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Mortgage Loans
 9 Months Ended
Sep. 30, 2020
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]  
Mortgage Loans Mortgage Loans
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 amortized cost of HFI loans for which we have not elected the fair value option at the unpaid principal balance, net of unamortized premiums and discounts, other cost basis adjustments, and accrued interest receivable, net. For purposes of our condensed consolidated balance sheet, we present accrued interest receivable, net separately from the amortized cost of our loans held for investment. We report the carrying value of HFS loans at the lower of cost or fair value and record valuation changes in “Investment gains, net” in our condensed consolidated statements of operations and comprehensive income.
For purposes of the single-family mortgage loan disclosures below, we display loans by class of financing receivable type. In the current period, we revised the financing receivable classes used for disclosure to consist of: “20- and 30-year or more, amortizing fixed-rate,” “15-year or less, amortizing fixed-rate,” “Adjustable-rate,” and “Other.” The “Other” class primarily consists of reverse mortgage loans, interest-only loans, negative-amortizing loans and second liens. We believe the revised classifications are more aligned with how we assess and manage the credit risk of our loans. We have revised the presentation of certain loan disclosures for prior periods to conform with the revised current period classes of financing receivables.
The following table displays the carrying value of mortgage loans and our allowance for loan losses.
As of
September 30, 2020December 31, 2019
(Dollars in millions)
Single-family$3,137,726 $2,972,361 
Multifamily355,950 327,593 
Total unpaid principal balance of mortgage loans
3,493,676 3,299,954 
Cost basis and fair value adjustments, net65,370 43,224 
Allowance for loan losses(11,703)(9,016)
Total mortgage loans(1)
$3,547,343 $3,334,162 
(1)Excludes $9.6 billion and $8.4 billion of accrued interest receivable, net of allowance on mortgage loans as of September 30, 2020 and December 31, 2019, respectively.
The following tables display information about our redesignation of loans from HFI to HFS and the sales of mortgage loans during the period.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2020201920202019
(Dollars in millions)
Single family loans redesignated from HFI to HFS:
Amortized cost$5,305 $5,154 $6,942 $15,287 
Lower of cost or fair value adjustment at time of redesignation(1)
(227)(227)(236)(946)
Allowance reversed at time of redesignation737 780 921 2,149 
Single-family loans sold:
Unpaid principal balance$4,593 $3,941 $5,088 $10,497 
Realized gains, net424 184 464 504 
(1)Consists of the write-off against the allowance at the time of redesignation.
The amortized cost of single-family mortgage loans for which formal foreclosure proceedings were in process was $6.0 billion and $7.6 billion as of September 30, 2020 and December 31, 2019, respectively. 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. In addition, in response to the COVID-19 pandemic, we have prohibited our servicers from completing foreclosures on our single-family loans through at least December 31, 2020, except in the case of vacant or abandoned properties.
Aging Analysis
The following tables display an aging analysis of the total amortized cost of our HFI mortgage loans by portfolio segment and class, excluding loans for which we have elected the fair value option.
Pursuant to the CARES Act, for purposes of reporting to the credit bureaus, servicers must report a borrower receiving a COVID-19-related payment accommodation during the covered period, 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 our disclosures regarding delinquency status, we report loans receiving COVID-19-related payment forbearance as delinquent according to the contractual terms of the loan. The increase in loans classified as delinquent as of September 30, 2020 compared with December 31, 2019 was primarily attributable to the economic dislocation caused by the COVID-19 pandemic.
 As of September 30, 2020
30 - 59 Days
Delinquent
60 - 89 Days Delinquent
Seriously Delinquent(1)
Total DelinquentCurrentTotalLoans 90 Days or More Delinquent and Accruing InterestNonaccrual Loans with No Allowance
 (Dollars in millions)
Single-family:
20- and 30-year or more, amortizing fixed-rate
$27,339 $13,584 $99,491 $140,414 $2,529,879 $2,670,293 $81,405 $7,156 
15-year or less, amortizing fixed-rate
2,084 965 6,170 9,219 420,848 430,067 5,533 393 
Adjustable-rate309 172 1,363 1,844 33,461 35,305 1,160 135 
Other(2)
1,267 606 5,355 7,228 51,276 58,504 3,271 785 
Total single-family
30,999 15,327 112,379 158,705 3,035,464 3,194,169 91,369 8,469 
Multifamily(3)
512 N/A4,074 4,586 355,131 359,717 3,729 44 
Total$31,511 $15,327 $116,453 $163,291 $3,390,595 $3,553,886 $95,098 $8,513 

 As of December 31, 2019
30 - 59 Days
Delinquent
60 - 89 Days Delinquent
Seriously Delinquent(1)
Total DelinquentCurrentTotalLoans 90 Days or More Delinquent and Accruing Interest
 (Dollars in millions)
Single-family:
20- and 30-year or more, amortizing fixed-rate
$26,882 $7,126 $13,082 $47,090 $2,470,457 $2,517,547 $28 
15-year or less, amortizing fixed-rate
1,616 286 445 2,347 371,740 374,087 — 
Adjustable-rate412 85 167 664 44,244 44,908 — 
Other(2)
2,323 829 1,891 5,043 64,726 69,769 136 
Total single-family
31,233 8,326 15,585 55,144 2,951,167 3,006,311 164 
Multifamily(3)
7 N/A115 122 330,496 330,618 — 
Total$31,240 $8,326 $15,700 $55,266 $3,281,663 $3,336,929 $164 
(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)Reverse mortgage loans included in “Other” are not aged due to their nature 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 amortized cost of our single-family HFI loans by class, year of origination and credit quality indicator, excluding loans for which we have elected the fair value option. The estimated mark-to-market LTV ratio is a primary factor we consider when estimating our allowance for loan losses for single-family loans. As LTV ratios increase, the borrower's equity in the home decreases, which may negatively affect the borrower's ability to refinance or to sell the property for an amount at or above the outstanding balance of the loan.
 
As of September 30, 2020, by Year of Origination(1)
20202019201820172016PriorTotal
 (Dollars in millions)
Estimated mark-to-market LTV ratio:(2)
20- and 30-year or more, amortizing fixed-rate:
Less than or equal to 80%$533,538 $261,595 $148,609 $210,619 $255,376 $868,596 $2,278,333 
Greater than 80% and less than or equal to 90%
105,147 105,917 40,296 11,281 2,789 7,711 273,141 
Greater than 90% and less than or equal to 100%
94,975 16,605 1,542 432 171 2,603 116,328 
Greater than 100%17 21 41 101 103 2,208 2,491 
Total 20 and 30-year or more, amortizing fixed-rate
733,677 384,138 190,488 222,433 258,439 881,118 2,670,293 
15-year or less, amortizing fixed-rate:
Less than or equal to 80%124,783 46,988 18,095 35,192 50,610 146,127 421,795 
Greater than 80% and less than or equal to 90%
5,020 1,627 100 18 11 25 6,801 
Greater than 90% and less than or equal to 100%
1,379 38 4 5 3 12 1,441 
Greater than 100%— — 4 6 4 16 30 
Total 15-year or less, amortizing fixed-rate
131,182 48,653 18,203 35,221 50,628 146,180 430,067 
Adjustable-rate:
Less than or equal to 80%2,542 2,102 2,853 5,696 3,169 18,138 34,500 
Greater than 80% and less than or equal to 90%
233 233 179 42 4 18 709 
Greater than 90% and less than or equal to 100%
72 16 2 2 — 3 95 
Greater than 100%— — — — — 1 1 
Total adjustable-rate2,847 2,351 3,034 5,740 3,173 18,160 35,305 
Other:
Less than or equal to 80%— 42 341 839 1,076 37,973 40,271 
Greater than 80% and less than or equal to 90%
— 3 25 54 37 1,590 1,709 
Greater than 90% and less than or equal to 100%
— 1 11 22 16 736 786 
Greater than 100%— 1 5 11 11 782 810 
Total other— 47 382 926 1,140 41,081 43,576 
Total$867,706 $435,189 $212,107 $264,320 $313,380 $1,086,539 $3,179,241 
Total for all classes by LTV ratio:(2)
Less than or equal to 80%$660,863 $310,727 $169,898 $252,346 $310,231 $1,070,834 $2,774,899 
Greater than 80% and less than or equal to 90%
110,400 107,780 40,600 11,395 2,841 9,344 282,360 
Greater than 90% and less than or equal to 100%
96,426 16,660 1,559 461 190 3,354 118,650 
Greater than 100%17 22 50 118 118 3,007 3,332 
Total$867,706 $435,189 $212,107 $264,320 $313,380 $1,086,539 $3,179,241 
As of December 31, 2019(1)
20- and 30-Year or More, Amortizing Fixed-Rate15-Year or Less, Amortizing Fixed-RateAdjustable-RateOtherTotal
(Dollars in millions)
Estimated mark-to-market LTV ratio:(2)
Less than or equal to 80%$2,145,018 $368,181 $43,415 $47,005 $2,603,619 
Greater than 80% and less than or equal to 90%
237,623 4,556 1,275 2,872 246,326 
Greater than 90% and less than or equal to 100%
130,152 1,284 215 1,398 133,049 
Greater than 100%4,754 66 3 1,365 6,188 
Total$2,517,547 $374,087 $44,908 $52,640 $2,989,182 
(1)Excludes $14.9 billion and $17.1 billion as of September 30, 2020 and December 31, 2019, respectively, of mortgage loans guaranteed or insured, in whole or in part, by the U.S. government or one of its agencies, which represents 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 divided by the estimated current value of the property as of the end of each reported period, which we calculate using an internal valuation model that estimates periodic changes in home value.
The following table displays the total amortized cost of our multifamily HFI loans by year of origination and credit-risk rating, excluding loans for which we have elected the fair value option. Property rental income and property valuations are key inputs to our internally assigned credit risk ratings.
As of September 30, 2020, by Year of Origination
20202019201820172016PriorTotal
(Dollars in millions)
Internally assigned credit risk rating:
Non-classified(1)
$45,240 $68,698 $62,601 $51,824 $44,804 $76,825 $349,992 
Classified(2)
8 848 1,448 2,559 1,489 3,373 9,725 
Total$45,248 $69,546 $64,049 $54,383 $46,293 $80,198 $359,717 
As of December 31, 2019
(Dollars in millions)
Internally assigned credit risk rating:
Non-classified(1)
$323,773 
Classified(2)
6,845 
Total$330,618 
(1)A loan categorized as “Non-classified” is current or adequately protected by the current financial strength and debt service capability of the borrower.
(2)Represents loans classified as “Substandard” or “Doubtful.” Loans classified as “Substandard” have a well-defined weakness that jeopardizes the timely full repayment. “Doubtful” refers to a loan with a weakness that makes collection or liquidation in full highly questionable and improbable based on existing conditions and values. We had no loans classified as doubtful as of September 30, 2020 and loans with an amortized cost of $5 million classified as doubtful as of December 31, 2019.
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. However, our current TDR accounting described herein is temporarily impacted by our election to account for certain eligible loss mitigation activities under the COVID-19 Relief granted pursuant to the CARES Act. See “Note 1, Summary of Significant Accounting Policies” for more information on the impact of the CARES Act.
The substantial majority of the loan modifications accounted for as a TDR result in term extensions, interest rate reductions or a combination of both. The average term extension of a single-family modified loan was 159 months and 164 months for the three months ended September 30, 2020 and 2019, respectively. The average interest rate reduction was 0.42 and 0.15 percentage points, for the three months ended September 30, 2020 and 2019, respectively. During the nine months ended September 30, 2020 and 2019, the average term extension of a single-family modified loan was 166 months and 160 months, respectively, and the average interest rate reduction was 0.35 and 0.11 percentage points, respectively.
The following tables display the number of loans and amortized cost in loans classified as a TDR.
For the Three Months Ended September 30,
20202019
Number of LoansAmortized CostNumber of LoansAmortized Cost
(Dollars in millions)
Single-family:
20- and 30-year or more, amortizing fixed-rate5,993 $1,006 10,113 $1,694 
15-year or less, amortizing fixed-rate579 50 1,078 97 
Adjustable-rate109 16 182 28 
Other371 47 648 87 
Total single-family
7,052 1,119 12,021 1,906 
Multifamily
— — 3 4 
Total TDRs
7,052 $1,119 12,024 $1,910 

For the Nine Months Ended September 30,
20202019
Number of LoansAmortized CostNumber of LoansAmortized Cost
(Dollars in millions)
Single-family:
20- and 30-year or more, amortizing fixed-rate25,360 $4,412 31,960 $5,226 
15-year or less, amortizing fixed-rate2,448 216 3,554 317 
Adjustable-rate395 62 612 91 
Other1,464 185 2,383 323 
Total single-family
29,667 4,875 38,509 5,957 
Multifamily
— — 9 37 
Total TDRs
29,667 $4,875 38,518 $5,994 
For loans that defaulted in the period presented and that were classified as a TDR in the twelve months prior to the default, the following table displays the number of loans and the amortized cost of these loans at the time of 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 Three Months Ended September 30,
20202019
Number of LoansAmortized CostNumber of LoansAmortized Cost
(Dollars in millions)
Single-family:
20- and 30-year or more, amortizing fixed-rate2,956 $532 3,582 $567 
15-year or less, amortizing fixed-rate21 1 164 12 
Adjustable-rate3 — 34 5 
Other219 35 422 62 
Total single-family3,199 568 4,202 646 
Multifamily— — 1 13 
Total TDRs that subsequently defaulted3,199 $568 4,203 $659 

For the Nine Months Ended September 30,
20202019
Number of LoansAmortized CostNumber of LoansAmortized Cost
(Dollars in millions)
Single-family:
20- and 30-year or more, amortizing fixed-rate11,529 $2,119 11,871 $1,825 
15-year or less, amortizing fixed-rate106 7 415 30 
Adjustable-rate15 2 57 8 
Other1,094 180 1,564 247 
Total single-family12,744 2,308 13,907 2,110 
Multifamily4 16 2 19 
Total TDRs that subsequently defaulted
12,748 $2,324 13,909 $2,129 
Nonaccrual Loans
The table below displays the forgone interest and the accrued interest receivable written off through the reversal of interest income for nonaccrual loans. For updates to our application of our nonaccrual policy for loans negatively impacted by the COVID-19 pandemic, see “Note 1, Summary of Significant Accounting Policies.”
For the Three Months Ended September 30, 2020For the Nine Months Ended September 30, 2020
(Dollars in millions)
Single-family:
Interest income forgone(1)
$219 $573 
Accrued interest receivable written off through the reversal of interest income33 165 
Multifamily:
Interest income forgone(1)
$8 $9 
Accrued interest receivable written off through the reversal of interest income5 7 
(1)For loans on nonaccrual status held as of period end, represents the amount of interest income we did not recognize but would have recognized if the loans had performed in accordance with their original contractual terms.
The table below includes the amortized cost of and interest income recognized on our HFI single-family and multifamily loans on nonaccrual status by class, excluding loans for which we have elected the fair value option.
As ofFor the Three Months Ended September 30, 2020For the Nine Months Ended September 30, 2020
September 30, 2020June 30, 2020December 31, 2019
Amortized Cost
Total Interest Income Recognized(1)
(Dollars in millions)
Single-family:
20- and 30-year or more,
amortizing fixed-rate		$21,902 $23,783 $23,427 $68 $309 
15-year or less, amortizing
  fixed-rate
780 844 858 2 9 
Adjustable-rate247 275 288 1 3 
Other2,438 2,851 2,973 5 31 
Total single-family25,367 27,753 27,546 76 352 
Multifamily347 316 435 — 3 
Total nonaccrual loans
$25,714 $28,069 $27,981 $76 $355 
(1)Single-family interest income recognized includes amounts accrued while the loans were performing, including the amortization of any deferred cost basis adjustments, as well as payments received on nonaccrual loans, for nonaccrual loans held as of period end. Multifamily interest income recognized includes amounts accrued while the loans were performing and the amortization of any deferred cost basis adjustments, for nonaccrual loans held as of period end.
Individually Impaired Loans
Prior to the adoption of the CECL standard, we recorded a specific loss reserve for individually impaired loans and a collective loss reserve for all other 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, excluding loans classified as HFS and loans for which we have elected the fair value option. The following tables display the unpaid principal balance, total amortized cost and related allowance for loan losses as of December 31, 2019 and average amortized cost, total interest income recognized and interest income recognized on a cash basis for individually impaired loans for the three and nine months ended September 30, 2019.
As of December 31, 2019
Unpaid Principal BalanceTotal Amortized CostRelated Allowance for Loan Losses
(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
20- and 30-year or more, amortizing fixed-rate$63,091 $61,033 $(5,851)
15-year or less, amortizing fixed-rate954 960 (24)
Adjustable-rate156 157 (9)
Other15,181 14,078 (2,291)
Total single-family79,382 76,228 (8,175)
Multifamily314 315 (45)
Total individually impaired loans with related allowance recorded79,696 76,543 (8,220)
With no related allowance recorded:(1)
Single-family:
20- and 30-year or more, amortizing fixed-rate18,372 17,578 — 
15-year or less, amortizing fixed-rate410 407 — 
Adjustable-rate265 265 — 
Other3,014 2,718 — 
Total single-family22,061 20,968 — 
Multifamily363 365 — 
Total individually impaired loans with no related allowance recorded22,424 21,333 — 
Total individually impaired loans(2)
$102,120 $97,876 $(8,220)
(1) The discounted cash flows or collateral value equals or exceeds the carrying value of the loan and, as such, no valuation allowance is required.
(2) Includes single-family loans restructured in a TDR with an amortized cost of $96.9 billion as of December 31, 2019. Includes multifamily loans restructured in a TDR with an amortized cost of $102 million as of December 31, 2019.
For the Three Months Ended September 30, 2019
Average Amortized CostTotal Interest Income RecognizedInterest Income Recognized on a Cash Basis
(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
20- and 30-year or more, amortizing fixed-rate$67,788 $702 $61 
15-year or less, amortizing fixed-rate1,141 10 1 
Adjustable-rate155 1 1 
Other16,011 164 11 
Total single-family85,095 877 74 
Multifamily313 2 — 
Total individually impaired loans with related allowance recorded85,408 879 74 
With no related allowance recorded:(1)
Single-family:
20- and 30-year or more, amortizing fixed-rate15,787 255 37 
15-year or less, amortizing fixed-rate329 4 1 
Adjustable-rate300 3 1 
Other2,767 55 5 
Total single-family19,183 317 44 
Multifamily401 8 — 
Total individually impaired loans with no related allowance recorded19,584 325 44 
Total individually impaired loans$104,992 $1,204 $118 
For the Nine Months Ended September 30, 2019
Average Amortized CostTotal Interest Income RecognizedInterest Income Recognized on a Cash Basis
(Dollars in millions)
Individually impaired loans:
With related allowance recorded:
Single-family:
20- and 30-year or more, amortizing fixed-rate$72,229 $2,268 $210 
15-year or less, amortizing fixed-rate1,237 32 3 
Adjustable-rate135 4 1 
Other17,995 557 41 
Total single-family91,596 2,861 255 
Multifamily280 7 — 
Total individually impaired loans with related allowance recorded91,876 2,868 255 
With no related allowance recorded:(1)
Single-family:
20- and 30-year or more, amortizing fixed-rate15,041 708 98 
15-year or less, amortizing fixed-rate320 11 3 
Adjustable-rate352 12 2 
Other2,875 158 14 
Total single-family18,588 889 117 
Multifamily377 16 — 
Total individually impaired loans with no related allowance recorded18,965 905 117 
Total individually impaired loans$110,841 $3,773 $372 
(1) The discounted cash flows or collateral value equals or exceeds the carrying value of the loan and, as such, no valuation allowance is required.