Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Allowance for Loan Losses Roll Forward by Segment

The following table displays changes in our allowance for single-family loans, multifamily loans and total allowance for loan losses, including the transition impact of adopting the CECL standard. The provision for loan losses excludes provision for accrued interest receivable losses, guaranty loss reserves and credit losses on AFS debt securities. Cumulatively, these expenses are recognized as “Benefit (provision) for credit losses” in our consolidated statements of operations and comprehensive income.


	For the Year Ended December 31,
	2020
	(Dollars in millions)
Single-family allowance for loan losses:
Beginning balance	$	(8,759)
Transition impact of the adoption of the CECL standard	(1,229)
Benefit for loan losses	127
Write-offs	457
Recoveries	(93)
Other	153
Ending Balance	$	(9,344)
Multifamily allowance for loan losses:
Beginning balance	$	(257)
Transition impact of the adoption of the CECL standard	(493)
Provision for loan losses	(593)
Write-offs	136
Recoveries	(1)
Ending Balance	$	(1,208)
Total allowance for loan losses:
Beginning balance	$	(9,016)
Transition impact of the adoption of the CECL standard	(1,722)
Provision for loan losses	(466)
Write-offs	593
Recoveries	(94)
Other	153
Ending Balance	$	(10,552)

The following tables display changes in single-family and multifamily allowance for loan losses for the years ended 2019 and 2018 and the amortized cost in our HFI loans by impairment or allowance methodology and portfolio segment as of each year-end prior to the adoption of the CECL standard. For a description of our previous allowance and impairment methodology refer to “Note 1, Summary of Significant Accounting Policies.”


	For the Year Ended December 31,
	2019		2018
	(Dollars in millions)
Single-family allowance for loan losses:
Beginning balance	$	(13,969)	$	(18,849)
Benefit for loan losses	3,988		2,990
Write-offs	1,299		2,148
Recoveries	(71)		(240)
Other	(6)		(18)
Ending Balance	$	(8,759)	$	(13,969)
Multifamily allowance for loan losses:
Beginning balance	$	(234)	$	(235)
Provision for loan losses	(27)		(3)
Write-offs	8		4
Recoveries	(4)		—
Ending Balance	$	(257)	$	(234)
Total allowance for loan losses:
Beginning balance	$	(14,203)	$	(19,084)
Benefit for loan losses	3,961		2,987
Write-offs	1,307		2,152
Recoveries	(75)		(240)
Other	(6)		(18)
Ending Balance	$	(9,016)	$	(14,203)

Allowance for Loan Losses and Total Recorded Investment in HFI Loans

The following table displays the carrying value of our mortgage loans and allowance for loan losses.


	As of December 31,
	2020		2019
	(Dollars in millions)
Single-family	$	3,216,146	$	2,972,361
Multifamily	373,722		327,593
Total unpaid principal balance of mortgage loans	3,589,868		3,299,954
Cost basis and fair value adjustments, net	74,576		43,224
Allowance for loan losses for HFI loans	(10,552)		(9,016)
Total mortgage loans(1)	$	3,653,892	$	3,334,162

(1)Excludes $9.8 billion and $8.4 billion of accrued interest receivable, net of allowance as of December 31, 2020 and 2019, respectively.

The following tables display information about our redesignation of loans, and the sales of mortgage loans during the period.


	For the Year Ended December 31,
	2020		2019		2018
	(Dollars in millions)
Single family loans redesignated from HFI to HFS:
Amortized cost	$	8,309	$	18,245	$	23,494
Lower of cost or fair value adjustment at time of redesignation(1)	(291)		(995)		(1,478)
Allowance reversed at time of redesignation	963		2,484		3,385

Single family loans redesignated from HFS to HFI:
Amortized cost	$	144	$	28	$	46
Allowance established at time of redesignation	(15)		(1)		(2)

Single-family loans sold:
Unpaid principal balance	$	9,519	$	19,737	$	21,918
Realized gains, net	831		1,238		444

(1)Consists of the write-off against the allowance at the time of redesignation.


	As of December 31,
	2019
	Single-Family		Multifamily			Total
	(Dollars in millions)
Allowance for loan losses by segment:
Individually impaired loans	$	(8,175)		$	(45)	$	(8,220)
Collectively reserved loans	(584)			(212)		(796)
Total allowance for loan losses	$	(8,759)		$	(257)	$	(9,016)
Amortized cost in loans by segment:
Individually impaired loans	$	97,196		$	680	$	97,876
Collectively reserved loans	2,909,115			329,938		3,239,053
Total amortized cost in loans	$	3,006,311		$	330,618	$	3,336,929