Fannie Mae Multifamily Reports Net Income for 2018

Multifamily Wire

Multifamily Facts

Rob LevinThank you for making 2018 an outstanding year for Fannie Mae Multifamily! Today, Multifamily posted an annual net income of $2.2 billion.

It is our partnership and the success of the Loan We All Own that makes all the difference in our results. Together with our DUS partners, Fannie Mae provided $65.4 billion in financing to the multifamily market, while maintaining prudent credit standards, a quality book of business, and delivering solid financial results. We also worked with you to move the DUS platform to new levels through continued innovation with DUS Gateway, DUS Disclose and our various other technology enhancements. I look forward to a terrific 2019 and our continued partnership in providing financing and securitization for rental workforce housing in every market, every day.

Below are some highlights from our filing.

Multifamily Business Highlights

  • Multifamily's net income was $2.2 billion in 2018, driven by $2.8 billion in net interest income. Over 80% of our multifamily revenue comes from guaranty fees, which continue to provide a stable and consistent driver of earnings for the business. Our guaranty fee revenue continued to increase in 2018 as the multifamily guaranty book of business reached over $300 billion. For the fourth quarter, Multifamily's net income was $580 million, likewise driven by $765 million of net interest income.
  • Fannie Mae provided $65.4 billion in multifamily financing, which supported 777,000 units of multifamily housing in 2018. More than 90% of the multifamily units the company financed were affordable to families earning at or below 120% of the median income, providing support for both affordable and workforce housing. Approximately 46% of Fannie Mae's 2018 multifamily new business counted toward FHFA's 2018 multifamily volume cap.
  • Fannie Mae was one of the largest issuers of Green Bonds in the world in 2018, issuing more than $20 billion Green MBS during the year and increased the multifamily green financing book of business to more than $50 billion.
  • In 2018, we completed our third and fourth multifamily CIRT transactions, which covered multifamily loans with an unpaid balance of approximately $22 billion. As of December 31, 2018, 12% of the unpaid principal balance in our multifamily guaranty book was covered by a CIRT transaction.
  • The multifamily serious delinquency rate was 0.06% as of December 31, 2018, a decrease from 0.11% as of December 31, 2017, driven primarily by a decrease in hurricane-impacted loans with interim forbearances.

Company Highlights

  • Fannie Mae reported 2018 net income of $16.0 billion, compared with net income of $2.5 billion in 2017. Fannie Mae's annual pre-tax income for 2018 was $20.1 billion, compared with $18.4 billion in 2017, reflecting the strength of the company's underlying business fundamentals.
  • The increase in net income for 2018 compared with 2017 was driven primarily by the absence of a $9.9 billion one-time charge for federal income taxes recorded in 2017 and the lower corporate tax rate in effect as a result of the Tax Cuts and Jobs Act of 2017.
  • For the fourth quarter of 2018, Fannie Mae reported net income of $3.2 billion. As a result, the company reported a net worth of $6.2 billion as of December 31, 2018.
  • Fannie Mae provided approximately $512 billion in liquidity to the mortgage market in 2018, including approximately $122.5 billion in liquidity in the fourth quarter of 2018. Through its purchases and guarantees of mortgage loans in 2018, Fannie Mae acquired approximately 1.9 million mortgage loans.

More information is available here:

Best,

Jeff