Allowance for Credit Losses

12 Months Ended

Dec. 31, 2025

Allowance for Credit LossesWe maintain an allowance for credit losses for HFI loans held by Fannie Mae and by consolidated Fannie Mae MBS

trusts. In addition, we maintain allowances for credit losses on advances of pre-foreclosure costs, accrued interest

receivable, guaranty loss reserves, and credit reserves on AFS debt securities.The following table displays changes in single-family and multifamily allowance for credit losses as well as the

components of the single-family and multifamily allowance for credit losses.


	For the Year Ended December 31,
	2025	2024	2023
	(Dollars in millions)
Single-family allowance for credit losses:
Beginning balance	$(5,487)	$(6,868)	$(9,703)
(Provision) benefit for credit losses	(1,323)	938	2,165
Write-offs	740	733	880
Recoveries	(202)	(290)	(210)
Ending balance	$(6,272)	$(5,487)	$(6,868)
Multifamily allowance for credit losses:
Beginning balance	$(2,399)	$(2,066)	$(1,913)
(Provision) benefit for credit losses	(283)	(752)	(495)
Write-offs	470	505	401
Recoveries	(108)	(86)	(59)
Ending balance	$(2,320)	$(2,399)	$(2,066)
Total allowance for credit losses:
Beginning balance	$(7,886)	$(8,934)	$(11,616)
(Provision) benefit for credit losses	(1,606)	186	1,670
Write-offs	1,210	1,238	1,281
Recoveries	(310)	(376)	(269)
Ending balance	$(8,592)	$(7,886)	$(8,934)

Components of allowance for credit losses
	For the Year Ended December 31,
	2025	2024	2023
Single-family allowance for credit losses:
Allowance for loan losses	$(6,056)	$(5,319)	$(6,671)
Other(1)	(216)	(168)	(197)
Total	$(6,272)	$(5,487)	$(6,868)

Multifamily allowance for credit losses:
Allowance for loan losses	$(2,308)	$(2,388)	$(2,059)
Other(1)	(12)	(11)	(7)
Total	$(2,320)	$(2,399)	$(2,066)

Total allowance for credit losses:
Allowance for loan losses	$(8,364)	$(7,707)	$(8,730)
Other(1)	(228)	(179)	(204)
Total	$(8,592)	$(7,886)	$(8,934)

(1)Consists of allowance for credit losses on advances of pre-foreclosure costs, accrued interest receivable, our guaranty loss reserves, and

credit reserves on our AFS debt securities. Pre-foreclosure costs represent advances for property taxes and insurance receivables.

Our estimate of credit losses can vary substantially from period to period due to factors such as changes in actual and

forecasted home prices, property valuations, and fluctuations in actual and forecasted interest rates. Other drivers

include the volume and credit risk profile of our new acquisitions, borrower payment behavior; events such as natural

disasters or pandemics; the type, volume and effectiveness of our loss mitigation activities, including forbearances and

loan modifications, the volume of completed foreclosures and the volume and pricing of loans redesignated from HFI to

HFS. In addition, updates to the models, assumptions, and data used in determining our estimate for credit losses can

impact our allowance. Changes in our estimate of credit losses are recognized as “(Provision) benefit for credit losses”

in our consolidated statements of operations and comprehensive income.

Our single-family provision for credit losses in 2025 was primarily driven by current-year loan acquisitions and by loan

delinquencies.

•Provision for newly acquired loans. The provision for newly acquired loans was largely attributable to our 2025

single-family acquisitions, which primarily consisted of purchase loans. At acquisition, we record expected

lifetime credit losses for newly acquired loans, resulting in provision for credit losses. Purchase loans generally

have higher original LTV ratios than refinance loans, and as a result, generally carry higher expected lifetime

credit losses than refinance loans.

•Provision from loan delinquencies. As loans migrate into delinquency status, expected credit losses increase

due to higher probabilities of default and greater potential loss severity assumptions. For 2025, provision

related to loan delinquencies was primarily driven by loans that became newly delinquent during the year, as

well as an increase in the population of loans that were 60 days or more past due, which resulted in higher

expected credit losses.

Our single-family benefit for credit losses for 2024 was primarily driven by improvements to our longer-term single-family

home price forecast, partially offset by provision from the risk profile of newly acquired loans, and provision related to

higher mortgage interest rates.

•Home price forecast benefit. We recognized a benefit from improvements to our longer-term single-family home

price forecast. Higher home prices decrease the likelihood that loans will default and reduce the amount of

losses on loans that default, which impacts our estimate of losses and ultimately reduces our loss reserves and

provision for credit losses.

•Provision for newly acquired loans. The provision for newly acquired loans was primarily driven by the credit

risk profile of our 2024 single-family acquisitions, which primarily consisted of purchase loans.

•Provision for higher interest rates. We also recognized provision from higher mortgage interest rates. As

mortgage rates increase, we expect a decrease in future prepayments on single-family loans. Lower expected

prepayments extend the expected life of the loan, which increases our expectation of credit losses.

Our multifamily provision for credit losses in 2025 was primarily driven by an increase in delinquencies including

provision from seriously delinquent loans that were written down to the net recoverable amount of the loans’ collateral

value during the period. These factors were partially offset by a slightly improved long-term forecast of multifamily

property net operating income (“NOI”) and property values.

Our multifamily provision for credit losses in 2024 was primarily driven by declining multifamily property values, an

increase in multifamily loan delinquencies, and provision related to our estimate of losses on loans involving fraud or

suspected fraud. These factors were partially offset by an improved long-term forecast of multifamily property NOI.

•Provision relating to declining multifamily property values. During 2024, multifamily property values declined,

primarily due to elevated interest rates resulting in higher market yield requirements. This decrease in property

values led to higher LTV ratios for loans in our multifamily guaranty book of business, which drove higher

estimated risk of default and loss severity in the allowance and therefore a higher loan loss provision.

•Provision relating to increased delinquencies. Multifamily loan delinquencies increased in 2024, particularly for

adjustable-rate conventional loans that became seriously delinquent and were written down to their net

recoverable amount, which contributed to the multifamily provision for credit losses.

•Provision relating to fraud or suspected fraud. Expected losses relating to multifamily lending transactions

involving fraud or suspected fraud further heightened the risk of default and added to our multifamily loan loss

provision.

•Benefit relating to improved NOI forecast. Our forecast of NOI on multifamily properties improved compared to

our prior forecast, which also positively impacted our projection of multifamily property values. This

improvement in our NOI forecast was primarily due to a refinement of our forecast assumptions to use the

average NOI historical growth rate for a longer period of the forecast.