In This Article:
Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Federal National Mortgage Association Fannie Mae (FNMA) reported a net income of $17 billion in 2024, marking its 28th consecutive quarter of positive earnings.
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The company provided $381 billion of liquidity to the single-family and multifamily markets, assisting approximately 1.4 million households in buying, refinancing, or renting a home.
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Single-family originations increased to an estimated $1.7 trillion in 2024, up from $1.5 trillion in 2023.
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Multifamily mortgage market originations rose to an estimated $295 billion in 2024, up from $246 billion in 2023.
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FNMA has built nearly $37 billion of regulatory capital over the past two years, enhancing its financial stability.
Negative Points
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Net income decreased by $430 million from 2023, primarily due to a lower benefit for credit losses.
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Housing affordability remains a significant challenge, with only one in five consumers believing it is a good time to buy a home.
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The multifamily provision for credit losses increased by $257 million due to declining property values, rising delinquencies, and suspected fraud in lending transactions.
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The multifamily serious delinquency rate increased to 57 basis points at the end of 2024, up from 46 basis points at the end of 2023.
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FNMA faces a $146 billion capital shortfall to its minimum total risk-based capital requirement, largely due to the senior preferred stock not qualifying as regulatory capital.
Q & A Highlights
Q: Can you elaborate on the factors contributing to the decrease in net income for 2024 compared to 2023? A: Priscilla Almodovar, CEO, explained that the decrease in net income from $17.4 billion in 2023 to $17 billion in 2024 was primarily due to a lower benefit for credit losses. The single-family benefit for credit losses was $938 million, driven by improvements in home price forecasts, while the multifamily provision increased due to declining property values and rising delinquencies.
Q: How did the economic conditions in 2024 impact Fannie Mae's operations? A: Priscilla Almodovar, CEO, noted that while consumer spending was steady and unemployment remained low, inflation, particularly in housing, persisted. The 30-year mortgage rate averaged 6.7%, leading to fewer home sales and a lock-in effect. Despite these challenges, Fannie Mae provided $381 billion in liquidity to the housing market, aiding approximately 1.4 million households.