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fnm-20201029

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): October 29, 2020

Federal National Mortgage Association

(Exact name of registrant as specified in its charter)

Fannie Mae

Federally chartered corporation

0-50231

52-0883107

1100 15th Street, NW

800

232-6643

Washington,

20005

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)

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):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§203.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


			Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

The information in this report, including information contained in the exhibits submitted with this report, 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 October 29, 2020, Fannie Mae filed its quarterly report on Form 10-Q for the quarter ended September 30, 2020 and is issuing a news release reporting its financial results for the periods covered by the Form 10-Q. Copies of the news release and a financial supplement are furnished as Exhibits 99.1 and 99.2, respectively, to this report and are incorporated herein by reference. Copies may also be found on Fannie Mae’s website, www.fanniemae.com, in the “About Us” section under “Investor Relations/Quarterly and Annual Results.” Information appearing on the company’s website is not incorporated into this report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are being submitted with this report:



Exhibit Number						Description of Exhibit
99.1						News release, dated October 29, 2020
99.2						Financial Supplement for Q3 2020, dated October 29, 2020
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document included as Exhibit 101

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/ Celeste M. Brown
						Celeste M. Brown
						Executive Vice President and Chief Financial Officer

Date: October 29, 2020

Document

Contact: Pete Bakel Resource Center: 1-800-732-6643

202-752-2034 Exhibit 99.1

Date: October 29, 2020

Fannie Mae Reports Net Income of $4.2 Billion for Third Quarter 2020

Third Quarter 2020 Results

“Fannie Mae has helped more than 1.2 million homeowners with forbearance plans so far in 2020, while providing record levels of critical liquidity to the mortgage market through one of the most severe and sudden economic shocks in a century. Our performance this year demonstrates our ability to support the mortgage market in a safe and sound manner even during these uniquely challenging times. To continue meeting these challenges, we believe our company and the broader housing finance system would be best served by a responsible end to Fannie Mae’s conservatorship, consistent with FHFA’s goals.”

Hugh R. Frater,

Chief Executive Officer

•

Fannie Mae reported net income of $4.2 billion for the third quarter of 2020, compared with net income of $2.5 billion for the second quarter of 2020. The increase in net income was due to higher amortization income driven by an increase in mortgage prepayment activity, a decrease in fair value losses, an increase in net investment gains, and a shift to credit-related income in the third quarter of 2020 from credit-related losses in the prior quarter.

•

Fannie Mae continues to provide economic relief to borrowers impacted by COVID-19 through its forbearance program. As of September 30, 2020, 4.1% of Fannie Mae’s single-family guaranty book of business based on loan count and 0.5% of the company’s multifamily guaranty book of business based on unpaid principal balance were in forbearance, the vast majority of which were related to COVID-19.

•

Fannie Mae’s net worth increased from $16.5 billion as of June 30, 2020 to $20.7 billion as of September 30, 2020. Based on its agreement with the U.S. Department of the Treasury, the company may retain quarterly earnings until its net worth reaches $25 billion.

•

Fannie Mae expects the impact of the COVID-19 pandemic to continue to negatively affect its financial results, contributing to lower net income in 2020 than in 2019.

Business Highlights

•

Fannie Mae is providing substantial liquidity to lenders during the COVID-19 pandemic and fulfilling Fannie Mae’s mission to stabilize the housing finance market and provide liquidity, support, and access to affordable mortgage financing in all U.S. markets in all economic cycles. Fannie Mae provided $982 billion of liquidity in the first nine months of 2020, which represents the company’s highest acquisition volume since the same period in 2003.

•

Fannie Mae provided $933 billion in single-family liquidity to the mortgage market in the first nine months of 2020, including $506 billion through its whole loan conduit, enabling the financing of approximately 1,039,000 home purchases and 2,298,000 refinancings. Fannie Mae has financed approximately one in four single-family mortgage loans outstanding in the United States.

•

Fannie Mae provided $49 billion in multifamily financing in the first nine months of 2020, which enabled the financing of 542,000 units of multifamily housing. More than 90% of the multifamily units the company financed in the first nine months of 2020 were affordable to families earning at or below 120% of the area median income, providing support for both affordable and workforce housing.


Third Quarter 2020 Results						1

WASHINGTON, DC — Fannie Mae (FNMA/OTCQB) reported net income of $4.2 billion and comprehensive income of $4.2 billion for the third quarter of 2020, compared with net income of $2.5 billion and comprehensive income of $2.5 billion for the second quarter of 2020. The increase in net income was due to higher amortization income driven by an increase in mortgage prepayment activity as a result of the historically low interest rate environment in the third quarter of 2020; a decrease in fair value losses due primarily to yields remaining mostly flat during the quarter and gains on credit enhancement derivatives due to higher loan default expectations on loans covered by certain credit risk transfer transactions; an increase in net investment gains driven by an increase in sales of single-family held-for-sale loans; and a shift from credit-related expense to credit-related income in the third quarter of 2020 due to the impact of actual and forecasted home prices as well as the redesignation of reperforming single-family mortgage loans from held-for-investment to held-for-sale, partially offset by an increase in the allowance for loan losses the company expects to incur as a result of the COVID-19 pandemic.


Fannie Mae Response to COVID-19

In March 2020, the COVID-19 outbreak in the United States was declared a national emergency. The COVID-19 pandemic resulted in stay-at-home orders, school closures, and widespread business shutdowns across the country. Although business activity has begun to resume to varying degrees, the speed and nature of the resumption of economic activity remains highly uncertain. The COVID-19 pandemic continues to have a significant impact on Fannie Mae’s business and financial results. Fannie Mae significantly increased its allowance for loan losses in the first nine months of 2020 to reflect the company’s expected loan losses as a result of the pandemic, which resulted in substantial credit-related expenses. Fannie Mae also is incurring other costs associated with the pandemic, such as paying higher fees to servicers to support providing loss mitigation to borrowers. Fannie Mae has increased technology investments in tools that support its forbearance programs. In addition, the company has increased its debt balances to fund increased conduit volumes and in anticipation of future loss mitigation activities and future loan buyouts from trusts. The company’s capital requirements also have increased as a result of loans that have stopped making payments as a result of the forbearance the company has provided.

Fannie Mae Response

Fannie Mae is taking a number of actions to help borrowers, renters, lenders, and its employees manage the negative impact of the COVID-19 pandemic.

Borrowers and Renters

•Fannie Mae has implemented new policies to enable the company’s single-family and multifamily loan servicers to better assist borrowers and renters impacted by COVID-19, including to:

◦provide forbearance to single-family borrowers reporting they are experiencing a financial hardship due to the COVID-19 pandemic for up to 180 days, and at the borrower’s request, extend the forbearance period up to a maximum of 12 months total; approximately 703,000 single-family loans in the company’s book of business were in forbearance as of September 30, 2020;

▪as of September 30, 2020, Fannie Mae estimates that the company had provided forbearance on approximately 96% of those single-family loans in its book of business that were negatively impacted by COVID-19 (that is, were current as of March 1, 2020 and were 60 days or more delinquent as of September 30, 2020).

◦offer options following forbearance, including a repayment plan, payment deferral, or a loan modification that aims to reduce a borrower’s monthly payment;

◦suspend foreclosures and foreclosure-related activities for single-family properties through at least December 31, 2020, other than for vacant or abandoned properties;

◦report as current to credit bureaus homeowners who receive a forbearance plan or other form of relief as a result of the COVID-19 pandemic during the covered period if they were current before the accommodation and make payments as agreed under the accommodation in accordance with the Fair Credit Reporting Act, as amended by the CARES Act, and provide that no late fees are charged for homeowners in a forbearance plan; and


Third Quarter 2020 Results						2

◦provide forbearance to multifamily borrowers experiencing a financial hardship due to the COVID-19 pandemic for up to 6 months on the condition that the borrower suspend all renter evictions for nonpayment of rent during the forbearance period, through the 120-day eviction moratorium under the CARES Act, which ended on July 25, 2020, or any longer period required by federal, state or local law, including the order issued by the Centers for Disease Control and Prevention, effective September 4, 2020 through December 31, 2020, which halts residential evictions for nonpayment of rent for tenants who qualify for protection under the order.

•Fannie Mae created the #HeretoHelp educational effort and updated the company’s KnowYourOptions.com website to help keep people in their homes, providing information and resources on relief options for borrowers and renters impacted by COVID-19. The website includes the Renters Resource Finder, an online tool that allows renters to enter their building address to determine whether they live in a Fannie Mae-financed property and learn what resources they can access for help. Resources include access to Fannie Mae’s Disaster Response Network, which offers free assistance to renters in Fannie Mae-financed rental properties, such as HUD-approved housing counselors that can help create a personalized action plan, offer financial coaching and budgeting, and provide other support.

Lenders

•Fannie Mae provided more than $860 billion in liquidity to the single-family and multifamily mortgage markets from the beginning of March 2020 through September 2020, including more than $460 billion through the company’s whole loan conduit, which primarily supports small- to mid-sized lenders, including community lenders, fulfilling Fannie Mae’s mission to stabilize the housing finance market and provide liquidity, support, and access to affordable mortgage financing in all U.S. markets in all economic cycles.

•Fannie Mae limited the duration of single-family servicers’ obligations to advance principal and interest payments on delinquent loans to four months, and allows servicers to automatically receive reimbursement for advanced payments of principal and interest on a delinquent loan after four missed payments. Multifamily servicers can be reimbursed for advanced payments of principal and interest on a delinquent mortgage loan after paying the fourth of four continuous months of advances.

•Fannie Mae continues to build its digital mortgage capabilities, enabling the company to adapt quickly to lenders’ needs. In addition, the company is offering measures to help ensure lenders have the clarity and flexibility to continue to lend in a prudent and responsible manner during the COVID-19 pandemic. These measures include: offering additional methods of obtaining verbal verification of borrower employment; using the company’s digital tools to offer flexibilities related to the lender’s process for obtaining inspections and appraisals; and allowing remote online notarization options.

Employees

•Fannie Mae has taken steps to help protect the safety and resiliency of its workforce. From mid-March through early October 2020, the company required nearly all of its workforce to work remotely. In early October, the company began allowing employees, on a voluntary basis, to request approval to return to work at some of its office locations and has established mandatory COVID-19 safety protocols for these locations. Fannie Mae expects a significant majority of its employees will continue to work remotely for the foreseeable future.

•To date, the company’s business resiliency plans and technology systems have effectively supported its telework arrangement, allowing Fannie Mae to continue its critical function of supporting mortgage market liquidity.

•Fannie Mae offers support services and resources for employees and their families affected by COVID-19, including the company’s Employee Assistance Program, which provides a helpline number to support loved ones who may not be covered otherwise.


Third Quarter 2020 Results						3

Risks and Uncertainties

Fannie Mae’s current forecasts and expectations relating to the impact of the COVID-19 pandemic are subject to many uncertainties and may change, perhaps substantially. It is difficult to assess or predict the impact of this unprecedented event on the company’s business, financial results, or financial condition. Factors that will impact the extent to which the COVID-19 pandemic affects the company’s business, financial results, and financial condition include: the duration, spread, and severity of COVID-19 outbreaks; the actions taken to contain the virus or treat its impact, including government actions to mitigate the economic impact of the pandemic and the widespread availability and public acceptance of a COVID-19 vaccine; the extent to which consumers, workers, and families feel safe resuming pre-pandemic activities; the nature, extent and success of the forbearance, payment deferrals, modifications, and other loss mitigation options the company provides to borrowers affected by the pandemic; accounting elections and estimates relating to the impact of the COVID-19 pandemic; borrower and renter behavior in response to the pandemic and its economic impact; how quickly and to what extent normal economic and operating conditions can resume, including whether any future outbreaks or increases in the daily number of new COVID-19 cases interrupt economic recovery; and how quickly and to what extent affected borrowers, renters, and counterparties can recover from the negative economic impact of the pandemic. See “Risk Factors” in the company’s Third Quarter 2020 Form 10-Q for a discussion of the risks to the company’s business, financial results and financial condition relating to the COVID-19 pandemic. See “Forward-Looking Statements” in the company’s Third Quarter 2020 Form 10-Q for a discussion of factors that could cause actual conditions, events, or results to differ materially from those described in the company’s forecasts, expectations, and other forward-looking statements in this release.


Summary of Financial Results


(Dollars in millions)	3Q20		2Q20		Variance		3Q19		Variance
Net interest income	$	6,656	$	5,777	$	879	$	5,348	$	1,308
Fee and other income	93		90		3		188		(95)
Net revenues	6,749		5,867		882		5,536		1,213
Investment gains, net	653		149		504		253		400
Fair value losses, net	(327)		(1,018)		691		(713)		386
Administrative expenses	(762)		(754)		(8)		(749)		(13)
Credit-related income (expenses):
Benefit (provision) for credit losses	501		(12)		513		1,857		(1,356)
Foreclosed property expense	(71)		(10)		(61)		(96)		25
Total credit-related income (expenses)	430		(22)		452		1,761		(1,331)
Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees	(679)		(660)		(19)		(613)		(66)
Credit enhancement expense	(325)		(360)		35		(290)		(35)
Change in expected credit enhancement recoveries	(48)		273		(321)		—		(48)
Other expenses, net	(313)		(261)		(52)		(186)		(127)
Income before federal income taxes	5,378		3,214		2,164		4,999		379
Provision for federal income taxes	(1,149)		(669)		(480)		(1,036)		(113)
Net income	$	4,229	$	2,545	$	1,684	$	3,963	$	266


Total comprehensive income	$	4,216	$	2,532	$	1,684	$	3,977	$	239

Net revenues, which consist of net interest income and fee and other income, were $6.7 billion for the third quarter of 2020, compared with $5.9 billion for the second quarter of 2020.

Net interest income was $6.7 billion for the third quarter of 2020, compared with $5.8 billion for the second quarter of 2020. The increase in net interest income was due to higher mortgage loan prepayment activity as a result of the historically low interest rate environment in the third quarter of 2020. The company’s net interest income for the third quarter of 2020 was also impacted by the application of its updated accounting policy for nonaccrual loans that allowed the company to continue accruing interest income on delinquent loans that were current at March 1, 2020 and have been negatively impacted by the COVID-19 pandemic. As a result of this update, the company recognized


Third Quarter 2020 Results						4

$763 million in interest income related to these loans in the third quarter, which it would not have recognized prior to the application of its updated policy.

Net Interest Income

(Dollars in Billions)

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(1)Includes revenues generated by the 10 basis point guaranty fee increase the company implemented pursuant to the TCCA, the incremental revenue from which is remitted to Treasury and not retained by Fannie Mae.

Net fair value losses were $327 million in the third quarter of 2020, compared with $1.0 billion in the second quarter of 2020. Net fair value losses decreased in the third quarter of 2020 compared with the second quarter of 2020 due primarily to (1) a decrease in losses on debt reported at fair value due to yields remaining mostly flat during the quarter compared to declines in the second quarter of 2020 and (2) gains on credit enhancement derivatives as higher loan default expectations led to an increase in the fair value of risk-sharing securities covering the loans.

Fair Value Gains (Losses), Net

(Dollars in Billions)

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Net investment gains were $653 million in the third quarter of 2020, compared with $149 million in the second quarter of 2020. The increase in the third quarter of 2020 was driven by an increase in sales of single-family held-for-sale loans.

Investment Gains (Losses), Net

(Dollars in Billions)

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Third Quarter 2020 Results						5

Credit-related income (expense) consists of a benefit or provision for credit losses and foreclosed property expense. Credit-related income was $430 million in the third quarter of 2020, compared with credit-related expense of $22 million in the second quarter of 2020. The shift to credit-related income in the third quarter of 2020 was driven by the impact of actual and forecasted home prices as well as the redesignation of reperforming single-family mortgage loans from held-for-investment to held-for-sale, partially offset by an increase in the allowance for loan losses the company expects to incur as a result of the COVID-19 pandemic. In the third quarter of 2020, management continued to apply its judgment and supplement model results as of September 30, 2020, taking into account the continued high degree of uncertainty regarding the future impact of the pandemic and its effect on the economy, future economic and housing policy, and extended foreclosure moratoriums.

Credit-Related Income (Expense)

(Dollars in Billions)

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Providing Liquidity and Support to the Market

Fannie Mae’s mission is to provide a stable source of liquidity to support housing for low-and moderate-income borrowers and renters. In the first nine months of 2020, more than 90% of the multifamily units the company financed were affordable to families earning at or below 120% of the area median income, providing support for workforce housing and affordable housing.

Through its single-family and multifamily business segments, Fannie Mae provided $982 billion in liquidity to the mortgage market in the first nine months of 2020, including $506 billion through its whole loan conduit, enabling the financing of approximately 3.9 million home purchases, refinancings, or rental units.

Fannie Mae Provided $982 Billion in Liquidity in the First Nine Months of 2020

Unpaid Principal Balance

Units

$286B

1.0M

Single-Family Home Purchases

$647B

2.3M

Single-Family Refinancings

$49B

542K

Multifamily Rental Units


Third Quarter 2020 Results						6


Business Segments

Fannie Mae’s two reportable business segments—Single-Family and Multifamily—engage in complementary business activities to provide liquidity, access to credit, and affordability in all U.S. housing markets at all times, while effectively managing risk.


Single-Family Business Financial Results


(Dollars in millions)	3Q20			2Q20			Variance		3Q19			Variance
Net interest income	$	5,870		$	4,939		$	931	$	4,484		$	1,386
Fee and other income	73			71			2		156			(83)
Net revenues	5,943			5,010			933		4,640			1,303
Investment gains, net	583			96			487		198			385
Fair value losses, net	(244)			(1,030)			786		(719)			475
Administrative expenses	(634)			(625)			(9)		(634)			—
Credit-related income	478			216			262		1,747			(1,269)
TCCA fees	(679)			(660)			(19)		(613)			(66)
Credit enhancement expense	(274)			(307)			33		(240)			(34)
Change in expected credit enhancement recoveries	(48)			208			(256)		—			(48)
Other expenses, net	(307)			(252)			(55)		(184)			(123)
Income before federal income taxes	4,818			2,656			2,162		4,195			623
Provision for federal income taxes	(1,049)			(556)			(493)		(872)			(177)
Net income	$	3,769		$	2,100		$	1,669	$	3,323		$	446
Serious delinquency rate	3.20		%	2.65		%			0.68		%

Business Highlights

•The average single-family conventional guaranty book of business during the third quarter of 2020 increased from the second quarter of 2020 by approximately $72 billion. The average charged guaranty fee, net of Temporary Payroll Tax Cut Continuation Act of 2011 (TCCA) fees, on the single-family conventional guaranty book increased from 44.2 basis points as of June 30, 2020 to 44.4 basis points as of September 30, 2020. The credit characteristics of the single-family conventional guaranty book of business did not change materially in the third quarter of 2020 and remained strong, with a weighted-average mark-to-market loan-to-value ratio of 57% and weighted-average FICO credit score of 749.

•Fannie Mae’s average charged guaranty fee on newly acquired conventional single-family loans, net of TCCA fees, decreased 1.8 basis points to 44.9 basis points in the third quarter of 2020 from 46.7 basis points in the second quarter of 2020, driven primarily by the stronger credit profile of the single-family loans acquired in the third quarter of 2020 compared with the second quarter of 2020.

•Single-family acquisition volume was $391.4 billion in the third quarter of 2020, an increase of 11% compared with the second quarter of 2020. The increase was driven by a $7 billion increase in refinance volume due to the historically low interest rate environment, resulting in the highest level of refinance volumes in any quarter since the third quarter of 2003.

•The single-family serious delinquency rate increased to 3.20% as of September 30, 2020, from 2.65% as of June 30, 2020, as a result of the large number of loans in COVID-19-related forbearances becoming seriously delinquent. The single-family serious delinquency rate excluding loans in forbearance was 0.65% as of September 30, 2020, compared to 0.59% as of June 30, 2020. Single-family seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process.

•As of September 30, 2020, 4.1% of Fannie Mae’s single-family guaranty book of business based on loan count was in forbearance, the vast majority of which was related to the COVID-19 pandemic, compared to 5.7% as of June 30, 2020. As of September 30, 2020, 20% of the loans in forbearance were still current.


Third Quarter 2020 Results						7


Multifamily Business Financial Results


(Dollars in millions)	3Q20			2Q20			Variance		3Q19			Variance













Net interest income	$	786		$	838		$	(52)	$	864		$	(78)
Fee and other income	20			19			1		32			(12)
Net revenues	806			857			(51)		896			(90)
Fair value gains (losses), net	(83)			12			(95)		6			(89)
Administrative expenses	(128)			(129)			1		(115)			(13)
Credit-related income (expense)	(48)			(238)			190		14			(62)
Credit enhancement expense	(51)			(53)			2		(50)			(1)
Change in expected credit enhancement recoveries	—			65			(65)		—			—
Other income, net	64			44			20		53			11
Income before federal income taxes	560			558			2		804			(244)
Provision for federal income taxes	(100)			(113)			13		(164)			64
Net income	$	460		$	445		$	15	$	640		$	(180)
Serious delinquency rate	1.12		%	1.00		%			0.06		%

Business Highlights

•The multifamily guaranty book of business increased by $9 billion during the third quarter of 2020 to $367 billion. The average charged guaranty fee on the multifamily book increased from 72.3 basis points as of June 30, 2020 to 73.3 basis points as of September 30, 2020. This resulted in an increase in guaranty fee revenue, which was offset by a decrease in portfolio net interest income and yield maintenance revenue resulting in a decrease in net interest income for the quarter.

•New multifamily business volume was $49 billion in the first nine months of 2020. Approximately $33 billion of new business capacity remains under the $100 billion multifamily business volume cap for the five-quarter period ending December 31, 2020.

•The multifamily serious delinquency rate increased to 1.12% as of September 30, 2020 from 1.00% as of June 30, 2020 as a result of the large number of loans in COVID-19-related forbearances becoming seriously delinquent. The multifamily serious delinquency rate excluding loans in forbearance was 0.04% as of September 30, 2020. Multifamily seriously delinquent loans are loans that are 60 days or more past due.

•As of September 30, 2020, based on unpaid principal balance, 1.3% of Fannie Mae’s multifamily guaranty book of business received a forbearance plan, primarily as a result of the COVID-19 pandemic. Approximately half of those loans measured by unpaid principal balance are currently in a repayment plan, and 0.5% of the book, or $1.7 billion, is still in active forbearance.


Third Quarter 2020 Results						8


Net Worth, Treasury Funding and Senior Preferred Stock Dividends

Treasury has made a commitment under a senior preferred stock purchase agreement to provide funding to Fannie Mae under certain circumstances if the company has a net worth deficit. Pursuant to the senior preferred stock purchase agreement, the company issued shares of senior preferred stock to Treasury in 2008.

Under the terms of the senior preferred stock, Fannie Mae will not owe senior preferred stock dividends to Treasury until it has accumulated over $25 billion in net worth as of the end of a quarter. Accordingly, no dividends were payable to Treasury for the third quarter of 2020, and none are payable for the fourth quarter of 2020.

The charts below show information about Fannie Mae’s net worth, the remaining amount of Treasury’s funding commitment to Fannie Mae, senior preferred stock dividends the company has paid Treasury and funds the company has drawn from Treasury pursuant to its funding commitment.

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https://cdn.kscope.io/9c2e8ace7f6bddff9408ea61af9ab1b7-chart-5b1024fffc0d47ea84e1a.jpg

(1)Aggregate amount of dividends the company has paid to Treasury on the senior preferred stock from 2008 through September 30, 2020. Under the terms of the senior preferred stock purchase agreement, dividend payments the company makes to Treasury do not offset its draws of funds from Treasury.

(2)Aggregate amount of funds the company has drawn from Treasury pursuant to the senior preferred stock purchase agreement from 2008 through September 30, 2020.

The aggregate liquidation preference of the senior preferred stock increased from $135.4 billion as of June 30, 2020 to $138.0 billion as of September 30, 2020 due to the $2.5 billion increase in the company’s net worth during the second quarter of 2020. The aggregate liquidation preference of the senior preferred stock will increase to $142.2 billion as of December 31, 2020 due to the $4.2 billion increase in our net worth during the third quarter of 2020.

If the company were to draw additional funds from Treasury under the senior preferred stock purchase agreement with respect to a future period, the amount of remaining funding under the agreement would be reduced by the amount of the company’s draw, and the aggregate liquidation preference of the senior preferred stock would increase by the amount of that draw.

For a description of the terms of the senior preferred stock purchase agreement and the senior preferred stock, see “Business—Conservatorship, Treasury Agreements and Housing Finance Reform” in the company’s 2019 Form 10-K.

Fannie Mae’s financial statements for the third quarter of 2020 are available in the accompanying Annex; however, investors and interested parties should read the company’s Third Quarter 2020 Form 10-Q, which was filed today with the Securities and Exchange Commission and is available on Fannie Mae’s website, www.fanniemae.com. The company provides further discussion of its financial results and condition, credit performance, and other matters in


Third Quarter 2020 Results						9

its Third Quarter 2020 Form 10-Q. Additional information about the company’s financial and credit performance is contained in Fannie Mae’s Q3 2020 Financial Supplement at www.fanniemae.com.

# # #

In this release, the company has presented a number of estimates, forecasts, expectations, and other forward-looking statements, including statements regarding: the company’s business plans, the company’s future business and financial results, the future impact of the COVID-19 pandemic on the company’s business and financial results, future dividend payments to Treasury, and the future liquidation preference of the senior preferred stock. These estimates, forecasts, expectations, and statements are forward-looking statements based on the company’s current assumptions regarding numerous factors and are subject to significant uncertainties and changes in circumstances. Actual results, and future projections, could be materially different from what is set forth in these forward-looking statements due to a variety of factors, including those described in “Forward-Looking Statements” and “Risk Factors” in the company’s Third Quarter 2020 Form 10-Q and its 2019 Form 10-K.

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

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.


Third Quarter 2020 Results						10

ANNEX

FANNIE MAE

(In conservatorship)

Condensed Consolidated Balance Sheets — (Unaudited)

(Dollars in millions)


	As of
	September 30, 2020			December 31, 2019

ASSETS
Cash and cash equivalents		$	37,472		$	21,184
Restricted cash (includes $65,431 and $33,294, respectively, related to consolidated trusts)		73,516			40,223
Federal funds sold and securities purchased under agreements to resell or similar arrangements		12,700			13,578
Investments in securities:
Trading, at fair value (includes $6,237 and $3,037, respectively, pledged as collateral)		142,472			48,123
Available-for-sale, at fair value (with an amortized cost of $1,780, net of allowance for credit losses of $3 as of September 30, 2020)		1,895			2,404
Total investments in securities		144,367			50,527
Mortgage loans:
Loans held for sale, at lower of cost or fair value		8,312			6,773
Loans held for investment, at amortized cost:
Of Fannie Mae		111,056			94,911
Of consolidated trusts		3,439,678			3,241,494
Total loans held for investment (includes $6,968 and $7,825, respectively, at fair value)		3,550,734			3,336,405
Allowance for loan losses		(11,703)			(9,016)
Total loans held for investment, net of allowance		3,539,031			3,327,389
Total mortgage loans		3,547,343			3,334,162
Advances to lenders		10,228			6,453
Deferred tax assets, net		12,808			11,910
Accrued interest receivable, net (includes $9,867 and $8,172, respectively, related to consolidated trusts and net of an allowance of $569 as of September 30, 2020)		9,748			8,604
Acquired property, net		1,462			2,366
Other assets		14,959			14,312
Total assets		$	3,864,603		$	3,503,319
LIABILITIES AND EQUITY
Liabilities:
Accrued interest payable (includes $9,133 and $9,361, respectively, related to consolidated trusts)		$	9,982		$	10,228
Debt:
Of Fannie Mae (includes $3,986 and $5,687, respectively, at fair value)		289,423			182,247
Of consolidated trusts (includes $24,741 and $21,880, respectively, at fair value)		3,530,381			3,285,139
Other liabilities (includes $1,813 and $376, respectively, related to consolidated trusts)		14,124			11,097
Total liabilities		3,843,910			3,488,711
Commitments and contingencies (Note 13)		—			—
Fannie Mae stockholders’ equity:
Senior preferred stock (liquidation preference of $137,976 and $131,178, respectively)		120,836			120,836
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 1,158,087,567 shares outstanding		687			687
Accumulated deficit		(112,680)			(118,776)
Accumulated other comprehensive income		120			131
Treasury stock, at cost, 150,675,136 shares		(7,400)			(7,400)
Total stockholders’ equity (See Note 1: Senior Preferred Stock Purchase Agreement and Senior Preferred Stock for information on the related dividend obligation and liquidation preference)		20,693			14,608
Total liabilities and equity		$	3,864,603		$	3,503,319

See Notes to Condensed Consolidated Financial Statements in the Third Quarter 2020 Form 10-Q


Third Quarter 2020 Results						11

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Operations and Comprehensive Income — (Unaudited)

(Dollars in millions, except per share amounts)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,

	2020			2019			2020			2019
Interest income:
Trading securities		$	177		$	418		$	712		$	1,277
Available-for-sale securities		19			40			76			138
Mortgage loans		25,810			29,072			81,755			88,445
Federal funds sold and securities purchased under agreements to resell or similar arrangements		14			178			135			698
Other		33			47			92			120
Total interest income		26,053			29,755			82,770			90,678
Interest expense:
Short-term debt		(19)			(125)			(175)			(369)
Long-term debt		(19,378)			(24,282)			(64,815)			(74,938)
Total interest expense		(19,397)			(24,407)			(64,990)			(75,307)
Net interest income		6,656			5,348			17,780			15,371
Benefit (provision) for credit losses		501			1,857			(2,094)			3,732
Net interest income after benefit (provision) for credit losses		7,157			7,205			15,686			19,103
Investment gains, net		653			253			644			847
Fair value losses, net		(327)			(713)			(1,621)			(2,298)
Fee and other income		93			188			303			435
Non-interest income (loss)		419			(272)			(674)			(1,016)
Administrative expenses:
Salaries and employee benefits		(386)			(361)			(1,161)			(1,123)
Professional services		(230)			(241)			(673)			(699)

Other administrative expenses		(146)			(147)			(431)			(415)
Total administrative expenses		(762)			(749)			(2,265)			(2,237)
Foreclosed property expense		(71)			(96)			(161)			(364)
Temporary Payroll Tax Cut Continuation Act of 2011 (“TCCA”) fees		(679)			(613)			(1,976)			(1,806)
Credit enhancement expense		(325)			(290)			(1,061)			(782)
Change in expected credit enhancement recoveries		(48)			—			413			—
Other expenses, net		(313)			(186)			(792)			(551)
Total expenses		(2,198)			(1,934)			(5,842)			(5,740)
Income before federal income taxes		5,378			4,999			9,170			12,347
Provision for federal income taxes		(1,149)			(1,036)			(1,935)			(2,552)
Net income		4,229			3,963			7,235			9,795
Other comprehensive income (loss):
Changes in unrealized gains (losses) on available-for-sale securities, net of reclassification adjustments and taxes		(11)			16			(4)			(85)
Other, net of taxes		(2)			(2)			(7)			(7)
Total other comprehensive income (loss)		(13)			14			(11)			(92)
Total comprehensive income		$	4,216		$	3,977		$	7,224		$	9,703
Net income		$	4,229		$	3,963		$	7,235		$	9,795
Dividends distributed or amounts attributable to senior preferred stock		(4,216)			(3,977)			(7,224)			(9,703)

Net income (loss) attributable to common stockholders		$	13		$	(14)		$	11		$	92
Earnings per share:
Basic		$	0.00		$	0.00		$	0.00		$	0.02
Diluted		0.00			0.00			0.00			0.02
Weighted-average common shares outstanding:
Basic		5,867			5,762			5,867			5,762
Diluted		5,893			5,762			5,893			5,893

See Notes to Condensed Consolidated Financial Statements in the Third Quarter 2020 Form 10-Q


Third Quarter 2020 Results						12

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Cash Flows — (Unaudited)

(Dollars in millions)


	For the Nine Months Ended September 30,
	2020			2019
Net cash provided by (used in) operating activities		$	(76,994)		$	3,176
Cash flows provided by (used in) investing activities:
Proceeds from maturities and paydowns of trading securities held for investment		35			46
Proceeds from sales of trading securities held for investment		44			49
Proceeds from maturities and paydowns of available-for-sale securities		275			364
Proceeds from sales of available-for-sale securities		258			376
Purchases of loans held for investment		(519,133)			(181,898)
Proceeds from repayments of loans acquired as held for investment of Fannie Mae		7,711			9,338
Proceeds from sales of loans acquired as held for investment of Fannie Mae		4,422			8,987
Proceeds from repayments and sales of loans acquired as held for investment of consolidated trusts		770,982			377,789
Advances to lenders		(223,007)			(95,636)
Proceeds from disposition of acquired property and preforeclosure sales		4,694			5,644
Net change in federal funds sold and securities purchased under agreements to resell or similar arrangements		878			9,762
Other, net		(576)			(74)
Net cash provided by investing activities		46,583			134,747
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt of Fannie Mae		501,627			587,659
Payments to redeem debt of Fannie Mae		(394,187)			(606,665)
Proceeds from issuance of debt of consolidated trusts		716,591			286,126
Payments to redeem debt of consolidated trusts		(743,578)			(385,496)
Payments of cash dividends on senior preferred stock to Treasury		—			(5,601)

Other, net		(461)			1,129
Net cash provided by (used in) financing activities		79,992			(122,848)
Net increase in cash, cash equivalents and restricted cash		49,581			15,075
Cash, cash equivalents and restricted cash at beginning of period		61,407			49,423
Cash, cash equivalents and restricted cash at end of period		$	110,988		$	64,498
Cash paid during the period for:
Interest		$	86,035		$	86,699
Income taxes		2,750			1,250

See Notes to Condensed Consolidated Financial Statements in the Third Quarter 2020 Form 10-Q


Third Quarter 2020 Results						13

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Changes in Equity (Deficit) — (Unaudited)

(Dollars and shares in millions)


	Fannie Mae Stockholders’ Equity (Deficit)
	Shares Outstanding			Senior Preferred Stock		Preferred Stock		Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Income		Treasury Stock		Total Equity
	Senior Preferred	Preferred	Common
Balance as of June 30, 2020	1	556	1,158	$	120,836	$	19,130	$	687	$	(116,909)	$	133	$	(7,400)	$	16,477
Senior preferred stock dividends paid	—	—	—	—		—		—		—		—		—		—
Comprehensive income:
Net income	—	—	—	—		—		—		4,229		—		—		4,229
Other comprehensive income, net of tax effect:
Changes in net unrealized gains on available- for-sale securities (net of taxes of $0)	—	—	—	—		—		—		—		1		—		1
Reclassification adjustment for gains included in net income (net of taxes of $3)	—	—	—	—		—		—		—		(12)		—		(12)
Other (net of taxes of $1)	—	—	—	—		—		—		—		(2)		—		(2)
Total comprehensive income																4,216
Balance as of September 30, 2020	1	556	1,158	$	120,836	$	19,130	$	687	$	(112,680)	$	120	$	(7,400)	$	20,693


	Fannie Mae Stockholders’ Equity (Deficit)
	Shares Outstanding			Senior Preferred Stock		Preferred Stock		Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Income		Treasury Stock		Total Equity
	Senior Preferred	Preferred	Common
Balance as of December 31, 2019	1	556	1,158	$	120,836	$	19,130	$	687	$	(118,776)	$	131	$	(7,400)	$	14,608
Transition impact, net of tax, from the adoption of the current expected credit loss standard	—	—	—	—		—		—		(1,139)		—		—		(1,139)
Balance as of January 1, 2020, adjusted	1	556	1,158	120,836		19,130		687		(119,915)		131		(7,400)		13,469
Senior preferred stock dividends paid	—	—	—	—		—		—		—		—		—		—
Comprehensive income:
Net income	—	—	—	—		—		—		7,235		—		—		7,235
Other comprehensive income, net of tax effect:
Changes in net unrealized gains on available- for-sale securities (net of taxes of $1)	—	—	—	—		—		—		—		2		—		2
Reclassification adjustment for gains included in net income (net of taxes of $2)	—	—	—	—		—		—		—		(6)		—		(6)
Other (net of taxes of $2)	—	—	—	—		—		—		—		(7)		—		(7)
Total comprehensive income																7,224
Balance as of September 30, 2020	1	556	1,158	$	120,836	$	19,130	$	687	$	(112,680)	$	120	$	(7,400)	$	20,693

See Notes to Condensed Consolidated Financial Statements in the Third Quarter 2020 Form 10-Q


Third Quarter 2020 Results						14

FANNIE MAE

(In conservatorship)

Condensed Consolidated Statements of Changes in Equity (Deficit) — (Unaudited)

(Dollars and shares in millions)


	Fannie Mae Stockholders’ Equity (Deficit)
	Shares Outstanding			Senior Preferred Stock		Preferred Stock		Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Income		Treasury Stock		Total Equity
	Senior Preferred	Preferred	Common
Balance as of June 30, 2019	1	556	1,158	$	120,836	$	19,130	$	687	$	(127,104)	$	216	$	(7,400)	$	6,365
Senior preferred stock dividends paid	—	—	—	—		—		—		—		—		—		—
Comprehensive income:
Net income	—	—	—	—		—		—		3,963		—		—		3,963
Other comprehensive income, net of tax effect:
Changes in net unrealized gains on available- for-sale securities (net of taxes of $2)	—	—	—	—		—		—		—		10		—		10
Reclassification adjustment for gains included in net income (net of taxes of $1)	—	—	—	—		—		—		—		6		—		6
Other (net of taxes of $1)	—	—	—	—		—		—		—		(2)		—		(2)
Total comprehensive income																3,977
Balance as of September 30, 2019	1	556	1,158	$	120,836	$	19,130	$	687	$	(123,141)	$	230	$	(7,400)	$	10,342


	Fannie Mae Stockholders’ Equity (Deficit)
	Shares Outstanding			Senior Preferred Stock		Preferred Stock		Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Income		Treasury Stock		Total Equity
	Senior Preferred	Preferred	Common
Balance as of December 31, 2018	1	556	1,158	$	120,836	$	19,130	$	687	$	(127,335)	$	322	$	(7,400)	$	6,240
Senior preferred stock dividends paid	—	—	—	—		—		—		(5,601)		—		—		(5,601)
Comprehensive income:
Net income	—	—	—	—		—		—		9,795		—		—		9,795
Other comprehensive income, net of tax effect:
Changes in net unrealized gains on available- for-sale securities (net of taxes of $7)	—	—	—	—		—		—		—		27		—		27
Reclassification adjustment for gains included in net income (net of taxes of $30)	—	—	—	—		—		—		—		(112)		—		(112)
Other (net of taxes of $2)	—	—	—	—		—		—		—		(7)		—		(7)
Total comprehensive income																9,703
Balance as of September 30, 2019	1	556	1,158	$	120,836	$	19,130	$	687	$	(123,141)	$	230	$	(7,400)	$	10,342

See Notes to Condensed Consolidated Financial Statements in the Third Quarter 2020 Form 10-Q


Third Quarter 2020 Results						15

q320exhibit992

DRAFT ▪ Some of the terms and other information in this presentation are defined and discussed more fully in our Form 10-Q for the quarter ended September 30, 2020 (“Q3 2020 Form 10-Q”) and Form 10-K for year ended December 31, 2019 ("2019 Form 10-K"). This presentation should be reviewed together with the Q3 2020 Form 10-Q, and the 2019 Form 10-K, which are available at www.fanniemae.com in the “About Us—Investor Relations—SEC Filings” section. Information on or available through our website is not part of this supplement. ▪ Some of the information in this presentation is based upon information 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 sum to totals indicated (i.e. 100%), or amounts shown as 100% may not reflect the entire population. ▪ Unless otherwise indicated "Q3 YTD 2020" data is as of September 30, 2020 or for the first nine months of 2020. Data for prior years is as of December 31 or for the full year indicated. ▪ Note references are to endnotes, appearing on pages 28 to 31. ▪ Terms used in presentation CAS: Connecticut Avenue Securities® CIRT™: Credit Insurance Risk Transfer™ CRT: credit risk transfer DSCR: weighted average debt service coverage ratio DTI ratio: Debt-to-income ("DTI") ratio refers to the ratio of a borrower’s outstanding debt obligations (including both mortgage debt and certain other long- term and significant short-term debts) to that borrower’s reported or calculated monthly income, to the extent the income is used to qualify for the mortgage DUS®: Fannie Mae’s Delegated Underwriting and Servicing program HARP®: Home Affordable Refinance Program®, registered trademarks of the Federal Housing Finance Agency, which allowed eligible Fannie Mae borrowers with high LTV ratio loans to refinance into more sustainable loans LTV ratio: loan-to-value ratio MSA: metropolitan statistical area MTMLTV ratio: mark-to-market loan-to-value ratio, which refers to the current unpaid principal balance of a loan at period end, divided by the estimated current home price at period end OLTV ratio: origination loan-to-value ratio, which refers to the unpaid principal balance of a loan at the time of origination of the loan, divided by the home price at origination of the loan Refi Plus™: our Refi Plus initiative, which offered refinancing flexibility to eligible Fannie Mae borrowers REO: real estate owned TCCA: Temporary Payroll Tax Cut Continuation Act of 2011 UPB: unpaid principal balance © 2020 Fannie Mae Q3 2020 Financial Supplement 2

Table of Contents DRAFT Overview Corporate Financial Highlights 5 Guaranty Book of Business Highlights 6 Single-Family Credit Characteristics 7 Multifamily Credit Characteristics 8 Single-Family and Multifamily Conventional Guaranty Books of Business in Forbearance 9 Portfolio and Liquidity Management 10 Key Market Economic Indicators 11 Net Worth, Treasury Funding and Senior Preferred Stock Dividends 12 Single-Family Business Single-Family Highlights 14 Credit Characteristics of Single-Family Conventional Loan Acquisitions 15 Credit Characteristics of Single-Family Conventional Guaranty Book of Business 16 Single-Family Credit Risk Transfer 17 Single-Family Conventional Guaranty Book of Business in Forbearance 18 Single-Family Problem Loan Statistics 19 Credit Loss Concentration of Single-Family Conventional Guaranty Book of Business 20 Single-Family Cumulative Default Rates 21 Multifamily Business Multifamily Highlights 23 Credit Characteristics of Multifamily Loan Acquisitions 24 Credit Characteristics of Multifamily Guaranty Book of Business 25 Multifamily Serious Delinquency Rates and Credit Losses 26 Endnotes Endnotes 28 © 2020 Fannie Mae Q3 2020 Financial Supplement 3

DRAFT Corporate Financial Highlights Summary of Q3 2020 Financial Results Q3 Key Financial Highlights Q3 YTD Q3 YTD Comprehensive income increased (Dollars in millions) Q3 2020 Q2 2020 Variance 2020 2019 Variance $1.7 billion from Q2 2020 to $4.2 billion for Q3 2020 Net interest income(1) $6,656 $5,777 $879 $17,780 $15,371 $2,409 • Prepayment volumes are at record highs Fee and other income 93 90 3 303 435 (132) due to the historically low interest rate environment, driving an increase from Net revenues 6,749 5,867 882 18,083 15,806 2,277 Q2 2020 in net interest income. • Net fair value losses decreased in Q3 Investment gains, net 653 149 504 644 847 (203) 2020 compared with the Q2 2020 primarily due to (1) a decrease in losses on debt reported at fair value due to Fair value losses, net (327) (1,018) 691 (1,621) (2,298) 677 yields remaining mostly flat during Q3 2020 compared to declines in Q2 2020 Administrative expenses (762) (754) (8) (2,265) (2,237) (28) and (2) gains on credit enhancement derivatives as higher loan default Total credit-related income (expense) 430 (22) 452 (2,255) 3,368 (5,623) expectations led to an increase in the fair value of risk-sharing securities covering those loans. TCCA fees (679) (660) (19) (1,976) (1,806) (170) • The company sold $4.0 billion UPB of single-family reperforming loans in Q3 Other expenses, net (686) (348) (338) (1,440) (1,333) (107) 2020 resulting in $0.4 billion of Income before federal income investment gains. taxes 5,378 3,214 2,164 9,170 12,347 (3,177) • The company redesignated $5.7 billion Provision for federal income UPB of single-family reperforming loans taxes (1,149) (669) (480) (1,935) (2,552) 617 in Q3 2020 from held for investment ("HFI") to held for sale ("HFS"), resulting Net income $4,229 $2,545 $1,684 $7,235 $9,795 $(2,560) in $0.5 billion of credit-related income; credit-related income also benefited from Total comprehensive improved actual and forecasted home income $4,216 $2,532 $1,684 $7,224 $9,703 $(2,479) prices, partially offset by higher expense for losses the company expects as a Net worth $20,693 $16,477 $20,693 $10,342 result of COVID-19. © 2020 Fannie Mae Q3 2020 Financial Supplement 5

Guaranty Book of Business Highlights DRAFT Market Liquidity Provided Q3 2020 Q3 2020 $982 Unpaid Principal Balance Units $1,000 $286 $637 $666 $125B 446K $570 Single-Family Home Purchases $512 $500 $257 $313 $281 $291 $647 946K $266B $325 $283 Single-Family Refinancings UP B (dollars in billions) $223 $156 $55 $66 $65 $70 $49 $0 2016 2017 2018 2019 Q3 YTD $15B 170K Multifamily 2020 Rental Units Single-Family Home Purchases Multifamily Rental Units Single-Family Refinancings Outstanding Conventional Guaranty Highlights Book of Business at Period End 71.9 71.8 71.9 72.3 73.3 $4.0 75 • Fannie Mae provided $982B of liquidity in the first $3.5 $3.5 nine months of 2020, which represents the $3.2 $3.3 $3.3 $0.4 Av erage Gfee (in bps) company's highest acquisition volume since the $0.3 $0.3 $0.3 $0.4 $3.0 same period in 2003. $3.1 $3.1 50 $2.9 $3.0 $3.0 • The company's whole loan conduit continues to provide lender liquidity to primarily support small- 43.5 43.6 43.8 44.2 44.4 UP B $2.0 to medium-sized lenders. 54% of year-to-date acquisitions, or $506B, have gone through the 25 (D ollars in trillions) company's whole loan conduit; this volume is $1.0 almost double the amount that went through the conduit in 2019. $0.0 0 • Average charged guaranty fees increased for both Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 single-family and multifamily over the year. UPB outstanding of single-family conventional UPB outstanding of multifamily guaranty book of guaranty book(2) business(3) Average charged guaranty fee on single-family Average charged guaranty fee on multifamily conventional guaranty book, net of TCCA (bps)(4) guaranty book of business (bps) © 2020 Fannie Mae Q3 2020 Financial Supplement 6

DRAFT Single-Family Credit Characteristics Credit Characteristics of Guaranty Book Guaranty Book in a CRT 60% 850 58% 57% 57% 57% 46% 60 We ighted Average MTMLTV $1,500 39% 680 745 745 746 746 749 50 35% 40% 32% $1,341 510 40 $1,000 $1,143 22% $1,067 30 UP B $927 340 20% 20 (D ollars in billions) $500 $628 170 10 We ighted Average FICO Credit Score 0 0 $0 0% 2016 2017 2018 2019 Q3 YTD 2016 2017 2018 2019 Q3 YTD 2020 2020 Weighted-Average MTMLTV Ratio(5) % Single-family conventional guaranty book in a CRT transaction Weighted-Average FICO Credit Score(6) Outstanding UPB of single-family loans in a CRT transaction(7) Credit Ratios Highlights 4% 4bps • The credit characteristics of the single-family conventional 3.20% Cr edit Loss Ratio (in bps) guaranty book of business did not change materially in Q3 2020 and remained strong, with a weighted-average 2.65% 3% 2.6bps 3bps MTMLTV ratio of 57% and weighted-average FICO credit score of 749. 1.7bps 1.7bps 2% 2bps • The company has not entered into a new CRT transaction 1.2bps since Q1 2020. 0.68% • Total SDQ rate has increased throughout 2020 as a result 1% 0.66% 0.66% 0.6bps 1bps of the large number of loans in COVID-19-related Se rious Delinquency Rate forbearances becoming seriously delinquent. Excluding 0.68% 0.66% 0.66% 0.59% 0.65% 0% 0bps loans in forbearance, the SDQ rate has remained relatively Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 flat. Serious Delinquency ("SDQ")(8) Rate SDQ Rate without Forbearances Credit Loss Ratio(9) © 2020 Fannie Mae Q3 2020 Financial Supplement 7

DRAFT Multifamily Credit Characteristics Credit Characteristics of Guaranty Book Guaranty Book in a CRT 28% 30% 67% 67% 66% 66% 66% We ighted Average OLTV Ratio 70 25% $100 $102 60 2.0 2.2 2.1 2.0 1.9 2.0 50 $84 20% 40 12% UP B $50 30 1.0 10% (D ollars in billions) 6% 20 $37 We ighted Average DSCR 4% 10 $17 $9 0.0 0 $0 0% 2016 2017 2018 2019 Q3 YTD 2016 2017 2018 2019 Q3 YTD 2020 2020 Weighted Average DSCR(10) Weighted Average OLTV Ratio % Multifamily conventional guaranty book in a CRT transaction Outstanding UPB of Mulitfamily loans in a CRT transaction Credit Ratios Highlights 1.5% • The credit characteristics of the multifamily conventional Cr edit Loss (Benefit) Ratio, Net (in bps) 14bps guaranty book of business did not change materially in Q3 1.3% 1.1% 12bps 2020 and remained strong, with a weighted-average original LTV of 66% and weighted average DSCR of 2.0. 1.0% 1.0% 10bps 7.4bps 8bps • As of September 30, 2020, 99% of loans, based on UPB, 0.8% are covered by DUS loss-sharing. Additionally, 28% have 6bps back-end coverage through CRT programs. 0.5% 4bps 2.1bps • Total SDQ rate has increased throughout 2020 as a result Se rious Delinquent Rate 0.3% 0.3bps 0.6bps 2bps of the large number of loans in COVID-19-related (0.1)bps 0.05% 0.04% forbearances becoming seriously delinquent. The SDQ rate 0.06% 0bps 0.0% without forbearances has remained very low. 0.06% 0.09% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 SDQ Rate(11) SDQ Rate without Forbearance Credit Loss(Benefit) Ratio, Net(12) © 2020 Fannie Mae Q3 2020 Financial Supplement 8

DRAFT Single-Family and Multifamily Conventional Guaranty Books of Business in Forbearance Delinquency Status of Loans in Forbearance as of September 30, 2020(13) Key Highlights $100 • Since the onset of the COVID-19 pandemic, Fannie Mae has provided economic relief to its single-family and multifamily $75 borrowers by offering payment forbearance. • Once the forbearance period ends, loss mitigation options, $50 $95.0 which include repayment plans, payment deferrals, and loan UP B modifications, are offered to borrowers in order to help bring $25 the loan current. (D ollars in billions) $27.5 $3.5 $0.5 $0.6 $11.6 $0.5 $11.2 • During the third quarter, many loans began to successfully $0 exit forbearance. Current 30 to 59 days 60 to 89 days 90+ days delinquent delinquent delinquent Single-family UPB Multifamily UPB Single-Family Loan Forbearance Status(14) Multifamily Loan Forbearance Status(16) 2.8% 1.7% 5.5% 7.3% 9.6% 34.3% 1,241,278 22.2% $5.0B UPB Total Loans in Forbearance in Forbearance in 2020 in 2020 56.4% 0.6% 10.2% 0.5% 48.9% Active Forbearance Other(55) Liquidations Payment Deferral Active Forbearance(17) Defaulted(18) Liquidations (19) Reinstated Repayment Plan Modification(15) Reinstated Repayment Plan © 2020 Fannie Mae Q3 2020 Financial Supplement 9

Portfolio and Liquidity Management DRAFT Sources of Net Interest Income and Retained Mortgage Portfolio Balance Key Highlights 100% $600 8% • The COVID-19 pandemic and the relief the company is 21% 21% 15% Re tained Mortgage Portfolio 26% 92% offering impacted borrowers has increased its debt 85% (D ollars in billions) funding needs and activity. The company increased long- 75% 79% 79% 74% $400 term debt issuances significantly in 2020 due to increased whole loan conduit acquisitions, to pay off callable debt, in 50% preparation for new FHFA liquidity risk management requirements and in anticipation of potential future $272.4 $200 $230.8 liquidity needs, including loss mitigation activities and loan 25% % Net Interest Income buyouts from trust. $179.2 $172.1 $153.6 • Total outstanding debt UPB increased by 59% from December 31, 2019 to reach $290B at September 30, 0% $0 2016 2017 2018 2019 Q3 YTD 2020. 2020 • OIP balance has also increased significantly during 2020 (20) % Net interest income from guaranty book of business driven by proceeds from debt issuances and high levels (21) % Net interest income from portfolios of loan refinance activity. Retained mortgage portfolio, at end of period Debt of Fannie Mae(22) Other Investments Portfolio ("OIP") Treasury Debt Limit $200 $186.2 $300.0 $176.0 $289.9 $300 $276.2 $150 $133.0 $250 $229.1 $213.6 $96.0 $200 $182.3 $44.7 $136.0 $100 $81.8 $233.9 $74.3 $150 $170.7 $266.4 $177.7 $36.0 $25.5 $100 $155.6 $50 $39.5 (D ollars in billions) (D ollars in billions) $12.7 $23.2 $80.5 $50 $13.6 $54.5 $58.4 $37.5 $35.9 $26.7 $42.3 $22.6 $21.2 $23.5 $0 $0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Cash and cash equivalents(23) Short-term debt Federal funds sold and securities purchased under agreements to resell or similar arrangements Long-term debt U.S. Treasury securities © 2020 Fannie Mae Q3 2020 Financial Supplement 10

DRAFT Key Market Economic Indicators U.S. GDP Growth (Decline) Rate and Benchmark Interest Rates Unemployment Rate(25) 4.72% 7.9% 3.83% 10% 3.64% 4.7% 4.1% 3.9% 3.81% 3.5% 2.90% 5% 2.97% 2.61% 0% 3.06% 1.6% 2.4% 1.3% 2.4% 2.33% -5% (2.6)% 1.40% Ra te (as of period end) 1.66% -10% 0.68% 2016 2017 2018 2019 Q3 YTD 9/30/2017 9/30/2018 9/30/2019 9/30/2020 2020 (24) 30-year FRM rate 10-year Treasury rate 30-year Fannie Mae MBS par coupon rate Growth (decline) in GDP, annualized change U.S. unemployment rate (26) One Year Home Price Growth Rate Q3 2020 (26) United States 7.3% Single-Family Home Price Growth Rate 8% 7.0% 5.8% 6% 5.3% 5.2% 4.5% 4% 2% Ho me Price Growth 0% 2016 2017 2018 2019 Q3 YTD 2020 Top 10 States by UPB(26) Share of Single- One Year Home Price Family Conventional State Growth Rate Q3 2020 Guaranty Book CA 6.94% 19.0% TX 5.23% 6.6% FL 6.74% 5.9% NY 6.40% 4.7% WA 10.49% 3.9% IL 4.88% 3.4% NJ 6.56% 3.4% CO 7.24% 3.3% State Growth Rate: 0.0 to 4.9% 5.0 to 9.9% 10% and above VA 7.40% 3.3% PA 6.67% 2.8% © 2020 Fannie Mae Q3 2020 Financial Supplement 11

DRAFT Net Worth, Treasury Funding and Senior Preferred Stock Dividends Net Worth and Treasury Funding Commitment Dividend Payments and Draws (Dollars in billions) (Dollars in billions) $181.4 $119.8 $113.9 $20.7 As of September 30, 2020 As of September 30, 2020 Net worth Cumulative dividend payments to Treasury(27) Remaining Treasury funding commitment Cumulative draws from Treasury(28) © 2020 Fannie Mae Q3 2020 Financial Supplement 12

Single-Family Highlights DRAFT Single-Family Conventional Loan Single-Family Conventional Guaranty Book Q3 2020 Acquisitions(2) of Business(2) $4,000 50 49.4 44.2 44.4 46.9 46.7 43.5 43.6 43.8 45.9 44.9 50 40 $5,870M $391 $3,000 Net interest income 40 $3,086 $400 $351 $2,924 $2,946 $2,964 $3,014 30 30 $2,000 UP B UP B $194 $266 $189 $191 20 $259 $200 20 (D ollars in billions) (D ollars in billions) $90 $1,000 $583M $116 $122 10 10 Investment gains, net $125 $104 $73 $69 $92 $0 0 $0 0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Refinance Average UPB outstanding of single-family conventional guaranty book Purchase Average charged guaranty fee on single-family conventional guaranty book, (4) Average charged guaranty fee on new single-family conventional acquisitions, net net of TCCA (bps) $(244)M of TCCA (bps)(4) Fair value losses, net New Single-Family Mortgage-Related Securities Share of Issuances Q3 2020 Key Highlights • The average single-family conventional guaranty book of $478M Private-label business during the third quarter of 2020 increased from the Credit-related securities second quarter of 2020 by approximately $72 billion to $3.1 income 2% trillion. Ginnie Mae • Single-family serious delinquency rate increased to 3.20% as 23% of September 30, 2020 from 2.65% as of June 30, 2020, as a Fannie Mae result of the large number of loans in COVID-19-related 41% forbearances becoming seriously delinquent. The single-family serious delinquency rate excluding loans in forbearance was $3,769M 0.65% as of September 30, 2020. Net income • As of September 30, 2020, 4.1% of Fannie Mae’s single-family guaranty book of business based on loan count was in forbearance, the vast majority of which was related to Freddie Mac COVID-19, compared to 5.7% as of June 30, 2020. As of 34% September 30, 2020, 20% of the loans in forbearance were still current. © 2020 Fannie Mae Q3 2020 Financial Supplement 14

DRAFT Credit Characteristics of Single-Family Conventional Loan Acquisitions Q3 YTD 2020 Acquisition Credit Characteristics of Single-Family Conventional Loans Credit Profile by Acquisition Period by Certain Loan Features Full Year OLTV Ratio Home- FICO Credit DTI Ratio Categories are not mutually exclusive Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 >95% Ready®(30) Score < 680(6) > 43%(29) Total UPB (Dollars in billions) $194.3 $188.5 $595.9 $190.5 $351.3 $391.4 $26.4 $22.7 $40.7 $194.3 Weighted Average OLTV Ratio 77% 74% 76% 74% 72% 71% 97% 88% 72% 74% OLTV Ratio > 95% 7% 4% 7% 3% 3% 3% 100% 33% 0% 3% Weighted-Average FICO® Credit Score(6) 751 753 749 753 759 762 748 746 658 749 FICO Credit Score < 680(6) 6% 6% 7% 6% 4% 4% 0% 6% 100% 5% DTI Ratio > 43%(29) 26% 25% 28% 25% 20% 19% 19% 37% 25% 100% Fixed-rate 100% 99% 99% 99% 100% 100% 100% 99% 100% 100% Owner Occupied 93% 92% 92% 92% 93% 92% 100% 100% 96% 91% HomeReady®(30) 7% 4% 7% 3% 2% 2% 28% 100% 3% 4% Origination Loan-to-Value Ratio FICO Credit Score(6) Acquisitions by Loan Purpose 100% 25% 25% 100% 750 750 749 759 20% 19% 745 743 19% 22% 22% 80% 20% 20% % FICO Credit Score < 680 Or igination LTV > 95% 75% 75% 77% 76% 12% 74% 72% 500 20% 28% 60% 15% 15% 33% 50% 10.6% 11.2% 50% 8.7% 40% 10% 7.5% 7.3% 10% 6.6% 250 4.9% Sh are of Acquisitions 65% 4.0% We ighted-Average OLTV Ratio 56% 52% 20% 2.8% 3.0% 5% 5% 25% We ighted Average FICO Credit Score 44% 31% 0% 0% 0 0% 2016 2017 2018 2019 Q3 2016 2017 2018 2019 Q3 0% YTD YTD 2016 2017 2018 2019 Q3 YTD 2020 2020 2020 (31) % OLTV > 95% % FICO Credit Score < 680 Refi Plus including HARP Other Refinance Weighted-Average OLTV Ratio Weighted-Average FICO Credit Score Cash-out Refinance Purchase © 2020 Fannie Mae Q3 2020 Financial Supplement 15

Credit Characteristics of Single-Family Conventional Guaranty Book of BusinessDRAFT Credit Characteristics of Single-Family Conventional Guaranty Book of Business by Origination Year and Loan Features(2)(32) As of September 30, 2020 Origination Year Certain Loan Features FICO Credit Refi Plus Overall 2004 & 2005- 2009- OLTV Home- Score < Including DTI Ratio ®(30) (6) (29) Categories are not mutually exclusive Book Earlier 2008 2016 2017 2018 2019 2020 Ratio > 95% Ready 680 HARP(31) > 43% Total UPB (Dollars in billions) $3,120.3 $55.4 $89.6 $1,247.9 $258.7 $208.8 $426.0 $833.9 $188.8 $89.5 $295.3 $234.4 $715.6 Average UPB $181,361 $67,196 $115,064 $149,247 $189,835 $193,903 $238,279 $276,753 $160,107 $179,139 $142,863 $121,230 $193,581 Share of Single-Family Conventional Guaranty Book 100% 2% 3% 40% 8% 7% 13% 27% 6% 3% 10% 8% 24% Loans in Forbearance by UPB 4.7% 8.2% 13.1% 4.6% 6.9% 9.0% 6.3% 1.1% 7.5% 7.5% 11.7% 6.2% 8.2% Share of Loans with Credit Enhancement(33) 45% 6% 15% 48% 68% 76% 55% 26% 77% 88% 43% 44% 48% Serious Delinquency Rate(8) 3.20% 5.81% 9.84% 2.76% 4.20% 5.44% 3.61% 0.53% 5.47% 4.73% 8.28% 3.76% 5.40% Weighted-Average OLTV Ratio 74% 74% 76% 75% 76% 78% 76% 72% 106% 89% 77% 86% 76% OLTV Ratio > 95% 6% 6% 10% 7% 6% 10% 7% 3% 100% 39% 11% 30% 8% Amortized OLTV Ratio(34) 67% 48% 62% 60% 69% 74% 74% 71% 95% 86% 69% 68% 69% Weighted-Average Mark-to-Market LTV Ratio(5) 57% 33% 54% 44% 59% 66% 70% 70% 74% 79% 57% 46% 60% Weighted-Average FICO Credit Score(6) 749 700 695 751 743 737 748 759 727 738 648 728 736 FICO Credit Score < 680(6) 10% 36% 39% 9% 12% 14% 8% 4% 17% 11% 100% 22% 14% (8) Mark-to-Market Loan-to-Value (6) SDQ Rate by Vintage (5) FICO Credit Score (MTMLTV) Ratio as of September 30, 2020 70% 10% 25% 100.00% 750 100% 95.35% 60% 745 745 746 746 749 9.84% 60% 20% FI CO Credit Score < 680 58% 57% 57% 10% 57% 7.5% % MTMLTV >100% 50% 75% 500 15% SD Q Rate 40% 12.2% 11.8% 11.4% 5.81% 5% 10.5% 9.5% 50% 30% 10% 5% 250 Bo ok of Business 3.20% 20% 2.74% 1.9% 2.5% We ighted Average MTMLTV 25% 5% 1.0% 10% % of UPB in Conventional Guaranty 0.5% We ighted Average FICO Credit Score 0.3% 0.1% 1.78% 2.87% 0 0% 0% 0% 0% 0% 2016 2017 2018 2019 Q3 2016 2017 2018 2019 Q3 Total 2004 2005- 2009- YTD YTD and 2008 2020 2020 2020 Prior % MTMLTV > 100% % FICO Credit Score < 680 SDQ Rate Weighted-Average MTMLTV Weighted-Average FICO Credit Score % of UPB in Conventional Guaranty Book of Business by Origination Year © 2020 Fannie Mae Q3 2020 Financial Supplement 16

DRAFT Single-Family Credit Risk Transfer Single-Family Credit Risk Transfer Single-Family Loans with Credit Enhancement $1,750 46% 46% 2018 2019 Q3 YTD 2020 $1,500 41% 40% 35% 40% Credit Enhancement Outstanding % of Book(35) Outstanding % of Book(35) Outstanding % of Book(35) $1,250 $1,341 $1,371 Outstanding UPB (dollars in billions) UPB Outstanding UPB Outstanding UPB Outstanding $1,213 $1,224 Primary mortgage insurance & (36) $618 21% $653 22% $674 21% $1,000 $1,067 other UP B $750 Connecticut Avenue Securities(37) $798 27% $919 31% $708 23% 20% (D ollars in billions) Credit Insurance Risk $500 $243 8% $275 10% $246 8% Transfer(7) $250 Lender risk-sharing(37) $102 4% $147 5% $113 4% $0 0% (Less: loans covered by multiple ($394) (13)% ($438) (15)% ($338) (11)% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 credit enhancements) % Single-family conventional guaranty book in a CRT transaction Total single-family loans with $1,367 47% $1,556 53% $1,403 45% Outstanding UPB of single-family loans in a CRT transaction(7) credit enhancement Single-Family Credit Risk Transfer Issuance $600 $445 $410 $400 $73 $331 $44 $338 $15 $45 UP B $233 $239 $265 $290 $200 (D ollars in billions) $240 $206 $133 $222 $189 $14 $58 $76 $102 $86 $82 $40 $61 $0 2014 2015 2016 2017 2018 2019 Q3 YTD 2020 Lender risk-sharing Connecticut Avenue Securities Credit Insurance Risk Transfer © 2020 Fannie Mae Q3 2020 Financial Supplement 17

Single-Family Conventional Guaranty Book of Business in ForbearanceDRAFT Credit Characteristics of Single-Family Loans in Forbearance(39) As of September 30, 2020 Origination Year 2004 & 2005- 2009- Categories are not mutually exclusive Total Earlier 2008 2016 2017 2018 2019 2020 Total UPB (Dollars in billions) $145.3 $4.5 $11.9 $56.9 $17.8 $18.7 $26.7 $8.8 Average UPB $206,547 $95,766 $164,122 $187,095 $228,585 $236,353 $280,977 $314,339 Share of Single-Family Conventional Guaranty Book 4.1% 0.3% 0.4% 1.6% 0.5% 0.5% 0.6% 0.2% based on Loan Count Share of Single-Family Conventional Guaranty Book 4.7% 0.1% 0.4% 1.8% 0.6% 0.6% 0.9% 0.3% based on UPB(40) MTMLTV Ratio >80% without Mortgage Insurance 16.6% 0.1% 1.4% 1.0% 1.0% 3.7% 7.1% 2.3% DTI Ratio > 43%(29) 40.5% 1.0% 3.6% 13.5% 4.9% 6.9% 8.2% 2.4% FICO Score < 680(6) 23.7% 1.5% 3.7% 8.3% 3.0% 3.4% 3.1% 0.7% OLTV Ratio >95% 9.7% 0.3% 0.8% 3.8% 1.0% 1.6% 1.9% 0.3% Delinquency Status of Loans in Forbearance as of September 30, 2020(13) Single-Family Loan Forbearance Exits 500K 444K 6.4% Nu mber of Loans (in thousands) $100.0 400K $95.0 23.5% $80.0 16.7% 300K 537,932 $60.0 Loans Exited 1.2% UP B Forbearance 1.5% 200K in 2020 $40.0 142K (D ollars in billions) $20.0 $27.5 60K 57K 100K 50.7% $11.6 $11.2 $0.0 0K Current 30 to 59 60 to 89 90+ days Payment Deferral Other(55) Liquidations days days delinquent delinquent delinquent Reinstated Repayment Plan Modification(15) © 2020 Fannie Mae Q3 2020 Financial Supplement 18

DRAFT Single-Family Problem Loan Statistics Single-Family Serious Delinquency Rate by State as of September 30, 2020(8) Top 10 States by UPB Serious Average Delinquency Months to (41) State Rate(8) Foreclosure CA 3.04% 21 TX 3.67% 18 FL 4.76% 39 NY 5.39% 61 WA 2.22% 42 IL 3.46% 19 NJ 5.31% 30 CO 2.15% 11 VA 2.81% 16 PA 3.19% 23 State SDQ Rate: 1.01% to 2.00% 2.01% to 3.00% 3.01% and above Single-Family Loan Workouts Single-Family REO Ending Inventory $70 179.8K 200K 40 Nu mber of Loan Workouts $60 38 150K (i n thousands) 30 $50 118.1K 103.5K $40 100.6K $37.9 26 100K 20 UP B $30 20 56.3K 18 $17.5 $19.0 $20 $16.7 10 (U nits in thousands) (D ollars in billions) 37.6 50K RE O Ending Inventory $3.1 $2.1 $9.3 10 $10 $14.4 $14.6 $17.9 $8.6 0 $0 0K 2016 2017 2018 2019 Q3 YTD 2016 2017 2018 2019 Q3 YTD 2020 2020 Foreclosure Alternatives(42) Total Loan Workouts Home Retention Solutions(43) © 2020 Fannie Mae Q3 2020 Financial Supplement 19

DRAFT Credit Loss Concentration of Single-Family Conventional Guaranty Book of Business (44) % of Single-Family Conventional Guaranty Book of Business(35) % of Single-Family Credit Losses For the Period Ended Certain Product Features Q3 YTD Q3 YTD Categories are not mutually exclusive 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Credit losses by period (Dollars in millions) $3,338 $2,963 $2,457 $1,719 $505 100.0% 100.0% 100.0% 100.0% 100.0% Alt-A(45) 3.1% 2.5% 1.9% 1.5% 1.2% 24.9% 21.9% 22.4% 16.6% 16.7% Interest-only 1.7% 1.2% 0.8% 0.5% 0.4% 12.2% 15.7% 15.4% 11.5% 10.1% Origination LTV Ratio >95% 6.9% 6.6% 6.8% 6.9% 6.1% 15.2% 16.9% 14.9% 16.0% 14.1% FICO Credit Score < 680 and OLTV Ratio > 95%(6) 1.7% 1.6% 1.4% 1.3% 1.0% 8.1% 8.7% 8.7% 9.4% 8.9% FICO Credit Score < 680(6) 12.2% 11.8% 11.4% 10.5% 9.5% 48.7% 45.4% 46.3% 43.1% 43.0% Refi Plus including HARP 15.4% 13.2% 11.4% 9.5% 7.5% 14.0% 15.9% 13.2% 15.8% 15.5% Q3 YTD Q3 YTD Vintage 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2009 - 2020 87% 90% 92% 94% 95% 19% 23% 20% 27% 30% 2005 - 2008 8% 6% 5% 4% 3% 65% 65% 66% 61% 59% 2004 & Prior 5% 4% 3% 2% 2% 16% 12% 14% 12% 11% % of Q3 YTD 2020 Single-Family % of Single-Family Conventional Guaranty Book of Credit Losses by State (44)(46) Business by State as of September 30, 2020 3.4% 5.9% 8.6% 3.4% 9.2% 4.7% 13.0% $505M $3.1T UPB 54.4% 19.0% 63.6% 7.8% 7.0% All Other States New York New Jersey All Other States New York New Jersey California Illinois Florida California Illinois Florida © 2020 Fannie Mae Q3 2020 Financial Supplement 20

DRAFT Single-Family Cumulative Default Rates Cumulative Default Rates of Single-Family Conventional Guaranty Book of Business by Origination Year(47) 2007 16% 2006 14% 12% 10% 2005 8% 2008 6% Cu mulative Default Rate 2004 4% 2% 2012 2011 2010 2009 0% Yr 1 Yr 3 Yr 5 Yr 7 Yr 9 Yr 2 Yr 4 Yr 6 Yr 8 Yr 10 Yr 12 Yr 14 Yr 11 Yr 13 Yr 15 Yr 17 Yr 16 Time Since Beginning of Origination Year 2004 2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020* * As of September 30, 2020, cumulative default rates on the loans originated in each individual year from 2009-2020 were less than 1% © 2020 Fannie Mae Q3 2020 Financial Supplement 21

Multifamily Highlights DRAFT Q3 2020 Multifamily New Business Volume Multifamily Guaranty Book of Business(3) $25 $400 71.9 71.8 71.9 72.3 73.3 80 70 $357.8 $366.8 $20 $345.4 $786M $329.6 $338.8 $300 60 Net interest income $19.6 $18.0 $18.1 $15 50 $15.2 $14.1 $200 40 UP B UP B $10 30 (D ollars in billions) $20M (D ollars in billions) $100 20 Fee and other $5 income 10 $0 $0 0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Average charged guaranty fee on multifamily guaranty book of business, at end of period (bps) $(83)M UPB outstanding of multifamily guaranty book of business Fair value losses, net Multifamily Credit Risk Transfer Key Highlights $104.0 $103.2 $102.4 40% • Multifamily guaranty book of business increased by $100 approximately $9 billion during the third quarter of 2020 to $74.8 $74.1 $(48)M $84.0 $73.4 35% $367 billion. Credit-related • Multifamily serious delinquency rate increased to 1.12% as of $75 $66.9 30% expense September 30, 2020 from 1.00% as of June 30, 2020 as a 30% 29% result of the large number of loans in COVID-19-related 28% 25% UP B $50 $57.7 forbearances becoming seriously delinquent. The multifamily 25% serious delinquency rate excluding loans in forbearance was 20% 0.04% as of September 30, 2020. (D ollars in billions) $25 18% 15% • As of September 30, 2020, based on unpaid principal balance, $460M $29.2 $29.1 $29.0 1.3% of Fannie Mae’s multifamily guaranty book of business Net income 0 $17.1 received a forbearance plan, primarily as a result of the $0 10% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 COVID-19 pandemic. Approximately half of those loans measured by unpaid principal balance are currently in a % Multifamily guaranty book in a Multifamily UPB outstanding of multifamily loans in a CRT transaction Multifamily Connecticut Avenue SecuritiesTM repayment plan, and 0.5% of the book, or $1.7 billion, is still in UPB outstanding of multifamily loans in a transaction active forbearance. Multifamily CIRT transaction © 2020 Fannie Mae Q3 2020 Financial Supplement 23

DRAFT Credit Characteristics of Multifamily Loan Acquisitions Credit Characteristics of Multifamily Loans by Acquisition Period(3) Categories are not mutually exclusive 2016 2017 2018 2019 Q3 YTD 2020 Total UPB (Dollars in billions) $55.3 $67.1 $65.4 $70.2 $48.9 Weighted Average OLTV Ratio 68% 67% 65% 66% 64% Loan Count 3,335 3,861 3,723 4,113 3,303 % Lender Recourse(48) 99% 100% 100% 100% 99% % DUS(49) 99% 98% 99% 100% 99% % Full Interest-Only 23% 26% 33% 33% 39% Weighted Average OLTV Ratio on Full Interest-Only Acquisitions 57% 58% 58% 59% 58% Weighted Average OLTV Ratio on Non-Full Interest-Only Acquisitions 71% 70% 68% 69% 68% % Partial Interest-Only(50) 60% 57% 53% 56% 48% Origination Loan-to-Value Top 10 MSAs by Q3 YTD 2020 (3) Ratio(3) Acquisition UPB(3) Acquisitions by Note Type 100% 100% 11% 7% 6% 20% $1.2B 24% 80% $1.3B $3.5B 80% 53% 59% 66% 68% 73% $1.3B 60% 60% Share of Acquisitions: $1.3B 38% 89% 93% 94% 40% 40% Total UPB: $3.1B 76% 80% $18.6B Sh are of Acquisitions $1.3B Sh are of Acquisitions 47% 20% 20% 41% 33% 32% 26% $1.4B $2.6B 0% 0% $1.6B 2016 2017 2018 2019 Q3 2016 2017 2018 2019 Q3 YTD YTD Washington, D.C. San Jose 2020 2020 % Origination LTV less than or equal to 70% New York Phoenix Variable-rate % Origination LTV greater than 70% and less than or equal to 80% Los Angeles Denver Fixed-rate % Origination LTV greater than 80% Dallas San Francisco Seattle Atlanta © 2020 Fannie Mae Q3 2020 Financial Supplement 24

DRAFT Credit Characteristics of Multifamily Guaranty Book of Business Credit Characteristics of Multifamily Guaranty Book of Business by Acquisition Year, Asset Class, or Targeted Affordable Segment(3) As of September 30, 2020 Acquisition Year Asset Class or Targeted Affordable Segment Overall 2004 & Conventional Seniors Student Manufactured Privately Owned Categories are not mutually exclusive Book Earlier 2005-2008 2009-2016 2017 2018 2019 2020 /Co-op(51) Housing(51) Housing(51) Housing(51) with Subsidy(52) Total UPB (Dollars in billions) $366.8 $3.8 $5.7 $117.3 $58.6 $62.7 $69.8 $48.9 $319.7 $17.3 $14.4 $15.4 $36.5 % of Multifamily Book 100% 1% 2% 32% 16% 17% 19% 13% 87% 5% 4% 4% 10% Loan Count 27,928 691 2,962 10,091 3,268 3,527 4,086 3,303 25,205 690 683 1,350 3,591 Average UPB (Dollars in millions) $13.1 $5.5 $1.9 $11.6 $17.9 $17.8 $17.1 $14.8 $12.7 $25.0 $21.0 $11.4 $10.2 Loans in Forbearance by UPB(38) 0.5% 0.1% 0.5% 0.4% 1.6% 0.1% 0.2% 0.0% 0.2% 3.4% 2.7% 0.0% 0.1% Weighted Average OLTV Ratio 66% 72% 66% 67% 67% 65% 66% 64% 66% 66% 67% 66% 69% Weighted Average DSCR(10) 2.0 3.1 2.4 2.0 2.0 1.8 1.9 2.2 2.0 1.8 1.8 2.0 2.1 % Fixed rate 90% 11% 42% 91% 87% 91% 93% 94% 91% 64% 86% 92% 77% % Full Interest-Only 29% 33% 25% 21% 29% 34% 33% 39% 31% 12% 24% 23% 20% % Partial Interest-Only(50) 51% 8% 23% 49% 56% 53% 56% 48% 50% 56% 66% 57% 41% % Small Balance Loans(53) 46% 74% 92% 50% 31% 28% 35% 37% 47% 14% 26% 51% 54% % DUS(3) 99% 97% 85% 99% 98% 100% 100% 99% 99% 98% 100% 100% 98% Serious Delinquency Rate(11) 1.12% 0.10% 0.92% 1.55% 2.67% 0.59% 0.38% 0.10% 0.56% 10.85% 3.06% 0.00% 0.27% UPB by Maturity Year(3) Top 10 MSAs by UPB(3) Top 5 MSAs by Forbearance UPB(38) $0.6B $9.1B $6.5B $9.4B $31.4B $76M $12.6B $9.6B $15.3B Share of Book Share of of Business: Forbearance: $82M $226M Total UPB: $18.8B $9.7B 40% 33% $366.8B Total Top 10 Total Top 5 UPB: Forbearance $10.9B $22.7B $146.5B UPB: $313.0B $0.6B $11.0B $87M $16.6B $16.1B $91M New York Atlanta New York Philadelphia Los Angeles Phoenix 2020 2023 Houston Cleveland Dallas Seattle 2021 2024 Dallas Washington, D.C. San Francisco 2022 Other Houston Chicago © 2020 Fannie Mae Q3 2020 Financial Supplement 25

DRAFT Multifamily Serious Delinquency Rates and Credit Losses DUS/Non-DUS Cumulative Credit Loss Rates by Acquisition Year Through Q3 YTD 2020(49)(54) 2% 1.5% 1.4% 1.1% 1.1% 1.1% 0.9% 1% 0.9% 0.8% 0.7% Cr edit Loss Rate 0.5% 0.5% 0.3% 0.2% 0.3% 0.3% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% —% —% —% —% —% —% —% —% —% 0% 2005 2006 2007 2008 2009 2010 —% 20—%11 2012 2013 2014 2015 - 2019 Q3 YTD 2020 DUS Credit Loss Rate Multifamily Total Credit Loss Rate Non-DUS Credit Loss Rate (11)(49) Multifamily Loan Forbearance Serious Delinquency Rates (16) Status 1.36% 1.4% 1.7% 1.20% 1.2% 5.5% 1.12% 9.6% 1.0% 34.3% 0.92% 0.8% 0.71% $5.0B UPB 0.63% in Forbearance 0.59% 0.6% in 2020 0.44% 0.55% 0.39% 0.56% 0.4% 0.30% 0.50% Se rious Delinquency Rate 0.34% 0.24% 0.21% 0.21% 48.9% 0.24% 0.24% 0.15% 0.2% 0.18% 0.10% 0.11% 0.05% 0.07% 0.05% 0.06% 0.07% 0.04% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 (17) Defaulted(18) Liquidations 2020 Active Forbearance (19) DUS Serious Delinquency Rate Multifamily Total Serious Delinquency Rate Non-DUS Serious Delinquency Rate Reinstated Repayment Plan © 2020 Fannie Mae Q3 2020 Financial Supplement 26

DRAFT Endnotes (1) Prior period amounts have been adjusted to reflect the current year change in presentation related to yield maintenance fees. As of January 1, 2020, all yield maintenance fees have been reported in interest income. For consolidated loans, the portion of the fee passed through to the holders of the trust certificates are classified as interest expense. (2) Single-family conventional loan population consists of: (a) single-family conventional mortgage loans of Fannie Mae; (b) single-family conventional mortgage loans underlying Fannie Mae MBS other than loans underlying Freddie Mac securities that Fannie Mae has resecuritized; and (c) other credit enhancements that Fannie Mae provided on single- family mortgage assets, such as long-term standby commitments. It excludes non-Fannie Mae single-family mortgage-related securities held in the retained mortgage portfolio for which Fannie Mae does not provide a guaranty. Conventional refers to mortgage loans and mortgage-related securities that are not guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies. (3) The multifamily guaranty book of business consists of: (a) multifamily mortgage loans of Fannie Mae; (b) multifamily mortgage loans underlying Fannie Mae MBS; and (c) other credit enhancements that the company provided on multifamily mortgage assets. It excludes non-Fannie Mae multifamily mortgage-related securities held in the retained mortgage portfolio for which Fannie Mae does not provide a guaranty. Data reflects the latest available information as of September 30, 2020. (4) Represents the sum of the average guaranty fee rate for the company's single-family conventional guaranty arrangements during the period plus the recognition of any upfront cash payments relating to these guaranty arrangements over an estimated average life at the time of acquisition. Excludes the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which is remitted to Treasury and not retained by the company. (5) The average estimated mark-to-market LTV ratio is based on the unpaid principal balance of the loan divided by the estimated current value of the property at period end, which the company calculates using an internal valuation model that estimates periodic changes in home value. Excludes loans for which this information is not readily available. (6) FICO credit score is as of loan origination, as reported by the seller of the mortgage loan. (7) Includes mortgage pool insurance transactions covering loans with an unpaid principal balance of approximately $7 billion at issuance and approximately $2.5 billion outstanding as of September 30, 2020. (8) Single-family “serious delinquency rate" refers to single-family conventional loans that are 90 days or more past due or in the foreclosure process in the applicable origination year, product feature, or state, divided by the number of loans in the single-family conventional guaranty book of business in that origination year, product feature, or state. Loans in forbearance are reported as delinquent according to the contractual terms of the loans. (9) Basis points are calculated based on the amount of write-offs, recoveries and foreclosed property expenses annualized divided by the average single-family conventional guaranty book of business during the period. (10) Weighted average debt service coverage ratio, or DSCR, is calculated using the most recent property financial operating statements. When operating statement information is not available, the DSCR at the time of acquisition is used. If both are unavailable, the underwritten DSCR is used. Although the company uses the most recently available results from our multifamily borrowers, there is a lag in reporting, which typically can range from three to six months, but in some cases may be longer. Accordingly, the financial information we have received from borrowers may only reflect the initial impact of COVID-19. Co-op loans are excluded from this metric. (11) Multifamily loans are classified as seriously delinquent when payment is 60 days or more past due. (12) Credit loss (benefit) ratio, net represents the annualized net credit loss or benefit for the period divided by the average unpaid principal balance of the multifamily guaranty book of business for the period. Net credit benefits are the result of recoveries on previously charged-off amounts. Net credit losses include expected benefit of freestanding credit enhancements, primarily multifamily DUS lender-risk sharing transactions. (13) Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), for purposes of reporting to the credit bureaus, servicers must report a borrower receiving a COVID-19-related payment accommodation, such as a forbearance plan or loan modification, as current if the borrower was current prior to receiving the accommodation and the borrower makes all required payments in accordance with the accommodation. For purposes of the company's disclosures regarding delinquency status, loans receiving COVID-19-related payment forbearance are reported as delinquent according to the contractual terms of the loan. © 2020 Fannie Mae Q3 2020 Financial Supplement 28 .

DRAFT Endnotes (14) As a part of the company's relief programs and pursuant to the CARES Act, it is providing payment forbearance for up to 12 months to borrowers experiencing a COVID-19- related financial hardship. The company estimates that, through September 30, 2020, approximately 7.3% of the single-family loans, based on loan count, in the single- family conventional guaranty book of business as of March 31, 2020 have been in a COVID-19-related forbearance at some point in time. (15) Includes loans that are in trial modifications. (16) The table displays the status as of current period end of the multifamily loans in the guaranty book of business as well as loans that had liquidated prior to period end that have received a forbearance. Since the COVID-19 pandemic was declared a national emergency in March 2020, Fannie Mae has broadly offered forbearance to affected multifamily borrowers. Nearly all of our multifamily loans in forbearance were associated with a COVID-19-related financial hardship. (17) Includes loans that are in the process of extending their forbearance. (18) Includes loans that are no longer in forbearance and are not on a repayment plan. Loans in this population may proceed to other loss mitigation activities, such as foreclosure or modification. (19) Represents loans that are no longer in forbearance but are current according to the original terms of the loan. (20) Guaranty fee income includes the impact of a 10 basis point guaranty fee increase implemented in 2012 pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011, the incremental revenue from which is remitted to Treasury and not retained by the company. (21) Includes interest income from assets held in the company’s retained mortgage portfolio and other investments portfolio, as well as other assets used to generate lender liquidity. Also includes interest expense on the company’s outstanding corporate debt and Connecticut Avenue Securities® debt. (22) Reflects the company's aggregate indebtedness measured in unpaid principal balance and excludes effects of debt basis adjustments and debt of consolidated trusts at the end of each period presented. (23) Cash equivalents are comprised of overnight repurchase agreements and U.S. Treasuries that have a maturity at the date of acquisition of three months or less. (24) Refers to the U.S. weekly average fixed-rate mortgage rate according to Freddie Mac's Primary Mortgage Market Survey®. These rates are reported using the latest available data for a given period. (25) U.S. Gross Domestic Product ("GDP") annual growth (decline) rate for periods prior to Q3 YTD 2020 are based on the quarterly series calculated by the Bureau of Economic Analysis and are subject to revision. GDP growth (decline) rate for Q3 YTD 2020 is based on Fannie Mae’s forecast. (26) Home price estimates are based on purchase transactions in Fannie-Freddie acquisition and public deed data available through the end of September 2020. Including subsequent data may lead to materially different results. Home price growth rate is not seasonally adjusted. UPB estimates are based on data available through the end of September 2020, and the top 10 states are reported by UPB in descending order. One year home price growth rate is for the 12 month period ending September 30, 2020. (27) Aggregate amount of dividends Fannie Mae has paid to Treasury on the senior preferred stock from 2008 through September 30, 2020. Under the terms of the senior preferred stock purchase agreement, dividend payments made to Treasury do not offset prior draws of funds from Treasury. (28) Aggregate amount of funds the company has drawn from Treasury pursuant to the senior preferred stock purchase agreement from 2008 through September 30, 2020. (29) Excludes loans for which this information is not readily available. From time to time, the company revises its guidelines for determining a borrower’s DTI ratio. The amount of income reported by a borrower and used to qualify for a mortgage may not represent the borrower’s total income; therefore, the DTI ratios reported may be higher than borrowers' actual DTI ratios. © 2020 Fannie Mae Q3 2020 Financial Supplement 29

DRAFT Endnotes (30) Refers to HomeReady® mortgage loans, a low down payment mortgage product offered by the company that is designed for creditworthy low-income borrowers. HomeReady allows up to 97% loan-to-value ratio financing for home purchases. The company offers additional low down payment mortgage products that are not HomeReady loans; therefore, this category is not representative of all high LTV single-family loans acquired or in the single-family conventional guaranty book of business for the periods shown. See the “OLTV Ratio > 95%” category for information on the single-family loans acquired or in the single-family conventional guaranty book of business with origination LTV ratios greater than 95%. (31) "Refi Plus" refers to loans acquired under Fannie Mae's Refi Plus initiative, which offered refinancing flexibility to eligible Fannie Mae borrowers who were current on their loans and who applied prior to the initiative’s December 31, 2018 sunset date. Refi Plus had no limits on maximum LTV ratio and provided mortgage insurance flexibilities for loans with LTV ratios greater than 80%. (32) Calculated based on the aggregate unpaid principal balance of single-family loans for each category divided by the aggregate unpaid principal balance of loans in the single-family conventional guaranty book of business. Loans with multiple product features are included in all applicable categories. (33) Percentage of loans in the single-family conventional guaranty book of business, measured by unpaid principal balance, included in an agreement used to reduce credit risk by requiring collateral, letters of credit, mortgage insurance, corporate guarantees, inclusion in a credit risk transfer transaction reference pool, or other agreement that provides for our compensation to some degree in the event of a financial loss relating to the loan. (34) Amortized origination loan-to-value ratio is calculated based on the current UPB of a loan at period end, divided by the home price at origination of the loan. (35) Based on the unpaid principal balance of the single-family conventional guaranty book of business as of period end. (36) Refers to loans included in an agreement used to reduce credit risk by requiring primary mortgage insurance, collateral, letters of credit, corporate guarantees, or other agreements to provide an entity with some assurance that it will be compensated to some degree in the event of a financial loss. Excludes loans covered by credit risk transfer transactions unless such loans are also covered by primary mortgage insurance. (37) Outstanding unpaid principal balance represents the underlying loan balance, which is different from the reference pool balance for CAS and some lender risk-sharing transactions. (38) Includes multifamily loans that are in an active forbearance as of September 30, 2020. (39) Calculated based on the unpaid principal balance of loans in forbearance with the specific credit characteristic and vintage divided by the total unpaid principal balance of loans in forbearance in that origination year at period end. (40) Share of Single-Family Conventional Guaranty Book based on UPB was calculated based upon the unpaid principal balance of loans in forbearance by vintage divided by the total unpaid principal balance of the single-family conventional guaranty book of business at period end. (41) 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 nine months ended September 30, 2020. Home Equity Conversion Mortgages insured by the Department of Housing and Urban Development are excluded from this calculation. (42) 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. (43) Consists of loan modifications and completed repayment plans and forbearances. Repayment plans reflect only those plans associated with loans that were 60 days or more delinquent. Forbearances reflect only completed forbearance arrangements that involve loans that were 90 days or more delinquent. Excludes trial modifications, loans to certain borrowers who have received bankruptcy relief that are classified as troubled debt restructurings, and repayment and forbearance plans that have been initiated but not completed. © 2020 Fannie Mae Q3 2020 Financial Supplement 30

DRAFT Endnotes (44) Credit losses consist of (a) charge-offs net of recoveries and (b) foreclosed property expense (income). Percentages exclude the impact of recoveries that have not been allocated to specific loans. (45) For a description of our Alt-A loan classification criteria, refer to the glossary in Fannie Mae’s 2019 Form 10-K. The company discontinued the purchase of newly originated Alt-A loans in 2009, except for those that represent the refinancing of a loan acquired prior to 2009, which has resulted in the acquisitions of Alt-A mortgage loans remaining low and the percentage of the book of business attributable to Alt-A to continue to decrease over time. (46) Total amount of single-family credit losses includes those not directly associated with specific loans. Single-family credit losses by state exclude the impact of recoveries that have not been allocated to specific loans. Presents the five states with the highest credit losses for the applicable period among the company's top ten states by percentage of outstanding single-family conventional guaranty book of business. (47) 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 September 30, 2020 is not necessarily indicative of the ultimate performance of the loans and performance is likely to change, perhaps materially, in future periods. (48) Represents the percentage of loans with lender risk-sharing agreements in place, measured by unpaid principal balance. (49) Under the Delegated Underwriting and Servicing (DUS) program, 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 a pre-review by the company. (50) Includes any loan that was underwritten with an interest-only term less than the term of the loan, regardless of whether it is currently in its interest-only period. (51) See https://www.fanniemae.com/multifamily/products for definitions. Loans with multiple product features are included in all applicable categories. (52) The Multifamily Affordable Business Channel focuses on financing properties that are under an agreement that provides long-term affordability, such as properties with rent subsidies or income restrictions. (53) In Q1 2019, the DUS program updated the definition of small multifamily loans to any loan with an original unpaid balance of up to $6 million nationwide. The updated definition has been applied to all loans in the current multifamily guaranty book of business, including loans that were acquired under the previous small loan definition. (54) Cumulative net credit loss rate is the cumulative net credit losses (gains) through September 30, 2020 on the multifamily loans that were acquired in the applicable period, as a percentage of the total acquired unpaid principal balance of multifamily loans in the applicable period. Net credit losses include expected benefit of freestanding credit enhancements, primarily multifamily DUS lender-risk sharing transactions. (55) Includes loans that were delinquent upon the expiration of the forbearance arrangement and did not enter into a modification or other loan workout. © 2020 Fannie Mae Q3 2020 Financial Supplement 31