Mortgage Loans

12 Months Ended

Dec. 31, 2015

Mortgage Loans on Real Estate [Abstract]

We own single-family mortgage loans, which are secured by four or fewer residential dwelling units, and multifamily mortgage loans, which are secured by five or more residential dwelling units. We classify these loans as either HFI or HFS. We report the carrying value of HFI loans at the unpaid principal balance, net of unamortized premiums and discounts, other cost basis adjustments, and an allowance for loan losses. We report the carrying value of HFS loans at the lower of cost or fair value and record valuation changes in our consolidated statements of operations and comprehensive income. We define the recorded investment of HFI loans as unpaid principal balance, net of unamortized premiums and discounts, other cost basis adjustments, and accrued interest receivable.

For purposes of the single-family mortgage loan disclosures below, we define “primary” class as mortgage loans that are not included in other loan classes; “government” class as mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies, that are not Alt-A; and “other” class as loans with higher-risk characteristics, such as interest-only loans and negative-amortizing loans, that are neither government nor Alt-A.

The following table displays the carrying value of our mortgage loans.



	As of December 31,
	2015												2014
	Of Fannie Mae				Of Consolidated Trusts				Total				Of Fannie Mae				Of Consolidated Trusts				Total
	(Dollars in millions)
Single-family		$	238,237			$	2,574,174			$	2,812,411			$	262,116			$	2,569,884			$	2,832,000
Multifamily		13,099				185,243				198,342				23,255				164,045				187,300
Total unpaid principal balance of mortgage loans		251,336				2,759,417				3,010,753				285,371				2,733,929				3,019,300
Cost basis and fair value adjustments, net		(12,939		)		49,781				36,842				(12,705		)		48,440				35,735
Allowance for loan losses for loans held for investment		(26,510		)		(1,441		)		(27,951		)		(33,117		)		(2,424		)		(35,541		)
Total mortgage loans		$	211,887			$	2,807,757			$	3,019,644			$	239,549			$	2,779,945			$	3,019,494

For the years ended December 31, 2015, 2014 and 2013, we redesignated loans with a carrying value of $8.6 billion, $2.2 billion and $1.3 billion, respectively, from HFI to HFS. For the year ended December 31, 2014, we redesignated loans with a carrying value of $285 million from HFS to HFI. We sold loans with an unpaid principal balance of $3.6 billion, $1.9 billion and $1.2 billion, respectively, during the years ended December 31, 2015, 2014 and 2013.

The recorded investment of single-family mortgage loans for which formal foreclosure proceedings are in process was $25.6 billion as of December 31, 2015. As a result of our various loss mitigation and foreclosure prevention efforts, we expect that a portion of the loans in the process of formal foreclosure proceedings will not ultimately foreclose.

Aging Analysis

The following tables display an aging analysis of the total recorded investment in our HFI mortgage loans by portfolio segment and class, excluding loans for which we have elected the fair value option.



	As of December 31, 2015
	30 - 59 Days Delinquent			60 - 89 Days Delinquent			Seriously Delinquent⁽¹⁾			Total Delinquent			Current		Total		Recorded Investment in Loans 90 Days or More Delinquent and Accruing Interest			Recorded Investment in Nonaccrual Loans
	(Dollars in millions)
Single-family:
Primary		$	29,154		$	7,937		$	26,346		$	63,437	$	2,598,756	$	2,662,193		$	46	$	34,216
Government⁽²⁾		58			24			291			373		40,461		40,834			291		—
Alt-A		4,085			1,272			6,141			11,498		84,603		96,101			6		7,407
Other		1,494			484			2,160			4,138		32,272		36,410			6		2,632
Total single-family		34,791			9,717			34,938			79,446		2,756,092		2,835,538			349		44,255
Multifamily⁽³⁾		23			N/A			123			146		200,028		200,174			—		591
Total		$	34,814		$	9,717		$	35,061		$	79,592	$	2,956,120	$	3,035,712		$	349	$	44,846



	As of December 31, 2014
	30 - 59 Days Delinquent			60 - 89 Days Delinquent			Seriously Delinquent⁽¹⁾			Total Delinquent			Current		Total		Recorded Investment in Loans 90 Days or More Delinquent and Accruing Interest			Recorded Investment in Nonaccrual Loans
	(Dollars in millions)
Single-family:
Primary		$	29,130		$	8,396		$	38,248		$	75,774	$	2,580,446	$	2,656,220		$	55	$	46,556
Government⁽²⁾		63			26			305			394		44,927		45,321			305		—
Alt-A		4,094			1,414			11,603			17,111		95,650		112,761			8		13,007
Other		1,520			516			3,763			5,799		38,460		44,259			6		4,259
Total single-family		34,807			10,352			53,919			99,078		2,759,483		2,858,561			374		63,822
Multifamily⁽³⁾		60			NA			89			149		189,084		189,233			—		823
Total		$	34,867		$	10,352		$	54,008		$	99,227	$	2,948,567	$	3,047,794		$	374	$	64,645

__________


⁽¹⁾	Single-family seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process. Multifamily seriously delinquent loans are loans that are 60 days or more past due.


⁽²⁾	Primarily consists of reverse mortgages, which due to their nature, are not aged and are included in the current column.


⁽³⁾	Multifamily loans 60-89 days delinquent are included in the seriously delinquent column.

Credit Quality Indicators

The following table displays the total recorded investment in our single-family HFI loans by class and credit quality indicator, excluding loans for which we have elected the fair value option.



	As of December 31,
	2015⁽¹⁾							2014⁽¹⁾
	Primary		Alt-A		Other			Primary		Alt-A		Other
	(Dollars in millions)
Estimated mark-to-market LTV ratio:⁽²⁾
Less than or equal to 80%	$	2,228,533	$	59,000		$	21,274	$	2,156,165	$	60,851		$	22,558
Greater than 80%and less than or equal to 90%	250,373		12,588			4,936		261,709		15,151			6,046
Greater than 90%and less than or equal to 100%	122,939		9,345			3,861		140,778		12,490			5,236
Greater than 100%and less than or equal to 110%	27,875		6,231			2,596		43,014		8,998			3,900
Greater than 110% and less than or equal to 120%	14,625		3,730			1,592		23,439		6,033			2,615
Greater than 120% and less than or equal to 125%	4,520		1,260			545		7,529		2,114			904
Greater than 125%	13,328		3,947			1,606		23,586		7,124			3,000
Total	$	2,662,193	$	96,101		$	36,410	$	2,656,220	$	112,761		$	44,259

__________


⁽¹⁾	Excludes $40.8 billion and $45.3 billion as of December 31, 2015 and 2014, respectively, of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies, that are not Alt-A loans. The segment class is primarily reverse mortgages for which we do not calculate an estimated mark-to-market LTV ratio.


⁽²⁾	The aggregate estimated mark-to-market LTV ratio is based on the unpaid principal balance of the loan as of the end of each reported period divided by the estimated current value of the property, which we calculate using an internal valuation model that estimates periodic changes in home value.

The following table displays the total recorded investment in our multifamily HFI loans by credit quality indicator, excluding loans for which we have elected the fair value option.



	As of December 31,
	2015			2014
	(Dollars in millions)
Credit risk profile by internally assigned grade:⁽¹⁾
Pass		$	194,132	$	182,079
Special Mention		3,202		3,070
Substandard		2,833		3,842
Doubtful		7		242
Total		$	200,174	$	189,233

__________

⁽¹⁾

Pass (loan is current and adequately protected by the current financial strength and debt service capacity of the borrower); special mention (loan with signs of potential weakness); substandard (loan with a well defined weakness that jeopardizes the timely full repayment); and doubtful (loan with a weakness that makes collection or liquidation in full highly questionable and improbable based on existing conditions and values).

Individually Impaired Loans

Individually impaired loans include TDRs, acquired credit-impaired loans and multifamily loans that we have assessed as probable that we will not collect all contractual amounts due, regardless of whether we are currently accruing interest. The following tables display the total unpaid principal balance, recorded investment, related allowance, average recorded investment and interest income recognized for individually impaired loans.



	As of December 31,
	2015								2014
	Unpaid Principal Balance			Total Recorded Investment			Related Allowance for Loan Losses		Unpaid Principal Balance			Total Recorded Investment			Related Allowance for Loan Losses		Related Allowance for Accrued Interest Receivable⁽¹⁾
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary		$	116,477		$	110,502	$	16,745		$	125,960		$	120,221	$	20,327	$	309
Government		322			327		59			281			285		46		12
Alt-A		31,888			29,103		6,217			35,492			32,816		7,778		136
Other		12,893			12,179		2,416			14,667			13,947		3,049		38
Total single-family		161,580			152,111		25,437			176,400			167,269		31,200		495
Multifamily		650			654		80			1,230			1,241		175		6
Total individually impaired loans with related allowance recorded		162,230			152,765		25,517			177,630			168,510		31,375		501
With no related allowance recorded:⁽²⁾
Single-family:
Primary		15,891			14,725		—			16,704			14,876		—		—
Government		58			54		—			61			57		—		—
Alt-A		3,721			3,169		—			3,993			3,119		—		—
Other		1,222			1,102		—			1,240			1,056		—		—
Total single-family		20,892			19,050		—			21,998			19,108		—		—
Multifamily		353			354		—			565			568		—		—
Total individually impaired loans with no related allowance recorded		21,245			19,404		—			22,563			19,676		—		—
Total individually impaired loans⁽³⁾		$	183,475		$	172,169	$	25,517		$	200,193		$	188,186	$	31,375	$	501



	For the Year Ended December 31,
	2015									2014									2013
	Average Recorded Investment			Total Interest Income Recognized⁽⁴⁾			Interest Income Recognized on a Cash Basis			Average Recorded Investment			Total Interest Income Recognized⁽⁴⁾			Interest Income Recognized on a Cash Basis			Average Recorded Investment			Total Interest Income Recognized⁽⁴⁾			Interest Income Recognized on a Cash Basis
	(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
Primary		$	114,737		$	4,190		$	318		$	121,926		$	4,321		$	494		$	124,659		$	4,351		$	603
Government		299			12			—			270			13			—			213			11			—
Alt-A		30,453			1,034			54			33,676			1,066			100			35,075			1,096			135
Other		12,863			376			21			14,490			402			36			15,537			425			52
Total single-family		158,352			5,612			393			170,362			5,802			630			175,484			5,883			790
Multifamily		973			16			—			1,699			80			1			2,552			128			1
Total individually impaired loans with related allowance recorded		159,325			5,628			393			172,061			5,882			631			178,036			6,011			791
With no related allowance recorded:⁽²⁾
Single-family:
Primary		15,796			1,039			91			13,852			864			215			11,442			1,369			227
Government		55			4			—			67			5			—			112			8			—
Alt-A		3,647			218			11			2,799			189			47			2,207			329			45
Other		1,259			75			3			974			56			12			752			117			17
Total single-family		20,757			1,336			105			17,692			1,114			274			14,513			1,823			289
Multifamily		442			10			—			1,472			64			—			1,863			97			3
Total individually impaired loans with no related allowance recorded		21,199			1,346			105			19,164			1,178			274			16,376			1,920			292
Total individually impaired loans⁽³⁾		$	180,524		$	6,974		$	498		$	191,225		$	7,060		$	905		$	194,412		$	7,931		$	1,083

__________


⁽¹⁾	Effective January 1, 2015, we charged off accrued interest receivable associated with loans on nonaccrual status in connection with our adoption of a change in accounting policy related to the treatment of interest previously accrued, but not collected, at the date that loans are placed on nonaccrual status. See “Note 1, Summary of Significant Accounting Policies” for additional information.


⁽²⁾	The discounted cash flows or collateral value equals or exceeds the carrying value of the loan and, as such, no valuation allowance is required.


⁽³⁾	Includes single-family loans restructured in a TDR with a recorded investment of $170.3 billion, $185.2 billion and $187.6 billion as of December 31, 2015, 2014 and 2013, respectively. Includes multifamily loans restructured in a TDR with a recorded investment of $451 million, $716 million and $911 million as of December 31, 2015, 2014 and 2013, respectively.

⁽⁴⁾

Total single-family interest income recognized of $6.9 billion for the year ended December 31, 2015 consists of $5.7 billion of contractual interest and $1.2 billion of effective yield adjustments. Total single-family interest income recognized of $6.9 billion for the year ended December 31, 2014 consists of $5.8 billion of contractual interest and $1.1 billion of effective yield adjustments. Total single-family interest income recognized of $7.7 billion for the year ended December 31, 2013 consists of $5.7 billion of contractual interest and $2.0 billion of effective yield adjustments.

Troubled Debt Restructurings

A modification to the contractual terms of a loan that results in granting a concession to a borrower experiencing financial difficulties is considered a TDR. In addition to formal loan modifications, we also engage in other loss mitigation activities with troubled borrowers, which include repayment plans and forbearance arrangements, both of which represent informal agreements with the borrower that do not result in the legal modification of the loan’s contractual terms. We account for these informal restructurings as a TDR if we defer more than three missed payments. We also classify loans to certain borrowers who have received bankruptcy relief as TDRs.

The substantial majority of the loan modifications we complete result in term extensions, interest rate reductions or a combination of both. The average term extension of a single-family modified loan was 161 months for the years ended December 31, 2015 and 2014 and 154 months for the year ended December 31, 2013. The average interest rate reduction was 0.74, 0.99 and 1.68 percentage points for the years ended December 31, 2015, 2014 and 2013, respectively.

The following table displays the number of loans and recorded investment in loans restructured in a TDR.



	For the Year Ended December 31,
	2015				2014				2013
	Number of Loans		RecordedInvestment		Number of Loans		RecordedInvestment		Number of Loans		RecordedInvestment
	(Dollars in millions)
Single-family:
Primary		71,293	$	9,713		100,956	$	14,301		126,998	$	19,016
Government		241	27			365	47			312	35
Alt-A		9,037	1,374			14,715	2,441			21,471	3,794
Other		1,835	333			3,357	686			6,226	1,378
Total single-family		82,406	11,447			119,393	17,475			155,007	24,223
Multifamily		12	40			19	853			33	213
Total TDRs		82,418	$	11,487		119,412	$	18,328		155,040	$	24,436

The following table displays the number of loans and our recorded investment in these loans at the time of payment default for loans that were restructured in a TDR in the twelve months prior to the payment default. For purposes of this disclosure, we define loans that had a payment default as: single-family and multifamily loans with completed TDRs that liquidated during the period, either through foreclosure, deed-in-lieu of foreclosure or a short sale; single-family loans with completed modifications that are two or more months delinquent during the period; or multifamily loans with completed modifications that are one or more months delinquent during the period.



	For the Year Ended December 31,
	2015				2014				2013
	Number of Loans		RecordedInvestment		Number of Loans		RecordedInvestment		Number of Loans		RecordedInvestment
	(Dollars in millions)
Single-family:
Primary		26,206	$	3,808		33,853	$	5,095		45,539	$	6,978
Government		118	16			124	15			130	17
Alt-A		4,128	706			5,392	960			9,601	1,732
Other		1,229	247			1,738	387			3,093	685
Total single-family		31,681	4,777			41,107	6,457			58,363	9,412
Multifamily		3	6			9	42			9	64
Total TDRs that subsequently defaulted		31,684	$	4,783		41,116	$	6,499		58,372	$	9,476