FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE (FNMA): Results of Operations and Financial Condition
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE (FNMA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Fannie Mae Earns $4.0 Billion in Second Quarter 2026 • Growth in earnings from prior quarter reflects increased net revenues (1) , which more than offset higher credit loss provision • 34 th consecutive quarterly profit pushed net worth to $116.5 billion, a $103.0 bi
How this was made
The 30-second read
Why it matters
The filing updates quarterly earnings, capital (net worth, illustrative CET1 return), and credit-loss provisioning, which are core drivers of FNMA valuation and risk pricing.
Market read
Fresh quarterly financial and credit metrics can reset near-term expectations for FNMA’s earnings power and credit-cost outlook.
What to watch
Traders may focus on the mix shift (investment gains vs fair value losses) and the CET1 illustrative return (10.8% vs 10.4%) as signals for capital and risk appetite, not just net income.
Fannie Mae Earns $4.0 Billion in Second Quarter 2026
Net income increased to $4.0 billion from $3.7 billion in 1Q 2026 and $3.317 billion in 2Q25, while net revenues rose to $7.6 billion, net worth reached $116.5 billion, and total comprehensive income was $3.830 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest incomeother | $7,493 million | 4 % | 5 % |
| Fee and other incomeother | $72 million | (12) % | (16) % |
| Net revenuesother | $7,565 million | 4 % | 4 % |
| Fair value gains (losses), netother | $(76) million | NM | NM |
| Investment gains (losses), netother | $53 million | NM | NM |
| Other gains (losses), netother | $(23) million | 85 % | NM |
| Provision for credit lossesother | $(485) million | (75) % | 49 % |
| Administrative expensesother | $(811) million | (9) % | 4 % |
| Legislative assessmentsother | $(934) million | — %* | 1 % |
| Credit enhancement expenseother | $(361) million | (1) % | 10 % |
| Other income (expense), netother | $38 million | NM | NM |
| Total non-interest expenseother | $(2,068) million | 5 % | 11 % |
| Income before federal income taxesother | $4,989 million | 7 % | 20 % |
| Provision for federal income taxesother | $(1,007) million | (7) % | (20) % |
| Net incomeother | $3,982 million | 7 % | 20 % |
| Total comprehensive incomeother | $3,830 million | 5 % | 15 % |
| Net worthother | $116,497 million | 3 % | 15 % |
| Guaranty book of businessother | $4.1 trillion | – | – |
| Administrative expense ratioother | 10.7% | – | – |
| Illustrative return on average required CET1 capitalother | 10.8% | – | – |
| Single-family conventional acquisition volumeother | $111.2 billion | – | – |
| Average single-family conventional guaranty bookother | $3.56 trillion | – | – |
| Single-family serious delinquency rateother | 0.58% | – | – |
| Multifamily acquisition volumeother | $14.2 billion | – | – |
| Multifamily book of businessother | $544.6 billion | – | – |
| Multifamily serious delinquency rateother | 0.60% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Single-FamilyHigher net interest income, higher net deferred guaranty fee income, and a $3.6 trillion conventional guaranty book with an average charged guaranty fee of 49.0 basis points. | $6,301 million | 4 % | 4 % |
| MultifamilyNet revenues were supported by net interest income of $1,245 million. The guaranty book was $544.6 billion with an average charged guaranty fee of 70.5 basis points. | $1,264 million | 2 % | 7 % |
What drove it
- Net revenues increased primarily because of higher net interest income from portfolios and higher net deferred guaranty fee income.
- Other losses decreased by $133 million compared with 1Q 2026, driven by a shift from investment losses to investment gains, partially offset by a shift from fair value gains to fair value losses.
- Non-interest expense decreased to $2.1 billion from $2.2 billion in 1Q 2026, driven primarily by a shift from other expense to other income in the Multifamily segment, partially offset by higher administrative expenses.
- Fannie Mae provided $125 billion in mortgage-market liquidity, supporting approximately 201,000 home purchases, 117,000 refinancings, and 99,000 rental units.
- Single-family purchase acquisition volume increased by $17.9 billion, partially offset by a $5.4 billion decrease in refinance acquisition volume.
Concerns
- Provision for credit losses increased to $485 million from $277 million in 1Q 2026.
- Multifamily provision for credit losses was $259 million, primarily associated with weaker property valuations, slower net operating income growth, and loans that became seriously delinquent.
- Single-family provision for credit losses was $226 million, primarily associated with new acquisitions, newly delinquent loans, and the redesignation of certain loans to held for sale.
- Fair value gains (losses), net shifted to $(76) million from $121 million in 1Q 2026.
- Multifamily acquisition volume declined to $14.2 billion from $17.1 billion in 1Q 2026.
What to watch
- Provision for credit losses and the stated effects of property valuations, net operating income growth, and serious delinquencies in the multifamily guaranty book.
- The direction of fair value gains (losses), net and investment gains (losses), net.
- Single-family purchase and refinance acquisition volumes.
- The average charged guaranty fee on newly acquired conventional loans, which decreased to 53.5 basis points from 55.1 basis points in 1Q 2026.
- Multifamily book growth and its average charged guaranty fee, which decreased to 70.5 basis points from 71.1 basis points as of March 31, 2026.
Balance sheet and cash flow
- Net worth was $116.5 billion as of June 30, 2026.
- Total comprehensive income was $3,830 million.
- Net worth increased by $103.0 billion since the start of 2020.
Analysis
Fannie Mae reported net income of $3,982 million in the second quarter of 2026, compared with $3,720 million in 1Q 2026 and $3,317 million in 2Q25. Net revenues were $7,565 million, up $285 million, or 4 %, from 1Q 2026 and up $324 million, or 4 %, from 2Q25. Net interest income increased to $7,493 million, while fee and other income declined to $72 million. The release attributes the revenue improvement primarily to higher net interest income from portfolios and higher net deferred guaranty fee income.
The quarter included favorable movement in investment gains (losses), net, which shifted to $53 million from $(277) million in 1Q 2026. Other gains (losses), net improved to $(23) million from $(156) million. Those items were partly offset by fair value gains (losses), net shifting to $(76) million from $121 million and by a higher provision for credit losses of $(485) million versus $(277) million. Total non-interest expense declined to $(2,068) million from $(2,183) million, although administrative expenses increased to $(811) million from $(745) million.
Single-Family generated net revenues of $6,301 million, up 4 % from both 1Q 2026 and 2Q25. Conventional acquisition volume increased to $111.2 billion from $98.7 billion in 1Q 2026, driven by higher purchase acquisition volume. Its provision for credit losses rose to $(226) million from $(103) million. The single-family serious delinquency rate remained unchanged at 0.58% as of June 30, 2026, and the average charged guaranty fee on new conventional acquisitions decreased to 53.5 basis points from 55.1 basis points.
Multifamily net revenues were $1,264 million, up 2 % sequentially and 7 % year over year. Its book of business grew to $544.6 billion as of June 30, 2026, while acquisition volume declined to $14.2 billion from $17.1 billion in 1Q 2026. The multifamily serious delinquency rate decreased to 0.60% from 0.78%, but the segment's provision for credit losses increased to $(259) million from $(174) million amid weaker property valuations, slower net operating income growth, and newly seriously delinquent loans.
Capital continued to build. Net worth rose to $116,497 million from $112,667 million in 1Q 2026 and $101,636 million in 2Q25, while total comprehensive income was $3,830 million. The illustrative return on average required CET1 capital increased to 10.8% from 10.4% in the first quarter of 2026. The provided release contains no forward guidance, capital-return announcement, cash balance, debt balance, operating cash flow, or free cash flow disclosure.
Management, verbatim
The strength of our core guaranty business and financial discipline enabled us to deliver another quarter of solid earnings and real impact. We provided $125 billion in mortgage market liquidity, supporting 417,000 home purchases, refinances, and rental units, including helping almost 110,000 borrowers buy their first home. Our financial performance advances our mission to promote a stable, accessible, and affordable housing market across America.
Peter Akwaboah, Acting Chief Executive Officer and Chief Operating Officer, Fannie Mae
Our second quarter results highlight 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, bringing our net worth to above $116 billion.
Chryssa C. Halley, Chief Financial Officer, Fannie Mae
In a dynamic multifamily market, we remain focused on disciplined growth, working with our lenders to provide reliable liquidity for borrowers and support the demand for affordable rental housing across the country.
Kelly Follain, EVP, Head of Multifamily, Fannie Mae
Not in the filing
stated, not guessed- Gross margin
- Operating income
- Earnings per share, including GAAP and non-GAAP EPS
- Non-GAAP financial measures
- Forward guidance
- Prior guidance for comparison
- Share repurchases
- Dividends
- Cash balance
- Debt balance
- Operating cash flow
- Free cash flow
- Complete Multifamily Business Financial Results table beyond provision for credit losses, as the provided filing text is truncated
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The SEC 8-K includes Fannie Mae’s 2Q26 results of operations and financial condition, with key metrics and segment highlights.
Ticker impact
Fannie Mae reported 2Q26 net income of $4.0B, net worth of $116.5B, and a higher $485M credit loss provision in an 8-K.
Near-term trading likely hinges on credit-loss trajectory versus net interest and guaranty-fee strength; expect volatility around credit metrics.
The filing provides fresh quarterly datapoints (net income, net revenues, credit loss provision, CET1 return) that can reframe expectations for credit costs and capital generation.
Market effects
GSE earnings and credit-loss provisioning can influence read-across sentiment for mortgage credit risk and agency MBS performance.
Limited direct regional impact; housing finance conditions may affect broader mortgage origination sentiment.
Low global relevance, but agency mortgage credit risk can marginally affect global fixed-income risk appetite.
Counterpoint
The quarter’s improvement in net income may be partly offset by fair value loss shifts and a higher credit loss provision, so headline profitability may not imply improving credit fundamentals.
Key entities
- issuerFannie Mae
Reported 2Q26 net income of $4.0B, net worth of $116.5B, net revenues of $7.6B, and credit loss provision of $485M.
- capital_metricCET1 (illustrative return)
Illustrative return on average required CET1 capital was 10.8% in 2Q26, up from 10.4% in 1Q26.
