resulted in higher net income quarter-over-quarter and year-over-year. Page 11 reinforces the strong credit quality of our single-family acquisitions in the first quarter. Weighted average OLTV declined slightly given the higher share of refinance acquisitions in the first quarter. While weighted average FICO scores remained stable quarter-over-quarter at 757.

[Chryssa C. Halley, CFO at Fannie Mae]

The share of our first quarter single-family acquisitions with DTI greater than 43% declined 2 percentage points from 2025 levels to 34%, driven by a higher share of refinance activity in the first quarter. Turning to page 12, multifamily continued to price business competitively to deliver $17 billion in new business volume and grow the guarantee book to $542 billion in the first quarter. This growth supported relatively stable multifamily guarantee fee revenue quarter-over-quarter, despite a lower average guarantee fee charged on the multifamily guarantee book. As a reminder, to price our multifamily business, we consider many factors, including individual loan characteristics and external forces, such as interest rates, MBS spreads, the availability and cost of other sources of liquidity, and our mission-related goals.

[Chryssa C. Halley, CFO at Fannie Mae]

Despite the strength of multifamily net revenues, the higher first quarter provision for credit losses and shift from other gains to other losses drove multifamily net income lower quarter-over-quarter and year-over-year. On page 13, we remain focused on maintaining the credit quality of our multifamily guarantee book. Weighted average debt service coverage and original loan-to-value metrics for both the guarantee book and new acquisitions remain roughly in line with 2025 levels. Because of our unique DUS risk-sharing model and our CRT programs, nearly all our multifamily guarantee book had some form of credit protection at quarter end. On page 14, we highlight how we are effectively using our balance sheet as our net worth grows.

[Chryssa C. Halley, CFO at Fannie Mae]

We grew our retained mortgage portfolio by $36 billion in the first quarter and reduced our Corporate Liquidity Portfolio by $7 billion, reflecting a shift in our portfolio mix towards higher-yielding investments. We also increased long-term debt issuance during the quarter to replace debt scheduled to mature later in the year and to further enhance our liquidity position by taking advantage of favorable market conditions. To wrap up, our first quarter results underscore the strength of our business model. We benefited from the durability and quality of our $4.1 trillion Guarantee Book, a leaner cost structure that supported higher earnings, and a strong and growing net worth position. Together, these strengths position us well to navigate market challenges, deliver solid results, and continue supporting the U.S. housing market. Thank you again for joining today's webcast.

[Operator]

Thank you, everyone. That concludes today's webcast. You may disconnect.

Participants

Executives

• Chryssa C. Halley, CFO
• Peter Akwaboah, Acting CEO and COO
• Terence O'Hara, Director of Enterprise Communications