Fannie Mae Trims Costs, Boosts Mbs Purchases To Post $14.4b Profit In 2025

Fannie Mae reported $14.4 billion in profit for 2025, a year in which it provided $409 billion in liquidity to the mortgage market and increased its purchases of mortgage-backed securities (MBS), the company said Wednesday.

Net income declined by $2.6 billion from the prior year, primarily due to a $1.8 billion shift from a benefit for credit losses to a provision for credit losses, along with a $1.7 billion decrease in fair value gains in 2025.

Fannie ended the year with a net worth of $109 billion. It remains the largest guarantor of outstanding residential mortgage debt in the U.S., representing an estimated 25% of single-family and 21% of multifamily mortgage debt.

“For the first time in four years, we reduced annual administrative expenses, positioning the company for long-term success,” Bill Pulte, director of the Federal Housing Finance Agency (FHFA), said in a statement.   

Fannie reduced administrative expenses by $40 million and total noninterest expenses by $141 million in 2025. The enterprise cut its workforce by about 1,200 employees, scaled back contractors and renegotiated key contracts while paying $95 million more in severance.

Acting CEO and chief operating officer Peter Akwaboah said the performance was “driven by disciplined expense management and ongoing progress to simplify our core processes and technology infrastructure.”

Fourth-quarter earnings fell to $3.5 billion, down from $3.9 billion in the third quarter, which reflected fair value changes, lower investment gains and higher administrative expenses. 

“During the quarter, the majority of fair-value losses were driven by the compression in interest rate spreads, which are not covered by hedge accounting,” said chief financial officer Chryssa C. Halley.

Net revenues totaled $7.3 billion in the fourth quarter. Earnings continued to be driven by guaranty fees for providing credit protection on MBS issued in the secondary market, which accounted for 81% of Q4 net revenues.

According to Halley, Fannie increased its holdings of agency MBS to achieve “higher returns and support market and lender liquidity.” In its retained mortgage portfolio, single-family mortgages and mortgage-related securities reached $123.4 billion in 2025, compared to $89.3 billion in 2024.

“We plan to continue investing in agency MBS, while remaining in compliance with portfolio limits and managing the interest rate risk associated with our retained mortgage portfolio,” she said.

Single-family business

Fannie provided liquidity for the purchase of 704,000 homes, the refinancing of 283,000 properties and the purchase of 531,000 rental units in 2025. First-time homebuyers accounted for more than half of single-family purchase mortgages.

In the fourth quarter, the company acquired $96.8 billion in single-family loans, up from $90.4 billion in the prior quarter, driven by a $19.2 billion increase in refinance volume amid a more favorable rate environment.

Halley said that “competitive market dynamics, including the impact of our capital requirements on pricing, compressed our share of new business and made it difficult to fully replace loan runoff with new acquisitions.” She added that these factors could persist in 2026. 

The serious delinquency rate for its single-family loans ended the year at 0.58%, up from 0.56% a year earlier. Foreclosure prevention solutions reached nearly 99,000 homeowners. The average credit score was 753 and the loan-to-value ratio averaged 51%, the company said.. 

“We saw increases in delinquencies in the fourth quarter. The 4-basis-point increase in single-family seriously delinquent loans was due primarily to seasonal factors and an increase in forbearance from the government shutdown,” Halley said.