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2015 Q2 8K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2015
 
Federal National Mortgage Association
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Federally chartered corporation
 
000-50231
 
52-0883107
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification Number)
 
 
 
 
 
 
 
3900 Wisconsin Avenue, NW
Washington, DC
 
20016
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: 202-752-7000
(Former Name or Former Address, if Changed Since Last Report): ______________
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




The information in this report, including information in the exhibits submitted herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of Section 18, nor shall it be deemed incorporated by reference into any disclosure document relating to Fannie Mae (formally known as the Federal National Mortgage Association), except to the extent, if any, expressly incorporated by specific reference in that document.

Item 2.02 Results of Operations and Financial Condition.
On August 6, 2015, Fannie Mae filed its quarterly report on Form 10-Q for the quarter ended June 30, 2015 and issued a news release reporting its financial results for the periods covered by the Form 10-Q. The news release, a copy of which is furnished as Exhibit 99.1 to this report, is incorporated herein by reference. A copy of the news release may also be found on Fannie Mae’s Web site, www.fanniemae.com, in the “About Us” section under “Investor Relations/Quarterly and Annual Results.” Information appearing on the company’s Web site is not incorporated into this report.
Item 7.01 Regulation FD Disclosure.
On August 6, 2015, Fannie Mae posted to its Web site a 2015 Second Quarter Credit Supplement presentation consisting primarily of information about Fannie Mae’s guaranty book of business. The presentation, a copy of which is furnished as Exhibit 99.2 to this report, is incorporated herein by reference. A copy of the presentation may also be found on Fannie Mae’s Web site, www.fanniemae.com, in the “About Us” section under “Investor Relations/Quarterly and Annual Results.”
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The exhibit index filed herewith is incorporated herein by reference.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
FEDERAL NATIONAL MORTGAGE ASSOCIATION
 
 
 
 
By
/s/ David C. Benson
 
 
David C. Benson
 
 
Executive Vice President and
Chief Financial Officer
Date: August 6, 2015




EXHIBIT INDEX
The following exhibits are submitted herewith:
 
 
 
 
Exhibit Number
  
Description of Exhibit
99.1

  
News release, dated August 6, 2015
99.2

  
2015 Second Quarter Credit Supplement presentation, dated August 6, 2015



2015 Q2 Press Release

Resource Center: 1-800-732-6643                                  
Exhibit 99.1
Contact:     Pete Bakel
202-752-2034
Date:    August 6, 2015

Fannie Mae Reports Net Income of $4.6 Billion and Comprehensive Income of $4.4 Billion for Second Quarter 2015
•
Fannie Mae reported net income of $4.6 billion and comprehensive income of $4.4 billion for the second quarter of 2015.
•
Fannie Mae expects to pay $4.4 billion in dividends to Treasury in September 2015. With the expected September dividend payment, the company will have paid a total of $142.5 billion in dividends to Treasury. Dividend payments do not reduce prior Treasury draws, which total $116.1 billion since 2008.
•
Fannie Mae provided approximately $144 billion in liquidity to the mortgage market in the second quarter of 2015, enabling families to buy, refinance, or rent homes.
•
Fannie Mae helped distressed families retain their homes or avoid foreclosure through approximately 34,000 workout solutions in the second quarter of 2015 using a combination of Fannie Mae’s proprietary programs as well as government sponsored programs.
WASHINGTON, DC — Fannie Mae (FNMA/OTC) reported net income of $4.6 billion for the second quarter of 2015 and comprehensive income of $4.4 billion. The company reported a positive net worth of $6.2 billion as of June 30, 2015 resulting in a dividend obligation to Treasury of $4.4 billion, which the company expects to pay in September 2015.
Fannie Mae’s net income of $4.6 billion and comprehensive income of $4.4 billion for the second quarter of 2015 compares to net income of $1.9 billion and comprehensive income of $1.8 billion for the first quarter of 2015. Net income increased due primarily to fair value gains, partially offset by credit-related expense, in the second quarter of 2015.
The company’s financial results for the second quarter of 2015 were affected by an increase in interest rates. Although the increase in interest rates had a positive impact on the fair value of the company’s financial instruments, the increase in interest rates had a negative impact on its credit-related expense. The negative impact on credit-related expense was partially offset by an increase in home prices during the second quarter of 2015. Also contributing to credit-related expense was the redesignation of certain nonperforming single-family loans from “held for investment” to “held for sale” in the second quarter of 2015.
Fannie Mae recognized a provision for federal income taxes of $2.2 billion for the second quarter of 2015, reflecting an effective tax rate of 32 percent.
“We reported another strong quarter of financial performance with solid revenues and an impressive book of business that only continues to improve. We have reduced the risk of our business and have made great strides in transferring credit risk to private capital to better protect taxpayers,” said Timothy J. Mayopoulos, president and chief executive officer. “We are committed to serving our customers and the market with solutions that promote simplicity and certainty. We are creating revolutionary new tools, products, and solutions – and enhancing our existing foundational resources – to support our lenders. We continue to make changes throughout our company that improve the way we work and increase the value we provide to the housing finance system.”  

Second Quarter 2015 Results
 
1

SUMMARY OF SECOND QUARTER 2015 RESULTS
(Dollars in millions)
 
2Q15
 
1Q15
 
Variance
 
2Q15
 
2Q14
 
Variance
Net interest income
 
$
5,677

 
$
5,067

 
$
610

 
$
5,677

 
$
4,904

 
$
773

Fee and other income
 
556

 
308

 
248

 
556

 
383

 
173

Net revenues
 
6,233

 
5,375

 
858

 
6,233

 
5,287

 
946

Investment gains, net
 
514

 
342

 
172

 
514

 
483

 
31

Fair value gains (losses), net
 
2,606

 
(1,919
)
 
4,525

 
2,606

 
(934
)
 
3,540

Administrative expenses
 
(689
)
 
(723
)
 
34

 
(689
)
 
(697
)
 
8

Credit-related income
 
 
 
 
 
 
 
 
 
 
 
 
(Provision) benefit for credit losses
 
(1,033
)
 
533

 
(1,566
)
 
(1,033
)
 
1,639

 
(2,672
)
Foreclosed property (expense) income
 
(182
)
 
(473
)
 
291

 
(182
)
 
214

 
(396
)
Total credit-related (expense) income
 
(1,215
)
 
60

 
(1,275
)
 
(1,215
)
 
1,853

 
(3,068
)
Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees
 
(397
)
 
(382
)
 
(15
)
 
(397
)
 
(335
)
 
(62
)
Other non-interest expenses(1)
 
(202
)
 
5

 
(207
)
 
(202
)
 
(238
)
 
36

Net gains (losses) and income (expenses)
 
617

 
(2,617
)
 
3,234

 
617

 
132

 
485

Income before federal income taxes
 
6,850

 
2,758

 
4,092

 
6,850

 
5,419

 
1,431

Provision for federal income taxes
 
(2,210
)
 
(870
)
 
(1,340
)
 
(2,210
)
 
(1,752
)
 
(458
)
Net income
 
4,640

 
1,888

 
2,752

 
4,640

 
3,667

 
973

Less: Net income attributable to noncontrolling interest
 
—

 
—

 
—

 
—

 
(1
)
 
1

Net income attributable to Fannie Mae
 
$
4,640

 
$
1,888

 
$
2,752

 
$
4,640

 
$
3,666

 
$
974

Total comprehensive income attributable to Fannie Mae
 
$
4,359

 
$
1,796

 
$
2,563

 
$
4,359

 
$
3,711

 
$
648

Dividends distributed or available for distribution to senior preferred stockholder
 
$
(4,359
)
 
$
(1,796
)
 
$
(2,563
)
 
$
(4,359
)
 
$
(3,712
)
 
$
(647
)
(1)    Consists debt extinguishment gains, net and other expenses.
Net revenues, which consist of net interest income and fee and other income, were $6.2 billion for the second quarter of 2015, compared with $5.4 billion for the first quarter of 2015.
Net interest income, which includes guaranty fee revenue, was $5.7 billion for the second quarter of 2015 compared with $5.1 billion for the first quarter of 2015. Net interest income for the second quarter was driven by guaranty fee revenue, including amortization income from prepayments, and interest income earned on mortgage assets in the company’s retained mortgage portfolio.
An increasing portion of Fannie Mae’s net interest income in recent years has been derived from guaranty fees rather than from interest income earned on the company’s retained mortgage portfolio assets. This is a result of both the impact of guaranty fee increases implemented in 2012 and the shrinking of the retained mortgage portfolio. The company estimates that a majority of its net interest income for the second quarter of 2015 was derived from guaranty fees on loans underlying its Fannie Mae MBS. The company expects that guaranty fees will continue to account for an increasing portion of its net interest income.

Second Quarter 2015 Results
 
2

Net fair value gains were $2.6 billion in the second quarter of 2015, compared with losses of $1.9 billion in the first quarter of 2015. Fair value gains for the second quarter of 2015 were due primarily to increases in longer-term interest rates positively impacting the value of the company’s risk management derivatives. The estimated fair value of the company’s financial instruments may fluctuate substantially from period to period because of changes in interest rates, the yield curve, mortgage spreads, implied volatility, and activity related to these financial instruments.
Credit-related expense, which consists of a provision for credit losses and foreclosed property expense, was $1.2 billion in the second quarter of 2015, compared with credit-related income of $60 million in the first quarter of 2015. The shift to credit-related expense in the second quarter of 2015 from credit-related income in the first quarter of 2015 was due primarily to an increase in the company’s provision for credit losses due to increased mortgage interest rates during the second quarter of 2015. Due to the rise in mortgage interest rates, the company expects a decline in future prepayments on individually impaired loans, including modified loans. Lower expected prepayments lengthen the expected lives of modified loans, which increases the impairment related to concessions provided on these loans and results in an increase in the provision for credit losses. The negative impact from the increase in interest rates was partially offset by a positive impact from an increase in home prices during the second quarter of 2015. Also contributing to credit-related expense was the redesignation of certain nonperforming single-family loans from “held for investment” to “held for sale” in the second quarter of 2015. These loans were adjusted to the lower of cost or fair value, which negatively impacted the company’s provision for credit losses by approximately $500 million. The change in intent is aligned with the company’s plan to complete additional sales of nonperforming loans by building these sales into a programmatic offering.

Second Quarter 2015 Results
 
3

VARIABILITY OF FINANCIAL RESULTS
Fannie Mae expects to remain profitable on an annual basis for the foreseeable future; however, the company expects its earnings in 2015 and future years will be substantially lower than its earnings for 2014, due primarily to the company’s expectation of substantially lower income from resolution agreements, continued declines in net interest income from its retained mortgage portfolio assets, and lower credit-related income or a shift to credit-related expense. In addition, certain factors, such as changes in interest rates or home prices, could result in significant volatility in the company’s financial results from quarter to quarter or year to year. Fannie Mae’s future financial results also will be affected by a number of other factors, including: the company’s guaranty fee rates; the volume of single-family mortgage originations in the future; the size, composition, and quality of its retained mortgage portfolio and guaranty book of business; and economic and housing market conditions. The company’s expectations for its future financial results do not take into account the impact on its business of potential future legislative or regulatory changes, which could have a material impact on the company’s financial results, particularly the enactment of housing finance reform legislation. For additional information on factors that affect the company’s financial results, please refer to “Executive Summary” in the company’s quarterly report on Form 10-Q for the quarter ended June 30, 2015 (the “Second Quarter 2015 Form 10-Q”).

Second Quarter 2015 Results
 
4

SUMMARY OF SECOND QUARTER 2015 BUSINESS SEGMENT RESULTS
The business groups running Fannie Mae’s three reporting segments – its Single-Family business, its Multifamily business, and its Capital Markets group – engage in complementary business activities in pursuing the company’s goals of providing liquidity to the market, expanding access to credit, and helping the U.S. housing market recover.
(Dollars in millions)
 
2Q15
 
1Q15
 
Variance
 
2Q15
 
2Q14
 
Variance
Single-Family Segment:
 
 
 
 
 
 
 
 
 
 
 
 
Guaranty fee income(1)
 
$
3,092

 
$
3,040

 
$
52

 
$
3,092

 
$
2,893

 
$
199

Credit-related (expense) income
 
(1,238
)
 
(7
)
 
(1,231
)
 
(1,238
)
 
1,781

 
(3,019
)
TCCA fees(1)
 
(397
)
 
(382
)
 
(15
)
 
(397
)
 
(335
)
 
(62
)
Other expense, net(2)
 
(412
)
 
(539
)
 
127

 
(412
)
 
(512
)
 
100

Income before federal income taxes
 
1,045

 
2,112

 
(1,067
)
 
1,045

 
3,827

 
(2,782
)
Provision for federal income taxes
 
(419
)
 
(581
)
 
162

 
(419
)
 
(1,133
)
 
714

Net income
 
$
626

 
$
1,531

 
$
(905
)
 
$
626

 
$
2,694

 
$
(2,068
)
Multifamily Segment:
 
 
 
 
 
 
 
 
 
 
 
 
Guaranty fee income
 
$
357

 
$
340

 
$
17

 
$
357

 
$
317

 
$
40

Credit-related income
 
23

 
67

 
(44
)
 
23

 
72

 
(49
)
Other(3)
 
27

 
146

 
(119
)
 
27

 
(4
)
 
31

Income before federal income taxes
 
407

 
553

 
(146
)
 
407

 
385

 
22

Provision for federal income taxes
 
(41
)
 
(70
)
 
29

 
(41
)
 
(9
)
 
(32
)
Net income
 
$
366

 
$
483

 
$
(117
)
 
$
366

 
$
376

 
$
(10
)
Capital Markets Segment:
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
1,513

 
$
1,602

 
$
(89
)
 
$
1,513

 
$
1,917

 
$
(404
)
Investment gains, net
 
1,562

 
1,509

 
53

 
1,562

 
1,648

 
(86
)
Fair value gains (losses), net
 
2,555

 
(1,970
)
 
4,525

 
2,555

 
(1,098
)
 
3,653

Other(4)
 
(230
)
 
(323
)
 
93

 
(230
)
 
(308
)
 
78

Income before federal income taxes
 
5,400

 
818

 
4,582

 
5,400

 
2,159

 
3,241

Provision for federal income taxes
 
(1,750
)
 
(219
)
 
(1,531
)
 
(1,750
)
 
(610
)
 
(1,140
)
Net income
 
$
3,650

 
$
599

 
$
3,051

 
$
3,650

 
$
1,549

 
$
2,101

(1) 
Consists of the impact of a 10 basis point guaranty fee increase implemented pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011 (the “TCCA”), the incremental revenue from which must be remitted to Treasury. The resulting revenue is included in guaranty fee income and the expense is recognized in “TCCA fees.”
(2)    Consists primarily of administrative expenses and fee and other income.
(3)     Consists primarily of gains from partnership investments, administrative expenses, and fee and other income.
(4)    Consists primarily of guaranty fee expense, administrative expenses, and fee and other income.
Single-Family Business
•
Single-Family net income was $626 million in the second quarter of 2015, compared with $1.5 billion in the first quarter of 2015. Net income in the second quarter of 2015 was driven primarily by guaranty fee income, offset by credit-related expense.
•
Single-Family guaranty fee income was $3.1 billion in the second quarter of 2015, compared with $3.0 billion in the first quarter of 2015. Single-Family guaranty fee income increased in the second quarter of 2015 compared with the first quarter of 2015 as loans with higher guaranty fees have become a

Second Quarter 2015 Results
 
5

larger part of the company’s Single-Family guaranty book of business due to the cumulative impact of guaranty fee price increases implemented in 2012. The Single-Family guaranty book of business was $2.83 trillion as of June 30, 2015, compared with $2.84 trillion as of March 31, 2015.
•
Single-Family credit-related expense was $1.2 billion in the second quarter of 2015, compared with $7 million in the first quarter of 2015. The increase in credit-related expense in the second quarter of 2015 from the first quarter of 2015 was due primarily to an increase in the company’s provision for credit losses due to increased mortgage interest rates during the second quarter of 2015. This was partially offset by a benefit for credit losses due to an increase in home prices during the second quarter of 2015. Also contributing to credit-related expense was the redesignation of certain nonperforming single-family loans from “held for investment” to “held for sale” in the second quarter of 2015. These loans were adjusted to the lower of cost or fair value, which negatively impacted the company’s provision for credit losses.
Multifamily Business
•
Multifamily net income was $366 million in the second quarter of 2015, compared with $483 million in the first quarter of 2015. Multifamily net income in the second quarter of 2015 was driven primarily by guaranty fee income. The decrease in Multifamily net income in the second quarter of 2015 compared with the first quarter of 2015 was due to lower gains on sales of partnership investments.
•
Multifamily guaranty fee income was $357 million for the second quarter of 2015, compared with $340 million for the first quarter of 2015. Multifamily guaranty fee income increased in the second quarter of 2015 compared with the first quarter of 2015 as loans with higher guaranty fees have become a larger part of the company’s Multifamily guaranty book of business, while loans with lower guaranty fees continue to liquidate.
•
The Multifamily guaranty book of business was $213.2 billion as of June 30, 2015, compared with $206.7 billion as of March 31, 2015.
Capital Markets
•
Capital Markets net income was $3.7 billion in the second quarter of 2015, compared with $599 million in the first quarter of 2015. Net income in the second quarter of 2015 was driven primarily by fair value gains, investment gains, and net interest income.
•
Capital Markets net fair value gains were $2.6 billion in the second quarter of 2015, compared with net fair value losses of $2.0 billion in the first quarter of 2015. Net fair value gains for the second quarter of 2015 were due primarily to fair value gains on risk management derivatives driven by increases in longer-term interest rates during the quarter.
•
Capital Markets net investment gains were $1.6 billion in the second quarter of 2015, compared with $1.5 billion in the first quarter of 2015. Net investment gains for the second quarter of 2015 were due primarily to the sale of mortgage-related securities during the quarter.
•
Capital Markets net interest income was $1.5 billion for the second quarter of 2015, compared with $1.6 billion for the first quarter of 2015. Net interest income was driven primarily by interest earned on the retained mortgage portfolio.
•
Capital Markets retained mortgage portfolio balance decreased to $390.3 billion as of June 30, 2015, compared with $411.7 billion as of March 31, 2015, resulting from purchases of $69.7 billion and sales and liquidations of $91.1 billion during the second quarter of 2015.

Second Quarter 2015 Results
 
6

BUILDING A SUSTAINABLE HOUSING FINANCE SYSTEM
In addition to continuing to provide liquidity and support to the mortgage market, Fannie Mae continues to invest significant resources toward helping to maintain a safer and sustainable housing finance system for today and build a safer and sustainable housing finance system for the future. The company is pursuing the strategic goals identified by its conservator, the Federal Housing Finance Agency (“FHFA”). These strategic goals are: maintain, in a safe and sound manner, credit availability and foreclosure prevention activities for new and refinanced mortgages to foster liquid, efficient, competitive, and resilient national housing finance markets; reduce taxpayer risk through increasing the role of private capital in the mortgage market; and build a new single-family securitization infrastructure for use by Fannie Mae and Freddie Mac and adaptable for use by other participants in the secondary market in the future.
ABOUT FANNIE MAE’S CONSERVATORSHIP
Fannie Mae has operated under the conservatorship of FHFA since September 6, 2008. Fannie Mae has not received funds from Treasury since the first quarter of 2012. The funding the company has received under its senior preferred stock purchase agreement with Treasury has provided the company with the capital and liquidity needed to fulfill its mission of providing liquidity and support to the nation’s housing finance markets and to avoid a trigger of mandatory receivership under the Federal Housing Finance Regulatory Reform Act of 2008. For periods through June 30, 2015, Fannie Mae has requested cumulative draws totaling $116.1 billion and paid $138.2 billion in dividends to Treasury. Under the senior preferred stock purchase agreement, the payment of dividends does not offset prior draws. As a result, Treasury maintains a liquidation preference of $117.1 billion on the company’s senior preferred stock.

Treasury Draws and Dividend Payments
(1) 
Treasury draw requests are shown in the period for which requested and do not include the initial $1.0 billion liquidation preference of Fannie Mae’s senior preferred stock, for which Fannie Mae did not receive any cash proceeds. The payment of dividends does not offset prior Treasury draws.
(2) 
Fannie Mae expects to pay a dividend for the third quarter of 2015 calculated based on the company’s net worth of $6.2 billion as of June 30, 2015 less a capital reserve amount of $1.8 billion.
(3) 
Amounts may not sum due to rounding.
In August 2012, the terms governing the company’s dividend obligations on the senior preferred stock were amended. The amended senior preferred stock purchase agreement does not allow the company to build a capital reserve. Beginning in 2013, the required senior preferred stock dividends each quarter equal the amount, if any, by which the company’s net worth as of the end of the immediately preceding fiscal

Second Quarter 2015 Results
 
7

quarter exceeds an applicable capital reserve amount. The capital reserve amount is $1.8 billion for each quarter of 2015 and will be reduced by $600 million each year until it reaches zero in 2018.
The amount of remaining funding available to Fannie Mae under the senior preferred stock purchase agreement with Treasury is currently $117.6 billion. If the company were to draw additional funds from Treasury under the agreement in a future period, the amount of remaining funding under the agreement would be reduced by the amount of the company’s draw. Dividend payments Fannie Mae makes to Treasury do not restore or increase the amount of funding available to the company under the agreement.
Fannie Mae is not permitted to redeem the senior preferred stock prior to the termination of Treasury’s funding commitment under the senior preferred stock purchase agreement. The limited circumstances under which Treasury’s funding commitment will terminate are described in “Business—Conservatorship and Treasury Agreements” in the company’s annual report on Form 10-K for the year ended December 31, 2014.
CREDIT QUALITY
While continuing to make it possible for families to buy, refinance, or rent homes, Fannie Mae has maintained responsible credit standards. Since 2009, Fannie Mae has seen the effect of the actions it took, beginning in 2008, to significantly strengthen its underwriting and eligibility standards and change its pricing to promote sustainable homeownership and stability in the housing market. Fannie Mae actively monitors on an ongoing basis the credit risk profile and credit performance of the company’s single-family loan acquisitions, in conjunction with housing market and economic conditions, to determine if its pricing, eligibility, and underwriting criteria accurately reflects the risk associated with loans the company acquires or guarantees. Single-family conventional loans acquired by Fannie Mae in the first six months of 2015 had a weighted average borrower FICO credit score at origination of 749 and a weighted average original loan-to-value ratio of 74 percent.
Fannie Mae’s single-family conventional guaranty book of business as of June 30, 2015 consisted of single-family loans acquired prior to 2009; non-Refi PlusTM loans acquired beginning in 2009; loans acquired through the Administration’s Home Affordable Refinance Program® (“HARP®”); and other loans acquired pursuant to the company’s Refi Plus initiative, excluding HARP loans. The company’s Refi Plus initiative, which started in April 2009 and includes HARP, provides expanded refinance opportunities for eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100 percent.

Second Quarter 2015 Results
 
8

The single-family serious delinquency rate for Fannie Mae’s book of business has decreased for 21 consecutive quarters since the first quarter of 2010, and was 1.66 percent as of June 30, 2015, compared with 5.47 percent as of March 31, 2010. This decrease is primarily the result of home retention solutions, foreclosure alternatives and completed foreclosures, improved loan payment performance, as well as the company’s acquisition of loans with stronger credit profiles since the beginning of 2009. Although Fannie Mae’s single-family serious delinquency rate has decreased, and is expected to continue to decrease, the company expects the number of single-family loans in its book of business that are seriously delinquent to remain above pre-2008 levels for years. The company’s single-family serious delinquency rate and the period of time that loans remain seriously delinquent continue to be negatively impacted by the length of time required to complete a foreclosure in some states. High levels of foreclosures, changes in state foreclosure laws, new federal and state servicing requirements imposed by regulatory actions and legal settlements, and the need for servicers to adapt to these changes have lengthened the time it takes to foreclose on a mortgage loan in a number of states, particularly in New York, Florida, and New Jersey. Other factors such as the pace of loan modifications, the timing and volume of future sales the company makes of non-performing loans, changes in home prices, unemployment levels, and other macroeconomic conditions also influence serious delinquency rates.
Total loss reserves, which reflect the company’s estimate of the probable losses the company has incurred in its guaranty book of business, including concessions it granted borrowers upon modification of their loans, decreased to $32.1 billion as of June 30, 2015 from $32.9 billion as of March 31, 2015. Although the company’s loss reserves have declined substantially from their peak and are expected to decline further, the company expects its loss reserves will remain elevated relative to the levels experienced prior to the 2008 housing crisis for an extended period because (1) the company expects future defaults on loans that it acquired prior to 2009 and the resulting charge-offs will occur over a period of years and (2) a significant portion of the company’s reserves represents concessions granted to borrowers upon modification of their loans and its reserves will continue to reflect these concessions until the loans are fully repaid or default.

Second Quarter 2015 Results
 
9

PROVIDING LIQUIDITY AND SUPPORT TO THE MARKET
Liquidity
Fannie Mae provided approximately $144 billion in liquidity to the mortgage market in the second quarter of 2015, through its purchases of loans and guarantees of loans and securities, which resulted in approximately:
•
229,000 home purchases
•
344,000 mortgage refinancings
•
181,000 units of multifamily housing
The company remained the largest single issuer of single-family mortgage-related securities in the secondary market in the second quarter of 2015, with an estimated market share of new single-family mortgage-related securities issuances of 37 percent, compared with 40 percent in the first quarter of 2015 and 39 percent in the second quarter of 2014.

Second Quarter 2015 Results
 
10

Fannie Mae also remained a continuous source of liquidity in the multifamily market. As of March 31, 2015 (the latest date for which information is available), the company owned or guaranteed approximately 19 percent of the outstanding debt on multifamily properties.
Refinancing Initiatives
Through the company’s Refi Plus initiative, which offers refinancing flexibility to eligible Fannie Mae borrowers and includes HARP, the company acquired approximately 59,000 loans in the second quarter of 2015. Refinancings delivered to Fannie Mae through Refi Plus in the second quarter of 2015 reduced borrowers’ monthly mortgage payments by an average of $183. The company expects the volume of refinancings under HARP to continue to decline, due to a decrease in the population of borrowers with loans that have high LTV ratios who are willing to refinance and would benefit from refinancing.
Home Retention Solutions and Foreclosure Alternatives
To reduce the credit losses Fannie Mae ultimately incurs on its book of business, the company has been focusing its efforts on several strategies, including reducing defaults by offering home retention solutions, such as loan modifications.
 
For the Six Months Ended June 30,
 
2015
 
2014
 
Unpaid Principal Balance
 
Number of Loans
 
Unpaid Principal Balance
 
Number of Loans
 
(Dollars in millions)
Home retention strategies:
 
 
 
 
 
 
 
Modifications
$
8,800

 
52,914

 
$
11,584

 
68,054

Repayment plans and forbearances completed
476

 
3,423

 
511

 
3,884

Total home retention strategies
9,276

 
56,337

 
12,095

 
71,938

Foreclosure alternatives:
 
 
 
 
 
 
 
Short sales
1,610

 
7,781

 
2,760

 
13,347

Deeds-in-lieu of foreclosure
629

 
4,004

 
996

 
6,296

Total foreclosure alternatives
2,239

 
11,785

 
3,756

 
19,643

Total loan workouts
$
11,515

 
68,122

 
$
15,851

 
91,581

Loan workouts as a percentage of single-family guaranty book of business
0.81
%
 
0.79
%
 
1.11
%
 
1.05
%

Second Quarter 2015 Results
 
11

Fannie Mae views foreclosure as a last resort. For homeowners and communities in need, the company offers alternatives to foreclosure. In dealing with homeowners in distress, the company first seeks home retention solutions, which enable borrowers to stay in their homes, before turning to foreclosure alternatives.
•
Fannie Mae provided approximately 34,000 loan workouts during the second quarter of 2015 enabling borrowers to avoid foreclosure.
•
Fannie Mae completed approximately 26,000 loan modifications during the second quarter of 2015.
FORECLOSURES AND REO
When there is no viable home retention solution or foreclosure alternative that can be applied, the company seeks to move to foreclosure expeditiously in an effort to minimize prolonged delinquencies that can hurt local home values and destabilize communities.
 
For the Six Months Ended June 30,
 
2015
 
2014
Single-family foreclosed properties (number of properties):
 
 
 
Beginning of period inventory of single-family foreclosed properties (REO)
87,063

 
103,229

Total properties acquired through foreclosure
44,161

 
63,574

Dispositions of REO
(62,507
)
 
(70,007
)
End of period inventory of single-family foreclosed properties (REO)
68,717

 
96,796

Carrying value of single-family foreclosed properties (dollars in millions)
$
7,997

 
$
10,347

Single-family foreclosure rate
0.51
%
 
0.73
%
•
Fannie Mae acquired 19,845 single-family REO properties, primarily through foreclosure, in the second quarter of 2015, compared with 24,316 in the first quarter of 2015.
•
As of June 30, 2015, the company’s inventory of single-family REO properties was 68,717, compared with 79,319 as of March 31, 2015. The carrying value of the company’s single-family REO was $8.0 billion as of June 30, 2015.
•
The company’s single-family foreclosure rate was 0.51 percent for the six months ended June 30, 2015. This reflects the annualized total number of single-family properties acquired through foreclosure or deeds-in-lieu of foreclosure as a percentage of the total number of loans in Fannie Mae’s single-family guaranty book of business.
Fannie Mae’s financial statements for the second quarter of 2015 are available in the accompanying Annex; however, investors and interested parties should read the company’s Second Quarter 2015 Form 10-Q, which was filed today with the Securities and Exchange Commission and is available on Fannie Mae’s Web site, www.fanniemae.com. The company provides further discussion of its financial results and condition, credit performance, and other matters in its Second Quarter 2015 Form 10-Q. Additional information about the company’s credit performance, the characteristics of its guaranty book of business, its foreclosure-prevention efforts, and other measures is contained in the “2015 Second Quarter Credit Supplement” at www.fanniemae.com.

# # #


Second Quarter 2015 Results
 
12

In this release, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements, including statements regarding: its future dividend payments to Treasury; the level and sources of its future revenues; the company’s plans for future sales of nonperforming loans; the company’s future profitability; the level of the company’s earnings in 2015 and future years as compared with 2014; the drivers of the expected decline in the company’s earnings in 2015 and future years; the factors that will affect the company’s future financial results; the company’s future single-family serious delinquency rates; the future volume of its HARP refinancings; the future fair value of the company’s securities and derivatives; the company’s future loss reserves; and the impact of the company’s actions to reduce credit losses. These estimates, forecasts, expectations, and statements are forward-looking statements based on the company’s current assumptions regarding numerous factors, including future interest rates and home prices, the future performance of its loans and the future guaranty fee rates applicable to the loans the company acquires. Actual results, and future projections, could be materially different from what is set forth in the forward-looking statements as a result of: home price changes; interest rate changes; unemployment rates; other macroeconomic and housing market variables; the company’s future serious delinquency rates; the company’s future guaranty fee pricing, and the impact of that pricing on the company’s guaranty fee revenues and competitive environment; government policy; credit availability, borrower behavior, including increases in the number of underwater borrowers who strategically default on their mortgage loan; the volume of loans it modifies; the effectiveness of its loss mitigation strategies and activities; significant changes in modification and foreclosure activity; the volume and pace of future nonperforming loan sales and their impact on the company’s results and serious delinquency rates; management of its real estate owned inventory and pursuit of contractual remedies; changes in the fair value of its assets and liabilities; future legislative or regulatory requirements or changes that have a significant impact on the company’s business, such as a requirement that the company implement a principal forgiveness program or the enactment of housing finance reform legislation; the company’s reliance on and future updates to the company’s models relating to loss reserves, including the assumptions used by these models; changes in generally accepted accounting principles; changes to the company’s accounting policies; whether the company’s counterparties meet their obligations in full; effects from activities the company takes to support the mortgage market and help borrowers; the company’s future objectives and activities in support of those objectives, including actions the company may take to reach additional underserved creditworthy borrowers; actions the company may be required to take by FHFA, as its conservator or as its regulator, such as changes in the type of business the company does or the implementation of a single GSE security; the conservatorship and its effect on the company’s business; the investment by Treasury and its effect on the company’s business; the uncertainty of the company’s future; challenges the company faces in retaining and hiring qualified employees; the deteriorated credit performance of many loans in the company’s guaranty book of business; a decrease in the company’s credit ratings; defaults by one or more institutional counterparties; resolution or settlement agreements the company may enter into with its counterparties; operational control weaknesses; changes in the fiscal and monetary policies of the Federal Reserve, including any change in the Federal Reserve’s policy toward the reinvestment of principal payments of mortgage-backed securities or any future sales of such securities; changes in the structure and regulation of the financial services industry; the company’s ability to access the debt markets; disruptions in the housing, credit, and stock markets; government investigations and litigation; the company’s reliance on and the performance of the company’s servicers; conditions in the foreclosure environment; global political risk; natural disasters, terrorist attacks, pandemics, or other major disruptive events; information security breaches; and many other factors, including those discussed in the “Risk Factors” section of and elsewhere in the company’s annual report on Form 10-K for the year ended December 31, 2014 and the company’s quarterly report on Form 10-Q for the quarter ended June 30, 2015, and elsewhere in this release.

Fannie Mae provides Web site addresses in its news releases solely for readers’ information. Other content or information appearing on these Web sites is not part of this release.

Fannie Mae enables people to buy, refinance, or rent homes.

Visit us at www.fanniemae.com/progress

Follow us on Twitter: http://twitter.com/FannieMae



Second Quarter 2015 Results
 
13

ANNEX
FANNIE MAE
(In conservatorship)
Condensed Consolidated Balance Sheets — (Unaudited)
(Dollars in millions, except share amounts)
 
As of
 
June 30,
 
December 31,
 
2015
 
2014
ASSETS
Cash and cash equivalents
 
$
19,313

 
 
 
$
22,023

 
Restricted cash (includes $33,047 and $27,515, respectively, related to consolidated trusts)
 
37,388

 
 
 
32,542

 
Federal funds sold and securities purchased under agreements to resell or similar arrangements
 
22,010

 
 
 
30,950

 
Investments in securities:
 
 
 
 
 
 
 
Trading, at fair value
 
34,864

 
 
 
31,504

 
Available-for-sale, at fair value (includes $419 and $596, respectively, related to consolidated trusts)
 
24,161

 
 
 
30,654

 
Total investments in securities
 
59,025

 
 
 
62,158

 
Mortgage loans:
 
 
 
 
 
 
 
Loans held for sale, at lower of cost or fair value
 
4,563

 
 
 
331

 
Loans held for investment, at amortized cost:
 
 
 
 
 
 
 
Of Fannie Mae
 
250,872

 
 
 
272,360

 
Of consolidated trusts (includes $14,981 and $15,629, respectively, at fair value)
 
2,787,893

 
 
 
2,782,344

 
Total loans held for investment
 
3,038,765

 
 
 
3,054,704

 
Allowance for loan losses
 
(31,150
)
 
 
 
(35,541
)
 
Total loans held for investment, net of allowance
 
3,007,615

 
 
 
3,019,163

 
Total mortgage loans
 
3,012,178

 
 
 
3,019,494

 
Accrued interest receivable, net (includes $7,306 and $7,169, respectively, related to consolidated trusts)
 
8,039

 
 
 
8,193

 
Acquired property, net
 
8,506

 
 
 
10,618

 
Deferred tax assets, net
 
39,803

 
 
 
42,206

 
Other assets
 
19,138

 
 
 
19,992

 
Total assets
 
$
3,225,400

 
 
 
$
3,248,176

 
LIABILITIES AND EQUITY
Liabilities:
 
 
 
 
 
 
 
Accrued interest payable (includes $8,160 and $8,282, respectively, related to consolidated trusts)
 
$
10,011

 
 
 
$
10,232

 
Federal funds purchased and securities sold under agreements to repurchase
 
—

 
 
 
50

 
Debt:
 
 
 
 
 
 
 
Of Fannie Mae (includes $8,861 and $6,403, respectively, at fair value)
 
425,085

 
 
 
460,443

 
Of consolidated trusts (includes $22,885 and $19,483, respectively, at fair value)
 
2,773,484

 
 
 
2,761,712

 
Other liabilities (includes $445 and $503, respectively, related to consolidated trusts)
 
10,661

 
 
 
12,019

 
Total liabilities
 
3,219,241

 
 
 
3,244,456

 
Commitments and contingencies
 
—

 
 
 
—

 
Fannie Mae stockholders’ equity:
 
 
 
 
 
 
 
Senior preferred stock, 1,000,000 shares issued and outstanding
 
117,149

 
 
 
117,149

 
Preferred stock, 700,000,000 shares are authorized—555,374,922 shares issued and outstanding
 
19,130

 
 
 
19,130

 
Common stock, no par value, no maximum authorization—1,308,762,703 shares issued and 1,158,082,750 shares outstanding
 
687

 
 
 
687

 
Accumulated deficit
 
(124,807
)
 
 
 
(127,618
)
 
Accumulated other comprehensive income
 
1,360

 
 
 
1,733

 
Treasury stock, at cost, 150,679,953 shares
 
(7,401
)
 
 
 
(7,401
)
 
Total Fannie Mae stockholders’ equity
 
6,118

 
 
 
3,680

 
Noncontrolling interest
 
41

 
 
 
40

 
Total equity
 
6,159

 
 
 
3,720

 
Total liabilities and equity
 
$
3,225,400

 
 
 
$
3,248,176

 

See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2015 Form 10-Q

Second Quarter 2015 Results
 
14


FANNIE MAE
(In conservatorship)
Condensed Consolidated Statements of Operations and Comprehensive Income — (Unaudited)
(Dollars and shares in millions, except per share amounts)

 
 
For the Three Months
 
 
For the Six Months
 
 
 
Ended June 30,
 
 
Ended June 30,
 
 
 
2015
 
 
2014
 
 
2015
 
 
2014
 
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
Trading securities
 
$
116

 
 
$
143

 
 
$
231

 
 
$
270

 
Available-for-sale securities
 
294

 
 
414

 
 
670

 
 
854

 
Mortgage loans (includes $24,267 and $25,533, respectively, for the three months ended and $48,889 and $51,487, respectively, for the six months ended related to consolidated trusts)
 
26,682

 
 
28,165

 
 
53,726

 
 
56,753

 
Other
 
34

 
 
24

 
 
67

 
 
48

 
Total interest income
 
27,126

 
 
28,746

 
 
54,694

 
 
57,925

 
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
Short-term debt
 
33

 
 
21

 
 
62

 
 
41

 
Long-term debt (includes $19,528 and $21,692, respectively, for the three months ended and $40,043 and $43,768, respectively, for the six months ended related to consolidated trusts)
 
21,416

 
 
23,821

 
 
43,888

 
 
48,242

 
Total interest expense
 
21,449

 
 
23,842

 
 
43,950

 
 
48,283

 
Net interest income
 
5,677

 
 
4,904

 
 
10,744

 
 
9,642

 
(Provision) benefit for credit losses
 
(1,033
)
 
 
1,639

 
 
(500
)
 
 
2,413

 
Net interest income after (provision) benefit for credit losses
 
4,644

 
 
6,543

 
 
10,244

 
 
12,055

 
Investment gains, net
 
514

 
 
483

 
 
856

 
 
578

 
Fair value gains (losses), net
 
2,606

 
 
(934
)
 
 
687

 
 
(2,124
)
 
Debt extinguishment gains, net
 
3

 
 
38

 
 
11

 
 
38

 
Fee and other income
 
556

 
 
383

 
 
864

 
 
4,738

 
Non-interest income (loss)
 
3,679

 
 
(30
)
 
 
2,418

 
 
3,230

 
Administrative expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
331

 
 
319

 
 
682

 
 
644

 
Professional services
 
251

 
 
275

 
 
522

 
 
517

 
Occupancy expenses
 
43

 
 
47

 
 
86

 
 
97

 
Other administrative expenses
 
64

 
 
56

 
 
122

 
 
111

 
Total administrative expenses
 
689

 
 
697

 
 
1,412

 
 
1,369

 
Foreclosed property expense (income)
 
182

 
 
(214
)
 
 
655

 
 
(476
)
 
Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees
 
397

 
 
335

 
 
779

 
 
657

 
Other expenses, net
 
205

 
 
276

 
 
208

 
 
407

 
Total expenses
 
1,473

 
 
1,094

 
 
3,054

 
 
1,957

 
Income before federal income taxes
 
6,850

 
 
5,419

 
 
9,608

 
 
13,328

 
Provision for federal income taxes
 
(2,210
)
 
 
(1,752
)
 
 
(3,080
)
 
 
(4,336
)
 
Net income
 
4,640

 
 
3,667

 
 
6,528

 
 
8,992

 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
Changes in unrealized gains on available-for-sale securities, net of reclassification adjustments and taxes
 
(280
)
 
 
45

 
 
(371
)
 
 
417

 
Other
 
(1
)
 
 
—

 
 
(2
)
 
 
—

 
Total other comprehensive (loss) income
 
(281
)
 
 
45

 
 
(373
)
 
 
417

 
Total comprehensive income
 
4,359

 
 
3,712

 
 
6,155

 
 
9,409

 
Less: Comprehensive income attributable to noncontrolling interest
 
—

 
 
(1
)
 
 
—

 
 
(1
)
 
Total comprehensive income attributable to Fannie Mae
 
$
4,359

 
 
$
3,711

 
 
$
6,155

 
 
$
9,408

 
Net income
 
$
4,640

 
 
$
3,667

 
 
$
6,528

 
 
$
8,992

 
Less: Net income attributable to noncontrolling interest
 
—

 
 
(1
)
 
 
—

 
 
(1
)
 
Net income attributable to Fannie Mae
 
4,640

 
 
3,666

 
 
6,528

 
 
8,991

 
Dividends available for distribution to senior preferred stockholder
 
(4,359
)
 
 
(3,712
)
 
 
(6,155
)
 
 
(9,404
)
 
Net income (loss) attributable to common stockholders
 
$
281

 
 
$
(46
)
 
 
$
373

 
 
$
(413
)
 
Earnings (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
0.05

 
 
(0.01
)
 
 
0.06

 
 
(0.07
)
 
Diluted
 
0.05

 
 
(0.01
)
 
 
0.06

 
 
(0.07
)
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
5,762

 
 
5,762

 
 
5,762

 
 
5,762

 
Diluted
 
5,893

 
 
5,762

 
 
5,893

 
 
5,762

 
See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2015 Form 10-Q

Second Quarter 2015 Results
 
15


FANNIE MAE
(In conservatorship)
Condensed Consolidated Statements of Cash Flows— (Unaudited)
(Dollars in millions)
 
For the Six Months Ended June 30,
 
2015
 
2014
Net cash (used in) provided by operating activities
$
(1,506
)
 
$
3,420

Cash flows provided by investing activities:
 
 
 
Proceeds from maturities and paydowns of trading securities held for investment
484

 
681

Proceeds from sales of trading securities held for investment
992

 
1,188

Proceeds from maturities and paydowns of available-for-sale securities
2,279

 
3,022

Proceeds from sales of available-for-sale securities
5,311

 
1,740

Purchases of loans held for investment
(98,042
)
 
(55,843
)
Proceeds from repayments and sales of loans acquired as held for investment of Fannie Mae
12,853

 
12,840

Proceeds from repayments and sales of loans acquired as held for investment of consolidated trusts
259,429

 
177,527

Net change in restricted cash
(4,846
)
 
(592
)
Advances to lenders
(62,110
)
 
(42,545
)
Proceeds from disposition of acquired property and preforeclosure sales
11,384

 
13,471

Net change in federal funds sold and securities purchased under agreements to resell or similar arrangements
8,940

 
22,275

Other, net
(65
)
 
(349
)
Net cash provided by investing activities
136,609

 
133,415

Cash flows used in financing activities:
 
 
 
Proceeds from issuance of debt of Fannie Mae
213,648

 
165,337

Payments to redeem debt of Fannie Mae
(249,610
)
 
(217,988
)
Proceeds from issuance of debt of consolidated trusts
167,880

 
113,448

Payments to redeem debt of consolidated trusts
(265,969
)
 
(183,124
)
Payments of cash dividends on senior preferred stock to Treasury
(3,716
)
 
(12,882
)
Other, net
(46
)
 
(7
)
Net cash used in financing activities
(137,813
)
 
(135,216
)
Net (decrease) increase in cash and cash equivalents
(2,710
)
 
1,619

Cash and cash equivalents at beginning of period
22,023

 
19,228

Cash and cash equivalents at end of period
$
19,313

 
$
20,847

Cash paid during the period for:
 
 
 
Interest
$
52,679

 
$
53,594

Income taxes
370

 
2,475


See Notes to Condensed Consolidated Financial Statements in the Second Quarter 2015 Form 10-Q

Second Quarter 2015 Results
 
16
creditsupplementq22015
August 6, 2015 Fannie Mae 2015 Second Quarter Credit Supplement Exhibit 99.2

 
 This presentation includes information about Fannie Mae, including information contained in Fannie Mae’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, the “2015 Q2 Form 10-Q.” Some of the terms used in these materials are defined and discussed more fully in the 2015 Q2 Form 10-Q and in Fannie Mae’s Form 10-K for the year ended December 31, 2014, the “2014 Form 10-K.” These materials should be reviewed together with the 2015 Q2 Form 10-Q and the 2014 Form 10-K, copies of which are available on the “SEC Filings” page in the “Investor Relations” section of Fannie Mae’s web site at www.fanniemae.com.  Some of the information in this presentation is based upon information that we received from third-party sources such as sellers and servicers of mortgage loans. Although we generally consider this information reliable, we do not independently verify all reported information.  Due to rounding, amounts reported in this presentation may not add to totals indicated (or 100%). A dash indicates less than 0.05% or a null value.  Unless otherwise indicated data labeled as “YTD 2015” is as of June 30, 2015 or for the first six months of 2015.

 
2 Table of Contents Home Prices Home Price Growth/Decline Rates in the U.S. 3 One Year Home Price Change as of 2015 Q2 4 Home Price Change From 2006 Q3 Through 2015 Q2 5 Credit Profile of Fannie Mae Single-Family Loans Credit Characteristics of Single-Family Business Acquisitions 6 Credit Risk Profile Summary of Single-Family Business Acquisitions 7 Certain Credit Characteristics of Single-Family Business Acquisitions: 2004 - 2015 8 Single-Family Business Acquisitions by Loan Purpose 9 Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Origination Year 10 Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Certain Product Features 11 Geographic Credit Profile of Fannie Mae Single-Family Loans and Foreclosed Properties (REO) Credit Characteristics of Single-Family Conventional Guaranty Book of Business and Single-Family Real Estate Owned (REO) in Select States 12 Seriously Delinquent Loan and REO Ending Inventory Share by Select States 13 Single-Family Short Sales and REO Sales Prices to UPB of Mortgage Loans 14 Workouts of Fannie Mae Single-Family Loans Single-Family Loan Workouts 15 Re-performance Rates of Modified Single-Family Loans 16 Additional Credit Information for Fannie Mae Single-Family Loans Credit Loss Concentration of Single-Family Conventional Guaranty Book of Business 17 Cumulative Default Rates of Single-Family Conventional Guaranty Book of Business by Origination Year 18 Credit Profile of Fannie Mae Multifamily Loans Multifamily Credit Profile by Loan Attributes 19 Multifamily Credit Profile by Acquisition Year 20 Multifamily Credit Profile 21 Multifamily YTD 2015 Credit Losses by State Through 2015 Q2 22

 
3 13.6% 13.5% 1.7% -5.4% -12.0% -3.8% -4.1% -3.9% 6.5% 10.8% 4.6% 0.9% 10.6% 11.3% 2.7% -3.6% -9.1% -4.8% -4.3% -3.5% 4.1% 8.0% 4.5% 3.7% -15% -10% -5% 0% 5% 10% 15% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Home Price Growth/Decline Rates in the U.S. Fannie Mae Home Price Index * Year-to-date as of Q2 2015. Estimate based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of June 2015. Including subsequent data may lead to materially different results **Year-to-date as of Q1 2015. As comparison, Fannie Mae’s index for the same period is 0.9%. Based on our home price index, we estimate that home prices on a national basis increased by 2.8% in the second quarter of 2015 and by 3.7% in the first half of 2015, following increases of 4.5% in 2014 and 8.0% in 2013. Despite the recent increases in home prices, we estimate that, through June 30, 2015, home prices on a national basis remained 7.0% below their peak in the third quarter of 2006. Our home price estimates are based on preliminary data and are subject to change as additional data become available. * S&P/Case-Shiller Index **

 
4 HI 4.9% 0.8% AK 4.4% 0.2% TX 6.1% 5.7% MT 3.9% 0.3% CA 7.9% 19.7% NM 1.4% 0.5% AZ 5.9% 2.5% NV 7.8% 1.0% WY 3.3% 0.2% OR 7.4% 1.7% UT 4.4% 1.1% MN 2.5% 2.0% ID 4.0% 0.5% CO 10.6% 2.8% KS 3.1% 0.5% NE 4.3% 0.4% SD 4.1% 0.2% ND 4.5% 0.1% OK 1.2% 0.6% MO 3.7% 1.3% WA 7.0% 3.5% GA 5.1% 2.6% IL 2.3% 4.0% IA 2.9% 0.7% WI 2.0% 1.8% AR 2.0% 0.5% AL 2.2% 1.0% NC 3.0% 2.4% MS 4.2% 0.4% NY 2.6% 5.5% PA 1.5% 3.0% MI 6.9% 2.4% OH 2.5% 2.1% VA 1.4% 3.5% IN 3.1% 1.2% SC 4.4% 1.2% FL 8.3% 5.6% LA 3.3% 0.9% TN 4.5% 1.3% KY 2.7% 0.6% ME 2.5% 0.3% WV -0.4% 0.2% MD 1.9% 2.7% VT 0.1% 0.2% NH 1.4% 0.5% MA 1.4% 3.0% NJ 0.5% 3.9% CT -0.3% 1.3% DE 0.3% 0.4% RI 3.4% 0.3% DC 8.3% 0.4% Below 0% 0% to 5% 5% to 10% 10% and Above *Source: Fannie Mae. Home price estimates are based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of June 2015. UPB estimates are based on data available through the end of June 2015. Including subsequent data may lead to materially different results. ** “UPB %” refers to unpaid principal balance of loans on properties in the applicable state as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. One Year Home Price Change as of 2015 Q2* United States 4.3% State Growth Rate State: NM Growth Rate: 1.4% UPB %**: 0.5% Example

 
5 TX 22.9% 5.7% MT 9.9% 0.3% NM -8.3% 0.5% UT 5.0% 1.1% CO 16.7% 2.8% KS 7.9% 0.5% OR -5.3% 1.7% AZ -28.8% 2.5% WY 13.5% 0.2% NV -35.7% 1.0% MN -8.1% 2.0% ID -9.5% 0.5% NE 10.1% 0.4% SD 19.5% 0.2% MO -1.3% 1.3% WA -5.3% 3.5% IA 9.6% 0.7% OK 11.4% 0.6% ND 48.8% 0.1% AR 1.7% 0.5% GA -9.8% 2.6% AL -2.1% 1.0% CA -18.5% 19.7% WI -5.2% 1.8% PA 0.8% 3.0% TN 3.1% 1.3% NC -0.6% 2.4% KY 5.2% 0.6% MS -0.5% 0.4% NY -5.5% 5.5% IL -14.9% 4.0% FL -31.1% 5.6% LA 11.9% 0.9% IN 4.1% 1.2% OH -5.3% 2.1% MI -12.0% 2.4% VA -10.9% 3.5% ME -6.2% 0.3% SC -2.0% 1.2% WV 2.1% 0.2% VT -4.5% 0.2% MA -5.4% 3.0% MD -19.7% 2.7% NH -12.5% 0.5% NJ -21.0% 3.9% CT -18.5% 1.3% DE -15.9% 0.4% RI -23.9% 0.3% DC 29.2% 0.4% HI -2.0% 0.8% AK 10.6% 0.2% United States -7.0% *Source: Fannie Mae. Home price estimates are based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of June 2015. UPB estimates are based on data available through the end of June 2015. Including subsequent data may lead to materially different results. ** “UPB %” refers to unpaid principal balance of loans on properties in the applicable state as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. Note: Home prices on a national basis reached a peak in the third quarter of 2006. Home Price Change From 2006 Q3 Through 2015 Q2* Below -30% -30% to -15% -15% to -5% -5% to 0% 0% to 5% 5% and Above State Growth Rate State: NM Growth Rate: -8.3% UPB %**: 0.5% Example

 
6 Single-Family Acquisitions Excl. Refi Plus (2) Single-Family Acquisitions Excl. Refi Plus (2) Single-Family Acquisitions Excl. Refi Plus (2) Single-Family Acquisitions Excl. Refi Plus (2) Single-Family Acquisitions Excl. Refi Plus (2) Single-Family Acquisitions Excl. Refi Plus (2) Unpaid Principal Balance (billions) $128.1 $118.9 $113.2 $104.9 $369.8 $324.8 $106.0 $97.0 $102.3 $92.2 $85.2 $73.9 Weighted Average Origination Note Rate 3.87% 3.86% 3.98% 3.97% 4.31% 4.28% 4.22% 4.20% 4.28% 4.26% 4.37% 4.35% Origination Loan-to-Value (LTV) Ratio <= 60% 19.6% 18.8% 18.5% 17.8% 15.9% 15.1% 16.5% 15.8% 14.7% 13.9% 15.8% 14.8% 60.01% to 70% 14.4% 14.3% 14.6% 14.6% 12.2% 12.1% 12.7% 12.6% 11.7% 11.5% 11.7% 11.6% 70.01% to 80% 39.7% 41.2% 40.4% 42.0% 40.4% 43.5% 40.8% 42.7% 41.0% 43.5% 40.6% 44.1% 80.01% to 90% 11.8% 11.6% 12.4% 12.2% 13.1% 12.7% 13.3% 13.1% 13.8% 13.6% 13.0% 12.4% 90.01% to 100% 13.8% 14.1% 13.2% 13.4% 16.2% 16.5% 15.6% 15.9% 17.1% 17.5% 16.6% 17.1% > 100% 0.8%  0.9%  2.2%  1.2%  1.7%  2.3%  Weighted Average Origination LTV Ratio 74.0% 74.0% 74.2% 74.2% 76.6% 76.1% 75.8% 75.7% 77.1% 76.8% 76.8% 76.3% FICO Credit Scores (3) < 620 0.6%  0.7%  1.2%  0.9%  1.1%  1.3%  620 to < 660 4.3% 3.7% 4.6% 4.0% 5.4% 4.4% 5.4% 4.7% 5.4% 4.6% 5.3% 4.1% 660 to < 700 11.1% 10.6% 11.8% 11.4% 13.4% 12.6% 13.2% 12.7% 13.4% 12.7% 13.3% 12.3% 700 to < 740 19.7% 19.8% 20.1% 20.3% 21.0% 21.2% 20.8% 21.0% 21.1% 21.3% 20.8% 21.1% >=740 64.3% 65.8% 62.7% 64.3% 58.9% 61.7% 59.8% 61.6% 59.0% 61.4% 59.3% 62.5% Weighted Average FICO Credit Score 750 753 748 751 744 748 745 748 744 748 744 749 Certain Characteristics Fixed-rate 98.1% 98.0% 97.2% 97.1% 95.3% 94.9% 96.1% 95.9% 95.2% 94.9% 95.1% 94.6% Adjustable-rate 1.9% 2.0% 2.8% 2.9% 4.7% 5.1% 3.9% 4.1% 4.8% 5.1% 4.9% 5.4% Alt-A (4) 0.4%  0.5%  0.9%  0.6%  0.8%  0.8%  Interest Only             Investor 7.7% 7.0% 8.4% 7.7% 9.0% 7.7% 8.2% 7.4% 8.1% 7.1% 9.0% 7.7% Condo/Co-op 10.3% 10.4% 9.6% 9.6% 10.3% 10.3% 9.9% 10.0% 10.1% 10.1% 10.6% 10.7% Refinance 59.7% 56.6% 63.2% 60.2% 48.3% 41.1% 50.3% 45.7% 43.4% 37.2% 45.6% 37.3% Loan Purpose Purchase 40.3% 43.4% 36.8% 39.8% 51.7% 58.9% 49.7% 54.3% 56.6% 62.8% 54.4% 62.7% Cash-out refinance 18.1% 19.5% 18.8% 20.3% 16.1% 18.3% 18.1% 19.8% 14.9% 16.5% 14.9% 17.2% Other refinance 41.6% 37.0% 44.4% 40.0% 32.2% 22.8% 32.2% 25.9% 28.5% 20.6% 30.7% 20.2% Top 3 Geographic Concentration California 24.8% California 25.6% California 21.2% California 22.1% California 20.5% California 20.9% Texas 6.9% Texas 6.7% Texas 7.7% Texas 7.5% Texas 8.0% Texas 8.2% Florida 4.9% Florida 4.7% Florida 5.3% Florida 5.1% Florida 5.2% Florida 5.4% Single-Family Acquisitions Single-Family Acquisitions Single-Family Acquisitions Single-Family Acquisitions Single-Family Acquisitions Single-Family Acquisitions Acquisition Period Full Year 2014 Q4 2014 Q3 2014 Q2 2014Q1 2015Q2 2015 Credit Characteristics of Single-Family Business Acquisitions (1) (1) Percentage calculated based on unpaid principal balance of loans at time of acquisition. Single-family business acquisitions refer to single-family mortgage loans we acquire through purchase or securitization transactions. (2) Single-family business acquisitions for the applicable period excluding loans acquired under our Refi PlusTM initiative, which includes the Home Affordable Refinance Program® (“HARP®”). Our Refi Plus initiative provides expanded refinance opportunities for eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100%. (3) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. (4) Newly originated Alt-A loans for the applicable periods consist of the refinance of existing loans under our Refi Plus initiative. For a description of our Alt-A loan classification criteria, refer to Fannie Mae’s 2015 Q2 Form 10-Q.

 
7 <= 60% 60.01% to 80% 80.01% to 95% > 95% Total >= 740 13.4% 36.6% 14.5% 0.6% 65.1% 660 to < 740 4.3% 17.1% 9.0% 0.7% 31.0% 620 to < 660 0.7% 2.3% 0.8% 0.1% 3.9% Total 18.3% 56.0% 24.4% 1.3% 100.0%FIC O C red it S cor e (2 ) For the Six Months Ended June 30, 2015 Origination Loan-to-Value (LTV) Ratio <= 60% 60.01 t 80 80.01% to 95% > 95% Total >= 740 10.5 35.1 15.9% 0 6 62.1% 660 to < 740 4 3 18.5% 10.4% 0 5 33.7% 62 to < 660 0.7 2.6 0.8  4.1% Total 15.6 56.2 27.1% 1.1% 100.0%FIC O C red it S cor e (2 ) For the Six Months Ended June 30, 2014 Origination Loan-to-Value (LTV) Ratio <= 60% 60.01% to 80% 80.01% to 100% > 100% Total >= 740 10.4% 31.3% 15.5% 1.1% 58.3% 660 to < 740 4.7% 17.3% 11.2% 1.3% 34.6% 620 to < 660 0.9% 2.7% 1.4% 0.4% 5.5% < 620 0.3% 0.5% 0.5% 0.3% 1.6% Total 16.3 51.9 28.6 3.2% 100.0% For the Six Months Ended June 30, 2014 Origination Loan-to-Value (LTV) Ratio FIC O C red it S cor e (2 ) <= 60% 60.01% to 80% 8 . to 10 > 100% Total >= 740 13.5% 35.1 14.7 0.3% 63 6 660 to < 740 4.6% 16 8 9.7% 0.3% 3 4 620 to < 660 .8% 2.4 1.1 0.1 4. < 620 0.1% .2 .2 .1 .6 Total 19.1% 54.5 25.6 .8% 100.0% For the Six Months Ended June 30, 2015 Origination Loan-to-Value (LTV) Ratio FIC O C red it S cor e (2 ) <= 60% 60.01% to 80% 8 .01% to 95% > 95% Total >= 740 2.9% 1.5% -1.4%  3.0% 660 to < 740 -0.1% -1.4% -1.4% 0.1% -2.7% 6 to < 660 -0.1% -0.3%   -0.3% Total .8% -0.2% -2.8% 0.2% FIC O C red it S cor e (2 ) Change in Acquisitions Profile Origination Loan-to-Value (LTV) Ratio <= 60% 60.01% to 80% 80.01% to 100% > 100% Total >= 7 0 .2% 3.8% -0.9% -0.8% 5.3% 660 to < 740 -0.1% -0.6% -1.5% -1.0% -3.3% 6 0 to < 660 -0.1% -0.3% -0.3% -0.3% -1.1% < 620 -0.1% -0.2% -0.3% -0.3% -0.9% Total 2.8% 2.6% -3.0% -2.4%  Change in Acquisitions Profile Origination Loan-to-Value (LTV) Ratio FIC O C red it S cor e (2 )Credit Risk Profile Summary of Single-Family Business Acquisitions (1) Credit Profile for Single-Family Acquisitions (1) Percentage calculated based on unpaid principal balance of loans at time of acquisition. Single-family business acquisitions refer to single-family mortgage loans we acquire through purchase or securitization transactions. (2) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. FICO credit scores below 620 primarily consist of the refinance of existing loans under our Refi Plus initiative, which includes the Home Affordable Refinance Program (“HARP”). Our Refi Plus initiative provides expanded refinance opportunities for eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100%. (3) Single-family business acquisitions for the applicable period excluding loans acquired under our Refi Plus initiative, which includes HARP. Credit Profile for Singl -Family Acquisitions (Excluding Refi Plus) (3)

 
8 Certain Credit Characteristics of Single-Family Business Acquisitions: 2004 – 2015(1) (1) Percentage calculated based on unpaid principal balance of loans at time of acquisition. Single-family business acquisitions refer to single-family mortgage loans we acquire through purchase or securitization transactions. (2) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. Loans acquired after 2009 with FICO credit scores below 620 primarily consist of the refinance of existing loans under our Refi Plus initiative, which includes HARP. FICO Credit Score (2) Origination Loan-to-Value Ratio Product Feature * Year-to-date through June 30, 2015.

 
9 HARP (1) Refi Plus (Excluding HARP) (1) HARP (1) Refi Plus (Excluding HARP) (1) HARP (1) Refi Plus (Excluding HARP) (1) HARP (1) Refi Plus (Excluding HARP) (1) HARP (1) Refi Plus (Excluding HARP) (1) HARP (1) Refi Plus (Excluding HARP) (1) HARP (1) Refi Plus (Excluding HARP) (1) Unpaid Principal Balance (billions) $27.9 $44.7 $59.0 $80.5 $55.6 $81.2 $129.9 $73.8 $99.5 $64.4 $21.5 $23.5 $6.3 $11.2 Weighted Average Origination Note Rate 5.05% 4.85% 5.00% 4.68% 4.78% 4.44% 4.14% 3.89% 4.04% 3.80% 4.62% 4.39% 4.22% 4.07% Origination Loan-to-Value Ratio: <=80%  100%  100%  100%  100%  100%  100%  100% 80.01 to 105% 99.1%  94.4%  88.1%  57.2%  58.4%  73.3%  78.4%  105.01% to 125% 0.9% 5.6% 11.9% 22.1% 21.5% 16.9% 14.6% >125%       20.7  20.1  9.9%  7.0%  Weighted Average Origination Loan-to-Value Ratio 90.7% 63.3% 92.2% 62.3% 94.3% 60.2% 111.0% 61.1% 109.8% 60.2% 101.5% 61.3% 98.4% 60.3% FICO Credit Scores (2) < 620 1.2% 0.8% 2.0% 1.4% 2.1% 1.7% 3.7% 2.9% 6.7% 5.3% 10.6% 9.3% 9.4% 7.9% 620 to < 660 2.5 1.7 3.6 2.4 3.8 2.8 6.0 4.2 9.5 6.9 14.5 11.2% 13.9% 9.8 660 to < 740 31.9% 23.0% 33.1% 23.9% 32.6% 25.6% 33.8% 26.0% 38.7% 31.9% 41.0% 36.5 40.2 33.3% >=740 64.4 74.5 61.2 72.3 61.5 70.0 56.6 66.9 45.1 55.8 33.9 43.0% 36.5% 49.0 Weighted Average FICO Credit Score 749 762 746 760 746 758 738 753 722 737 704 717 709 726 2013 2014 Acquisition Year 2009 2010 2011 2012 2015* Single-Family Business Acquisitions by Loan Purpose (1) Our Refi Plus initiative, which started in April 2009, includes the Home Affordable Refinance Program (“HARP”). Our Refi Plus initiative provides expanded refinance opportunities for eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100%. (2) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. * Year-to-date through June 30, 2015.

 
10 As of June 30, 2015 Overall Book 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 and Earlier Unpaid Principal Balance (billions) (1) $2,770.0 $193.7 $328.4 $538.4 $614.2 $247.6 $208.1 $148.3 $57.3 $103.7 $330.4 Share of Single-Family Conventional Guaranty Book 100.0% 7.0% 11.9% 19.4% 22.2% 8.9% 7.5% 5.4% 2.1% 3.7% 11.9% Average Unpaid Principal Balance (1) $160,084 $222,023 $194,673 $185,421 $187,487 $157,565 $156,205 $151,553 $145,345 $161,174 $90,638 Serious Delinquency Rate 1.66%  0.11% 0.27% 0.28% 0.42% 0.58% 1.00% 5.90% 9.89% 4.32% Weighted Average Origination Loan-to-Value Ratio 74.8% 73.9% 76.9% 76.6% 76.3% 71.3% 71.2% 69.7% 74.8% 78.3% 73.4% Origination Loan-to-Value Ratio > 90% 16.1% 14.2% 19.1% 20.3% 19.0% 12.6% 10.4% 6.6% 12.6% 20.8% 11.3% Weighted Average Mark-to-Market Loan-to-Value Ratio 62.0% 72.0% 71.1% 63.1% 57.1% 52.5% 54.1% 56.1% 70.2% 86.3% 60.4% Mark-to-Market Loan-to-Value Ratio > 100% and <= 125% 2.9% 0.6% 1.0% 2.6% 2.4% 0.3% 0.5% 0.5% 6.9% 18.7% 6.7% Mark-to-Market Loan-to-Value Ratio > 125% 1.0% 0.1% 0.3% 0.9% 0.7%    1.4% 7.9% 2.3% Weighted Average FICO (2) 744 750 743 750 759 757 757 753 714 692 704 FICO < 620 (2) 2.4% 0.6% 1.2% 1.6% 1.0% 0.7% 0.7% 0.8% 6.0% 11.4% 8.0% Interest Only 2.3%   0.2% 0.3% 0.5% 0.9% 1.0% 8.2% 19.2% 9.6% Negative Amortizing 0.2%          1.3% Fixed-rate 92.4% 98.2% 95.7% 97.6% 97.6% 95.2% 96.1% 97.3% 73.7% 63.4% 73.5% Primary Residence 88.0% 88.4% 86.8% 86.2% 88.7% 87.2% 89.3% 90.7% 87.7% 90.0% 88.9% Condo/Co-op 9.4% 9.8% 10.0% 10.2% 9.0% 8.6% 8.3% 8.8% 10.8% 9.5% 9.2% Credit Enhanced (3) 16.6% 24.1% 28.9% 19.4% 13.6% 8.7% 6.3% 5.6% 24.8% 30.2% 12.4% Cumulative Default Rate (4)    0.1% 0.2% 0.3% 0.5% 0.7% 4.7% 14.1%  Origination Year Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Origination Year (1) Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of June 30, 2015. (2) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. (3) Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae has access to loan-level information. (4) Defaults include loan foreclosures, short sales, sales to third parties at the time of foreclosure and deeds-in-lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year. For 2006 and earlier cumulative default rates, refer to slide 18.

 
11 As of June 30, 2015 Interest Only Loans Loans with FICO < 620 (2) Loans with FICO ≥ 620 and < 660 (2) Loans with Origination LTV Ratio > 90% Loans with FICO < 620 and Origination LTV Ratio > 90% Alt-A Loans (3) Refi Plus Including HARP (4) Subtotal of Certain Product Features (1) Unpaid Principal Balance (billions) (5) $63.8 $66.5 $151.9 $444.9 $19.8 $109.7 $512.5 $983.0 Share of Single-Family Conventional Guaranty Book 2.3% 2.4% 5.5% 16.1% 0.7% 4.0% 18.5% 35.5% Average Unpaid Principal Balance (5) $230,899 $118,656 $132,953 $171,219 $133,490 $148,727 $156,963 $152,749 Serious Delinquency Rate 8.33% 7.89% 5.26% 2.41% 8.65% 6.96% 0.72% 2.96% Acquisition Years 2005 - 2008 81.6% 42.3% 32.8% 10.6% 31.9% 60.3%  18.6% Weighted Average Origination Loan-to-Value Ratio 74.1% 81.6% 79.3% 104.3% 108.0% 78.2% 86.7% 85.3% Origination Loan-to-Value Ratio > 90% 8.0% 29.7% 23.3% 100.0% 100.0% 15.3% 39.7% 45.3% Weighted Average Mark-to-Market Loan-to-Value Ratio 83.2% 73.7% 70.9% 87.1% 94.9% 75.9% 68.3% 72.7% Mark-to-Market Loan-to-Value Ratio > 100% and <= 125% 18.3% 10.8% 8.1% 11.1% 23.0% 13.6% 6.8% 7.1% Mark-to-Market Loan-to-Value Ratio > 125% 7.2% 4.4% 3.2% 4.0% 10.6% 5.5% 2.0% 2.5% Weighted Average FICO (2) 723 583 642 729 583 712 736 719 FICO < 620 (2) 1.6% 100.0%  4.4% 100.0% 2.6% 4.7% 6.8% Fixed-rate 23.5% 83.0% 85.7% 95.4% 87.9% 65.1% 98.8% 89.2% Primary Residence 85.5% 94.6% 93.0% 91.7% 94.3% 76.9% 84.6% 89.1% Condo/Co-op 14.8% 4.7% 6.1% 10.0% 5.9% 9.8% 9.5% 8.9% Credit Enhanced (6) 13.5% 23.1% 21.1% 61.1% 55.7% 10.6% 12.4% 30.5% Categories Not Mutually Exclusive (1) (1) Loans with multiple product features are included in all applicable categories. The subtotal is calculated by counting a loan only once even if it is included in multiple categories. (2) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. (3) For a description of our Alt-A loan classification criteria, refer to Fannie Mae’s 2015 Q2 Form 10-Q. (4) Our Refi Plus initiative, which started in April 2009, includes the Home Affordable Refinance Program (“HARP”). Our Refi Plus initiative provides expanded refinance opportunities for eligible Fannie Mae borrowers, and may involve the refinance of existing Fannie Mae loans with high loan-to-value ratios, including loans with loan-to-value ratios in excess of 100%. (5) Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of June 30, 2015. (6) Unpaid principal balance of all loans with credit enhancement as a percentage of unpaid principal balance of single-family conventional guaranty book of business for which Fannie Mae had access to loan-level information. Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Certain Product Features

 
12 UPB ($ in Billions) % of Total Weighted Average Mark-to- Market LTV Mark-to-Market LTV > 100% Seriously Delinquent Loan Share (2) SDQ Rate (2) Q2 2015 Acquisitions (# of Properties) Q2 2015 Dispositions (# of Properties) REO Ending Inventory as of June 30, 2015 Average Days to Foreclosure (3) Select States (5) California $546.4 19.7% 52.7% 2.6% 5.2% 0.62% 739 1,238 2,490 736 1.1% Texas $157.8 5.7% 58.5% 0.1% 3.0% 0.77% 510 677 1,225 668 0.1% Florida $154.0 5.6% 70.2% 13.9% 13.1% 3.40% 4,414 7,472 14,187 1,431 25.1% New York $151.6 5.5% 58.4% 3.5% 10.7% 3.84% 713 544 2,296 1,597 16.6% Illinois $111.6 4.0% 69.3% 8.2% 5.4% 2.03% 1,231 2,733 6,622 928 7.1% New Jersey $109.4 3.9% 68.0% 8.1% 10.4% 5.34% 1,102 756 3,715 1,550 22.3% Washington $98.1 3.5% 60.7% 2.1% 2.0% 1.09% 386 887 1,382 921 1.2% Virginia $97.2 3.5% 62.9% 2.7% 1.7% 0.97% 405 575 1,144 541 0.7% Pennsylvania $84.0 3.0% 64.8% 2.5% 4.6% 2.13% 943 1,167 2,775 974 3.0% Massachusetts $83.0 3.0% 59.3% 1.6% 3.0% 2.06% 304 371 1,339 1,268 1.7% Region (6) Midwest $411.2 14.8% 66.8% 4.1% 16.0% 1.41% 4,159 7,607 16,870 700 11.7% Northeast $520.5 18.8% 63.1% 4.2% 34.0% 3.24% 3,846 3,986 13,490 1,272 47.9% Southeast $608.6 22.0% 66.4% 6.1% 28.7% 2.00% 7,779 12,737 26,102 1,112 32.8% Southwest $453.2 16.4% 61.9% 1.9% 10.2% 0.92% 2,079 2,969 5,250 606 1.9% West $776.5 28.0% 55.5% 3.0% 11.1% 0.86% 1,982 3,148 7,005 965 5.6% Total $2,770.0 100.0% 62.0% 3.9% 100.0% 1.66% 19,845 30,447 68,717 985 100.0% SF Conventional Guaranty Book of Business as of June 30, 2015 (1) Seriously Delinquent Loans as of June 30, 2015 (2) Real Estate Owned (REO) % of YTD 2015 Credit Losses (4) Credit Characteristics of Single-Family Conventional Guaranty Book of Business and Single-Family Real Estate Owned (REO) in Select States (1) Based on the unpaid principal balance (UPB) of the single-family conventional guaranty book of business as of June 30, 2015. Excludes non-Fannie Mae securities held in portfolio and those Alt-A and subprime wraps for which Fannie Mae does not have loan-level information. Fannie Mae had access to detailed loan-level information for approximately 99% of its single-family conventional guaranty book of business as of June 30, 2015. (2) “Seriously delinquent loans” refers to single-family conventional loans that are 90 days or more past due or in the foreclosure process. “Seriously delinquent loan share” refers to the percentage of our single-family seriously delinquent loan population in the applicable state or region. “SDQ rate” refers to the number of single-family conventional loans that were seriously delinquent in the applicable state or region, divided by the number of loans in our single-family conventional guaranty book of business in that state or region. (3) Measured from the borrowers’ last paid installment on their mortgages to when the related properties were added to our REO inventory for foreclosures completed during the first six months of 2015. Home Equity Conversion Mortgages (HECMs) insured by HUD are excluded from this calculation. (4) Expressed as a percentage of credit losses for the single-family guaranty book of business. Credit losses consist of (a) charge-offs, net of recoveries and (b) foreclosed property expense (income), adjusted to exclude the impact of fair value losses resulting from credit-impaired loans acquired from MBS trusts. Includes the impact of credit losses associated with our redesignation in the first half of 2015 from held for investment to held for sale of certain nonperforming single-family loans expected to be sold in the foreseeable future. Also includes the impact of our approach to adopting the charge-off provisions of the Federal Housing Finance Agency’s Advisory Bulletin AB 2012-02, “Framework for Adversely Classifying Loans, Other Real Estate Owned, and Other Assets and Listing Assets for Special Mention” on January 1, 2015. For information on total credit losses, refer to Fannie Mae’s 2015 Q2 Form 10-Q. (5) Select states represent the top ten states in UPB of the single-family conventional guaranty book of business as of June 30, 2015. (6) For information on which states are included in each region, refer to Fannie Mae’s 2015 Q2 Form 10-Q.

 
13 528 287 20.9% 13.1% 7.3% (NY) 10.7% 7.4% (NJ) 10.4% 6.3% (IL) 5.4%6.5% (CA) 5.2% 0 100 200 300 400 500 600 0% 5% 10% 15% 20% 25% 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 SD Q Vo lume (T ho us an ds ) SDQ Volume Florida New York New Jersey Illinois California 101 6915.5% 20.6% 0.6% 3.3% 0.8% 5.4% 11.2% 9.6% 7.1% 3.6% 0 20 40 60 80 100 120 0% 5% 10% 15% 20% 25% 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 RE O En din g In ve nt or y ( Th ous an ds ) REO Ending Inventory Florida New York New Jersey Illinois California Seriously Delinquent Loan and REO Ending Inventory Share by Select States (1) Seriously Delinquent Loan Share by Select States (2) REO Ending Inventory Share by Select States (3) (1) Based on states with the largest volume of seriously delinquent loans in our single-family conventional guaranty book of business as of June 30, 2015. (2) “Seriously delinquent loan share” refers to the percentage of our single-family seriously delinquent loan population in the applicable state. (3) Share of REO ending inventory calculated as the number of properties in the single-family REO ending inventory for the state divided by the total number of single-family properties in the REO ending inventory for the specified time period. Our single-family serious delinquency rate and the period of time that loans remain seriously delinquent continue to be negatively impacted by the length of time required to complete a foreclosure in some states. High levels of foreclosures, changes in state foreclosure laws, new federal and state servicing requirements imposed by regulatory actions and legal settlements, and the need for servicers to adapt to these changes have lengthened the time it takes to foreclose on a mortgage loan in a number of states, particularly in New York, Florida and New Jersey. Longer foreclosure timelines result in these loans remaining in our book of business for a longer time, which has caused our serious delinquency rate to decrease more slowly in the last few years than it would have if the pace of foreclosures had been faster.

 
14 Short Sales Net Sales Prices to UPB Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Florida 68.3% 68.9% 70.2% 69.1% 72.7% California 75.8% 76.8% 77.8% 78.4% 78.3% Illinois 63.5% 65.1% 64.4% 65.5% 64.5% New Jersey 68.1% 66.8% 64.4% 67.8% 65.7% New York 71.0% 71.6% 70.4% 73.6% 72.8% Nevada 68.6% 68.9% 71.1% 68.6% 71.5% Maryland 68.7% 69.2% 71.2% 70.0% 70.3% Washington 76.1% 76.7% 79.3% 76.2% 78.5% Arizona 73.0% 74.1% 73.5% 75.3% 77.0% Michigan 63.3% 68.5% 65.3% 67.6% 71.7% REO Net Sales Prices to UPB Q2 2014 Q3 2014 Q4 2014 Q 2015 Q2 2015 Florida 66.5% 67.7% 69.2% 70.8% 73.5% Illinois 58.5% 59.5% 58.6% 60.8% 64.5% Ohio 54.4% 56.7% 56.1% 55.9% 62.7% Michigan 63.2% 60.4% 56.2% 59.2% 64.6% California 81.8% 81.2% 78.5% 81.3% 84.0% Pennsylvania 61.0% 61.0% 60.2% 59.6% 63.0% Maryland 60.4% 61.7% 61.4% 64.9% 67.5% Washington 77.8% 79.5% 78.5% 81.8% 84.8% Georgia 74.0% 75.2% 75.7% 76.8% 78.3% North Carolina 76.0% 75.1% 74.0% 75.9% 78.7% 71.7% 74.3% 76.2% 78.0% 78.6% 79.7% 80.4% 80.4% 80.7% 82.0% 64.5% 66.6% 68.2% 69.9% 70.6% 71.7% 72.2% 72.2% 72.6% 73.6% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 014 Q4 2015 Q1 2015 Q2 Short Sales Gross Sales / UPB Short Sales Net Sales / UPB 70.6% 74.6% 74.8% 74.2% 73.8% 75.7% 75.9% 75.2% 76.3% 79.3% 64.6% 68.4% 68.5% 67.9% 67. % 69.2% 69.3% 68.6% 69.8% 72.5% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 REO Gross Sales / UPB REO Net Sales / UPB Single-Family Short Sales and REO Sales Prices to UPB of Mortgage Loans (1) Includes REO properties that have been sold to a third party (excluding properties that have been repurchased by the seller/servicer, acquired by a mortgage insurance company, redeemed by a borrower, or sold through the FHFA Rental Pilot). (2) Sales Prices to UPB are calculated as the sum of sales proceeds received divided by the aggregate unpaid principal balance (UPB) of the related loans. Gross sales price represents the contract sale price. Net sales price represents the contract sale price less charges/credits paid by or due to the seller or other parties at closing. (3) The states shown had the greatest volume of properties sold in the first six months of 2015 in each respective category. REO (1) Direct Sale Dispositions: Sales Prices to UPB (2) Short Sales: Sales Prices to UPB (2) Net Sales Prices to UPB Trends for Top 10 States (3)

 
15 43 40 37 39 36 32 29 26 27 26 4 3 2 2 2 2 2 2 2 2 48 44 40 41 38 34 31 28 29 28 0 10 20 30 40 50 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 # o f L oa ns (Th ou sa nd s) Modifications Repayment Plans and Forbearances Completed 12 14 12 9 7 7 5 4 4 4 4 4 3 4 3 3 3 2 2 2 16 18 15 13 10 10 8 7 6 6 0 10 20 30 40 50 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 # o f L oa ns (Th ou sa nd s) Short Sales D eds-in-Li u Single-Family Loan Workouts Foreclosure Alternatives (2) Home Retention Strategies (1) (1) Consists of (a) modifications, which do not include trial modifications, loans to certain borrowers who have received bankruptcy relief that are accounted for as troubled debt restructurings, or repayment plans or forbearances that have been initiated but not completed and (b) repayment plans and forbearances completed. (2) Consists of (a) short sales, in which the borrower, working with the servicer and Fannie Mae, sells the home prior to foreclosure for less than the amount owed to pay off the loan, accrued interest and other expenses from the sale proceeds and (b) deeds-in-lieu of foreclosure, which involve the borrower’s voluntarily signing over title to the property.

 
16 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 Modifications (2) 35,332 41,697 39,712 43,153 40,358 37,337 39,159 36,044 32,010 28,861 25,908 26,700 % Current or Paid Off 3 months post modification 84% 84% 85% 86% 83% 83% 84% 83% 79% 79% 80% 79% 6 months post modification 77% 80% 82% 79% 77% 79% 79% 76% 72% 74% 74% n/a 9 months post modification 76% 78% 78% 76% 75% 76% 74% 72% 71% 71% n/a n/a 12 months post modification 75% 76% 76% 75% 74% 73% 73% 72% 70% n/a n/a n/a 15 months post modification 74% 74% 75% 74% 71% 72% 72% 71% n/a n/a n/a n/a 18 months post modification 73% 75% 75% 72% 70% 72% 71% n/a n/a n/a n/a n/a 21 months post modification 74% 75% 74% 72% 71% 72% n/a n/a n/a n/a n/a n/a 24 months post modification 75% 74% 74% 73% 72% n/a n/a n/a n/a n/a n/a n/a Re-performance Rates of Modified Single-Family Loans (1) (1) Excludes loans that were classified as subprime adjustable rate mortgages that were modified into fixed rate mortgages. Modifications reflect permanent modifications which does not include loans currently in trial modifications. (2) Defined as total number of completed modifications for the time periods noted.

 
17 2015 2014 2013 2012 2011 2010 2015 2014 2013 2012 2011 2010 Certain Product Features (3) Negative Amortizing Loans 0.2% 0.2% 0.2% 0.3% 0.3% 0.4% 1.6% 0.9% 0.8% 0.5% 1.2% 1.9% Interest Only Loans 2.3% 2.5% 2.9% 3.7% 4.7% 5.6% 20.2% 10.2% 18.7% 21.8% 25.8% 28.6% Loans with FICO < 620 (4) 2.4% 2.5% 2.6% 2.9% 3.2% 3.5% 11.2% 12.1% 7.0% 7.8% 7.9% 8.0% Loans with FICO ≥ 620 and < 660 (4) 5.5% 5.5% 5.5% 6.0% 6.7% 7.4% 18.2% 17.6% 15.7% 14.2% 14.7% 15.1% Loans with Origination LTV Ratio > 90% 16.1% 15.9% 15.1% 12.8% 10.0% 9.4% 15.7% 15.3% 20.8% 16.8% 14.0% 15.9% Loans with FICO < 620 and Origination LTV Ratio > 90% (4) 0.7% 0.7% 0.7% 0.7% 0.7% 0.8% 2.7% 2.9% 2.0% 2.3% 2.2% 2.7% Alt-A Loans (5) 4.0% 4.2% 4.7% 5.6% 6.6% 7.6% 31.3% 17.4% 26.0% 23.7% 27.3% 33.2% Subprime Loans (6) 0.1% 0.1% 0.1% 0.2% 0.2% 0.2% 2.1% 1.3% -0.2% 1.1% 0.6% 1.1% Refi Plus Including HARP 18.5% 19.1% 19.5% 16.5% 11.2% 7.1% 6.2% 10.4% 7.4% 3.5% 1.4% 0.1% Vintages 2009 - 2015 82.3% 80.5% 76.2% 65.3% 51.6% 39.0% 8.0% 13.3% 10.0% 5.1% 2.4% 0.4% 2005 - 2008 11.2% 12.2% 14.7% 21.7% 30.4% 38.0% 81.9% 74.7% 77.6% 81.8% 82.9% 87.9% 2004 & Prior 6.6% 7.3% 9.1% 13.1% 18.0% 23.0% 10.1% 12.0% 12.4% 13.1% 14.8% 11.7% Select States (7) Florida 5.6% 5.6% 5.7% 6.0% 6.3% 6.6% 25.1% 32.6% 28.9% 21.4% 11.0% 17.5% New Jersey 3.9% 4.0% 4.0% 4.0% 4.0% 4.0% 22.3% 7.2% 3.7% 2.0% 0.8% 1.2% New York 5.5% 5.5% 5.6% 5.6% 5.6% 5.5% 16.6% 4.8% 1.9% 0.9% 0.6% 0.8% Illinois 4.0% 4.1% 4.1% 4.2% 4.3% 4.3% 7.1% 10.9% 12.9% 9.6% 3.5% 4.3% Maryland 2.7% 2.7% 2.8% 2.8% 2.9% 2.8% 3.9% 5.9% 3.1% 1.8% 0.6% 1.9% Pennsylvania 3.0% 3.0% 3.1% 3.1% 3.0% 3.0% 3.0% 4.2% 3.0% 1.6% 0.8% 0.8% Connecticut 1.3% 1.3% 1.4% 1.4% 1.4% 1.4% 2.3% 2.8% 1.4% 0.9% 0.3% 0.4% Nevada 1.0% 1.0% 1.0% 1.0% 1.0% 1.1% 2.1% 1.4% 3.8% 4.8% 7.9% 6.1% Ohio 2.1% 2.1% 2.1% 2.2% 2.3% 2.4% 1.8% 4.2% 4.1% 3.3% 2.1% 2.2% Massachusetts 3.0% 3.0% 3.1% 3.1% 3.1% 3.0% 1.7% 1.0% 0.8% 1.0% 1.2% 1.3% All Other States 67.9% 67.7% 67.3% 66.6% 66.0% 65.8% 14.1% 25.0% 36.5% 52.8% 71.0% 63.6% % of Single-Family Credit Losses (2)% of Single-Family Conventional Guaranty Book of Business (1) (1) Based on the unpaid principal balance (UPB) of the single-family conventional guaranty book of business as of December 31 for the time periods noted, with the exception of 2015 which is as of June 30, 2015. (2) Based on the single-family credit losses for the year ended December 31 for the time periods noted, with the exception of 2015 which is through June 30, 2015. Credit losses consist of (a) charge-offs, net of recoveries and (b) foreclosed property expense (income), adjusted to exclude the impact of fair value losses resulting from credit-impaired loans acquired from MBS trusts. Does not reflect the impact of recoveries that have not been allocated to specific loans. Negative values are the result of recoveries on previously recognized credit losses. Includes the impact of credit losses associated with our redesignation in the first half of 2015 from held for investment to held for sale of certain nonperforming single-family loans expected to be sold in the foreseeable future. Also includes the impact of our approach to adopting the charge-off provisions of the Federal Housing Finance Agency’s Advisory Bulletin AB 2012-02, “Framework for Adversely Classifying Loans, Other Real Estate Owned, and Other Assets and Listing Assets for Special Mention” on January 1, 2015. (3) Loans with multiple product features are included in all applicable categories. Categories are not mutually exclusive. (4) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. (5) Newly originated Alt-A loans acquired after 2008 consist of the refinance of existing loans under our Refi Plus Initiative. For a description of our Alt-A loan classification criteria, refer to Fannie Mae’s 2015 Q2 Form 10-Q. (6) For a description of our subprime loan classification criteria, refer to Fannie Mae’s 2014 Form 10-K. (7) Select states represent the top ten states with the highest percentage of single-family credit losses for the six months ended June 30, 2015. Credit Loss Concentration of Single-Family Conventional Guaranty Book of Business

 
18 2002 2003 2004 2005 2006 2007 2008 20092010201120122014 20132015 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% Yr1-Q1 Yr2-Q1 Yr3-Q1 Yr4-Q1 Yr5-Q1 Yr6-Q1 Yr7-Q1 Yr8-Q1 Yr9-Q1 Yr10-Q1 Yr11-Q1 Cu mu lati ve D efaul t Ra te Time Since Beginning of Origination Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Defaults include loan foreclosures, short sales, sales to third parties at the time of foreclosure and deeds-in-lieu of foreclosure. Cumulative Default Rate is the total number of single-family conventional loans in the guaranty book of business originated in the identified year that have defaulted, divided by the total number of single-family conventional loans in the guaranty book of business originated in the identified year. Data as of June 30, 2015 is not necessarily indicative of the ultimate performance of the loans and performance is likely to change, perhaps materially, in future periods. Cumulative Default Rates of Single-Family Conventional Guaranty Book of Business by Origination Year

 
19 Total Multifamily Guaranty Book of Business 31,840 $211.7 100% 0.05% $23 $(46) $52 $257 Credit Enhanced Loans: Credit Enhanced 29,249 $197.8 93% 0.05% $23 $(35) $0 $189 Non-Credit Enhanced 2,591 $13.9 7% 0.11% $0 $(11) $52 $68 Origination loan-to-value ratio: (4) Less than or equal to 70% 20,218 $115.2 54% 0.03% $(5) $(11) $24 $37 Greater than 70% and less than or equal to 80% 9,792 $90.7 43% 0.08% $13 $(38) $18 $182 Greater than 80% 1,830 $5.8 3% 0.04% $14 $3 $10 $38 Delegated Underwriting and Servicing (DUS ®) Loans: (5) DUS ® - Small Balance Loans (6) 8,296 $15.6 7% 0.16% $2 $11 $3 $19 DUS ® - Non Small Balance Loans 13,257 $183.1 87% 0.03% $14 $(67) $29 $182 DUS ® - Total 21,553 $198.7 94% 0.04% $16 $(57) $32 $201 Non-DUS - Small Balance Loans (6) 9,805 $6.8 3% 0.34% $3 $11 $23 $41 Non-DUS - Non Small Balance Loans 482 $6.2 3%  $4 $0 $(3) $15 Non-DUS - Total 10,287 $13.0 6% 0.18% $6 $11 $20 $56 Maturity Dates: Loans maturing in 2015 581 $2.4 1% 0.34% $1 $(3) $(1) $20 Loans maturing in 2016 1,908 $9.2 4% 0.05% $0 $8 $17 $30 Loans maturing in 2017 3,076 $14.8 7% 0.17% $3 $(19) $42 $84 Loans maturing in 2018 2,740 $15.5 7% 0.14% $12 $(4) $0 $35 Loans maturing in 2019 2,602 $19.4 9% 0.03% $(4) $1 $(3) $21 Other maturities 20,933 $150.4 71% 0.03% $12 $(29) $(4) $68 Loan Size Distribution: Less than or equal to $750K 6,901 $1.8 1% 0.23% $1 $5 $7 $13 Greater than $750K and less than or equal to $3M 10,322 $15.7 7% 0.21% $7 $19 $33 $45 Greater than $3M and less than or equal to $5M 4,264 $15.6 7% 0.22% $8 $(9) $2 $31 Greater than $5M and less than or equal to $25M 8,632 $91.0 43% 0.04% $7 $(53) $(18) $141 Greater than $25M 1,721 $87.5 41%  $0 $(9) $29 $28 2012 Multifamily Credit Losses ($ in Millions) (3) As of June 30, 2015 Loan Counts Unpaid Principal Balance ($ in Billions) % of Multifamily Guaranty Book of Business (UPB) % Seriously Delinquent (1) 2013 Multifamily Credit Losses ($ in Millions) (2)(3) 2014 Multifamily Credit Losses ($ in Millions) (2)(3) YTD 2015 Multifamily Credit Losses ($ in Millions) (2)(3) (1) We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. (2) Negative values are the result of recoveries on previously recognized credit losses. (3) Dollar amount of multifamily credit-related losses/(income) for the applicable period and category. Total credit losses for each period will not tie to sum of all categories due to rounding. The 2013 multifamily credit losses for DUS and Non-DUS loans have been corrected from the amounts previously reported. (4) Weighted average origination loan-to-value ratio is 66% as of June 30, 2015. (5) Under the Delegated Underwriting and Servicing, or DUS ®, product line, Fannie Mae acquires individual, newly originated mortgages from specially approved DUS lenders using DUS underwriting standards and/or DUS loan documents. Because DUS lenders generally share the risk of loss with Fannie Mae, they are able to originate, underwrite, close and service most loans without our pre-review. (6) Multifamily loans with an original unpaid balance of up to $3 million nationwide or up to $5 million in high cost markets. Multifamily Credit Profile by Loan Attributes

 
20 2005 2006 2015 2007 2008 2010 2009 2011201220132014 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Cum ulat ive Def ault Rat e 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015As of June 30, 2015 Unpaid Principal Balance ($ in Billions) % of Multifamily Guaranty Book of Business (UPB) % Seriously Delinquent (1) # of Seriously Delinquent loans (1) YTD 2015 Multifamily Credit Losses ($ in Millions) (2)(3) 2014 Multifamily Credit Losses ($ in Millions) (2)(3) 2013 Multifamily Credit Losses ($ in Millions) (2)(3) 2012 Multifamily Credit Losses ($ in Millions) (3) Total Multifamily Guaranty Book of Business $211.7 100% 0.05% 47 $23 $(46) $52 $257 By Acquisition Year: 2015 $25.0 12%       2014 $28.6 13% 0.00% 1     2013 $26.8 13%   $0    2012 $28.9 14% 0.00% 1 $0 $0 $0  2011 $20.1 9% 0.10% 6 $0 $0 $(1) $0 2010 $13.9 7% 0.04% 2 $(1) $2 $7 $1 2009 $13.4 6% 0.05% 3 $2 $(3) $(14) $17 2008 $12.5 6% 0.24% 12 $4 $(4) $(6) $60 2007 $15.9 7% 0.20% 16 $5 $(17) $50 $123 Prior to 2007 $26.6 13% 0.03% 6 $13 $(25) $17 $57 20052006 2007 2008 2009 2011 20102012 2013 20142015 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 SD Q 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1) We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. (2) Negative values are the result of recoveries on previously recognized credit losses. (3) Dollar amount of multifamily credit-related losses/(income) for the applicable period and category. Total credit losses for each period will not tie to sum of all categories due to rounding. Multifamily Credit Profile by Acquisition Year Multifamily SDQ Rate by Acquisition Year Cumulative Defaults by Acquisition Year

 
21 Total Multifamily Guaranty Book of Business $211.7 100% 0.05% $23 $(46) $52 $257 Region: (4) Midwest $19.1 9% 0.19% $28 $(3) $(20) $40 Northeast $37.7 18% 0.08% $2 $4 $(4) $25 Southeast $48.1 23% 0.06% $1 $(22) $6 $138 Southwest $42.8 20% 0.01% $(4) $(21) $(16) $19 West $63.9 30% 0.01% $(5) $(4) $87 $35 Top Five States by UPB: California $48.5 23% 0.01% $0 $(2) $4 $4 Texas $22.8 11%  $(1) $(33) $(8) $6 New York $21.9 10% 0.05% $1 $2 $1 $7 Florida $12.2 6%  $(3) $(8) $11 $92 Washington $7.9 4% 0.02% $1 $(0) $1 $0 Asset Class: (5) Conventional/Co-op $188.4 89% 0.06% $15 $(37) $52 $242 Seniors Housing $13.5 6%  $9 $(3)   Manufactured Housing $5.5 3%  $0 $(2) $0 $7 Student Housing $4.3 2%  $(1) $(4) $1 $7 Targeted Affordable Segment: Privately Owned with Subsidy (6) $29.7 14% 0.07% $14 $(4) $(8) $9 DUS & Non-DUS Lenders/Servicers: DUS: Bank (Direct, Owned Entity, or Subsidiary) $83.3 39% 0.04% $12 $(28) $6 $55 DUS: Non-Bank Financial Institution $121.6 57% 0.06% $8 $(25) $39 $180 Non-DUS: Bank (Direct, Owned Entity, or Subsidiary) $6.3 3% 0.11% $1 $2 $2 $17 Non-DUS: Non-Bank Financial Institution $0.3  0.22% $2 $6 $5 $6 Non-DUS: Public Agency/Non Profit $0.1     $0 $0 As of June 30, 2015 Unpaid Principal Balance ($ in Billions) % of Multifamily Guaranty Book of Business (UPB) % Seriously Delinquent (1) 2013 Multifamily Credit Losses ($ in Millions) (2)(3) 2012 Multifamily Credit Losses ($ in Millions) (3) 2014 Multifamily Credit Losses ($ in Millions) (2)(3) YTD 2015 Multifamily Credit Losses ($ in Millions) (2)(3) (1) We classify multifamily loans as seriously delinquent when payment is 60 days or more past due. (2) Negative values are the result of recoveries on previously recognized credit losses. (3) Dollar amount of multifamily credit-related losses/(income) for the applicable period and category. Total credit losses for each period will not tie to sum of all categories due to rounding. (4) For information on which states are included in each region, refer to Fannie Mae’s 2014 Form 10-K. (5) Conventional Multifamily/Cooperative Housing/Affordable Housing: Conventional Multifamily is a loan secured by a residential property comprised of five or more dwellings which offers market rental rates (i.e., not subsidized or subject to rent restrictions). Cooperative Housing is a multifamily loan made to a cooperative housing corporation and secured by a first or subordinated lien on a cooperative multifamily housing project that contains five or more units. Affordable Housing is a multifamily loan on a mortgaged property encumbered by a regulatory agreement or recorded restriction that limits rents, imposes income restrictions on tenants or places other restrictions on the use of the property. Manufactured Housing Communities: A multifamily loan secured by a residential development that consists of sites for manufactured homes and includes utilities, roads and other infrastructure. In some cases, landscaping and various other amenities such as a clubhouse, swimming pool, and tennis and/or sports courts are also included. Seniors Housing: A multifamily loan secured by a mortgaged property that is intended to be used for residents for whom the owner or operator provides special services that are typically associated with either “independent living” or “assisted living.” Some Alzheimer’s and skilled nursing capabilities are permitted. Dedicated Student Housing: Multifamily loans secured by residential properties in which college or graduate students make up at least 80% of the tenants. Dormitories are not included. (6) The Multifamily Affordable Business Channel focuses on financing properties that are under a regulatory agreement that provides long-term affordability, such as properties with rent subsidies or income restrictions. Multifamily Credit Profile

 
22 Multifamily YTD 2015 Credit Losses by State Through 2015 Q2 ($ Millions) (1) Numbers: Represent YTD 2015 credit-related losses/(income) for each state which totaled $23M in losses for the six months ended June 30, 2015. States with no numbers had less than $500K in credit losses or less than $500K in credit-related income for the six months ended June 30, 2015. Shading: Represent Unpaid Principal Balance (UPB) for each state which totaled $211.7B as of June 30, 2015. Portfolio UPB Concentration by State as of 6/30/2015 (1) Total state credit losses will not tie to total YTD 2015 credit losses due to rounding. Negative values are the result of recoveries on previously recognized credit losses. Example: UPB in OH is $3B and YTD 2015 Credit Losses are $1M