Fannie Mae

A Congressional Research Service (CRS) report traces Fannie Mae’s origins to Title III of the National Housing Act of 1934, which authorized national mortgage associations.⁠[1]

In its own history, Fannie Mae places its creation in the Great Depression, when nearly a quarter of homeowners lost their homes to foreclosure, banks lacked money for home loans, and without long-term fixed-rate mortgages buyers faced large down payments and balloon payments. Congress created Fannie Mae as part of Franklin D. Roosevelt’s New Deal to help banks offer long-term, fixed-rate loans, and after World War II it financed home purchases for millions of returning veterans.⁠[2]

Fannie Mae was established in 1938 as a federal government entity and first bought mortgages insured by the Federal Housing Administration (FHA), later adding loans guaranteed by the Department of Veterans Affairs (VA). In 1954 Congress passed the Federal National Mortgage Association Charter Act, which “converted us into a public-private, mixed ownership corporation,” in the company’s words.⁠[3]

In 1968 Congress split Fannie Mae in two, and the part that remained in government became Ginnie Mae. The Housing and Urban Development Act of that year made Fannie Mae a privately owned, shareholder corporation chartered by Congress, removed it from the federal budget and left it to fund itself in the stock and bond markets.⁠[1][2]

In 1970 Fannie Mae gained authority to buy conventional mortgages, those not backed by a government agency, and the Emergency Home Finance Act of the same year created Freddie MacFreddie MacFreddie Mac, formally the Federal Home Loan Mortgage Corporation, is a U.S. government-sponsored enterprise created by Congress under the Emergency Home Finance Act of 1970 and headquartered in McLean, Virginia. It buys single-family and multifamily mortgages from lenders in the secondary market and packages them into securities, without lending directly to borrowers. It became shareholder-owned and listed on the New York Stock Exchange in 1989, restated its earnings and was penalized by regulators after a 2003 accounting scandal, was placed into conservatorship under the Federal Housing Finance Agency with U.S. Treasury support in September 2008, and was delisted in 2010. Since 2025, FHFA Director Bill Pulte has also chaired its board, and Kenny M. Smith has been chief executive since December 2025. In November 2026 Donald Trump announced that Fannie Mae and Freddie Mac would invest $4.3 billion in Kansas mortgages the following year.Open the full entry.⁠[3][1]

In the 1980s Fannie Mae began issuing mortgage-backed securities (MBS), making global capital markets central to its business.⁠[3][2]

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 set affordable housing goals for Fannie Mae and Freddie Mac, requiring them to purchase specified amounts of mortgages meeting particular single-family and multifamily goals. Until 2008 the two companies were regulated by the Office of Federal Housing Enterprise Oversight (OFHEO) and the Department of Housing and Urban Development (HUD).⁠[1]

OFHEO began a special examination of Fannie Mae in 2003.⁠[4]

OFHEO issued a special examination report on September 21, 2004, and on September 27 Fannie Mae reached an agreement with OFHEO, after which it hired consultants and submitted implementation plans, with director Donald B. Marron leading work on a capital plan. The board set up a Special Review Committee, with former Senator Warren Rudman of the law firm Paul, Weiss investigating accounting issues under FAS 91 and FAS 133, governance and executive compensation. On December 21, 2004, the board announced that chairman and chief executive Franklin D. Raines would retire and that vice chairman and chief financial officer J. Timothy Howard had resigned. Director Stephen B. Ashley became non-executive chairman, vice chairman and chief operating officer Daniel H. Mudd became interim chief executive, and executive vice president Robert Levin became interim chief financial officer. The board’s audit committee also dismissed KPMG LLP as the company’s independent auditor.⁠[5]

On May 23, 2006, OFHEO released the final report of its special examination. It found an unethical corporate culture at Fannie Mae from 1998 to 2004 in which employees manipulated accounting and earnings to trigger executive bonuses, and said the company had pursued rapid growth while underinvesting in systems, risk management and staff, weakening internal controls. OFHEO acting director James B. Lockhart said, “Our examination found an environment where the ends justified the means.”⁠[6]

The same day Fannie Mae settled with OFHEO and the Securities and Exchange Commission (SEC); the two settlements together included a $400 million civil penalty, and the company neither admitted nor denied any wrongdoing. Fannie Mae agreed to carry out all recommendations of the OFHEO report, covering accounting, internal controls, governance, capital plans, corporate culture, disclosure and compensation, and in the SEC settlement agreed to be enjoined from future violations of certain federal securities law provisions. Chief executive Mudd said the company still had to complete its restatement.⁠[7]

Under the consent order OFHEO issued at the same time, Fannie Mae had to maintain a capital surplus of 30% over its statutory minimum and to cap its net mortgage portfolio assets at $727.75 billion, the level in its December 31, 2005, minimum capital report.⁠[4]

On December 6, 2006, Fannie Mae filed its 2004 Form 10-K, restating previously issued financial statements for 2002, 2003 and the first two quarters of 2004; its 2005 Form 10-K followed on May 2, 2007.⁠[4]

In 2006 Fannie Mae met all of its housing goals and subgoals: 56.9% for low- and moderate-income housing (goal 53.0%), 43.6% for underserved areas (goal 38.0%) and 27.8% for special affordable housing (goal 23.0%). Its mortgage credit book of business was about $2.526 trillion at December 31, 2006, and its headquarters were at 3900 Wisconsin Avenue NW in Washington, D.C.⁠[4]

The Housing and Economic Recovery Act (HERA) was enacted on July 30, 2008. It created the Federal Housing Finance Agency (FHFA) to replace OFHEO and HUD as the combined regulator of Fannie Mae and Freddie Mac. In September 2008 the companies agreed with FHFA that unexpected mortgage delinquencies and resulting losses jeopardized their solvency, and on September 6 FHFA placed both in conservatorship.⁠[1]

Fannie Mae’s board consented to the conservatorship. As conservator, FHFA took over the powers of the company’s management, board and shareholders, while Fannie Mae continued to operate as a business corporation.⁠[8]

On September 7, 2008, the Treasury Department and FHFA announced measures for the two housing government-sponsored enterprises, saying they were intended to “protect the financial system, support the housing market, and protect taxpayers.” Under the Senior Preferred Stock Purchase Agreements (PSPAs) among them, Treasury committed up to $100 billion to each company and received $1 billion of senior preferred stock in each, plus warrants to buy 79.9% of their common stock at a nominal price.⁠[9][1]

In May 2009 Treasury raised its funding commitment to each company to $200 billion. In December 2009 the fixed dollar cap was replaced by a formula, which became fixed when it expired on December 31, 2012.⁠[1]

On June 15, 2010, the New York Stock Exchange notified Fannie Mae that it no longer met the minimum share price standard for continued listing, and on June 16 FHFA, as conservator, directed the company to delist from the NYSE and any other U.S. exchange. Fannie Mae notified the NYSE and the Chicago Stock Exchange that it expected to file Form 25 on or about June 28, with delisting effective 10 days later; its common stock and previously listed preferred series were expected to be quoted on the OTC Bulletin Board.⁠[10]

FHFA noted that Fannie Mae’s share price had recently been below the NYSE’s $1 average closing price requirement for 30 trading days. Acting director Edward J. DeMarco said, “A voluntary delisting at this time simply makes sense.”⁠[11]

On August 17, 2012, Treasury and FHFA adopted the Third Amendment to the PSPAs. Each company kept a $3 billion net worth buffer, reduced by $600 million a year to zero in 2018, and everything above it was paid to Treasury as dividends, the so-called “profit sweep.” The amendment also capped each company’s portfolio at $250 billion.⁠[1]

Fannie Mae says it returned to profitability in 2012 and in 2014 repaid all the funds it had received under conservatorship, and that it has since paid billions of dollars to Treasury.⁠[2]

In 2017 Treasury and FHFA reinstated a $3 billion capital reserve for each company. On September 30, 2019, Treasury announced changes allowing the companies to retain earnings and build capital: up to $25 billion for Fannie Mae and $20 billion for Freddie Mac. Through the end of 2018 Fannie Mae had paid $176 billion in dividends to Treasury.⁠[1]

On May 20, 2020, FHFA re-proposed a rule setting out a capital framework for the companies once they returned to shareholder control.⁠[1]

On November 18, 2020, FHFA announced that it had sent the final capital rule to the Federal Register, fulfilling the risk-based capital mandate in HERA. An enterprise must hold tier 1 capital above 4.0% to avoid limits on capital distributions and discretionary bonuses; the final rule increased capital relief for credit risk transfers and set a 20% risk-weight floor for single-family and multifamily exposures. FHFA director Mark Calabria said, “The final rule is another milestone necessary for responsibly ending the conservatorships.”⁠[12]

On June 23, 2021, the U.S. Supreme Court decided the shareholder case Collins v. Yellen. It held that FHFA had not exceeded its authority as conservator in adopting the Third Amendment, so HERA’s anti-injunction clause barred the shareholders’ statutory claim, and that the law’s “for cause” limit on removing the FHFA director violated the separation of powers. The Court saw no reason to treat actions under the Third Amendment as void, leaving the net worth sweep intact, and remanded the question of what remedy, if any, the shareholders should receive. Justice Samuel Alito wrote the majority opinion.⁠[13]

In In re Fannie Mae/Freddie Mac Senior Preferred Stock Purchase Agreement Class Action Litigations, tried in the U.S. District Court for the District of Columbia, plaintiffs argued that the 2012 amendment violated the original 2008 conservatorship terms. On August 14, 2023, the jury awarded shareholders $612 million: $299.4 million to holders of Fannie Mae junior preferred stock, $281.8 million to Freddie Mac junior preferred holders and $31.2 million to Freddie Mac common holders. FHFA said it was “disappointed in the verdict” and would review its post-trial options.⁠[14]

The jury found that the defendants had breached the implied covenant of good faith and fair dealing. The court awarded the Fannie Mae preferred class pre-judgment interest on October 24, 2023, and entered final judgment for $812,050,000 on March 20, 2024. On March 14, 2025, Judge Royce C. Lamberth upheld the verdict, and on July 24, 2026, the U.S. Court of Appeals for the D.C. Circuit issued an opinion and judgment affirming it.⁠[15]

William J. (Bill) Pulte was sworn in as FHFA’s fifth director at an agency ceremony on March 14, 2025.⁠[16]

On March 17, 2025, FHFA as conservator removed directors Amy E. Alving, Christopher J. Brummer, Michael J. Heid, Simon Johnson, Diane N. Lye, Diane C. Nordin, Chetlur S. Ragavan and Michael A. Seelig from Fannie Mae’s board and appointed Clinton Jones, William J. Pulte, Christopher Stanley and Michael Stucky, with Pulte as chairman. Five directors, including Priscilla Almodovar, remained.⁠[17]

Since March 17, 2025, the FHFA director has chaired Fannie Mae’s board, and FHFA’s general counsel has also served as a director.⁠[18]

In May 2025 Donald Trump wrote on Truth Social, “I am working on taking these amazing companies public,” adding that “the US government will keep its implicit guarantees.”⁠[19]

On August 9, 2025, Trump posted an AI-generated image on Truth Social showing him at the New York Stock Exchange with the words “The Great American Mortgage Corporation” and a date of November 2025; the post gave no other details.⁠[20]

Effective October 22, 2025, Priscilla Almodovar ceased to be Fannie Mae’s president and chief executive and left its board; her separation agreement provided $1.2 million, equal to two years of base salary, 12 months of subsidized medical and dental coverage and six months of outplacement services. Peter Akwaboah, executive vice president and chief operating officer since May 2024, was appointed acting chief executive, and John Roscoe and Brandon Hamara were appointed co-presidents, all subject to FHFA approval.⁠[21]

In 2025 Fannie Mae provided $409.3 billion of liquidity to the mortgage market, supporting about 1.5 million home purchases, refinancings and rental units. Net income for the year was $14.4 billion, down $2.6 billion from 2024, and net worth was $109.0 billion at December 31, 2025. As of September 30, 2025, it held about 25% of U.S. single-family mortgage debt outstanding and about 21% of multifamily mortgage debt outstanding.⁠[18]

At December 31, 2025, the aggregate liquidation preference of Treasury’s senior preferred stock was $227.0 billion; Treasury had paid $119.8 billion to Fannie Mae and had $113.9 billion of its commitment remaining. Treasury’s warrant entitles it to 79.9% of the common stock on a fully diluted basis at $0.00001 per share, exercisable through September 7, 2028. Excluding the $120.8 billion stated value of the senior preferred stock, Fannie Mae’s available capital showed a $22 billion deficit. The conservatorship has no specified termination date, and other than through mandatory receivership neither Fannie Mae nor FHFA may seek to end it without Treasury’s consent.⁠[18]

On Thursday, January 8, 2026, Trump directed in a social media post that Fannie Mae and Freddie Mac buy up to $200 billion of mortgage-backed securities, a move the White House presented as a way to make homeownership cheaper; Bill Pulte said online that FHFA was “on it.” Shortly after the announcement the spread between mortgage bond yields and Treasuries narrowed by about 10 basis points.⁠[22]

On October 28, 2026, Fannie Mae announced third-quarter 2026 net income of $4.2 billion ($4,177 million), up from $4.0 billion in the second quarter, and net worth of $119.6 billion at September 30, up 13% from a year earlier. In the quarter it provided $103 billion of liquidity, supporting about 194,000 home purchases, 66,000 refinancings and 96,000 rental units, bringing the total for 2026 so far to $344 billion. Its guaranty book of business stood at $4.1 trillion, with the multifamily guaranty book growing to $545.4 billion. Its available common equity tier 1 (CET1) capital showed a $30 billion deficit at September 30.⁠[23]

The release gave Pulte’s title as “Director, U.S. Federal Housing, and Chairman, Fannie Mae Board of Directors” and Peter Akwaboah’s as acting chief executive officer and chief operating officer. Pulte said, “Fannie Mae landed another strong performance this quarter, growing our net worth 13% year over year to $120 billion.”⁠[23]

On Sunday, November 1, 2026, at an airport campaign rally in Salina, Kansas, Trump said that Fannie Mae and Freddie Mac would invest $4.3 billion in Kansas home mortgages the following year to “help 15,000 Kansas home buyers achieve their American dream.”⁠[24]

In the same remarks Trump thanked Bill Pulte, chairman of both companies, for his work.⁠[25]

Fannie Mae is a government-sponsored, stockholder-owned corporation chartered by Congress to provide liquidity and stability to the U.S. housing market. It buys residential mortgage loans from lenders, freeing their funds for further lending, and packages them into Fannie Mae-guaranteed mortgage-backed securities sold to investors worldwide, earning guaranty fees; its charter does not permit it to originate loans or lend directly to consumers. The Charter Act, as amended through July 25, 2019, states Congress’s expectation that Fannie Mae will “promote access to affordable mortgage financing in all markets at all times.”⁠[18][3]

At the end of 2019 Fannie Mae and Freddie Mac were jointly responsible for about $6.68 trillion, or 61.6%, of U.S. residential mortgages outstanding.⁠[1]

As of December 2025 Fannie Mae had about 7,000 employees, and its principal executive offices were at 1100 15th Street NW, Washington, D.C.⁠[18]