Fannie Mae filed third quarter financial results this morning and I’m pleased to report another strong quarter for the company and Multifamily. We couldn’t continue to achieve these results without you, and I thank you for your business and continued partnership in serving the rental housing market.
Some highlights from our filing are below.
Multifamily Business Highlights
- Multifamily's net income was $640 million in the third quarter of 2019, driven by $745 million in net interest income. Approximately 80% of our multifamily net interest income in the quarter was derived from guaranty fee income, which continued to provide a stable driver of earnings for the business. The multifamily guaranty book of business reached approximately $330 billion in the third quarter of 2019.
- Working with our DUS® Partners, Fannie Mae provided $18.0 billion in multifamily financing in the third quarter of 2019, which supported 194,000 units of multifamily housing. Over 90% of the multifamily units the company financed in the third quarter of 2019 were affordable to families earning at or below 120% of the area median income, providing support for both affordable and workforce housing.
- Approximately 44% of our multifamily new business volume of $52.1 billion for the first nine months of 2019 counted toward FHFA’s 2019 multifamily volume cap. On September 13, 2019, FHFA announced a revised multifamily business volume cap structure. The new multifamily volume cap, which replaced the prior cap effective October 1, 2019, is $100 billion for the five-quarter period ending December 31, 2020. The new cap applies with no exclusions. In addition, FHFA directed that 37.5% of our multifamily business during that time period must be mission-driven, affordable housing, pursuant to FHFA’s guidelines for mission-driven loans.
- As of September 30, 2019, the company has completed six Multifamily Credit Insurance Risk Transfer™ (MCIRT™) transactions since the inception of the program, which covered multifamily loans with an unpaid principal balance of $62.0 billion at the time of the transactions. As of September 30, 2019, 18% of the loans in our multifamily guaranty book of business, measured by unpaid principal balance, were covered by a CIRT transaction.
- On October 30, 2019, Fannie Mae issued its first Multifamily Connecticut Avenue Securities™ (MCAS™) transaction. This issuance transferred a portion of the mortgage credit risk associated with Fannie Mae losses on a $17 billion reference pool of multifamily mortgage loans.
- The multifamily serious delinquency rate remained low at 0.06% as of September 30, 2019.
- Fannie Mae reported third quarter 2019 net income of $4.0 billion, reflecting the strength of the company's underlying business fundamentals.
- The U.S. Department of the Treasury and the FHFA, on the company’s behalf, agreed to increase the amount of capital Fannie Mae is permitted to retain from $3 billion to $25 billion, effective with the third quarter 2019 dividend period. Accordingly, the company can retain its quarterly earnings until it exceeds that capital reserve level, allowing it to begin restoring its capital base. As a result, Fannie Mae’s net worth increased to $10.3 billion as of September 30, 2019.
- Fannie Mae provided over $212 billion in liquidity to the mortgage market in the third quarter of 2019, through its purchases of loans and guarantees of loans and securities, which enabled the financing of approximately 915,000 home purchases, refinancings, or rental units.
More information is available here: