Fannie Mae Q2 Earnings Call Highlights

Fannie Mae OTCMKTS: FNMA reported second-quarter 2026 net income of $4 billion, up 7% from the first quarter and 20% from a year earlier, as growth in net revenues and lower non-interest expenses more than offset a higher credit-loss provision.

Net revenues rose 4% sequentially to $7.6 billion. Acting Chief Executive Officer and Chief Operating Officer Peter Akwaboah said the company’s results reflected “the durability of our guaranty business, the resilience of our balance sheet, and the disciplined execution of our strategy.” Fannie Mae ended the quarter with net worth exceeding $116 billion.

The company said it provided $125 billion in liquidity to the mortgage market during the quarter, serving approximately 417,000 households. That total included nearly 110,000 first-time homebuyers. Fannie Mae also said its foreclosure-prevention activities helped more than 21,000 homeowners remain in their homes.

Chief Financial Officer Chryssa C. Halley said the core guaranty business represented nearly 80% of total net revenues during the quarter. Fannie Mae’s average guaranty book stood at $4.1 trillion and generated more than $6 billion in guarantee-fee revenue, an increase of $117 million from the first quarter. Halley said the increase was primarily driven by single-family deferred guarantee-fee income. She noted that elevated loan prepayments late in the first quarter, stemming from lower mortgage rates, can lead to higher deferred fee income in later periods after mortgage-backed securities holders are repaid.

Portfolio income increased 12% from the first quarter, reflecting growth in the retained mortgage portfolio and corporate liquidity portfolio. Year-to-date net interest margin increased to 68.6 basis points, its highest level since 2022, according to the company.

Fannie Mae’s single-family business recorded $111 billion in acquisitions during the second quarter, its highest quarterly volume since the third quarter of 2022. Purchase acquisitions increased during the spring homebuying season, while refinance activity slowed as mortgage rates increased during the quarter. The company’s single-family guaranty book totaled $3.6 trillion. Single-family net revenues increased 4% from both the first quarter and the prior-year period, supported by higher deferred guarantee-fee income and the ongoing repricing of the guaranty book. Single-family net income was $3.3 billion, up 3% sequentially.

Fannie Mae said the weighted average original loan-to-value ratio on second-quarter single-family acquisitions was 77%, unchanged from the first quarter, while the weighted average FICO score was 756.

The multifamily business produced $14 billion in new business volume and grew its guaranty book to $545 billion. Net revenues increased 2% from the first quarter, though Fannie Mae said higher mortgage rates and competitive pressures constrained new business volumes. Multifamily net income rose 29% sequentially to $704 million. Lower non-interest expense and lower fair-value losses more than offset higher provisions for credit losses, according to Halley.

The company said multifamily market challenges continued to generate new delinquencies, although the multifamily serious delinquency rate declined during the quarter, primarily due to a recent loan portfolio modification and foreclosure activity. Management said it expects ongoing multifamily market challenges to result in additional delinquencies. Fannie Mae increased its total allowance for credit losses by $161 million. The single-family allowance rose $59 million, reflecting new acquisitions and newly delinquent loan.