Summary of Significant Accounting Policies (Policies) |
12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||
| Segment Reporting | We have two reportable business segments: Single-Family and Multifamily. The Single-Family business operates in the secondary mortgage market relating to loans secured by properties containing four or fewer residential dwelling units. The Multifamily business operates in the secondary mortgage market relating primarily to loans secured by properties containing five or more residential units. We have two reportable business segments, which are based on the type of business activities each perform: Single-Family and Multifamily. Results of our two business segments are intended to reflect each segment as if it were a stand- alone business. Our Acting Chief Executive Officer is the chief operating decision maker (“CODM”) for our two reportable business segments. The CODM uses both net revenues and income before federal income taxes, on a quarterly basis, to assess the financial performance of the segments and for purposes of allocating resources. The accounting policies of our two reportable business segments are the same as those described in “Note 1, Summary of Significant Accounting Policies.”
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| Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). To conform to our current-period presentation, we have reclassified certain amounts reported in our prior period consolidated financial statements, including those described below. Changes in Presentation Beginning in the first quarter of 2025, we changed our presentation on the consolidated statements of cash flows for certain borrowings with original contractual maturities of three months or less such that the proceeds from the issuance of these borrowings and the related payments to redeem them are presented on a net basis. Previously, proceeds from the issuance of these borrowings and the related repayments to redeem them were presented separately (i.e., gross) on the consolidated statements of cash flows. As a result of this change, we recast the prior periods presented to reflect the net presentation of cash flows on these borrowings. For borrowings with original contractual maturities greater than three months, we continue to present proceeds from issuance and payments to redeem the borrowings on a gross basis. Beginning in the third quarter of 2025, we changed the presentation of interest income from reverse repurchase agreements to separately disclose interest income from securities purchased under agreements to resell on the consolidated statements of operations and other comprehensive income. We also combined the remaining interest income previously classified as other with interest income from investments in securities. We recast the prior periods presented on the consolidated statements of operations and comprehensive income for these changes. Beginning in the fourth quarter of 2025, we changed the presentation of debt extinguishment gains and losses from "Other income (expense), net" to "Investment gains (losses), net" on the consolidated statements of operations and other comprehensive income. We recast the prior periods presented on the consolidated statements of operations and comprehensive income for this change. Change in Accounting Principle Beginning in the third quarter of 2025, we have changed which financial instruments are presented as cash equivalents and restricted cash equivalents. Previously, we presented U.S. Treasury securities that had a maturity of three months or less at acquisition and overnight reverse repurchase agreements as cash equivalents (both unrestricted and restricted, as appropriate). As a result of this change, all U.S. Treasury securities are presented as “Investments in securities” and all reverse repurchase agreements are presented as “Securities purchased under agreements to resell” on our consolidated balance sheets. Additionally, as a result of this change, there are no financial instruments presented as cash equivalents or restricted cash equivalents as of December 31, 2025 or December 31, 2024. We have concluded that the change in presentation of short-term U.S. Treasury securities and overnight reverse repurchase agreements is a change in accounting principle. Further, we concluded that the change is preferable because it provides consistency in the presentation of our holdings of investment securities and reverse repurchase agreements. Additionally, it more accurately reflects how these investments are managed within our corporate liquidity portfolio. Finally, the change aligns the presentation of short-term U.S. Treasury securities and overnight reverse repurchase agreements with the presentation used by other large financial institutions, increasing the comparability of our financial statements with the financial statements of those entities. The change in accounting principle made in the third quarter of 2025 is reflected in our financial statements on a retrospective basis.
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| Use of Estimates | Use of Estimates Preparing consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of our consolidated financial statements, as well as our reported amounts of revenues and expenses during the reporting periods. Management has made significant estimates in a variety of areas including, but not limited to, the allowance for loan losses. Actual results could be different from these estimates.
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| Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include our accounts as well as the accounts of the other entities in which we have a controlling financial interest. All intercompany balances and transactions have been eliminated. The typical condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. A controlling financial interest may also exist in an entity such as a variable interest entity (“VIE”) through arrangements that do not involve voting interests, such as control over the servicing of the collateral held by the VIE. Fannie Mae’s controlling interest generally arises from arrangements with VIEs. We consolidate VIEs when we have a controlling financial interest in the VIE and are therefore considered the primary beneficiary of the VIE. We are the primary beneficiary of a VIE when we have both the power to direct the activities of the VIE that most significantly impact its economic performance and exposure to losses or benefits of the VIE that could potentially be significant to the VIE. The primary beneficiary determination may change over time as our interest in the VIE changes. Therefore, we evaluate whether we are the primary beneficiary of VIEs in which we have variable interests at both inception and on an ongoing basis. Generally, the assets of our consolidated VIEs can be used only to settle obligations of the VIE, and the creditors of our consolidated VIEs do not have recourse to Fannie Mae, except when we provide a guarantee to the VIE. The measurement of assets and liabilities of VIEs that we consolidate depends on whether we are the transferor of assets into a VIE. When we are the transferor of assets into a VIE that we consolidate at the time of the transfer, we continue to recognize the assets and liabilities of the VIE at the amounts that they would have been recognized if we had not transferred the assets and no gain or loss is recognized. We are the transferor to the VIEs created during our portfolio securitizations; this execution occurs when we purchase loans from third-party sellers for cash and later deposit these loans into an MBS trust. The securities issued through a portfolio securitization are then sold to investors for cash. When we are not the transferor of assets into a VIE that we consolidate, we recognize the assets and liabilities of the VIE in our consolidated financial statements at fair value and a gain or loss for the difference between (1) the fair value of the consideration paid, fair value of noncontrolling interests and the reported amount of any previously held interests, and (2) the net amount of the fair value of the assets and liabilities recognized upon consolidation. However, for the VIEs established under our lender swap program, we do not recognize a gain or loss if the VIEs are consolidated at formation as there is no difference in the respective fair value of (1) and (2) above. We record gains or losses that are associated with the consolidation of VIEs as a component of “Investment gains (losses), net” in our consolidated statements of operations and comprehensive income. A lender swap transaction occurs when a mortgage lender delivers a pool of loans to us, which we immediately deposit into an MBS trust. If we cease to be deemed the primary beneficiary of a VIE, we deconsolidate the VIE. We use fair value to measure the initial cost basis for any retained interests that are recorded upon the deconsolidation of a VIE. Any difference between the fair value and the previous carrying amount of our investment in the VIE is recorded in “Investment gains (losses), net” in our consolidated statements of operations and comprehensive income.
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| Transfers of Financial Assets | Transfers of Financial Assets We evaluate each transfer of financial assets to determine whether we have surrendered control and the transfer qualifies as a sale. If a transfer does not meet the criteria for sale treatment, the transferred assets remain in our consolidated balance sheets and we record a liability to the extent of any proceeds received in connection with the transfer. When a transfer that qualifies as a sale is completed, we derecognize all assets transferred and recognize all assets received and liabilities incurred at fair value. The difference between the carrying basis of the assets transferred and the fair value of the net proceeds from the sale is recorded as a component of “Investment gains (losses), net” in our consolidated statements of operations and comprehensive income. We retain interests from the transfer and sale of mortgage-related securities to unconsolidated single-class and multi-class portfolio securitization trusts. Retained interests are primarily derived from transfers associated with our portfolio securitizations in the form of Fannie Mae securities. We provide additional information on the accounting for retained investment securities in the “Investments in Securities” section of this note.
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| Cash and Restricted Cash | Cash and Restricted Cash Cash and restricted cash in our consolidated balance sheets includes amounts held with depository institutions and the Federal Reserve. Restricted cash primarily represents cash held in accounts that are for the benefit of MBS certificateholders (inclusive of amounts that have been advanced by us under the terms of our guaranty) that will be distributed to the MBS certificateholders on a future date in accordance with the terms of the MBS trust agreements. Cash may also be recognized as restricted cash for certain collateral arrangements for which we do not have the right to use the cash.
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| Securities Purchased Under Agreements to Resell | Securities Purchased Under Agreements to Resell We enter into repurchase agreements that involve contemporaneous trades to purchase and sell securities. As the transferor has not relinquished control over the securities, these transactions are accounted for as secured financings and reported as securities purchased under agreements to resell in our consolidated balance sheets. We present cash flows from securities purchased under agreements to resell as investing activities in our consolidated statements of cash flows.
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| Investments in Securities | Investments in Securities We classify and account for our investments in securities as either trading or available-for-sale (“AFS”). Both trading and AFS securities are measured at fair value in our consolidated balance sheets and the related purchase discounts or premiums are amortized into interest income over the contractual term of the security using the effective yield method. When securities are sold, we recognize realized gains (losses) on AFS securities using the specific identification method. Gains (losses) are classified in the consolidated statements of operations and comprehensive income as follows.
An AFS security is impaired if the fair value of the security is less than its amortized cost. The amount of impairment that represents credit loss is recorded in “(Provision) benefit for credit losses” in our consolidated statements of operations and comprehensive income. When we own Fannie Mae MBS issued by unconsolidated trusts, the asset is recorded in “Investments in securities, at fair value” in our consolidated balance sheets. We determine the fair value of Fannie Mae MBS based on observable market prices because most Fannie Mae MBS are actively traded. For any subsequent purchase or sale of Fannie Mae MBS issued by unconsolidated trusts, we continue to account for any outstanding recorded amounts associated with the guaranty transaction on the same basis of accounting. We do not derecognize any components of the guaranty assets, guaranty obligations, or any other outstanding recorded amounts associated with the guaranty transaction for the Fannie Mae MBS because our contractual obligation to the MBS trust remains in force until the trust is liquidated.
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| Loans Held for Sale | Loans Held for Sale When we acquire mortgage loans that we intend to sell or securitize via trusts that will not be consolidated, we classify the loans as held for sale (“HFS”). We report the carrying value of HFS loans at the lower of cost or fair value. Any excess of an HFS loan’s cost over its fair value is recognized as a valuation allowance with the corresponding amount and subsequent changes in the valuation allowance recognized as “Investment gains (losses), net” in our consolidated statements of operations and comprehensive income. We recognize interest income on HFS loans on an accrual basis unless we determine that the ultimate collection of contractual principal or interest payments in full is not reasonably assured. Purchased premiums and discounts on HFS loans are deferred upon loan acquisition, included in the cost basis of the loan, and not amortized. We determine any lower of cost or fair value adjustment on HFS loans at an individual loan level. In the presentation of our consolidated statements of cash flows, we present cash flows from loans classified as HFS at acquisition as operating activities. If a loan is initially classified as held for investment (“HFI”) and it is redesignated to HFS, the principal cash flows and sales proceeds from such loans continue to be presented as investing activities in our consolidated statements of cash flows. Our accounting for redesignations to HFS differs based upon the loan’s classification as either nonperforming or performing. Nonperforming loans include both seriously delinquent and reperforming loans. For both single-family and multifamily loans, reperforming loans are loans that were previously delinquent but are performing again because payments on the loan have become current with or without the use of a loan modification plan. Single-family seriously delinquent loans are loans that are 90 days or more past due or in the foreclosure process. Multifamily seriously delinquent loans are loans that are 60 days or more past due. All other loans are considered performing. For nonperforming loans redesignated from HFI to HFS, based upon a change in our intent, we record the loans at the lower of cost or fair value on the date of redesignation. When the fair value of the nonperforming loan is less than its amortized cost, we record a write-off against the allowance for loan losses in an amount equal to the excess of the amortized cost basis over the fair value of the loan. Any difference between the amount written off upon redesignation and the recorded valuation allowance related to the redesignated loan is recognized in “(Provision) benefit for credit losses” in our consolidated statements of operations and comprehensive income. For performing loans redesignated from HFI to HFS, based upon a change in our intent, the allowance for loan losses previously recorded on the HFI mortgage loan is reversed through “(Provision) benefit for credit losses” at the time of redesignation. The loan is redesignated to HFS at its amortized cost basis and a valuation allowance is established to the extent that the amortized cost basis of the loan exceeds its fair value. The initial recognition of the valuation allowance and any subsequent changes are recorded as a gain or loss in “Investment gains (losses), net.” Upon redesignation from HFS to HFI, we reverse the valuation allowance on the loan, if any, and establish an allowance for loan losses as needed.
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| Loans Held for Investment | Loans Held for Investment When we acquire loans that we have the ability and the intent to hold for the foreseeable future or until maturity, we classify the loans as HFI. When we consolidate a securitization trust, we recognize the loans underlying the trust in our consolidated balance sheets. The trusts do not have the ability to sell loans and the use of such loans is limited exclusively to the settlement of obligations of the trusts. Therefore, loans acquired when we have the intent to securitize via consolidated trusts are generally classified as HFI in our consolidated balance sheets both prior to and subsequent to their securitization. In the presentation of our consolidated statements of cash flows, we present principal cash flows from loans classified as HFI as investing activities and interest cash flows as operating activities. We report the carrying value of HFI loans at the unpaid principal balance (“UPB”), net of unamortized premiums and discounts, other cost basis adjustments, and allowance for loan losses. We define the amortized cost of HFI loans as UPB and accrued interest receivable, net, including any unamortized premiums, discounts, and other cost basis adjustments. We present accrued interest receivable separately from the amortized cost of our HFI loans in our consolidated balance sheets. We recognize interest income on HFI loans on an accrual basis using the effective yield method over the contractual life of the loan, including the amortization of any deferred cost basis adjustments, such as the premium or discount at acquisition, unless we determine that the ultimate collection of contractual principal or interest payments in full is not reasonably assured. we report the amortized cost of HFI loans for which we have not elected the fair value option at the UPB, adjusted for unamortized premiums and discounts, hedge-related basis adjustments, other cost basis adjustments, and accrued interest receivable. Within our consolidated balance sheets, we present accrued interest receivable, net separately from the amortized cost of our loans held for investment.
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| Nonaccrual Loans and Allowance for Loan Losses | Nonaccrual Loans We recognize interest income on an accrual basis except when we believe the collection of principal and interest in full is not reasonably assured. This generally occurs when a single-family loan is 90 days or more past due and a multifamily loan is 60 days or more past due according to its contractual terms. A loan is reported as past due if a full payment of principal and interest is not received within one month of its due date. When a loan is placed on nonaccrual status based on delinquency status, interest previously accrued but not collected on the loan is reversed through interest income. Cost basis adjustments on HFI loans are amortized into interest income over the contractual life of the loan using the effective yield method. Cost basis adjustments on the loan are not amortized into income while a loan is on nonaccrual status. We have elected not to measure an allowance for credit losses on accrued interest receivable balances as we have a nonaccrual policy to ensure the timely reversal of unpaid accrued interest. For single-family loans, we recognize any contractual interest payments received on the loan while on nonaccrual status as interest income on a cash basis. For multifamily loans, we account for interest income on a cost recovery basis and we apply any payment received while on nonaccrual status to reduce the amortized cost of the loan. Thus, we do not recognize any interest income on a multifamily loan placed on nonaccrual status until the amortized cost of the loan has been reduced to zero. A nonaccrual loan is returned to accrual status when the full collection of principal and interest is reasonably assured. We generally determine that the full collection of principal and interest is reasonably assured when the loan returns to current payment status. If a loan is restructured for a borrower experiencing financial difficulty, we require a performance period of up to 6 months before we return the loan to accrual status. Upon a loan’s return to accrual status, we resume the recognition of interest income on an accrual basis and the amortization of cost basis adjustments, if any, into interest income. If interest is capitalized pursuant to a restructuring, any capitalized interest that had not been previously recognized as interest income or that had been reversed through interest income when the loan was placed on nonaccrual status is recorded as a discount to the loan and amortized into interest income over the remaining contractual life of the loan. Allowance for Loan Losses Our allowance for loan losses is a valuation account that is deducted from the amortized cost basis of HFI loans to present the net amount expected to be collected on the loans. The allowance for loan losses reflects an estimate of expected credit losses on single-family and multifamily HFI loans held by Fannie Mae and by consolidated MBS trusts. Estimates of credit losses are based on expected cash flows derived from internal models that estimate loan performance under simulated ranges of economic environments. Our modeled loan performance is based on our historical experience of loans with similar risk characteristics, adjusted to reflect current conditions and reasonable and supportable forecasts. Our historical loss experience and our credit loss estimates capture the possibility of remote events that could result in credit losses on loans that are considered low risk. Changes to our estimate of expected credit losses, including changes due to the passage of time, are recorded through the “(Provision) benefit for credit losses” in our consolidated statements of operations and comprehensive income. When calculating our allowance for loan losses, we consider only our amortized cost in the loans at the balance sheet date. We record write-offs as a reduction to the allowance for loan losses when amounts are deemed uncollectible. When losses are confirmed through the receipt of assets in satisfaction of a loan, such as the underlying collateral upon foreclosure or cash upon completion of a short sale, we record a write-off in an amount equal to the excess of a loan’s amortized cost over fair value of assets received. We include expected recoveries of amounts previously written off and expected to be written off in determining our allowance for loan losses. The allowance for loan losses does not consider benefits from freestanding credit enhancements, such as our Connecticut Avenue Securities® (“CAS”) and Credit Insurance Risk Transfer™ (“CIRT™”) programs and multifamily Delegated Underwriting and Servicing (“DUS®”) lender risk-sharing arrangements, which are recorded in “Other assets” in our consolidated balance sheets. Changes in benefits recognized from freestanding credit enhancements are recorded in “Other income (expense), net” in our consolidated statements of operations and comprehensive income. Single-Family Loans We estimate the amount expected to be collected on our single-family loans using a discounted cash flow approach. Our allowance for loan losses is calculated as the difference between the amortized cost basis of the loan and the present value of expected cash flows on the loan. Expected cash flows include payments from the borrower, net of fees retained by a third-party for servicing, contractually attached credit enhancements and proceeds from the sale of the underlying collateral, net of selling costs. When foreclosure of a single-family loan is probable, the allowance for loan losses is calculated as the difference between the amortized cost basis of the loan and the fair value of the collateral as of the reporting date, adjusted for the estimated costs to sell the property and the amount of expected recoveries from contractually attached credit enhancements or other proceeds we expect to receive. Expected cash flows are developed using internal models that capture market and loan characteristic inputs. Market inputs include information such as actual and forecasted home prices, interest rates, volatility and spreads, while loan characteristic inputs include information such as mark-to-market loan-to-value (“LTV”) ratios, delinquency status, geography and borrower credit scores. The model assigns a probability to borrower events including contractual payment, loan payoff and default under various economic environments based on historical data, current conditions and reasonable and supportable forecasts. The two primary drivers of our forecasted economic environments are interest rates and home prices. Our model projects the range of possible interest rate scenarios over the life of the loan based on actual interest rates and observed option pricing volatility in the capital markets. For single-family home prices, we develop regional forecasts based on Metropolitan Statistical Area data using a multi-path simulation that captures home price projections over a five-year period, the period for which we can develop reasonable and supportable forecasts. After the five-year period, the home price forecast reverts to a historical long-term growth rate. Expected cash flows on the loan are discounted at the effective interest rate on the loan, adjusted for expected prepayments. We update the discount rate of the loan each reporting period to reflect changes in expected prepayments. Multifamily Loans Our allowance for loan losses on multifamily loans is calculated based on estimated probabilities of default and loss severities to derive expected loss ratios, which are then applied to the amortized cost basis of the loans. Our probabilities of default and severity are estimated using internal models based on historical loss experience of loans with similar risk characteristics that affect credit performance, such as debt service coverage ratio (“DSCR”), mark-to- market LTV ratio, collateral type, age, loan size, geography, prepayment penalty term and note type. Our models simulate a range of possible future economic scenarios, which are used to estimate probabilities of default and loss severities. Key inputs to our models include net operating income and property values. These inputs are both projected based on Metropolitan Statistical Area data over the expected life of each loan. When foreclosure of a multifamily loan is probable, the allowance for loan losses is calculated as the difference between the amortized cost basis of the loan and the fair value of the collateral as of the reporting date, adjusted for the estimated costs to sell the property. Restructured Loans We may modify loans to borrowers experiencing financial difficulty as part of our loss mitigation activities and consider the effects of both actual and estimated restructurings in our estimate of expected credit losses. Loan restructurings are evaluated to determine whether they result in a new loan or a continuation of an existing loan. Loan restructurings are generally accounted for as a continuation of the existing loan when borrowers are experiencing financial difficulty as the terms of the restructured loans are typically not at market rates. Further, the allowance for loan losses does not measure the economic concession that is provided to the borrower because, when a discount rate is used to measure impairment, it is based on the loan’s restructured terms. For most restructurings that occurred prior to January 1, 2022, we continue to apply the troubled debt restructuring (“TDR”) accounting model. Under the TDR accounting model, we use the discount rate in effect prior to the restructuring to measure impairment on each loan, which results in the recognition of the economic concession granted to borrowers as part of the restructuring in the allowance for loan losses. As a result, the economic concession related to these loans will continue to be measured in our allowance for loan losses and may increase or decrease as we update our cash flow assumptions related to the loan’s expected life. Further, the component of the allowance for loan losses representing economic concessions will decrease as the borrower makes payments in accordance with the restructured terms of the loan and as the loan is sold, liquidated, or subsequently restructured.The estimated mark-to-market LTV ratio is a primary factor we consider when estimating our allowance for loan losses for single-family loans. As LTV ratios increase, the borrower’s equity in the home decreases, which may negatively affect the borrower’s ability to refinance or to sell the property for an amount at or above the outstanding balance of the loan. 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
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| Advances to Lenders | Advances to Lenders Advances to lenders represent our payments of cash in exchange for the receipt of loans from lenders in a transfer that is accounted for as a secured lending arrangement. These transfers primarily occur when we provide early funding to lenders for loans that they will subsequently either sell to us or securitize into a Fannie Mae MBS that they will deliver to us. We individually negotiate early lender funding advances with our lenders. Early lender funding advances have terms up to 60 days and earn a short-term market rate of interest. We report cash outflows from advances to lenders as an investing activity in our consolidated statements of cash flows. Settlements of the advances to lenders, other than through lender repurchases of loans, are not collected in cash, but rather in the receipt of either loans or Fannie Mae MBS. Accordingly, this activity is reflected as non-cash supplemental information, which is disclosed in the “Non-Cash Activities Related to Mortgage Loans” table of “Note 4, Mortgage Loans” in the line item entitled “Mortgage loans received by consolidated trusts to satisfy advances to lenders.”
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| Income Taxes | Income Taxes We recognize deferred tax assets and liabilities based on the differences in the book and tax bases of assets and liabilities. We measure deferred tax assets and liabilities using enacted tax rates that are applicable to the periods that the differences are expected to reverse. We adjust deferred tax assets and liabilities for the effects of changes in tax laws and rates in the period of enactment. We recognize investment and other tax credits through our effective tax rate calculation assuming that we will be able to realize the full benefit of the credits. We invest in Low-Income Housing Tax Credit (“LIHTC”) projects pursuant to Section 42 of the Internal Revenue Code, which generate both tax credits and net operating losses. We elect the proportional amortization method and amortize the cost of a LIHTC investment each reporting period in proportion to the tax credits and other tax benefits received. We recognize the resulting amortization as a component of the “Provision for federal income taxes” in our consolidated statements of operations and comprehensive income. We present deferred taxes net in our consolidated balance sheets. We reduce our deferred tax assets by an allowance if, based on the weight of available positive and negative evidence, it is more likely than not (a probability of greater than 50%) that we will not realize some portion, or all, of the deferred tax asset. We account for uncertain tax positions using a two-step approach whereby we recognize an income tax benefit if, based on the technical merits of a tax position, it is more likely than not that the tax position would be sustained upon examination by the taxing authority, which includes all related appeals and litigation. We then measure the recognized tax benefit based on the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement with the taxing authority, considering all information available at the reporting date. We recognize any associated interest as a component of income before federal income taxes in our consolidated statements of operations and comprehensive income. Our tax years 2022 through 2024 remain open to examination by the Internal Revenue Service (“IRS”). We evaluate our deferred tax assets for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including our historical profitability and projections of future taxable income. Our framework for assessing the recoverability of deferred tax assets requires us to weigh all available evidence, to the extent it exists, including: •the sustainability of recent profitability required to realize the deferred tax assets; •the cumulative net income or losses in our consolidated statements of operations and comprehensive income in recent years; •unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels on a continuing basis in future years; •the carryforward period for capital losses; and •tax planning strategies.
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| Derivative Instruments | Derivative Instruments We recognize derivatives in a gain position in “Other assets” and derivatives in a loss position in “Other liabilities” in our consolidated balance sheets at their fair value on a trade date basis. Changes in fair value and interest accruals on derivatives not in qualifying fair value hedging relationships are recorded as “Fair value gains (losses), net” in our consolidated statements of operations and comprehensive income. We offset the carrying amounts of certain derivatives that are in gain positions and loss positions as well as cash collateral receivables and payables associated with derivative positions pursuant to the terms of enforceable master netting arrangements. We offset these amounts only when we have the legal right to offset under the contract and we have met all the offsetting conditions. For our over-the-counter (“OTC”) derivative positions, our master netting arrangements allow us to net derivative assets and liabilities with the same counterparty. For our cleared derivative contracts, our master netting arrangements allow us to net our exposure by clearing organization and by clearing member. We present cash flows from derivatives that do not contain financing elements and their related gains and losses as operating activities in our consolidated statements of cash flows. We evaluate financial instruments that we purchase or issue and other financial and non-financial contracts for embedded derivatives. To identify embedded derivatives that we must account for separately, we determine whether: (1) the economic characteristics of the embedded derivative are not clearly and closely related to the economic characteristics of the financial instrument or other contract (i.e., the host contract); (2) the financial instrument or other contract itself is not already measured at fair value with changes in fair value included in earnings; and (3) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the embedded derivative meets all three of these conditions, we elect to carry the hybrid contract in its entirety at fair value with changes in fair value recorded in earnings. Fair Value Hedge Accounting To reduce earnings volatility related to changes in benchmark interest rates, we apply fair value hedge accounting to certain pools of single-family loans and certain issuances of our funding debt by designating such instruments as the hedged item in hedging relationships with interest-rate swaps. In these relationships, we have designated the change in the benchmark interest rate, the Secured Overnight Financing Rate (“SOFR”), as the risk being hedged. We have elected to use the portfolio layer method to hedge certain pools of single-family loans. This election involves establishing fair value hedging relationships on the portion of each loan pool that is not expected to be affected by prepayments, defaults and other events that affect the timing and amount of cash flows. The term of each hedging relationship is generally one business day and we typically establish hedging relationships each business day to align our hedge accounting with our risk management practices. We apply hedge accounting to qualifying hedging relationships. A qualifying hedging relationship exists when changes in the fair value of a derivative hedging instrument are expected to be highly effective in offsetting changes in the fair value of the hedged item attributable to the risk being hedged during the term of the hedging relationship. We assess hedge effectiveness using statistical regression analysis. A hedging relationship is considered highly effective if the total change in fair value of the hedging instrument and the change in the fair value of the hedged item due to changes in the benchmark interest rate offset each other within a range of 80% to 125% and certain other statistical tests are met. If a hedging relationship qualifies for hedge accounting, the change in the fair value of the interest-rate swap and the change in the fair value of the hedged item for the risk being hedged are recorded through net interest income. A corresponding basis adjustment is recorded against the hedged item, either the pool of loans or the debt, for the changes in the fair value attributable to the risk being hedged. For hedging relationships that hedge pools of single- family loans, basis adjustments are allocated to individual single-family loans based on the relative UPB of each loan at the termination of the hedging relationship. The cumulative basis adjustments on the hedged item are amortized into earnings using the effective yield method over the contractual life of the hedged item, with amortization beginning upon termination of the hedging relationship. All changes in fair value of the designated portion of the derivative hedging instrument (i.e., interest-rate swap), including interest accruals, are recorded in the same line item in the consolidated statements of operations and comprehensive income used to record the earnings effect of the hedged item. Therefore, changes in the fair value of the hedged loans and debt attributable to the risk being hedged are recognized in “Interest income” or “Interest expense,” respectively, along with the changes in the fair value of the respective derivative hedging instruments. The recognition of basis adjustments on the hedged item and the subsequent amortization are noncash activities and are removed from net income to derive the “Net cash provided by (used in) operating activities” in our consolidated statements of cash flows. Cash paid or received on designated derivative instruments during a hedging relationship is reported as “Net cash provided by (used in) operating activities” in the consolidated statements of cash flows. Commitments to Purchase and Sell Loans and Securities We enter into commitments to purchase and sell mortgage-backed securities and to purchase single-family and multifamily loans. Certain of these commitments to purchase or sell mortgage-backed securities and to purchase single- family loans are accounted for as derivatives, while other commitments are not within the scope of the derivative accounting criteria or do not meet the definition of a derivative. Our commitments for the purchase and sale of regular-way securities trades are exempt from derivative accounting and are recorded on their trade date. When derivative purchase commitments settle, we include the fair value on the settlement date in the cost basis of the loan or unconsolidated security we purchase. When derivative commitments to sell securities settle, we include the fair value of the commitment on the settlement date in the cost basis of the security we sell. Purchases and sales of securities issued by our consolidated single-class securitization trusts and certain resecuritization trusts where the security that has been issued by the trust is substantially the same as the underlying collateral are treated as extinguishments or issuances of the underlying MBS debt, respectively. For commitments to purchase and sell securities issued by these trusts, we recognize the fair value of the commitment on the settlement date as a component of debt extinguishment gains and losses or in the cost basis of the debt issued, respectively. We recognize all derivatives as either assets or liabilities in our consolidated balance sheets at their fair value on a trade-date basis.
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| Collateral | Collateral We enter into various transactions where we pledge and accept collateral, the most common of which are our derivative transactions. Required collateral levels vary depending on the credit rating and type of counterparty. We also pledge and receive collateral under our repurchase and reverse repurchase agreements. In order to reduce potential exposure to counterparties for securities purchased under agreements to resell, a third-party custodian typically maintains the collateral and any margin. We monitor the fair value of the collateral received from our counterparties, and we may require additional collateral from those counterparties in accordance with contractual terms. Cash Collateral We record cash collateral accepted from a counterparty that we have the right to use as “Cash” and cash collateral accepted from a counterparty that we do not have the right to use as “Restricted cash” in our consolidated balance sheets. We net our obligation to return cash collateral pledged to us against the fair value of derivatives in a gain position recorded in “Other assets” in our consolidated balance sheets when the offsetting requirements have been met as part of our counterparty netting calculation. For derivative positions with the same counterparty under master netting arrangements where we pledge cash collateral, we remove it from “Cash” and net the right to receive it against the fair value of derivatives in a loss position recorded in “Other liabilities” in our consolidated balance sheets as a part of our counterparty netting calculation. Non-Cash Collateral We classify securities pledged to counterparties as “Investments in securities, at fair value” in our consolidated balance sheets. Securities that we own that are pledged to counterparties may include securities issued by consolidated VIEs. The pledged collateral is classified as “Mortgage loans” when the trust that issued the security has been consolidated to align with the classification of the underlying asset. We posted U.S. Treasury securities of $8.2 billion and $8.9 billion as collateral as of December 31, 2025 and December 31, 2024, respectively. The fair value of non-cash collateral received was $45.6 billion and $56.3 billion, of which $43.4 billion and $49.0 billion could be sold or repledged, as of December 31, 2025 and December 31, 2024, respectively. None of the underlying collateral we received was sold or repledged as of December 31, 2025 or December 31, 2024.
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| Debt | Debt Our consolidated balance sheets contain debt of Fannie Mae as well as debt of consolidated trusts. We report debt issued by us as “Debt of Fannie Mae” and by consolidated trusts as “Debt of consolidated trusts.” Debt issued by us represents debt that we issue to third parties to fund our general business activities and certain credit risk-sharing securities. The debt of consolidated trusts represents the amount of Fannie Mae MBS issued from such trusts that is held by third-party certificateholders and prepayable without penalty at any time. We report deferred items, including premiums, discounts and other cost basis adjustments, as adjustments to the related debt balances in our consolidated balance sheets. Our liability to third-party holders of Fannie Mae MBS that arises as the result of a consolidation of a securitization trust is collateralized by the underlying loans and/or mortgage-related securities. We classify interest expense as either short-term or long-term based on the contractual maturity of the related debt. We recognize the amortization of premiums, discounts and other cost basis adjustments through interest expense using the effective yield method over the contractual term of the debt. Amortization of premiums, discounts and other cost basis adjustments begins at the time of debt issuance. We purchase and sell guaranteed MBS that have been issued through lender swap and portfolio securitization transactions. When we purchase or sell a Fannie Mae MBS issued from a consolidated single-class securitization trust and certain resecuritization trusts where the security that has been issued by the trust is substantially the same as the underlying collateral, we extinguish or issue, respectively, the related debt of the consolidated trust to reflect the debt that is owed to a third-party. For the extinguishment of debt, we record debt extinguishment gains or losses related to debt of consolidated trusts for any difference between the purchase price of the MBS and the carrying value of the related consolidated MBS debt reported in our consolidated balance sheets (including unamortized premiums, discounts and other cost basis adjustments) at the time of purchase as a component of “Investment gains (losses), net” in our consolidated statements of operations and comprehensive income. When we issue consolidated debt, the debt is recorded at its fair value with any premiums or discounts amortized over the securities’ contractual life.
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| New Accounting Guidance | New Accounting Guidance Income Taxes In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the required disclosures primarily related to the income tax rate reconciliation and income taxes paid. The ASU requires an entity’s income tax rate reconciliation to provide additional information for reconciling items meeting a quantitative threshold, and to disclose certain selected categories within the income tax rate reconciliation. The ASU also requires entities to disclose the amount of income taxes paid, disaggregated by federal, state and foreign taxes. We adopted this ASU retrospectively for the annual period ended December 31, 2025. The adoption of this guidance did not have a material impact on our consolidated financial statements. Purchased Financial Assets In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans which amends the guidance to align the accounting for purchased seasoned loans with the accounting for purchases of financial assets that have experienced more-than-insignificant credit deterioration since origination. Specifically, the ASU requires a “gross-up approach” on purchased seasoned loans such that the initial measurement of the loan is equal to the purchase price plus the expected credit losses on the loan at the date of acquisition. Seasoned purchased loans include loans obtained in a business combination and loans acquired more than 90 days after their origination date by a transferee that was not involved in their origination. The ASU is effective for reporting periods beginning after December 15, 2026 and the guidance is applied prospectively to loans acquired on or after January 1, 2027. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements
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| Conservatorship | Conservatorship In September 2008, FHFA was appointed as our conservator pursuant to authority provided by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (the “GSE Act”). Conservatorship is a statutory process designed to preserve and conserve our assets and property and put the company in a sound and solvent condition. Our conservatorship has no specified termination date. FHFA, as conservator, succeeded to: •all rights, titles, powers and privileges of Fannie Mae, and of any stockholder, officer or director of Fannie Mae with respect to Fannie Mae and its assets; and •title to the books, records and assets of any other legal custodian of Fannie Mae. As conservator, FHFA has broad authority over our business and operations, including the authority to: •direct us to enter into contracts or enter into contracts on our behalf; and •transfer or sell our assets or liabilities. The GSE Act provides special protections for mortgage loans and mortgage-related assets we hold in trust. Specifically, mortgage loans and mortgage-related assets that have been transferred to a Fannie Mae MBS trust must be held by the conservator for the beneficial owners of such MBS and cannot be used to satisfy the company’s general creditors. While we are operating in conservatorship, our directors: •serve on behalf of the conservator; •exercise their authority as directed by and with the approval (where required) of the conservator; •owe their fiduciary duties of care and loyalty solely to the conservator, and not to either the company or the stockholders; and •are elected by the conservator, not by our stockholders. FHFA, as conservator, has issued an order authorizing our Board of Directors to exercise specified functions and authorities, and instructions regarding matters for which conservator decision or notification is required. The conservator retains the authority to amend or withdraw its order and instructions at any time. The conservator has suspended stockholder meetings since conservatorship, and our common stockholders are not empowered to vote on directors or any other matters. The conservator also eliminated dividends on our common and preferred stock (other than dividends on the senior preferred stock described below) during the conservatorship. Receivership Under the GSE Act, the FHFA Director must place us into receivership if he determines that our assets are less than our obligations (that is, we have a net worth deficit) or if we have not been paying our debts as they become due, in either case, for a period of 60 days. FHFA has clarified that the 60-day measurement period will commence no earlier than the SEC filing deadline for our Form 10-K or Form 10-Q for the relevant period. In addition, the FHFA Director may, with the prior consent of Treasury, place us into receivership at the Director’s discretion at any time for other reasons set forth in the GSE Act, including if we are critically undercapitalized or if we are undercapitalized and have no reasonable prospect of becoming adequately capitalized. Should we be placed into receivership, different assumptions would be required to determine the carrying value of our assets, which would likely lead to substantially different financial results.
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| Related Parties | Related Parties Because Treasury holds a warrant to purchase shares of Fannie Mae common stock equal to 79.9% of the total number of shares of Fannie Mae common stock, we and Treasury are deemed related parties. As of December 31, 2025, Treasury held an investment in our senior preferred stock with an aggregate liquidation preference of $227.0 billion. FHFA’s control of both Fannie Mae and Freddie Mac has caused Fannie Mae, FHFA and Freddie Mac to be deemed related parties. Additionally, Fannie Mae and Freddie Mac jointly own U.S. Financial Technology, LLC (“U.S. FinTech”), formerly named Common Securitization Solutions, LLC, a limited liability company created to operate a common securitization platform; as a result, U.S. FinTech is deemed a related party. Recurring transactions with our related parties are described below:
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| Financing Receivable, Loss Mitigation | As part of our loss mitigation activities, we may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. In addition to loan modifications, we also provide other loss mitigation options to assist borrowers who experience financial difficulties. Below we provide disclosures relating to loan restructurings where borrowers were experiencing financial difficulty, including restructurings that resulted in an insignificant payment delay. The disclosures exclude loans classified as held for sale and those for which we have elected the fair value option.Single-Family Loan Restructurings We offer several types of restructurings to single-family borrowers that may result in a payment delay, interest rate reduction, term extension, or combination thereof. We do not typically offer principal forgiveness. We offer the following types of restructurings to single-family borrowers that only result in a payment delay: •a forbearance plan is a short-term loss mitigation option which grants a period of time (typically in 6-month increments and generally do not exceed a total of 12 months) during which the borrower’s monthly payment obligations are reduced or suspended. A forbearance plan does not impact our reporting of when a loan is considered past due, which remains based on the contractual terms of the loan. Borrowers may exit a forbearance plan by repaying all past due amounts to fully reinstate the loan, paying off the loan in full, or entering into another loss mitigation option, such as a repayment plan, a payment deferral, or a loan modification. •a repayment plan is a short-term loss mitigation option that allows borrowers a specific period of time to return the loan to current status by paying the regular monthly payment plus additional agreed-upon delinquent amounts (generally for a period up to 12 months and the monthly repayment plan amount must not exceed 150% of the contractual mortgage payment). A repayment plan does not impact our reporting of when a loan is considered past due, which remains based on the contractual terms of the loan. At the end of the repayment plan, the borrower resumes making the regular monthly payment; and •a payment deferral is a loss mitigation option which defers the repayment of the delinquent principal and interest payments and other eligible default-related amounts that were advanced on behalf of the borrower by converting them into a non-interest-bearing balance due at the earlier of the payoff date, the maturity date, or sale or transfer of the property. The remaining mortgage terms, interest rate, payment schedule, and maturity date remain unchanged, and no trial period is required. The number of months of payments deferred varies based on the types of hardships the borrower is facing. We also offer single-family borrowers loan modifications, which contractually change the terms of the loan. Our loan modification programs generally require completion of a trial period of three to four months where the borrower makes reduced monthly payments prior to receiving the modification. During the trial period, the mortgage loan is not contractually modified and continues to be reported as past due according to its contractual terms. The reduced payments that are made by the borrower during the trial period will result in a payment delay with respect to the original contractual terms of the loan. After successful completion of the trial period, and the borrower’s execution of a modification agreement, the mortgage loan is contractually modified. Loan modifications include the following concessions as necessary to achieve a targeted payment reduction as outlined by our Servicing Guide: •capitalization of past due amounts, a form of payment delay, which capitalizes interest and other eligible default related amounts that were advanced on behalf of the borrower that are past due into the UPB; and •a term extension, which may extend the contractual maturity date of the loan up to 40 years from the effective date of the modification. In addition to these concessions, loan modifications may also include an interest rate reduction, which reduces the contractual interest rate of the loan, or a principal forbearance, which is another form of payment delay that includes forbearing repayment of a portion of the principal balance as a non-interest bearing amount that is due at the earlier of the payoff date, the maturity date, or sale or transfer of the property. Multifamily Loan Restructurings For multifamily borrowers, loan restructurings include short-term forbearance plans and loan modification programs, which primarily result in term extensions of up to one year with no change to the loan’s interest rate. In certain cases, we may make more significant modifications of terms for borrowers experiencing financial difficulty, such as reducing the interest rate, converting to interest-only payments, extending the maturity for longer than one year, providing principal forbearance, or some combination of these terms. In some instances when a loan is restructured, we may require additional collateral, which may take the form of a guaranty from another entity, to further mitigate the risk of nonperformance. extensive historical experience of loans with similar risk characteristics, adjusted to reflect current conditions and reasonable and supportable forecasts. The historical loss experience used in our single-family and multifamily credit loss models includes the impact of the loss mitigation options provided to borrowers experiencing financial difficulty, and also includes the impact of projected loss severities as a result of a loan default.
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| Financial Guarantees | We recognize a guaranty obligation for our obligation to stand ready to perform on our guarantees to unconsolidated trusts and other guaranty arrangements. These off-balance sheet guarantees expose us to credit losses primarily relating to the UPB of our unconsolidated Fannie Mae MBS and other financial guarantees.We measure our guaranty reserve for estimated credit losses for off-balance sheet exposures over the contractual period for which they are exposed to the credit risk, unless that obligation is unconditionally cancellable by the issuer.
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| Earnings per Share | 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.”
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| Risk Characteristics of our Guaranty Book of Business | One of the measures by which management gauges our credit risk is the delinquency status of the mortgage loans in our guaranty book of business. For single-family and multifamily loans, management uses this information, in conjunction with housing market data, other economic data, our capital requirements and our mission objectives, to help inform changes to our eligibility and underwriting criteria. Management also uses this data together with other credit risk measures to identify key trends that guide the development of our loss mitigation strategies.
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| Acquired Property, Net | When an insured loan held in our retained mortgage portfolio subsequently goes into foreclosure, we charge off the loan, eliminating any previously-recorded loss reserves, and record REO and a mortgage insurance receivable for the claim proceeds deemed probable of recovery, as appropriate. However, if a mortgage insurer rescinds, cancels or denies insurance coverage, the initial receivable becomes due from the mortgage seller or servicer.
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| Derivatives, Hedging | Pursuant to our fair value hedge accounting program, we may designate certain interest-rate swaps as hedging instruments in hedges of the change in fair value attributable to the designated benchmark interest rate for certain closed pools of fixed-rate, single-family mortgage loans or our funding debt. For hedged items in qualifying fair value hedging relationships, changes in fair value attributable to the designated risk are recognized as a basis adjustment to the hedged item. We also report changes in the fair value of the derivative hedging instrument in the same consolidated statements of operations and comprehensive income line item used to recognize the earnings effect of the hedged item’s basis adjustment.
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| Derivatives, Offsetting | Derivative instruments are recorded at fair value and securities purchased under agreements to resell are recorded at amortized cost in our consolidated balance sheets. We determine our rights to offset the assets and liabilities presented above with the same counterparty, including collateral posted or received, based on the contractual arrangements entered into with our individual counterparties and various rules and regulations that would govern the insolvency of a derivative counterparty.
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| Fair Value Measurements | Fair Value Measurement Fair value measurement guidance defines fair value, establishes a framework for measuring fair value and sets forth disclosures around fair value measurements. This guidance applies whenever other accounting guidance requires or permits assets or liabilities to be measured at fair value. The guidance establishes a three-level fair value hierarchy that prioritizes the inputs into the valuation techniques used to measure fair value as follows: •Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2: Limited observable inputs or observable inputs for similar assets and liabilities. •Level 3: Unobservable inputs. In our consolidated balance sheets certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when we evaluate loans for impairment). Fair Value OptionWe generally elect the fair value option on a financial instrument when the accounting guidance would otherwise require us to separately account for a derivative that is embedded in the instrument at fair value. Under the fair value option, we carry this type of instrument, in its entirety, at fair value instead of separately accounting for the derivative. Interest income from the mortgage loans is recorded in “Interest income: Mortgage loans” and interest expense for the debt instruments is recorded in “Interest expense: Long-term debt” in our consolidated statements of operations and comprehensive income.
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| Fair Value of Financial Instruments | The fair value of financial instruments we disclose includes commitments to purchase multifamily and single-family mortgage loans that we do not record in our consolidated balance sheets. The fair values of these commitments are included as “Mortgage loans held for investment, net of allowance for loan losses.” The disclosure excludes all non-financial instruments; therefore, the fair value of our financial assets and liabilities does not represent the underlying fair value of our total consolidated assets and liabilities.
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| Commitments and Contingencies | On a quarterly basis, we review relevant information about pending legal actions and proceedings for the purpose of evaluating and revising our contingencies, accruals and disclosures. We establish an accrual only for matters when the likelihood of a loss is probable and we can reasonably estimate the amount of such loss. We are often unable to estimate the possible losses or ranges of losses, particularly for proceedings that are in their early stages of development, where plaintiffs seek indeterminate or unspecified damages, where there may be novel or unsettled legal questions relevant to the proceedings, or where settlement negotiations have not occurred or progressed. Given the uncertainties involved in any action or proceeding, regardless of whether we have established an accrual, the ultimate resolution of certain of these matters may be material to our operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our net income or loss for that period.
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| Commitments to Purchase and Sell Mortgage Loans and Securities | We have $52.9 billion in unconditional commitments related to the purchase of loans and mortgage-related securities. These are primarily mortgage commitment derivatives with maturities under one year and include both on- and off- balance sheet commitments. A portion of these have been recorded as derivatives in our consolidated balance sheets.
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| Variable Interest Entity | We consolidate the substantial majority of our single-class securitization trusts because our role as guarantor and master servicer provides us with the power to direct activities (primarily the servicing of mortgage loans) that impact the credit risk to which we are exposed. In contrast, we do not consolidate single-class securitization trusts when other organizations have the power to direct these activities unless we have the unilateral ability to dissolve the trust. We also do not consolidate our resecuritization trusts unless we have the unilateral ability to dissolve the trust.We do not have any incremental rights or powers related to resecuritization trusts that would enable us to direct any activities of the underlying trust. As a result, we have concluded that we are not the primary beneficiary of, and therefore do not consolidate, our resecuritization trusts unless we have the unilateral right to dissolve the trust. We have this right when we hold 100% of the beneficial interests issued by the resecuritization trust.
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