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Financial Guarantees

12 Months Ended

Dec. 31, 2023

Financial GuaranteesWe recognize a guaranty obligation for our obligation to stand ready to perform on our guarantees to unconsolidated

trusts and other guaranty arrangements. These off-balance sheet guarantees expose us to credit losses primarily

relating to the unpaid principal balance of our unconsolidated Fannie Mae MBS and other financial guarantees. The

maximum remaining contractual term of our guarantees is 29 years; however, the actual term of each guaranty may be

significantly less than the contractual term based on the prepayment characteristics of the related mortgage loans. We

measure our guaranty reserve for estimated credit losses for off-balance sheet exposures over the contractual period

for which they are exposed to the credit risk, unless that obligation is unconditionally cancellable by the issuer.

As the guarantor of structured securities backed in whole or in part by Freddie Mac-issued securities, we extend our

guaranty to the underlying Freddie Mac securities in our resecuritization trusts. However, Freddie Mac continues to

guarantee the payment of principal and interest on the underlying Freddie Mac securities that we have resecuritized.

When we began issuing UMBS, we entered into an indemnification agreement under which Freddie Mac agreed to

indemnify us for losses caused by its failure to meet its payment or other specified obligations under the trust

agreements pursuant to which the underlying resecuritized securities were issued. As a result, and due to the funding

commitment available to Freddie Mac through its senior preferred stock purchase agreement with Treasury, we have

concluded that the associated credit risk is negligible. Accordingly, we exclude from the following table Freddie Mac

securities backing unconsolidated Fannie Mae-issued structured securities of $215.6 billion and $234.0 billion as of

December 31, 2023 and 2022, respectively.

The following table displays our off-balance sheet maximum exposure, guaranty obligation recognized in our

consolidated balance sheets and the potential maximum recovery from third parties through available credit

enhancements and recourse related to our financial guarantees.


	As of December 31,
	2023						2022
	Maximum Exposure		Guaranty Obligation		Maximum Recovery(1)		Maximum Exposure		Guaranty Obligation		Maximum Recovery(1)
		(Dollars in millions)
Unconsolidated Fannie Mae MBS		$2,778		$14		$2,713		$3,139		$15		$3,058
Other guaranty arrangements(2)		9,154		65		1,967		9,573		79		2,012
Total		$11,932		$79		$4,680		$12,712		$94		$5,070

(1)Recoverability of such credit enhancements and recourse is subject to, among other factors, the ability of our mortgage insurers and the

U.S. government, as a financial guarantor, to meet their obligations to us. For information on our mortgage insurers, see “Note 14,

Concentrations of Credit Risk.”

(2)Primarily consists of credit enhancements and long-term standby commitments.

- Definition

The entire disclosure for each guarantee obligation, or each group of similar guarantee obligations, including (a) the nature of the guarantee, including its term, how it arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments (undiscounted) the guarantor could be required to make under the guarantee; (c) the current carrying amount of the liability, if any, for the guarantor's obligations under the guarantee; and (d) the nature of any recourse provisions under the guarantee, and any assets held either as collateral or by third parties, and any relevant related party disclosure. Excludes disclosures about product warranties.

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