v3.25.4
Equity
 12 Months Ended
Dec. 31, 2025
Equity [Abstract]  
Equity Equity
Senior Preferred Stock
Liquidation Preference
There were one million shares of the senior preferred stock authorized, issued and outstanding as of December 31,
2025 and 2024. Shares of the senior preferred stock have no par value and have a stated value and initial liquidation
preference equal to $1,000 per share, for an aggregate initial liquidation preference of $1 billion. The senior preferred
stock is non-participating and non-voting.
Under the terms that currently govern the senior preferred stock, the aggregate liquidation preference will be increased
by the following:
•any amounts Treasury pays to us pursuant to its funding commitment under the agreement (as of the date of
this filing, the cumulative amount Treasury has paid to us under its funding commitment is $119.8 billion);
•any quarterly commitment fees that are payable but not paid by us (no such fees have become payable, nor will
such fees be set until the capital reserve end date, as defined in “Note 2, Conservatorship, Senior Preferred
Stock Purchase Agreement and Related Matters”);
•any senior preferred stock dividends that are payable but not paid, regardless of whether or not they are
declared; and
•for each fiscal quarter through and including the capital reserve end date, an amount equal to the increase in
our net worth, if any, during the immediately prior fiscal quarter.
The aggregate liquidation preference of the senior preferred stock was $227.0 billion as of December 31, 2025 and will
further increase to $230.5 billion as of March 31, 2026, due to the $3.5 billion increase in our net worth during the fourth
quarter of 2025.
The senior preferred stock ranks ahead of our common stock and our preferred stock as to both dividends and rights
upon liquidation. As a result, if we are liquidated, the holder of the senior preferred stock is entitled to its then-current
liquidation preference before any distributions are made to the holders of our other equity securities.
Dividend Provisions
Treasury, as the holder of the senior preferred stock, is entitled to receive, when, as and if declared, out of legally
available funds, cumulative quarterly cash dividends. The dividends we have paid to Treasury on the senior preferred
stock were declared by, and paid at the direction of, our conservator. Dividend payments we make on the senior
preferred stock do not restore or increase the amount of Treasury’s funding commitment under the agreement.
We are currently not required to pay or accumulate new dividends on the senior preferred stock until our net worth
exceeds the amount of adjusted total capital necessary for us to meet the capital requirements and buffers set forth in
the enterprise regulatory capital framework. Our net worth is the amount, if any, by which our total assets (excluding
Treasury’s funding commitment and any unfunded amounts related to the commitment) exceed our total liabilities
(excluding any obligation with respect to equity securities). After the capital reserve end date, the quarterly dividends
due on the senior preferred stock will be the lesser of (i) any quarterly increase in our net worth, and (ii) a 10% annual
rate on the then-current liquidation preference of the senior preferred stock (or 12% if we fail to pay dividends due).
We had no dividends declared or paid on the senior preferred stock for the years ended December 31, 2025, 2024 or
2023.
Limitations on Redemption and Paydown of Liquidation Preference; Requirement to Pay Net
Proceeds of Capital Stock Issuances to Reduce Liquidation Preference
We are not permitted to redeem or retire the senior preferred stock prior to the termination of Treasury’s funding
commitment under the agreement. Moreover, we are not permitted to reduce or pay down the liquidation preference of
the senior preferred stock out of regular corporate funds except to the extent of (1) accumulated and unpaid dividends
previously added to the liquidation preference; and (2) quarterly commitment fees previously added to the liquidation
preference. While the senior preferred stock remains outstanding, we are required to use the net cash proceeds of
issuances of equity securities to pay down the liquidation preference of the senior preferred stock; however, we are
permitted to retain up to $70 billion in aggregate gross cash proceeds from issuances of common stock. The liquidation
preference of the senior preferred stock may not be paid down below $1,000 per share prior to the termination of
Treasury’s funding commitment. After termination, we may fully pay down the liquidation preference of the senior
preferred stock.
Common Stock Warrant
On September 7, 2008, we, through FHFA in its capacity as conservator, issued to Treasury a warrant to purchase, at a
nominal price of $0.00001 per share, shares of our common stock equal to 79.9% of the total number of shares of our
common stock outstanding on a fully diluted basis on the date the warrant is exercised. The warrant may be exercised
in whole or in part at any time on or before September 7, 2028.
If the market price of one share of common stock is greater than the exercise price, in lieu of exercising the warrant by
payment of the exercise price, Treasury may elect to receive shares equal to the value of the warrant (or portion thereof
being canceled) pursuant to the formula specified in the warrant. Upon exercise of the warrant, Treasury may assign the
right to receive the shares of common stock issuable upon exercise to any other person. If the warrant is exercised, the
stated value of the common stock issued will be reclassified as “Common stock” in our consolidated balance sheets. As
of February 11, 2026, Treasury has not exercised the warrant.
We recorded the warrant at fair value in our stockholders’ equity as a component of additional paid-in-capital. The fair
value of the warrant was calculated using the Black-Scholes Option Pricing Model. Since the warrant has an exercise
price of $0.00001 per share, the model is insensitive to the risk-free rate and volatility assumptions used in the
calculation and the share value of the warrant is equal to the price of the underlying common stock. We estimated that
the fair value of the warrant at issuance was $3.5 billion based on the price of our common stock on September 8, 2008,
which was after the dilutive effect of the warrant had been reflected in the market price. Subsequent changes in the fair
value of the warrant are not recognized in our financial statements.
Preferred Stock
The following table displays our preferred stock outstanding.
Authorized, Issued and Outstanding as of
December 31,
Annual
Dividend Rate
as of
December 31,
2025
2025
2024
Stated
Value per
Share
Title
Issue Date
Shares
Amount
Shares
Amount
Redeemable on or
After
(Dollars and shares in millions, except per share amounts)
Series D
September 30, 1998
3
$150
3
$150
$50
5.250%
September 30, 1999
Series E
April 15, 1999
3
150
3
150
50
5.100
April 15, 2004
Series F
March 20, 2000
14
690
14
690
50
4.482
(1)
March 31, 2002
(2)
Series G
August 8, 2000
6
288
6
288
50
3.368
(3)
September 30, 2002
(2)
Series H
April 6, 2001
8
400
8
400
50
5.810
April 6, 2006
Series I
October 28, 2002
6
300
6
300
50
5.375
October 28, 2007
Series L
April 29, 2003
7
345
7
345
50
5.125
April 29, 2008
Series M
June 10, 2003
9
460
9
460
50
4.750
June 10, 2008
Series N
September 25, 2003
5
225
5
225
50
5.500
September 25, 2008
Series O
December 30, 2004
50
2,500
50
2,500
50
7.000
(4)
December 31, 2007
Convertible Series
2004-I(5)
December 30, 2004
—
2,492
—
2,492
100,000
5.375
January 5, 2008
Series P
September 28, 2007
40
1,000
40
1,000
25
4.684
(6)
September 30, 2012
Series Q
October 4, 2007
15
375
15
375
25
6.750
September 30, 2010
Series R(7)
November 21, 2007
21
530
21
530
25
7.625
November 21, 2012
Series S
December 11, 2007
280
7,000
280
7,000
25
8.164
(8)
December 31, 2010
(9)
Series T(10)
May 19, 2008
89
2,225
89
2,225
25
8.250
May 20, 2013
Total
556
$19,130
556
$19,130
(1)Rate effective March 31, 2024. Variable dividend rate resets every two years at a per annum rate equal to the two-year Constant Maturity
U.S. Treasury Rate (“CMT”) minus 0.16% with a cap of 11% per year.
(2)Represents initial call date. Redeemable every two years thereafter.
(3)Rate effective September 30, 2024. Variable dividend rate resets every two years at a per annum rate equal to the two-year CMT rate
minus 0.18% with a cap of 11% per year.
(4)Rate effective December 31, 2025. Variable dividend rate resets quarterly thereafter at a per annum rate equal to the greater of 7% or 10-
year CMT rate plus 2.375%.
(5)Issued and outstanding shares were 24,922 as of December 31, 2025 and 2024.
(6)Rate effective December 31, 2025. In accordance with the Federal Reserve Board’s Regulation ZZ implementing the Adjustable Interest
Rate (LIBOR) Act (“Regulation ZZ”), for quarterly periods beginning after June 30, 2023, the quarterly dividend resets at a per annum rate
equal to the greater of 4.50% or the sum of 3-month CME Term SOFR plus 0.26161% plus 0.75%.
(7)On November 21, 2007, we issued 20 million shares of preferred stock in the amount of $500 million. Subsequent to the initial issuance,
we issued an additional 1.2 million shares in the amount of $30 million on December 14, 2007 under the same terms as the initial
issuance.
(8)Rate effective December 31, 2025. In accordance with Regulation ZZ, for quarterly periods beginning after June 30, 2023, the quarterly
dividend resets at a per annum rate equal to the greater of 7.75% or the sum of 3-month CME Term SOFR plus 0.26161% plus 4.23%.
(9)Represents initial call date. Redeemable every five years thereafter.
(10)On May 19, 2008, we issued 80 million shares of preferred stock in the amount of $2 billion. Subsequent to the initial issuance, we issued
an additional 8 million shares in the amount of $200 million on May 22, 2008 and 1 million shares in the amount of $25 million on June 4,
2008 under the same terms as the initial issuance.
The preferred stock ranks junior to the senior preferred stock as to both dividends and distributions upon dissolution,
liquidation or winding down of the company. Each series of our preferred stock has no par value, is non-participating, is
non-voting and has a liquidation preference equal to the stated value per share.
Holders of preferred stock are entitled to receive non-cumulative, quarterly dividends when, and if, declared by our
Board of Directors, but have no right to require redemption of any shares of preferred stock. Payment of dividends on
preferred stock is not mandatory but has priority over payment of dividends on common stock, which are also declared
by the Board of Directors. If dividends on the preferred stock are not paid or set aside for payment for a given dividend
period, dividends may not be paid on our common stock for that period. The senior preferred stock purchase agreement
prohibits the payment of dividends on preferred stock without the prior written consent of Treasury, and the conservator
has separately confirmed the elimination of such dividends. In addition, FHFA’s regulations relating to conservatorship
and receivership operations prohibit us from paying any dividends while in conservatorship unless authorized by the
FHFA Director. As such, we had no dividends declared or paid on the preferred stock for the years ended December 31,
2025, 2024 or 2023.
After a specified period, we have the option to redeem preferred stock at its redemption price plus the dividend (whether
or not declared) for the then-current period accrued to, but excluding, the date of redemption. The redemption price is
equal to the stated value for all issues of preferred stock except Series O, which has a redemption price of $50 to
$52.50 depending on the year of redemption and Convertible Series 2004-1, which has a redemption price of $105,000
per share.
None of our preferred stock is convertible into or exchangeable for any of our other stock or obligations, with the
exception of the Convertible Series 2004-1 which are convertible at any time, at the option of the holders, into shares of
Fannie Mae common stock at a conversion price of $94.31 per share of common stock (equivalent to a conversion rate
of 1,060.3329 shares of common stock for each share of Series 2004-1 Preferred Stock). The conversion price is
adjustable, as necessary, to maintain the stated conversion rate into common stock. Events which may trigger an
adjustment to the conversion price include certain changes in our common stock dividend rate, subdivisions of our
outstanding common stock into a greater number of shares, combinations of our outstanding common stock into a
smaller number of shares and issuances of any shares by reclassification of our common stock. No such events have
occurred.
Our preferred stock is traded in the over-the-counter market.
Common Stock
The common stock ranks junior to the senior preferred stock and the preferred stock as to both dividends and
distributions upon dissolution, liquidation or winding down of the company. Shares of common stock outstanding, net of
shares held as treasury stock, totaled 1.2 billion as of December 31, 2025 and 2024.
During conservatorship, the rights and powers of stockholders are suspended. Accordingly, our common stockholders
have no ability to elect directors or to vote on other matters during the conservatorship unless FHFA elects to delegate
this authority to them. In addition, we issued a warrant to Treasury that provides Treasury with the right to purchase for a
nominal price shares of our common stock equal to 79.9% of the total number of shares of common stock outstanding
on a fully diluted basis on the date of exercise, which would substantially dilute the ownership in Fannie Mae of our
common stockholders at the time of exercise. Refer to the “Senior Preferred Stock” and “Common Stock Warrant”
sections of this note for more information.
The senior preferred stock purchase agreement prohibits the payment of dividends on common stock without the prior
written consent of Treasury and the conservator has separately confirmed the elimination of such dividends. In addition,
FHFA’s regulations relating to conservatorship and receivership operations prohibit us from paying any dividends while
in conservatorship unless authorized by the FHFA Director. As such, we had no dividends declared or paid on the
common stock for the years ended December 31, 2025, 2024 or 2023.
Earnings per Share
Earnings per share (“EPS”) is presented for basic and diluted EPS. However, as a result of our conservatorship status
and the terms of the senior preferred stock, no amounts would be available to distribute as dividends to common or
preferred stockholders (other than to Treasury as the holder of the senior preferred stock).
We compute basic EPS by dividing net income attributable to common stockholders by the weighted-average number of
shares of common stock outstanding during the period. Net income attributable to common stockholders excludes
amounts attributable to the senior preferred stock because such amounts increase the liquidation preference of the
senior preferred stock and therefore are required to be excluded from basic EPS. See further information on the senior
preferred stock above in “Senior Preferred Stock.”
The calculation of diluted EPS includes all the components of basic earnings per share, plus the dilutive effect of
common stock equivalents such as convertible securities and stock options. Weighted-average common shares
outstanding is increased to include the number of additional common shares that would have been outstanding if the
dilutive potential common shares had been issued. Our diluted EPS weighted-average common shares outstanding
includes 26 million shares of convertible preferred stock for the years ended December 31, 2025, 2024 and 2023.
During periods in which a net loss attributable to common stockholders has been incurred, potential common equivalent
shares outstanding are not included in the calculation because it would have an anti-dilutive effect.
We include the shares of common stock that would be issuable upon full exercise of the common stock warrant in the
weighted average shares of outstanding for the computation of both basic and diluted earnings per share because the
warrant’s exercise price per share is considered non-substantive (compared to the market price of our common stock)
and therefore was determined to have characteristics of non-voting common stock. For the years ended December 31,
2025, 2024 and 2023, the common stock warrant added 4.7 billion shares to weighted average common shares
outstanding.