Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2021

The following table displays our segment results.


	For the Three Months Ended March 31,
	2021						2020
	Single-Family		Multifamily		Total		Single-Family		Multifamily		Total
	(Dollars in millions)
Net interest income(1)	$	5,894	$	848	$	6,742	$	4,541	$	806	$	5,347
Fee and other income(2)	62		25		87		94		26		120
Net revenues	5,956		873		6,829		4,635		832		5,467
Investment gains (losses), net(3)	64		(19)		45		(152)		(6)		(158)
Fair value gains (losses), net(4)	740		44		784		(460)		184		(276)
Administrative expenses	(623)		(125)		(748)		(629)		(120)		(749)
Credit-related income (expense):(5)
Benefit (provision) for credit losses	662		103		765		(2,172)		(411)		(2,583)
Foreclosed property income (expense)	17		(12)		5		(78)		(2)		(80)
Total credit-related income (expense)	679		91		770		(2,250)		(413)		(2,663)
TCCA fees(6)	(731)		—		(731)		(637)		—		(637)
Credit enhancement expense(7)	(226)		(58)		(284)		(316)		(60)		(376)
Change in expected credit enhancement recoveries(8)	(16)		(15)		(31)		58		130		188
Other expenses, net	(287)		(32)		(319)		(163)		(55)		(218)
Income before federal income taxes	5,556		759		6,315		86		492		578
Provision for federal income taxes	(1,162)		(160)		(1,322)		(18)		(99)		(117)
Net income	$	4,394	$	599	$	4,993	$	68	$	393	$	461

(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 from which is remitted to Treasury and not retained by us. Also includes yield maintenance fees we recognized on the prepayment of multifamily loans.

(2)Single-family fee and other income primarily consists of compensation for engaging in structured transactions and providing other lender services. Multifamily fee and other income consists of fees associated with Multifamily business activities.

(3)Single-family investment gains and losses primarily consist of gains and losses on the sale of mortgage assets. Multifamily investment gains and losses primarily consists of gains and losses on resecuritization activity.

(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, fair value option debt, 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.

(7)Single-family credit enhancement expense consists of costs associated with our freestanding credit enhancements, which include primarily costs associated with our Credit Insurance Risk TransferTM (“CIRTTM”), Connecticut Avenue Securities® (“CAS”) and enterprise-paid mortgage insurance (“EPMI”) programs. Multifamily credit enhancement expense primarily consists of costs associated with our Multifamily CIRTTM (“MCIRTTM”) and Multifamily Connecticut Avenue SecuritiesTM (“MCAS”) programs as well as amortization expense for certain lender risk-sharing programs. Excludes CAS transactions accounted for as debt instruments and credit risk transfer programs accounted for as derivative instruments.

(8)Consists of change in benefits recognized from our freestanding credit enhancements, primarily from our CAS and CIRT programs as well as certain lender risk-sharing arrangements, including our multifamily DUS program. See “Note 1, Summary of Significant Accounting Policies” in our 2020 Form 10-K for more information on our change in presentation.