Consolidations and Transfers of Financial Assets

3 Months Ended

Mar. 31, 2025

Consolidations and Transfers of Financial Assets [Abstract]

Consolidations and Transfers of Financial Assets

We have interests in various entities that are considered to be variable interest entities (“VIEs”). The primary types of VIEs are securitization and resecuritization trusts, limited partnerships and special purpose vehicles (“SPVs”). Variable interests from Freddie Mac and other issuers may include a guaranty that reduces our exposure to credit risk when we hold them as investments or resecuritize them in a resecuritization trust that issues MBS that are backed by our guaranty. We consolidate the substantial majority of our single-class securitization trusts because our role as guarantor and master servicer provides us with the power to direct activities (primarily the servicing of mortgage loans) that impact the credit risk to which we are exposed. In contrast, we do not consolidate single-class securitization trusts when other organizations have the power to direct these activities unless we have the unilateral ability to dissolve the trust. We also do not consolidate our resecuritization trusts unless we have the unilateral ability to dissolve the trust. We may include securities issued by Freddie Mac in some of our resecuritization trusts. The mortgage loans that serve as collateral for Freddie Mac-issued securities are not held in trusts that are consolidated by Fannie Mae.

Unconsolidated VIEs

We do not consolidate VIEs when we are not deemed to be the primary beneficiary. The following table displays the carrying amount and classification of our assets and liabilities that relate to our involvement with unconsolidated securitization and resecuritization trusts.


	As of
	March 31, 2025		December 31, 2024
	(Dollars in millions)
Assets and liabilities recorded in our condensed consolidated balance sheets related to unconsolidated mortgage-backed trusts:









Investments in securities, at fair value	$	1,094	$	1,182
Other assets	32		33
Other liabilities	(37)		(38)
Net carrying amount	$	1,089	$	1,177

Our maximum exposure to loss generally represents the greater of our carrying amount related to our involvement with unconsolidated securitization and resecuritization trusts or the unpaid principal balance of the assets covered by our guaranty. Our involvement in unconsolidated resecuritization trusts may give rise to additional exposure to loss depending on the type of resecuritization trust. Fannie Mae resecuritization trusts that are backed entirely by Fannie Mae MBS are not consolidated and do not give rise to any additional exposure to loss as we already consolidate the underlying collateral. In contrast, Fannie Mae resecuritization trusts that are backed in whole or in part by Freddie Mac securities may increase our exposure to loss to the extent that we are providing a guaranty for the timely payment and interest on the underlying Freddie Mac securities that we have not previously guaranteed. Our maximum exposure to loss for these unconsolidated trusts is measured by the amount of Freddie Mac securities that are held in these resecuritization trusts.

Our maximum exposure to loss related to unconsolidated securitization and resecuritization trusts, which includes but is not limited to our exposure to these Freddie Mac securities, was approximately $199 billion and $203 billion as of March 31, 2025 and December 31, 2024, respectively. The total assets of our unconsolidated securitization and resecuritization trusts were approximately $200 billion and $204 billion as of March 31, 2025 and December 31, 2024, respectively.

The maximum exposure to loss for our unconsolidated limited partnerships and similar legal entities, which consist primarily of low income housing tax credit (“LIHTC”) investments, was $697 million and the related net carrying value was $697 million as of March 31, 2025. As of December 31, 2024, the maximum exposure to loss was $669 million and the related net carrying value was $669 million. The total assets of these limited partnership investments were $6.3 billion and $6.4 billion as of March 31, 2025 and December 31, 2024, respectively.

The maximum exposure to loss related to our involvement with unconsolidated SPVs that transfer credit risk represents the unpaid principal balance and accrued interest payable of obligations issued by our Connecticut Avenue Securities® (“CAS”) and Multifamily Connecticut Avenue Securities® (“MCASTM”) SPVs. The maximum exposure to loss related to these unconsolidated SPVs was $24.2 billion and $23.2 billion as of March 31, 2025 and December 31, 2024, respectively. The total assets related to these unconsolidated SPVs were $24.2 billion and $23.2 billion as of March 31, 2025 and December 31, 2024, respectively.

As our lending relationship does not provide us with a controlling financial interest in the borrower entity for loans in our multifamily loan portfolio, we do not consolidate these borrowers regardless of their status as either a VIE or a voting interest entity. We have excluded these entities from our VIE disclosures. As of March 31, 2025, the unpaid principal balance of our multifamily loan portfolio was $495.4 billion. However, the disclosures we have provided in “Note 4, Mortgage Loans,” “Note 5, Allowance for Loan Losses” and “Note 7, Financial Guarantees” with respect to this population are consistent with the FASB’s stated objectives for the disclosures related to unconsolidated VIEs.

Transfers of Financial Assets and Portfolio Securitizations

We issue single-class Fannie Mae MBS through portfolio securitization transactions by transferring pools of mortgage loans or mortgage-related securities to one or more trusts or special purpose entities. For the three months ended March 31, 2025 and 2024, the unpaid principal balance of portfolio securitizations was $35.5 billion and $31.2 billion, respectively. We consolidate the substantial majority of these portfolio securitization transactions.

We retain interests from the transfer and sale of mortgage-related securities to unconsolidated single-class portfolio securitization trusts and unconsolidated single-class and multi-class portfolio resecuritization trusts. As of March 31, 2025, the unpaid principal balance of retained interests was $639 million and its related fair value was $1.0 billion. As of December 31, 2024, the unpaid principal balance of retained interests was $661 million and its related fair value was $1.0 billion. For the three months ended March 31, 2025 and 2024, the principal, interest and other fees received on retained interests was $57 million and $64 million, respectively.