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1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2018 Commission file number:0-50231 Federal National Mortgage Association(Exact name of registrant a
2、s specified in its charter)Fannie MaeFederally charteredcorporation52-08831071100 15th Street,NWWashington,DC 20005(800)2FANNIE(800-232-6643)(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)(Address of principal executive offices,including zip code)(Regi
3、strants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:NoneSecurities registered pursuant to Section 12(g)of the Act:Common Stock,without par value8.25%Non-Cumulative Preferred Stock,Series T,stated value$25 per share8.75%Non-Cumulative Mandatory Conve
4、rtible Preferred Stock,Series 2008-1,stated value$50 per shareFixed-to-Floating Rate Non-Cumulative Preferred Stock,Series S,stated value$25 per share7.625%Non-Cumulative Preferred Stock,Series R,stated value$25 per share6.75%Non-Cumulative Preferred Stock,Series Q,stated value$25 per shareVariable
5、Rate Non-Cumulative Preferred Stock,Series P,stated value$25 per shareVariable Rate Non-Cumulative Preferred Stock,Series O,stated value$50 per share5.375%Non-Cumulative Convertible Series 2004-1 Preferred Stock,stated value$100,000 per share5.50%Non-Cumulative Preferred Stock,Series N,stated value$
6、50 per share4.75%Non-Cumulative Preferred Stock,Series M,stated value$50 per share5.125%Non-Cumulative Preferred Stock,Series L,stated value$50 per share5.375%Non-Cumulative Preferred Stock,Series I,stated value$50 per share5.81%Non-Cumulative Preferred Stock,Series H,stated value$50 per shareVariab
7、le Rate Non-Cumulative Preferred Stock,Series G,stated value$50 per shareVariable Rate Non-Cumulative Preferred Stock,Series F,stated value$50 per share5.10%Non-Cumulative Preferred Stock,Series E,stated value$50 per share5.25%Non-Cumulative Preferred Stock,Series D,stated value$50 per shareIndicate
8、 by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all
9、 reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check
10、 mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indica
11、te by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 1
12、0-K or any amendment to this Form 10 K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller report
13、ing company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended tran
14、sition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the common stoc
15、k held by non-affiliates of the registrant computed by reference to the last reported sale price of the common stock quoted on the OTCQB,operated by OTC Markets Group,Inc.,on June 29,2018(the last business day of the registrants most recently completed second fiscal quarter)was approximately$1.6 bil
16、lion.As of January 31,2019,there were 1,158,087,567 shares of common stock of the registrant outstanding.Fannie Mae 2018 Form 10-KiTable of ContentsPagePART I.Item 1.Business.Introduction.Executive Summary.Mortgage Securitizations.Managing Mortgage Credit Risk.Conservatorship,Treasury Agreements and
17、 Housing Finance Reform.Charter Act and Regulation.Employees.Where You Can Find Additional Information.Forward-Looking Statements.Item 1A.Risk Factors.Item 1B.Unresolved Staff Comments.Item 2.Properties.Item 3.Legal Proceedings.Item 4.Mine Safety Disclosures.PART II.Item 5.Market for Registrants Com
18、mon Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.Item 6.Selected Financial Data.Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.Key Market Economic Indicators.Consolidated Results of Operations.Consolidated Balance Sheet Ana
19、lysis.Retained Mortgage Portfolio.Total Book of Business.Business Segments.Single-Family Business.Multifamily Business.Liquidity and Capital Management.Off-Balance Sheet Arrangements.Risk Management.Critical Accounting Policies and Estimates.Impact of Future Adoption of New Accounting Guidance.Gloss
20、ary of Terms Used in This Report.Item 7A.Quantitative and Qualitative Disclosures about Market Risk.Item 8.Financial Statements and Supplementary Data.Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.Item 9A.Controls and Procedures.Item 9B.Other Information
21、.PART III.Item 10.Directors,Executive Officers and Corporate Governance.Directors.Corporate Governance.Executive Officers.232323254454747505860626263938286Fannie Mae 2018 Form 10-KiiItem 11.Executive Compensation.Compensation Discussi
22、on and Analysis.Compensation Committee Report.Compensation Risk Assessment.Compensation Tables and Other Information.Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.Item 13.Certain Relationships and Related Transactions,and Director Independence
23、.Policies and Procedures Relating to Transactions with Related Persons.Transactions with Related Persons.Director Independence.Item 14.Principal Accounting Fees and Services.PART IV.Item 15.Exhibits,Financial Statement Schedules.Item 16.Form 10-K Summary.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.F-
24、6552182184Business|IntroductionFannie Mae 2018 Form 10-K1PART IWe have been under conservatorship,with the Federal Housing Finance Agency(“FHFA”)acting as conservator,sinceSeptember 6,2008.As conservator,FHFA succeeded to all rights,titles,powers and privileges of th
25、e company,and ofany shareholder,officer or director of the company with respect to the company and its assets.The conservator has sinceprovided for the exercise of certain authorities by our Board of Directors.Our directors do not have any fiduciary duties toany person or entity except to the conser
26、vator and,accordingly,are not obligated to consider the interests of thecompany,the holders of our equity or debt securities,or the holders of Fannie Mae MBS unless specifically directed to doso by the conservator.We do not know when or how the conservatorship will terminate,what further changes to
27、our business will be madeduring or following conservatorship,what form we will have and what ownership interest,if any,our current common andpreferred stockholders will hold in us after the conservatorship is terminated or whether we will continue to exist followingconservatorship.Congress and the A
28、dministration continue to consider options for reform of the housing finance system,including Fannie Mae.We are not permitted to retain more than$3.0 billion in capital reserves or to pay dividends or otherdistributions to stockholders other than the U.S.Department of the Treasury(“Treasury”).Our ag
29、reements with Treasuryinclude covenants that significantly restrict our business activities.For additional information on the conservatorship,theuncertainty of our future,our agreements with Treasury,and recent actions and statements relating to housing financereform by the Administration,Congress a
30、nd FHFA,see“Conservatorship,Treasury Agreements and Housing FinanceReform,”“Charter Act and Regulation”and“Risk Factors.”Forward-looking statements in this report are based on managements current expectations and are subject to significant uncertainties and changes in circumstances,as we describe in
31、“BusinessForward-Looking Statements.”Future events and our future results may differ materially from those reflected in our forward-looking statements due to a variety of factors,including those discussed in“Risk Factors”and elsewhere in this report.You can find a“Glossary of Terms Used in This Repo
32、rt”in“Managements Discussion and Analysis of Financial Condition and Results of Operations(MD&A).”Item 1.Business Introduction Fannie Mae provides a stable source of liquidity to the mortgage market and supports the availability and affordability of housing in the United States.We operate in the sec
33、ondary mortgage market,primarily working with lenders.We do not originate loans or lend money directly to consumers in the primary mortgage market.Instead,we securitize mortgage loans originated by lenders into Fannie Mae mortgage-backed securities that we guarantee(which we refer to as Fannie Mae M
34、BS or our MBS);purchase mortgage loans and mortgage-related securities,primarily for securitization and sale at a later date;manage mortgage credit risk;and engage in other activities that support the supply of affordable housing.Through our single-family and multifamily business segments,we provide
35、d$512 billion in liquidity to the mortgage market in 2018,which enabled the financing of approximately 3 million home purchases,refinancings or rental units.Fannie Mae Provided$512 Billion in Liquidity in 2018 Business|Executive SummaryFannie Mae 2018 Form 10-K2Executive Summary Please read this Exe
36、cutive Summary together with our MD&A and our consolidated financial statements as of December 31,2018 and related notes to the consolidated financial statements.Summary of Our Financial PerformanceConsolidated Results(Dollars in billions)(1)Net revenues consist of net interest income and fee and ot
37、her income.2017 vs.20162018 vs.2017The decrease in our net income in 2017 compared with 2016 was primarily driven by:a$9.9 billion one-time federal income tax charge resulting from the enactment of the Tax Cuts and Jobs Act(the“Tax Act”)that drove the remeasurement of our deferred tax assets using t
38、he lower corporate tax rate enacted in the fourth quarter of 2017.The increase in our pre-tax income in 2017 compared with 2016 was primarily driven by:higher net revenues due to$975 million of income resulting from a settlement agreement in 2017 resolving legal claims related to private-label secur
39、ities we purchased.The increase in our net income in 2018 compared with 2017 was primarily driven by a reduction in our provision for federal income taxes in 2018 due to:the absence of the$9.9 billion one-time tax charge for federal income taxes recorded in 2017;and the lower corporate tax rate in e
40、ffect as a result of the Tax Act.The increase in our pre-tax income in 2018 compared with 2017 was primarily driven by:a shift to fair value gains from fair value losses;an increase in credit-related income;partially offset by a decrease in fee and other income.Business|Executive SummaryFannie Mae 2
41、018 Form 10-K3See“MD&AConsolidated Results of Operations”for more information on our financial results.Net Worth.Our net worth of$6.2 billion as of December 31,2018 reflects our comprehensive income of$3.2 billion for the fourth quarter of 2018 and$3.0 billion in retained capital reserves.Financial
42、Performance OutlookWe expect to remain profitable on an annual basis for the foreseeable future;however,certain factors could result in significant volatility in our financial results from quarter to quarter or year to year.We expect quarterly volatility in our financial results due to a number of f
43、actors,particularly changes in market conditions that result in fluctuations in the estimated fair value of our derivatives and other financial instruments that we mark to market through our earnings.Other factors that may result in volatility in our quarterly financial results include developments
44、that affect our loss reserves,such as redesignations of loans from held for investment(“HFI”)to held for sale(“HFS”),changes in interest rates,home prices or accounting standards,or events such as natural disasters,and other factors,as we discuss in“Risk Factors”and“MD&AConsolidated Results of Opera
45、tionsCredit-Related Income(Expense).”The potential for significant volatility in our financial results could result in a net loss in a future quarter.We are permitted to retain up to$3.0 billion in capital reserves as a buffer in the event of a net loss in a future quarter.However,any net loss we ex
46、perience in the future could be greater than the amount of our capital reserves,resulting in a net worth deficit for that quarter.If we experience a net worth deficit in a future quarter,we will be required to draw additional funds from Treasury under the senior preferred stock purchase agreement to
47、 avoid being placed into receivership.See“Risk Factors”for a discussion of the risks associated with the limitations on our ability to rebuild our capital reserves,including factors that could result in a net loss or net worth deficit in a future quarter.Treasury Draws and Dividend Payments Treasury
48、 has made a commitment under a senior preferred stock purchase agreement to provide funding to us under certain circumstances if we have a net worth deficit.Pursuant to the senior preferred stock purchase agreement,we issued shares of senior preferred stock to Treasury in 2008.Acting as successor to
49、 the rights,titles,powers and privileges of the Board,the conservator has declared and directed us to pay dividends to Treasury on the senior preferred stock on a quarterly basis for every dividend period for which dividends were payable since we entered conservatorship.The chart below shows the fun
50、ds we have drawn from Treasury pursuant to the senior preferred stock purchase agreement,as well as the dividend payments we have made to Treasury on the senior preferred stock,since entering into conservatorship.Treasury Draws and Dividend Payments:2008-2018(Dollars in billions)(1)Under the terms o
51、f the senior preferred stock purchase agreement,dividend payments we make to Treasury do not offset our prior draws of funds from Treasury.Amounts may not sum due to rounding.(2)Treasury draws are shown in the period for which requested,not when the funds were received by us.Draw requests have been
52、funded in the quarter following a net worth deficit.Business|Executive SummaryFannie Mae 2018 Form 10-K4We expect to pay Treasury a first quarter 2019 dividend of$3.2 billion by March 31,2019.The senior preferred stock currently provides for dividends each quarter in the amount,if any,by which our n
53、et worth as of the end of the prior quarter exceeds a$3.0 billion capital reserve amount.As of the date of this filing,the maximum amount of remaining funding under the agreement is$113.9 billion.If we were to draw additional funds from Treasury under the agreement with respect to a future period,th
54、e amount of remaining funding under the agreement would be reduced by the amount of our draw.Dividend payments we make to Treasury do not restore or increase the amount of funding available to us under the agreement.For a description of the terms of the senior preferred stock purchase agreement and
55、the senior preferred stock,see“Conservatorship,Treasury Agreements and Housing Finance ReformTreasury Agreements.”Although Treasury owns our senior preferred stock and a warrant to purchase 79.9%of our common stock,and has made a commitment under a senior preferred stock purchase agreement to provid
56、e us with funds to maintain a positive net worth under specified conditions,the U.S.government does not guarantee our securities or other obligations.Our Strategic ObjectivesOur vision is to be Americas most valued housing partner and to provide liquidity,access to credit and affordability in all U.
57、S.housing markets at all times,while effectively managing risk.We are advancing this vision by pursuing four strategic objectives:advancing a sustainable and reliable business model with low risk to the housing finance system and taxpayers;providing great service to our customers and partners,enabli
58、ng them to serve the needs of American households more effectively;supporting and sustainably increasing access to credit and affordable housing;and building a simple,efficient,innovative and continuously improving company.We believe pursuing these strategic objectives will position us to compete ef
59、fectively in a diverse and rapidly changing housing finance market in the years ahead.Advancing a sustainable and reliable business model with low risk to the housing finance system and taxpayersWe have significantly changed our business model over the last decade in ways that reduce risks for the h
60、ousing system and taxpayers.After strengthening our underwriting and eligibility standards,we developed innovative credit risk transfer programs,and we now transfer a portion of the credit risk on our guaranty book of business to private investors.We have also transitioned from a portfolio-driven bu
61、siness to a guaranty-driven business.Taken together,these changes affect how we manage credit risk,market risk,and liquidity and funding risk,and they have transformed our business model into one that focuses Fannie Maes efforts on safely delivering the value of our risk management expertise to our
62、customers,to taxpayers,and to the housing system as a whole.Business|Executive SummaryFannie Mae 2018 Form 10-K5Strong underwriting and eligibility standardsOur underwriting and eligibility standards have significantly improved the credit quality of our single-family guaranty book of business during
63、 the last decade.Combined with improvement in the overall economy,including strong home price growth and reduced levels of unemployment,our strong underwriting and eligibility standards have driven substantial improvement in our credit performance during the last decade.Our single-family serious del
64、inquency rate decreased in 2018,primarily driven by improved loan payment performance and nonperforming loan sales,after increasing in 2017 due to Hurricanes Harvey,Irma and Maria(the“2017 hurricanes”).With the exception of 2017,our single-family serious delinquency rate has decreased in each of the
65、 last nine years.Single-Family Serious Delinquency Rate1(1)Calculated as of December 31 for each year shown,based on the number of single-family conventional loans that are 90 days or more past due and loans that have been referred to foreclosure but not yet foreclosed upon,divided by the number of
66、loans in our single-family conventional guaranty book of business.Transferring mortgage credit risk We continue to innovate and improve our credit risk transfer programs,expanding the types of loans covered and promoting the continued growth of the credit risk transfer market.For single-family mortg
67、ages,we have relied principally on two types of transactions to transfer credit risk:our Connecticut Avenue Securities(“CAS”)transactions and our Credit Insurance Risk TransferTM(“CIRTTM”)transactions.In these transactions,we transfer to investors a portion of the credit risk associated with losses
68、on a reference pool of mortgage loans.In November 2018,we completed our first CAS offering under a new Real Estate Mortgage Investment Conduit(“REMIC”)structure.This new structure is designed to promote the continued growth of the market by expanding the potential investor base for these securities
69、and limiting investor exposure to Fannie Mae counterparty risk,without disrupting the“To-Be-Announced”(“TBA”)MBS market.The new structure will also align the timing of our recognition of provisions for credit losses with the related recovery from CAS REMICTM transactions.While our Multifamily busine
70、ss has for many years used a shared-risk business model through our Delegated Underwriting and Servicing(“DUS”)program,we are also transferring multifamily mortgage credit risk beyond our DUS program.In 2018,we completed our third and fourth multifamily CIRT transactions since the inception of the p
71、rogram,and we expect to continue to expand this program and explore additional programs for transferring multifamily mortgage credit risk.See“Managing Mortgage Credit Risk,”“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk Management”and“MD&AMultifamily BusinessMultifamily Mortgage Credi
72、t Risk Management”for more information on how we manage credit risk in our guaranty book of business.A guaranty-driven businessWe have two primary sources of revenues:guaranty fees we receive for managing the credit risk on loans underlying Fannie Mae MBS held by third parties;andBusiness|Executive
73、SummaryFannie Mae 2018 Form 10-K6 the difference between interest income earned on the assets in our retained mortgage portfolio and our other investments portfolio(collectively,our“portfolios”)and the interest expense associated with the debt that funds those assets.Our retained mortgage portfolio,
74、which we discuss in“MD&ARetained Mortgage Portfolio,”refers to the mortgage-related assets we own(excluding the portion of assets that back mortgage-related securities owned by third parties),including assets we use to provide liquidity to the mortgage markets and for our loss mitigation efforts.Bot
75、h of these sources of revenues are recorded as net interest income in our consolidated financial statements.More than 75%of our 2018 net interest income was derived from the loans underlying our Fannie Mae MBS in consolidated trusts,which primarily generate income through guaranty fees.The chart bel
76、ow shows the portion of our net interest income derived from guaranty fees compared with the portion derived from assets in our portfolios.Sources of Net Interest Income and Retained Mortgage Portfolio Balance(Dollars in billions)(1)Guaranty fee income includes the impact of a 10 basis point guarant
77、y fee increase implemented in 2012 pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011,the incremental revenue from which is remitted to Treasury and not retained by us.Common securitization platform and Single Security InitiativeOur business also continues to evolve as a result of ou
78、r many other efforts to build a safer and sustainable housing finance system and to pursue the strategic goals identified by our conservator.These efforts include our work with Freddie Mac,our jointly owned limited liability company,Common Securitization Solutions,LLC(“CSS”),and FHFA to develop a co
79、mmon securitization platform that,starting in 2019,we expect to use to perform certain aspects of the securitization process.We are also working with Freddie Mac,CSS and FHFA on the“Single Security Initiative”to develop and implement a uniform mortgage-backed security for Fannie Mae and Freddie Mac.
80、The common securitization platform and the Single Security Initiative represent significant changes for the mortgage market and for our securitization operations and business.See“Mortgage SecuritizationsCommon Securitization Platform and Single Security Initiative”and“Risk FactorsGSE and Conservator
81、ship Risk”for more information on these efforts and the risks they present.See“Conservatorship,Treasury Agreements and Housing Finance ReformHousing Finance ReformConservator Developments and Strategic Goals”for more information on FHFAs strategic goals for our conservatorship.Business|Executive Sum
82、maryFannie Mae 2018 Form 10-K7Providing great service to our customers and partners,enabling them to serve the needs of American households more effectivelyWe achieve our mission through our customers.Responding to and anticipating the changing needs of our mortgage lender and servicer customers wit
83、h products,services and tools that offer greater speed,efficiency and effectiveness is a core part of our strategy.In 2018,we continued to make improvements to our business processes and policies to serve our customers better and enhance the value they can deliver to borrowers.We continue to work to
84、wards our goal of a digital mortgage process that meaningfully reduces the time,cost and risk of originating and servicing mortgage loans.In addition to providing value to our customers,we believe these improvements will encourage lenders to safely expand their lending to a wider range of qualified
85、borrowers.We also continue to work on enhancing our customers day-to-day experience in doing business with us.We believe our investments in an improved customer experience will provide us with not only a competitive advantage,but also allow us to collaborate with customers more effectively on long-t
86、erm efforts to create new solutions to serve a continuously changing housing finance market.Supporting and sustainably increasing access to credit and affordable housingWe have a mission to provide liquidity and promote stability and affordability in the residential mortgage market.This mission incl
87、udes promoting access to mortgage credit throughout the nation.We are focused on supporting sustainable access to credit and affordable housing,within our risk tolerance.Market forces in recent years have contributed to an overall decline in the supply of affordable housing for both single-family ho
88、mes and multifamily rental housing.We are working on multiple fronts to help address housing affordability issues.For example:Serving underserved markets.We began implementing our Duty to Serve plan in January 2018,which incorporates innovative solutions to expand our reach into three underserved ma
89、rkets:manufactured housing;affordable housing preservation;and rural housing.Providing liquidity through our activities.We continue to support housing affordability through our purchases of loans to meet our single-family and multifamily housing goals.In addition,in 2018 our Multifamily business res
90、umed investing in low income housing tax credit(“LIHTC”)projects to help support and preserve the supply of affordable housing.Financing programs to address affordable housing supply and barriers to homeownership.We are working with some customers and other partners to develop and test financing pro
91、grams that could spur the development of more affordable housing supply and help borrowers prudently overcome barriers to homeownership.Advancing sustainable,healthy communities.Through our Sustainable Communities Initiative,we are working with partners to find new ways to increase,improve and prese
92、rve the supply of affordable housing through the advancement of sustainable,healthy communities.Collaboration to reduce cost of producing and maintaining housing.We have initiated a number of collaborations with participants in the housing industry to find ways housing can be produced and maintained
93、 with lower costs,with a focus on cost reductions that our secondary market role could help enable.Macroeconomic and housing research.We are working to understand and help educate the market about a variety of related macroeconomic and housing issues,including the effect that inadequate new home pro
94、duction in the current expansion has in limiting housing affordability,particularly for low-and moderate-income borrowers.See“Charter Act and RegulationCharter Act”for more information about our mission.Building a simple,efficient,innovative and continuously improving companyWith the goal of making
95、Fannie Mae more competitive and responsive to changing market conditions and customer expectations,we continue to work on internal,multiyear initiatives to make our organization simpler,more efficient and more innovative.For example,we made significant progress in 2018 on a number of strategic proje
96、cts to improve our technology infrastructure,including projects aimed at simplifying the customer experience and improving our data infrastructure.We also continued to implement plans designed to improve the effectiveness of our organization,including continuing to increase the percentage of our wor
97、kforce using our Way of Working management system,which is based on lean management principles and techniques.Mortgage Securitizations We support market liquidity by issuing Fannie Mae MBS that are readily traded in the capital markets.We create Fannie Mae MBS by placing mortgage loans in a trust an
98、d issuing securities that are backed by those mortgage loans.Monthly payments received on the loans are the primary source of payments passed through to Fannie Mae MBS holders.We guarantee to the Business|Mortgage SecuritizationsFannie Mae 2018 Form 10-K8MBS trust that we will supplement amounts rec
99、eived by the MBS trust as required to permit timely payment of principal and interest on the trust certificates.In return for this guaranty,we receive guaranty fees.Below we discuss(1)the three broad categories of our securitization transactions;(2)features of our MBS trusts;(3)single-class and mult
100、i-class Fannie Mae MBS and(4)our work to develop a common securitization platform and a uniform mortgage-backed security.Securitization TransactionsWe currently securitize a substantial majority of the single-family and multifamily mortgage loans we acquire.Our securitization transactions primarily
101、fall within three broad categories:lender swap transactions,portfolio securitizations,and structured securitizations.Lender Swap TransactionsOur most common type of securitization transaction is our“lender swap transaction.”In a single-family lender swap transaction,a mortgage lender that operates i
102、n the primary mortgage market generally delivers a pool of mortgage loans to us in exchange for Fannie Mae MBS backed by these mortgage loans.Lenders may hold the Fannie Mae MBS they receive from us or sell them to investors.A pool of mortgage loans is a group of mortgage loans with similar characte
103、ristics.After receiving the mortgage loans in a lender swap transaction,we place them in a trust for which we serve as trustee.This trust is established for the sole purpose of holding the mortgage loans separate and apart from our corporate assets.We deliver to the lender(or its designee)Fannie Mae
104、 MBS that are backed by the pool of mortgage loans in the trust and that represent an undivided beneficial ownership interest in each of the mortgage loans.We guarantee to each MBS trust that we will supplement amounts received by the MBS trust as required to permit timely payment of principal and i
105、nterest on the related Fannie Mae MBS.We are entitled to a portion of the interest payment as a fee for providing our guaranty.The mortgage servicer also retains a portion of the interest payment as a fee for servicing the loan.Then,on behalf of the trust,we make monthly distributions to the Fannie
106、Mae MBS certificateholders from the principal and interest payments and other collections on the underlying mortgage loans.Lender Swap TransactionOur Multifamily business generally creates multifamily Fannie Mae MBS in lender swap transactions in a manner similar to our Single-Family business.Our mu
107、ltifamily lender customers typically deliver only one mortgage loan to back each multifamily Fannie Mae MBS.The characteristics of each mortgage loan are used to establish guaranty fees on a risk-adjusted basis.Securitizing a multifamily mortgage loan into a Fannie Mae MBS facilitates its sale into
108、the secondary market.Business|Mortgage SecuritizationsFannie Mae 2018 Form 10-K9Portfolio Securitization TransactionsIn contrast to our lender swap securitizations,in which a mortgage lender delivers a pool of mortgage loans to us that we immediately place in a trust for securitization,we also purch
109、ase mortgage loans and mortgage-related securities for securitization and sale at a later date through our“portfolio securitization transactions.”Most of our portfolio securitization transactions are driven by our single-family whole loan conduit activities,pursuant to which we purchase single-famil
110、y whole loans from a large group of typically smaller lenders principally for the purpose of securitizing the loans into Fannie Mae MBS,which may then be sold to dealers and investors.We also securitize loans that have been held in our portfolio for a longer period of time,including reperforming loa
111、ns.Reperforming loans are mortgage loans on which the borrower had previously been delinquent but subsequently became current,either with or without a modification.Portfolio Securitization TransactionStructured Securitization TransactionsIn a“structured securitization transaction,”we create structur
112、ed Fannie Mae MBS,typically for our lender customers or securities dealer customers,in exchange for a transaction fee.In these transactions,the customer“swaps”a mortgage-related asset that it owns(typically a mortgage security)in exchange for a structured Fannie Mae MBS we issue.The process for issu
113、ing Fannie Mae MBS in a structured securitization is similar to the process involved in our lender swap securitizations described above.We also issue structured transactions backed by multifamily Fannie Mae MBS through the Fannie Mae Guaranteed Multifamily Structures(“Fannie Mae GeMSTM”)program,whic
114、h provides additional liquidity and stability to the multifamily market,while expanding the investor base for multifamily Fannie Mae MBS.Features of Our MBS Trusts Our MBS trusts hold either single-family or multifamily mortgage loans or mortgage-related securities.Each trust operates in accordance
115、with a trust agreement or a trust indenture.Generally,each MBS trust is also governed by an issue supplement documenting the formation of that MBS trust,the identification of its related assets and the issuance of the related Fannie Mae MBS.The trust agreement or the trust indenture,together with th
116、e issue supplement and any amendments,are considered the“trust documents”that govern an individual MBS trust.Single-Class and Multi-Class Fannie Mae MBS Fannie Mae MBS trusts may be single-class or multi-class.Single-class MBS are MBS in which the investors receive principal and interest payments on
117、 the mortgage loans backing the MBS directly in proportion to their percentage ownership of the MBS issuance.Multi-class MBS are MBS,including REMICs,in which the cash flows on the underlying mortgage assets are divided,creating several classes of securities,each of which represents a beneficial own
118、ership interest in the assets of the related MBS trust and entitles the related holder to a specific portion and priority of cash flows.Terms to maturity of some multi-class Fannie Mae MBS,particularly REMIC classes,may match or be shorter than the maturity of the underlying Business|Mortgage Securi
119、tizationsFannie Mae 2018 Form 10-K10mortgage loans and/or mortgage-related securities.After these classes mature,cash flows received on the underlying mortgage assets are allocated to the remaining classes in accordance with the payment terms of the securities.As a result,each of the classes in a mu
120、lti-class MBS may have a different coupon rate,average life,repayment sensitivity or final maturity.Structured Fannie Mae MBS are either multi-class MBS or single-class MBS that are typically resecuritizations of other single-class Fannie Mae MBS.In a resecuritization,pools of MBS are collected and
121、securitized.Common Securitization Platform and Single Security InitiativeIn pursuit of the strategic goals identified by our conservator,for the past several years we have been working with FHFA,Freddie Mac and CSS on the development of a common securitization platform that we expect to use beginnin
122、g in 2019 to perform certain aspects of the securitization process.We have also been working on developing and implementing a single-family uniform mortgage-backed security for Fannie Mae and Freddie Mac.Common Securitization PlatformThe intended purpose of the common securitization platform,which i
123、s operated by CSS,is to replace certain elements of Fannie Maes and Freddie Macs proprietary systems for securitizing mortgages and performing associated back office and administrative functions.In addition,FHFA specified that the design of the common securitization platform should allow for the int
124、egration of additional market participants in the future.While Fannie Mae and Freddie Mac each fund CSS and each appoint two managers to the CSS Board of Managers,CSS operates as a company separate from us and Freddie Mac.Freddie Mac began using the common securitization platform for some activities
125、 relating to the issuance of its current single-class fixed-rate mortgage-backed securities in November 2016.We continue to work with FHFA,Freddie Mac and CSS on building and testing the common securitization platform,as well as on implementing required changes to our systems and operations to integ
126、rate with the common securitization platform in support of the initial issuance of the single security expected in June 2019.Single Security InitiativeThe uniform mortgage-backed security,which we,Freddie Mac and FHFA have been working on since 2014,is intended to maximize liquidity for both Fannie
127、Mae and Freddie Mac mortgage-backed securities in the TBA market.In March 2018,FHFA announced that Fannie Mae and Freddie Mac will start issuing these uniform mortgage-backed securities,or“UMBS,”on June 3,2019.FHFA has determined that the following features will apply to these securities:Fannie Mae
128、and Freddie Mac will each issue and guarantee UMBS directly backed by mortgage loans it has acquired,referred to as first-level securities,and will not cross-guarantee each others first-level securities;mortgage loans backing first-level uniform mortgage-backed securities will be limited to fixed-ra
129、te mortgage loans now eligible for financing through the TBA market;Fannie Mae and Freddie Mac will each be able to issue and guarantee second-level securities,also referred to as resecuritizations,backed by first-or second-level UMBS issued by either company;key features of the new uniform mortgage
130、-backed security will be the same as those of the current Fannie Mae MBS;the loan-and security-level disclosures for uniform mortgage-backed securities will closely resemble those of Freddie Mac participation certificates(“Freddie Mac PCs”);and investors in Freddie Mac PCs will have the option to ex
131、change legacy Freddie Mac PCs for comparable uniform mortgage-backed securities backed by the same mortgage loans;there will not be an exchange option for legacy Fannie Mae MBS because FHFA expects investors to treat them as fungible with the uniform mortgage-backed securities.Once UMBS are issued,l
132、ender customers,securities dealers and other investors will be able to swap UMBS issued by either Fannie Mae or Freddie Mac for a new form of structured security issued and guaranteed by Fannie Mae(to be called“Supers”)that combines collateral and provides Fannie Maes guaranty of principal and inter
133、est on the underlying UMBS,even if that UMBS was not issued by Fannie Mae.We expect that once we begin issuing UMBS,the vast majority of our single-family MBS will be issued as UMBS.Historically,Fannie Mae MBS had a trading advantage over comparable Freddie Mac PCs.One of FHFAs stated objectives for
134、 the Single Security Initiative is to reduce the costs to Freddie Mac and taxpayers that result from differences in liquidity of Fannie Mae MBS and Freddie Mac PCs.In the last couple of years,as the implementation date of the Single Security Initiative has drawn closer,Fannie Mae MBS and comparable
135、Freddie Mac PCs have been trading at or near parity.See“Risk Factors”for a discussion of the risks to our business associated with the Single Security Initiative.Business|Managing Mortgage Credit RiskFannie Mae 2018 Form 10-K11Managing Mortgage Credit Risk We facilitate the flow of global capital in
136、to the U.S.mortgage market by assuming and managing credit risk.Accordingly,effective credit risk management is a key component of our overall operations.Our single-family and multifamily businesses have built a comprehensive approach to credit risk management with end-to-end processes.Our single-fa
137、mily credit risk management strategy includes acquisition and servicing policies,underwriting and servicing standards,portfolio diversification and monitoring,problem loan and real estate owned(“REO”)management,and the transfer of credit risk through credit enhancements including risk transfer trans
138、actions.The Federal National Mortgage Association Charter Act,which we refer to as the Charter Act or our charter,requires that we obtain credit enhancements on our single-family conventional mortgage loans that have loan-to-value(“LTV”)ratios over 80%when we acquire them.We use several types of cre
139、dit enhancements,including primary mortgage insurance and pool mortgage insurance.In addition,our Single-Family business has developed risk-sharing capabilities to obtain credit enhancement by transferring portions of our single-family mortgage credit risk to the private market.In most of our credit
140、 risk transfer transactions,investors receive payments,which effectively reduce the guaranty fee income we retain on the loans.In exchange we transfer to investors a small portion of our expected losses and a significant portion of the losses we expect we would incur in a stressed credit environment
141、,such as a severe or prolonged downturn.The chart below displays the percentage of loans in our single-family guaranty book of business,measured by unpaid principal balance,that are covered by one or more forms of credit enhancement,including mortgage insurance or a credit risk transfer transaction.
142、Single-Family Guaranty Book of Business with Credit EnhancementThe portion of our single-family guaranty book of business without credit enhancement consists mostly of:loans that did not require credit enhancement at the time we acquired them because they had LTV ratios below 80%;loans we acquired b
143、efore the inception of or too recently to be included in our CAS or CIRT programs;and loans that are not in our current target population for credit risk transfer transactions because they have lower LTV ratios,are intermediate-term or adjustable-rate mortgages,or were acquired under our former Refi
144、 PlusTM refinancing initiative for borrowers with high LTV ratios due to declines in home prices.We will continue to transfer more credit risk to investors in future years.See“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk Management”for more information on credit enhancements on our s
145、ingle-family loans,including our target criteria for including loans in a credit risk transfer transaction,and how we manage credit risk in our single-family guaranty book.Our Multifamily business uses a shared-risk business model that distributes credit risk to the private markets,primarily through
146、 our DUS program,which was initiated in 1988.Under DUS,we delegate to lenders the ability to underwrite multifamily loans in accordance with our standards and requirements,and our DUS lenders typically share with us approximately one-third of the credit risk on these loans,aligning the interests of
147、lenders and Fannie Mae from day one.We also transfer multifamily mortgage credit risk outside of our DUS program,including through multifamily CIRT transactions.We expect to expand our multifamily CIRT program and explore additional programs for transferring multifamily credit risk.As of December 31
148、,2018,98%of the unpaid principal balance of loans in our multifamily guaranty book of business had lender risk-sharing,compared with 96%as of December 31,2017.See“MD&AMultifamily BusinessMultifamily Mortgage Credit Risk Management”for more information on how we manage credit risk in our multifamily
149、guaranty book.Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2018 Form 10-K12Conservatorship,Treasury Agreements and Housing Finance Reform Conservatorship On September 6,2008,the Director of FHFA appointed FHFA as our conservator,pursuant to authority provided by
150、the Federal Housing Enterprises Financial Safety and Soundness Act of 1992,as amended,including by the Federal Housing Finance Regulatory Reform Act of 2008(together,the“GSE Act”).The conservatorship is a statutory process designed to preserve and conserve our assets and property and put the company
151、 in a sound and solvent condition.The conservatorship has no specified termination date and there continues to be significant uncertainty regarding the future of our company,including how long the company will continue to exist in its current form,the extent of our role in the market,how long we wil
152、l be in conservatorship,what form we will have and what ownership interest,if any,our current common and preferred stockholders will hold in us after the conservatorship is terminated,and whether we will continue to exist following conservatorship.For more information on the risks to our business re
153、lating to the conservatorship and uncertainties regarding the future of our company and business,as well as the adverse effects of the conservatorship on the rights of holders of our common and preferred stock,see“Risk Factors.”Our conservatorship could terminate through a receivership.For informati
154、on on the circumstances under which FHFA is required or permitted to place us into receivership and the potential consequences of receivership,see“Charter Act and RegulationGSE Act and Other RegulationReceivership”and“Risk Factors.”Management of the Company during Conservatorship Upon its appointmen
155、t,the conservator immediately succeeded to(1)all rights,titles,powers and privileges of Fannie Mae,and of any shareholder,officer or director of Fannie Mae with respect to Fannie Mae and its assets,and(2)title to the books,records and assets of any other legal custodian of Fannie Mae.The conservator
156、 subsequently issued an order that provided for our Board of Directors to exercise specified authorities.The conservator also provided instructions regarding matters for which conservator decision or notification is required.The conservator retains the authority to amend or withdraw its order and in
157、structions at any time.For more information on the authorities of our Board of Directors during conservatorship,see“Directors,Executive Officers and Corporate GovernanceCorporate GovernanceConservatorship and Board Authorities.”Our directors serve on behalf of the conservator and exercise their auth
158、ority as directed by and with the approval,where required,of the conservator.Our directors have no fiduciary duties to any person or entity except to the conservator.Accordingly,our directors are not obligated to consider the interests of the company,the holders of our equity or debt securities,or t
159、he holders of Fannie Mae MBS unless specifically directed to do so by the conservator.Because we are in conservatorship,our common stockholders currently do not have the ability to elect directors or to vote on other matters.The conservator eliminated common and preferred stock dividends(other than
160、dividends on the senior preferred stock issued to Treasury)during the conservatorship.Powers of the Conservator under the GSE Act FHFA has broad powers when acting as our conservator.As conservator,FHFA can direct us to enter into contracts or enter into contracts on our behalf.Further,FHFA may tran
161、sfer or sell any of our assets or liabilities(subject to limitations and post-transfer notice provisions for transfers of certain types of financial contracts),without any approval,assignment of rights or consent of any party.However,mortgage loans and mortgage-related assets that have been transfer
162、red to a Fannie Mae MBS trust must be held by the conservator for the beneficial owners of the Fannie Mae MBS and cannot be used to satisfy the general creditors of the company.Neither the conservatorship nor the terms of our agreements with Treasury change our obligation to make required payments o
163、n our debt securities or perform under our mortgage guaranty obligations.Treasury Agreements On September 7,2008,we,through FHFA,in its capacity as conservator,and Treasury entered into a senior preferred stock purchase agreement,pursuant to which we issued to Treasury one million shares of Variable
164、 Liquidation Preference Senior Preferred Stock,Series 2008-2,which we refer to as the“senior preferred stock,”and a warrant to purchase shares of common stock equal to 79.9%of the total number of shares of our common stock outstanding on a fully diluted basis at the time the warrant is exercised for
165、 a nominal price.The senior preferred stock purchase agreement was amended and restated on September 26,2008 and was subsequently amended three times:in May 2009,December 2009 and August 2012.In addition,the dividend and liquidation preference provisions of the senior preferred stock were amended in
166、 December 2017 pursuant to a letter agreement between us,through FHFA in its capacity as conservator,and Treasury.See“Risk Factors”for a description of the risks to our business relating to the senior preferred stock purchase agreement,as well as the adverse effects of the senior preferred stock and
167、 the warrant on the rights of holders of our common stock and other series of preferred stock.Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2018 Form 10-K13Senior Preferred Stock Purchase AgreementThe senior preferred stock purchase agreement provides that,on a qu
168、arterly basis,we may draw funds up to the amount,if any,by which our total liabilities exceed our total assets,as reflected in our consolidated balance sheet,prepared in accordance with generally accepted accounting principles in the United States of America(“GAAP”),for the applicable fiscal quarter
169、(referred to as the“deficiency amount”),up to the maximum amount of remaining funding under the agreement.As of the date of this filing,the maximum amount of remaining funding under the agreement is$113.9 billion.If we were to draw additional funds from Treasury under the agreement with respect to a
170、 future period,the amount of remaining funding under the agreement would be reduced by the amount of our draw.The senior preferred stock purchase agreement provides that the deficiency amount will be calculated differently if we become subject to receivership or other liquidation process.Dividend pa
171、yments we make to Treasury do not restore or increase the amount of funding available to us under the senior preferred stock purchase agreement.The amount of remaining funding under the agreement also would not change if the full quarterly dividend amount were not declared and paid to Treasury.Treas
172、urys funding commitment under the senior preferred stock purchase agreement has no expiration date.The agreement provides that Treasurys funding commitment will terminate under any of the following circumstances:(1)the completion of our liquidation and fulfillment of Treasurys obligations under its
173、funding commitment at that time;(2)the payment in full of,or reasonable provision for,all of our liabilities(whether or not contingent,including mortgage guaranty obligations);or(3)the funding by Treasury of the maximum amount that may be funded under the agreement.In addition,Treasury may terminate
174、 its funding commitment and declare the agreement null and void if a court vacates,modifies,amends,conditions,enjoins,stays or otherwise affects the appointment of the conservator or otherwise curtails the conservators powers.Treasury may not terminate its funding commitment under the agreement sole
175、ly by reason of our being in conservatorship,receivership or other insolvency proceeding,or due to our financial condition or any adverse change in our financial condition.Most provisions of the senior preferred stock purchase agreement may be waived or amended by mutual agreement of the parties;how
176、ever,no waiver or amendment of the agreement is permitted that would decrease Treasurys aggregate funding commitment or add conditions to Treasurys funding commitment if the waiver or amendment would adversely affect in any material respect the holders of our debt securities or guaranteed Fannie Mae
177、 MBS.In the event of our default on payments with respect to our debt securities or guaranteed Fannie Mae MBS,if Treasury fails to perform its obligations under its funding commitment and if we and/or the conservator are not diligently pursuing remedies with respect to that failure,any holder of suc
178、h defaulted debt securities or Fannie Mae MBS may file a claim in the United States Court of Federal Claims for relief requiring Treasury to fund us up to(1)the amount necessary to cure the payment defaults on our debt and Fannie Mae MBS,(2)the deficiency amount,or(3)the amount of remaining funding
179、under the senior preferred stock purchase agreement,whichever is the least.Any payment that Treasury makes under those circumstances will be treated for all purposes as a draw under the agreement that will increase the liquidation preference of the senior preferred stock.Senior Preferred StockShares
180、 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$1.0 billion.Under the terms of the senior preferred stock,the aggregate liquidation preference is increased by the f
181、ollowing:any amounts Treasury pays to us pursuant to its funding commitment under the senior preferred stock purchase agreement(a total of$119.8 billion as of the date of this filing),any quarterly commitment fees that are payable but not paid in cash(no such fees have become payable,nor will they u
182、nder the current terms of the agreement and the senior preferred stock),and any dividends that are payable but not paid in cash to Treasury,regardless of whether or not they are declared.In addition,the December 2017 letter agreement increased the aggregate liquidation preference of the senior prefe
183、rred stock by$3.0 billion as of December 31,2017.Accordingly,the aggregate liquidation preference of the senior preferred stock was$123.8 billion as of December 31,2018.Treasury,as the holder of the senior preferred stock,is entitled to receive,when,as and if declared,out of legally available funds,
184、cumulative quarterly cash dividends.The dividends we have paid to Treasury on the senior preferred stock during conservatorship have been declared by,and paid at the direction of,our conservator,acting as successor to the rights,titles,powers and privileges of the Board of Directors.The dividend pro
185、visions of the senior preferred stock have been amended twice.Original Dividend Rate.As originally issued,the senior preferred stock provided for cumulative quarterly cash dividends at an annual rate of 10%per year on the stocks then-current liquidation preference.This dividend rate was applicable f
186、rom the fourth quarter of 2008 through the fourth quarter of 2012.“Net Worth Sweep”Amendment.As amended in August 2012,the senior preferred stock provides for a“net worth sweep”dividend.For each quarterly dividend period,the dividend amount is the amount,if any,by which our net Business|Conservators
187、hip,Treasury Agreements and Housing Finance ReformFannie Mae 2018 Form 10-K14worth as of the end of the immediately preceding fiscal quarter exceeds an applicable capital reserve amount.Our net worth is defined as the amount,if any,by which our total assets(excluding Treasurys funding commitment and
188、 any unfunded amounts related to the commitment)exceed our total liabilities(excluding any obligation in respect of capital stock),in each case as reflected on our balance sheet prepared in accordance with GAAP.The applicable capital reserve amount was initially$3.0 billion for dividend periods in 2
189、013 and decreased by$600 million each year until it reached$600 million for dividend periods in 2017.These provisions became applicable in the first quarter of 2013 and remain in effect as modified by the December 2017 letter agreement.December 2017 Amendment.As amended in December 2017,the applicab
190、le capital reserve amount was increased to$3.0 billion.If we do not declare and pay the dividend amount in full for any dividend period for which dividends are payable,then the applicable capital reserve amount will thereafter be zero.The December 2017 letter agreement also reduced by$2.4 billion th
191、e dividend amount otherwise payable for the fourth quarter of 2017.As a result of these amended dividend provisions,for each quarterly period beginning with the first quarter of 2018,dividends on the senior preferred stock accumulate and are payable based on the amount by which our net worth as of t
192、he end of the immediately preceding fiscal quarter exceeds$3.0 billion.If our net worth does not exceed the applicable capital reserve amount of$3.0 billion as of the end of the immediately preceding fiscal quarter,then dividends will neither accumulate nor be payable for such period.The senior pref
193、erred stock ranks ahead of our common stock and all other outstanding series of our preferred stock,as well as any capital stock we issue in the future,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-c
194、urrent liquidation preference(which includes any accumulated but unpaid dividends)before any distribution is made to the holders of our common stock or other preferred stock.The senior preferred stock provides that we may not,at any time,declare or pay dividends on,make distributions with respect to
195、,or redeem,purchase or acquire,or make a liquidation payment with respect to,any common stock or other securities ranking junior to the senior preferred stock unless(1)full cumulative dividends on the outstanding senior preferred stock(including any unpaid dividends added to the liquidation preferen
196、ce)have been declared and paid in cash,and(2)all amounts required to be paid with the net proceeds of any issuance of capital stock for cash(as described in the following paragraph)have been paid in cash.Shares of the senior preferred stock are not convertible.Shares of the senior preferred stock ha
197、ve no general or special voting rights,other than those set forth in the certificate of designation for the senior preferred stock or otherwise required by law.The consent of holders of at least two-thirds of all outstanding shares of senior preferred stock is generally required to amend the terms o
198、f the senior preferred stock or to create any class or series of stock that ranks prior to or on parity with the senior preferred stock.We are not permitted to redeem the senior preferred stock prior to the termination of Treasurys funding commitment under the senior preferred stock purchase agreeme
199、nt.Moreover,we are not permitted to pay down the liquidation preference of the outstanding shares of senior preferred stock except to the extent of(1)accumulated and unpaid dividends previously added to the liquidation preference and not previously paid down;and(2)quarterly commitment fees previousl
200、y added to the liquidation preference and not previously paid down.In addition to these exceptions,if we issue any shares of capital stock for cash while the senior preferred stock is outstanding,the net proceeds of the issuance must be used to pay down the liquidation preference of the senior prefe
201、rred stock;however,the liquidation preference of each share of senior preferred stock may not be paid down below$1,000 per share prior to the termination of Treasurys funding commitment.Following the termination of Treasurys funding commitment,we may pay down the liquidation preference of all outsta
202、nding shares of senior preferred stock at any time,in whole or in part.Common Stock WarrantPursuant to the senior preferred stock purchase agreement,on September 7,2008,we,through FHFA,in its capacity as conservator,issued to Treasury a warrant to purchase shares of our common stock equal to 79.9%of
203、 the total number of shares of our common stock outstanding on a fully diluted basis on the date the warrant is exercised,for an exercise price of$0.00001 per share.The warrant may be exercised in whole or in part at any time on or before September 7,2028.Covenants under Treasury Agreements The seni
204、or preferred stock purchase agreement contains covenants that prohibit us from taking a number of actions without the prior written consent of Treasury,including:paying dividends or other distributions on or repurchasing our equity securities(other than the senior preferred stock or warrant);issuing
205、 equity securities(except in limited instances);selling,transferring,leasing or otherwise disposing of any assets,except for dispositions for fair market value in limited circumstances including if(a)the transaction is in the ordinary course of business and consistent with past practice or(b)the ass
206、ets have a fair market value individually or in the aggregate of less than$250 million;issuing subordinated debt;andBusiness|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2018 Form 10-K15 seeking or permitting the termination of our conservatorship,other than in connection
207、 with a receivership.The senior preferred stock purchase agreement also prohibits us from entering into any new compensation arrangements or increasing amounts or benefits payable under existing compensation arrangements with any of our executive officers(as defined by Securities and Exchange Commis
208、sion(“SEC”)rules)without the consent of the Director of FHFA,in consultation with the Secretary of the Treasury.In addition,the senior preferred stock purchase agreement subjects us to limits on the amount of mortgage assets that we may own and the total amount of our indebtedness.Mortgage Asset Lim
209、it.The amount of mortgage assets we are permitted to own decreased by a specified amount each year until it reached a limit of$250.0 billion as of December 31,2018.In addition,FHFA has directed that we further cap our mortgage assets at$225.0 billion.For purposes of calculating our limit,mortgage as
210、set amounts are based on the unpaid principal balance of such assets and do not reflect market valuation adjustments,allowance for loan losses,impairments,unamortized premiums and discounts and the impact of our consolidation of variable interest entities.Applying this measure,our mortgage assets as
211、 of December 31,2018 were$179.2 billion.We disclose the amount of our mortgage assets on a monthly basis under the caption“Mortgage Portfolio End Balance”in our Monthly Summaries,which are available on our website and announced in a press release.Debt Limit.Our debt limit under the senior preferred
212、stock purchase agreement is set at 120%of the amount of mortgage assets we were allowed to own under the agreement on December 31 of the immediately preceding calendar year.Accordingly,our debt limit in 2018 was$346.1 billion and,beginning in 2019 and for each year thereafter,our debt limit is$300.0
213、 billion.For purposes of this calculation,indebtedness is based on the par value of each applicable loan and does not reflect the impact of consolidation of variable interest entities.Applying this measure,our indebtedness as of December 31,2018 was$232.5 billion.We disclose the amount of our indebt
214、edness on a monthly basis under the caption“Total Debt Outstanding”in our Monthly Summaries,which are available on our website and announced in a press release.Annual Risk Management Plan Covenant.Each year we remain in conservatorship we are required to provide Treasury a risk management plan that
215、sets out our strategy for reducing our risk profile,describes the actions we will take to reduce the financial and operational risk associated with each of our business segments,and includes an assessment of our performance against the planned actions described in the prior years plan.We submitted o
216、ur most recent annual risk management plan to Treasury in December 2018.Lawsuits Challenging the Senior Preferred Stock Purchase Agreements and ConservatorshipSeveral lawsuits have been filed by preferred and common stockholders of Fannie Mae and Freddie Mac against one or more of the United States,
217、Treasury and FHFA challenging actions taken by the defendants relating to the senior preferred stock purchase agreements and the conservatorships of Fannie Mae and Freddie Mac.Some of these lawsuits also contain claims against Fannie Mae and Freddie Mac.For a description of these lawsuits,see“Legal
218、Proceedings”and“Note 16,Commitments and Contingencies.”Housing Finance ReformPolicymakers and others have focused significant attention in recent years on how to reform the nations housing finance system,including what role,if any,Fannie Mae and Freddie Mac should play.We describe below some recent
219、actions and statements relating to housing finance reform from the Administration and Congress,as well as actions our conservator has been taking to further housing finance reform.We expect Congress,the Administration and FHFA to continue to consider housing finance reform,which could result in sign
220、ificant changes in our structure and role in the future.As a result,there continues to be significant uncertainty regarding the future of our company.See“Risk FactorsGSE and Conservatorship Risk”for more information on our uncertain future,including the risks to our business and profitability arisin
221、g from our conservatorship status and potential housing finance reform.Administration DevelopmentsOfficials in the Trump Administration have indicated that resolving the conservatorships of Fannie Mae and Freddie Mac is a priority and that the Administration intends to release a framework for housin
222、g finance reform in early 2019.On January 3,2019 President Trump submitted the nomination of Mark Calabria to serve as Director of FHFA for a five-year term.On January 7,2019,Joseph Otting,Comptroller of the Currency,became Acting Director of FHFA pending Senate confirmation of Mr.Calabrias nominati
223、on.As we discuss in“Risk FactorsGSE and Conservatorship Risk,”the changes in leadership at the FHFA could result in significant changes to FHFAs goals for our conservatorship and have a material impact on our business and financial results.Business|Conservatorship,Treasury Agreements and Housing Fin
224、ance ReformFannie Mae 2018 Form 10-K16Legislative Developments The Chairman of the Senate Committee on Banking,Housing and Urban Affairs and the Chairwoman of the House Committee on Financial Services have each stated that addressing housing finance reform is a responsibility of their respective Com
225、mittees.On February 1,2019,the Chairman of the Senate Banking Committee stated his desire to reform the housing finance system and released an outline of reform legislation.Congress may continue to consider proposed housing finance reform legislation that could result in significant changes in our s
226、tructure and role in the future,including proposals that would result in Fannie Maes liquidation or dissolution.Conservator Developments and Strategic GoalsStrategic Goals and ScorecardsFHFAs current strategic goals for Fannie Mae and Freddie Macs conservatorships are to:Maintain,in a safe and sound
227、 manner,credit availability and foreclosure prevention activities for new and refinanced mortgages to foster liquid,efficient,competitive and resilient national housing finance markets.Reduce taxpayer risk through increasing the role of private capital in the mortgage market.Build a new single-famil
228、y infrastructure for use by Fannie Mae and Freddie Mac and adaptable for use by other participants in the secondary market in the future.Since 2012,FHFA has released annual corporate performance objectives for Fannie Mae and Freddie Mac,referred to as the conservatorship scorecard.The conservatorshi
229、p scorecard details the specific priorities each year for implementing FHFAs strategic goals.Some of the actions we are taking pursuant to the mandates of the scorecards are helping to build the policies and infrastructure for a safer and more sustainable housing finance system.FHFAs recent conserva
230、torship scorecards have included objectives relating to development of the common securitization platform for Fannie Mae and Freddie Mac,development of UMBS,credit risk transfer transactions,and mortgage data standardization.For more information on FHFAs 2019 conservatorship scorecard objectives,see
231、 our Current Report on Form 8-K filed with the SEC on December 20,2018.For information on actions we took in 2018 pursuant to FHFAs 2018 conservatorship scorecard,see“Executive CompensationCompensation Discussion and AnalysisDetermination of 2018 CompensationAssessment of Corporate Performance again
232、st 2018 Conservatorship Scorecard.”Proposed Rule on MBS Prepayment RatesOn September 12,2018,FHFA issued a proposed rule to require Fannie Mae and Freddie Mac to align their programs,policies and practices that affect the prepayment rates of TBA-eligible MBS.The rule would apply to Fannie Maes and F
233、reddie Macs current offerings of TBA-eligible MBS and to the new UMBS scheduled to be implemented in June 2019.The objective of the Single Security Initiative and the proposed rule is to enhance the overall liquidity of Fannie Mae and Freddie Mac TBA-eligible MBS by supporting their fungibility with
234、out regard to which company is the issuer.The proposed rule notes that“the industry has expressed concerns that Fannie Mae and Freddie Mac UMBS may not be truly fungible because differences in Fannie Mae and Freddie Mac policies could result in materially differing cash flows(as a result of,e.g.,dif
235、fering prepayment speeds).”FHFA,as conservator,has previously responded to industry input by imposing alignment mandates on Fannie Mae and Freddie Mac,and publishing a Prepayment Monitoring Report.The proposed rule would codify FHFAs previous mandates,and is intended to ensure that Fannie Mae and Fr
236、eddie Mac programs,policies and practices that individually have a material effect on cash flows(including policies that affect prepayment speeds)are aligned and will continue to be aligned.See“Mortgage Securitizations”for more information on the Single Security Initiative and“Risk Factors”for a dis
237、cussion of the risks to our business associated with the new UMBS and the Single Security Initiative.Charter Act and Regulation Charter Act Fannie Mae is a shareholder-owned corporation organized and existing under the Charter Act.We were initially established in 1938.The Charter Act defines our mis
238、sion of providing liquidity,increasing stability and promoting affordability in the residential mortgage market.Specifically,the Charter Act states that our purposes are to:provide stability in the secondary market for residential mortgages;respond appropriately to the private capital market;provide
239、 ongoing assistance to the secondary market for residential mortgages(including activities relating to mortgages on housing for low-and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities)by increasing the liquidity of mortgage
240、investments and improving the distribution of investment capital available for residential mortgage financing;andBusiness|Charter Act and RegulationFannie Mae 2018 Form 10-K17 promote access to mortgage credit throughout the nation(including central cities,rural areas and underserved areas)by increa
241、sing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgage financing.Principal balance limitations.To meet these purposes,the Charter Act authorizes us to purchase and securitize mortgage loans secured by single-family and multi
242、family properties,subject to maximum original principal balance limits,known as“conforming loan limits”on single-family conventional mortgage loans that we purchase or securitize.The conforming loan limits are adjusted each year based on FHFAs housing price index.For 2018,the conforming loan limit f
243、or mortgages secured by one-family residences was set at$453,100,with higher limits for mortgages secured by two-to four-family residences and in four statutorily-designated states and territories(Alaska,Hawaii,Guam and the U.S.Virgin Islands).For 2019,FHFA increased the national conforming loan lim
244、it for one-family residences to$484,350.In addition,higher loan limits of up to 150%of the otherwise applicable loan limit apply in certain high-cost areas.The Charter Act does not impose maximum original principal balance limits on loans we purchase or securitize that are insured by the Federal Hou
245、sing Administration(“FHA”)or guaranteed by the Department of Veterans Affairs(“VA”).The Charter Act also includes the following provisions:Credit enhancement requirements.The Charter Act generally requires credit enhancement on any single-family conventional mortgage loan that we purchase or securit
246、ize that has an LTV ratio over 80%at the time of purchase.The credit enhancement required by our charter may take the form of one or more of the following:(1)insurance or a guaranty by a qualified insurer on the portion of the unpaid principal balance of a mortgage loan that exceeds 80%of the proper
247、ty value;(2)a sellers agreement to repurchase or replace the loan in the event of default;or(3)retention by the seller of at least a 10%participation interest in the loan.Regardless of LTV ratio,the Charter Act does not require us to obtain credit enhancement to purchase or securitize loans insured
248、by FHA or guaranteed by the VA.Issuances of our securities.We are authorized,upon the approval of the Secretary of the Treasury,to issue debt obligations and mortgage-related securities.Neither the U.S.government nor any of its agencies guarantees,directly or indirectly,our debt or mortgage-related
249、securities.Authority of Treasury to purchase our debt obligations.At the discretion of the Secretary of the Treasury,Treasury may purchase our debt obligations up to a maximum of$2.25 billion outstanding at any one time.Exemption for our securities offerings.Our securities offerings are exempt from
250、registration requirements under the federal securities laws.As a result,we do not file registration statements or prospectuses with the SEC with respect to our securities offerings.However,our equity securities are not treated as exempt securities for purposes of Sections 12,13,14 or 16 of the Secur
251、ities Exchange Act of 1934(the“Exchange Act”).Consequently,we are required to file periodic and current reports with the SEC,including annual reports on Form 10-K,quarterly reports on Form 10-Q,and current reports on Form 8-K.Our non-equity securities are exempt securities under the Exchange Act.Exe
252、mption from specified taxes.Fannie Mae is exempt from taxation by states,territories,counties,municipalities and local taxing authorities,except for taxation by those authorities on our real property.We are not exempt from the payment of federal corporate income taxes.Limitations.We may not originat
253、e mortgage loans or advance funds to a mortgage seller on an interim basis,using mortgage loans as collateral,pending the sale of the mortgages in the secondary market.We may purchase or securitize mortgage loans only on properties located in the United States and its territories.GSE Act and Other R
254、egulation As a federally chartered corporation,we are subject to government regulation and oversight.FHFA is our primary regulator,and regulates our safety and soundness and our mission.FHFA is an independent agency of the federal government with general supervisory and regulatory authority over Fan
255、nie Mae,Freddie Mac and the Federal Home Loan Banks(“FHLBs”).The U.S.Department of Housing and Urban Development(“HUD”)is our regulator with respect to fair lending matters.Our regulators also include the SEC and Treasury.The GSE Act provides FHFA with safety and soundness authority that is comparab
256、le to and in some respects broader than that of the federal banking agencies.We describe below regulations applicable to us pursuant to the GSE Act and other legislation,including the Dodd-Frank Wall Street Reform and Consumer Protection Act(the“Dodd-Frank Act”).We also describe some regulations app
257、licable to the mortgage industry and the securities markets that may indirectly affect us.CapitalThe GSE Act establishes minimum,risk-based,and critical capital standards for Fannie Mae and Freddie Mac,which we discuss in“Note 12,Regulatory Capital Requirements.”However,FHFA has suspended these capi
258、tal classifications because we are under conservatorship.Although existing statutory and regulatory capital requirements are not binding during conservatorship,we continue to submit capital reports to FHFA and FHFA monitors our capital levels.Moreover,with our 2017 implementation of the conservators
259、hip capital framework and FHFAs 2018 proposal of new capital requirements,both discussed below,we are focused on managing our business in a manner consistent with the conservatorship capital framework and working with FHFA to adopt any new capital rule,when approved and applicable.Business|Charter A
260、ct and RegulationFannie Mae 2018 Form 10-K18Conservatorship Capital Framework In lieu of these statutory capital requirements,in 2017 FHFA directed Fannie Mae and Freddie Mac to implement an aligned risk measurement framework for evaluating Fannie Mae and Freddie Mac business decisions and performan
261、ce during conservatorship.The framework includes specific requirements relating to risk on our book of business and modeled returns on our new acquisitions.We are required to submit quarterly reports to FHFA relating to the frameworks requirements.We continuously review our business decisions as the
262、y relate to existing and prospective capital framework standards.In December 2017 and February 2018,FHFA,in its capacity as conservator,provided guidance relating to our guaranty fee pricing for new single-family acquisitions.FHFAs guidance requires that we meet a specified minimum return on equity
263、target based on the conservatorship capital framework.We implemented this target in the first quarter of 2018.Proposed Capital RequirementsIn June 2018,FHFA proposed new capital requirements for Fannie Mae and Freddie Mac,which would also be suspended while we remain in conservatorship.The proposed
264、rule would implement a new framework for risk-based capital requirements and a revised minimum leverage capital requirement.The proposed risk-based capital framework would provide a granular assessment of credit risk specific to different mortgage loan categories,as well as components for market ris
265、k,operational risk,and a going-concern buffer.The proposed rule includes two alternative leverage ratio proposals on which FHFA sought feedback.FHFA received approximately 80 comments on the proposed capital rule,including a comment from us,addressing a broad range of issues prior to the closing of
266、the comment period on November 16,2018.Any final capital rule would have a significant impact on our business and profitability outside of conservatorship.Stress TestingThe Dodd-Frank Act requires certain financial companies to conduct annual stress tests to determine whether the companies have the
267、capital necessary to absorb losses as a result of adverse economic conditions.Under FHFA regulations implementing this requirement,each year we are required to conduct a stress test using three different scenarios of financial conditions provided by FHFA:baseline,adverse and severely adverse.In cond
268、ucting the stress test,we are required to calculate the impact of the scenario conditions on our capital levels and other specified measures of financial condition and performance over a period of at least nine quarters.We published our most recent stress test results for the severely adverse scenar
269、io on our website in August 2018.Portfolio StandardsThe GSE Act requires FHFA to establish standards governing our portfolio holdings,to ensure that they are backed by sufficient capital and consistent with our mission and safe and sound operations.FHFA is also required to monitor our portfolio and,
270、in some circumstances,may require us to dispose of or acquire assets.In 2010,FHFA adopted,as the standard for our portfolio holdings,the portfolio limits specified in the senior preferred stock purchase agreement described under“Conservatorship,Treasury Agreements and Housing Finance ReformTreasury
271、AgreementsCovenants under Treasury Agreements,”as it may be amended from time to time.The rule is effective for as long as we remain subject to the terms and obligations of the senior preferred stock purchase agreement.New Products and ActivitiesThe GSE Act requires us to obtain FHFAs approval befor
272、e initially offering any new product,subject to certain exceptions.The GSE Act also requires us to provide FHFA with written notice before commencing any new activity.FHFA published an interim final rule implementing these provisions in July 2009,but concluded that permitting us to engage in new pro
273、ducts was inconsistent with the goals of the conservatorship and instructed us not to submit new product requests under the rule.Strategic Business Plan In October 2018,FHFA amended the corporate governance regulation that applies to us to require our Board of Directors to adopt and have in effect a
274、t all times a strategic business plan that describes our strategy for achieving our mission and public purposes.The plan must articulate measurable goals for each significant activity,describe any significant changes to business strategy or approach we are planning to undertake,and identify current
275、and emerging risks associated with our significant activities.Our Board of Directors must review the strategic business plan at least annually,re-adopt the plan at least every three years,establish management reporting requirements,and monitor the plans implementation.See“Executive SummaryOur Strate
276、gic Objectives”for information about our strategic objectives.Receivership Under the GSE Act,FHFA must place us into receivership if the Director of FHFA makes a written determination that our assets are less than our obligations(that is,we have a net worth deficit)or if we have not been paying our
277、debts as they become due,in either case,for a period of 60 days.FHFA has notified us that the measurement period for any mandatory receivership determination with respect to our assets and liabilities would commence no earlier than the SEC public filing deadline for our quarterly or annual financial
278、 statements and would continue for 60 calendar days thereafter.FHFA has advised us that if,during that 60-day period,we receive funds from Treasury in an amount at least equal to the deficiency Business|Charter Act and RegulationFannie Mae 2018 Form 10-K19amount under the senior preferred stock purc
279、hase agreement,the Director of FHFA will not make a mandatory receivership determination.In addition,we could be put into receivership at the discretion of the Director of FHFA at any time for other reasons set forth in the GSE Act.The statutory grounds for discretionary appointment of a receiver in
280、clude:a substantial dissipation of assets or earnings due to unsafe or unsound practices;the existence of an unsafe or unsound condition to transact business;an inability to meet our obligations in the ordinary course of business;a weakening of our condition due to unsafe or unsound practices or con
281、ditions;critical undercapitalization;undercapitalization and no reasonable prospect of becoming adequately capitalized;the likelihood of losses that will deplete substantially all of our capital;or by consent.The appointment of FHFA as receiver would immediately terminate the conservatorship.In the
282、event of receivership,the GSE Act requires FHFA,as the receiver,to organize a limited-life regulated entity with respect to Fannie Mae.Among other requirements,the GSE Act provides that this limited-life regulated entity:would succeed to Fannie Maes charter and thereafter operate in accordance with
283、and subject to such charter;would assume,acquire or succeed to our assets and liabilities to the extent that such assets and liabilities are transferred by FHFA to the entity;and would not be permitted to assume,acquire or succeed to any of our obligations to shareholders.Placement into receivership
284、 would likely have a material adverse effect on holders of our common stock and preferred stock,and could have a material adverse effect on holders of our debt securities and Fannie Mae MBS.Should we be placed into receivership,different assumptions would be required to determine the carrying value
285、of our assets,which could lead to substantially different financial results.For more information on the risks to our business relating to receivership and uncertainties regarding the future of our business,see“Risk FactorsGSE and Conservatorship Risk.”Affordable Housing AllocationsThe GSE Act requir
286、es us to set aside in each fiscal year an amount equal to 4.2 basis points for each dollar of the unpaid principal balance of our total new business purchases and to pay this amount to specified HUD and Treasury funds.New business purchases consist of single-family and multifamily whole mortgage loa
287、ns purchased during the period and single-family and multifamily mortgage loans underlying Fannie Mae MBS issued during the period pursuant to lender swaps.We are prohibited from passing through the cost of these allocations to the originators of the mortgage loans that we purchase or securitize.In
288、December 2014,FHFA directed us to begin setting aside amounts for these contributions and to transfer the amounts set aside within 60 days after the end of each fiscal year,except for any fiscal year for which a draw from Treasury was made under the terms of the senior preferred stock purchase agree
289、ment or in which such transfer would cause such a draw.Our new business purchases were$512 billion for the year ended December 31,2018.Accordingly,we recognized an expense of$215 million related to this obligation for the year ended December 31,2018.Executive CompensationThe amount of compensation w
290、e may pay our executives is subject to a number of legal and regulatory restrictions,particularly while we are in conservatorship.For example:GSE Act.The GSE Act directs FHFA to prohibit us from providing compensation to our executive officers that is not reasonable or comparable.FHFA may at any tim
291、e review the reasonableness and comparability of an executive officers compensation and may require us to withhold any payment to the officer during such review.STOCK Act.Pursuant to the Stop Trading on Congressional Knowledge Act(the“STOCK Act”)and related regulations issued by FHFA,our senior exec
292、utives are prohibited from receiving bonuses while the company remains in conservatorship.Equity in Government Compensation Act.The Equity in Government Compensation Act of 2015 caps the annual total direct compensation of our chief executive officer position at$600,000 while the company is in conse
293、rvatorship or receivership.Golden Parachute Regulation.FHFA regulation requires the approval of the Director of FHFA before we may enter into any agreement providing compensation in connection with the termination of an executive officers employment.FHFA regulation also generally prohibits us from m
294、aking golden parachute payments to any current or former director,officer or employee of the company during any period in which we are in conservatorship,receivership or other troubled condition,unless either a specific exemption applies or the Director of FHFA approves the payments.A golden parachu
295、te payment generally refers to a compensatory payment that is contingent on termination of employment.For more information on our executive compensation program and regulatory and other legal requirements affecting our executive compensation,see“Executive Compensation.”Business|Charter Act and Regul
296、ationFannie Mae 2018 Form 10-K20Fair LendingThe GSE Act requires the Secretary of HUD to assure that Fannie Mae and Freddie Mac meet their fair lending obligations.Among other things,HUD periodically reviews and comments on our underwriting and appraisal guidelines to ensure consistency with the Fai
297、r Housing Act.Guaranty Fees and PricingOur guaranty fees and pricing are subject to regulatory and legislative requirements:In July 2016,FHFA in its regulatory capacity,established minimum base guaranty fees that generally apply to our acquisitions of 30-year and 15-year single-family fixed-rate loa
298、ns in lender swap transactions.These minimum base guaranty fees were implemented in November 2016.In December 2011,Congress enacted the Temporary Payroll Tax Cut Continuation Act of 2011(“TCCA”)under which,at the direction of FHFA,we increased the guaranty fee on all single-family residential mortga
299、ges delivered to us by 10 basis points effective April 1,2012.The revenue generated by this fee increase is paid to Treasury and helps offset the cost of a two-month extension of the payroll tax cut from January 1,2012 through February 29,2012.FHFA and Treasury advised us to remit this fee increase
300、to Treasury with respect to all loans acquired by us on or after April 1,2012 and before January 1,2022,and to continue to remit these amounts to Treasury on and after January 1,2022 with respect to loans we acquired before this date until those loans are paid off or otherwise liquidated.In addition
301、,as discussed in“CapitalConservatorship Capital Framework,”FHFA has established requirements for our guaranty fee pricing in its capacity as conservator.Housing Goals Our housing goals,which are established by FHFA in accordance with the GSE Act,require that a specified amount of mortgage loans we a
302、cquire meet requirements relating to affordability or location.For single-family goals,our acquisitions are measured against the lower of benchmarks set by FHFA or the level of goals-qualifying originations in the primary mortgage market.Multifamily goals are established as a number of units to be f
303、inanced.In December 2018,FHFA determined that we met all of our single-family and multifamily housing goals for 2017.The tables below display our housing goals for 2017 and 2018,as well as our 2017 performance against our goals.Single-Family Housing Goals(1)20172018FHFABenchmarkSingle-FamilyMarket L
304、evelResultFHFABenchmarkhome purchases24%24.3%25.5%24%home purchases65.95.96Low-income areas home purchases(2)1821.522.918Low-income and high-minority areas home purchases(3)1417.118.314Low-income families refinances2125.424.821(1)The FHFA benchmarks and our results are expressed as a percentage of t
305、he total number of eligible single-family mortgages acquired during the period.The Single-Family Market level is the percentage of eligible single-family mortgages originated in the primary mortgage market.(2)These mortgage loans must be secured by a property that is(a)in a low-income census tract,(
306、b)in a high-minority census tract and affordable to moderate-income families(those with incomes less than or equal to 100%of area median income),or(c)in a designated disaster area and affordable to moderate-income families.(3)These mortgage loans must be secured by a property that is(a)in a low-inco
307、me census tract or(b)in a high-minority census tract and affordable to moderate-income families.Business|Charter Act and RegulationFannie Mae 2018 Form 10-K21Multifamily Housing Goals20172018GoalResultGoal(in units)Low-income families300,000401,145315,000Very low-income families60,00082,67460,000Sma
308、ll affordable multifamily properties(1)10,00012,04310,000(1)Small affordable multifamily properties are those with 5 to 50 units that are affordable to low-income families.We will report our 2018 housing goals performance to FHFA in March 2019,and FHFA will make a final determination regarding our 2
309、018 performance later in the year,after data regarding the share of goals-qualifying originations in the primary mortgage market,reported under the Home Mortgage Disclosure Act(“HMDA”),becomes available.As described in“Risk Factors,”actions we may take to meet our housing goals and duty to serve req
310、uirements described below may increase our credit losses and credit-related expense.Duty to Serve Underserved Markets The GSE Act requires that we serve very low-,low-,and moderate-income families in three specified underserved markets:manufactured housing,affordable housing preservation and rural h
311、ousing.In December 2016,FHFA published a final rule implementing our duty to serve these underserved markets.Under the rule,we are required to adopt an underserved markets plan for each underserved market covering a three-year period that sets forth the activities and objectives we will undertake to
312、 meet our duty to serve that market.Our first underserved markets plans received non-objections from FHFA and were finalized and published in December 2017.The plans are effective for 2018 to 2020.The types of activities that are eligible for duty to serve credit in each underserved market are summa
313、rized below:Manufactured housing market.For the manufactured housing market,duty to serve credit is available for eligible activities relating to manufactured homes(whether titled as real property or personal property(known as chattel)and loans for specified categories of manufactured housing commun
314、ities.Affordable housing preservation market.For the affordable housing preservation market,duty to serve credit is available for eligible activities relating to preserving the affordability of housing for renters and buyers under specified programs enumerated in the GSE Act and other comparable aff
315、ordable housing programs administered by state and local governments,subject to FHFA approval.Duty to serve credit also is available for activities related to small multifamily rental properties,energy efficiency improvements on existing multifamily rental and single-family first lien properties,cer
316、tain shared equity homeownership programs,the purchase or rehabilitation of certain distressed properties,and activities under HUDs Choice Neighborhoods Initiative and Rental Assistance Demonstration programs.Rural housing market.For the rural housing market,duty to serve credit is available for eli
317、gible activities related to housing in rural areas,including activities related to housing in high-needs rural regions and for high-needs rural populations.As provided under the rule,FHFA adopted final evaluation guidance in November 2017.The guidance communicates FHFAs expectations regarding the de
318、velopment of the underserved markets plans and describes the annual process by which FHFA will evaluate our achievements under the plans.Our performance results will be reported to Congress annually.If FHFA determines that we failed to meet the requirements of an underserved markets plan,it may resu
319、lt in the imposition of a housing plan that could require us to take additional steps.Swap Transactions;Minimum Capital and Margin RequirementsAs a result of the Dodd-Frank Act,we are required to submit new swap transactions for clearing to a derivatives clearing organization.Additionally,in October
320、 2015,an inter-agency body of regulators issued a final rule under the Dodd-Frank Act governing margin and capital requirements applicable to entities that are subject to their oversight.The rule is effective in two phases and each phase requires that we implement operational changes and changes rel
321、ating to the collateral we collect and provide for swap transactions.We complied with the first phase of the rule that became effective in 2017.The second phase of the rule is scheduled to become effective in September 2020.This phase will require additional operational changes and changes to collat
322、eral requirements,which may increase the costs associated with hedging our retained mortgage portfolio.Risk RetentionIn 2014,an inter-agency body of regulators issued a final rule implementing the Dodd-Frank Acts credit risk retention requirement.The final rule generally requires securitizers to ret
323、ain at least 5%of the credit risk of the assets they securitize.The rule offers several compliance options,one of which is to have either Fannie Mae or Freddie Mac(so long as Business|Charter Act and RegulationFannie Mae 2018 Form 10-K22they are in conservatorship or receivership with capital suppor
324、t from the United States)securitize and fully guarantee the assets,in which case no further retention of credit risk is required.In addition,securities backed solely by mortgage loans meeting the definition of a“qualified residential mortgage”are exempt from the risk retention requirements of the ru
325、le.The rule defines“qualified residential mortgage”to have the same meaning as the term“qualified mortgage”as defined by the Consumer Financial Protection Bureau(the“CFPB”)in connection with its ability-to-repay rule discussed below.Ability to Repay The Dodd-Frank Act amended the Truth in Lending Ac
326、t(“TILA”)to require creditors to determine that borrowers have a“reasonable ability to repay”most mortgage loans prior to making such loans.In 2013,the CFPB issued a final rule under Regulation Z that,among other things,requires creditors to determine a borrowers“ability to repay”a mortgage loan.If
327、a creditor fails to comply,a borrower may be able to offset a portion of the amount owed in a foreclosure proceeding or recoup monetary damages.The rule offers several options for complying with the ability-to-repay requirement,including making loans that meet certain terms and characteristics(refer
328、red to as“qualified mortgages”),which may provide creditors and their assignees with special protection from liability.Generally,a loan will be a qualified mortgage under the rule if,among other things,(1)the points and fees paid in connection with the loan do not exceed 3%of the total loan amount,(
329、2)the loan term does not exceed 30 years,(3)the loan is fully amortizing with no negative amortization,interest-only or balloon features and(4)the debt-to-income ratio on the loan does not exceed 43%at origination.The CFPB also defined a special class of conventional mortgage loans that will be qual
330、ified mortgages if they(1)meet the points and fees,term and amortization requirements of qualified mortgages generally and(2)are eligible for sale to Fannie Mae or Freddie Mac.This class of qualified mortgages expires on the earlier of January 10,2021 or when Fannie Mae and Freddie Mac cease to be i
331、n conservatorship or receivership.Although TILA does not apply to us,as we do not originate loans in the primary mortgage market,these rules apply to the lenders from which we acquire single-family mortgage loans.In May 2013,FHFA directed Fannie Mae and Freddie Mac to limit our acquisition of single
332、-family loans to those loans that meet the points and fees,term and amortization requirements for qualified mortgages,or to loans that are exempt from the ability-to-repay rule,such as loans made to investors.In January 2019,the CFPB released a white paper reviewing the ability-to-repay rule.The pap
333、er did not contain any recommendations for regulatory changes but may be used to make changes in the future.We anticipate that the CFPB may take action on the temporary qualified mortgage rule in the next 12 months.Changes in this rule may affect,perhaps materially,the quality and quantity of loans available for delivery to us.TILA-RESPA Integrated Disclosure(“TRID”)The Dodd-Frank Act required the