FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

12 Months Ended

Dec. 31, 2025

FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

NOTE 12 —FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

Fannie Mae DUS Related Commitments—Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing, and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 10, the Company accounts for these commitments as derivatives recorded at fair value.

The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5%, and Agency MBS are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held the majority of its pledged securities in Agency MBS as of December 31, 2025. The majority of the loans for which the Company has risk sharing are Tier 2 loans.

The Company is in compliance with the December 31, 2025 collateral requirements as outlined above. As of December 31, 2025, reserve requirements for the December 31, 2025 DUS loan portfolio will require the Company to fund $99.7 million in additional restricted liquidity

over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within the at-risk portfolio. Fannie Mae has reassessed the DUS Capital Standards in the past and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future increases to collateral requirements may adversely impact the Company’s available cash.

Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate the Company's servicing authority for all or some of the portfolio if, at any time, it determines that the Company's financial condition is not adequate to support its obligations under the DUS agreement. The Company is required to maintain acceptable net worth, as defined in the agreement, and the Company satisfied the requirements as of December 31, 2025. The net worth requirement is derived primarily from unpaid principal balances on Fannie Mae loans and the level of risk sharing. As of December 31, 2025, the net worth requirement was $350.4 million, and the Company's net worth, as defined in the requirements, was $1.0 billion, as measured at the Company’s wholly owned operating subsidiary, Walker & Dunlop, LLC. As of December 31, 2025, the Company was required to maintain at least $69.7 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae, and the Company had operational liquidity, as defined in the requirements, of $290.6 million as of December 31, 2025, as measured at the Company’s wholly owned operating subsidiary, Walker & Dunlop, LLC.

Pledged Securities, at Fair Value—Pledged securities, at fair value on the Consolidated Balance Sheets consisted of the following balances as of December 31, 2025, 2024, 2023, and 2022:

	December 31,
Pledged Securities (in thousands)	2025		2024		2023		2022
Restricted cash	$	17,419	$	3,015	$	2,727	$	5,788
Money market funds		4,869		20,457		38,556		8,870
Total pledged cash and cash equivalents	$	22,288	$	23,472	$	41,283	$	14,658
Agency MBS		202,666		183,432		142,798		142,624
Total pledged securities, at fair value	$	224,954	$	206,904	$	184,081	$	157,282

The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Consolidated Statements of Cash Flows as more fully discussed in NOTE 2.

The Company’s investments included within Pledged securities, at fair value consist primarily of money market funds and Agency debt securities. The investments in Agency debt securities consist of multifamily Agency MBS and are all accounted for as AFS securities. A detailed discussion of the Company’s accounting policies regarding the allowance for credit losses for AFS securities is included in NOTE 2. The following table provides additional information related to the AFS Agency MBS as of December 31, 2025 and 2024:

Fair Value and Amortized Cost of Agency MBS (in thousands)	December 31, 2025		December 31, 2024
Fair value	$	202,666	$	183,432
Amortized cost		200,469		182,912
Total gains for securities with net gains in AOCI		3,247		1,650
Total losses for securities with net losses in AOCI		(1,050)		(1,130)
Fair value of securities with unrealized losses		124,684		136,976

Pledged securities with a fair value of $94.8 million, an amortized cost of $95.8 million, and a net unrealized loss of $1.0 million have been in a continuous unrealized loss position for more than 12 months. All securities that have been in a continuous loss position are Agency debt securities that carry a guarantee of the contractual payments; therefore, an allowance for credit losses has not been recorded.

The following table provides contractual maturity information related to Agency MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date.

	December 31, 2025
Detail of Agency MBS Maturities (in thousands)	Fair Value		Amortized Cost
Within one year	$	—	$	—
After one year through five years		95,083		94,499
After five years through ten years		94,702		93,734
After ten years		12,881		12,236
Total	$	202,666	$	200,469