Fannie Mae publishes third-quarter results

Find out if it has kept its hot earnings streak alive in Q3

Fannie Mae publishes third-quarter results

Fannie Mae has revealed its financial results for the third quarter of 2021.

The mortgage giant suffered a significant income decline for the three months ended September 30, down from $7.2 billion to $4.8 billion quarter over quarter. Fannie said the decline was mainly driven by a drop in credit-related income (-$1.7 billion) and lower net interest income (-$1.3 billion).

Overall, its net worth grew to $42.2 billion in the third quarter.

Despite the fall, Fannie Mae CEO Hugh Frater claims it was a strong quarter for Fannie Mae as it continues to build capital. However, the government-sponsored enterprise remains “significantly undercapitalized” in the third quarter, Fannie Mae admitted in its release.

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“Our results reflect the credit quality of our guaranty book, a growing economy, strong home price growth, and low-interest rates,” Frater said. “However, rising home prices, while good for homeowners and others involved with selling a home, can negatively impact affordability for first-time homebuyers. For too many lower- and middle-income families, affordable housing options are scarce, and inequities persist in the housing economy. We look forward to continuing to work with FHFA and others to advance equitable and sustainable access to homeownership and affordable, quality rental housing for communities across America.”

The GSE’s single-family acquisitions fell from $373.3 billion in Q2 to $296.4 billion in Q3. Purchase acquisitions decreased from $129.5 billion to $115.4 billion quarter over quarter, of which nearly 50% were for first-time homebuyers. Fannie’s refinance acquisitions also declined in the third quarter, down from $243.8 billion to $180.9 billion, but remained at a high level due to the continued low interest-rate environment. Its average single-family conventional guaranty book of business climbed by 2.3% quarter over quarter.

Read more: Number of borrowers looking to refinance continues to decrease

Fannie Mae’s multifamily business volume posted a $16.4 billion gain to $48.8 billion, and its multifamily guaranty book of business increased by $6.2 billion to $408.1 billion.