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Segment Reporting
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We have two reportable business segments: Single-Family and Multifamily. The chief operating decision maker allocates resources and assesses performance based on these two business segments. Results of our two business segments are intended to reflect each segment as if it were a stand-alone business. The sum of the results for our two business segments equals our consolidated results of operations.
The section below provides a discussion of our business segments.
Single-Family Business Segment
•
Works with our lender customers to acquire and securitize single-family mortgage loans delivered to us by lenders into Fannie Mae MBS.
•
Issues structured Fannie Mae MBS backed by single-family mortgage assets and provides other services to our lender customers.
•
Prices and manages the credit risk on loans in our single-family guaranty book of business. Also enters into transactions that transfer a portion of the credit risk on some of the loans in our single-family guaranty book of business.
•
Works to reduce costs of defaulted single-family loans through home retention solutions and foreclosure alternatives, management of foreclosures and our REO inventory, selling nonperforming loans and pursuing contractual remedies from lenders, servicers and providers of credit enhancement.
Multifamily Business Segment
•
Works with our lender customers to acquire and securitize multifamily mortgage loans delivered to us by lenders into Fannie Mae MBS.
•
Issues structured multifamily Fannie Mae MBS through our Fannie Mae Guaranteed Multifamily Structures (“Fannie Mae GeMS”) program and provides other services to our lender customers.
•
Prices and manages the credit risk on loans in our multifamily guaranty book of business. Lenders retain a portion of the credit risk in most multifamily transactions.
•
Enters into transactions that transfer an additional portion of Fannie Mae’s credit risk on some of the loans in our multifamily guaranty book of business.
•
Works to maintain credit quality of the book, prevent foreclosure, reduce costs of defaulted multifamily loans, manage our REO inventory, and pursue contractual remedies from lenders, servicers and providers of credit enhancement.
Segment Allocations and Results
The majority of our assets, revenues and expenses are directly associated with each respective business segment and are included in determining its asset balance and operating results. Those assets, revenues and expenses that are not directly attributable to a particular business segment are allocated based on the size of each segment’s guaranty book of business. The substantial majority of our gains and losses associated with our risk management derivatives are allocated to our Single-Family business segment.
The following table displays total assets by segment.
 
 
As of December 31,
 
 
2019
 
2018
 
 
 
(Dollars in millions)
Single-Family
 
$
3,149,212

 
$
3,099,588

 
Multifamily
 
354,107

 
318,730

 
Total assets
 
$
3,503,319

 
$
3,418,318

 

We operate our business solely in the United States and its territories, and accordingly, we generate no revenue from and have no long-lived assets, other than financial instruments, in geographic locations other than the United States and its territories.
The following tables display our segment results.
 
 
For the Year Ended December 31, 2019
 
 
Single-Family
 
 
Multifamily
 
 
Total
 
 
(Dollars in millions)
Net interest income(1)
 
$
18,013

 
 
$
2,949

 
 
$
20,962

Fee and other income(2)
 
453

 
 
723

 
 
1,176

Net revenues
 
18,466

 
 
3,672

 
 
22,138

Investment gains, net(3)
 
1,589

 
 
181

 
 
1,770

Fair value gains (losses), net(4)
 
(2,216
)
 
 
2

 
 
(2,214
)
Administrative expenses
 
(2,565
)
 
 
(458
)
 
 
(3,023
)
Credit-related income (expense):(5)
 
 
 
 
 
 
 
 
Benefit (provision) for credit losses
 
4,038

 
 
(27
)
 
 
4,011

Foreclosed property income (expense)
 
(523
)
 
 
8

 
 
(515
)
Total credit-related income (expense)
 
3,515

 
 
(19
)
 
 
3,496

TCCA fees(6)
 
(2,432
)
 
 
—

 
 
(2,432
)
Other expenses, net
 
(1,661
)
 
 
(497
)
 
 
(2,158
)
Income before federal income taxes
 
14,696

 
 
2,881

 
 
17,577

Provision for federal income taxes
 
(2,859
)
 
 
(558
)
 
 
(3,417
)
Net income
 
$
11,837

 
 
$
2,323

 
 
$
14,160

 
 
For the Year Ended December 31, 2018
 
 
Single-Family
 
 
Multifamily
 
 
Total
 
 
(Dollars in millions)
Net interest income(1)
 
$
18,162

 
 
$
2,789

 
 
$
20,951

Fee and other income(2)
 
450

 
 
529

 
 
979

Net revenues
 
18,612

 
 
3,318

 
 
21,930

Investment gains, net(3)
 
850

 
 
102

 
 
952

Fair value gains (losses), net(4)
 
1,210

 
 
(89
)
 
 
1,121

Administrative expenses
 
(2,631
)
 
 
(428
)
 
 
(3,059
)
Credit-related income (expense):(5)
 
 
 
 
 
 
 
 
Benefit (provision) for credit losses
 
3,313

 
 
(4
)
 
 
3,309

Foreclosed property expense
 
(604
)
 
 
(13
)
 
 
(617
)
Total credit-related income (expense)
 
2,709

 
 
(17
)
 
 
2,692

TCCA fees(6)
 
(2,284
)
 
 
—

 
 
(2,284
)
Other expenses, net
 
(1,012
)
 
 
(241
)
 
 
(1,253
)
Income before federal income taxes
 
17,454

 
 
2,645

 
 
20,099

Provision for federal income taxes
 
(3,708
)
 
 
(432
)
 
 
(4,140
)
Net income
 
$
13,746

 
 
$
2,213

 
 
$
15,959

 
 
For the Year Ended December 31, 2017
 
 
Single-Family
 
 
Multifamily
 
 
Total
 
 
(Dollars in millions)
Net interest income(1)
 
$
18,212

 
 
$
2,521

 
 
$
20,733

Fee and other income(2)
 
1,378

 
 
849

 
 
2,227

Net revenues
 
19,590

 
 
3,370

 
 
22,960

Investment gains, net(3)
 
1,352

 
 
170

 
 
1,522

Fair value losses, net(4)
 
(1,188
)
 
 
(23
)
 
 
(1,211
)
Administrative expenses
 
(2,391
)
 
 
(346
)
 
 
(2,737
)
Credit-related income (expense):(5)
 
 
 
 
 
 
 
 
Benefit (provision) for credit losses
 
2,090

 
 
(49
)
 
 
2,041

Foreclosed property income (expense)
 
(540
)
 
 
19

 
 
(521
)
Total credit-related income (expense)
 
1,550

 
 
(30
)
 
 
1,520

TCCA fees(6)
 
(2,096
)
 
 
—

 
 
(2,096
)
Other expenses, net
 
(1,004
)
 
 
(507
)
 
 
(1,511
)
Income before federal income taxes
 
15,813

 
 
2,634

 
 
18,447

Provision for federal income taxes
 
(14,301
)
 
 
(1,683
)
 
 
(15,984
)
Net income
 
$
1,512

 
 
$
951

 
 
$
2,463

(1) 
Net interest income primarily consists of guaranty fees received as compensation for assuming and managing the credit risk on loans underlying Fannie Mae MBS held by third parties for the respective business segment, and the difference between the interest income earned on the respective business segment’s mortgage assets in our retained mortgage portfolio and the interest expense associated with the debt funding those assets. Revenues from single-family guaranty fees include revenues generated by the 10 basis point increase in guaranty fees pursuant to the TCCA, the incremental revenue for which is remitted to Treasury and not retained by us.
(2) 
Single-family fee and other income primarily consists of compensation for engaging in structured transactions and providing other lender services, and income resulting from settlement agreements resolving certain claims relating to private-label securities we purchased or that we have guaranteed. Multifamily fee and other income consists of fees associated with Multifamily business activities, including yield maintenance income.
(3) 
Investment gains and losses primarily consist of gains and losses on the sale of mortgage assets for the respective business segment.
(4) 
Single-family fair value gains and losses primarily consist of fair value gains and losses on risk management and mortgage commitment derivatives, trading securities and other financial instruments associated with our single-family guaranty book of business. Multifamily fair value gains and losses primarily consist of fair value gains and losses on MBS commitment derivatives, trading securities and other financial instruments associated with our multifamily guaranty book of business.
(5) 
Credit-related income or expense is based on the guaranty book of business of the respective business segment and consists of the applicable segment’s benefit or provision for credit losses and foreclosed property income or expense on loans underlying the segment’s guaranty book of business.
(6) 
Consists of the portion of our single-family guaranty fees that is remitted to Treasury pursuant to the TCCA.