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Segment Reporting
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We have two reportable business segments, which are based on the type of business activities each perform: Single-Family and Multifamily. 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 condensed consolidated results of operations. For additional information related to our business segments, including basis of organization and other segment activities, see “Note 10, Segment Reporting” in our 2020 Form 10-K.
Segment Allocations and Results
The majority of our revenues and expenses are directly associated with each respective business segment and are included in determining its operating results. Those 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 the gains and losses associated with our risk management derivatives, including the impact of hedge accounting, are allocated to our Single-Family business segment.
The following tables display our segment results.
For the Three Months Ended September 30,
20212020
Single-FamilyMultifamilyTotalSingle-FamilyMultifamilyTotal
(Dollars in millions)
Net interest income(1)
$5,870 $1,102 $6,972 $5,870 $786 $6,656 
Fee and other income(2)
86 25 111 73 20 93 
Net revenues5,956 1,127 7,083 5,943 806 6,749 
Investment gains, net(3)
222 21 243 583 70 653 
Fair value gains (losses), net(4)
(31)14 (17)(244)(83)(327)
Administrative expenses(620)(125)(745)(634)(128)(762)
Credit-related income (expense)(5)
Benefit (provision) for credit losses887 50 937 542 (41)501 
Foreclosed property income (expense)(80)11 (69)(64)(7)(71)
Total credit-related income (expense)807 61 868 478 (48)430 
TCCA fees(6)
(781)— (781)(679)— (679)
Credit enhancement expense(7)
(174)(59)(233)(274)(51)(325)
Change in expected credit enhancement recoveries(8)
(28)(14)(42)(48)— (48)
Other expenses, net(261)(7)(268)(307)(6)(313)
Income before federal income taxes5,090 1,018 6,108 4,818 560 5,378 
Provision for federal income taxes(1,065)(201)(1,266)(1,049)(100)(1,149)
Net income
$4,025 $817 $4,842 $3,769 $460 $4,229 
For the Nine Months Ended September 30,
20212020
Single-FamilyMultifamilyTotalSingle-FamilyMultifamilyTotal
(Dollars in millions)
Net interest income(1)
$19,087 $2,913 $22,000 $15,350 $2,430 $17,780 
Fee and other income(2)
228 73 301 238 65 303 
Net revenues19,315 2,986 22,301 15,588 2,495 18,083 
Investment gains (losses), net(3)
944 (10)934 527 117 644 
Fair value gains (losses), net(4)
323 (2)321 (1,734)113 (1,621)
Administrative expenses(1,862)(377)(2,239)(1,888)(377)(2,265)
Credit-related income (expense)(5)
Benefit (provision) for credit losses4,102 188 4,290 (1,411)(683)(2,094)
Foreclosed property expense(91)(14)(105)(145)(16)(161)
Total credit-related income (expense)4,011 174 4,185 (1,556)(699)(2,255)
TCCA fees(6)
(2,270)— (2,270)(1,976)— (1,976)
Credit enhancement expense(7)
(619)(172)(791)(897)(164)(1,061)
Change in expected credit enhancement recoveries(8)
(101)(16)(117)218 195 413 
Other expenses, net(863)(4)(867)(722)(70)(792)
Income before federal income taxes18,878 2,579 21,457 7,560 1,610 9,170 
Provision for federal income taxes(3,952)(518)(4,470)(1,623)(312)(1,935)
Net income
$14,926 $2,061 $16,987 $5,937 $1,298 $7,235 
(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. Beginning in January 2021, net interest income was impacted by the application of fair value hedge accounting. See “Note 1, Summary of Significant Accounting Policies” and “Note 8, Derivative Instruments” for additional information on our fair value hedge accounting policy and related disclosures.
(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. Beginning in January 2021, fair value gains (losses), net was impacted by the application of fair value hedge accounting. See “Note 1, Summary of Significant Accounting Policies” and “Note 8, Derivative Instruments” for additional information on our fair value hedge accounting policy and related disclosures.
(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 primarily include 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 (“MCASTM”) 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 Delegated Underwriting and Servicing (“DUS®”) program.