Fannie Mae Q2 2026 Earnings Report

Fannie Mae EPS Results

• Actual EPS: $0.68
• Consensus EPS: $0.63
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A

Fannie Mae Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Fannie Mae Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong quarterly performance: Net income rose 7% quarter-over-quarter and 20% year-over-year to $4.0 billion, while net revenues increased 4% to $7.6 billion. The company said its $4.1 trillion guaranty book and disciplined expense management supported results.
• Positive Sentiment: Net worth surpassed $116 billion, further reducing Fannie Mae’s regulatory capital deficit and strengthening its ability to provide housing-market liquidity. The company supplied $125 billion in second-quarter liquidity, supporting approximately 417,000 households.
• Positive Sentiment: Cost efficiency continued to improve: Non-interest expense declined 5% quarter-over-quarter and 11% year-over-year, while the administrative expense ratio remained below 11%. Management also cited technology and AI investments as potential longer-term productivity drivers.
• Negative Sentiment: Credit costs increased, particularly in multifamily. The total allowance rose $161 million, including a $102 million multifamily increase driven by weaker property valuations, slower net operating income growth, and newly serious delinquencies; management expects multifamily market challenges to produce additional delinquencies.
• Neutral Sentiment: Interest-rate risk management affected comprehensive income: Fannie Mae increased longer-term rate exposure, including U.S. Treasury securities, and recorded $150 million in net unrealized losses on its available-for-sale portfolio due to higher long-term rates.

Presentation

[Operator]

Good day, welcome to the Fannie Mae second 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 all for joining today's webcast to discuss Fannie Mae's second quarter 2026 financial results. Please note this webcast includes forward-looking statements, including expectations related to the future performance and credit characteristics of the Company's book of business, the Company's future financial and mission performance, the Company's future financial condition, and the Company's business plans and strategies and their impact. Future events may turn out to be very different from these statements.

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

Factors that may lead to different results are identified in the Forward-Looking Statements section of the Company's second quarter 2026 Form 10-Q, filed today, and the Forward-Looking Statements and Risk Factors sections 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. We ask that you do not record this webcast for public broadcast, and that you do not publish any full transcript. I'd like now 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's Chief Financial Officer, Chryssa C. Halley.

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

Good morning, thank you for joining us today. We delivered another strong quarter, reporting net income of $4 billion, up 7% from the first quarter, 20% year-over-year, with net revenues of $7.6 billion. Our performance reflects the durability of our guaranteed business, the resilience of our balance sheet, and the disciplined execution of our strategy. These results also enabled us to build our net worth to over $116 billion. This further strengthens our ability to support a housing finance system through all market cycles and enable us to deliver on our mission. In the second quarter alone, we provided $125 billion in liquidity to the mortgage market, helping approximately 417,000 households, including nearly 110,000 homebuyers that were purchasing their first home. We also helped more than 21,000 homeowners remain in their homes through our foreclosure prevention efforts.

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

These are tangible examples of how our financial strength translates into meaningful outcomes for individuals, families, and communities across the country. We are also focused on helping our lender and industry partners serve borrowers more efficiently. This quarter, we updated our property insurance requirements, including changes to condominium policies to address affordability and insurance availability challenges while maintaining prudent risk management standards. We continued our efforts to modernize how properties are valued through our appraisal alternatives. We'd helped more than 76,000 households reduce appraisal-related closing costs during the second quarter, generating $45 million in estimated savings, bringing cumulative estimated borrower savings since 2018 through appraisal alternatives to more than $3 billion. In June, we launched the Purchase Application-Level Index, or PALI, providing the market with new, timely insights into future home purchase activity that complements our existing refinance index.

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

These innovations reflect our commitment to making the housing finance system more efficient, transparent, and accessible. At the same time, we are operating with greater discipline and efficiency compared with last year. This quarter marks one year since we launched our operational efficiency initiative, that work is delivering results. We maintained an administrative expense ratio below 11% this year, reflecting our focus on simplifying how we operate while investing in capabilities that we believe will drive long-term value for borrowers and business partners. Taken together, our second quarter results reinforce three important points. First, effective management of our $4.1 trillion guaranty book delivered strong financial performance in the second quarter. Second, that financial strength enables us to expand our impact by providing liquidity, supporting affordable homeownership and rental housing, and investing in innovations designed to improve the mortgage experience.

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

Third, we remain well-positioned to serve borrowers, renters, partners, and the housing market while operating in a safe and sound manner. Before I turn over to Chryssa Halley, our Chief Financial Officer, I would like to thank our employees for your continued dedication and our customers and business partners for the trust they place in us every day. With that, I would turn it to Chryssa to walk through our financial results.

[Chryssa C. Halley, CFO at Fannie Mae]

Thank you, Peter, and good morning, everyone. As Peter previously mentioned, in the second quarter, we earned net income of $4 billion, a 7% increase from the prior quarter, 20% increase from a year ago. The quarter once again demonstrated the strength and stability of our core guaranty business, which represented nearly 80% of total net revenues. Net revenues increased to $7.6 billion, up 4% quarter-over-quarter, providing a strong earnings foundation that more than offset the impact of the higher credit provision during the period. The benefits of our disciplined approach to expense management also remained an important contributor to our performance. With total non-interest expense 5% lower quarter-over-quarter.

[Chryssa C. Halley, CFO at Fannie Mae]

Although administrative expenses increased 9% from the prior quarter, our overall cost structure remains significantly improved and the $66 million increase notably included $56 million in costs associated with reducing our real estate footprint and severance costs. Our second quarter administrative expense ratio of 10.7% remained below the quarterly levels observed from 2023 to 2025, reflecting the sustained impact of the efficiency initiatives we began implementing in 2025. We remain focused on capital efficiency as measured by our illustrative return on required equity measure, calculated as annualized year-to-date net income, divided by our average common equity Tier 1 capital requirement. Our second quarter illustrative return was 10.8%, an increase of 40 basis points from the prior quarter. Finally, we are using our balance sheet effectively to support market liquidity, achieve higher returns, and reduce earnings volatility from changes in interest rates.

[Chryssa C. Halley, CFO at Fannie Mae]

As part of our updated interest rate risk management strategy, we have increased our exposure to longer-term rate positions, including U.S. Treasury securities classified as available for sale to reduce earnings volatility associated with short-term interest rate movements. This quarter, we recorded $150 million in net unrealized losses on our available-for-sale investment portfolio due to movements in long-term interest rates. These losses are reflected in total comprehensive income. Page three reinforces the scale and stability of our guaranty business. Our average guaranty book of $4.1 trillion generated over $6 billion of guarantee fee revenue during the quarter, an increase of $117 million from the first quarter. Growth was primarily driven by single-family deferred guarantee fee income.

[Chryssa C. Halley, CFO at Fannie Mae]

As a reminder, elevated loan prepayment activity as seen late in the first quarter stemming from lower mortgage rates can result in higher deferred guarantee fee income in subsequent periods after MBS holders have been repaid. This created a favorable quarter-over-quarter comparison in the second quarter. While guarantee fee revenue continued to drive the majority of our net interest income, portfolio income increased 12% from the first quarter, reflecting growth in our retained mortgage portfolio and corporate liquidity portfolio. Together, these revenue streams continue to provide a durable source of earnings. Building on the previous page four demonstrates our continued progress expanding net interest margin. Year to date, net interest margin increased to 68.6 basis points, reaching the highest level since 2022.

[Chryssa C. Halley, CFO at Fannie Mae]

Our guarantee fees continued to anchor stable margins as an increase in average single-family guarantee fees more than offset a decrease in average guarantee fees in our multifamily business. The increase in net interest margin in 2026 was primarily driven by higher portfolio interest income, which more than offset higher short-term and long-term debt expense for the quarter. Moving to expenses on page five. Second quarter non-interest expense declined 5% quarter-over-quarter and 11% year-over-year, primarily driven by a shift from other expense to other income. While administrative expenses were $66 million higher quarter-over-quarter, our cost structure remained significantly improved relative to prior years. For example, second quarter administrative expenses this year are 4% lower than the same period last year and 10% lower than the second quarter of 2024.

[Chryssa C. Halley, CFO at Fannie Mae]

We remain focused on disciplined expense management and improving productivity, including through the use of technology and AI that we believe will support earnings growth over time. Turning to our credit metrics on page six, our single-family serious delinquency rate was flat quarter-over-quarter, remaining at historically low levels. While multifamily market challenges continued to drive new delinquencies, the multifamily serious delinquency rate declined, primarily driven by a recent loan portfolio modification and foreclosure activity. Looking ahead, we expect ongoing multifamily market challenges to result in additional delinquencies. The higher share of 30-day delinquent loans in the second quarter reflects a return to recent levels for multifamily and the impact of seasonal trends for single-family, as single-family delinquencies are typically lower in the first quarter of the year when borrowers receive tax refunds.

[Chryssa C. Halley, CFO at Fannie Mae]

Page seven shows that we increased our total allowance by $161 million in the second quarter. Our single-family allowance increased by $59 million, reflecting the combined impact of new acquisitions and newly delinquent loans. The impact of these drivers was partially offset by a benefit from improvements in actual home prices. During the quarter, we recognized $167 million of net charge-offs and recorded a $226 million provision for credit losses. We built our multifamily allowance by $102 million for the quarter as the provision for credit losses exceeded net charge-offs. The $259 million provision was primarily driven by weaker property valuations, slower net operating income growth, and provision for loans that became seriously delinquent. We also recognized $157 million of net charge-offs, including charge-offs on loans that became seriously delinquent in the quarter. On page eight, the single-family business remained a large, stable contributor to net revenues.

[Chryssa C. Halley, CFO at Fannie Mae]

Stronger single-family housing activity during the spring buying season delivered $111 billion in second quarter acquisitions, our highest volume since the third quarter of 2022. Compared to the first quarter, refinance activity slowed as mortgage rates moved higher during the second quarter, whereas purchase acquisitions increased. While acquisition guarantee fees declined by 1.6 basis points, our $3.6 trillion single-family guarantee book continued to reprice higher, and we realized higher deferred guarantee fee income, supporting a 4% increase in net revenues from both the first quarter and the prior year. Overall, a shift to investment gains and higher net revenues more than offset the impact of the shift to fair value losses and higher provision for credit losses, resulting in second quarter net income of $3.3 billion, up 3% from the first quarter. Page nine highlights the strong credit quality of our second quarter single-family acquisitions.

[Chryssa C. Halley, CFO at Fannie Mae]

The weighted average original loan-to-value ratio remained stable quarter-over-quarter at 77%, while weighted average FICO scores were also relatively stable quarter-over-quarter at 756. Overall, our acquisition profile reflects our commitment to disciplined underwriting and credit quality. On page 10, multifamily delivered $14 billion in new business volume during the quarter and grew the guarantee book to $545 billion, supporting a 2% increase in net revenues from the prior quarter. While higher mortgage interest rates and competitive pressures constrained new business volumes, we remained disciplined and priced new business competitively. Non-interest expense declined quarter-over-quarter, mainly related to foreclosed property expense and expected credit enhancement recoveries. Multifamily foreclosed property expense can vary from quarter-to-quarter and was elevated in the first quarter, reflecting the impact of weakened valuations on foreclosed properties.

[Chryssa C. Halley, CFO at Fannie Mae]

Overall, lower non-interest expense and lower fair value losses more than offset the higher provision for credit losses, resulting in net income of $704 million in the second quarter, up 29% from the first quarter. On page 11, 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 remained in line with 2025 levels. Also, because of our unique DUS risk-sharing model and our CRT programs, nearly all of our multifamily guarantee book had some form of credit protection at quarter end.

[Chryssa C. Halley, CFO at Fannie Mae]

Turning to our balance sheet on page 12, we issued $25 billion of debt during the quarter to replace debt scheduled to mature later in the year and to support balance sheet growth, including purchases of U.S. Treasury securities as part of our interest rate risk management strategy. Growth in our agency MBS and lender liquidity portfolio slowed in the second quarter versus the last three quarters. We continue to monitor market dynamics, spreads, and returns to make sound decisions about balance sheet deployment while remaining in compliance with portfolio limits and managing interest rate risk. On page 13, we discuss the drivers of our regulatory capital requirements.

[Chryssa C. Halley, CFO at Fannie Mae]

Risk-weighted assets and risk density increased slightly quarter-over-quarter, reflecting the replacement of seasoned loans with new acquisitions that carry higher capital requirements at origination, as well as weaker multifamily property valuations and reduced capital relief from credit risk transfer or CRT transactions. As a result, our minimum CET1 capital requirement also increased slightly in the second quarter. To wrap up on page 14, our financial performance for the quarter highlights the benefits of our large, stable revenue base and continued expense and capital discipline. Together, these strengths contributed to our highest level of quarterly net income in over a year and drove a further reduction in our regulatory capital deficit. With more than $116 billion in net worth, we are well positioned to continue serving the housing market, fulfill our mission, and operate in a safe and sound manner. Thank you again for joining today's webcast.

[Operator]

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

Participants

Executives

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